Best Way to Inject More Money Into Company

[rowena]

Hi Guys,
My question is a little bit about accounting. I need to inject more money into my single shareholder freezone company in UAE to use company expenses. I already deposited the initial capital but I need to deposit more. I think I can amend the company capital with authority and inject more but the authority asking for $1500 to alter the capital. Can I deposit more capital without amending company capital? If not what are the other ways to deposit more money to the company from my personal account? Thanks.

 

[troubled soul]

I am not expert but You can loan amount to your personal account to Freezone company account .

 

[rowena]

I am not expert but You can loan amount to your personal account to Freezone company account .

Yes, I'm thinking the same if there is no other way.

 

[overnbeyond]

The equity route;
If you have 10 million dollars and you want to put it into your business, it is no one's business as long as the 10 million dollars was gotten legitimately; otherwise, it may be seen as an attempt to launder money, as long as it is legitimate funds and it is your funds it doesn't matter the amount, you just have to report it as owners equity.

 

[Sols]

The two most common ways are to issue a loan to the company or to do a capital injection.

The easiest is usually a loan. A simple loan agreement between you and the company will suffice. You can make it a shareholder's loan or director's loan, or just a private loan.

Capital injection can normally be done without altering the share capital of the company. It's just shareholders injecting money into the company, not buying more shares. Should be a piece of cake for a company with a single shareholder.

 

[rowena]

The two most common ways are to issue a loan to the company or to do a capital injection.

The easiest is usually a loan. A simple loan agreement between you and the company will suffice. You can make it a shareholder's loan or director's loan, or just a private loan.

Capital injection can normally be done without altering the share capital of the company. It's just shareholders injecting money into the company, not buying more shares. Should be a piece of cake for a company with a single shareholder.

Thanks but why a loan is the easiest? It looks like capital injection looks easier for single share company. As far as I understand, I just need to transfer money and that's all. No agreement, no loan payback, etc...

 

[Sols]

Thanks but why a loan is the easiest? It looks like capital injection looks easier for single share company. As far as I understand, I just need to transfer money and that's all. No agreement, no loan payback, etc...

Easiest in that a board resolution isn't required, while you generally need one for capital injections. Paying it back is simply a matter of making a payment back to yourself, whereas a capital injection can only ordinarily be retrieved through a dividend/emission.

I suppose for a single-shareholder company in a zero tax jurisdiction, the difference is much smaller.

 

[GPT]

Both are easy and quick. A loan agreement is however likely to be cheaper as you don’t have to involve your service provider to draw up a board resolution.

Given that you represent both yourself and the company you can make the agreement as flexible as you want it to be. Given that you are in a zero tax situation and that interests are according to Muslim law forbidden you can also easily bypass the interest part.

It doesn’t have to be more than a one pager that identifies the parties, describing the purpose, amount and any other clauses you find important.

By googling loan agreement you will find many examples and will quickly identify what you need for your situation.