[GNC] Can I add to Equity?

[Dr. David Kirkby]

On Fri, 2 Dec 2022 at 20:56, David Cousens <davidcousens49 at gmail.com> wrote:

> David,
>
> When I set up a private company in Australia many years ago, my accountant
> at
> the time charged me for the nominal $2 of share capital so I debited my
> personal
> bank balance  by $2 and credited an asset account recording my
> contributions to
> the company which also included other setup costs (accounting ,
> registration,
> various fees etc etc) paid initially out of my personal accounts before the
> business bank account was established.


I might be wrong, but I don’t think we can claim the registration cost
back, but that’s a very modest fee. I believe it costs £13 at Companies
House, but there are companies that offer a service of forming companies
charging even less. For example, this one at £12.48

https://www.yourcompanyformations.co.uk/

I assume that they get a discounted rate from Companies House.



> The point of recording the nominal share capital is, should you at some
> future
> time turn the company into a partnership (or even public company), that
> nominal
> share capital is then split with the incoming partner and its value can be
> used
> to determine the partners share of the equity i.e future profits. (IPO's
> are of
> course a lot more complicated).


It is recorded at Companies House, but not currently in the GnuCash account
I created.

In the highly unlikely event that I form a partnership, I will just leave
it to the accountant.

>

> The above of course is not accounting advice as jurisdictional business
> legislation and accounting practice may affect the treatment and a local
> accountant should be consulted for professional advice.


As you see, I did ask him, but didn’t get a totally satisfactory answer.


> David Cousens
>

Dave
-- 
Dr. David Kirkby,
Kirkby Microwave Ltd,
drkirkby at kirkbymicrowave.co.uk
https://www.kirkbymicrowave.co.uk/
Telephone 01621-680100./ +44 1621 680100

Registered in England & Wales, company number 08914892.
Registered office:
Stokes Hall Lodge, Burnham Rd, Althorne, Chelmsford, Essex, CM3 6DT, United
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