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lyndsey
Apprentice
Joined: 20 Nov 2004
Posts: 3
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 Posted: 03/04/08 - 08:53 Post subject: |
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| Hi, I’m Polly, I’m just an employee in a small company and I’m still not familiar with all the terms and I’m not sure which procedures are legal, which are not. For example, is it legal that the director of the company gives a loan to a company, and is it legal for the company to lend money to its director? |
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herculie
Apprentice
Joined: 26 Oct 2005
Posts: 4
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| Posted: 04/02/08 - 22:36 Post subject: |
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| Hello Polly, you’re probably concerned for your company’s future, I can give you an answer on your question, but I must admit I’m not 100% sure. In my opinion, it is completely legal that a company receives a loan from the director. It is the same as it takes loan from banks or other financial institutions or even other companies. But the opposite, giving a loan to the director doesn’t seem to be legal. It’s a transaction that could easily remain out of control to the tax system and it leaves free space for evading tax. So, if you notice that money from your company’s account goes to your directors, check the basis of that transfer. |
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