Quasi-loans to directors, connected persons and related arrangements—requirement to obtain members’ approval

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Published by a LexisNexis Corporate expert
Practice notes

Quasi-loans to directors, connected persons and related arrangements—requirement to obtain members’ approval

Copyright © 2025 LexisNexis

Published by a LexisNexis Corporate expert

Practice notes
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The Companies Act 2006 (CA 2006) contains provisions that require quasi-loans to directors, persons connected with directors and related arrangements to be approved by the members of the company.

Approval is required for such transactions as they involve directors (or their connected persons) and are considered to be particularly open to abuse. The relationship between the statutory provisions requiring approval of such a transaction and the general duties of a director that are set out in statute is discussed in Practice Note: Directors' duties—scope, nature, interpretation and application.

One of the general duties of a director set out in statute is the duty of a director to declare if they are in any way, directly or indirectly interested in a proposed transaction or arrangement with the company of which they are a director and the nature and extent of that interest to the other directors.

In relation to:

  1. •

    a director’s obligation to declare an interest in a transaction or arrangement with the company of which they are a director, see Practice

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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Loan definition
What does Loan mean?

An advance of funds from one party (the creditor) to another party (the debtor) for a period of time. The funds can be advanced for an agreed period or be repayable upon demand. Interest is usually paid on the advance which can be secured or unsecured

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