Pay back loan from company B to myself

[abc123]

Lets say I have a company (A) in EU who has received four loans each of 200k € from an overseas company B. Money was landed in company A two years ago and we have loan agreements where the loans must be "paid back" at latest 2030 but can be cleared before.

The company B runs by a friend of mine in another country (no connections anywhere can be found) whom owed me money before for various reasons. (I handed cash over to him long time ago as he was in big debt to mobsters and thereby saved him). So when this person now had funds in his company it was the only way for me to receive them back and at that time thought it's best the money are with me and not him rather than him losing them away or me never getting them back.

So we made a loan where company B transferred the amounts of 4x 200k € at an agreed rate of 200k € every 3 months. Last transfer was two years ago and audits/filings has been made since then twice. No questions asked anywhere.

Anyway, I now need to get these funds out of my EU company to my personal account and the same time clear out the debt we have in company A. What are the best ways to do so ?

I am thinking of following scenarios.
1) I transfer the money from my company A to my personal bank account and tell my accountant that the loan was transferred back to the Lender. Accountant will never crosscheck accounts numbers that are matching. Also do they even need to match?
The bank will not ask me why I am receiving 200k € from my own company. And if they do they can clearly see that transfer is made from my company account to my personal account as they are in the same bank.

2) I transfer the money to my personal bank account and tell my accountant that company B owes me money on a personal level (I can not provide any source of funds here on how I loaned the money in cash to him or though as it was over 10 years ago but we can write a paper and date this back). I am hereby on personal entity taking over the loans that company B made to company A and will send them to me to clear these out.

3) We write a paper that I on a personal level are taking over these loans. The accountant book me as the lender of these loans. We let one audit and filing pass. Next year I transfer the money out from the company to my personal account.

4) Your ideas?

 

[Martin Everson]

I will ignore the fact the story sounds off and the fact you should not have done things a different way in first place.

Anyway, I now need to get these funds out of my EU company to my personal account and the same time clear out the debt we have in company A. What are the best ways to do so ?

Try option 3 if your accountant says its possible.

 

[CoffeeCherryTea]

I doubt even option 3 will work in the end. Taking personal responsibility for company debt is of course possible, but not involving the company shifting money to the shareholder. Red flag there. Helping to find a solution I would first ask what the turnover of company A is, and how much 200k stand out of total traffic. Assuming the 200k loan received as working capital.

 

[Martin Everson]

Lets say I have a company (A) in EU

Out of interest in which EU country?

 

[abc123]

I doubt even option 3 will work in the end. Taking personal responsibility for company debt is of course possible, but not involving the company shifting money to the shareholder. Red flag there. Helping to find a solution I would first ask what the turnover of company A is, and how much 200k stand out of total traffic. Assuming the 200k loan received as working capital.

Turnover is about 10M Euro/year. Profit is about 1M Euro/year. Company is being audited every year due to the turnover.
The loan was received as working capital and was of great need as well. They have been used to increase the turnover/profit.

Out of interest in which EU country?

A is in a Nordic country.
B is in lower half of EU.



Another question. What would happen with the debt if company B was closed down and thereby it is not possible to transfer them back to the sender at all in 2030. Would they be treated suddenly as an asset and profit in company A?

 

[Martin Everson]

Another question. What would happen with the debt if company B was closed down and thereby it is not possible to transfer them back to the sender at all in 2030. Would they be treated suddenly as an asset and profit in company A?

Depends what happens during voluntary liquidation process of company B.

How are its outstanding noncurrent assets handled by the liquidator? Whats in the loan agreement? These should have been mentioned in a good loan agreement i.e "in event of liquidation xyz should happen" etc etc.

Normally this loan, which is an asset of company B, gets distributed with other assets to firstly any of the companies creditors and then to the companies members.

You really need to speak to an accountant.