A loan agreement is an agreement between two parties whereby one party (usually referred to as the ‘lender’) agrees to provide a loan to the other party (usually referred to as the ‘borrower’).
A Division 7A loan agreement is a loan agreement that covers certain payments or loans that are made or debts that are forgiven by a private (i.e. proprietary limited) company, and would otherwise be treated for tax purposes as assessable income of the recipient.
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You will need the following information to generate your document:
- Name of the lender and borrower
- Address of the lender and borrower
LegalVision’s LVDox™ Free Division 7a – Loan Agreement sets out:
- a basic interest clause;
- a basic repayment clause; and
- basic costs and expenses, amendments, waiver and governing law clauses.
If your loan arrangement is more complex, then it’s important that you have a lawyer assist you draft the following clauses:
- a sophisticated dispute resolution clause; and
- additional provisions in related to the rights, responsibilities and obligations of the partners, particularly if agreement has been reached on particular issues.