The Shareholder Loan Note is a crucial document used when a shareholder provides debt financing to a company in Australia. This arrangement is common in various scenarios, including start-up funding, bridge financing, or when traditional bank financing is not preferred or available. The document must comply with Australian corporate law, particularly the Corporations Act 2001, and typically includes detailed terms about the loan amount, interest, repayment schedule, and any security arrangements. It's particularly important in private companies and family businesses where shareholder financing is common, and needs to be carefully structured to avoid adverse tax implications or conflicts with existing financing arrangements.
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1. Parties: Identification of the Lender (Shareholder) and Borrower (Company), including ACN/ABN and registered addresses
2. Background: Context of the loan, relationship between parties, and purpose of the loan note
3. Definitions and Interpretation: Key terms used throughout the document and interpretation rules
4. Loan Amount and Drawdown: Specification of the loan amount and conditions for drawdown
5. Interest: Interest rate, calculation method, and payment frequency
6. Repayment Terms: Repayment schedule, prepayment provisions, and maturity date
7. Events of Default: Circumstances constituting default and consequences
8. Representations and Warranties: Standard company representations and specific shareholder acknowledgments
9. Covenants: Ongoing obligations of the company during the loan term
10. Notices: Process and requirements for formal communications between parties
11. General Provisions: Standard boilerplate clauses including governing law, assignment, and amendments
1. Security: Include when the loan is secured against company assets or other security is provided
2. Subordination: Required when the loan needs to be subordinated to other company debt
3. Conversion Rights: Include if the loan note can be converted to equity under certain conditions
4. Tax Provisions: Detailed tax clauses when specific tax treatment is required
5. Related Party Transaction Provisions: Additional provisions required for compliance with Chapter 2E of the Corporations Act
6. Currency and Exchange Rate: Include for loans in foreign currency or with international parties
7. Board Approval: Specific approval requirements when required by company constitution or shareholders agreement
1. Drawdown Notice: Template form for requesting drawdown of the loan amount
2. Repayment Schedule: Detailed schedule of repayment dates and amounts
3. Interest Calculation Examples: Examples showing how interest will be calculated in various scenarios
4. Security Details: Details of any security provided (if applicable)
5. Company Board Resolution: Copy of board resolution approving the loan
6. Shareholder Consents: Required consents from other shareholders if applicable
7. Existing Security Register: List of existing security interests over company assets
Relevant legal definitions
Clauses
Relevant Industries
Financial Services
Professional Services
Technology
Real Estate
Manufacturing
Retail
Healthcare
Mining and Resources
Agriculture
Construction
Start-ups and High Growth
Family Business
Private Equity
Relevant Teams
Legal
Finance
Corporate Finance
Treasury
Tax
Compliance
Company Secretariat
Board of Directors
Executive Management
Relevant Roles
Chief Financial Officer
Finance Director
Company Secretary
General Counsel
Legal Counsel
Corporate Lawyer
Managing Director
Chief Executive Officer
Financial Controller
Treasury Manager
Company Director
Investment Manager
Corporate Finance Manager
Tax Manager
Compliance Officer
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