Loan agreement between legal entities: nuances of drafting

A loan agreement between legal entities is an agreement under which the lender transfers to the borrower monetary or other valuables corresponding to generic characteristics, provided that the debtor undertakes to return the agreed amount or other funds on the terms specified in the agreement.

The legal nature of the contract is real, compensated and unilateral obligations. The first characteristic indicates that obligations under the contract arise only after one party transfers a certain amount or other valuables to the other party. The text of the law states that the lender transfers (and does not undertake to transfer) the specified funds.

The loan agreement is considered compensated by default, unless otherwise provided in the text.

Is it possible between organizations

In this situation, especially when special urgency arises, legal entities come to the aid of their business partners, with whom it is possible to quickly and without any problems draw up a loan agreement on terms beneficial to both parties.

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Article 807, paragraph 1 of the Civil Code of the Russian Federation states that a loan is a transfer of money or other things from the lender to the borrower, formalized in writing using an agreement in the established form.

A loan agreement between business entities can also be formalized in the form of the issue and sale of bonds (Article 816 of the Civil Code of the Russian Federation) or the issuance of a bill of exchange (Article 815 of the Russian Civil Code) by agreement of the parties.

When providing a loan from one organization to another, the following tasks must be performed:

the subject of the loan agreement must be described in detail in the agreement;
the lender transfers to the borrower exactly the loan items specified in the agreement;
the borrower must repay his debt without fail within the period specified in the agreement;
destruction or damage to taken items is subject to compensation by the borrower.

Unlike the activities of banks, when one business entity provides a loan to another under a written agreement, a license from the lender is not required.

Even if such transactions occur repeatedly, but at the expense of exclusively the business entity’s own and not attracted funds, they will not be considered a banking operation.

The subject of a loan agreement between legal entities can be things with certain generic characteristics and money. The date of conclusion of such an agreement is the moment of transfer of the subject of the agreement from the lender to the borrower.

The accounting procedure for loans received is described in detail in the Accounting Regulations “Accounting for expenses on loans and credits” (PBU15/2008), approved by order of the Russian Ministry of Finance. No. 107n dated June 02, 2008

Force Majeure (Sample loan agreement between legal entities)

5.1. The parties are released from liability for failure to fulfill or improper fulfillment of obligations under the Agreement due to force majeure, that is, extraordinary and unpreventable circumstances under the given conditions, which mean: ___________________________________

__________________________________________________________________________.

5.2. If the circumstances specified in clause 5.1 of the Agreement occur, the Party is obliged to notify the other Party about them in writing within _____ (__________) days The notice must contain information about the nature of the circumstances, the expected duration of their validity and termination.

5.3. If a Party does not send or untimely sends the notice provided for in clause 5.2 of the Agreement, then it is obliged to compensate the other Party for losses incurred by it.

5.4. In cases of the occurrence of circumstances provided for in clause 5.1 of the Agreement, the period for fulfilling obligations under the Agreement is suspended for the time during which these circumstances apply.

5.5. If the circumstances listed in clause 5.1 of the Agreement continue to apply for more than _________________________, then each of the Parties has the right to terminate the Agreement early.

What types of loans exist between legal entities?

Most often, a loan between organizations is used in practice to perform the following tasks:

a legal entity uses money or things received to pay debts to suppliers;
the subject of the loan can be used as a necessary tool for continuing the borrower’s business activities;
This is how the “help” of the parent company to its subsidiaries can be expressed when the latter encounter a difficult financial situation;
this can be a mutually beneficial cooperation between organizations that are part of the same holding.

Free and with interest

Is an interest-free loan possible between legal entities?

To answer this question, you should carefully analyze all Russian legislation, starting with the Civil and Tax Codes of the Russian Federation and ending with existing judicial practice and decisions of the Supreme Arbitration Court.

Chapter 42 of the Civil Code regulates the procedure for providing interest-free loans. Article 809 of the Civil Code contains mandatory conditions under which it is possible to provide a loan without interest.

Among them are the following:

the loan agreement must indicate that the lender receives things free of charge;
the subject of the agreement cannot be funds;
the loan agreement does not provide for interest rates or they are equal to zero;
the cost of the transaction does not exceed fifty minimum wages on average in the country;
The lender will not use the loan received to carry out business activities, i.e. he does not set himself the goal of making a profit.

According to Article 6 of Federal Law No. 115 of 08/07/2001. interest-free loans between organizations are subject to mandatory control.

In paragraphs 10 p. 1 art. 251 of the Tax Code states that the tax base does not include income received under loan agreements.

