Loans between companies

[YNWA]

I have two companies set-up, one which I contract through, and one which is a start-up company which I am looking to experiment in buying and selling stock.

I want to provide a loan to the start-up company from my Ltd Company. can I do this without any restrictions, or do I have to get it a formal written agreement with things such as interest, penalties written in?

I am 100% shareholder of the Ltd company but 50% with a friend of the start up.

Does any one know of such a situation or can help?

[Darren@UptonAccountants]

Loans

Would suggest putting an agreement in place, stating loan is repayable on demand, plus any interest charges, etc you want to put in place.

The loan should be disclosed in the company accounts as a related part transaction, but that's the job of your accountant.

[oraclesmith]

Might be a good idea to write a company minute for it. ie. have a formal board meeting with yourself and your comp.sec and write up the decision to loan the money. Also make sure your articles of association allow you to do this.