• February 2019
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We want to lend money to our new c-corp to cover startup costs. What type of loan document should we use to keep it simple yet effective?

Personal money going into a business can be treated as equity or as a loan that must be paid back by the business.

If you treat your personal funds as a loan, you should document the loan in a promissory note. A promissory note is a legal document that authorizes the business to borrow from the individual. It’s basically a glorified “IOU.” Make sure to separate your personal account from that of the corporation to avoid any messy accounting / IRS / SEC problems, and to maintain your personal liability protection.

If you need help drafting a contract detailing your loan then try LawTrades. Our legal platform consists of many top-notch startup attorneys who are experienced with this type of stuff. We offer free consultations and price quotes!

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