Hi, amateur question being fired here.
End of year accounts are being done by my accountant. There is a Director's Loan of £2050 outstanding (oops) which he says I will be paying interest on (refundable later) if it is not paid back today. He suggests paying a dividend to pay back the loan. No problem there. Anyway, he says only pay this dividend if the company has sufficient undistributed profit taking into account all its assets and liabilities for this to be legal. If I pay this dividend then I will be temporarily eating into the Corp Tax, but I am not too worried as there are outstanding invoices.
What should I do here? If I perform this illegal transaction will someone lock me up and throw away the key?
Ta.
End of year accounts are being done by my accountant. There is a Director's Loan of £2050 outstanding (oops) which he says I will be paying interest on (refundable later) if it is not paid back today. He suggests paying a dividend to pay back the loan. No problem there. Anyway, he says only pay this dividend if the company has sufficient undistributed profit taking into account all its assets and liabilities for this to be legal. If I pay this dividend then I will be temporarily eating into the Corp Tax, but I am not too worried as there are outstanding invoices.
What should I do here? If I perform this illegal transaction will someone lock me up and throw away the key?
Ta.
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