Legal Question in Business Law in California
corporation
One corporation. Two locations. Two
directors. Each runs a location. One
director has put personal funds into
the corporation to keep it afloat. The
other director has not. What is the
legal aspect here? Also, is it legal for
one director to pay bills for his
location out of the others account
without consent?
1 Answer from Attorneys
Re: corporation
Thanks for your question. Depending upon how the personal fund transaction was structured, it could be considered a loan or a capital contribution. Are the two directors the only two owners (in shares) of the corporation? If it is one corporation, then on its face, it would be legal and appropriate for the directors to pay expenses from the same account. Remember one corporation can have more than one bank account but for accounting purposes it all comes in and out of the same pot.
Yours truly,
Bryan
877.201.8728
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