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Trying to close company but outstanding Directors Loan Account. What are the options?

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    #11
    Originally posted by ChimpMaster View Post
    The DL account can be cleared on liquidation through an initial distribution in specie.
    Distribution in specie from what? Unless the OP's company has some other high value assets not mentioned, I think the company is insolvent (or perhaps technically solvent but only by virtue of the director's loan account). You need retained profit to do as you're suggesting.

    OP afraid there is no easy solution from here. You've taken out more from your company than you were entitled to do so. It now can't afford to pay its debts because of this.

    (EDIT - I'm evidently slow at typing!)

    Comment


      #12
      Originally posted by Maslins View Post
      Distribution in specie from what? Unless the OP's company has some other high value assets not mentioned, I think the company is insolvent (or perhaps technically solvent but only by virtue of the director's loan account). You need retained profit to do as you're suggesting.

      OP afraid there is no easy solution from here. You've taken out more from your company than you were entitled to do so. It now can't afford to pay its debts because of this.
      As he noted, there is no way around settling the outstanding CT, none whatsoever.

      Comment


        #13
        I reckon a bounce back loan could be used to pay some, or all, of the CT but won't cover the DLA.
        Whether a large enough bounce back loan would be available depends.

        As for the DLA. That's a touch one. Assuming available credit it would be cheaper to take a loan to pay that off than keep the company running. But if there's no available credit it may not be possible.

        Professional advice is needed for this one I reckon.
        See You Next Tuesday

        Comment


          #14
          Originally posted by Lance View Post
          I reckon a bounce back loan could be used to pay some, or all, of the CT but won't cover the DLA.
          Whether a large enough bounce back loan would be available depends.

          As for the DLA. That's a touch one. Assuming available credit it would be cheaper to take a loan to pay that off than keep the company running. But if there's no available credit it may not be possible.

          Professional advice is needed for this one I reckon.
          The company is technically insolvent otherwise I would have suggested just a bounce back loan already.
          merely at clientco for the entertainment

          Comment


            #15
            Originally posted by eek View Post
            The company is technically insolvent otherwise I would have suggested just a bounce back loan already.



            Originally posted by ukznmcl View Post
            I have a Directors Loan account of £11,411.01 and S455 of £6772.25, and also a Corporation Tax Bill of £26,378.84.

            Now I stopped trading in March, so there has been no income into the company, or nor have I drawn any money from the company. There is around £15,500 sitting in the company account at the moment.


            Taking the numbers at face value.
            Debtors = £11,411.01
            + cash on hand of £15,500 = £26,911.01

            Which is marginally greater than the creditor account of £26,378.84

            Is S455 owed by the company making it insolvent?
            See You Next Tuesday

            Comment


              #16
              Originally posted by Lance View Post
              Taking the numbers at face value.
              Debtors = £11,411.01
              + cash on hand of £15,500 = £26,911.01

              Which is marginally greater than the creditor account of £26,378.84

              Is S455 owed by the company making it insolvent?
              You ignore the fact that the debtor is known by the director to be unable to repay the debt owed...

              Now look at the accounts again with the knowledge that that £11,411.01 needs to be written off as a bad debt.
              merely at clientco for the entertainment

              Comment


                #17
                Originally posted by eek View Post
                You ignore the fact that the debtor is known by the director to be unable to repay the debt owed...

                Now look at the accounts again with the knowledge that that £11,411.01 needs to be written off as a bad debt.
                Well.... if you put it like that....
                Job’s buggered then I reckon.
                Penury and servitude for the foreseeable.

                It’s almost as if people don’t take their responsibilities seriously when starting a company. And these people are allowed to breed....
                See You Next Tuesday

                Comment


                  #18
                  Originally posted by ukznmcl View Post
                  I am trying to close my company down but my account has informed me that I have a Directors Loan account of £11,411.01 and S455 of £6772.25, and also a Corporation Tax Bill of £26,378.84.
                  Just to clarify something, is the director loan money that you owe to the company or money that the company owes to you? I think everyone else has assumed the former, in which case a personal loan is the obvious answer. If the latter, I assume that you (as the debtor) could write it off, and then the company would no longer be liable for that debt.

                  More generally, I think it will help to be clear about what you owe personally (e.g. a Director's Loan) and what the company owes (e.g. Corporation Tax).

                  Comment


                    #19
                    Originally posted by hobnob View Post
                    Just to clarify something, is the director loan money that you owe to the company or money that the company owes to you? I think everyone else has assumed the former, in which case a personal loan is the obvious answer. If the latter, I assume that you (as the debtor) could write it off, and then the company would no longer be liable for that debt.

                    More generally, I think it will help to be clear about what you owe personally (e.g. a Director's Loan) and what the company owes (e.g. Corporation Tax).
                    The clue is in the S455 - the director has borrowed money from the company...
                    merely at clientco for the entertainment

                    Comment


                      #20
                      There's always a way, but the OP is unlikely to return and so we'll never really know the true story and so won't be able to help him any further.

                      Comment

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