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Thread: NEW COMPANY

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    NEW COMPANY

    Hi, I have opened a new (Pty) for my existing business which was trading as a sole prop, date of registration 1/03/15.
    I opened a new bank account in company name.
    Do I still take the business entries into account from my old sole prop bank statements, as I was running 2 bank accounts for the first few months march 15-may15.
    thanks

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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by Kris View Post
    Do I still take the business entries into account from my old sole prop bank statements, as I was running 2 bank accounts for the first few months march 15-may15.
    The "2 bank accounts" is not the issue deciding this really. The relevant question to answer is - Were you trading two businesses?
    The trouble with opportunity is it normally comes dressed up as work.

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    Quote Originally Posted by Dave A View Post
    The "2 bank accounts" is not the issue deciding this really. The relevant question to answer is - Were you trading two businesses?
    :
    Hi Dave, I only have 1 business a plumbing service , I converted my sole prop to a PTY which incorporated on 1/03/15, however business transactions were being passed through sole prop bank account and the Pty bank account. the sole prop bank account subsequently closed.

    Also what do I do with my closing balance sheet items from my sole prop, do I use these as opening balances in the PTY, or do I start the PTY on a clean slate?

    Thanks

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    Site Caretaker Dave A's Avatar
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    As you need to process the transactions in the books of the business regardless of the bank account the money moved in, I suggest you should process the business transactions in your personal account as a second bank account.

    Quote Originally Posted by Kris View Post
    :lso what do I do with my closing balance sheet items from my sole prop, do I use these as opening balances in the PTY, or do I start the PTY on a clean slate?
    The simple way of doing this is by using the closing balance sheet account values of your sole prop entity - essentially a straight transfer with no capital gains implications.

    However, it would be remiss of me not to point out that you do not have to "sell at book value". If you're going to get fancy though, you'll need to take a close look at the cash flow implications.
    The trouble with opportunity is it normally comes dressed up as work.

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    Kris (07-Dec-15)

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