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Owner Advances: The Debt — Equity Dilemma1

Owner Advances: The Debt — Equity Dilemma1 It is common practice for owners of small business to make advances to the firm with the intent that these advances be considered debt. However, the Courts have carefully scrutinized these types of arrangements when bad debts are claimed and have frequently judged them to be equity investments.The intent of this article is to present characteristics which will infer favorably toward a debt determination. These factors are discussed in relationship to the court cases which lend their support. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Journal of Small Business SAGE

Owner Advances: The Debt — Equity Dilemma1

Boyer, Patricia A.
American Journal of Small Business , Volume 3 (1): 5 – Jul 1, 1978
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Publisher
SAGE
Copyright
© 1978 SAGE Publications
ISSN
0363-9428
eISSN
1540-6520
DOI
10.1177/104225877800300105
Publisher site
See Article on Publisher Site

Abstract

It is common practice for owners of small business to make advances to the firm with the intent that these advances be considered debt. However, the Courts have carefully scrutinized these types of arrangements when bad debts are claimed and have frequently judged them to be equity investments.The intent of this article is to present characteristics which will infer favorably toward a debt determination. These factors are discussed in relationship to the court cases which lend their support.

Journal

American Journal of Small Business – SAGE

Published: Jul 1, 1978

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