Directors' Duties: Loans to Directors

Companies (other than exempt private companies) are prohibited from granting loans or entering into any guarantee in relation to loans made to their directors or the directors of their related companies (section 162(1) of the Companies Act), except in circumstances prescribed in the statutory provision.

The director that authorised the loan or guarantee shall be guilty of an offence punishable with a fine up to $20,000 or with imprisonment for up to 2 years (section 162(4) of the Companies Act). 

The director may also be made to indemnify the company for any loss suffered as a result of the unauthorised grant.

Need help?

Want to know how to fulfill your statutory duties and to avoid criminal liability? It is recommended that you seek advice from our Singapore Commercial Lawyers at Gloria James-Civetta!

Are you facing potential charges? The trial process is often a mentally draining and challenging experience. You should seek a criminal defence lawyer to help you to present your case to the court in the best way possible. Not having a defence lawyer will put you at a great disadvantage. Should you have any questions or require legal representation, kindly contact Gloria James-Civetta & Co on 6337-0469 for a free consultation, or email us at consult@gjclaw.com.sg.