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Write off a Directors Account

awwallace22awwallace22 Feels At HomeRegistered Posts: 35
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:

Comments

  • PaulPSBPaulPSB Feels At Home Registered Posts: 55
    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
  • deanshepherddeanshepherd Font Of All Knowledge Registered Posts: 1,809
    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.
  • peugeotpeugeot Experienced Mentor Registered Posts: 624
    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
  • deanshepherddeanshepherd Font Of All Knowledge Registered Posts: 1,809
    peugeot wrote: »
    Oh no, Dean's right..

    Oh no?!!

    Is that such a bad thing..!

    :huh:

    :001_smile:
  • peugeotpeugeot Experienced Mentor Registered Posts: 624
    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
  • awwallace22awwallace22 Feels At Home Registered Posts: 35
    Thanks for clearing that,the debt will die with the company. Thanks guys!
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