General restriction on loans, etc. to directors and persons connected with themF2N.I.
338 .F1—(1) The prohibitions listed in this Article are subject to the exceptions in Articles 340 to 346.
(2) A company shall not—
(a)make a loan to a director of the company or of its holding company;
(b)enter into any guarantee or provide any security in connection with a loan made by any person to such a director.
(3) A relevant company shall not—
(a)make a quasi-loan to a director of the company or of its holding company; or
(b)make a loan or a quasi-loan to a person connected with such a director; or
(c)enter into a guarantee or provide any security in connection with a loan or quasi-loan made by any other person for such a director or a person so connected.
(4) A relevant company shall not—
(a)enter into a credit transaction as creditor for such a director or a person so connected;
(b)enter into any guarantee or provide any security in connection with a credit transaction made by any other person for such a director or a person so connected.
(5) For the purposes of this Article and Articles 339 and 354, a shadow director is treated as a director.
(6) A company shall not arrange for the assignment to it, or the assumption by it, of any rights, obligations or liabilities under any transaction which, if it had been entered into by the company, would have contravened paragraph (2), (3) or (4); but for the purposes of this Article and Articles 339 to 355 the transaction is to be treated as having been entered into on the date of the arrangement.
(7) A company shall not take part in any arrangement whereby—
(a)another person enters into a transaction which, if it had been entered into by the company, would have contravened any of paragraphs (2), (3), (4) and (6); and
(b)that other person, in pursuance of the arrangement, has obtained or is to obtain any benefit from the company or its holding company or a subsidiary of the company or its holding company.
F1mod. by 2000 c. 38
F2Order repealed (prosp.) by Companies Act 2006 (c. 46), ss. 1284(2), 1295, 1300(2), Sch. 16 and the repeal being partly in force, as to which see individual Articles (with savings (with adaptations) by Companies Act 2006 (Commencement No. 6, Saving and Commencement Nos. 3 and 5 (Amendment)) Order 2008 (S.I. 2008/674), arts. 2(3), {4}, Sch. 2) and subject to amendments (6.4.2008) by Companies Act 2006 (Consequential Amendments etc) Order 2008 (S.I. 2008/948), arts. 2(2), 3(1)(b)(2), Sch. 1 paras. 135, 147, 148 {Sch. 2 Note 1} (with arts. 6, 11, 12) and subject to amendments (6.4.2008) by S.R. 2008/133, {regs. 2, 3}