They can receive a dividend.
- A dividend is a sum of money paid regularly (usually quarterly) by a company to its shareholders out of its profits or reserves.
- It’s not taxed if it’s a return of the capital to the shareholder.
- It’s usually paid in cash.
- Owners can have a dividend of stock or other assets.
They can loan themselves.
- A shareholder loan is a debt-like form of financing provided by shareholders.
- The loan must have (1) a stated interest rate, (2) a maturity date, and (3) covenants for non-repayment.
- If the loan is below-market, it will be treated as some other payment.
They can do an owner’s draw.
- An owner’s draw is money taken out of a business by its owners.
- The draw isn’t taxed at the company-level.