C HAPTER 2 T HE B ANK ’ S ARTICLES OF ASSOCIATION ON ESTABLISHMENT 15 2 The Bank’s objects (1) The articles of association must state that the Bank’s main object is giving financial assistance to commercial activities for the purpose of promoting or sustaining economic development or employment in Scotland. (2) The articles of association must state that the Bank has the following ancillary objects— 20 (a) investing in inclusive and sustainable economic growth, (b) promoting and developing the activities of enterprises, where lack of financial investment is holding back economically viable commercial activity, (c) promoting and developing the activities of small and medium-sized enterprises, (d) creating and shaping markets through the provision of patient capital, SP Bill 43 Session 5 (2019) 2 Scottish National Investment Bank Bill Part 1—Establishment of the Bank Chapter 2—The Bank’s articles of association on establishment (e) contributing to the achievement of the Scottish Government’s economic policy objectives. 3 General powers (1) The articles of association must provide that the Bank may do anything for the purpose 5 of its objects and specifically mention— (a) giving financial assistance— (i) on any terms and conditions, and (ii) by any description of investment, lending or guarantee, and (b) forming and acting through subsidiaries. 10 (2) The articles of association must also mention the following as examples of the form which financial assistance given by the Bank may take— (a) investment by the Bank (alone or with others) through the acquisition of loan or share capital in any company, (b) investment by the Bank (alone or with others) through the acquisition of any— 15 (i) undertaking, or (ii) assets, (c) a loan (secured or unsecured, and with or without interest), (d) insurance or a guarantee to meet any contingency (including default on payment of a loan or any other failure to fulfil a contractual obligation). 20 4 Borrowing powers The articles of association must include a prohibition on the Bank borrowing from anyone other than the Scottish Ministers. 5 Ownership The articles of association must preclude— 25 (a) shares in the Bank from being allotted to anyone other than the Scottish Ministers, (b) the Scottish Ministers from transferring their shares in the Bank. 6 Directors: appointment (1) The articles of association must provide that— (a) the Bank is to have between 9 and 13 directors, 30 (b) there must be at least 2 executive directors (one of whom must be designated in the articles as chief executive and the other as chief financial officer), (c) there may not be more than 4 executive directors, (d) at least two thirds of the directors must be non-executive directors. (2) The articles of association must provide that all of the Bank’s directors are to be 35 appointed by the Scottish Ministers.