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Investing money in my own company.

Discussion in 'Accounting, Tax & Legal' started by samaka, 8th Jul, 2008.

  1. samaka

    samaka Well-Known Member

    30th Sep, 2007
    Ok, so let's say I go and register a propietary company - with a share capital of $1000 and I own the only share.

    Now 6 months later I want to invest another $1000 into the company. How do I account for it. Do I say that I'm creating another share and buying that for $1000 - so the company now has 2 shares with 50% weighting?

    Or do I just say my 1 and only share is now worth $2000?

    Can anyone recommend a good business book which will explaing this.... maybe I should do a TAFE accounting course?

    Might need to hunt around for my high school business studies text books....
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

    9th Jun, 2005
    Sydney, Australia
    Just ask your accountant about the best ways to do this. No need to go learn accounting - just focus on running your business!

    You have some options when it comes to injecting capital ... one suggestion is to structure it as a loan (interest free is easiest), which means that you can later extract that capital back out of the company tax-free as a loan repayment.

    Creating new shares is a pain - since you have to submit paperwork and such.