{"id":5604,"date":"2026-05-27T09:31:30","date_gmt":"2026-05-26T23:31:30","guid":{"rendered":"https:\/\/argylllaw.com\/?p=5604"},"modified":"2026-06-25T16:50:03","modified_gmt":"2026-06-25T06:50:03","slug":"intercompany-loans-directors-duties-australia","status":"publish","type":"post","link":"https:\/\/argylllaw.com\/de\/intercompany-loans-directors-duties-australia\/","title":{"rendered":"Intercompany loans: what Australian directors need to know before transferring funds to a parent company"},"content":{"rendered":"<div class=\"fusion-fullwidth fullwidth-box fusion-builder-row-1 fusion-flex-container nonhundred-percent-fullwidth non-hundred-percent-height-scrolling\" style=\"background-color: rgba(255,255,255,0);background-position: center center;background-repeat: no-repeat;border-width: 0px 0px 0px 0px;border-color:#e2e2e2;border-style:solid;\" ><div class=\"fusion-builder-row fusion-row fusion-flex-align-items-flex-start\" style=\"max-width:1352px;margin-left: calc(-4% \/ 2 );margin-right: calc(-4% \/ 2 );\"><div class=\"fusion-layout-column fusion_builder_column fusion-builder-column-0 fusion_builder_column_1_1 1_1 fusion-flex-column\"><div class=\"fusion-column-wrapper fusion-flex-justify-content-flex-start fusion-content-layout-column\" style=\"background-position:left top;background-repeat:no-repeat;-webkit-background-size:cover;-moz-background-size:cover;-o-background-size:cover;background-size:cover;padding: 0px 0px 0px 0px;\"><div class=\"fusion-text fusion-text-1\"><p><span data-contrast=\"auto\">In global corporate groups, money often moves\u00a0freely\u00a0between related companies. A parent company may\u00a0direct\u00a0an Australian subsidiary to transfer funds,\u00a0join up to a global finance\u00a0commitment,\u00a0approve an intercompany loan, repay a group balance, pay a\u00a0dividend\u00a0or move money to another entity in the group.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">From a group finance perspective, this makes sense. The money is within the same corporate group, and the request may come from head office, the finance\u00a0team\u00a0or the parent company.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">For directors of an Australian subsidiary, however, these requests need to be approached carefully. A transfer that makes sense for the wider group may still raise issues for the Australian company and its directors.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<h2>Why \u201c<i>it\u2019s all group money<\/i>\u201d is a risky assumption<span data-ccp-props=\"{}\">\u00a0<\/span><\/h2>\n<p><span data-contrast=\"auto\">In Australia, a company is its own legal entity.\u00a0That means it can:<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"9\" data-list-defn-props=\"{\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">enter into\u00a0contracts;\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"9\" data-list-defn-props=\"{\" data-aria-posinset=\"2\" data-aria-level=\"1\"><span data-contrast=\"auto\">own property;\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"9\" data-list-defn-props=\"{\" data-aria-posinset=\"3\" data-aria-level=\"1\"><span data-contrast=\"auto\">incur debts;\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"9\" data-list-defn-props=\"{\" data-aria-posinset=\"4\" data-aria-level=\"1\"><span data-contrast=\"auto\">sue and be sued in its own name; and\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"9\" data-list-defn-props=\"{\" data-aria-posinset=\"5\" data-aria-level=\"1\"><span data-contrast=\"auto\">have legal obligations that are separate from other companies in the same group.\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"auto\">It\u2019s\u00a0exactly why this structure is used to insulate one group company from another group company\u2019s debt and creditor obligations.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">This is important for directors of Australian subsidiaries. Even where the Australian company is wholly owned by an overseas parent company, the directors still owe duties to the Australian company itself (and importantly, its creditors) under <a href=\"https:\/\/www.legislation.gov.au\/C2004A00818\/latest\/text\">national legislation<\/a><\/span><span data-contrast=\"auto\">. We outline these duties in our article, <\/span><a href=\"https:\/\/argylllaw.com\/directors-duties-australia\/\">Directors\u2019 duties in Australia: a guide for foreign business owners<\/a>. In brief t<span data-contrast=\"auto\">hese duties include obligations to:<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"8\" data-list-defn-props=\"{\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">act with care and