Document background
The Internal Loan Agreement is a crucial document used when one entity within a corporate group provides financing to another related entity under Danish law. This type of agreement is commonly used for various purposes including subsidiary funding, project financing, working capital provision, or group treasury operations. The document must comply with Danish corporate law requirements, particularly regarding capital maintenance rules, transfer pricing regulations, and tax implications. The agreement typically includes detailed terms about the loan amount, interest calculation, repayment schedule, and various protective clauses. It's essential to ensure the Internal Loan Agreement reflects arm's length principles and includes appropriate documentation to satisfy both Danish tax authorities and corporate governance requirements. The agreement is particularly important in the context of group financing structures and must be carefully drafted to balance commercial flexibility with regulatory compliance.
