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Share capital/director loan: urgent help required

Only for UK Tier 1 (Entrepreneur) points system

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Meesha
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Share capital/director loan: urgent help required

Post by Meesha » Tue Nov 15, 2016 12:54 pm

Dear forum memebrs,
I am in a big trouble. I did not know it when i registered my company. I somehow picked the choice of share capital and had share of £50000 with £1 ordinary share. I transfered my money from personal bank to business bank and mentioned director loan in refrence for transactions. So in my annual returen Companies house statemnet i invested money in form of share capital but i believe i made director loan. I am up for extension in 3 weeks. My accountant is making management accounts this week end. What to do with it now?
What should i do now? How to sort this mess out quickly.
Is there any way that i can attach director loan agreement or what?
Please help.

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Zimba
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Re: Share capital/director loan: urgent help required

Post by Zimba » Tue Nov 15, 2016 12:57 pm

The random shares allocated during company incorporation has NOTHING to do with your investment. Simply go for DL route and prepare the agreement and accounts accordingly as that is the easiest option
Advice is given based on my personal research and experience only. Do NOT contact me via private message for immigration advice

live4pride
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Re: Share capital/director loan: urgent help required

Post by live4pride » Tue Nov 15, 2016 11:38 pm

Personally I do not see any problem as you have already invested money in a single transaction where your share value was £50,000 for your investment. However, for your management accounts you should be able to convert your £50,000 shares that you bought for £50,000 and transfer it to the Directors loan. A covering letter would be nice if you go this way but I would go with Share Capital and explain the same in the covering letter. HMRC has accepted your share capital as investment and I would assume they have not questioned the wrong reference in relation to this. So you should be fine. Just make sure you explain this. Trying to hide such things would get you in trouble but being honest might save you some time during application.

At the end of the day they know we are entrepreneurs and not accountants but we trying.. Thats me personally.. other way sounds bit messier for HMRC and UKVI.. Follow Zimba as his advise is worth listening to..
Meesha wrote:Dear forum memebrs,
I am in a big trouble. I did not know it when i registered my company. I somehow picked the choice of share capital and had share of £50000 with £1 ordinary share. I transfered my money from personal bank to business bank and mentioned director loan in refrence for transactions. So in my annual returen Companies house statemnet i invested money in form of share capital but i believe i made director loan. I am up for extension in 3 weeks. My accountant is making management accounts this week end. What to do with it now?
What should i do now? How to sort this mess out quickly.
Is there any way that i can attach director loan agreement or what?
Please help.
where there's a will there's a way

Meesha
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Re: Share capital/director loan: urgent help required

Post by Meesha » Wed Nov 16, 2016 1:41 pm

Hi ZImba88 and live4pride,
I talked with my accountant. He said i have to go for capital investment. He argue that if i chose director loan now, then HO will ask me where is ur share capital as HMRC had in their knowledge that i have invested £50,000 share capital.
I am confused as i did not put all £50000 in one go that i should have done for share capital (is not ti the case?). I put money in 4/5 insalments and mentioned DL in every transaction reference.

@Live4pride
Do you think i should chose share capital which everyone says is tough one to convince HO with and also i did not put money in one go and not in first year straight away. What should i explain in cover letter; the reason why i put DL in transaction refernec while choosing share capital? or the reason of converting share capital into director loan?
My accountant said he does not know how to convert share capital with director loan as its not doable in his dictionary.
Please advise me.
Cheers

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Zimba
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Re: Share capital/director loan: urgent help required

Post by Zimba » Wed Nov 16, 2016 1:57 pm

You can go with Share capital but then your accounts needs to show your name with the number of share allocated and value of each share.
Advice is given based on my personal research and experience only. Do NOT contact me via private message for immigration advice

Meesha
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Re: Share capital/director loan: urgent help required

Post by Meesha » Wed Nov 16, 2016 2:00 pm

Thanks for prompt reply. Is it fine that i did not invest money in one transaction and not in first year.


zimba88 wrote:You can go with Share capital but then your accounts needs to show your name with the number of share allocated and value of each share.

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Zimba
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Re: Share capital/director loan: urgent help required

Post by Zimba » Wed Nov 16, 2016 2:32 pm

yes, it is fine
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Meesha
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Re: Share capital/director loan: urgent help required

Post by Meesha » Wed Nov 16, 2016 3:25 pm

zimba88 wrote:yes, it is fine
For share capital investment i need to show only accounts correctly prepared; showing my name under capital investor indicating, number and value of shares and share holder name(Director name).
I am going to submit unaudited accounts filed with companies house and HMRC until April 2016 and management accounts for six months (Aril16-Nov16).
If these accounts are properly done then no need to show capital share certificate?

"New rules changes demand a Register Of Members to be issued by the Companies House but such a document cannot be obtained from Companies House at all."

As i understand for share capital i need to show accounts only. No other certificate or agreement required? Or do i need an accoutant letter too but i read somewhere on this forum that accountant letter in case of share capital is not acceptable form of investment evidence for HO.

