This is a total cancellation of the debt and not a partial cancellation of the debt or a waiver of certain conditions under the loan agreement. This debt statement is a mail-order agreement in the form of an act that frees a borrower from a debt he owes. To be valid by law, a total waiver of a loan must be included in an act and duly certified. Note that with respect to the amortization of a loan, it is likely that accounting and tax issues must be taken into account. This goes beyond the scope of this site. However, it is highly recommended that you consider generating the appropriate advice on accounting and tax matters. Executives of both companies must consider their legal obligations under the 2006 Companies Act, in particular s.172 (obligation to promote the success of the business) when amortising a loan, to ensure that it is in the best interests of the business. The board of directors will probably have to document it at a board meeting. Shareholder agreement on depreciation is unlikely to be necessary, but the articles should be revised to ensure that this is not necessary. In addition, conflict problems can arise, such as an intercompany loan. B, when the directors of the parent company are also directors of the 100% subsidiary.
Under these conditions, shareholders` approval can be obtained. We can create a package tailored to your individual needs. This model should be used when lenders are businesses, although they are suitable for use where either party is an individual. A typical scenario is one where a parent company proposes to write off a debt owed to it by a 100% subsidiary. To subscribe to this content, simply call 0800 231 5199.