50K investment query

[sonirulz]

Dear Value Team Mmbers and Gurus,

I have invested 50k from by personal bank account to my business bank account in 4 instalments in 2 years period. I am applying for my entrepreneur visa extension in Nov so preparing for my documents. My Accountant has shown my investment as more than 1 year creditor and have left notes in the last section saying it is investment done in my name.

I do have another business partner who has equal partnership but is not the part of the entrepreneurial team. We have £1 share each.

My query is how to convert the long term creditor value of £50k(Which is my invested money) to investment? I have seen that many applications are being rejected if the investments are not properly represented. I am not sure if I have to mention that value of my share is £50k (share investment) or leaving notes by my accountant and mentioning £1 share value of each share holder initially in the accounts will be sufficient. I am bit concern about the process and would appreciate experts thoughts.

I have made the investment last year is it ok to draft a Directors Loan agreement dated now? or should I back date it?

Regards,
Soni

[zimba]

The easiest way is to claim the money invested as director's loan. For that you need to show:

- Business bank statements showing money came from you to the business (for each instalment)
- A DL agreement as required in the guide (unsecured and subordinated in favour of 3rd party creditors, etc)
- You company accounts must show the full amount of money as director's loan under your name (seems you have that)

[sonirulz]

The directors loan in my name is mention in notes of the accounts. Will that be ok?

Do I need to say anywhere that the other director has no connection to the directors loan?

Can I also mention in directors loan agreement that I would not claim the money at all?

Can I draft directors loan dated now even though the investments were done earlier?

[zimba]

The directors loan in my name is mention in notes of the accounts. Will that be ok? Yes

Do I need to say anywhere that the other director has no connection to the directors loan? No

Can I also mention in directors loan agreement that I would not claim the money at all? Read the guide on what needs to be in the agreement

Can I draft directors loan dated now even though the investments were done earlier? Just backdate the document to a date before your investment

[sonirulz]

If I backdate Directors Loan Agreement (which will be backdates to 2 years) will the document be valid? As they say that documents should be within 3 months before application date?

Do I and my accountant need to sign p60, fps and various other job creation documents?

Do I require signature of Accountant as well on the Directors Loan Agreement sheet?

Appreciate your expert advice.

Regards,
Soni

[zimba]

If I backdate Directors Loan Agreement (which will be backdates to 2 years) will the document be valid? As they say that documents should be within 3 months before application date? That requirement does NOT apply to the DL agreement

Do I and my accountant need to sign p60, fps and various other job creation documents? No, your accountant signature not required

Do I require signature of Accountant as well on the Directors Loan Agreement sheet? No.

[sonirulz]

Thanks Zimba88 for all your advice.

Please can you advice what is the usual loan agreement period I should mention in the loan agreement?

Please can I get a link to a acceptable dl agreement so that I can draft it.

Thanks ones again.

Soni

[zimba]

Thanks Zimba88 for all your advice.

Please can you advice what is the usual loan agreement period I should mention in the loan agreement?

Please can I get a link to a acceptable dl agreement so that I can draft it.

Thanks ones again.

Soni

There is no specific period. Put 3 years. Search the forum for examples of DL samples

[FOCUS]

@Soni

LOAN AGREEMENT SAMPLE
THIS AGREEMENT is made on the xx day of May, 2015
BETWEEN:
xxxxxx , residing at Address of Director ("the Lender")
AND
The Director, Company name("the Borrower")
WHEREBY IT IS AGREED as follows:
1 – Term
This agreement commences from the start of xx.xx. 2015 ARD (accounting reference date) of company. xxxx and The Director of xxxxx Limited may terminate the loan agreement at any time with mutual consent of both the parties for payment due to third party/parties creditors prior to date of such terminations.

2 – Interest Rate

There is consensus between both the parties that xxxxx Loan is “1.5%”.

3 – Tenure
The tenure of Loan Agreement will be for the five years and renewable with the consensus of both the parties depending upon the profitability index of an enterprise.

4 – Loan Security
xxxxx loan is unsecured and subordinated in favour of third party short term and /or long term creditors.

5 – Loan Amount
The outstanding balance of loan is amounting to £50,000.00 as on xx May 2015.

6 – Confidentiality and Ownership
The loan agreement recognizes and acknowledges the confidentiality of all financial and other information of the company obtained by xxxx during the performance of her duties and obligations.

Executed this xx May 2015

Authorized Signature
(Company Officials)

______________________ _____________________
(XXXXX) (Witness)
(Borrower)
Director, M/s Company name

Authorized Signature
(Individual)

______________________ ______________________
(Ms. xxxx) (Witness)
(Lender)

[sonirulz]

@focuc thanks for your help. Please can you advice if the loan agreement has to be signed by any lawyer?

[FOCUS]

Iam also in due to apply for extension. As far as I researched this fourm, all the gurus n Zimba told that there is no need for a sign with the Lawyer. As DL is the contract between the director and his company. Correct me if iam wrong gurus.

[zimba]

Iam also in due to apply for extension. As far as I researched this fourm, all the gurus n Zimba told that there is no need for a sign with the Lawyer. As DL is the contract between the director and his company. Correct me if iam wrong gurus.

