Tier 1 Entrepreneur investment

[Shaikh123]

HI
I have heard very good things about this platform from a friend and been suggested to put up a query about my investment for Tier 1 Entrepreneur category. Sorry for a long post but i am really confused and worried.

1-) I purchased 2 running bussineses (take away shops) and started shop 3 by taking a new lease and investing 170000 more which didn't go to any previous owner.
shop 1:
Paid to previous owner 200000
Stock and other expenses 25000

Shop 2 )
Paid to previous owner 190000
Stock and other expenses 20000

Shop 3) lease , assets fixture and fittings 170000

I know only 45000 will qualify from shop 1 and 2 and after 12 months i sold shop 2 for 190000 in june 2022 out of which i returned 160000 as directors loan and 30000 remained in the company.

total qualifying investment on 1 jan 2021
shop 1 25000
shop 2 20000
shop 3 170000
Total 215000

I am confused whether this 160000 i withdrew from shop 2 will reduce my qualifying investment from 215000 to 55000 as i have sold the same shop where money went to previous owner.

Scenario 1:
total investment till 1 jan 21 215000
recieved payment in june 22 -160000
qulaifying investment 55000

scenario 2:
total investment 215000
with business 30000
qualifying investment 245000

Which scenario do i fall in and if not these 2 what is my current qualifying investment?
Thanks in advance

[marcnath]

It is neither 1 or 2.

You have listed what you spent money on, not what you invested INTO the business.

So it is not possible to say what your investment is

[Shaikh123]

Dear Marcnath

Thanks for your reply.
I have 3 companies and invested money into them by giving a directors loan.

shop 1 company A: Directors loan 225000 to a company A .200000 went to previous owner and 25000 includes buying new equipment , rent , rent deposits , solicitors fees and stock purchased.

Shop 2 company B: Directors loan 210000 to a company B .190000 went to previous owner and 20000 includes buying new equipment , rent , rent deposits , solicitors fees and stock purchased.

This was sold after sometime and received 190000 only and out of this only withdrew 160000 and 30000 part balance was used in marketing of shop A and Shop C and part is still in the company account.

Shop 3 company C: Directors Loan 170000 to company C. Nothing went to previous owner and invested in New Lease , machinery, advertisements, builder payment.


This is As per my my understanding but if you meant something else , kindly elaborate a bit more to answer.
Thanks

[Shaikh123]

It is neither 1 or 2.

You have listed what you spent money on, not what you invested INTO the business.

So it is not possible to say what your investment is

Dear Marcnath

Thanks for your reply.
I have 3 companies and invested money into them by giving a directors loan.

shop 1 company A: Directors loan 225000 to a company A .200000 went to previous owner and 25000 includes buying new equipment , rent , rent deposits , solicitors fees and stock purchased.

Shop 2 company B: Directors loan 210000 to a company B .190000 went to previous owner and 20000 includes buying new equipment , rent , rent deposits , solicitors fees and stock purchased.

This was sold after sometime and received 190000 only and out of this only withdrew 160000 and 30000 part balance was used in marketing of shop A and Shop C and part is still in the company account.

Shop 3 company C: Directors Loan 170000 to company C. Nothing went to previous owner and invested in New Lease , machinery, advertisements, builder payment.


This is As per my my understanding but if you meant something else , kindly elaborate a bit more to answer.
Thanks

[marcnath]

It is neither 1 or 2.

You have listed what you spent money on, not what you invested INTO the business.

So it is not possible to say what your investment is

Dear Marcnath

Thanks for your reply.
I have 3 companies and invested money into them by giving a directors loan.

shop 1 company A: Directors loan 225000 to a company A .200000 went to previous owner and 25000 includes buying new equipment , rent , rent deposits , solicitors fees and stock purchased.

Shop 2 company B: Directors loan 210000 to a company B .190000 went to previous owner and 20000 includes buying new equipment , rent , rent deposits , solicitors fees and stock purchased.

This was sold after sometime and received 190000 only and out of this only withdrew 160000 and 30000 part balance was used in marketing of shop A and Shop C and part is still in the company account.

