Director's Loan Agreement — Quebec (Convention de prêt à un administrateur)

Under the Quebec Business Corporations Act (LSAQ), loans to directors are permitted but subject to special rules. The director receiving the loan must disclose the conflict of interest to the board under LSAQ art. 120 and cannot vote on the resolution approving the loan. The loan must be approved by the board of directors (excluding the interested director) and documented in the minutes. For tax purposes, loans to shareholders/directors under the Income Tax Act (ITA) may be deemed income unless repaid within specific timeframes or made in the ordinary course of business. The loan must bear interest at CRA's prescribed rate to avoid adverse tax consequences.

A Director's Loan Agreement — Quebec (Convention de prêt à un administrateur) does not legally require a lawyer in Quebec, and individuals and businesses may draft and execute the document independently. However, seeking independent legal advice from a qualified Quebec lawyer is recommended for transactions involving substantial financial value, complex regulatory requirements, or cross-border elements where multiple legal jurisdictions may apply. A lawyer can verify that the document complies with all applicable statutory requirements, identify potential risks specific to the transaction, and confirm that the terms adequately protect the interests of all parties involved. The Superior Court of Québec has jurisdiction over disputes arising from this type of document, and Registraire des entreprises du Québec may impose additional compliance obligations depending on the nature of the underlying transaction. Professional legal review is particularly advisable where the document will be submitted to government agencies or used as evidence in legal proceedings.

A Quebec Director's Loan Agreement (Convention de pret a un administrateur) does not legally require a lawyer under the Civil Code of Quebec (CCQ) or the Quebec Business Corporations Act (LSAQ). However, given the overlap with federal Income Tax Act obligations and LSAQ art. 120 conflict-of-interest rules, advice from a member of the Barreau du Quebec is strongly recommended. The Registraire des entreprises du Quebec may require disclosure of related-party transactions. The Autorite des marches financiers (AMF) has oversight where the corporation is a reporting issuer. A lawyer can ensure the board resolution, conflict disclosure, and repayment terms satisfy both LSAQ art. 155 and CRA prescribed-rate requirements to avoid adverse tax consequences under Revenu Quebec rules.

Director's loans in Quebec carry significant tax implications under both the federal Income Tax Act (ITA) and Quebec's Taxation Act administered by Revenu Quebec. Under ITA s. 15(2), a loan from a corporation to a shareholder-director is generally included in the shareholder's income unless repaid within one year of the corporation's taxation year-end. If the loan bears interest at or above the CRA's quarterly prescribed rate and is made in the ordinary course of business, income inclusion may be avoided. Revenu Quebec applies parallel rules under Quebec's provincial tax legislation. The Autorite des marches financiers (AMF) may have jurisdiction if the corporation is publicly traded. A Quebec Director's Loan Agreement should specify the loan purpose, interest rate, and repayment schedule to satisfy both LSAQ art. 155 and Revenu Quebec reporting requirements.

Under the Quebec Business Corporations Act (LSAQ), loans to directors require formal board approval and conflict-of-interest disclosure. Article 120 of the LSAQ requires the interested director to disclose their interest and abstain from voting on the resolution authorizing the loan. The board minutes must record the disclosure, the approval resolution, and the loan terms. Without proper board approval, the loan may be challenged by minority shareholders or creditors in the Superior Court of Quebec. The Registraire des entreprises du Quebec expects corporations to maintain accurate corporate records including director loan approvals. Article 1385 of the Civil Code of Quebec (CCQ) governs the underlying loan contract, while LSAQ art. 155 governs the corporate governance obligations.