Negative distributable reserves

Negative distributable reserves

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Taken on new client. 2011 accounts were filed incorrectly

Muggin here spending days trying to make heads and tails of the 2011 accounts.  There are prior year adjustments in Sales/Purchases and huge stock write off

Now for 2012 director has taken cash out and therefore have taken them as dividends.  Client doesn't do formal processes of dividends. 

Year end is 31st July - yes we are late with the accounts but too much to sort out.  Reserves is showing is negative 20K but he has taken out 40K in dividends (takes out around 3.5K a month).  The company don't keep management accounts so the director didn't intentionally take out funds from the company knowing there was no distributable reserves.

Never been in such a position so appreciate any advice. 

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By bernard michael
02nd Aug 2013 08:47

Simplistically £20k is posted

Simplistically £20k is posted to DLA with the attendant tax implications

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