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Directors Loan Agreement for United Arab Emirates

Directors Loan Agreement Template for United Arab Emirates

A comprehensive legal document governed by UAE law that establishes the terms and conditions for a loan arrangement between a company and its director. This agreement ensures compliance with UAE Companies Law and corporate governance requirements while detailing the loan amount, repayment terms, interest provisions (if applicable under Sharia law), and security arrangements. The document incorporates necessary provisions for UAE regulatory compliance, including any required board or shareholder approvals, and provides mechanisms for enforcement under UAE jurisdiction.

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Directors Loan Agreement

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What is a Directors Loan Agreement?

The Directors Loan Agreement Template is a crucial document used in the UAE corporate environment when establishing formal lending arrangements between a company and its directors. This template is designed to comply with UAE Federal Law No. 32 of 2021 (Companies Law) and other relevant regulations, including Sharia principles where applicable. It is typically used when a director needs to either borrow funds from the company or lend money to the company, requiring formal documentation of the terms, conditions, and repayment schedule. The agreement includes provisions for regulatory compliance, corporate approvals, security arrangements if required, and appropriate interest structures that align with UAE legal requirements. This template is essential for maintaining transparent corporate governance and protecting both the company's and director's interests while ensuring all transactions are properly documented and legally enforceable within the UAE jurisdiction.

What sections should be included in a Directors Loan Agreement?

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

2. Background: Sets out the context of the loan, confirming the director's position and the company's authority to enter into the agreement

3. Definitions: Defines key terms used throughout the agreement

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

5. Interest Rate and Calculation: Details the applicable interest rate (if any, considering Sharia compliance) and calculation method

6. Repayment Terms: Specifies the repayment schedule, installment amounts, and payment methods

7. Representations and Warranties: Standard declarations by both parties regarding their capacity and authority to enter into the agreement

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

9. Events of Default: Defines circumstances constituting default and consequences

10. Governing Law and Jurisdiction: Specifies UAE law as governing law and determines jurisdiction for disputes

11. Notices: Details how formal communications between parties should be made

12. Execution: Signature blocks and execution formalities

What sections are optional to include in a Directors Loan Agreement?

1. Security Arrangements: Include when the loan is secured against specific assets or guarantees

2. Early Repayment Provisions: Include when early repayment options are available

3. Board Approval: Include when specific board approval details need to be referenced

4. Shareholder Approval: Include when shareholder approval is required under the company's articles

5. Assignment and Transfer: Include when either party may need to transfer their rights or obligations

6. Tax Provisions: Include when tax implications need to be addressed explicitly

7. Regulatory Compliance: Include when specific regulatory requirements need to be addressed

8. Islamic Finance Provisions: Include when the loan needs to be structured in accordance with Sharia principles

What schedules should be included in a Directors Loan Agreement?

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

2. Security Details: Description of any security or collateral provided

3. Board Resolution: Copy of board resolution approving the loan

4. Shareholder Resolution: Copy of shareholder resolution if required

5. Company's Constitutional Documents: Relevant extracts from company's articles regarding director loans

6. Regulatory Approvals: Copies of any required regulatory approvals or notifications

Authors

Alex Denne

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

Publisher

Ƶ

Document Type

Loan Agreement

Cost

Free to use
Relevant legal definitions






































Clauses





























Relevant Industries

Financial Services

Real Estate

Manufacturing

Technology

Retail

Healthcare

Professional Services

Construction

Energy

Telecommunications

Hospitality

Transportation

Education

Relevant Teams

Legal

Finance

Compliance

Corporate Governance

Treasury

Risk Management

Board Secretariat

Corporate Affairs

Executive Leadership

Internal Audit

Relevant Roles

Chief Executive Officer

Managing Director

Board Director

Company Secretary

Chief Financial Officer

Legal Counsel

Compliance Officer

Corporate Governance Officer

Finance Director

Treasury Manager

Risk Manager

Board Chairman

Executive Director

Non-Executive Director

Company Director

Industries






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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