Officers of a Corporation Officers include the president or chief executive officer, the chief financial officer or treasurer, and the chief operating officer. Officers of the corporation may also be owners of the corporation.

Do shareholders approve loans?

Loans are now permitted by the Companies Act but some require shareholder approval. This is achieved through an ordinary resolution of the shareholders.

What is a quasi loan example?

In general terms an example of a quasi-loan is when the company makes a payment that the director is bound to make personally on terms that the director will repay the company later. Generally all such transactions (whether lawful or not) must be disclosed in the company’s annual accounts.

Are directors loans legal?

Under the 2006 Act loans to directors are permissible but require the approval, by ordinary resolution, of the members of the company unless certain exceptions apply (as to which see below).

How is a loan to an officer / shareholder treated?

In the absence of such demonstrations by the taxpayer, courts are likely to find that such transfers from a corporation to an officer/shareholder are merely disguised compensation, and the amounts received are includable in the taxpayer’s gross income.

Can a company loan be considered a loan?

Commissioner, supra, held that a transaction between the taxpayer and the principal of a corporation with which the taxpayer was involved in business dealings was not a loan, but rather an impermissible sheltering of fees owed to the taxpayer by the business entity.

How are loans to shareholders treated by the IRS?

The court outlined certain conditions beneficial for the taxpayer to demonstrate in order for the funds to be treated as a loan, including (1) the existence of corporate records indicating that the corporation itself considered the transfer to be a loan; (2) tax returns filed by the corporation indicating amounts due on loans to shareholders.