Director who is also shareholder of private company wishes to invest in the private company and receive dividends, not interest.
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Director who is also shareholder of private company wishes to invest in the private company
The money "invested" in the company is treated a a loan from the director to the company. Unless there is a formal loan agreement in place the company does not pay interest on loan. The loan may be repaid by company by either declaring a dividend to all shareholders (taxable income for shareholder) from retained profits, or the director can simply withdraw the money as a debit against the loan, until amount is fully repaid.
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Director who is also shareholder of private company wishes to invest in the private company
The money "invested" in the company is treated a a loan from the director to the company. Unless there is a formal loan agreement in place the company does not pay interest on loan. The loan may be repaid by company by either declaring a dividend to all shareholders (taxable income for shareholder) from retained profits, or the director can simply withdraw the money as a debit against the loan, until amount is fully repaid.
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