[Question] Writing off a loan owing to a member in order to close the CC down

[Fiona.Pullen]

Hi there, I have a question.
a client of mine wants to close their cc down in order to get everything sorted so they can emigrate. the cc is basically dormant, however their is a loan owing from the cc to the member and we need to write it off in order to close the entity. what are the implications of this? any advice would be appreciated

[Justloadit]

There is no implications, as the member is the only creditor, and as the creditor does not wish to institute action to recover the loan account, there is nothing further to do.

To liquidate the CC will require about R15K so it may be cheaper to simply shut it down.

There is an advantage for the liquidation, it simply stops any action against the CC to recover what ever may have occurred in the past.

[Elijah]

Agree with Justloadit, there is no implication. So long as the CC does not owe money to any other Company or person and no monies are owed to SARS, you may de-register the CC, without any hitches, just remember to de-register with SARS first. You should only consider liquidation if the company owes money to an outside party and the CC is not able to meet these obligations, as liquidation will always leave a mark on your name.

[Justloadit]

You should only consider liquidation if the company owes money to an outside party and the CC is not able to meet these obligations, as liquidation will always leave a mark on your name.

Not necessarily, firstly if you do a voluntary liquidation, and secondly the CC is being liquidated, not the members. If surety was signed by the members, well that is another story then.