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Inter Company Loan Agreement for the United Kingdom

Inter Company Loan Agreement Template for England and Wales

An Inter Company Loan Agreement is a legally binding document governed by the laws of England and Wales that establishes the terms and conditions for a loan between related companies within the same corporate group. The agreement details the loan amount, interest rates, repayment terms, and obligations of both parties, while ensuring compliance with relevant company law, tax regulations, and transfer pricing requirements. It includes provisions for default, security (if applicable), and maintains proper documentation for regulatory compliance.

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Inter Company Loan Agreement

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What is a Inter Company Loan Agreement?

An Inter Company Loan Agreement is essential when companies within the same corporate group need to establish formal lending arrangements. This document, governed by English and Welsh law, is commonly used for group financing, cash management, and efficient capital allocation within corporate structures. It ensures compliance with transfer pricing regulations, maintains proper documentation for tax authorities, and protects both parties' interests while facilitating intra-group financing. The agreement is particularly important for maintaining clear financial boundaries between group entities and demonstrating arm's length transactions.

What sections should be included in a Inter Company Loan Agreement?

1. Parties: Identification of lender and borrower companies

2. Background: Context and purpose of the loan arrangement

3. Definitions: Key terms used throughout the agreement

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

5. Interest: Interest rate, calculation method, and payment terms

6. Repayment Terms: Schedule and method of repayment

7. Representations and Warranties: Standard company declarations and assurances

8. Events of Default: Circumstances constituting default and consequences

9. Governing Law: Specification of applicable law and jurisdiction

What sections are optional to include in a Inter Company Loan Agreement?

1. Security: Details of any security or guarantees - used when loan is secured

2. Conditions Precedent: Conditions to be met before loan availability - used for complex or high-value loans

3. Tax Gross-Up: Provisions for tax-related adjustments - used when cross-border elements exist

4. Change of Control: Provisions for ownership changes - used when required for group structure protection

What schedules should be included in a Inter Company Loan Agreement?

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

2. Form of Drawdown Notice: Template for requesting loan disbursements

3. Security Documents: Details of any security arrangements if applicable

4. Group Structure Chart: Corporate structure showing relationship between parties

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

Jurisdiction

England and Wales

Publisher

Ƶ

Document Type

Finance Agreement

Cost

Free to use
Relevant legal definitions





































Clauses


























Industries

Companies Act 2006: Core company law legislation covering directors' duties, financial assistance provisions, and requirements for maintaining proper accounting records in relation to inter-company loans

Financial Services and Markets Act 2000: Establishes the regulatory framework for financial services and requirements if the loan could be considered a regulated activity

Corporation Tax Act 2009: Governs corporate tax implications including transfer pricing considerations, thin capitalization rules, and tax treatment of interest payments

Income Tax Act 2007: Contains provisions regarding withholding tax requirements on interest payments between companies

Insolvency Act 1986: Covers provisions regarding transactions at an undervalue, rules about preferences, and directors' duties when company is approaching insolvency

Consumer Credit Act 1974: While generally exempt for inter-company loans, may need consideration if there's any consumer element involved

FCA Regulations: Financial Conduct Authority regulations that may apply depending on the nature of the loan and the companies involved

BEPS Rules: Base Erosion and Profit Shifting rules governing international tax considerations for cross-border loans

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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