sole to ltd assets

[Joop123]

Hi guys
We went from sole to ltd about 6 months ago, now the plan was that the money in the soletrader account was to be left (as I have paid up any tax liability on it) and I was then going to lend it back to the new ltd company to pay the bank loan off (as directors loan) and then be able to draw this loan back end of March (after corp tax and profits permitting)
However the accountant has told me that the funds were left in as it would of been illegal to form a new ltd company where the liabilities were greater than the assets ?
Is this correct or has he made a mistake when forming the company and leaving the cash in and is trying to cover it up ?
I'm a bit baffled ..mmm

Joop

 

[elaine@cheapaccounting]

The liabilities wouldn't be greater - you would introduce the cash so there would be an asset and the liability would be a loan from you to be repaid.

Did I misunderstand something?

 

[MyAccountantOnline]

Hi guys
We went from sole to ltd about 6 months ago, now the plan was that the money in the soletrader account was to be left (as I have paid up any tax liability on it) and I was then going to lend it back to the new ltd company to pay the bank loan off (as directors loan) and then be able to draw this loan back end of March (after corp tax and profits permitting)
However the accountant has told me that the funds were left in as it would of been illegal to form a new ltd company where the liabilities were greater than the assets ?
Is this correct or has he made a mistake when forming the company and leaving the cash in and is trying to cover it up ?
I'm a bit baffled ..mmm

Joop

The very best thing you can do is go back to your accountant and ask him to explain the posistion. Its a bit difficult for any of us to help not knowing the numbers involved etc.