Write off a Directors Account

awwallace22

Can anyone help! If a small Ltd company owes money to a director (the director is not worried about receiving the money owed) and the company no longer trades or is likely to trade, plus the company has no assets. How can this amount be written off?
:confused1:

PaulPSB

The director should prepare a document formally releasing the company from its obligation to repay the loan. Remember this would need to be a contract under deed as the director will not receive any consideration for his part of the deal.

I would recommend asking the company's solicitor to draw up a suitable letter - shouldn't be very costly as not much involved.

If that is the only liability the company can then be struck off if required

deanshepherd

If the company has ceased trading and is to be struck-off then I wouldn't be incurring solicitors fees.

Let the debt die with the company.

peugeot

Oh no, Dean's right - the company is legally its own form so any debts it incurs is essentially its own. It's really only when there's purposeful fraud that has led to the company's demise that it becomes the shareholders burden. In this case it seems it's hardly worth going to a solicitor who will charge for the privilege.

Steve

deanshepherd

peugeot wrote: »

Oh no, Dean's right..

Oh no?!!

Is that such a bad thing..!

:huh:

:001_smile:

peugeot

It does read a bit like that!:blushing:

The "oh no" was directed to the originator of the thread as in oh no don't incur any more costs than you have to! Certainly not at your advice.

Best wishes
steve

awwallace22

Thanks for clearing that,the debt will die with the company. Thanks guys!