Document background
The Intercompany Promissory Note is a crucial document used to formalize and document loan arrangements between companies within the same corporate group under Danish law. It is typically employed when one group entity provides financing to another, whether for operational needs, expansion projects, or restructuring purposes. The document serves multiple functions: it creates a legally binding obligation, supports tax compliance by evidencing arm's length terms, and provides documentation for accounting and audit purposes. The note must comply with Danish legal requirements, including the Danish Promissory Notes Act (Gældsbrevsloven) and relevant corporate and tax regulations. It should contain clear terms regarding the loan amount, interest rates, repayment schedule, and default provisions, while also considering transfer pricing implications and intercompany financing rules.
