Part 10A company’s directors
Chapter 4Transactions with directors requiring approval of members
Loans, quasi-loans and credit transactions
200Loans or quasi-loans to persons connected with 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 loan or quasi-loan to a person connected with a director of the company or of its holding company, or
b
give a guarantee or provide security in connection with a loan or quasi-loan made by any person to a person connected with such a director,
unless the transaction has been approved by a resolution of the members of the company.
3
If the connected person is a person connected with 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 loan or 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 loan or 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.