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Company or director to pay deposit

Can a director pay a deposit on behalf of a company? In the UK

Hi all,

I came about a situation where a company wishing to expand needed to put a sizable deposit down on a property lease (which is 100% refundable), but the company would need investment in order to make the payment. Is it possible for the sole director of the Ltd company to pay the deposit personally rather than make a directors loan to the business and the business then make the payment.

The deposit is a security deposit incase the business didnt meet the rental payments and would otherwise be untouched and refunded at the end of the lease period. 

I am not sure if this liability should show in the company accounts as there is a benefit arising from the payment (in that the lease would not be avaliable without the deposit).

Any advice is much appreciated.

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Nov 22nd 2017 14:25

I guess I am wondering if this would in any way be a benefit to the company or if it would effectively be treated like a directors guarantee, but cash rather than contractual...

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