Business losses as actual inestment

[ishfaqsangra]

I did ask this question before but I m just changing it somehow to understand as it was not understood .
Can home office only consider business losses as investment?
What if the losses are say 30000 for first 2 years and then profit 10000 for 3rd year.
For first 2 years the losses are compensated from DL investment , say for example ,but what about 3rd year where business generated enough for expenses and made profit?52000 invested as DL already.

Fully invested is something troubling me...thanks in advance

[zimba]

Do not confuse yourself. Invest your 50K in the business and do not take more than your (turnover - expenses) out. Simple

[babaty2k02]

............ do not take more than your (turnover - expenses) out......

.kindly clarify sir

[zimba]

Lets start with bank account with your investment in it say 50K. Now you make 30K in the next three years and your expenses end up being 25K. Now you have 55K in the bank. You can take 5K of that out for yourself as dividend/salary. More than that you are getting back the investment as remuneration.

[ishfaqsangra]

The remuneration point is clear but my question is about funds fully invested?
My business has started generating profit so my DL is in business bank account 24000(Excluding 26000 lossess in first 2 years out of total 50) plus profit for 3rd year 12000 so net business bank account is 38000.
Where do I stand now with regards to "funds should be fully invested"

The feedback which I got through the forum discussion seems once we transfer the amount as DL/Share certificate and then invest them in business running(salaries,marketing,advertising,insurance,staff training in my case,etc) we should be ok the remaining amount could be in business account which is 24000 in my case+3rd year profit.

Input highly appreciated.

[zimba]

You should be fine. You do not need to spend all your money.

[ishfaqsangra]

Thanks Zimba for your time and valuable cost_free advices☺