Re: Investment by Equity, Director loan or Share Capital?

[Irfanmz]

Dear Member,

i do not think you will find anyone who has gone through their extension just yet, but i think Share Capital route does tick most of required check boxes as compare to DL As Share certificate shows every single details HO requires along with your name and other share details, if someone disagree with me would love to hear from them. Thanks

[samaygrg]

Dear Member,

i do not think you will find anyone who has gone through their extension just yet, but i think Share Capital route does tick most of required check boxes as compare to DL As Share certificate shows every single details HO requires along with your name and other share details, if someone disagree with me would love to hear from them. Thanks

Agreed with Irfan .
Technically share investment is what we call investment. Having said that, DL option sets out a lot of flexibilities to us to manage the funds. Your accountant will be able to give the precise pros and cons.

[MTZ510]

Hi All,
My question is how do we clearly show that investment made directly by you in your own name in unaudited accounts & accountant's certificate of confirmation without having to use a director's loan agreement? The money will be transferred via CHAPS from a personal account to a Limited company account.

Do any successful extension applicants care to share his/her method? Or is everyone thinking safe and submitting director's loan agreement as evidence? which I think the loan still needs to be shown in the balance sheet or Director's loan accounts?

The case you have referred to in the last thread was a Self Employed Person and you can only use Share Certificate or DLA to prove the investment if its a Limited Company. For self employed and sole traders the only option is to submit the Un Audited Accounts along with Accounts compilation report proving funds were invested by you.

For Limited company best option is DLA which is acceptable document as mentioned in Guide. When you transfer money from personal account to Limited Company Account its automatically becomes a loan by the director to the Company and will appear in Liability side of your balance Sheet. All you need to do is to sign a DLA confirming that the loan is subordinated in favor of third party creditors.

In my opinion its much easier to prove your investment if you are doing it through a Limited Company as compare to being a Self employed business.

[MTZ510]

Thanks Everyone!

MTZ510
What would you suggest for a Sole Trader? Seems like Unaudited Accounts with Accounts Compilation report proving funds are not enough since the case I mentioned was rejected. I'm thinking to provide supplementary evidences of my personal and Sole Trader bank statements detailing each and every deposits and outgoing transaction made my me through my personal account to my sole trader account, but not sure if that is enough.

You can't have a Share Certificate or DLA for a sole trader business, the case worker was wrong and the decision was overturned in appeal the OP got the extension.
You can't do anything with the wrong decisions but yes you can document each and every transaction and submit along with Un Audited Accounts.

[whiteroses]

Hi sweetjane,

Have you applied for an extension?
If so, did you spend the entire £50,000/£200,000?

Thanks.