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A Loan Agreement Between Parent Company And Subsidiary is a crucial document for intra-group financing in Nigerian corporate structures. This agreement is typically used when a parent company provides financial support to its subsidiary through a formal loan arrangement, rather than equity injection. The document must comply with Nigerian legislation, particularly CAMA 2020, Central Bank of Nigeria regulations, and transfer pricing rules. It's essential for documenting the terms of the loan, protecting both parties' interests, and demonstrating compliance with arm's length principles for related-party transactions. The agreement becomes particularly important during tax audits, corporate restructuring, or when establishing the subsidiary's financial independence. It should be tailored to address specific requirements of Nigerian business law while maintaining standard international financing provisions.

1. Parties: Identifies the parent company as lender and subsidiary as borrower, including registration details and addresses

2. Background: Explains the parent-subsidiary relationship and purpose of the loan

3. Definitions: Defines key terms used throughout the agreement

4. Loan Amount and Purpose: Specifies the loan amount, currency, and permitted uses of the funds

5. Interest Rate and Calculation: Details the interest rate, calculation method, and payment frequency

6. Drawdown: Specifies conditions and procedures for accessing the loan funds

7. Repayment Terms: Sets out repayment schedule, method, and currency of repayment

8. Representations and Warranties: Standard declarations by the borrower about its status and capacity

9. Covenants: Ongoing obligations of the borrower during the loan term

10. Events of Default: Circumstances that would trigger default and remedies available

11. Transfer Pricing Compliance: Confirms arm's length nature of the loan terms

12. Notices: Specifies how formal communications between parties should be made

13. Governing Law and Jurisdiction: Confirms Nigerian law governs and specifies courts for disputes

14. Execution: Signature blocks and execution requirements