Companies Act 2014 section 239

Prohibition of loans, etc., to directors and connected persons

Section 239 prohibits companies from making loans, quasi-loans, credit transactions, guarantees or similar financial arrangements to or for the benefit of their directors or persons connected with those directors, subject to certain exceptions.

• A company must not make a loan or quasi-loan to a director of the company or its holding company, or to a person connected with such a director
• A company must not enter into a credit transaction as creditor for such a director or connected person, nor provide a guarantee or security for such transactions made by others
• A company must not take over the rights, obligations or liabilities under any transaction that would have breached these prohibitions had the company entered into it directly
• A company must not participate in any arrangement where another party carries out a prohibited transaction and receives a benefit from the company, its holding company or any subsidiary in return