Shareholder Loan Agreement for Montenegro

A Shareholder Loan Agreement (Montenegrin: Ugovor o [dionicarskom] zajmu) is a formal contract that is used when an incorporated company borrows money from one of its (founding) shareholders to finance its operations, make investments, or make salary or supplier payments.

It is usually short-term and mostly takes the form of cash, however, prolonged payback periods are no exception either. Shareholder loans are popular with smaller businesses that encounter challenges securing financing from banks, and is also common among founders who wish to inject capital into their company without giving away equity in the business.

In Montenegro, the shareholder loan agreement customarily includes the:

• Loan Amount: describes the total sum of money borrowed by the company from the shareholder
• Repayment Terms: Article 2 of the loan agreement usually outlines the repayment conditions, including the frequency of repayments (yearly, monthly, or quarterly), the total loan duration, and the interest rate (fixed or variable)
• Governing Law: It should be clear from the agreement which municipality’s laws govern the contract, giving both contracting parties certainty about which court is responsible in case of a dispute
• Late Payment Remedies and Default: formalizes the legal consequences of a late repayment or default; for example listing the higher default interest rate payable
• the company’s tax identification number and bank account number

By using Adriacom’s Shareholder Loan Agreement template, you will receive a document compliant with the laws of Montenegro.