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Shareholder Loan Agreement to Company

KShs 3,500.00

A Shareholder Loan Agreement is a legal document that outlines the terms and conditions under which a shareholder lends money to a company in which they hold equity. This agreement serves as a hybrid between debt and equity financing, allowing the shareholder to support the company’s financial needs without diluting their ownership stake. Key elements of the agreement include the loan amount, interest rate, repayment terms, and any collateral required. The agreement also specifies the rights and obligations of both parties, ensuring that the loan is repaid in a timely manner and that the shareholder’s investment is protected.

Additional information

Typically, the agreement will detail the loan amount and the interest rate, which is usually calculated annually. Repayment terms can vary, but they often include a schedule for regular payments or a lump sum repayment by a specified date. In the event of default, the agreement will outline the consequences, such as additional interest charges or legal action. Governing law clauses ensure that the agreement is interpreted according to the laws of a specific jurisdiction, providing a legal framework for resolving disputes. Overall, a Shareholder Loan Agreement is a crucial tool for managing financial relationships between shareholders and their companies, promoting transparency and trust.

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