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bigduckontax, Accountant
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Can a company I own 100% of purchase inventory for a new

Resolved Question:

Can a company I own 100% of purchase inventory for a new company where I own 51%?Both company are situated in the UK.
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

A company, its shareholders and directors are all separate legal entities. Providing that the inventory is correctly reflected in the two companys' books of account your proposal is perfectly feasible.

I do hope that you find my reply of assistance.

Customer: replied 1 year ago.
Thank you very much for the response. Would I in that case purchase the inventory through company A, then when transferring to Company B I would debit inventory and credit cash in company B, where in company A I would record it as a sale, credit inventory, debit cash and then record COGS and sales revenue accordingly. Would this be the correct way to go about?
Expert:  bigduckontax replied 1 year ago.

Perfect, you have it to a 'T' to use an old expression. It is the companies who are doing the transaction, not you.

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Expert:  bigduckontax replied 1 year ago.

Thank you for your support.