Can we invest total 200 k as Unsecured director loan

Can we invest total 200 k (some chunks of transferring amount to business account over three years to make 200k) as Unsecured director loan and start using this for

Employee salaries
Business expenses

etc etc


In this scenario can we claim that 200k is invested into the business and apply for extension.

Your urgent reply is appreciated. Waiting for your response.

This has been my question from a year back. But there are no clear answers.

You txfr 200K(in chunks/all at once) into business account - is this considered as investment done ?

Or will the business then need to spend all the 200K ?

I think the later. But its not clear anywhere.

But its an important question for everyone as it is necessary for extension.

la

you can invest all 200k in the form of unsecured director loan. You know you'll need an agreement between you and your company that this loan is subordinated in favour of other creditors of the business. You'll only need to present this evidence at time of your extension.

Once you put in 200k as unsecured director loan; technically investment is completed and now it is upto your business to decide where to spend the money i.e employee salaries, business expenses etc.

There are many technical ways to withdraw the money but I'm not sure if I'm allowed to answer that question on the forum as I guess people getting visa should invest funds and should not try to play around with UKBA rules.

Do we have to be shareholder of that business as well in which we invest as directors loan

la wrote:Can we invest total 200 k (some chunks of transferring amount to business account over three years to make 200k) as Unsecured director loan and start using this for

Employee salaries
Business expenses

etc etc


In this scenario can we claim that 200k is invested into the business and apply for extension.

Your urgent reply is appreciated. Waiting for your response.

No you cannot just keep money in business bank account. Please see below on page 40 of policy guidance.....

Money deposited in a bank account, even if it is in a United Kingdom business bank account, is not counted as investment in business. The money should be used in the business to encourage growth or expansion, to improve services or products and to ensure the business is profitable.

educators wrote:

la wrote:Can we invest total 200 k (some chunks of transferring amount to business account over three years to make 200k) as Unsecured director loan and start using this for

Employee salaries
Business expenses

etc etc


In this scenario can we claim that 200k is invested into the business and apply for extension.

Your urgent reply is appreciated. Waiting for your response.

No you cannot just keep money in business bank account. Please see below on page 40 of policy guidance.....

Money deposited in a bank account, even if it is in a United Kingdom business bank account, is not counted as investment in business. The money should be used in the business to encourage growth or expansion, to improve services or products and to ensure the business is profitable.

Hi Educators,

Above only applies to Construction/property development.

It does not apply to other businesses, that's what I understand. What you say?




A person involved in
property development
makes improvements of some kind to immovable
property (real estate), which increases its value. A person involved in
property management
is charged with operating immovable property (real estate) for a fee, on behalf of the owner
.
The restrictions on investment in property development and property management are intended
to ensure that the Entrepreneur route is used to promote United Kingdom competitiveness in
business.
There is no objection, however, to you investing in companies that are mainly involved in
construction.
Money should be fully used in the business and not held in the business bank account in order to
qualify for the award of points
Money deposited in a bank account, even if it is in a United Kingdom business bank account, is
not counted as investment in business. The money should be used in the business to encourage
growth or expansion, to improve services or products and to ensure the business is profitable.
W
hat is a business in the United Kingdom?
A21.
For the purposes of this application, you must have made a capital investment in a business
operating within the United Kingdom economy and subject to United Kingdom taxation. We will
consider a United Kingdom business to be one that:
1.
has its business premises (unless you are self-employed and do not have a premises) or its
registered office or, if it has no registered office, its head office (for a Director of a company)
in the United Kingdom;
2.
has a United Kingdom bank account showing transactions for the business that are current
(this may be either a business bank account, or a personal bank account for sole traders);
and
3.
is subject to United Kingdom taxation.
Any business that benefits from your £200,000 (or £50,000) investment used for the purposes of
claiming points for this application must be this type of business.
Multinational companies that are registered as United Kingdom companies with either a registered
office or head office in the United Kingdom are acceptable.
Registration as self-employed
A22.
A person setting up as self-employed must register as such with HM Revenue & Customs
within six months of starting up. For more information on the legal requirements see the section
Business and Self-employed at
www.gov.uk/browse/business.
Current appointment report from Companies House
A23.
You must obtain the report from Companies House, for a fee, and send it with your
application. This document shows when you became a director of a company. This will be the
same document for a new business as for those becoming directors of an existing business.
For more information on registration with Companies House, please contact Companies House
www.companieshouse.gov.uk/contact/contactUs.shtml
For information on obtaining the current
appointment report please see
http://www.companieshouse.gov.uk/toolsT ... Info.shtml.
Franchises
A24.
Businesses that are set up as franchises can be accepted for the award of points.
You will
either be self-employed or employed, depending on how you decide to structure the franchise
business, and should provide the appropriate evidence

