Intercompany loan agreements

It’s probably unfair to say that it’s a hallmark of a well-run company that it has established processes for documenting all of the processes which are key to its business. That would be easy to assert, but very hard to do. But if that principle did apply, then it would also apply to the creation and documentation of intra-group loan relationships. This includes cash-pooling arrangements, which typically amount to loans made by the various participating companies to the cash pool leader.

From a legal perspective, this is not rocket science. The key terms will include:

drawdown and utilisation of advances conditions precedent to drawdown term (repayment date) and the borrower’s ability to repay early (prepayment) interest rates, interest periods and compounding security and subordination events of default triggering early repayment, and default interest

As with any intra-group arrangements, a critical litmus test is whether directors can properly approve the terms of the loan relationship as being in the interests of each individual company of which they are a director.

From a lender’s perspective, this ‘corporate benefit’ issue is particularly relevant for loans by a subsidiary to a parent company or a sister company. It may less of an issue in the case of a loan by parent to its subsidiary, since the parent has a clear financial interest in the success of its investment. However, for upwards or sideways loans within a group structure, factors such as the borrower’s ability to repay the loan will obviously be important. It should go without saying that it’s not enough for the making of the loan to make sense from a group-wide perspective. The loan must also be justifiable from the perspective of each legal entity participating in the arrangements.

In one extreme but typical example, a group finance company made a loan of over a billion dollars to a special purpose vehicle (SPV) which used the loan proceeds to acquire listed securities in the market. The SPV was a sister company of the finance company – in other words, they were both subsidiaries of the same holding company. The loan was expressed to be repayable on demand. As was expected, the value of the securities fell almost immediately, leaving the SPV with negative net assets. It would be hard to justify those arrangements as being for the corporate benefit of the lender, in the absence of additional arrangement such as a parent company guarantee to support the borrower’s obligations.

From the borrower’s perspective, a parent company guarantee in favour of the lender doesn’t help. If the guarantee were to be called on – and the parent procured repayment of the loan amount to the lender – the balance sheet position of the borrower would not be improved. It would simply owe the same amount to the parent rather than the original lender. From the borrower’s perspective, it would therefore need some additional comfort, such as a subordination agreement with the parent or some other commitment of financial support.

Please see the following link for examples of short-form intercompany loan agreements.

http://www.groupreorganisation.com/?p=115

The Law of Attraction and Our Mindset

When we look at the law of attraction as a focal point for our lives now and into the future we must develop our mindset. The mindset of success is building on success, the ability to adapt to, but never accept failure. At times things will not go as planed. There will be glitches, mistakes, bungles and setbacks, but no failures. The law of attraction and our mind set must combine; give us strength and inner power to prevail against all odds.

Entrepreneurs are often asked, “What is the hardest decision they have had to make?” Most answer they dont know what a “hard decision” is. Why? Because they approach decision making with a mindset and concept that states there is a strong possibility that they will be wrong. There mindset lets them know they will do there best and they will handle the obstacles as they arise.

The law of attraction tells us to believe and manifest our desires. Have the wrong mind set and how can we believe? How can we succeed? Entrepreneurs realize that they will make mistakes, but look to make them as quickly as possible so they can learn and develop new strategies from them. The law of attraction is all about mindset, about belief within ourselves and in our self talk. Make your own mistakes learning tools and a passage forward, not stumbling blocks and reasons for things not working as you planed.

Mindset is all about developing your inner self, going with gut feeling that feel right, using your intuition. Lets face it all your inner feeling are being built of the exposure to life experiences, knowledge you have gained, courses you have attended and mentoring from those around us. Mindset is to trust yourself, it will not always be perfect but more often than not, you can work your way through or around the issues that arise. Dont let the checks and balances destroy good ideas. Learn to take risks, go with your instincts, while you remodel you mindset.

