Part X Enforcement of Fair Dealing by Directors
Restrictions on a company’s power to make loans, etc., to directors and persons connected with them
332 Short-term quasi-loans.
(1)
Subsection (3) of section 330 does not prohibit a company (“the creditor”) from making a quasi-loan to one of its directors or to a director of its holding company if—
(a)
the quasi-loan contains a term requiring the director or a person on his behalf to reimburse the creditor his expenditure within 2 months of its being incurred; and
(b)
the aggregate of the amount of that quasi-loan and of the amount outstanding under each relevant quasi-loan does not exceed F1£5,000.
(2)
A quasi-loan is relevant for this purpose if it was made to the director by virtue of this section by the creditor or its subsidiary or, where the director is a director of the creditor’s holding company, any other subsidiary of that company; and “the amount outstanding” is the amount of the outstanding liabilities of the person to whom the quasi-loan was made.