appropriate to the above selection. Shareholder It is very common for shareholders Choose one and delete the others: to provide loan funding to their loans: company. Shareholder loans will not interest attract interest This clause just records whether interest will be paid by the company to the shareholders, and Shareholder will attract if so how much. interest at the following rate of When it comes to interest, consider interest: percent. [INSERT] paying interest equal to the “prime” rate of interest your bank charges you, plus a E.g. Prime “margin”. rate charged by XX Bank plus 2%. Alternatively, you can fix this interest percentage. Shareholder Choose one and delete the others: Typically shareholder loans are repaid proportionately (pro rata). loans: For example: All shareholder loans will be repayment repaid proportionately over time if Shareholder A has loaned R90 and Shareholder B has loaned (“pro rata”) as and when the R10; and Company has the funds to do the company has R10 free to repay its loans; then so. the company will repay R9 rand to shareholder A and R1 to shareholder B Shareholder loans will be not be repaid proportionately over That is the first option in the column to the left. time (“pro rata”) but rather will be paid as follows (but only as However, in other circumstances, and when the Company has the this may not be appropriate. For example, where one shareholder funds to do so): has provided a much larger if any shareholder amount of loan funding. provides loan funding in a greater proportion than its shareholding in the Company; then the amount by which the loan is out of proportion will be repaid first, in priority to any other shareholder loan, until it is proportionate to the lender’s shareholding; and then
appropriate to the above selection. Shareholder loans: interest Choose one and delete the others: Shareholder loans will not attract interest Shareholder will attract interest at the following rate of interest: [INSERT] percent. It is very common for shareholders to provide loan funding to their company. This clause just records whether interest will be paid by the company to the shareholders, and if so how much. When it comes to interest, consider paying interest equal to the “prime” rate of interest your bank charges you, plus a “margin”. E.g. Prime rate charged by XX Bank plus 2%. Alternatively, you can fix this interest percentage. Shareholder loans: repayment Choose one and delete the others: All shareholder loans will be repaid proportionately over time (“pro rata”) as and when the Company has the funds to do so. Shareholder loans will be not be repaid proportionately over time (“pro rata”) but rather will be paid as follows (but only as and when the Company has the funds to do so): if any shareholder provides loan funding in a greater proportion than its shareholding in the Company; then the amount by which the loan is out of proportion will be repaid first, in priority to any other shareholder loan, until it is proportionate to the lender’s shareholding; and then Typically shareholder loans are repaid proportionately (pro rata). For example: if Shareholder A has loaned R90 and Shareholder B has loaned R10; and the company has R10 free to repay its loans; then the company will repay R9 rand to shareholder A and R1 to shareholder B That is the first option in the column to the left. However, in other circumstances, this may not be appropriate. For example, where one shareholder has provided a much larger amount of loan funding.
Skylaw-MOI-June-2015.docx