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Employees: loans for purchase of shares

A company may provide loans to bona fide employees other than directors for the purpose of acquiring fully paid shares in that company, or its holding company, provided that the employee holds them as beneficial owner. Loans may also be made towards the purchase of shares under an employees’ share scheme, which is for the benefit of employees or their immediate families. The amount outstanding on such loans must be disclosed, in total, in a note to the balance sheet of the company.

Reference: The Penguin Business Dictionary, 3rd edt.