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Making a loan to a corporation for start-up costs and operating expenses

By John R Mott |

Barbara asked:

My husband and I have registered our Ontario corporation recently. He is the only director, and we are both shareholders. I would like to make a loan to the corporation for start-up costs and operating expenses until revenue is earned. Is there a minimum or maximum rate of interest I should charge for the loan? Can it be an interest only loan initially?

John R Mott answered:

There are no restrictions on how much, how long or on what other terms you may lend money to your corporation. There is no requirement to charge interest on this loan.

There are restrictions on borrowing from your corporation, but that's a different subject.

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