diligence;\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"8\" data-list-defn-props=\"{\" data-aria-posinset=\"2\" data-aria-level=\"1\"><span data-contrast=\"auto\">act in good faith in the best interests of the company;\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"8\" data-list-defn-props=\"{\" data-aria-posinset=\"3\" data-aria-level=\"1\"><span data-contrast=\"auto\">use their powers for a proper purpose;\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"8\" data-list-defn-props=\"{\" data-aria-posinset=\"4\" data-aria-level=\"1\"><span data-contrast=\"auto\">avoid or properly manage <a href=\"https:\/\/argylllaw.com\/recognising-a-conflict-of-interest-as-a-director\/\">conflicts of interest<\/a><\/span><span data-contrast=\"auto\">;\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"8\" data-list-defn-props=\"{\" data-aria-posinset=\"5\" data-aria-level=\"1\"><span data-contrast=\"auto\">avoid improper use of their position or information; and\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"8\" data-list-defn-props=\"{\" data-aria-posinset=\"6\" data-aria-level=\"1\"><span data-contrast=\"auto\">prevent the company from trading while insolvent.\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"auto\">In simple terms, a director cannot approve a transfer just because the parent company wants it.\u00a0The director must consider whether the transaction is\u00a0in the best interests of\u00a0the Australian company.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">This can be uncomfortable in a global group. Head office may see the funds as group money. But Australian law looks at the Australian company as a separate legal entity.\u00a0That means the Australian company\u2019s interests need to be considered separately.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<h2>What directors should consider before approving an intercompany loan<\/h2>\n<p><span data-contrast=\"auto\">Intercompany loans are common in corporate groups and are not necessarily improper. In many cases, they are a legitimate way to manage finance within a group structure.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">The issue is whether the proposed loan or transfer has been\u00a0properly considered\u00a0in\u00a0the context of\u00a0the Australian company\u2019s own circumstances. Before approving an intercompany loan or transfer, directors may need to consider the company\u2019s financial position, the purpose of the transfer, the terms of the proposed transaction and the company\u2019s existing obligations\u00a0to its creditors and employees.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Common issues that may need to be considered include:<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" data-list-defn-props=\"{\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">Is the company solvent now?\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" data-list-defn-props=\"{\" data-aria-posinset=\"2\" data-aria-level=\"1\"><span data-contrast=\"auto\">Will the company remain solvent after the loan or transfer?\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" data-list-defn-props=\"{\" data-aria-posinset=\"3\" data-aria-level=\"1\"><span data-contrast=\"auto\">Are the funds genuinely surplus to the company\u2019s needs?\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" data-list-defn-props=\"{\" data-aria-posinset=\"4\" data-aria-level=\"1\"><span data-contrast=\"auto\">Does the company need the money to meet current or future obligations?<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" data-list-defn-props=\"{\" data-aria-posinset=\"5\" data-aria-level=\"1\"><span data-contrast=\"auto\">Are any funds held for a specific purpose?\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" data-list-defn-props=\"{\" data-aria-posinset=\"6\" data-aria-level=\"1\"><span data-contrast=\"auto\">Could the transfer affect creditors, customers,\u00a0employees\u00a0or the ATO?\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" data-list-defn-props=\"{\" data-aria-posinset=\"7\" data-aria-level=\"1\"><span data-contrast=\"auto\">Is the transaction in the Australian company\u2019s interests?\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" data-list-defn-props=\"{\" data-aria-posinset=\"8\" data-aria-level=\"1\"><span data-contrast=\"auto\">Is there a written loan agreement?\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" data-list-defn-props=\"{\" data-aria-posinset=\"9\" data-aria-level=\"1\"><span data-contrast=\"auto\">Are the repayment terms clear?\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" data-list-defn-props=\"{\" data-aria-posinset=\"10\" data-aria-level=\"1\"><span data-contrast=\"auto\">Are the terms commercial?