Inter Company Loana

BIG WAL
BIG WAL Registered Posts: 133 ? ? ?
Is there any restriction on Company A making a loan to Company B, where both have the same sole
director ?

I appreciate this will need a disclosure in the accounts of both companies.

Comments

  • groundy
    groundy Registered Posts: 495
    Not that I am aware of, we have companies that have done this in the past.

    Biggest issue is if Company A goes into Liquidation, then IP will want to reclaim loan from company B!
  • reader
    reader MAAT, AAT Licensed Accountant Posts: 1,037
    BIG WAL wrote: »
    Is there any restriction on Company A making a loan to Company B, where both have the same sole
    director ?

    I appreciate this will need a disclosure in the accounts of both companies.

    Is this being done to justify an interest charge to move profit from one company (profitable one) to another company (loss making one)?

    Depending on the shareholdings and nature of the companies, the companies may be associated for tax.
  • BIG WAL
    BIG WAL Registered Posts: 133 ? ? ?
    Many thanks. It's being done purely for practical reasons - no interest payments involved.
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