Legal Question in Business Law in California

The tax people are smarter than you think. Zero interest loans will cause imputed income at the market interest rate for the loan. If the consideration for the loan is a membership rather than interest, the value of a similar membership if it was paid for in cash will be imputed as income to you. Furthermore, if any of the loan is not repaid, you will owe taxes on that amount.

As for the SEC, if it truly is a loan, then they won’t get involved. However if, for example, there is no end date for the second 50% to be repaid, it will be treated as an investment and securities laws apply.

I think you need to realize that people who come up with creative and unconventional deals to get around tax and securities laws do so with teams of sophisticated accountants and lawyers figuring out how to set up and execute the deal. Amateurs who think they can outsmart the IRS, SEC and FTB only go broke if they’re lucky, and if they’re unlucky go to jail.

You need to either start hiring professionals or find another project. You’re not going to find the legal work you need for free on the internet.