increasing share capital

[swooth]

Hi everyone

I have only recently registered with this forum. I do have an accountant who is away on holiday for 3 weeks and would like to take this opportunity to post my first thread.

I am a director of a small Travel Agency. My company has been running for just over 18 months, and my first year company accounts have been prepared.

The company share capital needs to be increased in order to meet a qualifying criteria for a desired membership, and my query was how can the company increase its share capital, in the most easiest and cost effective manner?

The share capital needs to be £30K. I do have funds of say £10k which i can put forward.

The current share capital is as follows:

Athorised ordinary shares = £1000 (this is in memorandum)
Ordinary Issued shares of £1 each = £2 (£1 director & £1 secretary)

Profit in reserve = £1526
Directors Loan Account = £22000

I have put this forward to my accountant before he went on holiday and got a hurried reply, which i cant get my head aorund. I feel that i need further advice.

I look forward to your replies.


Adam

 

[elaine@cheapaccounting]

Adam

I really would strongly recommend that you hold fire and wait from your accountant to return from holiday. He / She will know your business and can best advise. This is an area to get right for long term benefits e.g. selling the business in the future etc.

 

[jpcentral]

I agree with Elaine. There could be greater ramifications. A few years ago I came across someone who had been in a similar situation but hadn't read the full requirements. I would think it unlikely that all they require is an issued share capital of £30,000 - there is likely to be further solvency tests which, if your reserves are only £1,526, you will be unlikely to meet. You could find that you go through the process just to fail on some other aspect.

Wait for your accountant.

John Perry
Central Business Services
Loughborough