COMPANIES ACT (NORTHERN IRELAND) 1960 - SECT 181 Prohibition of loans to directors.

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COMPANIES ACT (NORTHERN IRELAND) 1960 - SECT 181

Prohibition of loans to directors.

181.(1) It shall not be lawful for a company to make a loan to any person who
is its director or a director of its holding company, or to enter into any
guarantee or provide any security in connection with a loan made to such a
person as aforesaid by any other person, so, however, that nothing in this
section shall apply

Para.(a) rep. by 1978 NI 12 art.153(2) sch.7

(b)subject to sub-section (2), to anything done to provide any such person as
aforesaid with funds to meet expenditure incurred or to be incurred by him for
the purposes of the company or for the purpose of enabling him properly to
perform his duties as an officer of the company; or

(c)in the case of a company whose ordinary business includes the lending of
money or the giving of guarantees in connection with loans made by other
persons, to anything done by the company in the ordinary course of that
business;

(2) Paragraph (b) of sub-section (1) shall not authorise the making of any
loan, or the entering into any guarantee, or the provision of any security,
except either

(a)with the prior approval of the company given at a general meeting at which
the purposes of the expenditure and the amount of the loan or the extent of
the guarantee or security, as the case may be, are disclosed; or

(b)on condition that, if the approval of the company is not given as aforesaid
at or before the next following annual general meeting, the loan shall be
repaid or the liability under the guarantee or security shall be discharged,
as the case may be, within six months from the conclusion of that meeting.

(3) Where the approval of the company is not given as required by any such
condition, the directors authorising the making of the loan, or the entering
into the guarantee, or the provision of the security, shall be jointly and
severally liable to indemnify the company against any loss arising therefrom.

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Northern Irish Legislation

COMPANIES ACT (NORTHERN IRELAND) 1960 - SECT 181