Transferring personal funds into my business account

Discussion in 'Accounts & Finance' started by JoeG123, Mar 8, 2018.

  1. JoeG123

    JoeG123 UKBF Newcomer Free Member

    3 0
    I have a question regarding use of personal funds in a new business. Apologies if the answer is blindingly obvious, but I am young a new business owner so please excuse my naivety!

    I registered my new business with companies house (private limited company) a few weeks ago (a dropshipping business) and have now decided on my amount of capital required (£2000). I am self funding this and I have the money in my personal account to use in my business. I have also recently set up a business account. Is it as simple as I just transfer the £2000 from my personal account to my business account with no formal paper trail, or do I need to invest the money in the business through some formal transaction such as the creation of new shares? I would like to simply transfer the money over but I am unsure if this requires some legal formality?

    Many thanks in advance from a new member!
     
    Posted: Mar 8, 2018 By: JoeG123 Member since: Mar 8, 2018
    #1
  2. Scalloway

    Scalloway UKBF Legend Free Member

    14,037 2,993
    You can just pay the money into the company's account. It is probably better to put a note in your file that it is a loan.
     
    Posted: Mar 8, 2018 By: Scalloway Member since: Jun 6, 2010
    #2
  3. anonicee

    anonicee UKBF Newcomer Free Member

    6 1
    So I am assuming you are 100% shareholder, have you transferred £X for the shares?

    If you want the company to owe you the £2k, put it as a loan. If you want it to be company money you can create the shares.
     
    Posted: Mar 8, 2018 By: anonicee Member since: Mar 7, 2018
    #3
  4. JoeG123

    JoeG123 UKBF Newcomer Free Member

    3 0
    Yes I am 100% shareholder. I want it to be a loan, I am just wondering when you say 'put it as a loan', is there a formal way to document this loan or do I simply transfer over the money and write a note in my files that on X date I transferred X amount as an interest free loan to X company?
     
    Posted: Mar 9, 2018 By: JoeG123 Member since: Mar 8, 2018
    #4
  5. anonicee

    anonicee UKBF Newcomer Free Member

    6 1
    You would write a note in your file yes, you would need to create a "Directors Loan Account" which is a virtual documentation of your loans and payments between you and your company
     
    Posted: Mar 9, 2018 By: anonicee Member since: Mar 7, 2018
    #5
  6. MyAccountantOnline

    MyAccountantOnline UKBF Legend Full Member

    12,317 2,290
    No just record it as a loan in the company accounting records.

    Yes that's fine.
     
    Posted: Mar 9, 2018 By: MyAccountantOnline Member since: Sep 24, 2008
    #6
  7. JoeG123

    JoeG123 UKBF Newcomer Free Member

    3 0
    Thanks for all your help
     
    Posted: Mar 9, 2018 By: JoeG123 Member since: Mar 8, 2018
    #7