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Taking cash out of limited company bank account!!

Limited company. One Director. One investor. Can the Director take cash (bank card hole in the wall)

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Hi,

Can the sole Director of a Limited company who has 70% holding and who has not invested any money in the business - but has a Limited Company investor who has paid £15,000 for a 30% share of the business (but no directorship) take cash out of the business bank account ("cash" being cash money drawn from the company bank account using the company's cash card at a cash machine) as a loan which the Director intends to repay at some point in time - without the permission of the investor.

Amount of cash involved taken from the Bank by the Director is £2,000.

If the above is "legal" and above board - is there a date/timescalc by which the money must be repaid?

E

 

 

Replies (8)

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By Wanderer
24th Jul 2019 16:55

What does the agreement with the investor, that the investor took legal advice on before parting with their £15k, say about this scenario?

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By ellieandalisha
24th Jul 2019 17:11

No mention of a Director taking money out of the business.
Only that the Director cannot borrow money from external sources without permission of the shareholder.

E

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Replying to ellieandalisha:
By johngroganjga
24th Jul 2019 21:31

Are you sure? Do you perhaps mean that THE COMPANY can’t borrow without ... etc?

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Bramble
By Chris.Mann
24th Jul 2019 18:19

Is there a Shareholders Agreement?

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By Tim Vane
25th Jul 2019 07:27

This is theft, plain and simple. Unless it’s not, in which case it’s absolutely fine. Difficult to be sure either way given the almost total lack of any useful information.

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By paul.benny
25th Jul 2019 08:19

Are you the investor here?
How do you know about the cash withdrawals and have you discussed with the director?

In the absence of any particular agreement with shareholders, a sole director can do more or less what s/he likes. But if monies (cash or otherwise) paid to any party, including a director should be properly recorded in the books. This could be a loan, an advance of wages, for paying suppliers. Or paying a bribe.

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By pawncob
25th Jul 2019 16:06

As paul.benny says, how this is described depends upon how you record it. Subject to the right declarations on the accounts/HMRC it could be anything you want it to be.

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By LostinSuspense
26th Jul 2019 13:47

Remember : The Directors are responsible for running the company on behalf of the shareholders and they have the scope to make decisions they view as appropriate to provide a benefit to the shareholders.

Does the loan have interest on it? Also see above comments.

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