According to paragraph 2 of Art. 248 of the Tax Code, property (work, services) and property rights are considered to have been received free of charge if their appearance does not in any way imply reciprocal obligations on the part of the borrower.

However, Article 807 of the Civil Code presupposes the obligation to repay the debt to the lender; the Supreme Arbitration Court refers to the same obligation in its decision No. 3009/04 of August 3. 2004

. The interest rate under the loan agreement will be equal to the refinancing rate at the time of conclusion of the transaction, if it is not mentioned at all in this document.

In accordance with the Letter of the Ministry of Finance dated February 20, 2006. No. 03-03-04/1/128, as well as the official “message” of the Tax Service dated 13.01. 2005 No. 02-1-08/5 this unpaid amount of interest on a loan between legal entities does not need to be included in the borrower’s income.

Thus, it is not included in the base either as expenses or as income when taxing the profits of both parties.

In addition, according to paragraph 1 of Article 810 of the Civil Code, if the contract does not contain a specific loan repayment period in calendar days, it is considered equal to 30 days from the date the borrower receives the request for payment of the debt.

This means that an interest-free loan between legal entities is possible, and it does not carry any tax consequences for any of the parties to the loan agreement.

In the case of a loan with interest, the lending organization receives profit in the form of interest from the use of the subject of the agreement by the borrower, therefore it is obliged to show the amount of interest received in the column of non-operating income, then enter it into the income tax base and pay the interest determined by law.

If the loan was provided by goods, then both parties need to transfer value added tax to the budget. The organization that received the loan reflects the interest on it as part of non-operating expenses and reduces the tax base by this amount. Everything described above applies to loans between domestic organizations.

The whole process of obtaining a loan looks completely different if the borrower is a foreign company. This situation is presented in detail in the diagram below.

Article 309 of the Tax Code indicates that all income received from foreign companies is subject to taxation and is included in the income tax base.

But if at the international level there is an agreement between countries on the exclusion of dual taxation, then the Russian organization is exempt from paying income tax.

When paying interest amounts to foreign companies, the following rules apply:

interest rates for using a loan should not differ greatly from the average statistical values for Russia;
the maximum interest rate cannot be greater than the refinancing rate of the Central Bank of Russia multiplied by a factor of 1.1 (if payments are made in rubles) or 15% of the loan amount (if payments are made in foreign currency).

Target

Based on the nature of their use, loans between legal entities are divided into three main groups:

target (a loan that can only be used for the implementation by a business entity of certain goals strictly specified in the agreement);
state (assumes any financial state or municipal institution as a borrower, and any legal entity can act as a lender);
non-targeted (used to solve any problems of a business entity, but in most cases it costs much more).

You can find examples of an interest-bearing loan agreement in the article: borrowing money at interest. Receiving an interest-free loan from the founder is discussed on the page.

Secured by real estate

Sometimes loans between legal entities can be secured by real estate (for example, real estate, equipment, securities).

This serves as an additional guarantee of the borrower’s solvency, since in the event of his bankruptcy, it will be possible to sell the collateral to repay the debt.

By date

According to the period of use, there are short-term loans, medium-term and long-term loans. In accounting, the classification will be slightly different.

Paragraph 4 of PBU 15/01 contains an indication that loans with interest must be reflected in accounts payable from the moment the subject of the loan agreement is transferred from one party to the other; this definition does not apply to gratuitous loans.

Only the allocation of loans to accounting accounts will be different, depending on the period, namely:

if the debt repayment period is less than one year (12 months), then such debt will be reflected in account 66 entitled “Settlements for short-term loans and borrowings” - these are short-term loans;
if the debt repayment period is more than one year, then the loan is reflected in account 67 entitled “Settlements for long-term loans and borrowings” - these are long-term loans.

Interest-free loans, regardless of the term, are recorded in account 76 under the title “Settlements with various debtors and creditors.”

Analytical accounting of debt on loans received and issued by the organization is carried out by type of loan and lender.

Accounting Regulation 15/2008 provides a closed list of expenses associated with fulfilling obligations under loans received.

It includes:

interest to the lender (creditor);
amounts of information and consulting services;
cost of loan agreement examination;
other expenses.

Interest-bearing loan agreement between legal entities

Art. 808 of the Civil Code of the Russian Federation obliges the transaction to be formalized in writing if at least one of the parties is a legal entity. An essential condition of the loan agreement, which must be agreed upon in the document, is the subject of the transaction. If the subject is not agreed upon, the transaction is considered not concluded (clause 1 of Article 432 of the Civil Code of the Russian Federation).

