Companies Act 2006

Authorisation required for donations or expenditure

366 Authorisation required for donations or expenditure

(1) A company must not—

(a) make a political donation to a political party or other political organisation, or to an independent election candidate, or

(b) incur any political expenditure,

unless the donation or expenditure is authorised in accordance with the following provisions.

(2) The donation or expenditure must be authorised—

(a) in the case of a company that is not a subsidiary of another company, by a resolution of the members of the company;

(b) in the case of a company that is a subsidiary of another company by—

(i) a resolution of the members of the company, and

(ii) a resolution of the members of any relevant holding company.

(3) No resolution is required on the part of a company that is a wholly-owned subsidiary of a UK-registered company.

(4) For the purposes of subsection (2)(b)(ii) a “relevant holding company” means a company that, at the time the donation was made or the expenditure was incurred—

(a) was a holding company of the company by which the donation was made or the expenditure was incurred,

(b) was a UK-registered company, and

(c) was not a subsidiary of another UK-registered company.

(5) The resolution or resolutions required by this section—

(a) must comply with section 367 (form of authorising resolution), and

(b) must be passed before the donation is made or the expenditure incurred.

(6) Nothing in this section enables a company to be authorised to do anything that it could not lawfully do apart from this section.

367 Form of authorising resolution

(1) A resolution conferring authorisation for the purposes of this Part may relate to—

(a) the company passing the resolution,

(b) one or more subsidiaries of that company, or

(c) the company passing the resolution and one or more subsidiaries of that company.

(2) A resolution may be expressed to relate to all companies that are subsidiaries of the company passing the resolution—

(a) at the time the resolution is passed, or

(b) at any time during the period for which the resolution has effect,

without identifying them individually.

(3) The resolution may authorise donations or expenditure under one or more of the following heads—

(a) donations to political parties or independent election candidates;

(b) donations to political organisations other than political parties;

(c) political expenditure.

(4) The resolution must specify a head or heads—

(a) in the case of a resolution under subsection (2), for all of the companies to which it relates taken together;

(b) in the case of any other resolution, for each company to which it relates.

(5) The resolution must be expressed in general terms conforming with subsection (2) and must not purport to authorise particular donations or expenditure.

(6) For each of the specified heads the resolution must authorise donations or, as the case may be, expenditure up to a specified amount in the period for which the resolution has effect (see section 368).

(7) The resolution must specify such amounts—

(a) in the case of a resolution under subsection (2), for all of the companies to which it relates taken together;

(b) in the case of any other resolution, for each company to which it relates.

368 Period for which resolution has effect

(1) A resolution conferring authorisation for the purposes of this Part has effect for a period of four years beginning with the date on which it is passed unless the directors determine, or the articles require, that it is to have effect for a shorter period beginning with that date.

(2) The power of the directors to make a determination under this section is subject to any provision of the articles that operates to prevent them from doing so.