Division 7A Loan Agreement

Division 7A Loan Agreement

eSign with Lawpath
1st document free
4.6 (39)
Under 10 minutes
Under 10 minutes
Last updated December 2018
Last updated September 21, 2021
Suitable for all Australian states and territories
Suitable for all Australian states and territories

A Division 7A Loan Agreement is a document that formalises loans between a private company and an individual. Customisable and ready for use in under 10 minutes.

Get 1st document free

Document Overview

A Division 7A Loan Agreement is a document that formalises loans between a private company and an individual. If a company were to loan money to a shareholder or associate without a Division 7A agreement, the amount may be counted towards the individual’s income for that tax year. This agreement is particularly relevant when a company's loans are audited as loans that are not “formalised” with a Division 7A Loan agreement may be considered a dividend.  

Complying under Division 7A

In order for a loan to be compliant and to avoid being deemed a taxable dividend, the ATO indicates it must satisfy the following conditions:

  • A written agreement such as this one must be established before the company’s income tax return deadline.

  • The annual interest rate of the loan must be at least equal to the Division 7A benchmark rate.

  • For loans that are secured by property, as per the ATO’s guidelines, the term should not exceed 25 years 

  • For all other loans the terms should be no longer than 7 years.

  • The minimum yearly repayment must be met.

Use this Division 7A Loan Agreement If:

  • You’re a private company and;

  • You want to provide a loan to a shareholder or associate 

What does this Division 7A Loan Agreement Cover?

  • Lender and borrower details

  • Acknowledge of loan agreement

  • Interest rate

  • Loan term

  • Repayment terms

  • Definitions

Further Information:


 


Document Reviews

No reviews available.

How it works

Follow the steps below and you’ll have your ready-to-use document in no time.

Step 1

Set up a free Lawpath account

Step 2

Search and find the document you need from our list

Step 3

Follow the prompts and fill in all the relevant details

Step 4

Download your document in ready-to-use PDF or Docx* format. Access from any device, at anytime.

A giant library of template documents combined with a legal marketplace make this a must have for any small business owner.
Jake Benjafield

Create and access documents anytime, anywhere by signing up to our monthly or annual subscription plan

Sign up now

Recent Articles

Recent Articles

The A to Z Guide on ASIC For New Small Business Owners

Set up your business with the comfort of knowing you are legally complaint with ASIC requirements.

Business Outsourcing: A Comprehensive Guide for Business Owners

Want to efficiently grow your business but you feel as though you're lacking the resources? Outsourcing may be the answer you've been looking for.

Is a Signed Mediation Agreement Enforceable?

Read on to find out whether your signed mediation agreement is actually legally binding and enforceable.
Not sure what you need?
Call and speak to one of our
consultants for free on
1800 529 728
Australia’s leading
Online legal website

Lawpath has been recognised as a
leader and innovator across the legal
sector.

Safe and Secure

We keep all your information
encrypted to ensure your
privacy and safety.