Convertible Promissory Note Template for Australia

A Convertible Promissory Note is a hybrid financial instrument that functions as both debt and potential equity, governed by Australian law. The document outlines the terms of a loan that can convert into equity shares under specified conditions, typically during a future funding round. It includes detailed provisions for interest calculation, repayment terms, conversion mechanics, and various investor protections. The document complies with Australian securities regulations and corporate law requirements, particularly the Corporations Act 2001 (Cth) and ASIC regulations, making it suitable for Australian companies seeking bridge financing or early-stage investment.

Generate a Bespoke Document

1. Select your governing law:

2. Enter your key requirements:

Typically:

~~£1,203~~

With Genie AI:

£0

Download a Standard Convertible Promissory Note

Download our Australia-compliant template or see Genie's full template library.

Get template free

Review your own Convertible Promissory Note

Let Genie AI identify missing terms, unusual language, compliance issues and more.

Upload to review

Your data doesn't train Genie's AI

You keep IP ownership of your docs

4.6 / 5

4.8 / 5

What is a Convertible Promissory Note?

The Convertible Promissory Note is a strategic financing tool widely used in the Australian startup ecosystem, particularly for companies seeking bridge financing between formal funding rounds or initial seed investment. This document is designed to comply with Australian corporate and securities laws while providing flexibility for both investors and companies. It typically bridges the gap between debt and equity financing by allowing companies to defer equity valuation discussions while securing immediate funding. The note includes essential terms such as interest rates, maturity dates, conversion discounts, and valuation caps, along with investor protection provisions. It's particularly useful when companies need quick access to capital without establishing a firm valuation, with the investor having the right to convert the loan into equity shares during a qualifying financing event or at maturity.

What sections should be included in a Convertible Promissory Note?

1. Parties: Identifies the Lender and the Company (Borrower) and their respective addresses

2. Background: Sets out the context of the loan and the company's intention to borrow funds with a conversion feature

3. Definitions: Defines key terms used throughout the document, including Maturity Date, Conversion Price, Qualifying Financing, etc.

4. Loan Amount and Interest: Specifies the principal amount, interest rate, and interest calculation method

5. Repayment Terms: Details when and how the principal and interest must be repaid if not converted

6. Conversion Rights: Describes the circumstances under which the note can be converted into equity and the conversion mechanism

7. Conversion Price: Specifies how the conversion price is determined, including any discount to qualifying financing

8. Maturity Date: States when the note becomes due and payable if not converted earlier

9. Events of Default: Lists circumstances that constitute default and the consequences

10. Representations and Warranties: Standard company representations regarding authority, binding effect, and no conflicts

11. General Provisions: Standard boilerplate provisions including notices, amendments, and governing law

What sections are optional to include in a Convertible Promissory Note?

1. Security: Include when the note is secured against company assets

2. Subordination: Include when the note needs to be subordinated to other company debt

3. Pre-emptive Rights: Include when giving the noteholder rights to participate in future funding rounds

4. Most Favored Nation: Include when the lender should benefit from any better terms given to future noteholders

5. Board Observer Rights: Include when the lender is granted rights to attend board meetings

6. Information Rights: Include when the lender is entitled to receive specific company financial information

7. Tag-Along Rights: Include when the noteholder should have the right to participate in any sale of company shares

8. Change of Control: Include specific provisions for what happens in a change of control before conversion

What schedules should be included in a Convertible Promissory Note?

1. Conversion Mechanics: Detailed technical process for converting the note to shares

2. Form of Conversion Notice: Template notice to be used when exercising conversion rights

3. Cap Table: Current capitalization table of the company

4. Security Details: If secured, details of the security arrangement and secured assets

5. Shareholders Agreement: Key terms of the shareholders agreement that will apply post-conversion

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Cost

Free to use

Find the exact document you need

No matches found.

Promissory Note For Real Estate Purchase

An Australian-compliant financial instrument documenting a buyer's promise to pay for real estate purchase, including payment terms and security interests.

How a Fast-Growing Real Estate Company Uses Genie AI to Save $50,000 Per Year in Legal Fees

Generate a Bespoke Document

Download a Standard Convertible Promissory Note

Review your own Convertible Promissory Note

What is a Convertible Promissory Note?

What sections should be included in a Convertible Promissory Note?

What sections are optional to include in a Convertible Promissory Note?

What schedules should be included in a Convertible Promissory Note?

Authors

Alex Denne

Jurisdiction

Publisher

Document Type

Sector

Cost

Find the exact document you need

Promissory Note For Real Estate Purchase

Promissory Note For Vehicle Purchase

Promissory Note

Promissory Note For Remaining Balance

Hospital Promissory Note

Form Of Secured Promissory Note

Promissory Note For Rent Owed

Note Payable Form

Guarantor Promissory Note

Promissory Note For Services Rendered

Mortgage Note Form

Unconditional Promissory Note

Cash Promissory Note

Bill Of Sale With Promissory Note For Automobile

Installment Promissory Note

International Promissory Note

Simple Promissory Note For Personal Loan

Loan Note

Unsecured Promissory Note

Standard Promissory Note

Promissory Note With Notary

Promissory Note For Delayed Payment

Promissory Letter For Hospital Bill

Negotiable Promissory Note

Hospital Bill Promissory Note

Financial Promissory Note

Convertible Promissory Note

Balloon Promissory Note

Shareholder Promissory Note

Promissory Note With Personal Guarantee

Promissory Note Secured By A Mortgage

Promissory Note Repayment Schedule

Promissory Note Letter

Payable On Demand Promissory Note

Full Recourse Promissory Note

Personal Guarantee On Promissory Note

Promissory Note For Business Purchase

30 Day Promissory Note

Interest Only Promissory Note With Balloon Payment

Business Promissory Note

Genie’s Security Promise

Your documents are private:

Your documents are protected:

Organizational security:

Use Cases