Results 1 to 4 of 4

Thread: HELP - transfer of member loan account

  1. #1
    New Member
    Join Date
    Jul 2011
    Location
    Gauteng
    Posts
    1
    Thanks
    0
    Thanked 0 Times in 0 Posts

    HELP - transfer of member loan account

    I am sort of still part of a CC in Gauteng - members were distributed 33%/33%/34% the 34% being an Old Partner of mine, so we just gave him the extra 1 percent.
    For the lack of naming people lets just say Jack, John and Jill.
    Jack being the 34% just upped, resigned and left recently -supposedly just signed over his 34% to John. - John now thinks he owns the Company.

    John now wants to buy me out(pay me my dues)(Jill) which is OK, and I am ready to sign and get the %$^&*outa there
    However Jack left a Directors Loan Account in debit behind. Because I (Jill) invested the majority of the money into the Business, I have requested that in nthe sell agreement John CEDE Jacks Directors Loan account to me. He advises that due to accounting principles and Tax rules he cannot - CAN SOMEBODY ADVISE IF AT ALL POSSIBLE.

  2. #2
    Diamond Member Justloadit's Avatar
    Join Date
    Nov 2010
    Location
    Johannesburg
    Posts
    3,480
    Thanks
    134
    Thanked 695 Times in 593 Posts
    Blog Entries
    1
    Firstly do you have a members share holder agreement?

    The agreement will layout the manner in which the shares are to be distributed or sold.
    The shares in a C.C. must be offered to everyone as far as I know, and the remaining members then decide via a minuted meeting the outcome.
    If no agreement, then I suggest a lawyer get involved before a he said she said shooting match begins. The cost of the lawyer will be miniscule when compared to what can go south in this instance.
    Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
    Solar pumping, Solar Geyser & Solar Security lighting solutions - www.microsolve.co.za

  3. #3
    Diamond Member Justloadit's Avatar
    Join Date
    Nov 2010
    Location
    Johannesburg
    Posts
    3,480
    Thanks
    134
    Thanked 695 Times in 593 Posts
    Blog Entries
    1
    Another point, the change of shares for a C.C. require it to be registered at CIPRO not sure of the new name, which requires your signature as acceptance aone of the members of the C.C. so there is a lot more to it than simply giving the shares away.

    A power of attorney could be given by 'Jack' and the voting power given to 'John', but again this requires a munted meeting by the members of the CC to accept this change. There is a lot involved in a CC, and hence the reason to get a lawyer involved.
    Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
    Solar pumping, Solar Geyser & Solar Security lighting solutions - www.microsolve.co.za

  4. #4
    Gold Member
    Join Date
    Jun 2010
    Location
    Johannesburg
    Posts
    843
    Thanks
    181
    Thanked 177 Times in 146 Posts
    Quote Originally Posted by sablelodge View Post
    John now thinks he owns the Company.

    John now wants to buy me out(pay me my dues)(Jill) which is OK, and I am ready to sign and get the %$^&*outa there
    However Jack left a Directors Loan Account in debit behind. Because I (Jill) invested the majority of the money into the Business, I have requested that in nthe sell agreement John CEDE Jacks Directors Loan account to me. He advises that due to accounting principles and Tax rules he cannot - CAN SOMEBODY ADVISE IF AT ALL POSSIBLE.
    For all intense purposes, John essentially does own the company. Why do you want the loan account ceded to you? Can't you get a clean payout?

    I cannot think of any tax rules or accounting issues which stop him ceding a loan account. Ask him to explain which ones he is referring to. The only thing is that Jack's loan probably still belongs to Jack, so he is the one who has to make the cession. I can't see how John could do that on his behalf.

Similar Threads

  1. Property transfer
    By loopy100 in forum General Business Forum
    Replies: 3
    Last Post: 18-Feb-11, 07:33 AM
  2. Member Loan Account and Deferred Salary
    By Swapo in forum Tax Forum
    Replies: 7
    Last Post: 05-Nov-10, 03:17 PM
  3. Loan account in CC
    By Darko in forum General Business Forum
    Replies: 2
    Last Post: 06-May-09, 01:57 PM
  4. Transfer complete
    By Dave A in forum Administrative issues
    Replies: 2
    Last Post: 21-Apr-08, 08:23 PM
  5. Site transfer to new hosting machine.
    By Dave A in forum News Archive
    Replies: 1
    Last Post: 04-Jul-07, 04:53 PM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •