As a shareholder, it is important to have a formal agreement in place when lending money to your company. This agreement is known as a shareholder loan agreement and it outlines the terms and conditions of the loan. If you are looking for a free shareholder loan agreement template, you have come to the right place.
A shareholder loan agreement is a legal document that is signed by the borrower (the company) and the lender (the shareholder). This agreement sets out the terms and conditions of the loan, such as the amount, interest rate, repayment schedule, and any other relevant details. Having this agreement in place ensures that both parties are aware of their obligations and responsibilities throughout the loan period.
Some of the benefits of having a shareholder loan agreement include:
1. Clarity and transparency: By having a written agreement that stipulates the terms and conditions of the loan, there is clarity and transparency between the borrower and the lender.
2. Protection for both parties: The agreement sets out the rights and obligations of both parties, protecting both the borrower and the lender.
3. Legal enforceability: A shareholder loan agreement is a legally binding document that can be enforced in court if necessary.
Now, let`s take a look at what should be included in a shareholder loan agreement:
1. Loan amount: This is the total amount that the shareholder will be lending to the company.
2. Interest rate: This is the rate of interest that will be charged on the loan. The interest rate may be fixed or variable, and it should be clearly stated in the agreement.
3. Repayment schedule: This outlines the repayment schedule for the loan, including the repayment period and the frequency of repayments.
4. Late payment fees: This sets out the fees that will be charged if the company fails to make repayments on time.
5. Collateral: This outlines any collateral that the borrower is required to provide as security for the loan.
6. Default provisions: This outlines the consequences if the borrower defaults on the loan, such as the right to call in the loan and take legal action.
Now that you know what should be included in a shareholder loan agreement, where can you find a free template?
There are many websites that offer free shareholder loan agreement templates, but it is important to choose a reputable source. Some good options include legal websites like LawDepot and Rocket Lawyer, which offer customizable templates that can be tailored to your specific needs. You may also want to consult with a lawyer to ensure that the agreement meets all legal requirements and is enforceable in court.
In conclusion, having a shareholder loan agreement in place is important for both the borrower and the lender. It ensures that both parties are aware of their obligations and responsibilities, and it provides legal protection in the event of a dispute. When looking for a free shareholder loan agreement template, be sure to choose a reputable source and consider consulting with a lawyer for added assurance.