Directors Loans and Transactions
Transactions with directors of a company, including directors’ loans and advances, or indeed agreements to enter into such transactions, is potentially a contentious issue that must be handled carefully by companies. The Companies Act 2014 sets out very specific rules regarding arrangements with directors or their connected parties which are broadly similar to those under previous legislation. One significant difference of note however is that the Act now sets out how loans or advances to or from directors should be treated in the absence of appropriate documentation. A new innovation of the Act, known as the Summary Approval Procedures, permit arrangements with directors that would otherwise not be permitted by the Act, provided certain steps are taken. Further details are laid out in the sections below.