Money in

[APLimited]

Hi guys

looking for some advice, we put approx £26500.00 into our business to start up. We did this through beg borrowing and stealing. Credit cards, overdraft and loans.

How should this be put through my books.

This to me is a set up cost.

We initially set up as a sole trader before switching to Limited though.

Any advice much appreciated.

I run an excel cashbook.

Please dont advise me to go through my current accountant.
Im hoping you guys can show the best way to show this.

 

[Walkol]

I think I follow. Assuming you are a Limited company, and assuming that you as a director put in the money (ie, loans etc are in your name, and not the companies)....

All you need to do is put the amount through your directors loan account. Once the business is in a position cash flow wise to do so, you can draw the money back out.

 

[APLimited]

Hi

Thank you for a quick reply.

Yes we are Limited Nov 12.

We originally set up sole trader in 2011

all debts were Started in either my name or husbands name. Original Sole trader account was in my husbands name.

Limited company is in both names

Because we are only 6 months in, its not making my cashbook look to healthy but i know the business is doing great

 

[MyAccountantOnline]

we put approx £26500.00 into our business to start up. We did this through beg borrowing and stealing. Credit cards, overdraft and loans.

How should this be put through my books.

Assuming 'we' are the directors you will show it as a loan from each director for the relevant amount. It'll then appear as amounts owing (creditors) on the company balance sheet.

We initially set up as a sole trader before switching to Limited though.

If you were originally a sole trader make sure you transfer over any assets properly. It may be that goodwill is relevant too.

I run an excel cashbook.

VT cashbook, which is free, is MUCH better

 

[MyAccountantOnline]

Hi


all debts were Started in either my name or husbands name. Original Sole trader account was in my husbands name.

Have you taken some advice on transferring the sole trade to the company in particular regarding the debts. You need to be careful if the company is paying any of your husbands old debts.

 

[APLimited]

I need to find out if our accountant stopped the sole trader account.

The debts are CC and loans in both our names.

The Limited company is now a joint business.

Why do you say becareful?

 

[APLimited]

the old debts were used to set up in the very beginning. But not i cant prove all of it. its my word only.

 

[MyAccountantOnline]

I need to find out if our accountant stopped the sole trader account.

The debts are CC and loans in both our names.

The Limited company is now a joint business.

Why do you say becareful?

You, your husband and the company are all separate legal people/identities.

The debts don't belong to the company.

 

[MyAccountantOnline]

the old debts were used to set up in the very beginning. But not i cant prove all of it. its my word only.

Please correct me if I'm wrong but werent the debts used to set up your husbands sole trade, not company debts used to set up the company.

 

[arcon5]

If the debts was incurred as a sole trader, wouldn't the best way to deal with it is to sell the business to the Ltd leaving you both as a creditor?

Otherwise, wouldn't it be dealt with as capital, therefore a credit entry, and you'd have no debit entry as the money isn't hitting the bank account. No?