\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" data-list-defn-props=\"{\" data-aria-posinset=\"11\" data-aria-level=\"1\"><span data-contrast=\"auto\">Has the board\u00a0properly considered\u00a0the decision?\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" data-list-defn-props=\"{\" data-aria-posinset=\"12\" data-aria-level=\"1\"><span data-contrast=\"auto\">Has the decision-making process been recorded?\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"auto\">These questions are not a complete checklist. They are examples of the kinds of issues that may need to be considered before directors approve a transfer of funds to a parent company or another related entity.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<h2>Can directors be personally liable for approving an intercompany loan?<\/h2>\n<p><span data-contrast=\"auto\">Directors are not automatically personally liable for every decision a company makes. However, they can face personal risk if they breach their duties.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">This risk can arise where a director approves a loan or transfer without\u00a0properly considering\u00a0the company\u2019s position.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">For example, there may be risk if:<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"6\" data-list-defn-props=\"{\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">the company is insolvent, or close to insolvent;\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"6\" data-list-defn-props=\"{\" data-aria-posinset=\"2\" data-aria-level=\"1\"><span data-contrast=\"auto\">the transfer causes the company to become insolvent;\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"6\" data-list-defn-props=\"{\" data-aria-posinset=\"3\" data-aria-level=\"1\"><span data-contrast=\"auto\">the company cannot meet its own debts after the transfer;\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"6\" data-list-defn-props=\"{\" data-aria-posinset=\"4\" data-aria-level=\"1\"><span data-contrast=\"auto\">the transaction\u00a0benefits\u00a0the parent company but harms the Australian subsidiary;\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"6\" data-list-defn-props=\"{\" data-aria-posinset=\"5\" data-aria-level=\"1\"><span data-contrast=\"auto\">the director has not considered the company\u2019s creditors\u00a0or its\u00a0employees;\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"6\" data-list-defn-props=\"{\" data-aria-posinset=\"6\" data-aria-level=\"1\"><span data-contrast=\"auto\">the director has simply followed instructions from head office; or\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"6\" data-list-defn-props=\"{\" data-aria-posinset=\"7\" data-aria-level=\"1\"><span data-contrast=\"auto\">there is no proper record of the board\u2019s decision-making process.\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"auto\">This does not mean every intercompany loan is unlawful. Intercompany loans are common in corporate groups. They can be legitimate and commercially sensible. The issue is whether the directors have\u00a0properly considered\u00a0the Australian company\u2019s position before approving the transaction.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<h2>Example: When client funds are not really surplus cash<\/h2>\n<p><span data-contrast=\"auto\">An Australian subsidiary may appear to have cash available in its bank account. But that does not always mean the money is surplus.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">For example, the company may have received advance payments from clients for future project work. If a project is cancelled, some or\u00a0all of\u00a0that money may need to be refunded. In some cases, there may also be trust or purpose-based issues to consider.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">If directors approve a loan to a parent company without considering those obligations, they may expose the Australian company \u2014 and themselves \u2014 to risk.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h2>What should directors do if head office asks them to transfer funds?<\/h2>\n<p><span data-contrast=\"auto\">If head office asks an Australian subsidiary to transfer funds, approve an intercompany loan or move money to another group company, the directors should be careful about treating the request as a simple administrative step.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">These transactions can raise complex legal, tax,\u00a0accounting\u00a0and governance issues. If there is any uncertainty about the company\u2019s position, or about the director\u2019s duties, it is sensible to obtain independent legal advice before approving the transfer.