Q&As

Do the provisions of the Consumer Credit Act apply to a UK company making a loan to one or more of its employees to enable the employee(s) to fund part of the subscription monies for shares which are to be allotted to the employee(s) in the company?

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Published on LexisPSL on 01/04/2015

The following Financial Services Q&A provides comprehensive and up to date legal information covering:

  • Do the provisions of the Consumer Credit Act apply to a UK company making a loan to one or more of its employees to enable the employee(s) to fund part of the subscription monies for shares which are to be allotted to the employee(s) in the company?
  • Regulation of consumer credit
  • Can a company provide loans to employees?
  • Will the consumer Credit Act 1974 apply?
  • Does an exemption apply?
  • Exemption for fixed-cost credit
  • Regulated agreements
  • What are the consequences of contravention?

Do the provisions of the Consumer Credit Act apply to a UK company making a loan to one or more of its employees to enable the employee(s) to fund part of the subscription monies for shares which are to be allotted to the employee(s) in the company?

BREXIT: 11pm (GMT) on 31 December 2020 (‘IP completion day’) marked the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. Following IP completion day, key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see: Brexit and financial services: materials on the post-Brexit UK/EU regulatory regime.

Regulation of consumer credit

Regulation of consumer credit now sits with the Financial Conduct Authority (FCA). In consequence parts of the Consumer Credit Act 1974 (CCA 1974) were repealed from 1 April 2014 with regulated activities coming under the Financial Services and Markets Act 2000 (FSMA 2000) and the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (SI 2001/554) (RAO 2001).

Can a company provide loans to employees?

Companies can provide loans or credit arrangements as part of their employee share plans or other special employee incentive arrangements, which may include making a loan to an employee to fund the acquisition of shares in the company or

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