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Directors loan as share capital- please help

Only for UK Tier 1 (Entrepreneur) points system. This route is now closed to new applicants.

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bubbly123
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Directors loan as share capital- please help

Post by bubbly123 » Mon May 22, 2017 9:54 am

In 2013- I mentioned my accountant that my investment has to go as directors loan due to my visa requirements and he said ok. I constantly double checked with him if it was a director's loan and he assured it means I have lent to the company and it will repay back, its all the same. As I do not have accounting back ground have only limited knowledge about accounts I depended on him with all the information.

2017-Now I have only one month to submit my visa for extension and I see the accounts, there is no where mentioned about the directors loan and the it is mentioned as capital in accounts and as share capital in company house website. SO now does it mean its a directors loan or not as I am lost with these terms. Can I attach a directors loan agreement with the documents and claim its director loan? does the directors loan reflect as capital in balance sheet and reflect in liabilities?

Please help! I have only one month so please help if any amendments have to be made.

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zimba
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Re: Directors loan as share capital- please help

Post by zimba » Mon May 22, 2017 11:06 am

Advice is given based on my personal research and experience only. Do NOT contact me via private message for immigration advice

bubbly123
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Re: Directors loan as share capital- please help

Post by bubbly123 » Mon May 22, 2017 12:51 pm

Micro-Entity Balance sheet
As at 31 July 2015
Current assets: 557
Net current assets (liabilities): 557
Total assets less current liabilities: 557
Total net assets (liabilities): 557
Capital and reserves
Called up share capital: 28,050
Profit and loss account: ( 27,493 )
Total shareholders funds: 557

This is how it is shown in the accounts.In my annual accounts it says CALLED UP SHARE CAPITAL, but i asked my accountant to mention as DL. My account told me that I can still attach a director loan agreement to the accounts and show as Director loan but I am not sure if this is accepted by HO. Please can you provide any suggestions on what to do in this case as I am too stressed at the last minute.

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marcnath
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Re: Directors loan as share capital- please help

Post by marcnath » Mon May 22, 2017 1:26 pm

The amount invested can be in the form of Share Capital OR Director's loan.
====
If you have invested by way of share capital the business accounts must show the shareholders, the amount and value of the shares (on the date of purchase) in your name as it appears on your application. If the value of your share capital is not shown in the accounts, then a printout of the company’s register of members from Companies House must be provided.
====
However, from your description it is not clear what the situation is.
Your extract shows an amount of about 28K as CALLED UP share capital. It is neither 50K nor 200K, so not sure how it meets the needs of either route.
Also, Called up capital does not indicate that the money has been paid. For evidence of your investment, it has to be PAID UP share capital.
But yes, as long as the transfer of money is shown in your business bank accounts, you accountant is right in that you can still draw up a DL and submit that.

bubbly123
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Posts: 161
Joined: Tue May 20, 2014 12:15 pm

Re: Directors loan as share capital- please help

Post by bubbly123 » Mon May 22, 2017 1:45 pm

marcnath wrote:The amount invested can be in the form of Share Capital OR Director's loan.
====
If you have invested by way of share capital the business accounts must show the shareholders, the amount and value of the shares (on the date of purchase) in your name as it appears on your application. If the value of your share capital is not shown in the accounts, then a printout of the company’s register of members from Companies House must be provided.
====
However, from your description it is not clear what the situation is.
Your extract shows an amount of about 28K as CALLED UP share capital. It is neither 50K nor 200K, so not sure how it meets the needs of either route.
Also, Called up capital does not indicate that the money has been paid. For evidence of your investment, it has to be PAID UP share capital.
But yes, as long as the transfer of money is shown in your business bank accounts, you accountant is right in that you can still draw up a DL and submit that.

Thank you very much for taking time to reply,

In a normal scenario how does the investment show up in accounts ? does it show as capital or DL or liability ?

Thank you once again

bubbly123
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Posts: 161
Joined: Tue May 20, 2014 12:15 pm

Re: Directors loan as share capital- please help

Post by bubbly123 » Mon May 22, 2017 1:48 pm

marcnath wrote:The amount invested can be in the form of Share Capital OR Director's loan.
====
If you have invested by way of share capital the business accounts must show the shareholders, the amount and value of the shares (on the date of purchase) in your name as it appears on your application. If the value of your share capital is not shown in the accounts, then a printout of the company’s register of members from Companies House must be provided.
====
However, from your description it is not clear what the situation is.
Your extract shows an amount of about 28K as CALLED UP share capital. It is neither 50K nor 200K, so not sure how it meets the needs of either route.
Also, Called up capital does not indicate that the money has been paid. For evidence of your investment, it has to be PAID UP share capital.
But yes, as long as the transfer of money is shown in your business bank accounts, you accountant is right in that you can still draw up a DL and submit that.
I invested £25000 each year so this is only one years account hence showing less than 50k. I am in the 50k route.

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