# What is a “body corporate”, and why it matters for lending *Source: https://credicorp.co.uk/support/what-is-a-body-corporate/* You will see the phrase “body corporate” in our agreements and across this site, and it is not just legal decoration. Whether the borrower is a body corporate or an individual decides which rules apply to the loan — including whether consumer-credit protections are in play. This article explains what a body corporate is, and why the distinction shapes how we can lend. ## What a body corporate is A body corporate is an organisation that the law treats as a separate legal person, distinct from the people who own or run it. In practice, for our purposes, that means a **limited company** (registered at Companies House) or a **limited liability partnership (LLP)**. Because it is a separate legal person, a body corporate can do things in its own name: it can own property, enter contracts, sue and be sued, and — importantly here — borrow money. The debts of the company are the company’s debts, not automatically the personal debts of its directors or members. That principle of separate legal personality is the cornerstone of how limited liability works. ## Body corporate vs the individual behind it Contrast this with a sole trader. A sole trader is not a separate legal person from the human running the business; in law, they are the same. So a loan to a sole trader is, legally, a loan to an individual. A loan to a limited company or LLP is a loan to the body corporate. The director who signs does so on behalf of the company, not as the borrower. This is exactly why our product is built the way it is: we lend to the company, the company is liable, and we do not take a [personal guarantee](/support/what-is-a-personal-guarantee/) from the director. The borrowing belongs to the business. ## Why it matters for regulation Here is the part with real consequences. Most consumer-credit protection in the UK is built around lending to **individuals**. Under **Article 60B** (read with the definitions in Article 60L) of the **Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (FSMA RAO 2001)**, regulated credit agreements are essentially those made with an individual or a “relevant recipient of credit”. A body corporate is not an individual. So lending to a limited company or LLP for business purposes generally falls **outside** FCA consumer-credit regulation. This is not a “Consumer Credit Act exemption” — that statute governs consumer credit, which a loan to a company is not. The cleaner way to put it is that a company simply is not the kind of borrower the consumer regime is designed to protect. We explain the wider picture in [regulated vs unregulated business loans](/support/regulated-vs-unregulated-business-loans/). ## The conditions still apply Being a body corporate is necessary but not the whole story. The borrowing also has to be for a genuine business purpose. The lending sits outside the consumer regime only where it is for a [wholly or predominantly business purpose](/support/wholly-or-predominantly-business-purpose/), which is why you sign a declaration to that effect. A company borrowing for, say, a director’s personal spending would not fit, and we would not lend for that. ## What this means for you If your business is a limited company or an LLP, it is a body corporate, and it can borrow in its own name. The upside is that the debt stays with the company and we take no personal guarantee. The trade-off is that the consumer-credit safety net — including the Financial Ombudsman Service and the FSCS — does not apply to this borrowing. We think that makes transparency more important, not less, which is why we publish our terms and costs openly and show every figure on your Key Information Sheet (KIS) before you sign. You can verify the company itself on the [Companies House register](https://find-and-update.company-information.service.gov.uk/company/16093826) (company number 16093826). --- Credicorp Limited — UK lender to limited companies (Company No. 16093826). credicorp.co.uk