Context: We have a holdco with multiple shareholders. This holdco was recently set up to acquire other companies. We have one acquisition close to consummation. As a majority shareholder, I am planning to lend money to the holding company to come up with remaining funds for the acquisition. Probably thinking about a 1-2 year interest free loan. I spoke to multiple CPA's but didn't get a clear answer. The questions are as follows:

  1. Can the loan be interest free or should there be a minimum interest rate per tax laws?
  2. How long can the term of the loan be?

For the opposite, i.e. corporations giving loan to the shareholder, there are multiple pieces of info available but not the other way round i.e. us giving loan to the corp. Any Canada tax experts who know about this?