Shareholder Loan Agreement

How it works

What you will fill in

• Does any of these apply?
• Who is lending to whom?
• Where is the corporation incorporated?
• Corporation's full legal name
• Shareholder's full name and address
• Loan amount ($)
• Date the money is (or was) advanced
• Interest rate (% per year)
• How is it repaid?
• Repay by (date)
• Monthly payment ($)
• Corporation's financial year-end

Good to know

• Income Tax Act s. 15(2): if the corporation lends to a shareholder (or someone connected to them), the loan is added to the shareholder's income unless it is repaid within one year after the end of the corporation's tax year in which it was made, and the repayment is not part of a series of loans and repayments.
• Income Tax Act s. 80.4: if the interest rate is lower than CRA's prescribed rate, the shareholder may have a taxable benefit for the interest not paid.
• Record the loan in the corporation's books as 'due to shareholder' or 'due from shareholder', and have the directors approve it by resolution.

Help in your language

Every question comes with help like this. For example, “Does any of these apply?”:

English: These raise tax, creditor or shareholder questions. We still make the agreement, and we'll flag it.

اردو: کیا ان میں سے کوئی بات ہے؟

ਪੰਜਾਬੀ: ਕੀ ਇਹਨਾਂ ਵਿੱਚੋਂ ਕੋਈ ਗੱਲ ਹੈ?

हिन्दी: क्या इनमें से कोई बात है?

Français: Ces cas soulèvent des questions d'impôt ou de créanciers. Nous préparons quand même l'entente.

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