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Promissory Note From Corporation To Shareholder for Philippines

Promissory Note From Corporation To Shareholder Template for Philippines

A Promissory Note From Corporation To Shareholder is a formal financial instrument used in the Philippines that evidences a corporation's promise to pay a specific sum of money to one of its shareholders. The document is governed by Philippine law, particularly the Revised Corporation Code and Civil Code, and must comply with local securities regulations. It includes essential terms such as the principal amount, interest rate, payment schedule, and default provisions, while incorporating necessary corporate authorizations and compliance with Philippine corporate law requirements. The document serves as a legally binding obligation of the corporation and must be properly authorized by the board of directors.

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What is a Promissory Note From Corporation To Shareholder?

The Promissory Note From Corporation To Shareholder is commonly used in Philippine business practice when a corporation needs to formalize a debt obligation to one of its shareholders. This might occur in various scenarios, such as when a shareholder has provided additional funding to the corporation, in share buyback arrangements, or in dividend alternative arrangements. The document must comply with Philippine law, particularly the Revised Corporation Code and Civil Code, and requires proper corporate authorization through board resolutions. It typically includes specific terms regarding the principal amount, interest rates (subject to Philippine usury laws), payment schedules, default provisions, and any security arrangements. The note serves as evidence of the debt and provides legal protection for both the corporation and the shareholder. Given its nature as a formal financial instrument, it must be carefully drafted to ensure enforceability and compliance with local regulations, including securities laws if applicable.

What sections should be included in a Promissory Note From Corporation To Shareholder?

1. Date and Place of Execution: Specifies when and where the promissory note is executed, which is crucial for determining when the obligation begins

2. Parties: Identifies the Corporation as the Maker/Promisor and the Shareholder as the Payee/Promisee, including complete legal names and addresses

3. Promise to Pay: Clear statement of the unconditional promise to pay a specific sum of money, including the principal amount written in both words and figures

4. Interest Rate: Specifies the interest rate (if any), how it is calculated, and payment frequency, ensuring compliance with Philippine usury laws

5. Payment Terms: Details of payment schedule, including due date(s), installment amounts (if applicable), and method of payment

6. Place of Payment: Specifies where payments should be made or remitted

7. Default and Acceleration: Defines events of default and the consequence of acceleration of the entire obligation

8. Security/Collateral: If applicable, describes any assets pledged as security for the note

9. Governing Law: Explicitly states that the note is governed by Philippine law

What sections are optional to include in a Promissory Note From Corporation To Shareholder?

1. Prepayment Provisions: Optional clause allowing early payment of the note, with or without penalties

2. Late Payment Penalties: Optional provisions for penalties or additional interest for late payments

3. Assignment Rights: Optional clause specifying whether the note can be assigned to other parties

4. Corporate Authorization Statement: Optional section referencing the board resolution authorizing the note issuance

5. Tax Provisions: Optional section addressing responsibility for taxes, particularly relevant if there are withholding tax implications

6. Notices: Optional section specifying how and where formal notices should be delivered

7. Amendment Procedures: Optional section outlining how the note can be modified

What schedules should be included in a Promissory Note From Corporation To Shareholder?

1. Payment Schedule: If installment payments are involved, a detailed schedule of payment dates and amounts

2. Board Resolution: Copy of the corporate board resolution authorizing the issuance of the promissory note

3. Security Agreement: If collateral is involved, details of the security arrangement

4. Specimen Signatures: Authorized signatures of corporate officers executing the note

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

Philippines

Publisher

Ƶ

Document Type

Promissory Note

Sector

Banking

Cost

Free to use
Relevant legal definitions










Clauses
























Relevant Industries

Banking and Financial Services

Corporate Services

Investment Management

Professional Services

Legal Services

Business Services

Manufacturing

Real Estate

Technology

Retail

Healthcare

Energy

Relevant Teams

Legal

Finance

Corporate Secretariat

Treasury

Compliance

Corporate Governance

Risk Management

Accounts Payable

Board Secretariat

Shareholder Relations

Relevant Roles

Chief Financial Officer

Corporate Secretary

Legal Counsel

Finance Director

Corporate Treasurer

Compliance Officer

Board Director

Chief Executive Officer

Financial Controller

Corporate Lawyer

Investment Manager

Shareholder Relations Manager

Corporate Governance Officer

Risk Management Officer

Accounts Payable Manager

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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