N.D. Admin Code 13-02-09-04 - Loans to corporations and principals
1. Obligations
of a parent corporation must be combined with obligations of subsidiary
corporations in which the parent owns or controls a twenty-five percent or more
interest, if one of the conditions in subsection 4 exists.
2. Obligations of subsidiary corporations
must be combined, if one of the conditions in subsection 4 exists.
3. Except as provided in subsection 5,
obligations of an individual who owns or controls a twenty-five percent or more
interest in a corporation must be combined with the obligations of said
corporation, if one of the conditions in subsection 4 exists.
4. Combining under this section is required
if:
a. The primary source of repayment for
the obligation is the profits or cash flow of the same individual, parent
corporation, or other subsidiary.
b. One or more loans is for the accommodation
of the individual, parent corporation, or other subsidiary.
c. The borrowing corporations are not
separate concerns, in reality, but merely departments or divisions of a single
enterprise.
5. If an
extension of credit would otherwise be required to be combined under subsection
3, and the extension of credit is secured by a purchase money security interest
for an individual borrower's personal use, or is secured by a first lien on the
residence of, and the residence is owned by or is expected to be owned by
(after the extension of credit) the borrower, the extension of credit may not
be combined.
Notes
General Authority: NDCC 6-01-04
Law Implemented: NDCC 6-03-59
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