Hi,
I own a Pvt Ltd (Startup) in India. My company has a paidup capital of INR 1,00,000 by 2 shareholders who paid via cheque. How to record this such that bank shows the amount and what would be entered in Equity group. please help i’m confused.
How you set things up depends on your legal structure, including whether your “shareholders” have actually purchased shares of stock or are really capital partners. An accountant can better answer your question.
As your legal structure is a “LTD” then the paid up capital is represented by issued shares. If that is one issued share per INR 1.00 or INR 100.00 or 1,000.00 depends on the company formation documentation.
But your setup would be - under Customisation activate the Capital Accounts tab and create each Shareholder under that tab:
The Receive Money would then have these allocations:
NOTE: you don’t need to use the “sub-account” field, in fact you could go to Settings - Capital Subaccounts and delete them as they aren’t required for “LTD’s”
Also you could go to Settings - Chart of Accounts and rename ( clicking Edit) the Capital Accounts to Issued Shares:
1 Like
Unit price is INR 10.
Shareholder A has 10 × 5400 = 54000
Shareholder B has 10 × 4600 = 46000
What should be the amount in Capital Accounts when I create them?
Thanks for your timely help.
I did the same. In summary, it shows Cash at bank 1,00,000 that is OK.
Total equity shown is also 1,00,000.
But Issued Share shows Nil
Starting Balance Equity is 1,00,000.
Is it alright or the there is some problem?
Please verify last line.
There is a problem
- Have you created under Setting - Start Date a date, if so what date is it ?
- If you created a Receive Money for the Bank & Cash on Hand, what dates are they ?
All dates are November 1, 2017. But this is my first FY
I think the error was due to the fact that I started with paid balances in capital accounts. It’s ok now. See below. One more thing: Is there a way to clear Starting Date? It reappears even if I delete it in Settings > Starting Date.
Yes, highlight the date with the mouse and then hit the “delete” button on the keyboard.
It works. Thanks a lot!
Possibly last thing I’m going to ask today.
What “Amount to Pay” here refers to? Is it the amount business has to pay to shareholders or is it Shareholders need to pay to business?
This heading is more applicable to sole traders / partnerships then issued shares based Ltd’s.
In effect, its how much the person has invested in the business.
Alright. Thank you so much. You helped me a lot!