The Intra Group Loan Agreement is utilized when one entity within a corporate group provides financing to another related entity in Canada. This document is essential for formalizing financial arrangements between related companies while ensuring compliance with Canadian tax laws, particularly transfer pricing rules and thin capitalization requirements. It's commonly used for subsidiary financing, project funding, or working capital purposes within corporate groups. The agreement must carefully balance commercial terms with tax efficiency and regulatory compliance, including considerations under the Income Tax Act and various provincial laws. Key components include specific interest rate provisions that meet arm's length principles, detailed repayment terms, and appropriate corporate governance provisions.

1. Parties: Identification of the lender and borrower entities within the corporate group

2. Background: Context of the loan agreement, relationship between the parties, and purpose of the loan

3. Definitions: Defined terms used throughout the agreement, including financial terms, corporate relationships, and relevant dates

4. Loan Amount and Purpose: Specification of the loan amount, currency, and permitted use of funds

5. Interest: Interest rate, calculation method, payment frequency, and default interest provisions

6. Repayment Terms: Repayment schedule, prepayment provisions, and method of payment

7. Representations and Warranties: Standard corporate representations about capacity, authority, and financial condition

8. Covenants: Ongoing obligations of the borrower regarding financial reporting, use of funds, and corporate existence

9. Events of Default: Circumstances constituting default and consequences thereof

10. Tax Provisions: Treatment of withholding tax, tax gross-up provisions, and tax indemnities

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