Correct. A loan agreement needs the signature of the lenders and borrowers only. No witnesses required but you can choose to have one.

[paru.org]

Iam also in due to apply for extension. As far as I researched this fourm, all the gurus n Zimba told that there is no need for a sign with the Lawyer. As DL is the contract between the director and his company. Correct me if iam wrong gurus.

Correct. A loan agreement needs the signature of the lenders and borrowers only. No witnesses required but you can choose to have one.

hi zimba
i have invested £50,349 via dl which shows in my aanual account ye may 2015 but in same yr i took abt 8k as director salary, my firm is in loss, now for nxt acccounting period ye(yearend) may 2016, my accountant put £50349+£8000=£58349 as DL figure to make up that 8k , as he says that ukvi will deduct that director salary i took from 50k so he has added that onto nxt accounting period, my question is :
!) is it right way to do that?
2) how do i show that in DL agreement, do i have to make 2 dl agreement, i have dated dl as 14th july 2014,as all tf into buz account ( £50,349)were done after 14th july 2014 and before may 2015.
wat figure and date i put on dl agreement as for ac yr end may 2015 it was £50349 and for nxt yr may 2016, dl gone up to £58349.

thx
thx

[zimba]

!) is it right way to do that?

How can you withdraw 8K from your company and then claim in the accounts that the company owes you extra 8K ???
Any money you withdraw from your company will be subtracted from that 50K value not added (it is technically loan repayment)

2) how do i show that in DL agreement, do i have to make 2 dl agreement, i have dated dl as 14th july 2014,as all tf into buz account ( £50,349)were done after 14th july 2014 and before may 2015.
wat figure and date i put on dl agreement as for ac yr end may 2015 it was £50349 and for nxt yr may 2016, dl gone up to £58349.

I am not sure what you wrote up there is in English to be honest But I guess you want to know what date you put on your DL agreement. I say before the first investment.

[FOCUS]

Hi Zimba ,

As per what you said above, The total investment is 50k and spend or expenses is less than 50k ( say around 40-45k). But the company is functional and generates revenew then we can take directors salary and show it is taken from the revenew , isn't it ? and this can be shown in accounts ,right ? or would it be a problem as HO would substarct director's salary from 50k even though there is a revenew ? please let me know

[zimba]

Hi Zimba ,

As per what you said above, The total investment is 50k and spend or expenses is less than 50k ( say around 40-45k). But the company is functional and generates revenew then we can take directors salary and show it is taken from the revenew , isn't it ? and this can be shown in accounts ,right ? or would it be a problem as HO would substarct director's salary from 50k even though there is a revenew ? please let me know

Depends on how much salary you paid yourself. As a rules of thumb, your salary cannot come from the money you have in the bank unless you spent all your investment already as expenses.

[FOCUS]

Thank you Zimba,

What if I take 6-7k salary and 30k Dividends from the revenue and spend 45k out of 50 Investment which makes it left with 5k in bank account while going for extension. Then how can this be treated ?

[zimba]

Thank you Zimba,

What if I take 6-7k salary and 30k Dividends from the revenue and spend 45k out of 50 Investment which makes it left with 5k in bank account while going for extension. Then how can this be treated ?

You should be fine

[FOCUS]

Thank you Zimba

[sonirulz]

Dear Guru's,

I have always been helped and advised with expert advice. I would initially like to thank Zimba and all other gurus for expert advice.

have the following query regarding accounts:

1. Can I submit printout from accounting software that produces accounts for my visa? Or it has to be on the letter head of the accounting firm?

2. Do I and my accountant sign all accounts, CT600, CT610, CT620 visa submission?

3. Do I also submit abbreviated accounts and web filling history along with accounts?

4. When my accountant submitted accounts to companies house he did include director's salary in expenses. How do I separate that to show that it is not being consider and not being paid from Directors Loan?

Appreciate your help and advice

Thanks
Soni

[zimba]

1. Can I submit printout from accounting software that produces accounts for my visa? Or it has to be on the letter head of the accounting firm?

No company accounts has the accounting firm letter head !

2. Do I and my accountant sign all accounts, CT600, CT610, CT620 visa submission?

You accountant has nothing to do with your visa application. There is also no need to sign these documents

3. Do I also submit abbreviated accounts and web filling history along with accounts?

No

4. When my accountant submitted accounts to companies house he did include director's salary in expenses. How do I separate that to show that it is not being consider and not being paid from Directors Loan?

You can't. If you made no money, your salary will be subtracted from your investments. If you mad any money, your salary can come from that.

[sonirulz]

Dear Gurus,

Please can someone advice me on company's filling page? Is it the filling history found on companies house? Where do I get the print out?

Appreciate your response.

Thanks
Soni

[zimba]

Filling page is that last page of current appointments report, downloads ad for free from companies house website

[babaty2k02]

Filling page is that last page of current appointments report, downloads ad for free from companies house website

Thanks so much for clearing this my confusion.

[sonirulz]

Do I consider expense after each investment or do I consider expenses of entire 3 years?

When I calculate directors salary, expenses and turnover. Is it thatthe turnover of 3 years has to be more than directors salary of 3 years? Or is it yearly?

Do my accountant sign my annual accounts? or me signing it is enought?

Appreciate your help and advice.

Thanks
Soni