Shop 3 company C: Directors Loan 170000 to company C. Nothing went to previous owner and invested in New Lease , machinery, advertisements, builder payment.

This is As per my my understanding but if you meant something else , kindly elaborate a bit more to answer.
Thanks

In principle, this should mean the total investment is 215000.

This is assuming there are no issues with the source of funds. i.e. these are your personal funds (not loans, etc.)

[Shaikh123]

It is neither 1 or 2.

You have listed what you spent money on, not what you invested INTO the business.

So it is not possible to say what your investment is

Dear Marcnath

Thanks for your reply.
I have 3 companies and invested money into them by giving a directors loan.

shop 1 company A: Directors loan 225000 to a company A .200000 went to previous owner and 25000 includes buying new equipment , rent , rent deposits , solicitors fees and stock purchased.

Shop 2 company B: Directors loan 210000 to a company B .190000 went to previous owner and 20000 includes buying new equipment , rent , rent deposits , solicitors fees and stock purchased.

This was sold after sometime and received 190000 only and out of this only withdrew 160000 and 30000 part balance was used in marketing of shop A and Shop C and part is still in the company account.

Shop 3 company C: Directors Loan 170000 to company C. Nothing went to previous owner and invested in New Lease , machinery, advertisements, builder payment.

This is As per my my understanding but if you meant something else , kindly elaborate a bit more to answer.
Thanks

In principle, this should mean the total investment is 215000.

This is assuming there are no issues with the source of funds. i.e. these are your personal funds (not loans, etc.)

No its not a loan and had been transferred from my overseas personal account to UK account and transferred as a directors loan to business account
My investment will be 215000 and nothing of 30000 that is left in business account will be considered as an added investment?

thanks

[Shaikh123]

I have one more question

while buying shop 1 , i was told that being new in the country background checks were not possible and i had to add my brother British national as 10% shareholder and director which helped me passing those checks.
I transferred 225000 as a directors loan and later solicitor wanted my brother to transfer his 10% share from his account. my balance of 22500 was still in the company which i never withdrew and used in running of the business later.
After few months my brother transferred 10% of share holding to me without taking any money from me or business and now i have been told by a solicitor to transfer back that 10% to my brother again which is already done without taking any payments from him.

Total investment 225000
previous owner 200000
my share 90% 180000+ 22500=202500
partner 10% 20000+2500= 22500

my question is whether my 180000 will be counted as money went to previous owner of the business or 200000 as at the time of purchase i owned 90% that was 180000 and remaining 45000 was in the business.

Thanks in advance and Everything was normal until i met a solicitor to process my case and he created these confusions.

[Shaikh123]

It is neither 1 or 2.

You have listed what you spent money on, not what you invested INTO the business.

So it is not possible to say what your investment is

In principle, this should mean the total investment is 215000.

This is assuming there are no issues with the source of funds. i.e. these are your personal funds (not loans, etc.)

Dear Marchnath

I have been told by solicitor that HO might count 55000 as an investment and i ll have to invest 145000 more to qualify for 200k investment.


thanks

[HappyChap2021]

just a quick comment: you know that you could have your brother stay in the company with his 10% share? i noticed that solictor insisted of him getting out of the company

[marcnath]

It appears you have found a solicitor who does not understand the rules.

First and foremost - Investment is all about the money you invest IN TO the company. It is not about what it is spent on or what the balance in the accounts is. So it is only 215K in your case. I have no idea why you think the 30K should be included. If that were the logic, I assume you have some money in the other business banks accounts too - why are you not including them?

I have no idea why your solicitor even bothered about the other shareholder in the business. Again, immigration rules do not care if you had 10 other shareholders or none. Whether you had 0% shares or 100%. It only specifies that you have to be a Director. Your brother's shareholding does not impact the investment criteria in any way.

[Shaikh123]

It appears you have found a solicitor who does not understand the rules.

First and foremost - Investment is all about the money you invest IN TO the company. It is not about what it is spent on or what the balance in the accounts is. So it is only 215K in your case. I have no idea why you think the 30K should be included. If that were the logic, I assume you have some money in the other business banks accounts too - why are you not including them?

