Loan to company owner

Mixing private and business finance is still common. 


Company and owner’s money can be mixed in following cases:

  • company pays owner’s private expenditure, effectively paying private  costs to owner’s suppliers;
  • owner withdraws cash from company’s bank account;
  • owner receives loans in one  of following ways:
    • more smaller payments are made or
    • written contract is non existent or
    • contract has a long draw period or
    • owner does not pay installments or payments are made irregularly or
    • interest rate is low or
    • other loan conditions are not common and would not be accepted would company grant a loan to third persons.


There is high probability those “loans” would be levied taxes, late interest and substantial fines in case of tax control. Money received can be treated as:

  • salary, if owner is employed at the company;
  • dividend payout or
  • other income of a natural person. 


We strongly advise not to execute such payments to owner and suggest following:

  • private expenditure must be paid by owner from his private funds;
  • cash withdrawals are possible only if company pays small suppliers in cash;
  • loan to owner can be granted on arm’s length principle only – under usual market conditions. 


For more info feel free to call us at +386 8 2055 950 or write us at 


Robert Potočnik

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