Can someone tell me, in the event of company liquidation, what happens to oustanding directors loans - e.g. presumably the appointed liquidator seeks for immediate repayment ?
- posted
19 years ago
Liquidation - Directors Loan
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- posted
19 years ago
"David Sullivan" wrote
Do you mean loans *to* the director, or *from* the director?
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- posted
19 years ago
Presumably you mean a debtor of the company - and yes, the liquidator will seek immediate repayment.
That said, if you were the director and couldn't pay, the liquidator would rather do a deal and get something rather than bankrupt you and get nothing.
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- posted
19 years ago
Or not bankrupt them and get nothing as the case may be.
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Az.
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19 years ago
Yes - sorry, I should have made it clearer. It is a loan TO the director.
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19 years ago
In message , David Sullivan writes
Well apart from the fact that there is a chance that the loan contravenes the companies act, it would be repayable to the liquidator. How quickly that would need to be done would depend on the terms of the loan.
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- posted
19 years ago
And I hope that loan was interest bearing at commerical rates or declared on a P11D as a low cost loan, otherwise the Inland Revenue might start blurting out assessment under section 419 of the Income and Corporation Taxes Act
1988 (as amended) which is a pain in the arse having spent 2 years arguing over there interpritation of a technicality, we ended up being told that the inspector wouldn't back down fullstop and we were welcome to take it to special commissioners but basically we know your not going to do that cos you can't afford the barristers.