Care must be taken in relation to using the drawdown acknowledgement provided with the Division 7A agreement that forms part of the company constitution.
This is because the template provided assumes the borrower is a single individual (not acting in their capacity as trustee).
The template is set up in this manner as there is no way of knowing who the borrowing party will be at the date of adopting the constitution. Therefore, practically, there is no way to easily automate the signing provisions that will be required to make the document valid.
Care also needs to be taken with reference to the Tax Office’s Taxation Determination 2008/8, given that the example profiled there of loans made pursuant to the terms of a constitution only references loans by a company to an individual shareholder.