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FAQs

I put money into my business. Should I secure it?

Any money lent to your corporation should be documented by way of a debt instrument (i.e. a promissory note) and secured. A mortgage would be used for any of the corporation’s property that is comprised of real estate. For all other property, a general security agreement would be used. If a bank or other lender needs a priority security position for these assets, the shareholder’s interest in them can be postponed or subordinated. In that case, the shareholder’s interest would still be that of a secured creditor, even though subordinate to the institutional lender.

© 2015 Lawrence, Lawrence, Stevenson LLP

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43 Queen Street West, Brampton, ON, Canada L6Y 1L9
Telephone: 905.451.3040 Fax: 905.451.5058 Email: lls@lawrences.com

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