To achieve the outcomes from the law of attraction in personal your life and your business, you have to practice being a manifestor of ideas. Its not a course that available at schools and colleges, let alone on the internet, it is learned in the school of life as you progressively move forward from small manifestations to larger and more complex. The law of attraction and our mindset must become one with each other.

Your mindset must move from a current restrictive set of standards and beliefs and build to even higher standards in both behaviour and manifestation actions. Although appearances may be more noticeable than facts, our mindset must hold both as equal. In time, our actions will become more powerful than appearance, for we will be on a higher plan where appearance is not what our self-esteem or mindset needs for us to feel for filled.

You must learn to project yourself forward with confidence, if you are to be successful in bringing the bounty of the law of attraction into your life. As you commence the journey, you havent the faintest idea how you are going to achieve the things you want. All that you can take with you is blind faith that others have achieved that which you now seek over countless generations around the world. Mindset, mindset and mindset is the key just as position, position, and position is for estate agents. Law of attraction and our mind set go hand in hand.

The law of attraction and manifesting is your entry key into a life of plenty that will be supplied under the universal laws.

To protect your faith that youre in control and working with the right mindset, always ask yourself these two questions:

1.Could this be interpreted by anyone in a way that would shake his or her faith in me?
2.Could this be misinterpreted and held against me?

Strong leaders know that leadership is a lifelong learning experience, and when they make a mistake they simply continue to move forward. The innate ability to bounce back quickly following any setbacks is a quality that your mindset must have. It is a mark of the persons mindset and inner abilities to see the positive from any letdowns to there manifestations, should they occur.

When you blunder, get up and try again quickly. As one high-tech executive said, “Our strategy is to fail forward fast.” So fail as and when you do, but do not look backwards, as the past is history and will not be changed it, can only be altered by minor viewpoints.

The U S Constitution — John Eidsmoe Falls Short Of Proving It’s A Christian Document

According to John Eidsmoe, the U S Constitution was heavily influenced by Christianity. That is the thesis of his book Christianity and the Constitution. Published in 1987 by Baker House, the book is 415 pages in length.

The book leads off with a survey of various philosophical schools popular in the 18th Century, not least of which was Calvinism. John Eidsmoe states that a majority of Americans were Calvinist, but fails to demonstrate its influence on the Founders.

The book deals briefly with “John Locke’s social contract theory,” which is said to be the “secular expression” of the covenant. Mr. Eidsmoe equates the two, a usual tactic of Christian Federalists to explain away the obvious secularism of the U S Constitution.

For example, he glosses over Locke’s humanism with the assertion that he was “a Puritan by background” who “based his political theories on Rutherford’s Lex Rex.” Thus he excuses Locke’s humanism and Latitudinarianism to arrive at an very tenuous conclusion. John Locke was a Puritan prodigal, not a faithful son.

Mr. Eidsmoe’s repeated confusion of social contract theory and Bible covenant is his biggest problem. He naively mistakes the preamble of the U S Constitution as a commitment to Bible covenantalism, instead of the godless social contract which it is. This confusion is typical of Christian Constitutionalists, who frequently equate the U S Constitution and the Word of God.

Another chapter looks at aspects of 18th Century Puritanism such as optimistic eschatology and the application of Biblical law to all of life. John Eidsmoe wants his reader to draw the conclusion that these were incorporated into the U S Constitution. But this does not follow. The first Great Awakening of 1742 is described as a revival of Puritanism. This tenuous conclusion supports the non sequitor that Puritanism was built into the U S Constitution of 1787.

Several aberrant philosophies of the time are also discussed, including Freemasonry and Deism. Freemasonry is introduced and then waved off as an innocent social club, useful for political and business networking. John Eidsmoe simply ignores the anti-Christian oaths integral to Freemasonry.

It is hard to summarize all the problems in the chapter on “Law and Government”. For one thing, Mr. Eidsmoe presents Montesquieu as a champion of Biblical law. In reality Montesquieu took the Bible as but one among many authorities, with all subject to natural law.