I have no idea why your solicitor even bothered about the other shareholder in the business. Again, immigration rules do not care if you had 10 other shareholders or none. Whether you had 0% shares or 100%. It only specifies that you have to be a Director. Your brother's shareholding does not impact the investment criteria in any way.

May be solicitor doesn't understand the rules and have decided to change.

1- I got your point about 215000 but what i wanted to understand was money that goes to previous owner doesn't count . As my investment in the company is 225000 but 200000 went to previous owner and out of that 200000 my 90% shareholding was 180000 at the time of purchasing a business.

2- I have only 2 months left and in past few meetings with solicitor i have been told so many different things which has really put me into a stress. my brother investment won't have any impact but if his investment went to previous owner it shouldn't be counted as mine.

Sorry i don't know if i am making things clear or not but trying my best to make things easy to understand.

Thanks

[Shaikh123]

just a quick comment: you know that you could have your brother stay in the company with his 10% share? i noticed that solictor insisted of him getting out of the company

my brother itransferred 10% shareholding after few months of starting business in 2020 ,infact solicitor told me to give him back 10% and as it was being transferred to my brother i didn't bother much.

[marcnath]

It appears you have found a solicitor who does not understand the rules.

First and foremost - Investment is all about the money you invest IN TO the company. It is not about what it is spent on or what the balance in the accounts is. So it is only 215K in your case. I have no idea why you think the 30K should be included. If that were the logic, I assume you have some money in the other business banks accounts too - why are you not including them?

I have no idea why your solicitor even bothered about the other shareholder in the business. Again, immigration rules do not care if you had 10 other shareholders or none. Whether you had 0% shares or 100%. It only specifies that you have to be a Director. Your brother's shareholding does not impact the investment criteria in any way.

May be solicitor doesn't understand the rules and have decided to change.

1- I got your point about 215000 but what i wanted to understand was money that goes to previous owner doesn't count . As my investment in the company is 225000 but 200000 went to previous owner and out of that 200000 my 90% shareholding was 180000 at the time of purchasing a business.

2- I have only 2 months left and in past few meetings with solicitor i have been told so many different things which has really put me into a stress. my brother investment won't have any impact but if his investment went to previous owner it shouldn't be counted as mine.

Sorry i don't know if i am making things clear or not but trying my best to make things easy to understand.

Thanks

Did your brother invest money also? You said ALL of the money came from your personal account?
If it is all your money, it is all your investment and the shareholding does not matter.

[Shaikh123]

It appears you have found a solicitor who does not understand the rules.

First and foremost - Investment is all about the money you invest IN TO the company. It is not about what it is spent on or what the balance in the accounts is. So it is only 215K in your case. I have no idea why you think the 30K should be included. If that were the logic, I assume you have some money in the other business banks accounts too - why are you not including them?

I have no idea why your solicitor even bothered about the other shareholder in the business. Again, immigration rules do not care if you had 10 other shareholders or none. Whether you had 0% shares or 100%. It only specifies that you have to be a Director. Your brother's shareholding does not impact the investment criteria in any way.

May be solicitor doesn't understand the rules and have decided to change.

1- I got your point about 215000 but what i wanted to understand was money that goes to previous owner doesn't count . As my investment in the company is 225000 but 200000 went to previous owner and out of that 200000 my 90% shareholding was 180000 at the time of purchasing a business.

2- I have only 2 months left and in past few meetings with solicitor i have been told so many different things which has really put me into a stress. my brother investment won't have any impact but if his investment went to previous owner it shouldn't be counted as mine.

Sorry i don't know if i am making things clear or not but trying my best to make things easy to understand.

Thanks

Did your brother invest money also? You said ALL of the money came from your personal account?
If it is all your money, it is all your investment and the shareholding does not matter.

My brother did invest his 10% i.e 22500 in the business and i invested 225000
yes the money invested by me came from my personal accounts
so total investment was 247500

[marcnath]

It appears you have found a solicitor who does not understand the rules.

First and foremost - Investment is all about the money you invest IN TO the company. It is not about what it is spent on or what the balance in the accounts is. So it is only 215K in your case. I have no idea why you think the 30K should be included. If that were the logic, I assume you have some money in the other business banks accounts too - why are you not including them?

