Directors Loan

Rachel
Rachel Registered Posts: 348 Dedicated contributor 🦉
in General accounting discussion
Hello

I have a client with 100% share capital. He is a new start and to start the company has injected cash into the business as a loan. Where on the balance sheet should I show this as a creditor over a year or the bottom capital part.

Thanks in advance for your responses

Rachel

Comments

  • qwerty
    qwerty Registered Posts: 82 Regular contributor ⭐
    Hi Rachel

    The loan should be shown as a creditor. We usually show this in Creditors due within one year as the directors usually want to be able to call upon this money on demand. However, should a director want to disclose the loan as a creditor due after one year, we usually ask them to sign something along the lines of "I confirm that my directors loan account balance as at mm/dd/yy was £x and I can confirm that I will not require repayment of that loan before mm/dd/yy.". [the next year end]

    Regards
    Tom
  • Rachel
    Rachel Registered Posts: 348 Dedicated contributor 🦉
    Thank you very much for your response
  • November11
    November11 Registered Posts: 19 New contributor 🐸
    Notes to the accounts

    Please could someone tell me if a loan owing from a director at year end requires a note in the financial accounts?

Categories

Privacy Policy