Record shareholder funding with a clear loan agreement

It is commonly used when a shareholder is lending money to the company rather than subscribing for new shares or contributing funds informally. That might be for working capital, short-term cash flow support, growth funding or part of a wider restructure. A written agreement is especially useful where repayment timing, interest, priority against other creditors or director approval needs to be clear. It can also help if there are multiple shareholders and the company wants a documented record of who advanced funds, on what terms, and how that debt sits alongside other obligations.

The agreement will usually cover the loan amount, when funds are advanced, whether interest applies, repayment dates or repayment triggers, events of default, and what happens if the company cannot pay on time. Depending on the arrangement, it may also include subordination terms, security provisions, rights to demand repayment, conversion-related mechanics if relevant, and how notices are given. The drafting may need to line up with your constitution, shareholder arrangements or existing finance documents, because completion can depend on the company records and approvals already in place.

The level of tailoring often depends on the commercial context rather than the loan label alone. For example, a founder advancing short-term funds on an interest-free basis raises different issues from an investor making a secured loan with staged drawdowns or priority terms. We will usually need to know who the lender is, whether there are other shareholders, whether any bank or third-party finance exists, whether the loan is repayable on demand or over time, and whether related company documents already deal with debt funding. Those details shape the drafting significantly.

A template may be workable for a very simple arrangement, but it can miss important points once the loan interacts with other company documents or financing arrangements. Common gaps include unclear repayment triggers, no treatment of default, no subordination wording where other lenders are involved, or terms that do not fit the company's existing governance documents. A tailored agreement is often worthwhile where the amount is material, there is more than one shareholder, or the loan forms part of a broader ownership or funding structure. Tax and accounting consequences may need separate advice.

No. The service covers legal drafting of the shareholder loan agreement and related legal input on the document itself. It does not include tax advice, accounting advice, ongoing representation or full transaction management. If the loan has accounting treatment questions, interest deductibility issues, or balance sheet implications, those points should be checked with your accountant or tax adviser. If there are board resolutions, shareholder approvals or other completion documents needed, we can discuss that separately, as completion may depend on corporate records and approvals.

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Once you've formally accepted, we'll connect you with a specialist lawyer and they will work with you to complete your project. They will contact you by email or phone if they need to get in touch.

Sprintlaw works on fixed-fee pricing wherever possible, so you can review the scope and cost before you decide whether to proceed. For the Shareholder Loan Agreement service, pricing starts from $900.00.

After you enquire, a legal consultant will confirm what is included, the expected timing and whether any extra work is needed before you engage us.

We operate completely online, which means we can help you wherever you are in New Zealand. We have office spaces in Sydney, and in Melbourne, but our use of technology allows our team members to work remotely from around the world. Our legal team are mostly based in Sydney, Melbourne, Brisbane and Perth. We also have a London office for Sprintlaw UK.

Our legal team is made up of experienced lawyers, who are specialists in various areas of law and hold an Australian legal practising certificate. None of our Sprintlaw lawyers are New Zealand qualified lawyers and they do not currently hold a New Zealand practising certificate.

They provide legal services working remotely from Australia via our 'legal consultancy' model, through which (under section 6 and section 35 of the New Zealand Lawyers and Conveyancers Act 2006) our Australian legal team are permitted to provide legal services to New Zealand businesses provided they do not provide services in certain 'reserved' areas of law. You can read our FAQ page to learn a bit more about our 'legal consultancy' model.

Given the strong similarities between Australian and New Zealand law, and the areas of law in which we practice (being small business and startup law), we do not view the fact that our lawyers have not qualified in New Zealand as having any substantive impact on the quality of our service. We are committed to ensuring that we provide high quality, affordable legal services to all our New Zealand clients.

Our legal team have all trained at leading firms, but have left the traditional corporate law world to join us on our mission to create a new and better way of delivering legal services. They have specialist expertise in technology law, intellectual property law, contract drafting and review, corporate law and commercial law.