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Write 7 pages thesis on the topic the business law. However, there are certain norms and formalities to be followed with respect to the grant of loan to CPI since as per law, the company and its princ

Write 7 pages thesis on the topic the business law. However, there are certain norms and formalities to be followed with respect to the grant of loan to CPI since as per law, the company and its principle shareholder are distinct entitites. Hence, in the eyes of law, the shareholder Luigi Gelata and the loaner Company, ICCI are two distinct entities. If the event of LG acting on a personal capacity with regard to matters that effect the company, it is necessary that he seek the permission of the Board of Directors and seek their consent in such matters, especially in the case of granting, or receiving loans, or other matters which affect the company as a whole.

ICCI should authorize the grant of Shareholder Loan to CPI. Next, the Shareholder Loan Document has to be duly authenticated in a Board Meeting duly convened, minuted and signed by the Board of Directors of the lending Company, ICCI. Further, the Board of Directors should ratify Luigi Gelati's authority to disburse the loan.

The terms governing the granting of loan should be clearly specified in the document, including the interest rates (if any), mode, term and value of repayment or amortization scheduling and whether the loan is repayable on demand or is for a specified period.

The conditionalities to be imposed in the event of default of the loanee, that is, in the event of inability on the part of CPI to service the interest or principal amount should be clearly specified in the Shareholder Loan Document.

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