In most companies there is a
551 account
where the transfer of money made by the company to the partners is recorded. In this concept, both inputs and outputs; they obey the need to pay or enter debts where suppliers, creditors and banks are listed.

Account 551 has been designed for inflows and outflows of money on a sporadic basis and over a short period of time.

At the most critical economic times, the partners lend money to the company to be able to meet the needs of the treasury.

What is account 551?

Behind the so-called “account 551” are the current accounts in which the partners, administrators and natural or legal persons operate. Banks, suppliers and customers of the company are excluded, as they do not have participation.

The current assets of the balance sheet reflect the sum of the debit balances, while the liability will show the credit balance.

Undoubtedly, the use of this account 551 establishes an accounting relationship between the company and its owners,but without having to be part of the company’s business; since it tends to be confused with the business assets of the partners.

What is this current account used for with Partners and Administrators?

The fact of making a more widespread use of the account, implies greater vigilanceon the part of the Treasury, especially in relation to legislation.

Here are some basic concepts of operations linked to account 551:

1. Credit Balance

The credit balance in a 551 account means that the company owes money to the partners because these have been entering money before the specific liquidity needs, with the aim of making payments at certain specific times.

2. Debit Balance

The debit balance indicates that the partner owes money to the company by withdrawing money to make payments or meet certain expenses.

This will generate several problems if the partner has not taxed the income in his Personal Income Tax or if the company has not satisfied the withholdings, because before an inspection, interest for delay and possible sanctions are required.

Therefore, it is a negative balance sheet that would have to be corrected well, with the liquidation of the account or with the contribution of more capital.

3. Transfer the balance to Account 118

Account 118 includes the patrimonial elements delivered by the owners or partners of the company according to the operations not described in other accounts.

In this case, they must not constitute any consideration for the supply of goods or services by the company.

This account has a subsidy character granted by the partners, and meets the 18th valuation standard where own funds are directly recorded. In particular, the amounts delivered by the partners or owners to compensate for losses are included.

4. Capital increase

The capital increase is contemplated to compensate the credits. It is a decision that is taken after the agreement of the Board and understanding the expense caused by the notarial deed.

On many occasions, the partners do not want to make new contributions, which is why you have to convince them that they are going to recover their money.

5. Distribution of dividends from reserves

In this type of account there must be an agreement of the Board to practice the possible retention.

The amount to be distributed must implicitly consider this withholding. If there is a debit balance of 6,000 euros and the withholding is 21%, the amount of reserves is made by applying the following operation: 6,000 x 1.21 = 7,260 euros.

6. How to settle a 551 Account

As the end of a fiscal year approaches, most companies square their numbers to prepare for the accounting close of the year.

Given the economic situation of recent years, many companies face losses. For this reason, it is advisable to make a capital contribution.

This will allow to clean up the negative equity and settle the account 551. If we close the year with outstanding amounts in the account, it may result in the Treasury checking if the loan has been formalized and if the interest has been paid.

In the event that the partners had withdrawn the money from the company, the solution is very different because you can formalize a loan contract, or settle the account with the distribution of dividends that should be approved at the Meeting.


In summary, we can affirm that there are accounts that are frequently used by companies to adjust the cash out and inflows of money. Like the 570, there is account 551 where the partners make personal contributions and, sometimes, they get to forgive the debt.