Any bookkeepers/accountants able to give some advice?

[Helpmepleass]

My DH and I have recently inherited my FIL business after he passed away unexpectedly earlier this year.

We are really wanting to make things work so neither of us are currently taking a wage out of the business in order for it to grow (as there wasn’t much in it to begin with).

My DH and I found out after FIL death that he and my MIL had virtually no money. Since then we have had to pay (from our personal accounts) for the funeral and now we have had to take on their mortgage and some other bills which is a massive strain.

We do plan on taking a wage out of the business at some point but we wanted to wait until there was more money in it.

Anyways, cutting to the actual point. We’re worried we can’t afford Christmas presents for our children this year and was wondering what our options were for taking money out of the business account. Is there anything we can do without it being classed as a wage? It’s a limited business.

It does sound as though there's a lot for you to unravel here. Also I don't understand why your father-in-law didn't have life assurance to pay off the mortgage on his death? I think you need to tread extremely carefully here. What about probate? Has that all been finalised?

Who is the solicitor managing your FILs estate? Get in touch with them. The least of your problems is getting money out of the business account when you don’t know the viability of the business. And where are you getting the income to pay two mortgages?

1. Find the solicitor
2. contact the accountant
3. sell the house and downsize so she doesn’t have a mortgage
4. the business should be paying for itself - if it’s not profitable and that means making you money then just get rid.

Is your unwillingness to take a wage because it will impact on your benefits and you want to be able to use the profits from the business to grow the company while being subsidised by taxpayers? If so, you will need an accountant who knows about benefits not just limited companies.

This is not true. Dividends are only payable to the legal shareholders and can only be paid out of accumulated realised profits. You need to speak to an accountant.

Only shareholders can take dividends. Obviously, if the OP is BOTH a director AND a shareholder, they can draw a dividend if there are sufficient post tax profits/reserves as shown on the company's formal accounts.

Again not true. They can be an employee but often are not.

This is a muddle, and some of the advice above is nonsense. I'd advise speaking to a decent reputable accountant.

Who actually inherited the shares from your FIL? Who is the legal owner of the company now?

Agreed, some of the advice above just demonstrates why asking on internet forms is a recipe for disaster!

I would be surprised if the OP was the shareholder. Because people normally leave inheritance to their spouse and/or their child, not their DIL (obviously there are exceptions, but it would be more unusual).

In order to advise, the accountant will need to understand exactly who owns this company. And that's not necessarily the same as who the directors are.

There's a lot of advice on this thread, some of it correct, some of it completely wrong, so rather than try to unpick it all and confuse you even more, just remember that a Limited company is a separate legal entity in its own right.

Therefore, you need to mentally separate yours and your PILs personal financial affairs from the business. You need to engage a new accountant as soon as possible, and take their advice.

And yes, if you are a director it is possible to take money out of the business bank account. In the business accounts it will show in a Directors Loan Account, and what that means is that the business has loaned you some money. But if the business finances are as poor as you say, such a transaction could render the business insolvent on paper.

Engage an accountant asap is my advice.