Recording of Share Capital

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.

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?

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.

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

I refrain from creating new post. as I had similar confusion.

Which is the best practice for recording common stock / ordinary share?

until now I use Capital account to record private limited company’s ordinary share capital (sub-account). When I look again at balance sheet and capital account summary. How do I know how much ordinary share capital left? When I Set the report period for the following year. It only shows Opening balance from the Capital Accounts amount owing to shareholders. Can we have both knowing how much sub accounts opening balance while at the same time know owe to how much to which shareholders?

This situation requires me to actually hold additional record just to know balance of sub accounts. If I create a coa ordinary share capital, I won’t able to get the list owed/contributed by each shareholders in Manager concisely.

I don’t think that you can have such a report. The capital account module is very basic.

Once I proposed an upgrade Capital Accounts - company shares

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So to be safe, is not to include share capital under Capital Accounts as sub-account. The presentation of share capital have to be clear. The Capital Account Summary only records the movements. but not detailed balances for each sub-accounts.

One thing I did suggest about having multiple-sub accounts under special account tab. Can cater the situation I’m in. We’re not only have listing of employees, customers, and suppliers. We have share holders, membership for club, Tenant for indirect income, loans and what not. I’, still wondering why the suggestion have yet to discuss though.

You can use different capital accounts for each status and divide/group them under balance sheet with control accounts. Than register movements with journal entries.

Or maybe you can get some output through custom reports.

The later option doesn’t come out of what I expect. Not useful.

The idea of using control account. I had in mind for awhile using special accounts as (listing shareholder/members) then assign to appropriate coa accounts. This made capital accounts less relevant. and made expense claim limited to only employee or dedicate expense claim payer. The only problem is the special account didn’t have sub-accounts so is a bit messy. Since it will lump every different listing under the same page ahahaha.

however Since there is search feature which can filter to only what we want to see (specific listing) is adequte.

Basically you have to think of shares as inventory items with reverse signing. All the utilities, module and reporting should be the same…

@Davide I figured it out how to solve my issue,

  1. create Equity Account (Ordinary Share Capital) with Control account map to Capital Account in COA.

  2. then Create two same name with distinguished label, in my case Mr.Bossku(Director) who are directly managing the company, and the Mr.Bossku(Ordinary Shares) This is to distinguish the record for operation and stakeholder matter.

  3. Map Mr.Bossku(Ordinary Shares) to User-Defined Equity Control Account, My case is Ordinary Share Capital within Capital Account Tab.

  4. It may have the same name with other shareholders, all I have to do append national identity card number or passport number. So you have 2 Equity Account. The system account “Capital Account” and user-defined account (Ordinary Share Capital).

  5. I view Mrbossku(Director) are relevant in Capital Account Summary as he is directly communicate with shareholders. Plus at some scenario (starter up) the Director usually inject their fund either as loan or buffer cash since he/she may want the money back without interest (not as capital) after the company created their accounts in banks.

  6. I rename Capital Account Summary as ‘Stakeholders Summary’ since director commonly are included as stakeholders.

That’s similar to what I do

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duh… You could have told me step by step how you have done it. ahahahaha. I spent 2 days just to get the right setting.

Next time ask me through private message! I was busy with infra annual reporting and I gave a quick answer.

Thank you. I will, next time.