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">One of the first issues is the nature of the proposed transaction. Is it intended to be a loan, a dividend, a repayment of an existing group balance, a capital return, a management fee, or something else? Each type of transaction may have different legal\u00a0and tax\u00a0consequences and may need to be documented differently.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Directors may also need to understand why the transfer is being requested and whether the Australian company can properly afford it. That may involve considering the company\u2019s current and future cash flow, existing debts, creditor obligations, customer commitments, employee entitlements, tax\u00a0liabilities\u00a0and any funds that may be held for a specific purpose.\u00a0\u00a0These considerations should\u00a0be documented so that\u00a0it\u2019s\u00a0clear that the directors exercised their duty to\u00a0give proper consideration to\u00a0the best interests of the company and\u00a0weighed up all relevant factors.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">The request should also be considered from the perspective of the Australian company. A transaction that\u00a0benefits\u00a0the parent company or the wider corporate group may not necessarily be in the interests of the Australian subsidiary. That does not mean the transaction cannot\u00a0proceed, but it does mean the Australian company\u2019s position should be considered separately.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Depending on the circumstances, directors may also need to consider whether the transaction should be documented in writing, whether the terms are commercial, whether security or repayment terms are\u00a0appropriate, and whether the board\u2019s decision-making process should be recorded.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Directors need to consider any restrictions on inter-company loans in the constitution or a shareholders\u2019 agreement.\u00a0\u00a0These considerations are especially important where there are minority shareholders.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Where the request comes from overseas head office, a\u00a0director of an Australian company cannot assume that the parent company has considered the Australian legal position.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">If the directors are unsure, the safer course is to pause and seek independent advice before approving the transaction. That advice can help clarify the company\u2019s position,\u00a0identify\u00a0the\u00a0risks\u00a0and\u00a0determine\u00a0what documentation or further steps may be\u00a0required.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<h2>Professional advisory services for directors handling intercompany loans<\/h2>\n<p><span data-contrast=\"auto\">Directors do not need to manage these issues alone.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Legal advice helps\u00a0directors assess whether a proposed intercompany loan or transfer is lawful, properly\u00a0documented\u00a0and consistent with their duties to the Australian company.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">For foreign-owned subsidiaries, where directors may be dealing with pressure from overseas head office, group finance\u00a0teams\u00a0or parent company executives,\u00a0it\u2019s\u00a0essential to consider\u00a0their duties to the Australian company and document the decision-making process thoughtfully.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Argyll Law\u00a0assists\u00a0Australian and international businesses with commercial,\u00a0governance\u00a0and director-related issues.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">We\u00a0assist\u00a0with:<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"4\" data-list-defn-props=\"{\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">directors\u2019 duties advice;\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"4\" data-list-defn-props=\"{\" data-aria-posinset=\"2\" data-aria-level=\"1\"><span data-contrast=\"auto\">intercompany loan reviews;\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"4\" data-list-defn-props=\"{\" data-aria-posinset=\"3\" data-aria-level=\"1\"><span data-contrast=\"auto\">board decision support;\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"4\" data-list-defn-props=\"{\" data-aria-posinset=\"4\" data-aria-level=\"1\"><a href=\"https:\/\/argylllaw.com\/resident-director-services-in-australia\/\"><span data-contrast=\"auto\">Australian resident director services<\/span><\/a><span data-contrast=\"auto\">;\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"4\" data-list-defn-props=\"{\" data-aria-posinset=\"5\" data-aria-level=\"1\"><a href=\"https:\/\/argylllaw.com\/services\/ongoing-operations\/\"><span data-contrast=\"auto\">legal support for foreign-owned subsidiaries operating in Australia<\/span><\/a><span data-contrast=\"auto\">; and\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"4\" data-list-defn-props=\"{\" data-aria-posinset=\"6\" data-aria-level=\"1\"><span data-contrast=\"auto\">risk management where head office is\u00a0located\u00a0overseas.