How to categorise the investments done from our company

1

Hi,

im investing in 3 companies

Ex: My company is Company A and investing in Comp 1, Comp 2, Comp 3
on 1st jan from comp A, i invested 10000$ in comp 1
on 1st feb from comp A, invested 5000$ in comp 1

On 4th jan from comp A, invested 20000$ in comp 2
on 4th Feb from comp A, invested 5000$ in comp 2

on 6st jan from comp A, i invested 20000$ in comp 3
on 6st feb from comp A, invested 10000$ in comp 3

Should i use capital accounts to track the investments that i made these 3 companies?
i created Comp1,comp2, comp3 as capital account and sending money using bank accounts
or
is there any other way to enter these transactions?

1 Like
2

Investments in the companies are Assets, so you can set up your COA & BS like this

COA BS

In the COA you would create a New Group called Investments and allocate to Group - Assets

2 Likes
3

What if im receiving my profit in these companies in future?

ex:
July 1st , i receive 4000$ from comp 1 to comp A
July 4th , i receive 3000$ from comp 2 to Comp A

How do i show these transactions?

4

Your profit would be called a dividend if it’s from a registered company (PTY LTD, PLC).
Receive Money - P&L Income account - Dividends Received

5

THank you very much

6

Hi @Brucanna,

from company 1 point of view how to receive the investment funds?
while creating transaction i should select capital account> company A and mention amount and click create

is that correct ?

7

Are these investments funds (1) paying for share capital (ownership) or is the investment funds (2) paying for an advance (loan) that could be repaid if required in the future. ?

If ownership, how many shares are being issued ?

1 Like
8

Its ownership,

with 25% share

9

The Capital tab is generally designed for sole proprietorship or partnerships types of organisation rather then companies. With companies you have a BS Equity - Issued Shares account which holds the funds received in return for the shares issued. The Share Register is used to maintain the details of the various shareholders (investors).

However, if you only have a small number of shareholders then the Capital tab could be adapted to track the individual investors. In the COA’s change the Capital Accounts name to Issued Share Capital

Then under the Capital tab create a listing for each individual investor

And under Settings - Capital Sub Accounts you would use the Funds Contributed account and to keep things tidy, delete the Drawings and Share of Profits accounts.

The transaction would be Receive Money