The founder and former leader of the Atlantica Party has admitted to breaking the law by lending the party more than was allowed with a payback schedule that exceeded the two-year maximum stipulated in Nova Scotia's Elections Act.

By signing a compliance agreement with the chief electoral officer, Jonathan Dean won't face charges or any further action unless he breaches the undertaking.

Elections Nova Scotia found out about the $8,811 loan when the party filed its annual financial report last May.

In an audit report, accountant Christopher Mossop noted: "During the audit the Association disclosed two instances of possible non-compliance with the Nova Scotia Elections Act."

At issue were "a promissory note in the amount of $8,811" and "transfers to and from campaigns in the amount of $2,031 and $2,417."

According to Mossop, the party association was concerned those transactions were non-compliant and could result in the party being deregistered by Elections Nova Scotia and party officials held responsible for breaching the law.

In June, Nova Scotia's chief electoral officer suspended the Atlantica Party Association of Nova Scotia for failing to file financial statements supported by an auditor's statement.

"The Chief Electoral Officer is not satisfied that the statement filed to date meets these requirements," said the statement issued that day.

The statement also noted the breach of the regulations because of the loan and the payback period, but didn't name Dean as the lender.

The party now has until Aug. 15 to resolve the issue or face deregistration effective that date.