Likewise Blackstone’s Common Law is presented as a compendium of Biblical law par excellence. The fact of the matter was it had morphed into a barnacle- laiden anachronism by the 1750s. For example, some 200 mostly petty crimes carried the death penalty. Most juries refused to enforce it because it was so obviously unjust.

In reality Blackstone rarely even mentioned the Bible in his Commentaries. We assume John Eidsmoe has read Blackstone, so he should be aware of that.

Returning to Locke, Mr. Eidsmoe justifies his humanism and “blank slate” theory of the mind, which denies original sin. Again he draws the faulty conclusion that Locke’s “social compact theory is similar to the Calvinist idea of covenant.” This is a misleading statement because the two ideas are diametrically opposed. They represent the authority of man versus the authority of God.

All of these misperceptions color the religious biographies of the founders which comprise most of the book. For example, of John Witherspoon he notes that “He devoted his life to instilling the principles of Holy Scripture into the minds and souls of young men who then used these principles to shape America.”

It is difficult to see how anyone who has read Witherspoon’s class notes for his moral philosophy class could draw such a conclusion. Moral philosophy was the culminating class of the curriculum that Witherspoon taught personally to all the graduating seniors at the College of New Jersey. They are an exposition of natural law and secular social contract theory, with very little reference to Holy Scripture.

Typical of Christian apologists for the U S Constitution John Eidsmoe spends a good deal of time arguing that the Founding Fathers were all solid Christians. The usual assumption is that if we can prove the founders were Christian, the document they gave us must of necessity be Christian. But this is a non-sequitor. Space does not permit us to say all that could be said of these biographies.

At the end, John Eidsmoe lists all of the alleged biblical principles he has found in the U S Constitution. But most of what he cites is Enlightenment theory of the natural rights of man, egalitarianism, and natural law. The “consent of the governed” is the source of governing authority rather than God.

Mr. Eismoe is correct in concluding that knowledge of the sinfulness of man prompted the Constitution’s limited, delegated powers. This is the one point at which the Founders got it right, and we have Witherspoon to thank for that. But overall the complexities of this book should limit its use to the advanced student who is well-versed in the issues involved.

For More Information

what’s In A Name – Just Your Business Survival!

What’s so important about how I sign my name?”

I get asked that question all of the time from my business consulting clients.

I tell them that a better question to ask me is this:

“Who cares about how I sign my name?”

The answer is a simple one.

NOBODY.

FINE PRINT: Except… your customers and clients, your creditors, your bank, your mortgage company, your landlord, the I.R.S… oh yes… and anyone else that wants to SUE YOU (and don’t forget ALL their lawyers!).

As in many areas of the law, the exception to the rule swallows up the rule!

What do I mean by this?

Well, let’s start with some basics. For instance, if you’ve already formed a corporation or limited liability company (LLC), you may think that you’re already protected from personal liability in the event of a lawsuit against your business.

In general, the rule is that a corporation or LLC, if formed correctly, and if all of the formalities required under the law of the State where the entity was formed are followed, does protect you from personal liability for business debts and lawsuits.

FINE PRINT: Except… when you choose to do business as an individual, and not as the corporation or LLC that you initially formed.

You see, whenever you sign documents like contracts, purchase orders, contractual agreements, leases, loans, mortgages, promissory notes, and most other legal documents involving your business, you need to make sure that you sign your name only in your business capacity.

You MUST avoid signing your name in your individual capacity.

And how do you do that? It’s pretty simple. You see, the format that you use to sign your name is the controlling factor.

In many cases, you as the business owner, sign your name without knowing how to properly sign your name to business documents. In fact, most business owners of corporations and LLC’s still sign legally binding agreements in their individual capacity…and not as the business.

SIGN AS AN AGENT OF YOUR BUSINESS

If you have formed a corporation or an LLC, you must remember to sign all contracts, agreements, invoices, etc… as an agent of the business.