The subject of a loan transaction, both with and without remuneration in the form of interest on the loan, is the transfer of funds in Russian currency (except for cases provided for by the Law “On Currency Regulation and Currency Control” dated December 10, 2003 No. 173-FZ) or other things determined by generic characteristics.

The percentage clause of the loan agreement is assumed unless otherwise expressly stated in the legislation or the contractual document (Clause 1 of Article 809 of the Civil Code of the Russian Federation). In this case, the amount and procedure for paying interest must be specified in the terms of the agreement. However, if the contract document does not contain agreement on these conditions, then:

The amount of interest paid must correspond to the refinancing rate (bank interest rate) in force at the location of the lending organization on the day the debt is repaid or part of it is paid.
Interest is paid every month until the debt is repaid.

When concluding a loan agreement between legal entities, it is necessary to take into account that the constituent documents of organizations may establish a ban on loan transactions. In this case, concluding a transaction is impossible. In addition, when concluding a transaction, the sole executive body (director, president, general director), if the relevant provisions are provided for by the organization’s charter, must agree with the founders on the possibility of concluding a loan agreement with another legal entity.

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How to apply

A loan between legal entities is drawn up in writing in the form of an agreement, which must contain such mandatory clauses as:

Date of preparation;
place of compilation;
names of the parties;
description of the subject of the contract;
rights and obligations of the parties;
loan repayment terms;
loan payment options;
the interest rate for using the loan;
possibility and conditions of early repayment;
liability of the parties;
the amount of penalties or penalties for late payments;
description of the sequence of actions in the event of force majeure;
requirements reflecting the boundaries of confidential information;
dispute resolution options;
cases of unilateral or mutual termination of the contract and changes in its terms;
final provisions;
terms of the contract;
details of both parties;
signatures of the lender and borrower.

Final provisions (Sample loan agreement between legal entities)

8.1. This Agreement comes into force from the moment the Loan Amount specified in clause 1.1 of this Agreement is credited to the Borrower’s bank account specified in section. 9 of the Agreement.

8.2. This Agreement is valid until the Parties fully and properly fulfill their obligations under the Agreement.

8.3. For all other issues not regulated by this Agreement, the Parties will be guided by the current legislation of the Russian Federation.

8.4. This Agreement is drawn up in two copies having equal legal force, one copy for each of the Parties.

8.5. Applications:

8.5.1. Debt repayment schedule (Appendix N ___).

Addresses, details and signatures of the parties

The parties write down their details in detail at the end of the agreement on the last page. Signatures of the parties.

How are funds transferred?

Funds under a loan agreement between legal entities in most cases are transferred from the lender's current account to the borrower's current account using the specified details, and then when the borrower repays the debt, the money is transferred in full or in equal shares, as well as interest from the borrower's current account to the lender's account.

If a loan is issued between legal entities in cash, then legal entities must comply with a number of mandatory rules and conditions in force in the territory of the Russian Federation.

According to the Directive of the Central Bank of Russia dated 07.10. 2013 No. 3073 - in 2015 there is also a limit for cash payments between legal entities.

It amounts to one hundred thousand rubles under one agreement or an amount in foreign currency equivalent to 100 thousand rubles at the official exchange rate of the Bank of Russia on the date of cash payments. A legal entity cannot issue more than this amount in cash.

If a legal entity exceeds the amount of one hundred thousand rubles under one agreement, then this will be a violation of the procedure for working with cash.

According to Article 15.1 of the Code of the Russian Federation on Administrative Offenses, if the limit on cash payments is not observed, a fine of 40 to 50 thousand rubles is imposed on a legal entity.

The official will pay 4,000 - 5,000 rubles. But it is possible to bring an organization to justice only within two months from the date of violation (Part 1 of Article 4.5 of the Code of Administrative Offenses of the Russian Federation).

Amendment and early termination of the agreement (Sample loan agreement between legal entities)

7.1. Any changes and additions to this Agreement are valid if they are made in writing and signed by duly authorized representatives of the Parties. The corresponding additional agreements of the Parties are an integral part of the Agreement.

7.2. All notices and communications under the Agreement must be sent by the Parties to each other in writing.

7.3. The Agreement may be terminated early by agreement of the Parties or in another manner and on the grounds provided for by the current legislation of the Russian Federation.

How are risks specified in the contract?

The definition of risks is contained in the loan agreement. They are divided into internal and external.

Among the internal ones, the following can be listed:

insolvency of the borrower;
efficiency of the debtor's current activities;
breach of obligations;
loss of liquidity of the enterprise;
fraud;
lack of debt security.

