Company buy back of own shares and accounting entries

Posted by LotusC PM | on Wed, 02/05/2012 - 15:20 723 1 comment | report

Hi,

Could anyone help?

Here is the scenario:

Director A currently has 30% of shares and director B 60%. The directors are brothers and after much disagreement have agreed between them that the company will buy director B for £150K as director A doesn't have enough funds. The company takes out a loan to pay the director B. P&L reserves £170K.

How would accounting entries work here?

Thanks in advance.

Comments

There is 1 comment. Login or register to view it.

Are you aware that this will not qualify for CGT?

Nichola Ross Martin | Sat, 05/05/2012 - 09:01