Director's Loan Agreement — Quebec (Convention de prêt à un administrateur)
Convention de prêt à un administrateur — Quebec (LSAQ art. 155 / CCQ)
DIRECTOR'S LOAN AGREEMENT
Convention de prêt à un administrateur — Province of Quebec
Pursuant to LSAQ art. 155 and the Civil Code of Quebec (CCQ)
This Director's Loan Agreement ('Agreement') is entered into as of [Agreement Date] between [Corporation Name] of [Corporation Address] ('Corporation') and [Director Name] of [Director Address] ('Director').
1. LOAN DETAILS
Loan direction: [Loan Direction]
Loan amount: [Loan Amount] (CAD).
Purpose: [Loan Purpose]
Date of disbursement: [Disbursement Date]
2. INTEREST AND REPAYMENT
Interest rate: [Interest Rate] per annum, calculated on the outstanding principal balance.
Repayment schedule: [Repayment Schedule]
Security: [Security]
NOTE — TAX IMPLICATIONS: The parties acknowledge that loans from a corporation to a director/shareholder may be deemed income under the Income Tax Act (ITA) s. 15(2) unless repaid within one year after the end of the corporation's taxation year in which the loan was made, or unless the loan qualifies for one of the ITA exceptions. The parties are advised to seek independent tax advice regarding this Agreement.
3. CORPORATE GOVERNANCE
Board approval: This Agreement was approved by the Board of Directors of [Corporation Name] by resolution dated [Board Resolution Date], in accordance with LSAQ art. 155.
Conflict disclosure: [Conflict Disclosure]
The Director acknowledges the fiduciary duties owed to the Corporation under LSAQ arts. 119–122 and confirms that this Agreement does not create any conflict of interest beyond that disclosed above.
4. DEFAULT AND GOVERNING LAW
Upon default in payment, the entire outstanding principal and accrued interest shall become immediately due and payable at the election of the lender. This Agreement is governed by the laws of the Province of Quebec and the federal laws of Canada applicable therein. Any dispute shall be submitted to the courts of Quebec.
Corporation (authorized signatory)
________________
Signature
Director (Administrateur)
________________
Signature
What Is a Director's Loan Agreement — Quebec (Convention de prêt à un administrateur)?
A Quebec Director's Loan Agreement (Convention de prêt à un administrateur) is a formal contract documenting a loan between a corporation and one of its directors. Governed by LSAQ art. 155 and CCQ, it requires board approval, conflict of interest disclosure, and must comply with Income Tax Act rules to avoid adverse tax consequences.
When Do You Need a Director's Loan Agreement — Quebec (Convention de prêt à un administrateur)?
The Quebec Director's Loan Agreement — Quebec (Convention de prêt à un administrateur) agreement is needed when a corporation lends money to a director for any purpose — personal expenses, investment, home purchase — or when a director lends money to the corporation, to properly document the transaction and comply with corporate governance and tax requirements.
Parties in Quebec should prepare a Director's Loan Agreement — Quebec (Convention de prêt à un administrateur) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your Director's Loan Agreement — Quebec (Convention de prêt à un administrateur)
Key elements: corporation and director identification, loan amount in CAD, purpose, interest rate (CRA prescribed rate minimum), repayment schedule, board resolution reference, conflict disclosure, security if any, default provisions, and signatures.
Additional compliance elements for a Director's Loan Agreement — Quebec (Convention de prêt à un administrateur) used in Quebec include: Data Protection — applicable privacy legislation requires a lawful basis for processing personal data; Governing Law — specify Quebec law and jurisdiction; Dispute Resolution — parties may refer disputes to the appropriate tribunal or court.
The board resolution approving the director's loan under LSAQ art. 155 must be recorded in the corporate minute book maintained at the Registraire des entreprises du Quebec, and copies should be retained for Revenu Quebec audit purposes as required by the provincial Taxation Act.
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Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Director's Loan Agreement — Quebec (Convention de prêt à un administrateur) (Quebec) [Legal document template]. Forms Legal. https://forms-legal.com/quebec/business/corporate/directors-loan-agreement-quebec
"Director's Loan Agreement — Quebec (Convention de prêt à un administrateur) (Quebec)." Forms Legal, 2026, https://forms-legal.com/quebec/business/corporate/directors-loan-agreement-quebec.
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title = {Director's Loan Agreement — Quebec (Convention de prêt à un administrateur) (Quebec)},
year = {2026},
howpublished = {\url{https://forms-legal.com/quebec/business/corporate/directors-loan-agreement-quebec}},
note = {Free legal document template. Based on Civil Code of Québec (CCQ), Book Five: Obligations}
}Frequently Asked Questions
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.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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