Transfers from outside accounts

[Jan Steinman]

> From: Mike or Penny Novack <stepbystepfarm at mtdata.com>
> 
>>> From: EngineInstitute <info at chinablueart.com>
>>> The partner is making it a loan to the company.
>>> How do I post this?
>> I'd create a new account of type "A/Payable" or "Liability" just for his transfers. Our co-op has several such accounts for members who loan the co-op money.
>> 
> Please get professional advice. .. it might be a very different situation (for a for profit partnership; partners investing in the expectation of gain) than what was just described for this co-op...

Good point. Thanks for bringing that up.

That said, I'd hazard a guess that whether it's a payable or a liability depends on the expected term.

I'm not trying to give advice, but these are the sorts of issues you should take to your lawyer or accountant: Is there a written agreement regarding the loan? Is it for capital, or operations? Is it treated preferentially compared to other debt the organization has? A forced conversion of debt to equity at some later date could be painful.

:::: Cheap energy brought centralization, urbanization and globalization. Expensive energy will bring decentralization, de-urbanization and localization. -- Pat Murphy
:::: Jan Steinman, EcoReality Co-op ::::