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Thread: RA For member of Close Corporation

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    RA For member of Close Corporation

    Good day, please could someone advise me on how to capture the RA for the sole member of a Close Corporation, it comes off the main banking account as a debit order. I am thinking drawings but need to clarify.

    Thank you

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    Email problem Mike Simmonds's Avatar
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    The term Drawings would normally relate to a Sole Proprietor or Partnership. In Close Corporations we would use the term Loan Account. In this account we would record monies lent to the CC by the members, or expenses paid on behalf of the CC by the members. Also on the flip side then we expenses paid by the CC on behalf of the members, the RA belonging to a member would be one of these expenses.

    So the entry would be to debit the Loan Account and credit the Bank Account.

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    flaker (21-Mar-15)

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    Many thanks Mike, perfect.

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    Good day, I wonder if you could help me with another query. What is the best way to process the salary for the member. Sometimes they draw a salary and sometimes they don't, should I have a fixed basic salary loaded on my payroll and capture and pay the PAYE regardless of whether he actually draws a salary or not, or should I just allocate the amount of what he draws against his loan account?
    Thanks Lisa

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