I have no idea why your solicitor even bothered about the other shareholder in the business. Again, immigration rules do not care if you had 10 other shareholders or none. Whether you had 0% shares or 100%. It only specifies that you have to be a Director. Your brother's shareholding does not impact the investment criteria in any way.

May be solicitor doesn't understand the rules and have decided to change.

1- I got your point about 215000 but what i wanted to understand was money that goes to previous owner doesn't count . As my investment in the company is 225000 but 200000 went to previous owner and out of that 200000 my 90% shareholding was 180000 at the time of purchasing a business.

2- I have only 2 months left and in past few meetings with solicitor i have been told so many different things which has really put me into a stress. my brother investment won't have any impact but if his investment went to previous owner it shouldn't be counted as mine.

Sorry i don't know if i am making things clear or not but trying my best to make things easy to understand.

Thanks

Did your brother invest money also? You said ALL of the money came from your personal account?
If it is all your money, it is all your investment and the shareholding does not matter.

My brother did invest his 10% i.e 22500 in the business and i invested 225000
yes the money invested by me came from my personal accounts
so total investment was 247500

The only important figure is what you have on your Director Loan document that you will be submitting to HO. Of course, that figure has to match the company accounts that you submit.

So, if I understand it correctly, you invested 225000 to shop 1, of which 200000 was given to the previous owner and 22500 went into the business for other costs.

On a later date, your brother added 22500 to the business.

In this case, your investment for Tier1 purposes is still 22500. HO is just going to look at how the cash was used. As I have repeatedly said, your ownership % has no relevance at all.

[Shaikh123]

It appears you have found a solicitor who does not understand the rules.

First and foremost - Investment is all about the money you invest IN TO the company. It is not about what it is spent on or what the balance in the accounts is. So it is only 215K in your case. I have no idea why you think the 30K should be included. If that were the logic, I assume you have some money in the other business banks accounts too - why are you not including them?

I have no idea why your solicitor even bothered about the other shareholder in the business. Again, immigration rules do not care if you had 10 other shareholders or none. Whether you had 0% shares or 100%. It only specifies that you have to be a Director. Your brother's shareholding does not impact the investment criteria in any way.

May be solicitor doesn't understand the rules and have decided to change.

1- I got your point about 215000 but what i wanted to understand was money that goes to previous owner doesn't count . As my investment in the company is 225000 but 200000 went to previous owner and out of that 200000 my 90% shareholding was 180000 at the time of purchasing a business.

2- I have only 2 months left and in past few meetings with solicitor i have been told so many different things which has really put me into a stress. my brother investment won't have any impact but if his investment went to previous owner it shouldn't be counted as mine.

Sorry i don't know if i am making things clear or not but trying my best to make things easy to understand.

Thanks

Did your brother invest money also? You said ALL of the money came from your personal account?
If it is all your money, it is all your investment and the shareholding does not matter.

My brother did invest his 10% i.e 22500 in the business and i invested 225000
yes the money invested by me came from my personal accounts
so total investment was 247500

The only important figure is what you have on your Director Loan document that you will be submitting to HO. Of course, that figure has to match the company accounts that you submit.

So, if I understand it correctly, you invested 225000 to shop 1, of which 200000 was given to the previous owner and 22500 went into the business for other costs.

On a later date, your brother added 22500 to the business.

In this case, your investment for Tier1 purposes is still 22500. HO is just going to look at how the cash was used. As I have repeatedly said, your ownership % has no relevance at all.

On a later date, your brother added 22500 to the business.

it was invested before the exchange of contract.

As I have repeatedly said, your ownership % has no relevance at all.
sorry to bother again on this as i m still confused if a business is purchased in partnership and each partner investments as per the shareholding how come HO considers all money from my investment that goes to previous owner.

[marcnath]

It appears you have found a solicitor who does not understand the rules.

First and foremost - Investment is all about the money you invest IN TO the company. It is not about what it is spent on or what the balance in the accounts is. So it is only 215K in your case. I have no idea why you think the 30K should be included. If that were the logic, I assume you have some money in the other business banks accounts too - why are you not including them?

