DESKTOP EDITION CLOUD EDITION SERVER EDITION GUIDES FORUM

Recording of Share Capital


#1

I have been reading financial reports for years, but not creating them! Also, never for a trading company (only voluntary organisations). I am now using this software for a new company I am setting up, and have a small number of shares that have been created for the company.

In the Chart of Accounts, I created an Equity account called Share Capital and then used Receive Money in the Bank section to bring the share capital into the company.

I have also enabled the Capital Accounts and set up my family trust as a member (it owns the shares). What I can’t see is any way to link the ownership of the shares to my family trust member. Is it assumed that the only member will own all the shares? How would I add new shareholdings to any new members that might be created in the future?

Thanks in anticpation.


#2

I’m not certain I understand your question. First of all, have you read all pages of the Guides pertaining to capital accounts at http://www.manager.io/guides/capital-accounts/?

If you have, and your actions are consistent with those instructions, are you asking about accounting for number of shares or what?


#3

How many entities are you setting up? I think you have actually two entities. One company and one trust. Trust has beneficiaries, company has shareholders.

So in the first accounting entity (company), you would have an account called “Share Capital”. In the second accounting entity (trust), you should enable “Capital accounts” module and possibly rename the capital accounts account to “Beneficiary loan accounts” which would be more appropriate.

But first before you do anything, clarify with your accountant you have actually two accounting entities. Not just one.


#4

I think I’ve figured out my mistake. I created the “Share capital” account as an equity account before I enabled the capital accounts option and created the member.

Once I created a new share capital sub account under the capital accounts and edited the receive money transaction to put the share payment there (linked to the trust membership), everything looked like I thought it should.

Apologies for my confusion and thanks for your replies.

Regards,

Pcal