Ltd opened at an home address

andreauk2009

Hello there,

I've a silly question about the Home Address of an Ltd. If this is open at my home address, and for whatever reason the company fails and goes bankrupt what are the implication for my property?

In theory the Ltd lives with it's own life and once the money have gone, that's the only thing the Ltd is liable for. However, as I'm not an accountant I rather prefer checking this than making a change in the address later.

Thanks
Andrea

Ebe_Scrooge

As long as the company has not invested any of it's money in your house, then it's safe - that's one of the main things about a Ltd company, any shareholders are only exposed to capital they have invested in the company, personal assets are completely seperate.

The one thing you may need to watch out for is claiming expenses. If you work from home, then you can legally claim a portion of your bills and mortgage interest payments as company expenses. However, this then makes a portion of the house a company asset, and can complicate matters if the company gets into trouble. To be honest, for most small "work-from-home" businesses, it's far easier to not bother claiming these expenses, it's not a huge amount you can claim anyway, and it keeps things simple.

If you're at all worried about this, it really is worthwhile speaking to a proper accountant. Speaking from experience, a good accountant will not charge a massive amount for initial advice and basic tax returns etc., and to my mind it's money well spent to rest easy in the knowledge that your affairs with the tax man are squeaky clean

andreauk2009

Thanks Ebe. That makes sense.

LittleVoice

Ebe_Scrooge wrote: »

As long as the company has not invested any of it's money in your house, then it's safe - that's one of the main things about a Ltd company, any shareholders are only exposed to capital they have invested in the company, personal assets are completely seperate.

The one thing you may need to watch out for is claiming expenses. If you work from home, then you can legally claim a portion of your bills and mortgage interest payments as company expenses. However, this then makes a portion of the house a company asset, and can complicate matters if the company gets into trouble. To be honest, for most small "work-from-home" businesses, it's far easier to not bother claiming these expenses, it's not a huge amount you can claim anyway, and it keeps things simple.

If you're at all worried about this, it really is worthwhile speaking to a proper accountant. Speaking from experience, a good accountant will not charge a massive amount for initial advice and basic tax returns etc., and to my mind it's money well spent to rest easy in the knowledge that your affairs with the tax man are squeaky clean

I believe shareholders are liable to pay the nominal share value. If the shares are fully paid (eg £1 was paid for each £1 share), then nothing more is required. If they were partially paid (eg 50p paid for each £1 share), the remaining amount (ie 50p in this example) can be required to be paid into the company.

andreauk2009

Thanks again. So that I can completely understand this matter of the shares too.

Let's say I do and Ltd with 2 other persons and £1k net capital. The director owns 51%, shareholder 2 has a 39% and I own a 10%, but the director want to fund entirely the company.

Am I liable in some way? Should I put in capital according to my 10% share? Or will I ever be liable for that 10%?

Thanks

LittleVoice

andreauk2009 wrote: »

Thanks again. So that I can completely understand this matter of the shares too.

Let's say I do and Ltd with 2 other persons and £1k net capital. The director owns 51%, shareholder 2 has a 39% and I own a 10%, but the director want to fund entirely the company.

Am I liable in some way? Should I put in capital according to my 10% share? Or will I ever be liable for that 10%?

Thanks

If the company has 25,000 shares and you have 10% of them, you would have 2,500 shares. At, say, £1 a share, the company should have had £2,500 for its capital from those shares.

If it had received only, say, 50p/share, the owner of those particular shares would still be liable for £1,250. If those shares were fully-paid (ie £1 had been paid into the company for each share), then their owner would not owe anything.

Suarez

andreauk2009 wrote: »

Thanks again. So that I can completely understand this matter of the shares too.

Let's say I do and Ltd with 2 other persons and £1k net capital. The director owns 51%, shareholder 2 has a 39% and I own a 10%, but the director want to fund entirely the company.

Am I liable in some way? Should I put in capital according to my 10% share? Or will I ever be liable for that 10%?

Thanks

You could reduce the share capital to say £100 and pay £10 for your share.

The director could then loan the company the other £900 so there will be £1000 cash to use.

LittleVoice

Suarez wrote: »

You could reduce the share capital to say £100 and pay £10 for your share.

The director could then loan the company the other £900 so there will be £1000 cash to use.

If the director lent the company £900 that would be a loan to the company. It doesn't provide the share capital!

Your suggestion doesn't help the OP who is thinking about limiting her liability in case the company fails rather than ensuring that the company has working capital.

To avoid future liability, the OP would have to ensure that the shares she holds are fully paid.