Document background
A Shareholder Loan Agreement is a crucial financing instrument used when a company seeks funding from its shareholders as an alternative or complement to traditional bank financing or equity investment. This document, structured under Belgian law, provides a legal framework for documenting loans between shareholders and their companies, ensuring compliance with the Belgian Companies and Associations Code, tax regulations, and financial services laws. It's particularly useful for companies needing quick access to capital, bridge financing, or when bank financing is not readily available. The agreement includes detailed provisions on interest rates, repayment terms, and security arrangements, while addressing specific Belgian law requirements such as thin capitalization rules and potential recharacterization risks. A well-drafted Shareholder Loan Agreement helps prevent future disputes by clearly documenting the parties' intentions and ensuring the loan's treatment as debt rather than equity for tax and corporate purposes.
