Convertible loan agreement

Abstract

The subject of this article is a convertible loan agreement. The article offers an analysis of the legal nature of the convertible loan agreement, its subject, subject composition, content. The consequences of concluding a convertible loan agreement for a borrower business company are investigated. Alternative mechanisms of financing the activities of a business company are considered. The assessment of the applied value of the convertible loan agreement is given. It is noted that the convertible loan agreement should be considered as an independent civil law agreement, which includes elements of a number of civil law transactions, which, in cases established by law, is an optional element of a corporate legal relationship, aimed at its dynamics (occurrence or change), providing for the right of the lender, instead of returning all or part of the loan amount and paying all or part of the interest for using the loan upon the onset of the term and (or) other circumstances provided for by this agreement, to demand from the business company — the borrower’s participation in its authorized capital.