My client has received equity investment of £250k for a 25% share of their business and the investors have requested that their directors loan be converted to equity as part of this investment. The loan is for £29k. The current share structure is a £1 share for 100% ownership.
I haven't had to reclassify the equity for investment before and convert a directors loan to equity so your advice would be appreciated on the accounting treatment and any tax implications this may have for the business and the current owner.
Thanks
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