Internal risks can be reduced by reflecting additional conditions in the agreement or annex to it, such as: provision by the borrower of documents confirming its solvency, profitability and liquidity of assets; securing payment of debt by pledging the debtor’s property, etc.

External risks of the loan agreement also directly affect the fulfillment of obligations by both parties, but it is impossible to somehow resist them or change their influence.

They are divided into:

country;
political;
macroeconomic;
social;
inflationary;
industry;
regional;
changes in legislation;
associated with changes in the refinancing rate.

External risks can arise suddenly and neither the borrower nor the lender can protect themselves from them.

For example, with a high level of inflation in the country, money inevitably depreciates, and the lender of the loan agreement, when fulfilling all obligations under the agreement, will be at a loss, since the purchasing power of funds has decreased.

Responsibility of the parties (Sample loan agreement between legal entities)

4.1. In case of failure to repay the Loan Amount within the specified period of clause 2.3 of the Agreement, the Lender has the right to require the Borrower to pay a penalty in the amount of _____% of the debt amount for each day of delay, but not more than _____% of the Loan Amount.

4.2. Collection of penalties does not relieve the Borrower from fulfilling obligations under this Agreement.

4.3. In cases not provided for by this Agreement, property liability is determined in accordance with the current legislation of the Russian Federation.

Debt forgiveness between legal entities

After the end of the loan agreement, the lender may require the borrower to fully repay the existing debt.

To do this, the legal entity that issued the loan sends a written notice to the other party demanding payment of the debt. The borrower must fulfill all the conditions specified in the notice within one month.

If the loan amount is not repaid or not fully repaid, the lender files a lawsuit against the borrower with a similar demand to return the entire amount of the debt.

The borrower can sue within three years after the end date of the contract, because this is the statute of limitations that applies under loan agreements.

If the borrower does not repay his debt in full within three years, he includes the remaining amount as income and pays income tax on it.

Sometimes, after the end of the loan agreement, the borrower finds himself on the verge of bankruptcy, and he simply does not have the necessary financial resources to repay the loan amount.

In this case, the lender can only forgive the debt or part of it (Article 415, Part 1 of the Civil Code of the Russian Federation), but this is only possible if the interests of other persons who are associated with the lender’s property are not seriously infringed.

There is no legally established procedure for forgiving a borrower's debt. However, this decision must be formalized by a written agreement of the parties, which will clearly define all the details and the amount of the debt that the borrower no longer needs to repay.

If the loan agreement between legal entities was certified by a notary, then the additional agreement must be certified by him.

The Supreme Arbitration Court of the Russian Federation in letter No. 104 dated December 21, 2005 stated that the decision to forgive a debt cannot be considered a gift, since it most often carries only the desire of the lender to repay the remaining part of the debt or other debts that the given person has. recipient of loans.

In market conditions, enterprises can attract borrowed funds in the form of loans from legal entities. Such relationships are more beneficial for business entities compared to bank loans and are formalized in writing by a loan agreement.

A loan agreement is sometimes drawn up in the form of a promissory note or bonds. The loan may be gratuitous and the parties do not have any tax obligations, or it may also include the payment of interest, in which case it is reflected as accounts payable in the accounting accounts.

A loan between legal entities allows enterprises to conduct business activities more efficiently and minimizes their additional costs associated with servicing it.

Customer reviews of loans from the Alfa company are given in the article: Alfa loan. How to find private loans without being scammed against a receipt, see here.

There is information about the procedure for obtaining a targeted loan for maternity capital.

Interest-free loan agreement

Sample of an interest-free loan agreement between legal entities
Despite all the chances of negative consequences from the tax authorities, companies actively use this type of loan, helping each other in a crisis situation.

When drawing up an agreement, you must immediately indicate its type: interest-bearing or interest-free. If there is no exact wording, the lender has the right to demand payment of interest, which is determined by the average refinancing rate at the current time. Interest is paid monthly from the date of execution of the agreement until the day the loan is repaid.

There are no legislative restrictions in terms of concluding interest-free agreements; the main thing is that such loans do not have the nature of permanent transactions that can be classified as illegal banking activities . Typically, an interest-free loan is issued for non-commercial purposes.

The form of a standard agreement for an interest-free loan is free, but in writing. Apart from indicating the type of agreement, the rest of the design is similar to the other type. The interest-free loan agreement also provides for a payment schedule for debt repayment.

The agreement is considered legally executed if it is possible to establish the object of the loan (type, amount of valuables). If the item is not specified in the document, it is considered invalid.