I have no idea why your solicitor even bothered about the other shareholder in the business. Again, immigration rules do not care if you had 10 other shareholders or none. Whether you had 0% shares or 100%. It only specifies that you have to be a Director. Your brother's shareholding does not impact the investment criteria in any way.

May be solicitor doesn't understand the rules and have decided to change.

1- I got your point about 215000 but what i wanted to understand was money that goes to previous owner doesn't count . As my investment in the company is 225000 but 200000 went to previous owner and out of that 200000 my 90% shareholding was 180000 at the time of purchasing a business.

2- I have only 2 months left and in past few meetings with solicitor i have been told so many different things which has really put me into a stress. my brother investment won't have any impact but if his investment went to previous owner it shouldn't be counted as mine.

Sorry i don't know if i am making things clear or not but trying my best to make things easy to understand.

Thanks

Did your brother invest money also? You said ALL of the money came from your personal account?
If it is all your money, it is all your investment and the shareholding does not matter.

My brother did invest his 10% i.e 22500 in the business and i invested 225000
yes the money invested by me came from my personal accounts
so total investment was 247500

The only important figure is what you have on your Director Loan document that you will be submitting to HO. Of course, that figure has to match the company accounts that you submit.

So, if I understand it correctly, you invested 225000 to shop 1, of which 200000 was given to the previous owner and 22500 went into the business for other costs.

On a later date, your brother added 22500 to the business.

In this case, your investment for Tier1 purposes is still 22500. HO is just going to look at how the cash was used. As I have repeatedly said, your ownership % has no relevance at all.

On a later date, your brother added 22500 to the business.

it was invested before the exchange of contract.

As I have repeatedly said, your ownership % has no relevance at all.
sorry to bother again on this as i m still confused if a business is purchased in partnership and each partner investments as per the shareholding how come HO considers all money from my investment that goes to previous owner.

HO looks at the timing of the cash flow. In this case, it is very obvious that your investment was used to pay the owner. And you invested the money as a Director's loan, not as Shares. So, there is no relevance to the share holding percentages.

[Shaikh123]

May be solicitor doesn't understand the rules and have decided to change.

1- I got your point about 215000 but what i wanted to understand was money that goes to previous owner doesn't count . As my investment in the company is 225000 but 200000 went to previous owner and out of that 200000 my 90% shareholding was 180000 at the time of purchasing a business.

2- I have only 2 months left and in past few meetings with solicitor i have been told so many different things which has really put me into a stress. my brother investment won't have any impact but if his investment went to previous owner it shouldn't be counted as mine.

Sorry i don't know if i am making things clear or not but trying my best to make things easy to understand.

Thanks

Did your brother invest money also? You said ALL of the money came from your personal account?
If it is all your money, it is all your investment and the shareholding does not matter.

My brother did invest his 10% i.e 22500 in the business and i invested 225000
yes the money invested by me came from my personal accounts
so total investment was 247500

The only important figure is what you have on your Director Loan document that you will be submitting to HO. Of course, that figure has to match the company accounts that you submit.

So, if I understand it correctly, you invested 225000 to shop 1, of which 200000 was given to the previous owner and 22500 went into the business for other costs.

On a later date, your brother added 22500 to the business.

In this case, your investment for Tier1 purposes is still 22500. HO is just going to look at how the cash was used. As I have repeatedly said, your ownership % has no relevance at all.

On a later date, your brother added 22500 to the business.

it was invested before the exchange of contract.

As I have repeatedly said, your ownership % has no relevance at all.
sorry to bother again on this as i m still confused if a business is purchased in partnership and each partner investments as per the shareholding how come HO considers all money from my investment that goes to previous owner.

HO looks at the timing of the cash flow. In this case, it is very obvious that your investment was used to pay the owner. And you invested the money as a Director's loan, not as Shares. So, there is no relevance to the share holding percentages.

My brother also registered himself as a director in that company
Date of my directors loan 5 jan 2020
Date of other directors loan 10 jan 2020 My brother
transferred to solicitor 1 feb 2020 exchange of contract happened on 5 feb

[Shaikh123]

Dear Marcnath

I have checked the bank statements and asked my accountant.