\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"auto\">Intercompany loans\u00a0are\u00a0useful and legitimate\u00a0sources of funds within global groups. But they need to be considered properly.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Before approving a transfer, directors should be clear about:<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"3\" data-list-defn-props=\"{\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">why the money is being moved;\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"3\" data-list-defn-props=\"{\" data-aria-posinset=\"2\" data-aria-level=\"1\"><span data-contrast=\"auto\">whether the Australian company can afford the transfer;\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"3\" data-list-defn-props=\"{\" data-aria-posinset=\"3\" data-aria-level=\"1\"><span data-contrast=\"auto\">how the transaction will be documented;\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"3\" data-list-defn-props=\"{\" data-aria-posinset=\"4\" data-aria-level=\"1\"><span data-contrast=\"auto\">how the company\u2019s creditors and obligations may be affected; and\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"3\" data-list-defn-props=\"{\" data-aria-posinset=\"5\" data-aria-level=\"1\"><span data-contrast=\"auto\">whether the decision has been properly recorded.\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"auto\">A short pause before approval can help prevent a much larger problem later.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">If you are unsure whether a proposed intercompany loan is\u00a0appropriate, Argyll Law can help you assess the risks and work out the right next step.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<\/div><\/div><style type=\"text\/css\">.fusion-body .fusion-builder-column-0{width:100% !important;margin-top : 0px;margin-bottom : 20px;}.fusion-builder-column-0 > .fusion-column-wrapper {padding-top : 0px !important;padding-right : 0px !important;margin-right : 1.92%;padding-bottom : 0px !important;padding-left : 0px !important;margin-left : 1.92%;}@media only screen and (max-width:1180px) {.fusion-body .fusion-builder-column-0{width:100% !important;order : 0;}.fusion-builder-column-0 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}@media only screen and (max-width:1024px) {.fusion-body .fusion-builder-column-0{width:100% !important;order : 0;}.fusion-builder-column-0 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}<\/style><\/div><\/div><style type=\"text\/css\">.fusion-body .fusion-flex-container.fusion-builder-row-1{ padding-top : 0px;margin-top : 0px;padding-right : 0px;padding-bottom : 0px;margin-bottom : 0px;padding-left : 0px;}<\/style><\/div>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":4,"featured_media":5609,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-5604","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-setting-up-business-in-australia"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Intercompany loans: What Australian directors need to know before transferring funds to a parent company<\/title>\n<meta name=\"description\" content=\"Directors of Australian subsidiaries should be careful before approving intercompany loans or transfers to a parent company. Learn what issues may need to be considered and when to seek advice.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/argylllaw.com\/de\/intercompany-loans-directors-duties-australia\/\" \/>\n<meta property=\"og:locale\" content=\"de_DE\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Intercompany loans: What Australian directors need to know before transferring funds to a parent company\" \/>\n<meta property=\"og:description\" content=\"Directors of Australian subsidiaries should be careful before approving intercompany loans or transfers to a parent company. Learn what issues may need to be considered and when to seek advice.