Financial legal representation, consulting
Dr. Hernádi Law Firm’s main profile is business, corporate, and economic law, and this is why we also offer finance advice in addition to legal consultation.
Petty cash
The audits and accounting records of companies, and documents thereto, must be true and correct. In addition, the tax authority also assumes that the company’s accounting reflects real economic events and real transactions. However, there may be situations when the entries in the accounting record incorrect data. A typical case is when the company’s accounting record shows a large amount of cash in the petty cash, but the amount is not actually physically present there. The above situation can lead to a problem for us when the company is declared insolvent and a liquidation proceeding is ordered. The tax authority pays particular attention to requirements related to cash deficits. If the above detailed circumstances exist, the managing director of the company may face numerous tax and even criminal consequences.
The above situation can be resolved by depositing the amount recorded in the accountings into the petty cash. To put this into practice, legal and tax advice is required so you can make the right decision in the given situation while avoiding the time and energy-consuming stressful tax or possible criminal proceedings.
If you are facing the aforementioned problem, please do not hesitate to contact us!
Member loan
Granting a member’s loan to a company is not prohibited, but its improper administration and accounting can raise a number of problems. It often happens that a member loan is incorrectly or erroneously entered into the accounting, meaning that it is recorded as a current liability instead of a subordinated liability. In cases of larger amounts of members’ loans, you can expect the tax authority to conduct an audit. In this case, the person granting the member’s loan to the company will have to prove the source of the member’s loan. If the owner cannot prove this, not only the company’s assets but also the owner’s private assets could be at risk. If, during the investigation, the tax authority identifies a tax deficit in the company, the tax authority will oblige the company to pay the tax deficit, and a significant tax penalty will be imposed on the company, which could mean the end of the company. In this case, there is also the possibility of initiating a criminal proceeding against the person who provided the member’s loan for fiscal fraud. If a tax investigation is not yet pending, we can offer a number of legal and accounting solutions for the proper handling of the member’s loan.
Legal representation in tax proceedings
Should you or your company face any of the above problems and, as a result, be subject to a tax proceeding, our lawyers will represent you in cooperation with our tax advisor partners.
