Client (Ltd) with Sole Director has been in dispute with a customer and has lost the case and therefore owes the customer an awful lot of money (as well as legal fees) which they cannot afford to pay back and will have to liquidate. They have appealed against the decision which will be heard soon but likelihood of overturning the decision is slim. The company isn't quite insolvent yet and has become profitable recently
My client receives the usual £680 per month from the company. There is no scope to pay dividends even though it is generating profits now. He does want to take some money out of the company but obviously does not want to cause problems with the liquidators and creditors. Can he increase his Salary to market rates ? There is a small credit balance in his Directors Loan Account - can he take this out as well ?