Section 13-02-09-04 - Loans to corporations and principals1. 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. N.D. Admin Code 13-02-09-04
Effective September 1, 1986.General Authority: NDCC 6-01-04
Law Implemented: NDCC 6-03-59