Shareholder Loan Agreement
Simply complete the Shareholder Loan Agreement form below then click on View Results to see your completed contract.
 

LawDepot's Shareholder Loan Agreement is used when:

  • A corporation is borrowing money from one of its shareholders;
  • A shareholder is lending money to its corporation; or
  • A corporation owes money to a shareholder (for salary, etc.) and the parties need a record of the payment to the shareholder for tax purposes.
  • The corporation should authorize the execution of the Shareholder Loan Agreement with a Director Resolution / Minutes.
  • Payment Schedule (or Amortization Schedule) is also available.

For a loan from a corporation to a shareholder or between parties who are not a corporation and its shareholder, try our Promissory Note or Loan Agreement.

We regularly maintain this contract. Last Modified: November 2009

Shareholder Loan Agreement
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This software has the flexibility to let you quickly create the Shareholder Loan Agreement you want. It does this by providing many options with appropriate defaults.

Leave an answer empty if you want a blank line in place of the answer in order to complete it after printing, but before it is signed.
Governing Law
State: Q. What is the governing law for a Shareholder Loan Agreement? A. The governing law is the law of the jurisdiction in which the loan will be entered into. It may or may not coincide with the jurisdiction in which the parties reside.
Shareholder
Name: Q. Who is the Shareholder? A. The Shareholder is the party that advances money to the Corporation on condition that the Corporation will repay the loan in the future. The Shareholder owns shares in the Corporation. For the purpose of the loan the Shareholder is treated the same as any other debtor or lender.
Address:
(eg.  Street, City, State, Zip Code)
Corporation
Name: Q. Who is the Corporation? A. The Corporation is the party that borrows money from the Shareholder on condition that the money will be repaid in the future. If the Corporation was to liquidate then all loans including the shareholder loan must be paid before the shareholders can recover any equity from their shares.
Address:
(eg.  Street, City, State, Zip Code)

Where is the Corporation incorporated?
 
Interest  Q. What is Interest? A. Interest is an amount charged to the Corporation (the borrower) for the use of the Shareholder's money. It is usually expressed as a percentage of the amount borrowed and is calculated at a specified interval over the course of the loan. The interest rate is the annual interest rate.
Principal
Principal amount: (eg. 1,000.00) Q. What is the Principal Amount? A. The Principal is the original amount of the loan that is paid from the Shareholder to the Corporation on the date of the loan, before any interest accrues. Once the Corporation has begun to pay back the loan, the principal amount refers to the amount of money still owing to the Shareholder at any given moment in time.
Currency:
Term Q. What is the Term? A. The Term is the period of time over which the loan will be outstanding. At the end of the Term the Corporation will have repaid the loan and any interest that has accumulated.
Term of the loan is: Q. What is a demand loan? A. A demand loan does not need to be paid until the Shareholder demands it be repaid. There is no fixed end date for the repayment of the loan. Upon demand, the Corporation is given a reasonable period of time to repay the entire loan.
Payment
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Payments are: Q. What are the payment options available? A. There are four options for the method of repayment:
1. The loan can be repaid by "specific periodic amounts", which means that the Shareholder and Corporation agree upon an amount of money which the Corporation will pay to the Shareholder at agreed upon intervals.
2. The "lump sum" payment at the end of the term means that the Corporation pays nothing to the Shareholder until the end of the loan term, at which time the Shareholder repays the entire loan in one payment.
3. The "interest only" option means that the Corporation makes regular payments to the Shareholder that are put toward paying off the interest on the principal amount only, with no portion of the payment going towards the principal amount itself.
4. The "interest and principal" option means that the Corporation makes regular payments to the Shareholder that are put toward paying off both the principal amount and the interest as it is compounded.
First payment to happen:
Payment to start on: (e.g. April 1st, 2005)
Borrower can pay outstanding principal without penalty: Q. Should the Corporation be able to pay the outstanding principal without penalty? A. Granting this option enables the Corporation to pay down the principal at anytime without having to pay an additional sum as a penalty.
Security
Loan is to be secured by security/collateral? Yes No Q. As the Shareholder, should I demand that the Corporation provide security/collateral for the loan? A. You do not need to require collateral, however, in the event the Corporation goes bankrupt, your debt will have priority over debts owed by the Corporation to other lenders if you have "secured" your loan through collateral. This may be preferable if the Corporation does not have enough assets to fully repay all of its debts.
Additional Clauses Click here for tips on drafting your additional clauses.
Number of additional clauses:
First Clause:
Second Clause:
Third Clause:
Fourth Clause:
Miscellaneous
Specified address for payment:
Signing Details
Agreement to be signed: Click here to select a date from calendar
Are witnesses required to witness the signing of the Agreement? Q. Does my document need a witness, or a notary, or is it OK without a witness? A. Most documents and contracts do NOT require a witness for them to be legally valid. However, some documents can have clearly regulated requirements pertaining to witnesses. Additionally, many banks and other institutions have their own policies about signing requirements, and may refuse to accept documents that are not notarized regardless of their legal sufficiency. If your document will be used by a bank or registry, check with them regarding any additional witnessing requirements.