Contracting and implementation of the loan to the company from the founders is almost entirely governed by the provisions of the Law on Contracts and Torts.
The Companies Act in the part Additional Payments and Loan to the Company (Articles from 178 to 181) prescribes manner of esblishing the additional payment obligation, consequences of failure to make addititonal payment and return of the additonal payments, but does not provide specific rules relating to the loan. Provisions of the Companies Act which regulate payment limitations to the company’s founders, approval of a transaction in which there is personal interest and company’s share capital increase contain norms that are important for the contracting and implementation of loan.
The Law on Cotract and Torts doesn’t impose restrictions when it comes to the conclusion of the loan contract and the lender can be both as a business entity and natural person. According to the provisions of Article 557 of the Law on Contract and Torts by a loan contract the lender shall assume the obligation to transfer ownership to the borrower of a specific amount of money or other interchangeable objects, while the borrower shall assume the obligation to restitute after a certain time to him the same amount of money, or same quantity of objects of the same kind and quality. Continue reading Financing of the company by the founders through loan