C6C5Part 10A company's directors

Annotations:
Modifications etc. (not altering text)
C6

Pts. 1-39 modified (31.12.2020) by Regulation (EC) No. 2157/2001, Art. AAA1(3) (as inserted by The European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2018 (S.I. 2018/1298), regs. 1, 97 (with regs. 140-145) (as amended by S.I. 2020/523, regs. 1(2), 5(a)-(f)); 2020 c. 1, Sch. 5 para. 1(1))

Chapter 4Transactions with directors requiring approval of members

Loans, quasi-loans and credit transactions

I1C4C7198C3C2C1Quasi-loans to directors: requirement of members' approval

1

This section applies to a company if it is—

a

a public company, or

b

a company associated with a public company.

2

A company to which this section applies may not—

a

make a quasi-loan to a director of the company or of its holding company, or

b

give a guarantee or provide security in connection with a quasi-loan made by any person to such a director,

unless the transaction has been approved by a resolution of the members of the company.

3

If the director is a director of the company's holding company, the transaction must also have been approved by a resolution of the members of the holding company.

4

A resolution approving a transaction to which this section applies must not be passed unless a memorandum setting out the matters mentioned in subsection (5) is made available to members—

a

in the case of a written resolution, by being sent or submitted to every eligible member at or before the time at which the proposed resolution is sent or submitted to him;

b

in the case of a resolution at a meeting, by being made available for inspection by members of the company both—

i

at the company's registered office for not less than 15 days ending with the date of the meeting, and

ii

at the meeting itself.

5

The matters to be disclosed are—

a

the nature of the transaction,

b

the amount of the quasi-loan and the purpose for which it is required, and

c

the extent of the company's liability under any transaction connected with the quasi-loan.

6

No approval is required under this section on the part of the members of a body corporate that—

a

is not a UK-registered company, or

b

is a wholly-owned subsidiary of another body corporate.