investment as share capital or diarectors loan

[saeed123]

Dear All,
could anybody help me to understand what is the difference between showing investment on the way of share capital and showing investment as directors loan .?

[zimba]

Director loan: When a company director loans money to his/her business or vice versa. When company is in debt, the director can claim the loan money back tax free or even with interests from his/her company. This is how most business owners inject money to their businesses.

Share capital: This is when someone pays money to a business in return for shares in that company. This how most business raise money from third parties or investors. A shareholder does not need to be the director of the company and usually has to be pay taxes when selling the shares.

[saeed123]

many thanks for you valuable reply.
I have one more doubt ,which way would be good to show investment, share capital or directors loan ? from the previous post from the another users I understand if we show the investment as share certificate the account should have director name and the date of share issued.
on my accounts it doesn't have my name and date of share purchased .

[zimba]

many thanks for you valuable reply.
I have one more doubt ,which way would be good to show investment, share capital or directors loan ? from the previous post from the another users I understand if we show the investment as share certificate the account should have director name and the date of share issued.
on my accounts it doesn't have my name and date of share purchased .

Director's loan is usually the easiest and the most logical way for a director.
Share certificates are not acceptable form of evidence. You need either company accounts showing your names, shares allocated and values of each share or else you need to submit the 'Register of members of your company showing all those information.

[saeed123]

many thanks for the reply . if you can help me with one more thing ...how the directors loan should mention in the annual accounts . I am confused my 2016 final accounts showing investment-

Allotted, called up and fully paid ordinary shares of £1 each- 50,000

and in the notes mentioned - the company has an issued share capital of 50,000 ordinary shares of£1each. Mr. X and Mr.Y has invested 50k (from 27 June 2014 to 10 April 2016)by way of directors loan and retained the companies 50,000 issued ordinary shares since then.

please give me your suggestion on this .

[zimba]

This has been discussed several times here on the forums. See: http://www.immigrationboards.com/uk-tie ... 08860.html

[saeed123]

thanks for sharing the previous discussion . if any body has the template of directors loan agreement and the accountant letter confirming the investment please send it to me.
many thanks in advance..