Shareholders are not allowed to have a revolving loan account with their corporation. Loans to shareholders from the corporation (or loans from shareholders to the corporation) must have written documentation. Shareholder loan documentation should resemble a typical bank’s loan. Loan terms between the shareholder and the corporation should have a reasonable interest rate and the date or terms of repayment. Shareholder loans to the corporation which lack documentation are treated as contributed capital. Shareholder loans from the corporation which lack documentation or which cannot be repaid are treated as either dividends (C-Corp) or distributions (S-Corp). De minimis rules allow some relief to shareholders though. Loans which are less than $10,000 between the shareholder and the corporation do not require documentation, if the loan can reasonably be expected to be repaid in less than one year.