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Dividends or Director Loans

No Dividend Minutes or voucher

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Received physical copy of bank statements from new client whose accounts are late - all that has been entered on monies taken out is dividends on the bank statements but there is no paperwork to back this up.

Should this be treated as a Director Loan ?

Replies (11)

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Caroline
By accountantccole
18th Nov 2021 12:13

I would assume the intention was there and that the paper trail is missing, so fix that rather than treating it as the dividends didn't happen

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By Jim100
18th Nov 2021 13:12

Yes there was the intention but always thought you should not backdate documents.

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RLI
By lionofludesch
18th Nov 2021 14:09

Jim100 wrote:

Yes there was the intention but always thought you should not backdate documents.

There's a difference between backdating a transaction and recording a decision.

Would you say that drawing up the minutes of a meeting is a forgery ? No - happens all the time.

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By zebaa
18th Nov 2021 12:15

Why not ask the director ? You may need to explain the implications of loans too, including how solvent to company is, tax treatment and so on. You have not given us a lot to go on here Jim.

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By Wanderer
18th Nov 2021 12:19

You say they are dividends on the bank statements. Why are you thinking you should change this randomly to something else?

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By Winnie Wiggleroom
18th Nov 2021 12:29

maybe, maybe not, impossible to say without looking at the accounts and knowing the client

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By c Land
18th Nov 2021 12:45

withdrawn

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RLI
By lionofludesch
18th Nov 2021 12:53

Are there any profits ?

Even if there aren't, it could still be a dividend, albeit one capable of being recovered in an insolvency.

Have a chat with the director about the various ways he could withdraw funds from the company.

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Replying to lionofludesch:
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By Jim100
18th Nov 2021 13:14

Yes there are profits its just the lack of paperwork threw me a little bit. ok fine will put as dividends in the accounts

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By Leywood
18th Nov 2021 14:41

Im sure the Director can find the paperwork!

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By Cylhia66
18th Nov 2021 16:23

Unless he withdrew more than his allowance. You will have to work this out.

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