Shareholders’ Ordinary Resolution for Approving Loan to a Director or Acting as Guarantor for a Director

Use this Shareholders’ Ordinary Resolution where the company is either making a loan to a director, or agreeing to act as guarantor for a director in connection with a loan made to them by another person. Under section 197 of the Companies Act 2006, member approval is required by ordinary resolution.

What Does The Law Require?

An ordinary resolution is passed by a simple majority - more than 50% of the votes cast by members who are entitled to vote and who do vote.

If the resolution is proposed at a general meeting, at least 14 days’ notice is required unless a shorter period is agreed by a majority in number of members holding at least 90% of the shares (95% for public companies).

Alternatively, the written resolution procedure can be used. The resolution is passed if approved by members representing not less than 50% of the total voting rights of eligible members on the day the written resolution is circulated.

Related Templates

This template provides the wording of the ordinary resolution itself. If you are passing it at a general meeting, use it with Shareholders’ resolutions - General Meeting Format. If you are passing it as a written resolution, use it with Shareholders’ Written Ordinary Resolution.

Shareholders’ Ordinary Resolution for Approving Loan to a Director or Acting as Guarantor for a Director is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.