A few years ago, I paid $20,000 for 20% interest in a small corporation
that
a friend of mine owns and runs. My friend kept the remaining 80%. Now I
would like to sell my shares back to the corporation for what I paid for
them. My friend agrees and wants to do that too, but the corporation
can't
afford to buy my shares outright. So, our plan is for me to transfer all
of
my my shares back to the corporation now for $5,000 down and me holding a
loan for the remaining $15,000, payable over 3 years at a 6% annual
interest
rate. I know I could sell the shares back a little at a time but, for a
number of reasons, we would both like to have my friend become the 100%
owner, and me the 0% owner, right away. That's why I'd be taking back the
loan.
I am looking for a sample loan agreement that I could modify and we could
use to summarize this transaction. I would like the loan to be stated as
being secured by the assets of the corporation if possible, rather than
just
an unsecured loan. I know we could get a lawyer, but neither of us wants
to
do that. It really is a good faith agreement and the reality is that the
company could easily go under and I could lose my $15,000 loan. We just
want something basic so everything will be on the up-and-up in terms of
documentation for the IRS, etc.
Anyone know of any sample loan agreements that I could download? Would
this
be a "purchase money loan" or "secured loan", or is their some other term
I
should be using to search for a sample agreement?
Any thoughts or suggestions would be appreciated.
Try "promissory note" -and- "security agreement."
