2 questions regarding shareholder loans & managing directors
September 16, 2010 | 20,00 EUR | answered by Matthias Wander
Hello,
I recently founded a UG with 3 partners. Before we have our appointment with our tax advisor, there are 2 urgent questions that we would need answered.
1. We have appointed a managing director (in the founding document). This person is not one of the partners. He intends to work as a volunteer for us for the time being. We would like to formalize this arrangement in writing and are now looking for the most appropriate contract. Would a standard employment contract suffice, with a salary of 0.00 euros indicated? Is this volunteer work still subject to social security contributions, and is there anything else we need to consider (such as registration with Agency X)?
2. The company is expected to generate very little revenue in the first few months, so as a partner, I will need to inject "fresh" funds into the company every 3 months. What is the best way for me to do this? I have already researched that a partner loan is possible, but I am unclear on the exact process. I transfer the money to the company account. What needs to be taken into account beforehand or afterwards?
It would be greatly appreciated if you could answer these questions for us.
Best regards,
Michael
Dear inquirer,
Thank you for your inquiry, which I would like to answer based on your information and in the context of your commitment within the framework of an initial consultation.
1. It is possible for the managing director to engage in voluntary work. For this, a contract does not even need to be signed. However, you can also conclude a written contract with o,- € for xx months during the start-up phase. Any contractual changes should be made in writing. No social security contributions are due, as no remuneration is paid. However, remuneration for the managing director also includes performance-related remuneration (e.g. bonuses) or non-monetary benefits (e.g. company car provision). If such remuneration components are to be paid, I strongly recommend discussing this with your tax advisor.
2. If a shareholder contributes money to the company that is not the payment of the subscribed capital, it is considered a shareholder loan. A loan agreement should regularly be concluded, specifying the repayment and interest of the loan. Regarding the interest on the loan, it should be ensured that the interest rate is not higher than market rate, as it could otherwise be considered a hidden profit distribution. A interest-free loan with a term of more than 1 year must be discounted in the balance sheet of the UG, resulting in an increase in the UG's profit.
I hope this provides you with an initial overview.
Best regards,
Wander
Tax advisor
