Directors loan accounts and overdrawn directors loan accounts arent straightforward at the best of times and with the cost-of-living crisis hardly letting up, it seems a refresher might be in order, writes Gareth Wilcox of Opus Business Advisory Group.
What is a directors or participators loan?
Stripping back to basics, since a limited company is a separate legal entity to the directors and/or shareholders who control and own it, any funds paid in the absence of a payment obligation (e.g. salary, dividend or invoice payment) between the parties, represents a movement on a loan account.
The shorthand DLA is often used to describe a Directors Loan Account, i.e. specifically an amount owed to a companys director. But at the top, I reference…
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