There still has to be an original.
There still has to be a paper copy of the accounts.
There would be plenty of point when you were required to produce the original document.
Shareholders can agree by email. Therefore, you cannot send one years later and lie about it's origin any more effectively that you tried to make out you could with written documentation.
Yes , held electronically , The tax authorities and to some extent companies house all now expect companies to file electronically , its a legal requirement for larger companies , within a few years they will only accept electronic filing for all business
Not any longer the copy can be held electronically , its only convienience that a hard copy is printed off
See above
As there would be only one shareholder then it makes your argument mute
te:
No, when you file your accounts electronically at Companies House you have to confirm that a copy has been signed.
I demolished your incorrect statement.
What is "mute" about a company lending money when it is not allowed to do so?
You seem to be blundering from one incorrect statement to another.
Because companies are allowed to lend money , the law was changed in the revised companies act 2006 to allow directors to recieve loans from companies they work for or own via shares
There is no requirement to keep a written record of resolutions only the need to have resolutions if you read the companies act 2006 it refers to this in several sections
As we are talking about a sole director it makes your argument a farce
Really? Where? Would you like to argue that the passing of a resultion does not form part of the "proceedings" of a meeting? Read section 248. Minutes of all proceedings require to be recorded and kept for 10 years.
Let's ask ourselves how true this really is. The loan is either lawful or unlawful, depending on whether it was or was not duly authorised by a resolution. Breach as such is no longer a criminal offence, although failing to keep records of the authorisation is.
But let's just look at the civil consequences. Clearly these are greater in the case of a multiple director company, since s213(4)(d) makes co-directors jointly liable, even those who did not benefit from the loan.
In the case of a single member company that particular aspect is not an issue, so what's the difference in effect on a sole director between the two scenarios of whether the loan was or was not duly authorised?
Obviously, even if it was authorised, the director still owes the money to the company (or in the event of the company becoming insolvent, to its creditors), so it boils down to whether there is an *increased* liability if the loan was unlawful. And there is.
For a start, the simplest way out is for the loan to be "avoided", as subsection 213(2) calls it, by the director repaying it immediately. This can be impossible if the director has spent it and can't borrow elsewhere to stump up.
If the loan cannot be voided, the director must [s213(3)(a)] "account to the company for" [I suspect this means repay, but at least it would have something to do with BIK tax] any gain he personally derived from use of the money.
In addition [s213(3)(b)] the director becomes liable in damages for any loss the company incurs as a result of the loan. This loss can easily be substantial if it involves covering the expenses of insolvency or liquidation practitioners, or alternatively the high cost of short term borrowing from loan sharks to meet cash flow needs if insolvency and liquidation are to be averted.
We were not talking about multi director companies , we were talking about sole director companies were the director owned all the issued shares
As the sole director any loan would be duly authorised my him/herself
No one has said any different
Thats obvous
As i have already pointed this out on several occasions
Only if the size of the loan was so large as it would likely place the company into difficulty in normal trading .
No one has said that the director is not responsible for the loan he has taken from the company , even if the company later becomes insolvent
The arguments were was the loan ilegal , the answer was no , companies act 2006 dealt with this
The other point centred around holding a meeting to pass a resolution which with one shareholder who is also the director which is pointless .
I have always said the loan should be recorded in the company accounts and the directors report which is filed with the tax office and companies house
I note you have not yet substantiated your claim that the 2006 Act says in several places that you don't need to keep a record of resolutions.
I know, I mentioned it only for comparison purposes.
Indeed, but it can only be duly authorised by passing a resolution at a meeting. Now if the only person who will be at the meeting is the sole director/shareholder himself, clearly there are *some* formalities which can be dispensed with, like giving prior notice of when and where the meeting is to be held and what the agenda will be. But what can *not* be dispensed with is that the proceedings must be minuted.
Perhaps not explicitly, but the essence of your view appears to be that the acts or omissions of a sole director, and specifically the omission of failing to record the passing of a resolution authorising the loan, make no difference. But they do, because if the loan is not duly authorised (and if there is no record of it, then there is a good chance that it wasn't), then the loan *is* unlawful and consequences *are* different, i.e. the director will then owe *more than* just the loaned money back. It boils down, in effect, to an exception to the general rule of limited liability.
You have? Well, I must have missed it. The point is that since s213 mentions this as a specific consequence of the loan *not* being authorised, presumably there is no requirement to account for such gain to the company when the loan *was* duly authorised.
Well, it happens, doesn't it? That's the whole bloody point of why loans were totally banned under the old Act in the first place, and are still banned under the new Act except when duly authorised.
Quite, and it's only where the company runs into difficulty that anyone is going to bother about anything. So that is the potential situation on which we must focus when exploring what the consequences are of failing to pass and record a proper authorising resolution. It may seem like a mere irrelevant technicality to you, but the Receiver, if it comes to that, will seek to maximise the amount of dosh (over and above the amount you actually borrowed) which he can screw back out of you, and if there is a technicality to be exploited, i.e. if he can see a chance that you will not be able to prove that you passed the resolution, then he will exploit it.
No, the answer is that the loan could still be illegal, unless the authorising resolution was passed and recorded.
As above, it may seem pointless to you, but the law requires it. The meeting may not need to be quite as formal as if there were more members, so you could have it while in the bath, and you may not need to read the proposal out loud and have a show of your hand, you can conduct the meeting entirely in your head in total silence. But the important thing is that the decision you make must be minuted.
As has been said before, without a resolution this is not enough. If the loan is recorded in the accounts, this is merely evidence that the loan was made. It is not evidence that it was lawfully made.
You don't have to hold a meeting. You do have to document resolutions. You don't want to do so; more fool you.
And I keep saying that no directors report needs to be filed at Companies House and documents sent to HMRC are not on public record.
So, anyone know of a good wheeze to reduce the tax bill without ending up behind bars?
Cheers, Dave
register yor company in southern ireland
Ok, what about sailing a tad closer to the breeze then? Must be something.
That won't work if you are resident here.
Yes it does as long as you have eire residents as directors too its just a little more complicated to set up
Its often worth moving over there keeping a flat in the uk and traveling every week , tax savings are vast
The controlling shareholders also need to be non-resident.
Yes, if you move to Ireland, you pay Irish taxes. That might be possible for some businesses where you operate over the phone/internet, but it won't work if you have to be in Britain to serve your British customer base.
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