Where to record business equity in your personal books

[Adrien Monteleone]

Thanks David,

I guess I’ll just make make up an account name.

Regards,
Adrien

> On Jun 18, 2017, at 6:43 AM, DaveC49 <davidcousens at bigpond.com> wrote:
> 
> Hi Adrein,
> 
> I agree you would record the investment in a company as an asset. I don't
> know about elsewhere in the world but when you start a sole owner private
> company in Australia, you essentially become the only shareholder and the
> value of the share is the paid up capital of the company and has some
> implications for the legal liability of the owners for the debts of the
> company provided you have traded in accordance with the provisions of the
> company law. You can call the asset account whatever you like but something
> like 
> 
> 
> Asset:EquityinCompanyA         Dr $1000
> Bank:Cash                                                 Cr $1000
> 
> should be a reasonable way of recording it. 
> 
> You would then treat drawings/dividends from the company as Income in your
> personal books. The taxation aspects will be a lot more complex depending on
> whether the income is taxed in the hands of the company or it's owners and
> or both, which will be highly dependent on local taxation law. 
> 
> David Cousens
> 
> 
> 
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