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Thread: Making a Loan to my Business

  1. #1
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    Default Making a Loan to my Business

    What is the best way of funding a small business?

    I was thinking of doing a e-transfer from my personal account to my business account. How do I account for this as a loan to my company, so that I can pay myself back when the business is self sufficient?

    I am not too concerned about getting my money back into my personal account, more concerned with any tax issues I might come up with.

    Thanks.

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    Super simple, you can transfer an amount, write your company a cheque, or just pay expenses as they come up out of your personal money. No tax issues, it's called a "shareholder loan" and you can pay yourself back from revenue tax free for both the corporation and yourself as in individual.
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    Ok cool, do I need to some how document that this was a loan?

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    I didn't, but that's not to say you shouldn't. You company bank account statement is some documentation, or a cancelled cheque or cheque image would work too.
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    Always best practice to paper the transaction via a directors resoltion and be clear about the structure of the financing.

    Think about repayment terms (on demand, long-term, etc), interest (deductibility within the Corp) and seniority of the note (other debt would likely be senior to the loan).

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    OK, is there a form I can download to do this? Is it something I can do through Quickbooks?

    Any info is greatly appreciated, since I am new to this.

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    You can do this through quickbooks. If you just transfer the money over to yourself via e-transfer for example, you would just tag that as "shareholder loan". Then when you pay yourself bag you tag the outgoing monies as the same "shareholder loan". Super simple in quickbooks.
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    Quote Originally Posted by schurchill39 View Post
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    You can do this through quickbooks. If you just transfer the money over to yourself via e-transfer for example, you would just tag that as "shareholder loan". Then when you pay yourself bag you tag the outgoing monies as the same "shareholder loan". Super simple in quickbooks.


    Thanks!

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