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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 118788
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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I need to know if an investment contract, into a TN S

Customer Question

I need to know if an investment contract, into a TN S Corporation, if deemed a security, (when the investment is treated like a loan with the ROI being a participation of profits) constitutes ownership in the corporation.
Submitted: 1 year ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
Not all investors into S-corporations are deemed owners of the corporation. If you have a security contract for your investment, then absent any bylaws or owner agreement with you and the S-corp giving you ownership percentage of the company, you can be just an investor who is entitled to repayment and return on investment without any ownership control or rights.