Louisiana Revised Statutes 47:605.1 – Capital stock, surplus, and undivided profits
Terms Used In Louisiana Revised Statutes 47:605.1
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- corporation: shall mean a domestic corporation or foreign corporation as provided for in this Section. See Louisiana Revised Statutes 47:601
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- person: includes a body of persons, whether incorporated or not. See Louisiana Revised Statutes 1:10
A. If a corporation‘s total debt to all related parties exceeds the capital stock and surplus and undivided profits of the corporation as determined under La. Rev. Stat. 47:604 and 605, then fifty percent of the amount of the excess shall be included in the capital stock and surplus and undivided profits of the corporation and excluded from debt.
B. For purposes of this Section, “debt” shall not:
(1) Include trade debt that is less than one hundred eighty days old,
(2) Include deposit liabilities to related parties, or
(3) Be reduced by receivables.
C. For purposes of this Section, “related party” means any member of a controlled group of corporations as defined in 26 U.S.C. § 1563, or any other person that would be a member of a controlled group if rules similar to those of 26 U.S.C. § 1563 were applied to that person.
Acts 2004, 1st Ex. Sess., No. 2, §1, eff. Jan. 1, 2006; Acts 2005, No. 355, §1, eff. Jan. 1, 2006, for taxable periods beginning after Dec. 31, 2005.