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/argylllaw.com\/de\/intercompany-loans-directors-duties-australia\/\" \/>\n<meta property=\"og:site_name\" content=\"Argyll Law\" \/>\n<meta property=\"article:published_time\" content=\"2026-05-26T23:31:30+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-06-25T06:50:03+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/argylllaw.com\/wp-content\/uploads\/2026\/05\/Intercompany-Loans-What-Australian-Directors-need-to-know.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"255\" \/>\n\t<meta property=\"og:image:height\" content=\"199\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Jessica Livingstone\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Verfasst von\" \/>\n\t<meta name=\"twitter:data1\" content=\"Jessica Livingstone\" \/>\n\t<meta name=\"twitter:label2\" content=\"Gesch\u00e4tzte Lesezeit\" \/>\n\t<meta name=\"twitter:data2\" content=\"8\u00a0Minuten\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/argylllaw.com\/de\/intercompany-loans-directors-duties-australia\/\",\"url\":\"https:\/\/argylllaw.com\/de\/intercompany-loans-directors-duties-australia\/\",\"name\":\"Intercompany loans: What Australian directors need to know before transferring funds to a parent company\",\"isPartOf\":{\"@id\":\"https:\/\/argylllaw.com\/de\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/argylllaw.com\/de\/intercompany-loans-directors-duties-australia\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/argylllaw.com\/de\/intercompany-loans-directors-duties-australia\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/argylllaw.com\/wp-content\/uploads\/2026\/05\/Intercompany-Loans-What-Australian-Directors-need-to-know.jpg\",\"datePublished\":\"2026-05-26T23:31:30+00:00\",\"dateModified\":\"2026-06-25T06:50:03+00:00\",\"author\":{\"@id\":\"https:\/\/argylllaw.com\/de\/#\/schema\/person\/2d9cee97aa3aab8d88cb57a44ffbcdc2\"},\"description\":\"Directors of Australian subsidiaries should be careful before approving intercompany loans or transfers to a parent company. Learn what issues may need to be considered and when to seek advice.\",\"breadcrumb\":{\"@id\":\"https:\/\/argylllaw.com\/de\/intercompany-loans-directors-duties-australia\/#breadcrumb\"},\"inLanguage\":\"de\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/argylllaw.com\/de\/intercompany-loans-directors-duties-australia\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"de\",\"@id\":\"https:\/\/argylllaw.com\/de\/intercompany-loans-directors-duties-australia\/#primaryimage\",\"url\":\"https:\/\/argylllaw.com\/wp-content\/uploads\/2026\/05\/Intercompany-Loans-What-Australian-Directors-need-to-know.jpg\",\"contentUrl\":\"https:\/\/argylllaw.com\/wp-content\/uploads\/2026\/05\/Intercompany-Loans-What-Australian-Directors-need-to-know.jpg\",\"width\":255,\"height\":199,\"caption\":\"Intercompany Loans What Australian Directors need to know\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/argylllaw.com\/de\/intercompany-loans-directors-duties-australia\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/argylllaw.com\/de\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Intercompany loans: what Australian directors need to know before transferring funds to a parent company\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/argylllaw.com\/de\/#website\",\"url\":\"https:\/\/argylllaw.com\/de\/\",\"name\":\"Argyll Law\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/argylllaw.com\/de\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"de\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/argylllaw.com\/de\/#\/schema\/person\/2d9cee97aa3aab8d88cb57a44ffbcdc2\",\"name\":\"Jessica Livingstone\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"de\",\"@id\":\"https:\/\/argylllaw.com\/de\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/04965a6eb8bcff82f86c3af4525c0c22c75c75e2973298bc966e368dfe5e1adc?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/04965a6eb8bcff82f86c3af4525c0c22c75c75e2973298bc966e368dfe5e1adc?s=96&d=mm&r=g\",\"caption\":\"Jessica Livingstone\"}}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Intercompany loans: What Australian directors need to know before transferring funds to a parent company","description":"Directors of Australian subsidiaries should be careful before approving intercompany loans or transfers to a parent company. Learn what issues may need to be considered and when to seek advice.