Business losses and switching from Tier 1 GE

[Ali272]

Hi,

I'm switching from Tier 1 GE in few weeks. I invested the full £50k and have spent £11k in the first 9 month. So the company has £39k in cash. Do I need show that I have extra £11k when applying?

Thank you.

[Obie]

Provided the funds derived from one of the sources in Table 4 (b) of Appendix A

[Ali272]

Thanks Obie.

As I understand Tier 1 GEs can use their own money. Is that right? So I don't need to have add another 11k to my already 50k investment, right?

[Obie]

Thanks Obie.

As I understand Tier 1 GEs can use their own money. Is that right? So I don't need to have add another 11k to my already 50k investment, right?

I thought you are Tier 1 General migrant.


Yes Tier 1 Graduate Entrepreneurs can rely on their own funds.

[Ali272]

sorry about that. Just so I understand,I don't need to invest another 11k as I only have 39k at the time of the application?

[Obie]

I did not say that the 39 K will suffice.
I accept as a matter of law, that because of Appendix A (c), the money can be yours. However i don't accept you will be fine if you showed 39K.

You will not get 25 points, under Table 4, if you are unable to demonstrate that the funds are held in a regulated financial institution.

Therefore you have to demonstrate access to this 50 K funds.

[Ali272]

But I can show that I transferred 50k from my personal account to the company's account when I started the company as a share capital.
From reading the guidance, I think they money must have been invested less than 24 months before the date of application. I've spent 11k so that's considered invested.

"If you have already legally established a business that complies with relevant UK legislation
in the UK while here under a different immigration category, you must satisfy the full requirements
for the Tier 1 (Entrepreneur) initial application before you can be considered for approval. This
means that if you made the investment in the business more than 12 months before applying to
enter the category, you must make a further investment of £200,000.
If you were previously a Tier 1 (Graduate Entrepreneur) migrant and you invested your money
more than 24 months before applying to enter the category, you must make a further investment of
£50,000."

Can anybody else comment please? I'm really panicking. If that's true, they are really encouraging Graduate Entrepreneurs not to invest until they switch, considering almost all startups are not profitable in the first few years. Do I need to have another 11k? Thank you so much guys.

[Obie]

If the money is invested in a business and you can demonstrate this, then yes that is allowed under your category, but you will need to demonstrate this, and the balance income can be used, provided it is disposable, the 25 points will be awarded. By saying spent in you initial post, my understanding was not investment. I was thinking it was used for other purpose other than the business you are seeking to invest in.

74.This money can be made up from money already invested in business together with access to
any balance of money needed to total £50,000.

[Ali272]

Thank you.

What documents do I need to provide to prove this? I'm planning to provided unaudited accounts, transactions showing money going out & in and share certificate.

So Just to be clear, originally invested 50k as a share capital (transferring the money from my own account to the company's account), then spent 11k in the first 9 month under the company's name for business purposes, as a result the company will have 39k in cash at the time of the application. so I don't need to demonstrate that I have access to extra 11k? I'm really Sorry for asking again. Just want to make sure I understand.

Thank you.

[zimba]

Thank you.

What documents do I need to provide to prove this? I'm planning to provided unaudited accounts, transactions showing money going out & in and share certificate.

So Just to be clear, originally invested 50k as a share capital (transferring the money from my own account to the company's account), then spent 11k in the first 9 month under the company's name for business purposes, as a result the company will have 39k in cash at the time of the application. so I don't need to demonstrate that I have access to extra 11k? I'm really Sorry for asking again. Just want to make sure I understand.

Thank you.

You simply need to show that you already invested £50K in that business and score investment points right from the start. The evidence required is the same as Tier 1E extension requirements for investment. Share certificates are not acceptable according to the rules.
You specifically need to send unaudited accounts showing you as the shareholder with the number of shares allocated and the amount invested.

[Ali272]

Thank you Zimba. Great, clear answer again.