BHolmes
Jun 21, 2007, 04:48 PM
If an officer of a company loans the company money, how should the rate of interest on this loan be calculated? At what rate?
CaptainForest
Jun 21, 2007, 05:32 PM
The interest should be no more than current market rates.
If the company can go get a bank loan at 5%, then they should not be borrowing this money from the officer at more than 5%
But it is all very subjective and will vary based on the type of company, the type of people involved, etc.
bhet
Jun 21, 2007, 07:32 PM
The interst rate would be based upon the agreement of the involved parties.