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Directors Loan Agreement

Directors Loan Agreement Template for Germany

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Key Requirements PROMPT example:

Directors Loan Agreement

"I need a Directors Loan Agreement under German law for a €500,000 loan from our managing director to the company, with quarterly interest payments and full repayment by March 2025, secured against company property."

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Document background
The Director's Loan Agreement is a crucial document used when establishing a formal lending arrangement between a company and its director in Germany. It's commonly used in situations where either the company needs additional funding from its director, or where the company is providing a loan to its director for approved purposes. The agreement must comply with German corporate law, including the German Civil Code (BGB), German Commercial Code (HGB), and relevant corporate legislation. The document typically includes detailed provisions on loan amount, interest calculations, repayment terms, security arrangements, and regulatory compliance requirements. It's essential to ensure the agreement aligns with German tax regulations and corporate governance requirements, particularly regarding related-party transactions and directors' duties.
Suggested Sections

1. Parties: Identification of the company and the director entering into the loan agreement

2. Background: Context of the loan agreement, relationship between parties, and purpose of the loan

3. Definitions: Definitions of key terms used throughout the agreement

4. Loan Amount and Purpose: Specification of the loan amount and its intended use

5. Interest Rate and Calculations: Details of the applicable interest rate, calculation method, and payment frequency

6. Repayment Terms: Schedule and methods of repayment, including any early repayment provisions

7. Representations and Warranties: Statements of fact and assurances from both parties

8. Covenants: Ongoing obligations of both parties during the loan term

9. Events of Default: Circumstances constituting default and consequences

10. Regulatory Compliance: Compliance with German corporate and banking laws

11. Termination: Conditions and process for terminating the agreement

12. Governing Law and Jurisdiction: Specification of German law as governing law and jurisdiction for disputes

Optional Sections

1. Security: Details of any collateral or security provided for the loan - include when the loan is secured

2. Subordination: Provisions regarding the ranking of the loan - include when there are other creditors

3. Tax Provisions: Specific tax-related provisions - include when there are complex tax implications

4. Board Approval: Details of required corporate approvals - include for larger companies or specific corporate structures

5. Insurance: Requirements for insurance of any security - include when loan is secured by physical assets

6. Assignment and Transfer: Rights to assign or transfer the loan - include when transferability might be relevant

7. Shareholders' Approval: Requirements for shareholders' approval - include when required by articles or law

Suggested Schedules

1. Repayment Schedule: Detailed schedule of repayment dates and amounts

2. Loan Disbursement Details: Specifics of how and when the loan amount will be disbursed

3. Security Details: Detailed description of any security or collateral provided

4. Corporate Authorizations: Copies of relevant board resolutions and corporate approvals

5. Interest Calculation Examples: Examples showing how interest will be calculated

6. Form of Drawdown Notice: Template for requesting loan disbursements if multiple drawdowns are allowed

7. Existing Indebtedness: List of company's existing loans and financial obligations

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Agreement
Business Day
Company
Director
Board of Directors
Supervisory Board
Drawdown Date
Drawdown Notice
Default
Event of Default
Default Interest
Interest Payment Date
Interest Period
Interest Rate
Loan
Loan Amount
Material Adverse Effect
Repayment Date
Repayment Schedule
Security
Security Documents
Tax
Working Capital
Permitted Purpose
Related Party
Governing Law
Insolvency Event
Corporate Authorization
Confidential Information
Force Majeure
Encumbrance
Financial Indebtedness
Group
Subsidiary
Applicable Law
Business Plan
Financial Statements
Quarter Date
Reference Banks
EURIBOR
Security Interest
Termination Date
Tax Deduction
VAT
Articles of Association (Satzung)
Commercial Register (Handelsregister)
Management Board (Vorstand)
Shareholder Resolution
Authorized Signatory
Clauses
Loan Amount
Interest
Repayment
Security
Representations and Warranties
Conditions Precedent
Conditions Subsequent
Events of Default
Acceleration
Corporate Authority
Board Approval
Purpose of Loan
Disbursement
Early Repayment
Interest Calculation
Default Interest
Costs and Expenses
Tax Gross-up
Indemnification
Confidentiality
Notices
Assignment and Transfer
Set-off
Force Majeure
Severability
Amendments
Governing Law
Jurisdiction
Regulatory Compliance
Documentation Requirements
Information Rights
Financial Covenants
Subordination
Related Party Transactions
Director's Duties
Corporate Benefit
Insurance
Security Enforcement
Term and Termination
Entire Agreement
Relevant Industries

Financial Services

Technology

Manufacturing

Retail

Professional Services

Healthcare

Real Estate

Construction

Energy

Transportation

Media and Entertainment

Telecommunications

Hospitality

Education

Non-Profit Organizations

Relevant Teams

Legal

Finance

Corporate Secretariat

Tax

Compliance

Treasury

Risk Management

Corporate Governance

Board Secretariat

Executive Management

Relevant Roles

Director

Managing Director (Geschäftsführer)

Chief Executive Officer

Chief Financial Officer

Company Secretary

Financial Controller

Corporate Lawyer

Legal Counsel

Tax Director

Compliance Officer

Board Member

Finance Manager

Treasury Manager

Corporate Governance Officer

Risk Manager

Industries
German Civil Code (Bürgerliches Gesetzbuch - BGB): Contains fundamental provisions for loan agreements (§§ 488-507), including terms, interest rates, repayment obligations, and general contract law principles
German Commercial Code (Handelsgesetzbuch - HGB): Regulates commercial relationships and documentation requirements for business transactions, including loans involving company directors
German Stock Corporation Act (Aktiengesetz - AktG): Particularly §§ 89, 115 regarding loans to directors/supervisory board members, approval requirements, and restrictions on loans to management
Limited Liability Companies Act (GmbH-Gesetz): Relevant for director's loans in GmbH companies, particularly regarding capital maintenance rules and restrictions on financial assistance
German Income Tax Act (Einkommensteuergesetz - EStG): Governs taxation of loans, particularly regarding beneficial interest rates and potential classification as hidden profit distributions
German Banking Act (Kreditwesengesetz - KWG): May be relevant if the loan arrangement could be considered a banking transaction requiring supervision
Money Laundering Act (Geldwäschegesetz - GwG): Requirements for documentation and verification of significant financial transactions, including substantial loans
Insolvency Code (Insolvenzordnung - InsO): Provisions regarding treatment of director's loans in case of insolvency, particularly regarding subordination and repayment restrictions
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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