Financial support for a company by owner

Financial support for a company by owner 

 

Question:

 

Hello,

I am writing to you about forms of financial assistance through an additional cash contribution from the owner.
We registered a company (EOOD) on 09.09.2016 in the Commercial Register with a capital of BGN 1000. The company started activity from 24.09.2016 and from 12.10.16g made voluntary registration under VATA. The same is engaged in transport activities. The owner purchases a lorry and a trailer worth about 95 000 BGN. with own funds due to lack of such in the newly registered company. In view of the above, the following questions arise:
-It is the funding under Art. 134 of the CA for the above mentioned amount possible after a decision of the General Assembly for granting these funds for a certain period and is it possible to be interest-free?
-Protocol of the General Assembly is sufficient document to shape this funding?
-Does a corporate tax on these funds?
Thank you in advance for your reply.

 

 

Answer:

 

Hello,

The cleanest way for such a non-interest-bearing contribution is a decision of the sole owner of the capital in view of the urgent need for financial resources to make an additional contribution (not fixed capital plus a supplement not included in the Commercial Register) date must be provided and by which date the amount has to be returned. If you have a member in the memorandum on the additional contributions, you may refer to this member in the decision of the sole owner.

You must explicitly record in the record that no surcharges will be charged for the surcharge.

These meetings are accounted for and do not constitute income and are therefore not subject to the annual tax return.

There is a possibility to give a loan to the firm by entering into a temporary financial assistance agreement with it. In this case, however, interest will have to be charged, which should not be different from market rates.

We hope we have been useful.

Greetings.