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Directors Duties Explanatory Notes

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Directors duties - Explanatory Notes 1) Loans to directors Company ? MMC plc Subsidiary ? MMC finance ltd 1) MMC gives security to the bank to secure a loan to Andrew Moger, a director of its subsidiary, MMC finance ltd. Andrew Moger is not director of MMC plc

MMC plc

X 100%

MMC finance ltd

X Andrew Moger

Public company ? Loan under s.197 ? Director of subsidiary (Not caught as is 'loan made to a director of the company or of its holding company). Therefore no approval needed either by MMC plc (holding co) or MMC finance ltd. 2) MMC finance ltd provides a guarantee for a bank loan to Steve Watts, husband of MMC plc's HR director MMC plc

Y

Steve Watts

Steve Watts

100%
Guarantee

YN

MMC finance ltd

Associated with a public company ? Guarantee under s.200 ? Person connected to a Director of its Holding company. Therefore company itself will have to give approval. The holding company will also have to give approval under s.200(3). However as MMC finance ltd is a 100% subsidiary it will be caught by the exception in s.200(6) and won't have to pass a resolution.

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