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Shareholder loan

From Wikipedia, the free encyclopedia

Shareholder loan is a debt-like form of financing provided by shareholders. Usually, it is the most junior debt in the company's debt portfolio, and since this loan belongs to shareholders it should be treated as equity.[1] Maturity of shareholder loans is long with low or deferred interest payments. Sometimes, shareholder loan is confused with the inverse, a loan from a company that is extended to its shareholders.

YouTube Encyclopedic

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  • ✪ Accounting for Beginners #73 / Loan From Shareholder / Balance Sheet / Widget INC #1
  • ✪ Accounting for Beginners #81 / Paying a Shareholders Loan Back / General Ledger / Widget INC #9
  • ✪ How to Pay Less Corporate Tax in Canada

Transcription

yo yo yo what is going on I am so excited to bring you this and Who am I I'm CPA strength I am the strongest licensed CPA in the state of Florida you better believe it what do you do I teach accounting basic blocks basics building blocks building blocks building blocks building blocks out so educate motivate and inspire do it all on this channel just little old me do it all by myself you know what it is and I happen to have the best playlist in the entire world it happens to be the counting playlist but it's the best one in the whole world what's going on with my head and feel a little jacked up I feel good today I'm feeling good you know huh that's what you get you know you get CPH strength means feeling good cuz you don't need to know about the CPA strength it's not feeling good just know that I don't always feel good but I'm feeling good today I'm feeling good and I'm super excited to bring this this this episode this is number 73 of the classic series accounting for beginners baby that's my classic series this is number 73 now it's gonna be a loan from shareholder but it's gonna be a subset we're gonna run this out to 100 okay well this is road to 100 we're gonna run these out to 100 we're gonna do a business we're gonna start a business from scratch okay we're gonna do monthly journal entries our first journal entry is gonna be one 115 now you're like I don't know what's going on here just stick with me just stick with me I think you're gonna love it I think you're gonna learn the most that you could possibly learn in the next let's see 27 the next five weeks you know you might be you know you're starting a new class right now in school or whatever your ear you you know this is this is going to be the best way my opinion to learn to learn the basics of accounting and you know if I have 70 something videos before this so you can see you know like the dca learn stuff this is the mapping system this is really why people listen to me mostly I think I do have a bubbly personality I know I know but the sodi siedler it's a debit/credit acid row expense liability equity revenue now just think someone were the whole world threw away and each thirty came up with this at age 37 and now the whole world knows him over so just always I'm always trying to progress that I'm always trying to go gosh you know I can talk forever you know I could talk forever so let's just get into this so we're gonna start man we're gonna start a business from scratch okay and here we're gonna do a journal entry on this first board we're going to do the problem we're going to do what happened every month we're starting at 1 1 2015 we're gonna go you know 12 27 months or whatever so you so anyways the name of our the name of our visit oh so anyways we're gonna - first board is going to be a journal entry I have another board here with a chart of accounts we'll get that in a second I have another board chart of accounts and a general ledger then I have a third board with a balance sheet income statement and we're gonna do all all once and so we're gonna start from scratch and we're just gonna follow a business because that's how I learned the most all right this is bothering me I don't know why's is everything bothers me I think I have a problem II I think I have a problem please I know I have problems that's that's part of my it's part of why I got a little squad nobody's perfect right well you ain't got no problems you just sure you're sore in widgets have a glass house alright love from um we have a company called widget Inc all right we engine that's our company widget Inc that's our company now I want to pick widgets because they could be whatever you want them to be they can fit for your specific need don't don't focus so much on like the thing about which is because if it was a piece of pizza you said well what about this repeat salary what about this and if it was for tax returns what about this what about this and and I'm kind of it has to be a moldable the widget has to be moldable like first the specific video I don't know I don't think that made much sense but it's gonna be a widget and so basically it could make sense for the particular video whatever journal entry happens for the widget and also I also want you to you know whenever we do a widget whenever we sell whenever we sell widgets you know or you know whenever we sell widgets or or I'm not sure if it's going to be a service or tangible good but it can be either or but but whatever you know that's what we're doing we're selling we're selling widgets that's our thing and a widget could be anything I want it to be have you ever sold anything can you picture your head selling something like like candy or something you know did you ever sell candy I guess you know to jail remote lawns did you ever babysit you know I guess you had a job so you're selling your time so that could be a widget I just want you to picture you can picture what you want the widget to be so let me just get started here I'm not really going to go into too much of what the dca there is or how we get the journal entries I've already gone too far I already have a loan from shareholder journal entry somewhere in my my playlist so let's just get let's just get right into this okay and we're gonna just go down the road to a hundred winter well on the road to AFB 100 let's go JD that's me the sole shareholder of widget Inc that's the company and just FYI don't tell anybody but like we all own we all own just for like legal legal and tax and stuff we all own widget in everyone watching this has little share little stake in the company just want you to know that okay so JD's sole shareholder of winning which is what we're going to more pumping widgets we love pumping widgets we