Companies Act 2014 section 236

Loans, etc., by company to directors: evidential provisions

Section 236 sets out the presumptions that apply in civil proceedings where a company is alleged to have made a loan or quasi-loan to a director or a person connected with a director, particularly where the loan terms are unwritten or ambiguous.

• Where loan terms are not in writing, the loan is presumed repayable on demand and to bear interest at the appropriate rate until repaid
• Where written loan terms are ambiguous about repayment or interest, the same presumptions apply — repayable on demand and/or bearing interest at the appropriate rate
• These presumptions are rebuttable, meaning the director or connected person can provide evidence to the contrary
• Where partly written terms are silent on a matter and it is claimed unwritten terms address it, this is treated as ambiguity triggering the presumptions