Home › Forums › Money matters › Directors Loan

Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • December 14, 2020 at 3:42 am #1000497
    adamdavid
    Member
    • Total posts: 1
    Up
    0

    scenario:
    Person A and Person B are directors of their company.
    Person A loans 100k to the company.
    The company ceases trading and the debt is never repaid to Person A. Person A retires. Person B does not.
    The company entity is kept alive.

    Can Person B purchase the company’s debt to Person A from Person A at a discount?
    Eg. Person B pays Person A $10k so that Person A recovers 10% of the initial loan, and the company now owes Person B the $100k.

    Is this possible?

    February 16, 2021 at 12:28 am #1224590
    Sheena7
    Participant
    • Total posts: 7
    Up
    0

    This has many complexities that cannot be accurately answered by us as we don’t have the whole picture. It will depend on complex legal documents e.g. the company shareholder agreement. Best see a lawyer for this.

    February 16, 2021 at 4:04 am #1224591
    Paul – FS Concierge
    Keymaster
    • Total posts: 3,226
    Up
    0

    An Accountant can talk to Accounting rules.

    Good luck.

  • Author
    Posts
Viewing 3 posts - 1 through 3 (of 3 total)
  • You must be logged in to reply to this topic.