Resolution (board): approval of a small amount to a director

Under section 207(1) of the Companies Act 2006 (which came into effect on 1 October 2007), a company does not need prior shareholder approval to make a loan to a director of the company, or of its holding company, if the aggregate value of the loan and of any other relevant transactions or arrangements (within the meaning of section 207(1)), does not exceed £10,000. This is a specimen board resolution to be used for the grant of a loan of a small amount to a director.

For background information on loans to directors, see Practice note, Loans to directors: Companies Act 2006. For template board minutes see Standard document, Skeleton board minutes (transactional) and the related drafting note. The board minutes will, in particular, have to: note receipt of a declaration of interest in the loan contract from the relevant director (under section 177 of the Companies Act 2006 and the relevant article); recite why the loan is being made; and note the directors have checked the articles and there is no reason why the loan cannot be made. The directors will also have to consider how, if at all, the minutes should reflect the factors they have to consider to ensure they have met their duty under section 172 of the Companies Act 2006.


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