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Returning Loan from Private Limited Company

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Tony K

Shareholder

51 Points Posted on 13 January 2020

Hello -

Private Limited company has loan of 8 lacs on books from a person who used to be Shareholder in company. Now they are no longer shareholder.

- Is it fine if this loan continues on books going forward ?

- They are very old and no longer have a bank account for us to do reverse entry also. What is the best way to remove it on books? Can they take cash or can they provide a letter / paperwork saying they are not owed anything or they are fine if loan is transferred on another shareholder name?

Please let me know the easiest way/ paperwork to fix this that won't be an issue

Thank you!

Replies (2)

Quick Summary

A private limited company has an old loan of £800,000 on its books from a former shareholder who no longer has an account. The company wishes to remove this loan. Options discussed include writing off the loan if no obligation exists, with the former shareholder willing to sign documentation confirming this. The query seeks the simplest process and paperwork to achieve this without future issues.