Prohibition in reduction of invested capital.
It originates from the capital company law, the Gesetz betreffend die Gesellschaften mit beschränkter Haftung, (GmbHG).
According to § 30 GmbHG it is assumed that the contributed capital input is given (at least 25,000 Euros). In other words, the capital company's assets may not be paid out if the invested capital in this measure would be reduced at this time. If unlawful payment should be made, it is required to be reimbursed (§ 31 GmbHG). For the refund amount, the remaining co-owners are responsible.
Payment prohibition also against company directors.
The same rules apply to managers, procuration holders and corresponding authorized. Unauthorized loans in these cases must be promptly refunded.
The same applies to loans paid out by regular faculties (eg stock markets) (vgl. § 43a GmbHG).
- A loan contract is necessary.
- A further condition for payment is the existing loan contract in written form.
The provisions of the contract shall be the rules of a capital company and a stranger. In other words, it should contain the usual market recovery conditions in order to avoid complications with the tax authorities.
The interest rate shall not be below the market standard, where else can we get the impression that the loan was used as a hidden bonus allocation. But the loan will also contain a degree of security (e.g. encumbrance of life insurance, building equity securities or safe custody, due to debt, etc.).
A repayment agreement and the termination rights should exist in the loan contract.
If these conditions are met, the loan is paid to the joint owner. As a joint owner, more benefits exist. You will receive a loan that is close related with the current optimum, while the company receives interest income that increases shareholder profits.
This means that the shareholder is entitled to receive a tax-free loan from his or her GmbH, and this is considered as a bonus allocation. Through the free choice of repayment term, the possibility exists of optimizing the company's liquidity position.
Before you choose this kind of loan, it is advisable to get detailed information from a tax adviser.