Director’s Loan Account Agreement

Document a loan from a director to their company, or from the company to a director, with the tax and Companies Act points covered.

Editable Word document
13
10pages
Guidance notes included
aml consultancy solutions

Starting a business

Director’s Loan Account Agreement

About this document

What it’s for

A written loan agreement between a limited company and one of its directors. Option A covers money the director lends to the company. Option B covers money the company lends to the director (an overdrawn director’s loan account). It sets out the amount, interest, repayment and default terms, and includes a board minute, a members’ approval resolution and a loan record.

When to use it

  • A director puts personal money into the company to fund start-up costs (Option A)
  • A director borrows from the company, or their loan account is overdrawn (Option B)
  • To formalise an existing informal loan account

What’s inside

The document is laid out in the sections below. Each one comes with a plain-English guidance note explaining what it does and what to change.

  1. Definitions and interpretation
  2. The Loan
  3. Drawdown
  4. Interest
  5. Repayment
  6. Voluntary prepayment
  7. Tax and reporting
  8. Approvals and disclosure
  9. Events of default
  10. Set-off
  11. Ranking and subordination
  12. Notices
  13. General
  14. Governing law and jurisdiction

Also included

  • Worked example (Option B)
  • Memorandum (section 197(3)–(4) Companies Act 2006)

How to complete it

  • Choose Option A or Option B throughout and delete the other
  • Complete Schedule 1 (loan details)
  • Hold a board meeting (Schedule 2) and, for Option B loans over £10,000, get members’ approval (Schedule 3) before the loan is made
  • Keep the loan record (Schedule 4) up to date and give it to your accountant at the year end

Key points to check

  • Tax rates in [BRACKETS] change – check with your accountant
  • Take advice on Option B loans before they are made

Our templates are professionally structured starting points for UK businesses, not legal advice. For anything complex, unusual or high-value, have your final version checked by a solicitor.

Included in the pack

Starting a business

£20

for every document in this category

Editable Microsoft Word files

Guidance notes in every document

Written for UK businesses

Download and keep

Get the packSee every document in this pack →

Need more than one category?

Documents All-Access gives you every category for 12 months for £295.

Compare options →

Need it tailored?

We can adapt any template to your business, or write a document from scratch.

Talk to us →