Illegal dividends
BethRoberts21
Registered Posts: 6
I have a limited company who has taken out dividends even though the company is running at a loss. They were fully aware of this and despite several warnings from myself and other financial team members they went ahead with it anyway.
They are now obviously running at an even bigger loss.
From what I've read online, 'illegal dividends' can be back back and treated as a loan.
Bit of an awkward situation, the shareholders are still failing to acknowledge this and will not pay it back.
What can I do? I've only just finished my level 3 diploma in accounting (still waiting for the synoptic results though!) and do not want this to have any impact on my carer.
They are now obviously running at an even bigger loss.
From what I've read online, 'illegal dividends' can be back back and treated as a loan.
Bit of an awkward situation, the shareholders are still failing to acknowledge this and will not pay it back.
What can I do? I've only just finished my level 3 diploma in accounting (still waiting for the synoptic results though!) and do not want this to have any impact on my carer.
1
Comments
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0
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Hello,
I'm an employee of the company0 -
I would expect the final accounts to be prepared by an external accountant, in which case highlight the issue to them and let them deal with it. Is this the case?0
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It is yes. I will certainly make them aware of this if they are not already. I may just be over worrying as I've studied a lot ethics for my synoptic but will there be any come back on myself? I've finally found my career and am so scared to lose it before it's even begun.0
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If the year-end accounts are completed by an external accountant, then you will have done your due diligence by highlighting to them your worries. TBH, it is likely that the accountant is already putting it as a loan as we do with clients who like to spend the money.
You are right to question it and if it was being concealed, then I would suggest you contact AAT who will be able to give you advice on what to do next.
In the above circumstances, it might be that they don't want to listen to you as you are new in your studies but they will listen to the accountant when the accounts are done. Never be scared of losing a job by doing the right thing, as eventually when I become an employer, I would rather have an employee that has Integrity rather than a "yes" person.
You're doing the right thingAAT Level 2&3 - 2016
AAT Level 4 - 2017
Personal Tax, Business Tax and External Auditing
ACA/CTA -
Certificate Level - Jan 20192
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