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Post Info TOPIC: Loans into Company used personally by Director


Master Book-keeper

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Loans into Company used personally by Director


Interesting one. Loans has been received by a Ltd Co which have then been withdrawn by the Director for personal use. No payments have been made on the loan by the Company so it looks as if the Director has utilised a business type loan and is making the repayments from a personal account. The credits have been put to a loan account and withdrawals has been put to the DLA account by the previous accountant, but ethics aside, am I right in thinking this is just be a credit to creditors and a debit to creditors thus wiping the loans out on the accounts. The loans are from 18 months to 3 years ago.

Ethically, what should be my course of action, should there be one.



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John

Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.



Guru

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Hi John

I suppose the question to be asking would be what do the lenders think that the loans to the Company were for, and were they used for those purposes?



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Doug

These are only my opinions of how I see things and therefore should not be taken as advice



Master Book-keeper

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I know what the loans were intended for, and obviously the client has applied for them on that basis, but haven't been used for that purpose. Is it a SAR reporting issue? I don't think so but am happy to be corrected. Should I let the Company concerned know, or would that be a breach of client confidentiality?



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John

Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.



Guru

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Leger wrote:

I know what the loans were intended for, and obviously the client has applied for them on that basis, but haven't been used for that purpose. Is it a SAR reporting issue? I don't think so but am happy to be corrected. Should I let the Company concerned know, or would that be a breach of client confidentiality?


I don't think it warrants a SAR but that is just my opinion from what you have said, and I don't suppose the lenders are to bothered as long as the repayments are being made, but not sure of the outcome if the repayments were missed, are they the only participator in the Co? Would that make a difference if there was others involved?



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Doug

These are only my opinions of how I see things and therefore should not be taken as advice



Master Book-keeper

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Thanks Doug. Yes, just one Director who is also the Shareholder.



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John

Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.



Master Book-keeper

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Im kind of suprised that the Bank involved has picked up on this and demanded their loan back, but looks like he got away with that one.

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Joanne

Fallows Hall Ltd

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

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