Giving assets to my own company

by **musehead** on Fri Jun 10, 2011 6:40 pm

I have set up a limited company to run a music festival through this summer.

I am the sole director, and will be transferring enough money to bankroll the whole festival via a directors loan from my account to the company account (currently being set up).

It looks almost 100% likely at the moment that the festival will make a loss.

Today, I bought a load of drinks with my personal account to sell at the bar, but I want to transfer them to the ownership of the company, so that any profits from the selling of the drinks can go into the company accounts. I'm quite happy to give these drinks to the company, it will make little difference to me since we are projecting a loss and I am the sole director financing the whole thing with my own money.

What process do I need to do to officially give these drinks to the company so that profits from their sale belong to the company?

by **Incredulum** on Mon Jun 13, 2011 1:05 pm

You should have the invoice made out in the company's name and if you just pay it yourself then you will be increasing the value of the director's loan.

This all seems very generous of you BTW.

by **musehead** on Tue Jun 14, 2011 4:00 pm

I don't want to exempt the drinks income, I just want to make sure that the income is considered income for the business rather than myself.

A slightly different matter: Company income is only taxable if it makes an overall profit, right?

The income sources for the festival are ticket sales (mostly), and bar/catering. But the expenditure on things like site hire, marquees, bands, insurance etc is going to be larger overall than the income received from tickets and food/drinks. So am I right in thinking there will be no tax to pay?

Thanks

by **Incredulum** on Tue Jun 14, 2011 5:43 pm

Why have you set out to make a loss?

by **musehead** on Tue Jun 14, 2011 6:06 pm

I didn't set out to make a loss, we've just budgeted the event quite badly and there are lots of expenses we didn't take into account at the start. I've accepted it's going to run at a loss now, just trying to minimise it! I'd rather not make a loss, but I can afford to take the hit.

It's our first time running a music festival so the whole thing has been quite a learning experience.

by **LMT** on Wed Jun 15, 2011 10:17 am

that's showbiz!

by **Incredulum** on Wed Jun 15, 2011 1:43 pm

Fine. No problems then, you have a company that will have made a loss and will have no tax to pay. If it runs another festival shortly and makes a profit then the loss can be offset against the profit.

by **musehead** on Wed Jun 15, 2011 4:14 pm

Thanks Incredulum.

Btw, if we keep the company going until next near and run another festival, can these losses still be offset against that (potential) profit? Is there a time limit on this?

by **Incredulum** on Wed Jun 15, 2011 6:10 pm

If it runs another festival shortly and makes a profit then the loss can be offset against the profit.

No time limit - provided the company does not "cease trading" - and don't worry running an annual event does not constitute cessation of trading for the other 364 days of the year.