Are you a company director looking for flexible financing solutions for your business? A shareholder loan could be just the thing. Let's find out together how to make the most of it.
A FLEXIBLE FINANCING MECHANISM
Imagine a situation where your company needs a quick injection of cash. You, as a shareholder, can contribute funds to your company outside of a contribution to the share capital. You can do this by transferring money into a shareholder’s current account, lending money to the company or paying bills on behalf of the company. This is the unique flexibility offered by a shareholder loan.
ATTRACTIVE TAX REGIME
Under article 39 of the French General Tax Code (CGI), interest paid to the shareholder is deductible from the company's taxable profits. This means that a shareholder current account can be a powerful tool for optimising your company's tax burden. However, the law stipulates that the interest rate must not exceed the interest rate cap published by the Banque de France.
TIPS FOR OPTIMUM MANAGEMENT
To get the most out of your shareholder current account, there are a few tips you should follow carefully. Firstly, make sure you declare the interest received correctly on your tax return. Secondly, keep a close eye on your company's cash flow requirements so that you can adjust your current account contributions accordingly. Finally, don't hesitate to consult a lawyer specializing in business law to help you set up and manage this current account.
The shareholder loan is a flexible and tax-efficient financing tool for your company. It enables optimum cash management and offers attractive tax benefits. However, setting up and managing a current account requires in-depth knowledge of legal and tax rules. Don't hesitate to contact us for personalised support. We'll be back next month with a new legal analysis.