CONVERTIBLE LOAN AGREEMENT: PROBLEMS AND SOLUTIONS

Convertible loan is a financial instrument that allows investors to invest in a company with the possibility of later converting the debt into a share in the authorized capital. The new instrument of investment activity allows the borrower to exchange borrowed funds for shares in the company in the future. The subject of this article is the shortcomings of the regulation of the convertible loan agreement, the provisions of which have appeared in the Russian legislation relatively recently. Currently, there are no dissertations that focus on the institute of convertible loans. In Russia there are separate scientific studies within the framework of scientific articles. Therefore, it is important to identify theoretical and practical problems of application of the convertible loan, in order to eliminate them. The scientific methods employed for system study included analysis, synthesis, system analysis, and generalization. This helped to study the convertible loan as a system of interrelated elements, to understand their functioning and problems. The problems of applying a convertible loan that a borrower and lender may face are identified. Scope of application of the research results proposed ways of solving these problems and recommendations can be applied in the development of the law on convertible loan. The provided recommendations will help to form law enforcement practice related to financial instruments.

convertible loan agreement, loan, borrower, lender, investment, problems, recommendations, financial instrument, financing, shares, share in authorized capital

Ermolenko R. I. Convertible loan agreement: problems and solutions. Biznes. Obrazovanie. Pravo = Business. Education. Law. 2024;2(67):264—269. DOI: 10.25683/VOLBI.2024.67.1006.