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The Director Loan To Company Agreement is a crucial document used when a director provides financial support to their company through a loan arrangement in Australia. This agreement is particularly important for private companies where directors may need to inject personal funds to support business operations, expansion, or working capital needs. The document must comply with strict requirements under Australian corporate law, including the Corporations Act 2001 and Division 7A of the Income Tax Assessment Act 1997, which prevents private companies from making tax-free distributions disguised as loans. The agreement includes detailed terms about the loan amount, interest rates (which must meet minimum statutory requirements), repayment schedules, security arrangements if applicable, and default provisions. It serves to protect both the director's interests as a creditor and ensure the company maintains proper corporate governance and regulatory compliance.

1. Parties: Identifies the director as lender and the company as borrower, including full legal names, ACN/ABN, and addresses

2. Background: Explains the context of the loan, the director's relationship with the company, and the purpose of the loan

3. Definitions and Interpretation: Defines key terms used in the agreement and sets out rules for interpreting the agreement

4. Loan Amount and Purpose: Specifies the loan amount, drawdown conditions, and permitted use of funds

5. Interest: Details the interest rate (ensuring Division 7A compliance), calculation method, and payment frequency

6. Repayment Terms: Specifies repayment schedule, term of the loan, and early repayment provisions

7. Events of Default: Lists circumstances constituting default and consequences of default

8. Representations and Warranties: Standard company representations regarding capacity and authority to enter into the agreement

9. Company Covenants: Ongoing obligations of the company during the loan term

10. Notices: Specifies how formal communications between parties should be made

11. General Provisions: Standard boilerplate clauses including governing law, variation, and severability