For example… Many business owners haphazardly, or perhaps inadvertently, sign legal documents like the format shown in

EXAMPLE 1 below:

EXAMPLE 1

(signature)
————————
John Doe

“But what is the consequence of signing my name like in EXAMPLE 1 above to invoices, agreements, or documents?”

EXAMPLE 1 and the above signature format legally establishes that YOU have signed the contract, invoice, loan, or agreement as an individual.

And not as an agent on behalf of your business.

If you sign your name to agreements in the form depicted in EXAMPLE 1 above, YOU could very well be liable personally to meet all of the terms of the agreement.

And you likely don’t want to do this!

Why Simply out, because you’re therefore subjecting all of your business assets and personal assets as well to the risk of a lawsuit.

If you sign agreements as depicted in EXAMPLE 1 above, YOU will very likely be named personally, as well as your business, in any lawsuit filed against the business.

Remember then:

Signing your name like in EXAMPLE 1 above DOES NOT establish that you have signed the agreement as an agent on behalf of your business.

“Okay. So how should I sign my name to my invoices, contracts, leases, loans, or any other business agreements?

What simple step can I take to protect my business, and my personal assets as well?

SIGN DOCUMENTS ONLY AS AN AGENT OF YOUR BUSINESS

Make sure that you only sign legal documents, letters, memos, invoices, loans, leases, etc… as an agent of your business.

How must I sign my name to any legal document or agreement to show that I am signing only as an agent of my business?

Follow EXAMPLE 2 below:

EXAMPLE 2

ABC CORPORATION, INC.

(signature)
———————————–
BY: John Doe
President (Company Title)

If you sign your name on the dotted line following the exact format depicted in Example 2 above, you legally establish that you are only signing as an agent on behalf of the business…and not in your individual capacity.

But you MUST follow the Example 2 precisely.

CAVEAT: Another very important point on this topic.

AVOID SIGNING documents that state “PERSONAL GUARANTY” on them.

A Personal Guaranty is usually a separate legal document attached to the main agreement. You generally see a Personal Guaranty in a loan, mortgage, or lease. However, sometimes a Personal Guaranty can be established just by the way you sign the legal document, invoice, lease, or agreement.

How?

Simple. If the agreement merely has a signature line that has your individual name on it without any reference to your business name, you are signing the document as a Personal Guaranty. You are therefore personally liable for that agreement if you sign the agreement with such a signature line.

But, what do I do if I am being required to sign a Personal Guaranty, like for a business loan or commercial lease for example?

If a Personal Guaranty is required, you or your lawyer should negotiate a limited period of time (the shortest possible) that the Personal Guaranty will bind you as an individual.

Remember, if you formed a corporation or LLC in the first place, you did it to avoid personal liability and to protect your personal assets. Anyone who does business with your company should, and usually does, know this. So, be careful. Other possibilities can be negotiated too. Just do your best not to sign in your personal capacity by signing a Personal Guaranty.

It’s important to remember to only sign legal documents, invoices, and even letters as an agent of your business. (Follow the format found in EXAMPLE 2 above).

How else can I make sure that I am signing my name properly to all of my business documents?

Call your attorney to review all of your agreements, invoices, leases, and legal documents BEFORE you sign them. Your attorney will offer sound advice that protects YOU, your loved ones, and your business.

Now, let’s review.

What’s in a name?

Well… besides your business…

…it could be all of YOUR personal and family assets!

The best advicve especially in the midst of tough economic times or a Recession, is to have any document you sign first reviewed by your lawyer or business consultant.

Copyright (c) 2008. Miguel Mendez, Jr. All rights reserved.

Hemp And Legal Implications

Copyright 2006 Francesca Black

In 1619 Jamestown Colony, Virginia enacted laws ordering farmers to grow hemp. Similar laws were enacted in Massachusetts in 1631, Connecticut in 1632 and the Chesapeake Colonies in the mid-1700’s.

Even though the U.S. government encouraged American farmers to grow hemp for WWII and had even accepted it as payment of taxes in Colonial America, it is now prohibited to grow hemp in the United States.

