A term loan is an upfront loan to a borrower, repayable with interest at a fixed or floating rate on a fixed repayment date or over a certain repayment schedule. A term loan is often used by a business to purchase specified property or other fixed assets, such as equipment.

Loan Agreement: unsecured

Name: Business Loan Agreement Template UK - unsecured fixed amount
SKU: FIN001.001
Price: 35.00 GBP
Availability: InStock

Loan agreement for an unsecured loan of a fixed amount to a corporate borrower which is incorporated in England and Wales, to be drawn in a single advance and repayable either on a single repayment date or in instalments.

for an unsecured loan of a fixed amount to be drawn in a single advance
for a borrower which is a company incorporated in England and Wales
for a loan repayable on a single repayment date or in instalments

What are the key features?

21 clauses over 13 pages
single advance of the total amount of the loan money to the borrower
unsecured loan
regular interest payments at either fixed or floating interest rate by reference to specified bank’s base rate of interest
repayment terms, with repayment either on a single repayment date or in instalments
undertakings from the borrower, including to provide information to the lender lending money (such as copies of its financial statements) and prohibitions on granting security and additional borrowings
events of default, including if the borrower fails to repay the loan or interest and other borrower defaults, leading to the lender having the right to demand immediate repayment

What other documents are available?

For a form of secured loan agreement template, under which the borrower secures its obligations to the lender by granting a charge or other form of security, see

Loan Agreement: secured

For forms of unsecured and secured facility agreements

If a director or shareholder of the borrower will personally guarantee the obligations of the borrower, see Guarantee: individual guarantor

Description

When do I use this document?

where one or more shareholders wish to remove a director
where the Articles of Association do not include a simpler removal process
as special notice pursuant to the Companies Act 2006 to remove a director

Key features

special notice required to remove a director from office
including an ordinary resolution to remove a director, for use by either a single shareholder or multiple shareholders
alternative forms covering:
- removal of director only
- removal of director and appointment of replacement director

What else do I need to know?

Under section 168 of the Companies Act 2006, shareholders can remove a director by passing an ordinary resolution at a general meeting. This decision cannot be made by written resolution. The shareholder proposing the removal must give formal notice to the company. The Articles of Association cannot override this statutory process or change the notice periods required for the process.

Once the company receives special notice, the board must call a shareholder meeting. This meeting must take place at least 28 days after the notice is received. The director facing removal has the right to submit written representations, which the company must circulate to shareholders before the meeting.

The special notice may also propose appointing a new director to replace the one being removed.

In some companies, weighted voting rights can protect shareholder-directors being removed from office by granting them extra votes on removal resolutions. This is common in joint ventures, multi-shareholder businesses, or investor agreements where director rights need protection.

Being removed as a director does not affect employment rights, but it may lead to legal claims, such as wrongful dismissal. If the removed director is also a shareholder, they may claim unfair prejudice under the Companies Act 2006 – particularly in quasi-partnerships, where they expected to be involved in management. If the claim succeeds, the court may order other shareholders to buy their shares at fair value.

Explanatory Guides

As with all of our document templates, your purchase will include access to clear explanatory guidance on the document and its use.

£35.00 exc VAT

Updated by a lawyer on 02/09/2024

Updated By a lawyer on 01/05/2023

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Loan Agreement: unsecured