Companies Act 1967

27 Obligation of director of a company to notify it of interests of his in shares in, or debentures of, the company or associated companies.

(1) Subject to the provisions of this section and to any exceptions for which provision may be made by regulations made by the Board of Trade by statutory instrument.—

(a) a person who, at the time when this section comes into operation, is a director of a company and is then interested in shares in, or debentures of, the company or any other body corporate, being the company's subsidiary or holding company or a subsidiary of the company's holding company or thereafter becomes a director of a company and, at the time when he becomes a director, is so interested, shall be under obligation to notify the company in writing of the subsistence of his interests at the time in question and of the number of shares of each class in, and the amount of debentures of each class of, the company or any such other body corporate as aforesaid in which each interest of his subsists at that time ;

(b) a director of a company shall be under obligation to notify the company in writing of the occurrence, while he is a director, of any of the following events, namely.—

(i) any event in consequence of whose occurrence he becomes, or ceases to be, interested in shares in, or debentures of, the company or any other body corporate, being the company's subsidiary or holding company or a subsidiary of the company's holding company;

(ii) the entering into by him of a contract to sell any such shares or debentures;

(iii) the assignment by him of a right granted to him by the company to subscribe for shares in, or debentures of, the company ; and

(iv) the grant to him by another body corporate, being the company's subsidiary or holding company or a subsidiary of the company's holding company, of a right to subscribe for shares in, or debentures of, that other body corporate, the exercise of such a right granted to him as aforesaid and the assignment by him of such a right so granted ;

stating the number or amount, and class, of shares or debentures involved.

(2) The rules set out in the next following section shall have effect for the interpretation of, and otherwise in relation to, the foregoing subsection.

(3) The following provisions shall have effect with respect to the periods within which obligations imposed by subsection (1) above on persons must be fulfilled by them, that is to say.—

(a) an obligation imposed on a person by paragraph (a) to notify an interest must, if he knows of the existence of the interest on the relevant day (that is to say, in a case in which he is a director at the beginning of the day on which this section comes into operation, the last previous day, and, in a case in which he thereafter becomes a director, the day on which he becomes it), be fulfilled before the expiration of the period of fourteen days beginning with the day next following the relevant day; otherwise it must be fulfilled before the expiration of the period of fourteen days beginning with the day next following that on which the existence of the interest comes to his knowledge ;

(b) an obligation imposed on a person by paragraph (b) to notify the occurrence of an event must, if at the time at which the event occurs he knows of its occurrence and of the fact that its occurrence gives rise to the obligation, be fulfilled before the expiration of the period of fourteen days beginning with the day next following that on which it occurs; otherwise, it must be fulfilled before the expiration of the period of fourteen days beginning with the day next following that on which the fact that the occurrence of the event gives rise to the obligation comes to his knowledge.

(4) In the case of a person who is a director of a company at the time when this section comes into operation, paragraph (b) of subsection (1) above shall not require the notification by him of the occurrence of an event before that time; and that paragraph shall not require the notification by a person of the occurrence of an event whose occurrence comes to his knowledge after he has ceased to be a director.

(5) Where an event of whose occurrence a director is, by virtue of sub-paragraph (i) of subsection (1)(b) above under obligation to notify a company consists in his entering into a contract for the purchase by him of shares or debentures, the obligation shall be taken not to be discharged in the absence of inclusion in the notice of a statement of the price to be paid by him under the contract, and an obligation imposed on a director by virtue of sub-paragraph (ii) of that subsection shall be taken not to be discharged in the absence of inclusion in the notice of the price to be received by him under the contract.

(6) An obligation imposed on a director by virtue of sub-paragraph (iii) of subsection (1)(b) above to notify a company shall be taken not to be discharged in the absence of inclusion in the notice of a statement of the consideration for the assignment (or, if it be the case that there is no consideration, that fact), and where an event of whose occurrence a director is, by virtue of sub-paragraph (iv) of that subsection under obligation to notify a company consists in his assigning a right, the obligation shall be taken not to be discharged in the absence of inclusion in the notice of a similar statement.

(7) Where an event of whose occurrence a director is, by virtue of sub-paragraph (iv) of subsection (1)(b) above, under obligation to notify a company consists in the grant to him of a right to subscribe for shares or debentures, the obligation shall not be taken to be discharged in the absence of inclusion in the notice of a statement of the date on which the right was granted, the period during which or time at which the right is exercisable, the consideration for the grant (or, if it be the case that there is no consideration, that fact) and the price to be paid for the shares or debentures; and where an event of whose occurrence a director is, by virtue of that sub-paragraph, under obligation to notify a company consists in the exercise of a right granted to him to subscribe for shares or debentures, the obligation shall be taken not to be discharged in the absence of inclusion in the notice of a statement of the number of shares or amount of debentures in respect of which the right was exercised and, if it be the case that they were registered in his name, that fact, and, if not, the name or names of the person or persons in whose name or names they were registered, together (if they were registered in the names of two persons or more) with the number or amount thereof registered in the name of each of them.

(8) A person who fails to fulfil, within the proper period, an obligation to which he is subject by virtue of subsection (1) above, or who, in purported fulfilment of an obligation to which he is so subject, makes to a company a statement which he knows to be false or recklessly makes to a company a statement which is false, shall be guilty of an offence and liable—

(a) on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding £200, or to both;

(b) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine, or to both.

(9) An obligation imposed by this section shall be treated as not being fulfilled unless the notice by means of which it purports to be fulfilled is expressed to be given to fulfilment of that obligation.

(10) Proceedings in respect of an offence under this section shall not, in England or Wales, be instituted except by, or with the consent of, the Board of Trade or the Director of Public Prosecutions.

(11) For the purposes of this section, a person in accordance with whose directions or instructions the directors of a company are accustomed to act shall be deemed to be a director of the company.

(12) In reckoning, for the purposes of subsection (3) above, any period of fourteen days, a day that is a Saturday or Sunday or a bank holiday in any part of Great Britain shall be disregarded.

(13) Nothing in this section shall operate so as to impose an obligation with respect to shares in a body corporate which is the wholly owned subsidiary of another body corporate; and for this purpose a body corporate shall be deemed to be the wholly owned subsidiary of another if it has no members but that other and that other's wholly owned subsidiaries and its or their nominees.

(14) This and the two following sections shall have effect in place of section 195 (register of directors' shareholdings, &c.) of the principal Act and of so much of section 198 (general duty to make disclosure for the purposes of sections 195 to 197) of that Act as relates to section 195, and that section and so much of section 198 as relates thereto shall, accordingly, cease to have effect.