First year of flat roofing business. I call it a 50/50 company, but in legality, the voting shares are 100% mine. Due to a past bancruptcy, my critical foreman has no voting shares. Just non voting ones. The intension is to pay out dividends 50/50, once we a year under our belts. Neither of us take salary/bonus.
In leau of start up cash, the foreman contributed his large amount of tools. I bought the company truck, and kept it as a personal vehicle. (cra bill per km). A couple of jobs in, his tool were stolen from a job site. But he has no money to replace them. They aren't worth as much as he thinks, but they were collected over a decade in roofing, specialized tools, obviously no receipts. I (the company) bought some used fundamental tools to keep rolling. The next week, the jobsite was entered again, and those tools were stolen as well. I don't know how to handle this bookkeeping wise.
A) I don't really know the fair market value of the original tools,
B) Taking a guess at their value for inclusion into startup assets(shareholder loan), and then having marked down to zero, seems like it would be a flag that the tools never actually existed in the first place.
The truck turned out to run well for 6 weeks or so, but now we know why it was for sale. Its 2008. Repairing it would be about 10K. Possibly more than the value of the vehicle. While a per km rate personally might be the better route tax wise, if enough km were used and it was healthy, but with immediate repairs needed (or a huge loss on its sale), It seems it would be better suited to be in Company's name. It's usage is 100% business. Unfortunately this is awkward. The repairs, incurred personally, end up being paid entirely by me, I can't even deduct the gst. Can i put into the company name, then sell it back personally at the same price? Blue Book Value? This 50/50 dividend relationship is difficult with immediate hits to the company.
thanks for your thoughts. Get information, ask smart questions to professionals. Knowledgeable in bookeeping basics, but nothing more.
In leau of start up cash, the foreman contributed his large amount of tools. I bought the company truck, and kept it as a personal vehicle. (cra bill per km). A couple of jobs in, his tool were stolen from a job site. But he has no money to replace them. They aren't worth as much as he thinks, but they were collected over a decade in roofing, specialized tools, obviously no receipts. I (the company) bought some used fundamental tools to keep rolling. The next week, the jobsite was entered again, and those tools were stolen as well. I don't know how to handle this bookkeeping wise.
A) I don't really know the fair market value of the original tools,
B) Taking a guess at their value for inclusion into startup assets(shareholder loan), and then having marked down to zero, seems like it would be a flag that the tools never actually existed in the first place.
The truck turned out to run well for 6 weeks or so, but now we know why it was for sale. Its 2008. Repairing it would be about 10K. Possibly more than the value of the vehicle. While a per km rate personally might be the better route tax wise, if enough km were used and it was healthy, but with immediate repairs needed (or a huge loss on its sale), It seems it would be better suited to be in Company's name. It's usage is 100% business. Unfortunately this is awkward. The repairs, incurred personally, end up being paid entirely by me, I can't even deduct the gst. Can i put into the company name, then sell it back personally at the same price? Blue Book Value? This 50/50 dividend relationship is difficult with immediate hits to the company.
thanks for your thoughts. Get information, ask smart questions to professionals. Knowledgeable in bookeeping basics, but nothing more.