Companies Act 2006

234 Qualifying third party indemnity provision U.K.

(1) Section 232(2) (voidness of provisions for indemnifying directors) does not apply to qualifying third party indemnity provision.

(2) Third party indemnity provision means provision for indemnity against liability incurred by the director to a person other than the company or an associated company.

Such provision is qualifying third party indemnity provision if the following requirements are met.

(3) The provision must not provide any indemnity against—

(a) any liability of the director to pay—

(i) a fine imposed in criminal proceedings, or

(ii) a sum payable to a regulatory authority by way of a penalty in respect of non-compliance with any requirement of a regulatory nature (however arising); or

(b) any liability incurred by the director—

(i) in defending criminal proceedings in which he is convicted, or

(ii) in defending civil proceedings brought by the company, or an associated company, in which judgment is given against him, or

(iii) in connection with an application for relief (see subsection (6)) in which the court refuses to grant him relief.

(4) The references in subsection (3)(b) to a conviction, judgment or refusal of relief are to the final decision in the proceedings.

(5) For this purpose—

(a) a conviction, judgment or refusal of relief becomes final—

(i) if not appealed against, at the end of the period for bringing an appeal, or

(ii) if appealed against, at the time when the appeal (or any further appeal) is disposed of; and

(b) an appeal is disposed of—

(i) if it is determined and the period for bringing any further appeal has ended, or

(ii) if it is abandoned or otherwise ceases to have effect.

(6) The reference in subsection (3)(b)(iii) to an application for relief is to an application for relief under—

• section 661(3) or (4) (power of court to grant relief in case of acquisition of shares by innocent nominee), or

• section 1157 (general power of court to grant relief in case of honest and reasonable conduct).

Modifications etc. (not altering text)

C1 S. 234(6) modified (6.4.2008) by The Companies Act 2006 (Commencement No. 5, Transitional Provisions and Savings) Order 2007 (S.I. 2007/3495), art. 6, Sch. 1 para. 2 (with savings in arts. 7, 12)

Commencement Information

I1 S. 234 wholly in force at 1.10.2007; s. 234 not in force at Royal Assent see s. 1300; s. 234 in force at 1.10.2007 by S.I. 2007/2194, art. 2(1)(d) (with saving in art. 12 and subject to transitional adaptations specified in Sch. 1 para. 12 (as amended by S.I. 2007/3495, art. 10(2), S.I. 2008/674, art. 5, Sch. 3 para. 1 and S.I. 2008/2860, art. 6) and with transitional provisions and savings in Sch. 3 para. 15, and subject to transitional adaptations by S.I. 2007/3495, Sch. 1 para. 2 - which are omitted by virtue of S.I. 2008/674, Sch. 3 para. 5 and revoked by S.I. 2008/2860, art. 6 (subject to Sch. 2 of that Order) (as amended by S.I. 2009/1802, art. 18))