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Re: Share capital/director loan: urgent help required

Post by Zimba » Wed Nov 16, 2016 3:36 pm

Meesha wrote:As i understand for share capital i need to show accounts only. No other certificate or agreement required? Or do i need an accoutant letter too but i read somewhere on this forum that accountant letter in case of share capital is not acceptable form of investment evidence for HO.
Follow the guide. Accounts are enough as long as they have the correct information. Register of members is only required if you do not have shareholders information in the accounts. Share certificates or accountant letters are NOT acceptable forms of evidence
Advice is given based on my personal research and experience only. Do NOT contact me via private message for immigration advice

Meesha
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Re: Share capital/director loan: urgent help required

Post by Meesha » Wed Nov 16, 2016 3:46 pm

Thanks Zimba88,

My accountant using payroll manager software. It does not show start date of employes or end date. He argue that its obvious from first payslip where no balance is brough forward from previous months, and from P60 and His letter indicating start dates. What do u suggest?

cheers
zimba88 wrote:
Meesha wrote:As i understand for share capital i need to show accounts only. No other certificate or agreement required? Or do i need an accoutant letter too but i read somewhere on this forum that accountant letter in case of share capital is not acceptable form of investment evidence for HO.
Follow the guide. Accounts are enough as long as they have the correct information. Register of members is only required if you do not have shareholders information in the accounts. Share certificates or accountant letters are NOT acceptable forms of evidence

Jazz2007
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Re: Share capital/director loan: urgent help required

Post by Jazz2007 » Wed Nov 16, 2016 3:57 pm

Dear Meesha,

FPS need to have Start date and Leave date(if any) as its a requirement.
We saw on this board a applicant Visa was refused on this single point.

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Zimba
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Re: Share capital/director loan: urgent help required

Post by Zimba » Wed Nov 16, 2016 4:07 pm

My accountant using payroll manager software. It does not show start date of employes or end date. He argue that its obvious from first payslip where no balance is brough forward from previous months, and from P60 and His letter indicating start dates. What do u suggest?
Your accountant is not an immigration advisor. Start dates must appear on the FPS as per rules without which your application will be refused. This topic has been discussed many many times on the forum so better search the forum.
Advice is given based on my personal research and experience only. Do NOT contact me via private message for immigration advice

Meesha
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Re: Share capital/director loan: urgent help required

Post by Meesha » Wed Nov 16, 2016 4:19 pm

Hi Zimba88,
You are right i have read that section in detail. My accountant felt grumpy about this requirement. He even claims that he will take responssibility if my visa is refused for not mentioning start date on FPS. He says its moneysoft version and best. He claims his FPS has been used for sucessful apllications. He is not gonna use any other software on my recomendation. I believe i have to made these FPS by myself manually.
zimba88 wrote:
My accountant using payroll manager software. It does not show start date of employes or end date. He argue that its obvious from first payslip where no balance is brough forward from previous months, and from P60 and His letter indicating start dates. What do u suggest?
Your accountant is not an immigration advisor. Start dates must appear on the FPS as per rules without which your application will be refused. This topic has been discussed many many times on the forum so better search the forum.

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Re: Share capital/director loan: urgent help required

Post by Zimba » Wed Nov 16, 2016 4:36 pm

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

live4pride
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Re: Share capital/director loan: urgent help required

Post by live4pride » Wed Nov 16, 2016 5:11 pm

Thank you @zimba88 for the prompt responses for @meesha.

I do agree with your accountant that it could be bit confusing for everyone to do that way. Also please don't forget to submit amended previous accounts(there is a penalty for these as well I suppose) and do it as Zimba88 said in terms of adding the name next to the share allocated in your accounts.

Secondly, need to do some research on FPS. In the absence of FPS other supporting documents should really be sent such as p45, p60 and p11. A contract would also help in determining the start dates. Try to get your FPS sorted first if not then make sure you have evidences to back up missing info which might land you in an AR but then there would be fair chance she of winning! Not the ideal way but hey ho!
where there's a will there's a way

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Re: Share capital/director loan: urgent help required

Post by Zimba » Wed Nov 16, 2016 5:31 pm

live4pride wrote:Secondly, need to do some research on FPS. In the absence of FPS other supporting documents should really be sent such as p45, p60 and p11. A contract would also help in determining the start dates. Try to get your FPS sorted first if not then make sure you have evidences to back up missing info which might land you in an AR but then there would be fair chance she of winning! Not the ideal way but hey ho!
NO, alternative evidence such as P60, P11, contracts, etc is NOT ACCEPTABLE. HO only demands FPS as an acceptable evidence of reporting PAYE and start dates.
This has been clarified very very CLEARLY in the upcoming rule changes: http://www.immigrationboards.com/uk-tie ... 19351.html
Advice is given based on my personal research and experience only. Do NOT contact me via private message for immigration advice

live4pride
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Re: Share capital/director loan: urgent help required

