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Can Loan from Shareholders be an Equity?
In the U.S., can a corporation classify loan from shareholder as an investment equity account. If so, can someone find the corresponding tax law for the definition of loan from shareholders. Thank you!
2 Answers
- ?Lv 78 years agoFavorite Answer
Shareholder loan From Wikipedia, the free encyclopedia
en.wikipedia.org/wiki/Shareholder_loan
Shareholder loan is a debt-like form of financing provided by shareholders. Usually, it is the most junior debt in the company's debt portfolio, and since this loan belongs to shareholders it should be treated as equity. Maturity of shareholder loans is long with low or deferred interest payments. Sometimes, shareholder loan is confused with a loan from company to shareholders.
Hope that you find the above enclosed information useful. 06/19/2013
- troLv 78 years ago
a loan is a loan and is a liability of the corporation
equity would be any asset the shareholder contributed to the corp, neer the twain shall meet
