I'm looking to buy an office property to rent to my related trading company - company 1. I want to set up company 2 to buy it & company 1 lease it. Should I, as the director of both companies, loan the money to company 2? Or make an equity investment into company 2, for company 2 to then buy the real estate?
Company 2 would then pay me personally back in franked dividends (vs interest payments from a loan). What are the pros & cons from a commercial law and tax point of view?
Company 2 would then pay me personally back in franked dividends (vs interest payments from a loan). What are the pros & cons from a commercial law and tax point of view?