A) I invested 205000 and my brother invested 22500 to be exact in shop 1.total 227500
225000 transferred to solicitor from this and 2500 we paid to suppliers of food. Need your help on this please.

b) From shop 2 which i had sold and kept 30000 in the business assuming it might count to my investment will not be counted.

c) Proceeds received from shop 2 190000 will not be deducted from my qualifying investments as you told ealier which is total qualifying investment:
shop 1 25000
shop 2 20000
shop 3 170000
Total 215000

I am asking about 'A' as i had taken director's remuneration which as per my understanding is deducted and if nothing is working out then i can invest more as a directors loan into the business to make it 200000.

Your help is highly regarded and appreciated.
Thanks

[marcnath]

Dear Marcnath

I have checked the bank statements and asked my accountant.

A) I invested 205000 and my brother invested 22500 to be exact in shop 1.total 227500
225000 transferred to solicitor from this and 2500 we paid to suppliers of food. Need your help on this please.

b) From shop 2 which i had sold and kept 30000 in the business assuming it might count to my investment will not be counted.

c) Proceeds received from shop 2 190000 will not be deducted from my qualifying investments as you told ealier which is total qualifying investment:
shop 1 25000
shop 2 20000
shop 3 170000
Total 215000

I am asking about 'A' as i had taken director's remuneration which as per my understanding is deducted and if nothing is working out then i can invest more as a directors loan into the business to make it 200000.

Your help is highly regarded and appreciated.
Thanks

There are two documents that HO needs to verify the investment

1) Director's loan
2) The Director loan shown in the Accounts

What are the figures shown in those documents?

The amount you paid to the owners will not show up in either of these documents if they are done correctly.

The money you paid to the original owner should not come in the company books at all since the company is yours only after the owner has got their money. Basically you can't give a Director's loan to a company of which you are not a Director. And you only become a Director (normally) AFTER you have purchased the company i.e. paid to the owner.

[Shaikh123]

Dear Marcnath

I have checked the bank statements and asked my accountant.

A) I invested 205000 and my brother invested 22500 to be exact in shop 1.total 227500
225000 transferred to solicitor from this and 2500 we paid to suppliers of food. Need your help on this please.

b) From shop 2 which i had sold and kept 30000 in the business assuming it might count to my investment will not be counted.

c) Proceeds received from shop 2 190000 will not be deducted from my qualifying investments as you told ealier which is total qualifying investment:
shop 1 25000
shop 2 20000
shop 3 170000
Total 215000

I am asking about 'A' as i had taken director's remuneration which as per my understanding is deducted and if nothing is working out then i can invest more as a directors loan into the business to make it 200000.

Your help is highly regarded and appreciated.
Thanks

There are two documents that HO needs to verify the investment

1) Director's loan
2) The Director loan shown in the Accounts

What are the figures shown in those documents?

The amount you paid to the owners will not show up in either of these documents if they are done correctly.

The money you paid to the original owner should not come in the company books at all since the company is yours only after the owner has got their money. Basically you can't give a Director's loan to a company of which you are not a Director. And you only become a Director (normally) AFTER you have purchased the company i.e. paid to the owner.

So basically accountant has to make these things?

sorry i missed telling you that we opened a new company and transferred funds into it through a directors loan, that company then transferred funds to our solicitor and then to sellers solicitor.The leases were transferred under our company.

[marcnath]

Dear Marcnath

I have checked the bank statements and asked my accountant.

A) I invested 205000 and my brother invested 22500 to be exact in shop 1.total 227500
225000 transferred to solicitor from this and 2500 we paid to suppliers of food. Need your help on this please.

b) From shop 2 which i had sold and kept 30000 in the business assuming it might count to my investment will not be counted.

c) Proceeds received from shop 2 190000 will not be deducted from my qualifying investments as you told ealier which is total qualifying investment:
shop 1 25000
shop 2 20000
shop 3 170000
Total 215000

I am asking about 'A' as i had taken director's remuneration which as per my understanding is deducted and if nothing is working out then i can invest more as a directors loan into the business to make it 200000.

