Olms interpretative Manual

CONTENTS OF ANNUAL REPORT:LOANSTOOFFICERS-MEMBERS-EMPLOYEES

214.601LMRDA,SECTION201(b)(4)

. . . direct and indirect loans made to any officer, employee, or member, which aggregatedmorethan$250duringthefiscalyear,togetherwithastatementofthe purpose;security,ifany,andarrangements for repayment; . . .

214.605ADVANCES

An advance in salary and business expenses would be considered a loan, payable by servicestoberendered.InthecaseofGronev.EconomicLifeIns.Co.,80A.809,816(Del.Ch.1911),the court said “One of the meanings of ‘advance’ is a loan and when used in that sense naturallyimplies a reimbursement, so as to imply relation of debtor and creditor.”In re Will of Altman, 6N.Y.S.2d 972, 973-74 ( Sur. 1938), the court said “The word ‘advances’, when taken in its strictlegal sense, does not mean gift-advancements, and does mean a sort of loan; and taken in itsordinary and usual sense, includes both loans and gifts-loans more readily, perhaps, than gifts.”Because of the debtor-creditor relationship created by an “advance”, we believe a loan would beconstituted.

(Technical Revisions: Dec. 2016)214.610

See Instructions, Form LM-2, Schedule 2.Form LM-3, Items 18, 56.(TechnicalRevisions:Dec.2016)

CONTENTS OF ANNUAL REPORT:LOANSTOBUSINESSENTERPRISES

214.701LMRDA,SECTION201(b)(5)

. . . direct and indirect loans to any business enterprise, together with a statement of thepurpose,security,if any, and arrangements for repayment; and . . .

214.705

See Instructions for LM-3, Item18.

(TechnicalRevisions:Dec.2016andJan.2021)

214.720REPORTABLE AS“LOANSRECEIVABLE” ONLM-2

All loans made to business organizations by the reporting labor organization, whethersecured or unsecured, must be reported as “Loans Receivable” except those of an investmentnature, such as an arrangement with a bank or similar institution for the block purchase ofmortgages or the bona fide purchase of obligations of a business enterprise on the open market.“Loans Receivable” are reported under Item 24 of the LM-2 and the supporting informationrequiredforloanstobusinessorganizationsmustbesuppliedinSchedule2thereof.

(TechnicalRevisions:Dec. 2016)

214.730LOANSTOAFFILIATESORSUBSIDIARIES

Where an international labor organization makes loans to a “subsidiary organization” of asubordinate labor organization, or to the subordinate organization itself, which provide for thepayment of interest (at any percent) on the loan, the transaction is basically a loan to thesubordinate or its “subsidiary organization” and, consequently, is to be reported as “LoansReceivable” under Item 24 of the Statement of Assets and Liabilities of Form LM-2 of theInternational.It is notto be reported as any form of investment by the international labororganization,notwithstandingthefactthatitmayreceiveamorethanadequatereturnbywayofinterest for the use of its money by the subordinate.This is true even if the loan is secured byfirstmortgagesonthe property(orproperties)forwhichtheloanismade.

(Revised:Dec.2016)