--------------------------

helpingperson wrote:

educators wrote:

la wrote:Can we invest total 200 k (some chunks of transferring amount to business account over three years to make 200k) as Unsecured director loan and start using this for

Employee salaries
Business expenses

etc etc


In this scenario can we claim that 200k is invested into the business and apply for extension.

Your urgent reply is appreciated. Waiting for your response.

No you cannot just keep money in business bank account. Please see below on page 40 of policy guidance.....

Money deposited in a bank account, even if it is in a United Kingdom business bank account, is not counted as investment in business. The money should be used in the business to encourage growth or expansion, to improve services or products and to ensure the business is profitable.

Hi Educators,

Above only applies to Construction/property development.

It does not apply to other businesses, that's what I understand. What you say?
--------------------------

No I think if they want us not to held up money then it is for all types of investments. UKBA wants us that the money should be used in the business to encourage growth or expansion, to improve services or products and to ensure the business is profitable. In other case everyone can say after 3 years that I still have the money as I could not invest in anything which they will not accept.

educators wrote:

la wrote:Can we invest total 200 k (some chunks of transferring amount to business account over three years to make 200k) as Unsecured director loan and start using this for

Employee salaries
Business expenses

etc etc


In this scenario can we claim that 200k is invested into the business and apply for extension.

Your urgent reply is appreciated. Waiting for your response.

No you cannot just keep money in business bank account. Please see below on page 40 of policy guidance.....


Money deposited in a bank account, even if it is in a United Kingdom business bank account, is not counted as investment in business. The money should be used in the business to encourage growth or expansion, to improve services or products and to ensure the business is profitable.

With reference to your last line
Business is profitable.
Correct me if I am wrong as I could not find any statements in the policy guidance that suggested the business has to be profitable.
My understanding is that even if the business makes a loss and you have invested 200k you have completed the requirement.

cappachino wrote:

educators wrote:

la wrote:Can we invest total 200 k (some chunks of transferring amount to business account over three years to make 200k) as Unsecured director loan and start using this for

Employee salaries
Business expenses

etc etc


In this scenario can we claim that 200k is invested into the business and apply for extension.

Your urgent reply is appreciated. Waiting for your response.

No you cannot just keep money in business bank account. Please see below on page 40 of policy guidance.....


Money deposited in a bank account, even if it is in a United Kingdom business bank account, is not counted as investment in business. The money should be used in the business to encourage growth or expansion, to improve services or products and to ensure the business is profitable.

With reference to your last line
Business is profitable.
Correct me if I am wrong as I could not find any statements in the policy guidance that suggested the business has to be profitable.
My understanding is that even if the business makes a loss and you have invested 200k you have completed the requirement.

You are right, there is no requirement in the policy guidance for a business to be profitable. As long as you have invested 200k in accordance with the policy guidance and created 2 job places you meet the requirements.

I believe the OPs question was mainly concerned about "chunks" of cash.

It is VERY clear and already dicsussed so many times that as soon as 200K is transferred, the investment is done and now the company need to spend that money in day to day business activities which include rents, rates, salaries, dividends etc......

But what I understand OR what should be the point of discussion is:

How the chunks of cash will be counted?

e.g. If someone transfer just 50K into company account, use that money for some good profitable business and after spending that 50K (JUST 50K), lets say he is making 5K profit every month. So in one year, he has made 60K in profits and he use THAT 60K profits and deposit into the company account (or kept paying into company account every month 5K), so in this case he has ADDED 50K (at start) plus 60K (profits) into the company account in that particular time, so will it make his investment to 110K or it will be still 50K as the original funds?

Everyone know that THAT 60K will be liable for tax and NI, so we should not mix this with taxable terms.

JUST want clear comments, will this be making investment upto 110K?

Cheers

Saeed, I think it's just technicality. If you just keep your "profits" in the business account, then it wouldn't be an investment. To qualify it as investment you should, after paying due taxes on profits, declare dividend and reinvest the dividends into the business.