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Companies (Audit, Investigations and Community Enterprise) Act 2004

Companies (Audit, Investigations and Community Enterprise) Act 2004

2004 CHAPTER 27

Commentary on Sections

Part 2: Community Interest Companies

Summary and background

Supervision by Regulator

Section 44 - Civil proceedings

244.This section gives the Regulator the right to bring a derivative action on behalf of a CIC.  It is intended that the Regulator would use this power to bring court proceedings in the name of a CIC where the directors of a CIC fail to bring such proceedings, in a situation where it would be in the interests of the CIC or the community to bring those proceedings.  For instance, the power will allow the Regulator to bring a claim in respect of a breach of duty by the directors themselves.  The Regulator will have to reimburse the CIC for any costs it suffers as a result of the action (subsection (6)) and in return any costs awarded must be paid to the Regulator (subsection (7)).

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