think they're going to be the best company in the world we think we're going to make all the money oh it's going to be great it was so easy we're just somewhat everyone's gonna buy your widget loans widget Inc $10,000 alright because it's gotta get off the ground the company has nothing right now the company has nothing would you think it's it has some paperwork nothing you know what are you gonna do you're gonna you're gonna loan it $10,000 in the checking account and we're not doing captured on checking account now you're going to learn a $10,000 so it has some some money to get going here needs it needs it needs a lot of things before we can start selling widgets well it's a journal what's the journalists you're going to be for loaning loaning widget loaning our company loaning the company we're going to wear our hat our widget Inc at here boom is widget what is there cash involved yeah there's $10,000 cash we're getting cash no it's a debit so we're going to debit $10,000 checking account non-cash we're going to debit $10,000 checking account it happens to be an asset cash happens to be an asset the credit for that is a lot it's a liability because the company owes its shareholder money so it's liable for that if if you have a liability going up it's going to be a credit so that's going to be our credit $10,000 loan from shareholder liability equals $10,000 equals 10,000 dollars after out of one 115 now what we're going to do what happened there - right - right checking account and log from shareholder those are uncertain that those are in certain accounts do we have those so what we're going to do is I'm gonna look I'm gonna look and say I have a chart of accounts here we we wouldn't have anything in our chart of accounts we just started we just started okay so I would write in as I'm doing this you know do simultaneously like in QuickBooks or in some kind of software but you know you would say okay but anyways you'd say hmm I have checking account and I have a loan from shareholder do I have do I have those in my charge of accounts yet well no but I don't have anything in my chart of accounts so I'm gonna write in and the chart of accounts chart of accounts these two items okay baby was back was back we've got the the charge of accounts we didn't have any exist was our first one this is our first journal entry our first transaction of our business so we had to write in on our chart of accounts checking account so we can make the journal entry somewhere we have the chart of accounts checking accounts as we made our journal entry and half of three and under assets and then under liabilities we have another account that we created to record that journal entry which is loan from shareholders in inside of every account on the chart of accounts there's going to be a general ledger and the general ledger is going to be where if if things happen in journal entries is going to go to the chart of accounts and then a subgroup of the chart of accounts is going to be the general ledger so inside our checking account general ledger right now from r-11 15 we have ten thousand dollars because we got ten thousand dollars in our checking account also whoo yes is good I have spent so much photos like this is good right anyways love loan from shareholders is going to be another subsection of the chart of accounts of loan from shareholder journal entry right and this is what happened in inside our chart of accounts in the general ledger only one thing happened in the loan from shareholders chart of account on 1 1 1 15 it was $10,000 we out we out JT ain't you $10,000 alright what does that do what would you do for a Klondike bar you know I do a lot for a Klondike bar well alrighty then ways back I'll tell you what happens from the balance sheet and the income statement from those items now I'm going to go fast because as you can see there's not going to be too much happening because as only we have one transaction from the one transaction we had an asset ten thousand dollars in the checking account of ten thousand dollars so we had and as we know assets equal liabilities plus equity is the balance sheet we also had ten thousand dollars under liabilities alone from shareholder account and that's all we did we had the one transaction so there's you know there's two parts to a transaction so there's our two parts assets ten thousand dollars equal liabilities plus equity ten thousand dollars because there's no equity yet is the equity there's no retained earnings there's no net income but that's from off the income statement now we have it we haven't done anything with revenues or expenses yet so there's nothing our income statement so income statement is revenue minus expenses equals the net income and the net income flows over sorry to from the income statement flows over to the balance sheet and so that's that's the process it's going to be we're going to do a journal entry then we're going to see is in our chart of accounts we're going to go from our chart of accounts to our to our general ledger then we're going to go from our general ledger to our income statement balance sheet and then see what what's what's going on and we're going to do that 27 26 more times so it's going to be a lot of fun I hope you enjoy it I love doing these I'm just I'm just pumped I feel like I'm really doing something here I can remember my sleep and caffeine scheduler I just did right now but anyways I hope to see you on the next one it's going to be good I was gonna look up there what is this 173 hope to see you in 74 it's gonna be the second one of the set stay positive have fun stay blessed man just try to keep progressing never stop let's go

Contents

Applications

  • This form of financing is quite common while funding young companies with positive cash flows because such firms are still not able to raise debt from banks but need debt anyway to create a tax shield.
  • The contribution of shareholder loans to a corporation's capital structure generally relieves the corporation's debt load and is, therefore, used in leveraged buyouts to manage a degree of leverage.
  • Shareholders can extend the loan in distressed or near-default situations to save the company.[2]

See also

References

  1. ^ Gelter, Martin and Jurg Roth (2007). "SUBORDINATION OF SHAREHOLDER LOANS FROM A LEGAL AND ECONOMIC PERSPECTIVE" (PDF). cesifo-group.de. Retrieved 2014-02-04.
  2. ^ Subordination of Shareholder Loans from a Legal and Economic Perspective

External links

This page was last edited on 16 March 2019, at 17:36
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