 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
   |
|||||||||
|
|
Ask a Lawyer -- Corporations
|
|||||||
|
Brought to you by MedLawPlus.com®-- Corporate Bylaws and initial board of directors resolution Price: $14.99 (free trial) |
|
Question: What is meant when a corporation is said to be "thinly capitalized"? Response: It means the corporation has an insufficient level of assets in relation to its debts and operational needs for capital. The finding of a corporation to be "thinly capitalized" can have two negative consequences: (a) the owners might be held personally liable for certain corporate debts and (b) the IRS recharacterize shareholder debts as equity investments thereby disallowing the corporation an interest deduction on said shareholder debt. For a case on the IRS issue with thinly capitalized corporations, see Recklitis v. Commissioner, 91 T.C. 874 (1988). Submitted: 11-2-2006; Shawn, CA Response: 11-7-2006; JJR Add A Comment |
Ask a Lawyer, Corporations Archives
DISCLAIMER The above is provided for informational purposes only and is NOT to be relied upon as professional advice. The information presented on this site comes without any warranty of correctness and, therefore, should not be relied upon. This service is not a substitute for the advice of a professional. No attorney client relationship is created through use of this site.
Home | Site Map | Library | Ask Atty
Plastic Surgery | Divorce Lawyers | Legal Forms
MedLawPlus.com, Inc.
St. Louis, MO
Copyright 1999 - 2008 / Patent Pending
