Section 164 of The Companies Act No. 17 of 2015: Loans to directors to be approved by members
(1) A company may not—
make a loan to a director of the company or of its member, holding company; or
(b) give a guarantee or provide security in connection with a loan made by any person to such a director, unless the transaction has been approved by a resolution of the members of the company.
(2) If the director is a director of the company's holding company, the transaction also needs to have been approved by a resolution of the members of the holding company.
(3) A resolution approving a transaction to which this section applies can be passed only if a memorandum setting out the matters referred to in subsection (4) is made available to members—
(a) in the case of a written resolution, by being sent or submitted to every eligible member at or before the time at which the proposed resolution is sent or submitted to the member; or
(b) in the case of a resolution at a meeting, by being made available for inspection by members of the company both—
(i) at the company's registered office for not less than fourteen days ending with the day before the date of the meeting; and (ii) at the meeting itself.
(4) The matters to be disclosed are—(a) the nature of the transaction;
(b) the amount of the loan and the purpose for which it is required; and
(c) the extent of the company's liability under any transaction connected with the loan.
(5) An approval is not required to be obtained under this section from the members of a body corporate—
(a) that is not a company registered under this Act; or
(b) that is a wholly-owned subsidiary of another body corporate.
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