Does 10% limit for Company loan apply to each director?

[Gervan]

I understand Company law prohibits the granting of a loan to a director, with an exemption if the loan is below 10% of the company assets.
Does this apply per director i.e. 2 directors, 20% limit?

 

[capnhand]

Hi

Taken from Companies Act 1990

32. —(1) Section 31 shall not prohibit a company from entering into an arrangement with a director or a person connected with a director if—

( a) the value of the arrangement, and

( b) the total amount outstanding under any other arrangements entered into by the company with any director of the company, or any person connected with a director,

together, is less than ten per cent of the company's relevant assets.

So the 10% is a total amount of all directors balances and balances of those people who are connected with the directors

Kind regards

capnhand