If you are not willing to waive the refund, it is useful to document such a transaction whenever it comes to money. Lending a sum of money to a person or company should be done with a credit agreement. This would avoid disputes or ambiguities at a later stage. In addition, the exempt credit company may grant loans to the loan company, even if the director of the loan company holds 20% or more of the voting company`s stake. In this case, the borrowing company or limited liability company is also considered a data subject. All loans between these companies must be the subject of a prior agreement of the company at the general meeting. Guarantees include undertakings which provide guarantees or guarantees for a loan, quasi-loan or credit transaction carried out by or in favour of the Director. Some non-exhaustive points regarding a shareholders` agreement for Singapore companies: unlike a commercial loan agreement, a loan under a director/shareholder loan agreement can be interest-free and repayable on request. There is no legal obligation for the company`s interests on loans granted to its directors or related persons. Therefore, these loans can be interest-free or subsidized (if a third party pays interest on the loan). One of the reasons why such a credit agreement may be simpler is that the lender, as a shareholder or director of a company, usually wants to be able to better understand the financial situation of the company. For example, when a manager decides to sign a loan agreement with the company, he must be sure that the loan does not cause harm to the company.
The first category is that of the director`s family members, including the director`s spouse, children (including adopted children) and stepchildren. In other words, family members of these directors usually cannot obtain loans from the director`s business. However, these loans may be taxable. Under the Income Tax Act, managers are considered employees of the company. Therefore, all benefits generated by business loans are considered employment benefits when they are realized as managers of the company. Therefore, savings income should be taxed in the same way as employment benefits. In order to determine whether the necessary interest of the director for the borrowing of the company triggers the restrictions of the Companies Act, the interests of the members of the director`s family are considered to be interests of the director. This means that even if the director does not have a voting interest of 20% or more in the borrowing company, if the director`s family members accumulate such a stake, the loan must still be approved in advance.
If the shareholder grants a loan to the company, the interest is not taxable. . . .