An essential point will be the point where it is stated that no fee will be charged for the use of money or other funds. Without this criterion, the agreement is qualified as an interest-bearing agreement with all the consequences for the lender. If the document does not indicate the date of repayment of the loan, then the money is returned within 30 days after the lender submits the corresponding request.

What to do: LLC does not repay the loan?

If a legal entity does not repay the loan, then you should first try to resolve the dispute out of court by sending it a corresponding claim.

Please note that neither the founders nor the managing person is responsible for transactions concluded on behalf of the LLC.

True, if bankruptcy proceedings were opened against the LLC, and it was established that it was the fault of the actions of the manager or founder that the enterprise found itself in such a situation, these persons may be held vicariously liable.

Peculiarities

When providing such a loan, the following tasks must be performed:

the subject is reflected in the document;
the creditor transfers the specified amount or property;
the borrower repays debt obligations within the specified period;
If property is damaged or destroyed, the borrower undertakes to compensate for the loss.

If you compare a bank loan and a loan from a legal entity, you will notice that a license from the latter is not required to provide the product. Moreover, the company can provide loans free of charge. Even if lending is carried out at the expense of borrowed funds from one company to another, the operation will not be considered a banking operation.

The object of lending can be things, property, or cash. The date of conclusion of the contractual relationship is the date of transfer of property. This action is taken into account in the balance sheet, which is described in the Regulations “Accounting for expenses on loans to creditors”.

How to agree on a loan repayment condition

We recommend establishing in the contract the term and procedure for repaying the loan (Clause 1, Article 810 of the Civil Code of the Russian Federation).

If the parties did not indicate in the agreement the period for repayment of the loan or such a period is determined by the moment of demand, the loan, as a general rule, must be repaid within 30 days from the date the lender submits a request for this (clause 1 of Article 810 of the Civil Code of the Russian Federation).

The agreement may provide for a one-time or phased repayment of the loan amount.

Examples of wording of conditions regarding the loan repayment period

“The borrower undertakes to repay the entire loan amount on December 3, 2021. Funds are transferred by non-cash payment orders using the details specified in the section “Addresses and details of the parties” of this agreement.”

“The loan amount is repaid by the borrower in installments. The borrower undertakes to repay 50% (fifty percent) of the loan amount up to September 3, 2021 inclusive. The remaining 50% (fifty percent) is refundable up to and including November 1, 2021.

Transfer of funds is carried out by bank transfer using payment orders using the details specified in the section “Addresses and details of the parties” of this agreement.”

Early repayment of an interest-bearing loan under an agreement concluded between legal entities is possible only with the consent of the lender. Such consent can be expressed in an agreement (paragraph 3, paragraph 2, article 810 of the Civil Code of the Russian Federation).

An example of the wording of a condition for early repayment of a loan

“The borrower has the right to repay the loan amount early in full or in parts. The borrower is obliged to notify the lender about this at least 5 (five) working days before the repayment date.”

As a general rule, the borrower can repay the interest-free loan in whole or in part early. This does not require the consent of the lender (clause 2 of Article 810 of the Civil Code of the Russian Federation). The parties may agree, for example, that early repayment of such a loan is not allowed.

An example of the wording of a condition on limiting the early repayment of an interest-free loan

“Early repayment of an interest-free loan received under this agreement is not permitted.”

From April 14, 2021, as a general rule, residents of the Russian Federation, providing foreign currency or the currency of the Russian Federation in the form of loans to non-residents of the Russian Federation, are obliged, within the time periods stipulated by the loan agreements, to ensure that they receive from them the currency due under the terms of these agreements into their accounts in authorized banks (Article 1 of Federal Law dated April 3, 2018 N 64-FZ). For failure to fulfill this obligation, liability is established under Part 4 of Art. 15.25 of the Code of Administrative Offenses of the Russian Federation (as amended by Federal Law dated 04/03/2018 N 64-FZ). These rules do not apply to loan agreements concluded before the specified date (except for those whose essential terms were changed after April 14, 2018 (clause 2 of article 3 of the said Law)). We recommend that in loan agreements between residents and non-residents of the Russian Federation, the details of the authorized bank in which the resident lender has an account are provided as bank details for loan repayment.

In paragraph 1 of Art. 807 of the Civil Code of the Russian Federation determines that under a loan agreement the borrower is obliged to return to the lender the same amount of money or an equal number of things of the same kind and quality or the same securities received by him. If the parties agree on the possibility of repaying a cash loan with other property, such an agreement will not be a loan agreement. The consequence of this may be the unpredictability of the judicial qualification of the contract and its terms. Therefore, we do not recommend including such a condition in the contract.