Legal Question in Business Law in Virginia

Re: Employer/Employee Loan

Of course, if this so-called employee is now the owner of the property.

Re: Employer/Employee Loan

I think the answer to your concern depends upon the company. I understand why you don't want to identify the company, even indirectly.

In general, a private business can do anything it wants with its own property. The company is clearly favoring this one employee over others. I would certainly wonder why. There could be reasons that might not be legal, such as some form of illegal discrimination, sleeping with the boss, whatever. It could be simply irrational. But if I own property or money, I can give it to anyone I want, no matter how crazy it may seem to others.

HOWEVER.... if the company has other owners or has issued shares of stock to stockholders (or even if it has taken out loans of ANY kind, even trade credits), then this arrangement could be defrauding the other owners or other shareholders or even lenders if they have a "lien" (claim) for security on the assets of the company.

What you describe (in only 1 short sentence) suggests that the building really belongs to the company. The company's money was used to buy the building and land in the name of the employee, instead of in the name of the company. But it was the company's money used to buy it and the company is using the building.

Even a lender with a claim on the company's assets for repayment of THEIR loan to the company may be cheated by this arrangement, in terms of loss of security for their loan. (Really, really depends on what the loan agreement actually SAYS in detail.)

If there are other investors or owners involved how did not agree to this arrangement, then this is a net transfer of wealth away from the other owners or investors at their expense, to the benefit of the employee.

I would wonder if this was not done with the employee as a placeholder name, but you say that they are paying him rent, so I think not. I have been used to buy land for a client, where neighbors did not get along. To avoid personal conflict, the land was bought in my name as a trustee, but it was not really my land. I was only used as a placeholder / trustee to get around interpersonal conflicts among neighbors. But when you say they are paying him rent as a business, I doubt that is what is happening.