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Div 7A Loan Agreement $69.95

Division 7A Company Loan Agreement

The aim of Division 7A of the Income Tax Assessment Act 1936 (the Act) is to prevent privately held companies from making tax-free distributions of profits to its directors and shareholders in the form of loans.

Division 7A sets out strict provisions that automatically treat payments, loans and debts forgiven by private companies to its shareholders or associates of shareholders as deemed dividends and therefore assessable income.

Loans must be approved and in writing

The ATO have made it perfectly clear that whenever a company lends money to its directors or shareholders such loans must be set out in writing and approved by the company and the borrower.

Details such as the minimum interest rate and the maximum term of the loan along with other specific criteria must be addressed in the documentation.

Failing to implement this relatively simple document can have costly consequences for the taxpayer and the company should the ATO deem the company to have distributed profits disguised as a loan.

Our Div7A company loan agreement formalises the arrangement between the parties and has been drafted by a specialist lawyer to ensure compliance under section 109N of the ITAA.

Download Immediately - Easy to Edit

Our Division 7A Company Loan Agreement is provided to you as a Microsoft Word template. It is easy to edit and can be used as often as you need.

Provisions included

Provisions

Sample Document Excerpt - click to enlarge

Div 7A loan agreementsample div 7a loan agreement

 

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