Business Notes: Loans to Directors
- Created by: jutnut
- Created on: 21-08-18 11:25
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Loans to Directors
s. 197(1) requires s/h resolution to approve a loan to a director. Also needed for giving a guarantee or provision of security by the company to a 3rd party who gives a loan to a director.
Procedure:
- Section 197(3) a memorandum must be drawn up which sets out the nature of the transaction, the amount of the loan, its purpose and the extent of company liability under any transaction connected with a loan (s.197(4)).
- This memorandum must be available for inspection no less than 15 days ending on the day of the GM and the meeting itself (s.197(3)(b)
- If the resolution is passed by WR, a copy of the memorandum must be sent to all eligible s/h with resolution or…
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