Chaiman’s daughter wants a business loan – does Reg O apply?

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Question:

Our Board Chairman’s daughter has opened her own business and wants a loan from us. She is on it all by herself and he will not be a guarantor. Is her loan subject to Reg O?

Answer:

No. So long as the Director does not have “control” over the management of the daughter’s business, her loan would not be considered to be a related interest of the Board Chairman. As such, it could be made without regard to Reg O restrictions or provisions.

Not sure if he has “control” or not? Join my upcoming webinar “The Ins & Outs of Insider Lending and Reg O” on March 26, 2024 to learn more!

Learn more about Rebekah Leonard's
The Ins & Outs of Insider Lending and Reg O webinar.