Ltd company start up expenses

smartypants1902

Hi guys. I have put a significant amount of money in to starting up a Ltd company. However, over the course of the last year my health has been pretty poor as well as illness within my immediate family. 

I am thinking of winding down the business at it hasnt got going yet.
I have been paying out circa £600pm and bought numerous bits of equipment.
can I reclaim any of this despite the fact I haven’t made any money or is this just wishful thinking?

Sandtree

If you have been paying it from your personal monies then its effectively a directors loan to the company. When you wind up the company and liquidate its assets then there is a pecking order in which debts have to be repaid, a directors loan is below that of HMRC for example.

So if the assets are enough to cover all the liabilities then your directors loan will be repaid and any surplus cash will be distributed to the shareholders (presumably also you). If there isn't enough to cover all the liabilities then the shortfall ultimately is written off and is your, your bank and any other unsecured debtor's losses. 

smartypants1902

Thanks Sandree. There are no unsecured debts or anything like that.

all expenditure has been financed from personal money.

so to confirm this is something I can claim back?

Sandtree

From your company if it has the funds to reimburse you and you are talking about things that were exclusively for its use. As such if you then sell any of those assets the money has to go to the company and be declared as revenue and appropriate corporation taxes paid followed by the tax on the dividends when removed from the company. 

Jeremy535897

It sounds as if you have lent your company money, and it has made a loss. It seems most unlikely that there will be any corporation tax to pay, and as there will be no profits, there can be no dividends. Just sell the assets, repay any other creditors, and pay yourself as much as possible off the loan from you to the company. Presumably there was only a couple of pounds of share capital?

smartypants1902

Yes just myself.

the situation is I haven’t actually traded due to health. So income has been £0.

I have been paying out £600pm from personal funds for access to a network.

paid for laptop and networking memberships etc.

Is there anyway to reclaim the money?

Sandtree

smartypants1902 said:

Yes just myself.

the situation is I haven’t actually traded due to health. So income has been £0.

I have been paying out £600pm from personal funds for access to a network.

paid for laptop and networking memberships etc.

Is there anyway to reclaim the money?

As your company has no funds then no, it'd be insolvent with nothing to liquidate and the insolvency practitioner would just add another bill to be paid from selling of the laptop etc.

Have you been working in a PAYE job at the same time or having no employment based income?

smartypants1902

Nightmare. No nothing. I will probably just persevere with the business

Grumpy_chap

smartypants1902 said:

Nightmare. No nothing. I will probably just persevere with the business

Unless there has been a change of circumstances, to just carry on doing the same will just mean writing off a further £600 every month.

smartypants1902

I know, hopefully pressure at home eases soon