Your help is highly regarded and appreciated.
Thanks

There are two documents that HO needs to verify the investment

1) Director's loan
2) The Director loan shown in the Accounts

What are the figures shown in those documents?

The amount you paid to the owners will not show up in either of these documents if they are done correctly.

The money you paid to the original owner should not come in the company books at all since the company is yours only after the owner has got their money. Basically you can't give a Director's loan to a company of which you are not a Director. And you only become a Director (normally) AFTER you have purchased the company i.e. paid to the owner.

So basically accountant has to make these things?

sorry i missed telling you that we opened a new company and transferred funds into it through a directors loan, that company then transferred funds to our solicitor and then to sellers solicitor.The leases were transferred under our company.

And how was transferred to the sellers solicitors? The full 225000?

[Shaikh123]

Dear Marcnath

I have checked the bank statements and asked my accountant.

A) I invested 205000 and my brother invested 22500 to be exact in shop 1.total 227500
225000 transferred to solicitor from this and 2500 we paid to suppliers of food. Need your help on this please.

b) From shop 2 which i had sold and kept 30000 in the business assuming it might count to my investment will not be counted.

c) Proceeds received from shop 2 190000 will not be deducted from my qualifying investments as you told ealier which is total qualifying investment:
shop 1 25000
shop 2 20000
shop 3 170000
Total 215000

I am asking about 'A' as i had taken director's remuneration which as per my understanding is deducted and if nothing is working out then i can invest more as a directors loan into the business to make it 200000.

Your help is highly regarded and appreciated.
Thanks

There are two documents that HO needs to verify the investment

1) Director's loan
2) The Director loan shown in the Accounts

What are the figures shown in those documents?

The amount you paid to the owners will not show up in either of these documents if they are done correctly.

The money you paid to the original owner should not come in the company books at all since the company is yours only after the owner has got their money. Basically you can't give a Director's loan to a company of which you are not a Director. And you only become a Director (normally) AFTER you have purchased the company i.e. paid to the owner.

So basically accountant has to make these things?

sorry i missed telling you that we opened a new company and transferred funds into it through a directors loan, that company then transferred funds to our solicitor and then to sellers solicitor.The leases were transferred under our company.

And how was transferred to the sellers solicitors? The full 225000?

Not in full but around 220000
Seller's solicitor sent us the completion statement
like few of them included landlord solicitors fees ,landlords deposits and 6 months advance rent
these were transferred through sellers solicitor as he was dealing with landlord solicitor.
Thanks

[marcnath]

Dear Marcnath

I have checked the bank statements and asked my accountant.

A) I invested 205000 and my brother invested 22500 to be exact in shop 1.total 227500
225000 transferred to solicitor from this and 2500 we paid to suppliers of food. Need your help on this please.

b) From shop 2 which i had sold and kept 30000 in the business assuming it might count to my investment will not be counted.

c) Proceeds received from shop 2 190000 will not be deducted from my qualifying investments as you told ealier which is total qualifying investment:
shop 1 25000
shop 2 20000
shop 3 170000
Total 215000

I am asking about 'A' as i had taken director's remuneration which as per my understanding is deducted and if nothing is working out then i can invest more as a directors loan into the business to make it 200000.

Your help is highly regarded and appreciated.
Thanks

There are two documents that HO needs to verify the investment

1) Director's loan
2) The Director loan shown in the Accounts

What are the figures shown in those documents?

The amount you paid to the owners will not show up in either of these documents if they are done correctly.

The money you paid to the original owner should not come in the company books at all since the company is yours only after the owner has got their money. Basically you can't give a Director's loan to a company of which you are not a Director. And you only become a Director (normally) AFTER you have purchased the company i.e. paid to the owner.

So basically accountant has to make these things?

sorry i missed telling you that we opened a new company and transferred funds into it through a directors loan, that company then transferred funds to our solicitor and then to sellers solicitor.The leases were transferred under our company.

And how was transferred to the sellers solicitors? The full 225000?

