If there is a loan from the shareholder that is unsecured, interest-free, & repayable on demand, can we net off against the loan balance the cost of the share capital?
Or does the share capital have to be paid specifically, and the gross amounts shown?
Replies (3)
Please login or register to join the discussion.
Shareholder agreement
As long as the shareholder agrees to the offset. Unless the loan agreement (if there is one) specifically grants right of offset the company cannot just do it without confirming with the shareholder.
Not without asking him
Yes, you need to have a proper agreement to do so. You can't just do it unilaterally.
Agree with the above, but I believe technically it is the other way round. I believe the right of set off is automatic unless there is an explicit agreement to the contrary.