Shareholder loan agreements are an important aspect of any business that involves shareholders. It is an agreement between the shareholders and the company. In this agreement, the shareholders loan money to the company, and the company agrees to pay back the loan with interest.
A shareholder loan agreement is a legal document that spells out the terms and conditions of the loan. It is important that this agreement is written properly, and that it contains all the necessary information, so that both parties are protected. This article will provide you with a sample shareholder loan agreement that you can use as a reference for your own business.
Sample Shareholder Loan Agreement
AGREEMENT made on [Date] by and between [Name of Company], a [State] corporation, with its principal place of business at [Address of Company] (“Borrower”), and [Name of Shareholder], an individual with a residence at [Address of Shareholder] (“Lender”).
WHEREAS, the Borrower needs funds and desires to borrow from the Lender on the terms and conditions contained herein,
NOW, THEREFORE, the parties hereto agree as follows:
1. Amount and Term of the Loan. The Lender agrees to loan to the Borrower the principal sum of [Amount of Loan] Dollars ($[Amount of Loan]). The loan shall be for a term of [Length of Loan] months, commencing on [Date of Loan] and ending on [Maturity Date].
2. Interest. The loan shall bear interest at a rate of [Interest Rate] per annum, payable monthly on the [Day of Payment] of each month. Any interest that is not paid when due shall be added to the principal amount of the loan.
3. Repayment. The Borrower shall repay the loan in [Number of Payments] payments. The first payment shall be due on [Date of First Payment] and subsequent payments shall be made on the [Day of Payment] of each month thereafter until the loan is fully repaid. If the Borrower fails to make any payment when due, the Lender shall have the right to declare the entire balance of the loan immediately due and payable.
4. Security. The loan shall be secured by a security interest in the assets of the Borrower.
5. Representations and Warranties. The Borrower represents and warrants that it is duly organized, validly existing, and in good standing under the laws of the state of its organization. The Borrower further represents and warrants that the execution, delivery and performance of this Agreement has been duly authorized by all necessary corporate action and that this Agreement constitutes the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms.
6. Miscellaneous. This Agreement shall be governed by and construed in accordance with the laws of the state of [State]. This Agreement may not be assigned by either party without the prior written consent of the other party. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
[Borrower]
[Name of Company]
By: _____________________________
[Name of Authorized Representative]
Title: ______________________________
[Lender]
[Name of Shareholder]
By: _____________________________
[Name of Authorized Representative]
Title: ______________________________
Conclusion
In summary, a shareholder loan agreement is an important document that should be properly drafted to protect both the shareholders and the company. The sample agreement presented above is a useful guide for drafting your own agreement. Always seek professional advice before entering any loan agreement.