Laura Pickering of Moore Recovery in Stoke on Trent discusses Director Loan Accounts in insolvency scenarios.
Directors Loan Accounts
In the ordinary course of business it is not unusual for there to be financial transactions between a Company and its directors. Directors may loan money to their company to assist with cash flow, directors may draw funds from the company in lieu of wages or salary, or the company may pay for expenses on behalf of a director (or the director on behalf of the company).
In the accounts of the company these transactions are recorded via a directors loan account and at the end of the year the Company accounts may show a balance owing from the director to the company or vice-versa.
Dividends
Where at the end of…
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