Shall I prepare a loan agreement for £200,000

jafersadeq · Post by **jafersadeq** » Thu Jan 14, 2016 10:35 pm

Dear Members,

I have Tier1 Ent. Visa-200k. I transferred £200,000 from my personal account abroad to my company's business account in the UK.
Shall I prepare a loan agreement? Or no need for that ?

Thanks

zimba · Post by **zimba** » Fri Jan 15, 2016 9:50 am

According to the business law, you and your company have to agree on the terms of a loan before you transfer the money. If you want to invest your money in cash into your business and satisfy T1 Extension/ILR requirements by HO, you need to give your company an unsecured loan which is subordinated in favour of 3rd party creditors. This simply means that you cannot personally receive any loan repayments or company assets unless all your creditors are paid first (particularly when a company goes bankrupt or is dissolved)
This is required by immigration rules for your cash investment to be counted towards your extension/ILR.

jafersadeq · Post by **jafersadeq** » Fri Jan 22, 2016 10:00 pm

jafersadeq wrote:Dear Members,

I have Tier1 Ent. Visa-200k. I transferred £200,000 from my personal account abroad to my company's business account in the UK.
Shall I prepare a loan agreement? Or no need for that ?

Thanks

Casa · Post by **Casa** » Fri Jan 22, 2016 10:03 pm

jafersadeq wrote:
jafersadeq wrote:Dear Members,

I have Tier1 Ent. Visa-200k. I transferred £200,000 from my personal account abroad to my company's business account in the UK.
Shall I prepare a loan agreement? Or no need for that ?

Thanks

Why have you reposted this?

jafersadeq · Post by **jafersadeq** » Tue Jan 26, 2016 8:12 pm

Dear Casa,
Many thanks for your opinion, I posted it to whom has an answer and who has an advice. If you have an opinion you can mention it and all will thank you.
Thanks again,
Jafer

n8net · Post by **n8net** » Wed Jan 27, 2016 11:42 am

reading this answer, I have a a question,

should the money (200k) should be spent by the time of extension, or would a transfer to a business account via directors loan subordinated-in favour of the 3rd party will suffice ?

thanks

samaygrg · Post by **samaygrg** » Wed Jan 27, 2016 4:08 pm

jafersadeq wrote:Dear Members,

I have Tier1 Ent. Visa-200k. I transferred £200,000 from my personal account abroad to my company's business account in the UK.
Shall I prepare a loan agreement? Or no need for that ?

Thanks

Of course you need one unless you want to show your investment as share investment. Have a word with your accountant along with the guidance notes.

zimba · Post by **zimba** » Wed Jan 27, 2016 6:50 pm

n8net wrote:reading this answer, I have a a question,

should the money (200k) should be spent by the time of extension, or would a transfer to a business account via directors loan subordinated-in favour of the 3rd party will suffice ?

thanks

Rules are not clear if you need to spend all the money. However the guide says:

Money deposited in a bank account, even if it is in a UK business bank account, is not counted as investment in business.

So you better use the money and spend it the business if you can.

n8net · Post by **n8net** » Mon Feb 01, 2016 11:39 am

thanlks guys.

so,guess everyone got Tier 1 Extension has shown evidence that full 200k is invested by the date of extension ? even if it means because of the nature of the buisness you might strategically have to delay the investing ?

zimba · Post by **zimba** » Mon Feb 01, 2016 12:05 pm

n8net wrote:thanlks guys.

so,guess everyone got Tier 1 Extension has shown evidence that full 200k is invested by the date of extension ? even if it means because of the nature of the buisness you might strategically have to delay the investing ?

This question is being asked almost everyday sometimes more than once a day here. The guide and rules do not say anything about this unfortunately.
They only tell you what you should NOT spend your money on like paying back the money to yourself as salary, invest in residential property and property management, or purchase a business from previous owner.
They also tell you that merely transferring money from your account to a business is NOT considered investment. I think they seem to be satisfied if you show that you have spent all or large portion of it to pay your expenses and you are planning to continue to do so. I really think this needs proper clarification from HO.

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Shall I prepare a loan agreement for £200,000

Shall I prepare a loan agreement for £200,000

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