Not in full but around 220000
Seller's solicitor sent us the completion statement
like few of them included landlord solicitors fees ,landlords deposits and 6 months advance rent
these were transferred through sellers solicitor as he was dealing with landlord solicitor.
Thanks

Ok. So you run the risk that the amount transferred i.e. 220000 is what HO will consider paid to the owner. It is part of the purchase price. You may feel that it is unfair and you may be able to argue otherwise, but the immigration rules just exclude spending on
buying the business from a previous owner, where the money ultimately goes to that previous owner, rather than into the business being purchased, this applies:
o irrespective of whether invested funds are received or held directly or indirectly by that previous owner
o regardless of whether the money is channelled through the business on its way to the previous owner, for example, by means of the applicant or business purchasing ‘goodwill’ or other assets which were previously part of the business

So even if the payment to the previous owner was for the lease, rent advance or stock (all "other assets"), as per the above they are excluded.
In addition, you mentioned you had taken remuneration. That would normally be excluded also unless you can show that it was paid from income generated from the business.

This means instead of the 25000 you previously calculated, it would only be 5000. And I assume that is similar on the other shops too

[Shaikh123]

Dear Marcnath

I have checked the bank statements and asked my accountant.

A) I invested 205000 and my brother invested 22500 to be exact in shop 1.total 227500
225000 transferred to solicitor from this and 2500 we paid to suppliers of food. Need your help on this please.

b) From shop 2 which i had sold and kept 30000 in the business assuming it might count to my investment will not be counted.

c) Proceeds received from shop 2 190000 will not be deducted from my qualifying investments as you told ealier which is total qualifying investment:
shop 1 25000
shop 2 20000
shop 3 170000
Total 215000

I am asking about 'A' as i had taken director's remuneration which as per my understanding is deducted and if nothing is working out then i can invest more as a directors loan into the business to make it 200000.

Your help is highly regarded and appreciated.
Thanks

There are two documents that HO needs to verify the investment

1) Director's loan
2) The Director loan shown in the Accounts

What are the figures shown in those documents?

The amount you paid to the owners will not show up in either of these documents if they are done correctly.

The money you paid to the original owner should not come in the company books at all since the company is yours only after the owner has got their money. Basically you can't give a Director's loan to a company of which you are not a Director. And you only become a Director (normally) AFTER you have purchased the company i.e. paid to the owner.

So basically accountant has to make these things?

sorry i missed telling you that we opened a new company and transferred funds into it through a directors loan, that company then transferred funds to our solicitor and then to sellers solicitor.The leases were transferred under our company.

And how was transferred to the sellers solicitors? The full 225000?

Not in full but around 220000
Seller's solicitor sent us the completion statement
like few of them included landlord solicitors fees ,landlords deposits and 6 months advance rent
these were transferred through sellers solicitor as he was dealing with landlord solicitor.
Thanks

Ok. So you run the risk that the amount transferred i.e. 220000 is what HO will consider paid to the owner. It is part of the purchase price. You may feel that it is unfair and you may be able to argue otherwise, but the immigration rules just exclude spending on
buying the business from a previous owner, where the money ultimately goes to that previous owner, rather than into the business being purchased, this applies:
o irrespective of whether invested funds are received or held directly or indirectly by that previous owner
o regardless of whether the money is channelled through the business on its way to the previous owner, for example, by means of the applicant or business purchasing ‘goodwill’ or other assets which were previously part of the business

So even if the payment to the previous owner was for the lease, rent advance or stock (all "other assets"), as per the above they are excluded.
In addition, you mentioned you had taken remuneration. That would normally be excluded also unless you can show that it was paid from income generated from the business.

This means instead of the 25000 you previously calculated, it would only be 5000. And I assume that is similar on the other shops too

HI
Really thanks for a detailed post and taking time out time for it.

Even i tried understanding the guidelines but rent deposit and rent for 6 months were paid to landlord by sellers solicitor not to previous owner for sure.We had no option as sellers solicitor was directly in touch with them and we were not allowed to contact them directly .I can search for invoices as well.
I understand it was channeled through sellers solicitor but those were the requirements of landlords solicitor as i got those emails as well.
If still its not counted then i ll be investing more in the company before proceeding.