I hope you can help me how to start my account with me “brand new” limited company in a quick file.
First thing first:
We are a limited company with two people with significant control over the company (shares 50/50 £1 each).
How should I start “journey” by recording our shares?
Can you show me how it should look like on the screenshot for example (both shares of £1 was paid to company account already)?
Second question:
There is no profits yet but I have ordered a few marketing materials like business cards etc. using my private funds. How should I record it to company’s expenses?
To answer your second question, you need to set up a Director’s Loan account for each of you.
Purchases you make from private funds will be paid from the relevant director’s loan account, which will then mean the company owes you money. When the company starts making profits you can take money back out of the business to repay the directors loan with no tax implications - as long as you leave enough money in the company to cover the corporation tax liabilities and other bills. (Just make sure you don’t end up with the directors loan in credit as it means you owe the company money, and there are some serious tax implications for this if you let it go on too long).
Have you checked the KB article on this? If you do a search on the forum there are quite few posts on initial shares already, maybe one of those will have an answer?
@Digital_Advisers, to record the shares credit the shares paid account with £1 and debit the directors loan account (DLA) of £1. Repeat this for both shares or you could set up a petty cash with the £1 balance posted to there instead of the DLA.
I hope this helps
Hi, you say that the £1 for shares has already been paid into the company account? Is the account linked to QuickFile already and are those payments showing in your bank feed?
If so, you just need to tag those receipts to Share Capital.
For purchases from your personal accounts, as stated you will need to set up a director’s loan account for each director. You can then either create a journal for those entries which would debit the relevant expense codes in the P&L and credit the loan account.
Or, set up a new bank account specifically for each director’s loan then you can enter the transactions as either money in or out rather than having to use journals.
Not to sound harsh, as others are trying to help, but id say this is all abit beyond your scope, and if you are having trouble setting the company up I can only imagine the errors that will proceed moving forward, I would strongly advise you seek an accountant for help. You may say you cant afford one, but I think it will cost you more in the long run if you don’t.
Have to say I agree - there are a lot of rules and regs around preparing limited company accounts and you are definitely better off using an accountant. Once you have the bank feed up and running, you should be able to do most of the “bookkeeping” yourself by tagging bank transactions, but I would leave the rest to an accountant.
You can find accountants here who have experience of Quickfile or feel free to message me.