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https://www.justanswer.com/finance/1dqd3-corporation-loans-officer-corp.html
HelloCustomerand welcome to just answer Yes, a loan can be made to an officer, however it would not be legal for you to 1099 him three years later after the debt has been deemed as a bad debt expense. The loan can be written off as a bad debt expense, but that would seem illogical, if it was coming from an officer of the company.
http://www.njmediator.com/newsletters/business-law/corporate-loans-to-directors-and-officers/index.html
Under the Act, a corporation generally cannot make a personal loan to an officer or a director unless the loan has been approved (or subsequently ratified) by a majority of the shareholders. If an approved loan is challenged, judicial review is often focused on whether the loan was fair overall to the corporation and its shareholders.
https://scholarship.law.wm.edu/facpubs/323/
Abstract In most states, a corporation may loan money to an officer or director if the board of directors authorizes the loan and finds that it will "benefit" the corporation. According to Professor Jayne W. Barnard, however, this benefit requirement has …
https://www.jstor.org/stable/40683336
CORPORATE LOANS TO OFFICERS, DIRECTORS AND SHAREHOLDERS By JOHN F. RICH* There are in effect today some twenty-seven state statutes1 regulating loans to officers, directors or shareholders of business cor-porations. Such legislation must be regarded as the principal deterrent to a dissipation of corporate assets through loans to "insiders". Common Law Rule
https://taxes.uslegal.com/articles/irs-treatment-of-loans-to-officershareholder/
In conclusion, whether a transfer from a corporation to an officer/shareholder will be treated as a loan or as compensation determines if amounts received must be included in a taxpayer’s gross income. This determination is made by courts through examinations of the conditions attendant to the transaction.
https://www.lawinsider.com/clause/loans-to-officers
The corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiaries, including any officer or employee who is a Director of the corporation or its subsidiaries, whenever, in the judgment of the Board of Directors, such loan, guarantee or assistance may reasonably be expected to benefit …
https://www.lawinsider.com/clause/loans-to-officers-and-directors
No loans shall be made by the corporation to its officers or directors, unless first approved by the holders of two-thirds of the shares. Sample 1 Sample 2 …
https://www.dorsey.com/newsresources/publications/2002/08/sarbanesoxleys-new-ban-on-loans-to-directors-and__
Effective July 30, 2002, Section 402 of the Sarbanes-Oxley Act of 2002 amended the Securities Exchange Act of 1934 to prohibit U.S. and foreign companies with securities traded in the United States from making, or arranging for third parties to make, nearly any type of personal loan to their directors and executive officers. Although loans outstanding on July 30, …
https://www.calcorporatelaw.com/2016/09/californias-ban-on-loans-to-directors-and-officers
California banned loans to directors and officers decades before Congress thought of doing so as part of the Sarbanes-Oxley Act of 2002. Current Corporations Code Section 315 prohibits corporations (defined in Section 162) from making loans of money or property to, or guaranteeing the obligations of, any director or officer of the corporation or its parent.
https://www.askspaulding.com/blog/shareholder-loan-compliance-issues/
Shareholder/Officers are required to pay themselves a reasonable compensation when taking money from their corporation. To learn more about those requirements check out our blog S-Corps and The Reasonable Compensation Dilemma. If the shareholder instead pulls money out of the corporation as a distribution (not salary) they may end up trying to classify these …
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