Limited company
Michelle
Registered Posts: 4 New contributor 🐸
Hi,
I have just started doing bookkeeping for a small IT consultant who has two Limited companies.
He transfers cash from one Ltd company (A) to the other (B) to cover the payment of his staff.
His P&L has a massive loss due to the high salary costs but no sales.
Would this be classed as a loan in company (B)
Thanks
I have just started doing bookkeeping for a small IT consultant who has two Limited companies.
He transfers cash from one Ltd company (A) to the other (B) to cover the payment of his staff.
His P&L has a massive loss due to the high salary costs but no sales.
Would this be classed as a loan in company (B)
Thanks
0
Comments
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You could classify it as a loan but it's not going to work very well from a tax point of view, unless they are group companies.
I would probably advise putting a management charge through so that the losses are not wasted.0 -
They are seperate entities.
I have advised my client to charge the other company for management time. However I've a inclin that he might not want to invoice the other company as company B is vat registered and company A isn't.0
