Depending upon the amount of registered capital invested, the foreign shareholder may make shareholder loans to the WFOE, with payments of interest and repayment of principal not subject to profitability.

FORBES: Staking Out Your Market Position In China: Part II

The document proposed that Chinese partner Guangdong Provincial Highway Construction Co. agree to the transfer of the extra cost from Hopewell's balance sheet to that of the project in the form of shareholder loans.

CNN: HANGING ON AT HOPEWELL

Cash and loans flowed freely between Daewoo subsidiaries regardless of shareholder interests and so, if any one of the creditors calls in loans and bankrupts a Daewoo company, it could pull the whole lot down.

ECONOMIST: South Korea

Under current law, S corporation shareholders only increase their basis in the S corporation for loans made directly to the corporation by the shareholder.

FORBES: Business Return Due Dates