Cannabis hemp was legal tender in most of the Americas from 1631 until the early 1800’s. you could even pay your taxes with cannabis hemp. In the mid-to-late 1800’s the 2nd & 3rd most commonly used medications were concentrated cannabis extracts and resins (a.k.a. hashish). At one time American companies Eli Lily, Squibb and Park Davis produced cannabis extract medicines but clearly that is no longer the case..

Today the THC levels in industrial hemp are so low that no one could ever get high from smoking it. Moreover, hemp contains a relatively high percentage of another cannabinoid, CBD, that actually blocks the marijuana high. Hemp, it turns out, is not only not marijuana; it could be called ‘antimarijuana.’ Although opponents of hemp production claim that hemp fields will be used to hide marijuana fields, this is unlikely because cross-pollination between hemp and marijuana plants would significantly reduce the potency of the marijuana plant.

On March 12, 1998, Canada legalized hemp production and set a limit of 0.3% THC content that may be present in the plants and requires that all seeds be certified for THC content.

In 1942 the US government strongly encouraged hemp cultivation to help with the war effort, going so far as to produce a film entitled “Hemp For Victory”. Hemp was grown commercially (with increasing government interference) in the United States until the 1950s. While congress expressly expected the continued production of industrial hemp, the Federal Bureau of Narcotics lumped industrial hemp with marijuana, as its successor the United States Drug Enforcement Administration (DEA), does to this day. Even though the US government encouraged American farmers to grow hemp for WWII and had even accepted it as payment of taxes in Colonial America, it is now prohibited to grow hemp in the United States. While industrial hemp and marijuana may look somewhat alike to the untrained eye, an easily trained eye can easily distinguish the difference.

The European Union subsidizes its farmers to grow industrial hemp. Hemp seed is not psychoactive and cannot be used as a drug. Hemp Seed does not contain THC. From 1842 through the 1880s, extremely strong marijuana (then known as cannabis extractums), hashish extracts, tinctures, and elixirs were routinely the second and third most-used medicines in America for humans (from birth through old age). These extracts were also used in veterinary medicine until the 1920s.

The illogical and unrealistic reasons for not growing hemp should be set aside now, as this crop will be a wonderful economic boon. In 1935 116 million pounds (58,000 tons) of hemp seed was used to make paints and varnishes yet it has been effectively prohibited in the United States since the 1950s.

Hemp was doomed by the Marijuana Tax Act of 1937, which placed an extremely high tax and made it effectively impossible to grow industrial hemp. While congress expressly expected the continued production of industrial hemp, the Federal Bureau of Narcotics lumped industrial hemp with marijuana, as its successor the United States Drug Enforcement Administration (DEA), does to this day. While industrial hemp and marijuana may look somewhat alike to the untrained eye, an easily trained eye can easily distinguish the difference.

No marijuana grower would hide marijuana plants in a hemp field. Marijuana is grown widely spaced to maximize flowers and leaves; hemp is grown tightly-spaced to maximize stalk and is usually harvested before it goes to seed. It is also the first place where law enforcement officials would look. No one would want to smoke industrial hemp. Industrial hemp has a THC content of between 0.05 and 1%. Marijuana has a THC content of 3% to 20%. To receive a standard psychoactive dose would require a person to power-smoke 10-12 hemp cigarettes over a very short period of time. The large volume, high temperature of vapor, gas and smoke would be difficult for a person to withstand, much less enjoy.

The US State Department must certify each year that a foreign nation is cooperating in the war on drugs. The European Union subsidizes its farmers to grow industrial hemp. Those nations are not on this list, because the US State Department distinguishes the difference between hemp and marijuana. Over 30 industrialized democracies do distinguish hemp from marijuana. International treaties regarding marijuana make an exception for hemp, and trade alliances such as NAFTA allow for the importation of hemp. In fact NAFTA allow for the importation of hemp. All members of the Group of Seven Industrialized Nations permit hemp cultivation except one-the United States.