LOAN AGREEMENT: LOAN BY A DIRECTOR, PARTNER OR RELATIVE TO THE BUSINESS
BETWEEN
__________, of __________, PAN __________, who is __________ (the "Lender");
AND
__________, __________, of __________, acting through __________ (the "Business").
- 1. THE LOAN
1.2 The Lender declares that the Loan is made from the Lender's own funds, which are taxed or lawfully held, through banking channels, and that it is not money borrowed from, or received as a deposit or loan from, any other person.
1.3 The Loan is unsecured. It is a loan and not a contribution to the Business's capital, and gives the Lender no share in its profits, ownership or management beyond the interest and repayment in this Agreement.
- 2. INTEREST
2.2 The Parties confirm that the interest rate is fair for a loan of this kind and is not meant to move profit between them or to avoid tax. Interest is paid and received by banking channels.
- 3. REPAYMENT
3.2 If the Business does not pay any amount when due and does not put it right within thirty days of written notice, the whole Loan and interest become due at once, and interest continues to run on the unpaid amount at the same rate until payment.
- 4. COMPANY AND LEGAL POINTS
4.1 Where the Business is a company: its Board has approved this Loan by resolution, with the Lender, if a director, having disclosed his or her interest and not voting; the Loan is accepted in compliance with the Companies Act, 2013 and the rules on deposits, including any written declaration from the Lender that the law requires and any return the Company must file; and the Company shall record the Loan as a loan in its books and in its financial statements.
4.2 Where the Business is a firm, the other partners have consented to this Loan. Where it is a proprietorship, the Loan is to the proprietor for the Business.
- 5. DISPUTES AND GOVERNING LAW
5.3 This Agreement is governed by the laws of India.
- 6. GENERAL
6.1 This Agreement is the entire agreement between the parties about its subject matter and replaces all earlier discussion, whether oral or written.
6.2 No change to this Agreement is effective unless it is in writing and signed by all the parties.
6.3 If any provision is held invalid or unenforceable, the rest of this Agreement continues in effect.
6.4 A notice under this Agreement must be in writing and sent to the other party at its address stated above, or to a new address it has given in writing. It is treated as received on delivery, or on the third day after posting by registered post.
SIGNED by the LENDER
__________
Signature: ______________________________
SIGNED for the BUSINESS
__________
Signature: ______________________________
WITNESSES