If you are a shareholder or a company director, and you are looking to advance funds to your business, it is important to have a clear and detailed shareholder loan agreement in place. The shareholder loan agreement outlines the terms and conditions of the loan and helps protect both parties in case of any dispute.
Here is a sample shareholder loan agreement that you can use to set up your own agreement:
[Company name] [Address] [Shareholder name] [Address] [Date]Loan Amount: [Amount of loan]
Interest Rate: [Interest rate]
Term: [Length of loan]
1. Purpose of the loan: The purpose of this loan is to provide [company name] with additional capital to invest in the business operations.
2. Term of the loan: The loan term will be [length of loan], starting on [start date] and ending on [end date].
3. Interest rate: The annual interest rate on the loan will be [interest rate].
4. Repayment terms: The loan will be repaid in full at the end of the term. Interest payments will be made [monthly, quarterly, annually, etc.], starting on [first payment date]. Principal payments will be made on [final payment date].
5. Security: The shareholder loan is unsecured and will not have any collateral.
6. Default: If [company name] defaults on the loan, the shareholder has the right to demand immediate payment of the outstanding loan balance.
7. Payment allocation: Any payments on the loan will be allocated first to interest and then to principal.
8. Governing law: This Agreement shall be governed by and construed in accordance with the laws of the state of [state name].
9. Notices: Any notices required under this Agreement shall be delivered by mail or email to the parties’ respective addresses listed above.
10. Entire agreement: This Agreement constitutes the entire understanding between the parties and supersedes all prior negotiations, understandings, and agreements.
The above sample shareholder loan agreement covers the basic terms of a loan between a shareholder and a company. However, it is important to note that each loan agreement is unique and tailored to the specific needs of the parties involved. If you need help drafting a shareholder loan agreement or have any questions about the process, it is best to consult with a qualified attorney or financial advisor.