Help & Advice
Directors’ overdrawn current or loan accounts
If a director borrows money from their company but they must comply with the 2006 Companies Act. A shareholder approval (by ordinary resolution, subject also to the provisions in the articles) is required for loans in excess of £10,000 (£50,000 if the loan is to meet expenditure on company business). Also, the company should agree loan terms and have supporting documents.
Where there is an overdrawn director’s account there is potentially a S455 charge on the company and a taxable benefit on the director in respect interest-free loan.