Creating expenses from your new company
When you’re creating a company, there are obviously going to be certain expenses you can’t avoid. Thankfully, you can get the company to pay you back some of them!
Which fees can be paid back?
When your company is in formation, it’s in this awkward situation where it technically doesn’t exist yet, but still has expenses to pay. As such, you usually have to pay for some things out of pocket. However, most fees necessary for the creation or preparation of the company can be reimbursed, such as:
- Buying furniture
- House loans
- Expert fees
- Buying hardware and software
- Transportation
- Buying an internet domain
How are they paid back?
It’s actually quite simple! It all comes down to a simple transfer from one account to the other.
The only thing you should be on the lookout for is the time it takes for this money to be paid back depends on how these expenses are accounted for in the financial result:
- If they appear as “liabilities”, you can be paid in the first year.
- If they appear as “assets”, they have to be depreciated over a maximum of five years.
The expenses incurred must be transcribed in the accounting entry, and this in two ways. Either as a charge once the registration has been made, allowing a deduction in the first year, or as an asset balance sheet account, offering the amortization of expenses for a maximum of 5 years.
The reimbursement of expenses, achieved through a simple transfer of money from account to account, can be provided at any time when the company sees its share capital released by the bank. For those who wish to wait, it is also possible! You can wait several months (within one year maximum) or even incorporate it directly into the share capital.
It is also important to take seriously the accounting aspect of your company to benefit from your refund. All these expenses must be clearly mentioned in the company’s accounts, taking care to enter each expense in the correct line. All of these business expenses may be amortized over a maximum period of five years. This depreciation allows for a clearer display, especially in the case of significant expenses, over several fiscal years.
The refund of VAT for the company in formation
And what about the VAT will you tell us? Your first expenses have obviously not been able to miss the VAT settlement, since it was not the company, but the partner’s personal account that established these fees. It is therefore possible to get a refund of VAT only if you have chosen the scheme “VAT-free”. This allows the company to take advantage of the posted price excluding tax (HT).
Take this option into account when setting up your business, without which you will not get a VAT refund.
It should be noted that micro-entrepreneurs will in no case be reimbursed VAT for their expenses.
It’s no secret that the more business forms, the heavier the wallet becomes. And it is not always easy for young entrepreneurs to make often heavy expenses. This possibility of reimbursement of all expenses is thus a boon to form his business with more serenity. Thus, all expenses related to the creation of a company can be reimbursed within one year, or else integrated into the capital of the structure. It is essential to keep all receipts, without which the refund will become impossible to obtain. Whatever happens, it is always interesting to call on a chartered accountant before or while your registration is processed to avoid any incident in the accounting of your company in training.
