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Difference between Director's Loan Account & Directo's Current Account

When we prepare company accounts , i have seen Directo's loan account and Directo's Current account , i would like to know the technical difference between them.

Or is it the same account.
Rehan Arain

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By yeboyye
17th Sep 2006 10:53

Director's loan or current a/c
I assume they both are treated along with the other unsecured creditors in a liquidation. No advantage to have a loan rather than a current account?

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15th Sep 2006 10:27

No technical difference
You might take the view that if the amount is fixed (or is being repaid by regular instalments) and interest is being paid, it is a loan, while the usual case with small companies, where the director uses the company to pay for his personal expenses or he incurs business expenses privately which he does not reclaim from the company, would be called a current account. In practice, they are more usually all referred to as loan accounts.

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