Shareholders’ Ordinary Resolution Approving Director’s Loan

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

CO.DLA.03.A

This Shareholders’ Ordinary Resolution for Approving Loan to a Director or Acting as Guarantor for a Director is to be used where a company is making a loan to a director, or a director wishes the company to act as a guarantor on his behalf in connection with a loan given by any person to him/her. Under section 197 (loans) of the Companies Act 2006, the approval of the members must be obtained by ordinary resolution.

Shareholders’ Ordinary Resolutions require the votes of over 50% of members present in person or by proxy, who are entitled to vote and do vote at the meeting. The meeting at which the resolution is proposed must have had at least 14 days notice, unless a shorter period was agreed by a majority in number of members holding at least 90% of the shares (95% in the case of public companies).

Alternatively, the written resolution procedure can be used, and the resolution will be passed if approved by shareholders representing not less than 50% of the total voting rights of the shareholders entitled to vote on the written resolution on the day it is circulated.

This document sets out the required wording of the ordinary resolution. If it is to be passed at a general meeting, it should be used in conjunction with “Shareholders’ resolutions – General Meeting Format”. If it is to be passed as a written resolution, it should be used in conjunction with “Shareholders’ Written Ordinary Resolution”.

This Shareholders’ Ordinary Resolution for Approving Loan to a Director or acting as Guarantor for a Director is in open format. Either enter the requisite details in the highlighted fields or adjust the wording to suit your purposes.

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This document can also be found in Company Secretarial and Admin, in the Special and Ordinary Resolutions Subfolder, entitled Shareholders’ Ordinary Resolution for Approving Loan to a Director or Acting as Guarantor for a Director.

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