Loans involving directors – Guidance Note

Guidance Note: Loans Involving Directors

CO.LAT.06

This Guidance Note: Loans involving Directors is a practical guide for private companies covering the making of loans by companies to directors as well as the issues that need to be considered when a director (or a shareholder) makes a loan to a company.

This Guidance Note includes a discussion of:

  • The legislative rules (primarily under the Companies Act 2006) governing the making of loans & guarantees to directors;
  • Exceptions for loans under £10,000 in aggregate; 
  • Other exceptions to the requirement for shareholder approval; 
  • Loans involving connected persons; 
  • Loans from directors (or shareholders) to a company; 
  • Substantial property transactions; and
  • Conflicts of interest. 

This Guidance Note is a useful ‘aide-memoire’ to a company secretary or company director considering the issues surrounding directors and loans.

This Guidance Note is in open format.

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