Special Resolution Clause – Approving Loan to a Director or Acting as Guarantor for a Director

What is a special resolution clause for approving loan to a director or acting as a guarantor for a director and when should you use it?

This Special Resolution clause should be used with our special resolution templates where a company is making a loan to a director, or a director wishes the company to act as a guarantor on his behalf in connection with a loan given by any person to him/her.

Under section 202 of the Companies Act 2014, the approval of the members must be obtained by special resolution.

Shareholders’ Special Resolutions require the votes of over 75% of members present in person or by proxy, who are entitled to vote and do vote at the meeting.

The meeting at which the resolution is proposed must have had at least 21 days notice, unless a shorter period is unanimously agreed by all members entitled to vote. 

Alternatively, the written resolution procedure can be used, and the resolution will be passed if approved by shareholders representing not less than 75% of the total voting rights of the shareholders entitled to vote on the written resolution on the day it is circulated.

The relevant clause(s) you will find in this template should be included under the section Special Resolution in our proposed written special resolution template

If the resolution is passed you should then use our agreed written special resolution template to ratify the decision.