Wisconsin Promissory Note
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A Wisconsin Promissory Note is akin to an IOU, just a bit more dressed up. It's a pact between two folks, where one borrows bucks from the other with a pinky promise to pay it back. It sketches out all the must-know specifics, think repayment calendar and interest levies.
What is the Usury Rate for Wisconsin?
In simple terms, a usury rate is just the top permitted legal interest rate on a loan. If a friendly lender charges more than this limit, we call that "usury" and it's a no-go zone, legally speaking. These rates juggle around a bit state by state, so it's crucial to know the rules in your neck of the woods. By arming yourself with knowledge about the usury rate, you make sure your borrowing practices are above board and avoid potentially sticky situations. So, it's certainly a handy digit to know, like the back of your hand, if you're pondering about pulling out a loan for your venture.
For Wisconsin, the legal rate of interest is 5%. Parties may agree to a different rate in a written agreement, subject to limitations that depend on the identity of the lender. (Wis. Stat. § 138.04)
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Read on to learn more about Wisconsin Promissory Notes, including:
What's included in a Wisconsin Promissory Note?
Here are some key components that are typically included in a Wisconsin Promissory Note:
- Amount and Terms of the Loan
- Closing and Delivery
- Representations, Warranties the Company
- Organization, Good Standing and Qualification
- Corporate Power
- Authorization
- Compliance with Laws
- Use of Proceeds
1. Amount and Terms of the Loan
"The Loan" is the part where you pencil in the precise sum you're tossing to the company's way. This chunk matters because it clears any murkiness and shields both sides of the table. To finish up this provision, simply dab in the loan quantum in the waiting blank. Don't sidestep "Exhibit A" either—that's your promissory note, your written vow, and proof that a loan exists.
In brief—this crucial clause underlines the capital you're laying on the line, setting a transparent base for your promissory note pact.
The Loan. Subject to the terms of this Agreement, Purchaser agrees to lend to the Company at the Closing $_________ (“Loan Amount”) against the issuance and delivery by the Company of a promissory note for such amount, attached as EXHIBIT A (“Note”).
2. Closing and Delivery
The CLOSING AND DELIVERY section lays out the endgame of your promissory note agreement. In Closing, you'll decide when the deal wraps up. You and the other party can agree on this date together, no need for it to be the contract's birthday.
Delivery illustrates the swap aspect: the borrower hands over the loan sum to the company, and back comes a finished promissory note, spelling out the borrower's duty to repay. This friendly trade-off makes sure everything is crystal clear, and all involved stay on their toes.
CLOSING AND DELIVERY
Closing. The closing of the sale and purchase of the Notes (the “Closing”) will be held on the Effective Date, or at such other time as the Company and Purchasers may mutually agree (such date is referred to as the “Closing Date”).
Delivery. At the Closing (i) Purchaser will deliver to the Company a check or wire transfer funds in the amount of the Loan Amount; and (ii) the Company will issue and deliver to Purchaser a Note in favor of Purchaser payable in the principal amount of Purchaser’s Loan Amount.
3. Representation, Warranties The Company
This part contains the firm's affirmations about its honesty concerning vital specifics. Legally, they're committed to keeping it real to steer clear of possible legal troubles. Throw in pertinent points about the company's finances, daily runnings, or any legal hiccups. This bit's vital for fostering faith and lucidity in your pact.
a. Organization, Good Standing and Qualification
The Organization, Good Standing, and Qualification segment gives a thumbs up to the company's legal standing. Pop in the state where the company hangs its hat, making sure it can run like a well-oiled machine and build a solid bond between folks involved.
Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of [State]. The Company has the requisite corporate power to own and operate its properties and assets and to carry on its business as now conducted and as proposed to be conducted. The Company is duly qualified and is authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature of its activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to do so would not have a material adverse effect on the Company or its business.
b. Corporate Power
The Corporate Power chunk confirms the company's legal prowess to pull this agreement off and keep its promises. In basic terms, it declares: "Our business has the green light for this deal." This part is key for setting up trust and ensuring everything is by the book. So, do remember to slide this element in and make sure its meaning is grasped by all.
Corporate Power. The Company has all requisite corporate power to execute and deliver this Agreement, to issue the Note and to carry out and perform its obligations under the terms of the Note.
c. Authorization
The Authorization bit guarantees the company's stakeholder thumbs-up and the note's legal standing. Think of it as an essential cornerstone of your contract that double-checks all required company moves have happened. This clause, like a loyal watchdog, safeguards each side and lays down a reliable base for your pact.
Authorization. All corporate action has been taken on the part of the Company, its directors and its stockholders necessary for the authorization of the Note and the execution, delivery and performance of all obligations of the Company under the Note. The Note, when executed and delivered by the Company, will constitute valid and binding obligations of the Company enforceable in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency, the relief of debtors.
d. Compliance with Laws
The Compliance with Laws bit declares that your enterprise isn't intentionally ignoring any legal rules that might deal a blow to its operation. By tucking in this clause, it gives a friendly nod to all folks involved that your business is serious about playing by the legal book.
Compliance with Laws. To its knowledge, the Company is not in violation of any applicable statute, rule, regulation, order or restriction of any domestic or foreign government or any instrumentality or agency in respect of the conduct of its business or the ownership of its properties, which violation would materially and adversely affect the business, assets, liabilities, financial condition or operations of the Company.
e. Use of Proceeds
The Use of Proceeds portion clearly outlines that the loan is reserved strictly for business affairs, not for personal whims. It's pivotal to keep things above board and uphold trust with those holding the purse strings.
Use of Proceeds. The Company will use the proceeds of the Note for the operations of its business, and not for any personal, family or household purpose.
Can a promissory note be used without a mortgage?
Absolutely, a promissory note can fly solo, no mortgage attached. Think of a promissory note like a formal IOU, spelling out all the details of a loan agreement, a pinky swear in black and white. On the other hand, a mortgage is like a safety net for the loan when it comes to assets like your office building.
Promissory notes aren't picky; they play nice with both secured and unsecured loans. So yes, you can have a promissory note without a house-shaped parachute - that's what we call an unsecured loan. But, see, a mortgage doesn't like going solo as much. Usually, you can't have a mortgage without a promissory note. Because that little note is where all the repayment specifics live, along with the borrower's solemn scout's honor to pay back the loan.
How do you collect from a promissory note?
When it's time to gather dues from a promissory note, tally up the full amount, factoring in interest and any extra charges. Reach out to the debtor with a friendly written reminder. If they're still not coughing up the cash, mull over the idea of taking them to court. Make sure you keep your paperwork game strong and touch base with a savvy legal mind, considering every locality dances to its own tune when it comes to rules. Keep it cool, never harass the debtor—a big no-no in legal land. Double-check with your legal guru to sidestep any unpleasant road bumps.