Loans to Company used to pay down DLA

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A Company received loans from 4 different people and they've been sat on the balance sheet for the last couple of years.  Just had a conversation with the client about a large overdrawn DLA and I've been informed that the loans were to reduce the DLA, and the loans were paid back privately  Subject to the Director showing evidence of this, is it allowed?  My thoughts are that if that was the purpose of the loans, they should have paid them straight to the Director who in turn should pay it into the Company.

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By johngroganjga
30th Jan 2024 21:57

If you mean that the loan repayments made personally were debited to the new loans in the company’s books and credited to the overdrawn DLA, the right end result is achieved, albeit in a slightly odd way. Yes you need to see evidence of what payments have actually been made, but why would this not be “allowed”.

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By Mentinor
30th Jan 2024 23:01

this is a legal question

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By David Ex
31st Jan 2024 02:00

legerman wrote:

A Company received loans ….

Presumably having observed all the appropriate formalities to approve the borrowing and with full documentation.

You may say I’m a dreamer ….

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By bernard michael
31st Jan 2024 09:17

Oh what a tangled web we weave.........................our accountants simple to deceive

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