Is it OK for a Director of a company to draw funds from his business for his own personal useage?
for example, a holiday?/
2007-03-25 10:15:19 · 4 answers · asked by Mitch_Gough_UK 1 in Business & Finance ➔ Small Business
He can draw as much as the business will stand to remain in profit. It is then considered as earnings or salary and will be taxed accordingly.
Full accounts must be kept and the amounts shown. Also all directors or shareholders must agree to the drawing of any money and the agreements must be minuted.
2007-03-25 10:21:04 · answer #1 · answered by ANF 7 · 2⤊ 1⤋
If you draw it as a dividend, it would be taxed but there would be no NI on it. All shareholders would have to be given the dividend according to their share ratios and would only be able to go up to the value of reserves in the balance sheet. You would need to time it right according to your financial year end and the tax year end, ie, do it after 5th April to pay the tax later.
2007-03-26 11:50:05 · answer #2 · answered by JOANNE T 2 · 1⤊ 0⤋
No !
You could get banned from being a director for that.
2007-03-25 17:18:14 · answer #3 · answered by gav 4 · 0⤊ 1⤋
It is totally illegal - and punishable by imprisonment.
However - a company can make loans to individuals with the correct paperwork and knowledge of the accountant.
As a loan, it is repayable (with or without interest depends on the terms the loan is made.)
2007-03-25 17:22:48 · answer #4 · answered by Froggy 7 · 0⤊ 3⤋