How can I invest in a company without owning equity and without it being considered a loan?

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How can I invest in a company without owning equity and without it being considered a loan?

I am wanting to invest in a local business, but I don’t want the hassle of
owning equity, but I also don’t want to invest as a loan. Are there any options?
The business is incorporated as an LLC.

Asked on August 5, 2016 under Business Law, Georgia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

No, there really are only two ways to invest in a company: either with a direct investment which gives you an ownership interest ("equity"); or by loaning money in exchange for repayment with interest and/or a share or percentage of profit or sales (you can structure the repayment any way that works for both you and the company). All company investment is equity or loans, in one form or another.


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