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.

Submit an enquiry on this page or click 'Get started'. One of our legal consultants will review it within 1 business day and get in touch to understand what you need.

Your consultant will then email you a fixed-fee quote setting out the cost, scope and timing. If you're happy with it, you can accept the quote and sign our engagement letter online.

Once you've accepted, one of our Australian-qualified lawyers will work with you to complete your project. They'll contact you by email or phone if they need anything.

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 work online, so we can help wherever you are in New Zealand. Our team works remotely, mainly from Australia.

Your work is done by our Australian-qualified lawyers, who hold Australian practising certificates and specialise in business law. None of them are New Zealand lawyers or hold a New Zealand practising certificate.

Sprintlaw NZ Limited is a legal consultancy, not a law firm, and is not regulated by the New Zealand Law Society. We don't act in court or tribunal matters, conveyancing (including leases and business sales) or other reserved areas of work. Communications with Sprintlaw are unlikely to be protected by legal professional privilege. We still keep everything confidential under our engagement letter.