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Directors Loan Agreement

Directors Loan Agreement Template for Netherlands

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Key Requirements PROMPT example:

Directors Loan Agreement

I need a Directors Loan Agreement under Dutch law for a €500,000 unsecured loan to our Managing Director, with quarterly interest payments and full repayment by March 2025.

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Document background
The Directors Loan Agreement is a crucial document used when a company incorporated in the Netherlands extends a loan to one of its directors. This arrangement requires careful documentation to ensure compliance with Dutch corporate law, tax regulations, and governance requirements. The agreement becomes necessary when a director requires financing for personal or business purposes, and the company is willing to provide such funding. It must include specific provisions required under Dutch law regarding interest rates, security, repayment terms, and related party transaction requirements. The document needs to address potential conflicts of interest and ensure the loan terms are at arm's length to comply with Dutch tax authorities' requirements. This agreement is particularly important for maintaining transparency in corporate governance and protecting both the company's and shareholders' interests while providing the director with clear terms for the loan facility.
Suggested Sections

1. Parties: Identification of the company and the director entering into the loan agreement

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

3. Definitions: Definitions of key terms used throughout the agreement

4. Loan Amount and Purpose: Specification of the loan amount and its intended use

5. Interest Rate: Details of the applicable interest rate, calculation method, and payment frequency

6. Repayment Terms: Schedule and method of repayment, including any early repayment provisions

7. Security: Details of any security or collateral provided for the loan

8. Representations and Warranties: Statements of fact and assurances given by both parties

9. Covenants: Ongoing obligations of the director during the loan term

10. Events of Default: Circumstances that constitute default and their consequences

11. Termination: Conditions under which the agreement can be terminated

12. Governing Law and Jurisdiction: Specification of Dutch law as governing law and jurisdiction for disputes

13. General Provisions: Standard legal provisions including notices, amendments, and severability

Optional Sections

1. Tax Provisions: Specific tax-related terms when the loan has particular tax implications or requirements

2. Related Party Transaction Provisions: Additional provisions required when the loan must comply with specific related party transaction rules

3. Works Council Approval: Section addressing works council approval when required due to loan size or company circumstances

4. Change of Position: Provisions dealing with changes in the director's position or employment status

5. Subordination: Terms regarding the ranking of this loan relative to other company debts, if applicable

6. Insurance Requirements: Specific insurance obligations when security or collateral is involved

Suggested Schedules

1. Repayment Schedule: Detailed schedule of repayment dates and amounts

2. Security Details: Detailed description of any security or collateral provided

3. Company Board Resolution: Copy of the board resolution approving the loan

4. Calculation of Interest: Detailed methodology for interest calculation and examples

5. Form of Drawdown Notice: Template for requesting loan disbursements if paid in installments

6. Tax Calculations: Details of any tax implications and calculations where relevant

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 | Serial Founder & Legal AI Author

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alex.den.21@genieai.co
Relevant Industries

Financial Services

Technology

Manufacturing

Retail

Professional Services

Healthcare

Real Estate

Energy

Transportation

Construction

Agriculture

Media and Entertainment

Relevant Teams

Legal

Finance

Compliance

Tax

Treasury

Corporate Governance

Company Secretariat

Board of Directors

Executive Management

Risk Management

Relevant Roles

Managing Director

Chief Executive Officer

Chief Financial Officer

Board Member

Company Secretary

Financial Controller

Corporate Counsel

Legal Director

Tax Director

Compliance Officer

Finance Manager

Treasury Manager

Industries
Dutch Civil Code (Burgerlijk Wetboek) Book 2: Contains fundamental provisions about legal entities, corporate governance, and director responsibilities. Particularly relevant are articles about management board duties and conflicts of interest.
Dutch Corporate Income Tax Act (Wet op de vennootschapsbelasting): Regulates the tax treatment of loans between companies and their directors, including provisions about arm's length principles and potential requalification of loans as disguised dividends.
Dutch Income Tax Act (Wet inkomstenbelasting): Contains provisions about the personal tax implications for directors receiving loans from their companies, including rules about deemed interest rates.
Financial Supervision Act (Wet op het financieel toezicht): May be relevant if the loan amount exceeds certain thresholds or if the company is in a regulated sector, as it contains provisions about significant financial transactions.
Dutch Civil Code Book 7A: Contains general provisions about loan agreements (money lending) that form the basic legal framework for any loan agreement in the Netherlands.
Works Councils Act (Wet op de ondernemingsraden): May be relevant if the loan amount is significant enough to require works council consultation, as it could affect the company's financial position.
Dutch Corporate Governance Code: While not strictly legislation, this code provides important guidelines for listed companies regarding loans to directors and related party transactions.
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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