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Company paying off another company's debts

Company paying off another company's debts

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 Hi all,

Can a company pay off another company's liabilities if they are experiencing cashflow problems?

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By petersaxton
31st Mar 2011 22:54

Related parties

Yes but there may be various tax problems if there is some relationship between the owners and directors of the companies.

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By Richard Willis
01st Apr 2011 08:44


If either of them went bust it would cause serious problems for the other.  Not sure but I guess if it was the loanee the directors of the loanor could be held personally liable for the loss if it dragged them under.

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By Hannahmc8
01st Apr 2011 09:45

in reply

 If the company being loaned the money was a company run by one of the directors of the loaning company? 

Could the loanee pay the loaner back?

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