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/argylllaw.com\/de\/intercompany-loans-directors-duties-australia\/","og_locale":"de_DE","og_type":"article","og_title":"Intercompany loans: What Australian directors need to know before transferring funds to a parent company","og_description":"Directors of Australian subsidiaries should be careful before approving intercompany loans or transfers to a parent company. Learn what issues may need to be considered and when to seek advice.","og_url":"https:\/\/argylllaw.com\/de\/intercompany-loans-directors-duties-australia\/","og_site_name":"Argyll Law","article_published_time":"2026-05-26T23:31:30+00:00","article_modified_time":"2026-06-25T06:50:03+00:00","og_image":[{"width":255,"height":199,"url":"https:\/\/argylllaw.com\/wp-content\/uploads\/2026\/05\/Intercompany-Loans-What-Australian-Directors-need-to-know.jpg","type":"image\/jpeg"}],"author":"Jessica Livingstone","twitter_card":"summary_large_image","twitter_misc":{"Verfasst von":"Jessica Livingstone","Gesch\u00e4tzte Lesezeit":"8\u00a0Minuten"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/argylllaw.com\/de\/intercompany-loans-directors-duties-australia\/","url":"https:\/\/argylllaw.com\/de\/intercompany-loans-directors-duties-australia\/","name":"Intercompany loans: What Australian directors need to know before transferring funds to a parent company","isPartOf":{"@id":"https:\/\/argylllaw.com\/de\/#website"},"primaryImageOfPage":{"@id":"https:\/\/argylllaw.com\/de\/intercompany-loans-directors-duties-australia\/#primaryimage"},"image":{"@id":"https:\/\/argylllaw.com\/de\/intercompany-loans-directors-duties-australia\/#primaryimage"},"thumbnailUrl":"https:\/\/argylllaw.com\/wp-content\/uploads\/2026\/05\/Intercompany-Loans-What-Australian-Directors-need-to-know.jpg","datePublished":"2026-05-26T23:31:30+00:00","dateModified":"2026-06-25T06:50:03+00:00","author":{"@id":"https:\/\/argylllaw.com\/de\/#\/schema\/person\/2d9cee97aa3aab8d88cb57a44ffbcdc2"},"description":"Directors of Australian subsidiaries should be careful before approving intercompany loans or transfers to a parent company. Learn what issues may need to be considered and when to seek advice.","breadcrumb":{"@id":"https:\/\/argylllaw.com\/de\/intercompany-loans-directors-duties-australia\/#breadcrumb"},"inLanguage":"de","potentialAction":[{"@type":"ReadAction","target":["https:\/\/argylllaw.com\/de\/intercompany-loans-directors-duties-australia\/"]}]},{"@type":"ImageObject","inLanguage":"de","@id":"https:\/\/argylllaw.com\/de\/intercompany-loans-directors-duties-australia\/#primaryimage","url":"https:\/\/argylllaw.com\/wp-content\/uploads\/2026\/05\/Intercompany-Loans-What-Australian-Directors-need-to-know.jpg","contentUrl":"https:\/\/argylllaw.com\/wp-content\/uploads\/2026\/05\/Intercompany-Loans-What-Australian-Directors-need-to-know.jpg","width":255,"height":199,"caption":"Intercompany Loans What Australian Directors need to know"},{"@type":"BreadcrumbList","@id":"https:\/\/argylllaw.com\/de\/intercompany-loans-directors-duties-australia\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/argylllaw.com\/de\/"},{"@type":"ListItem","position":2,"name":"Intercompany loans: what Australian directors need to know before transferring funds to a parent company"}]},{"@type":"WebSite","@id":"https:\/\/argylllaw.com\/de\/#website","url":"https:\/\/argylllaw.com\/de\/","name":"Argyll Law","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/argylllaw.com\/de\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"de"},{"@type":"Person","@id":"https:\/\/argylllaw.com\/de\/#\/schema\/person\/2d9cee97aa3aab8d88cb57a44ffbcdc2","name":"Jessica Livingstone","image":{"@type":"ImageObject","inLanguage":"de","@id":"https:\/\/argylllaw.com\/de\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/04965a6eb8bcff82f86c3af4525c0c22c75c75e2973298bc966e368dfe5e1adc?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/04965a6eb8bcff82f86c3af4525c0c22c75c75e2973298bc966e368dfe5e1adc?s=96&d=mm&r=g","caption":"Jessica Livingstone"}}]}},"_links":{"self":[{"href":"https:\/\/argylllaw.com\/de\/wp-json\/wp\/v2\/posts\/5604","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/argylllaw.com\/de\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/argylllaw.com\/de\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/argylllaw.com\/de\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/argylllaw.com\/de\/wp-json\/wp\/v2\/comments?post=5604"}],"version-history":[{"count":4,"href":"https:\/\/argylllaw.com\/de\/wp-json\/wp\/v2\/posts\/5604\/revisions"}],"predecessor-version":[{"id":5674,"href":"https:\/\/argylllaw.com\/de\/wp-json\/wp\/v2\/posts\/5604\/revisions\/5674"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/argylllaw.com\/de\/wp-json\/wp\/v2\/media\/5609"}],"wp:attachment":[{"href":"https:\/\/argylllaw.com\/de\/wp-json\/wp\/v2\/media?parent=5604"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/argylllaw.com\/de\/wp-json\/wp\/v2\/categories?post=5604"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/argylllaw.com\/de\/wp-json\/wp\/v2\/tags?post=5604"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}