Post by live4pride » Wed Nov 16, 2016 8:09 pm

Thank you Zimba88 for the update.. means less paperwork for application.. :D :D
zimba88 wrote:
live4pride wrote:Secondly, need to do some research on FPS. In the absence of FPS other supporting documents should really be sent such as p45, p60 and p11. A contract would also help in determining the start dates. Try to get your FPS sorted first if not then make sure you have evidences to back up missing info which might land you in an AR but then there would be fair chance she of winning! Not the ideal way but hey ho!
NO, alternative evidence such as P60, P11, contracts, etc is NOT ACCEPTABLE. HO only demands FPS as an acceptable evidence of reporting PAYE and start dates.
This has been clarified very very CLEARLY in the upcoming rule changes: http://www.immigrationboards.com/uk-tie ... 19351.html
where there's a will there's a way

Meesha
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Re: Share capital/director loan: urgent help required

Post by Meesha » Wed Nov 16, 2016 8:45 pm

@live4pride

What do u mean by
"Also please don't forget to submit amended previous accounts (there is a penalty for these as well I suppose)".
What are amended accounts?

Cheers


zimba88 wrote:Follow here regrading FPS: http://www.immigrationboards.com/uk-tie ... 74-20.html

live4pride
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Re: Share capital/director loan: urgent help required

Post by live4pride » Wed Nov 16, 2016 9:22 pm

Amended accounts as in if you decide to amend the previous accounts where your name is not mentioned in the Allocated Shares to you with the nominal value.. There is an option to amend those but the penalty is huge depending upon the time taken since you last filed.. I am not sure if its still feasible to add the name without penalty.. I can ask my accountant though and let you know!

ALso, If your name is not mentioned previously then you can submit Register of Members through Companies House.. More information is on the same thread that Zimba88 shared previously..
Meesha wrote:@live4pride

What do u mean by
"Also please don't forget to submit amended previous accounts (there is a penalty for these as well I suppose)".
What are amended accounts?

Cheers


zimba88 wrote:Follow here regrading FPS: http://www.immigrationboards.com/uk-tie ... 74-20.html
where there's a will there's a way

waqas40581
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Re: Share capital/director loan: urgent help required

Post by waqas40581 » Thu Nov 17, 2016 4:15 pm

Hi zimba88,

I would like ask I have transferred funds from my personnel account to my business account as a director loan I will submit DL agreement at the time of my extension. The only thing making me worry transaction on my business account shows my sort code and account number not my name is that be ok to proof that funds is been transferred from my personal account.

Your opinion requires
Thanks

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Re: Share capital/director loan: urgent help required

Post by Zimba » Thu Nov 17, 2016 4:51 pm

waqas40581 wrote:Hi zimba88,

I would like ask I have transferred funds from my personnel account to my business account as a director loan I will submit DL agreement at the time of my extension. The only thing making me worry transaction on my business account shows my sort code and account number not my name is that be ok to proof that funds is been transferred from my personal account.

Your opinion requires
Thanks
Send personal bank accounts showing the money came from you
Advice is given based on my personal research and experience only. Do NOT contact me via private message for immigration advice

Meesha
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Re: Share capital/director loan: urgent help required

Post by Meesha » Sun Nov 20, 2016 7:13 pm

Dear Zimba88 and forum members:
I transfered 55200 from personal bank to business bank. As i invested in the form of share capital which shows shares of 50,000 with £1 value each. My accountant suggested to show £50000 as share capital and 5200 as director loan. It does not look great idea to me. As much as i have read; the case workers work on "tick the checklist basis". If i provide two kinds of investment, i think it will confuse case worker. What should i do?
I intend to show only capital investment of £50000 and leaving the rest (£5200) unexplained? is it ok?
Any help will be highly appriciated.

Cheers

Meesha
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Re: Share capital/director loan: urgent help required

Post by Meesha » Sun Nov 20, 2016 10:27 pm

Hi Zimba88,
Can you please advise me regarding above mentioned query.

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Re: Share capital/director loan: urgent help required

Post by Zimba » Sun Nov 20, 2016 10:33 pm

You need to show that you invested min £50K in the way they accept (DL or Shares) Any extra investment can be any other form as you wish.
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Anna2016
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Re: Share capital/director loan: urgent help required

Post by Anna2016 » Tue Nov 22, 2016 10:20 pm

zimba88 wrote:You need to show that you invested min £50K in the way they accept (DL or Shares) Any extra investment can be any other form as you wish.
Dear zimba88,
My situation is showed below:
At the first year I transferred £240000 from my personal bank account to my business bank account, then I invested into my business .it was very clear to show In my unaudited account report. the way of investment is director loan , it nearly 3 years before I applied my extended visa I changed the director loan to share capital which I already submitted every documents related to share capital to HO . My new solicitor said I did right, what's your opinion? Many many thanks.

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