Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Loan definition

What does Loan mean? In legal practice, a loan is an advance of money by a lender to a borrower with a binding obligation to repay the principal sum, usually with interest, either on demand or at agreed dates during a term. Loans may be secured or unsecured and may be documented as a loan or facility agreement, promissory note or deed. Repayment may be amortising or bullet. Interest and fees (for example, arrangement, commitment or default interest) are commonly payable but are not essential to a loan’s validity. The term is a descriptive expression used across commercial, consumer and corporate finance; specific statutes...

Failure to obtain members’ approval for directors’ quasi-loans and related arrangements: voidability, liabilities and defences under the Companies Act 2006

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Practice notes

The Companies Act 2006 (CA 2006) sets out the consequences where a company does not obtain the necessary members’ approval for quasi-loans to directors, persons connected with directors, and associated arrangements. For more detail on when approval is required, including key transitional provisions, see Practice Note: Quasi-loans to directors, connected persons and related arrangements—requirement to obtain members’ approval. For these statutory purposes, ‘director’ includes anyone occupying the position of a director, whatever title is used, and a shadow director. Where the company making the quasi-loan has a listing of equity shares in the equity shares (commercial companies) category, the UK Listing Rules (UKLR) may apply, particularly UKLR 8 on related party transactions (see Practice Note: Equity shares (commercial companies) listing category—key continuing obligations). For detailed Commentary on loans to directors see Loans and related transactions [17]–[25]: Gore-Browne on Companies, and for further Commentary on members’ approval see Common Matters Regarding Member Approval: Gore-Browne on Companies.

Consequences of a failure to obtain members' approval of a quasi-loan to a director or connected person and related arrangements

The statutory provisions setting...

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Web page updated on 21/05/2026

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