Document background
The Loan Conversion To Equity Agreement is a sophisticated financial instrument used when a company and its lender agree to transform outstanding debt into equity ownership. This document is particularly relevant in growth scenarios, restructuring situations, or when companies seek to strengthen their balance sheet by reducing debt. Under Belgian law, the agreement must comply with specific corporate law requirements regarding share capital increases and financial regulations. It typically follows an existing loan arrangement and requires careful consideration of tax implications, securities laws, and corporate governance issues. The document becomes crucial in startup funding rounds, corporate restructuring, and strategic investments, providing a framework for both parties to execute the conversion while ensuring compliance with Belgian regulatory requirements and protecting their respective interests.
