Division 7a Loan Dispute

Summary

Division 7A loans prevent tax-free distributions to shareholders. If a loan is deemed Division 7A, it must comply with specific criteria to avoid being treated as an unfranked dividend. Review shareholder agreements and loan documents to understand your obligations. If the loan increase was made without a resolution or documentation, consider consulting a corporate law expert for a second opinion.

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I h****ve ******** lo****n ****nd ****s soon ****s I resigned the other directors s****id there w****s **** mist****ke ****nd my lo****n w****s subsidised by other sh****reholders which I w****s not ****w****re of ****nd h****ve st****rted dem****nding to p****y the offset
It sounds like **** complex situ****tion involving comp****ny lo****ns ****nd sh****reholder ****greements. Here ****re some gener****l points reg****rding Division 7A lo****ns in Austr****li****:
- Division 7A prevents priv****te comp****nies from m****king t****x-free distributions to sh****reholders in the form of lo****ns or p****yments.
- If **** lo****n is deemed to be **** Division 7A lo****n, it must be rep****id or comply with specific criteri**** to ****void being tre****ted ****s ****n unfr****nked dividend.
To underst****nd your oblig****tions ****nd rights, reviewing ****ny sh****reholder ****greements ****nd lo****n documents is cruci****l. Consulting with **** leg****l expert speci****lizing in corpor****te l****w m****y be benefici****l.
H****ve you considered consulting **** loc****l l****wyer to help cl****rify your oblig****tions or resolve this dispute?
I h****ve ****nd I ****m not h****ppy with the ****dvice
It seems like **** ch****llenging situ****tion with your Division 7A lo****n. Since you're not s****tisfied with the ****dvice you received, you might consider seeking **** second opinion from ****nother l****wyer who speci****lizes in corpor****te l****w. Would you like ****ssist****nce in connecting with **** loc****l l****wyer who c****n better ****ssist you with this issue?
Expert in ********
C****se R****ting: *
It's underst****nd****ble th****t you're looking for ****n expert in Division 7A m****tters. Since you've ****lre****dy consulted **** l****wyer ****nd ****ren't s****tisfied, seeking ****nother opinion might be benefici****l. Would you like ****ny more inform****tion on Division 7A, or is there ****nything specific you'd like to know?
The incre****se w****s just done without **** resolution
C****se R****ting: *
It seems like you're de****ling with **** complex corpor****te l****w issue rel****ted to Division 7A lo****ns ****nd sh****reholder ****greements. If the incre****se w****s m****de without **** resolution, you might w****nt to explore:
- Reviewing the comp****ny's constitution ****nd ****ny sh****reholder ****greements.
- Checking if there ****re ****ny meeting minutes or resolutions th****t support the directors' ****ctions.
Would you like more inform****tion on how to proceed with this m****tter, or is there ****nything else specific you'd like to ****sk?
Also the subsidies ****mount w****s not discussed with me ****nd there isn’t ****ny document****tion showing I h****ve ****greed to it
C****se R****ting: *
It seems like you're de****ling with **** f****irly complex corpor****te issue. Here ****re some steps you might consider:
- Review ****ny existing ****greements or communic****tions rel****ted to the lo****n ****nd subsidies.
- Check if the directors' ****ctions ****lign with your comp****ny's constitution.
Would you like more inform****tion on how to explore this further, or is there ****nything else specific you'd like to know?
Yes ple****se more inform****tion
C****se R****ting: *
Here ****re some steps to consider for your situ****tion:
- Review ****ny communic****tions ****nd ****greements rel****ted to the lo****n, subsidies, ****nd sh****reholder ****ctions.
- Look into your comp****ny's constitution ****nd ****ny sh****reholder ****greements for relev****nt cl****uses.
- Consider seeking **** second opinion from **** l****wyer who speci****lizes in corpor****te l****w.
If you h****ve ****ny specific questions or need further det****ils, feel free to ****sk!