http://www.legislation.gov.uk/id/ukpga/2006/46

http://www.legislation.gov.uk/ukpga/2006/46/part/10/2013-10-01

Companies Act 2006

An Act to reform company law and restate the greater part of the enactments relating to companies; to make other provision relating to companies and other forms of business organisation; to make provision about directors' disqualification, business names, auditors and actuaries; to amend Part 9 of the Enterprise Act 2002; and for connected purposes.

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text/xml

Statute Law Database

2024-11-04

Expert Participation

2013-10-01

Companies Act 2006

s. 479A(2)(c)(zi)

The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019

reg. 4(b)(i)

reg. 2

Companies Act 2006

Sch. 10

para. 6(2D)

The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019

reg. 28(e)

reg. 2

Companies Act 2006

Sch. 10

para. 7(2A)

The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019

reg. 29(b)

reg. 2

Companies Act 2006

Act

The Companies (Revision of Defective Accounts and Reports) (Amendment) Regulations 2013

reg. 4

reg. 1(1)

Companies Act 2006

Act

The Companies (Revision of Defective Accounts and Reports) (Amendment) Regulations 2013

reg. 9(a)

reg. 1(1)

Companies Act 2006

Sch. 2 Pt. 2 Section (A) para. 28

Digital Markets, Competition and Consumers Act 2024

Sch. 18

para. 9(2)(a)(i)

Sch. 19

s. 339(1)

Companies Act 2006

Sch. 2 Pt. 2 Section (A) para. 29

Digital Markets, Competition and Consumers Act 2024

Sch. 18

para. 9(2)(a)(ii)

Sch. 19

s. 339(1)

Companies Act 2006

Sch. 2 Pt. 2 Section (A) para. 36

Digital Markets, Competition and Consumers Act 2024

Sch. 18

para. 9(2)(b)

Sch. 19

s. 339(1)

Companies Act 2006

Sch. 2 Pt. 2 Section (A) para. 25(j)

Digital Markets, Competition and Consumers Act 2024

Sch. 21

para. 10

s. 235

243

252

s. 339(1)

Companies Act 2006

Sch. 2 Pt. 2 Section (A) para. 25(m)

Digital Markets, Competition and Consumers Act 2024

Sch. 30

para. 30

s. 339(1)

C259Part 10A company's directors

Annotations:

Modifications etc. (not altering text)

C259

Pts. 1-39 (except for Pt. 7 and ss. 662-669), 45-47 extended (12.5.2011) by The Companies Act 2006 (Consequential Amendments and Transitional Provisions) Order 2011 (S.I. 2011/1265), art. 5(1), Sch. 1 para. 2

Chapter 1Appointment and removal of directors

Requirement to have directors

7

A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 5 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 5 on the standard scale.

Appointment

157Minimum age for appointment as director

1

A person may not be appointed a director of a company unless he has attained the age of 16 years.

2

This does not affect the validity of an appointment that is not to take effect until the person appointed attains that age.

3

Where the office of director of a company is held by a corporation sole, or otherwise by virtue of another office, the appointment to that other office of a person who has not attained the age of 16 years is not effective also to make him a director of the company until he attains the age of 16 years.

4

An appointment made in contravention of this section is void.

5

Nothing in this section affects any liability of a person under any provision of the Companies Acts if he—

a

purports to act as director, or

b

acts as a shadow director,

although he could not, by virtue of this section, be validly appointed as a director.

6

This section has effect subject to section 158 (power to provide for exceptions from minimum age requirement).

I2158Power to provide for exceptions from minimum age requirement

1

The Secretary of State may make provision by regulations for cases in which a person who has not attained the age of 16 years may be appointed a director of a company.

2

The regulations must specify the circumstances in which, and any conditions subject to which, the appointment may be made.

3

If the specified circumstances cease to obtain, or any specified conditions cease to be met, a person who was appointed by virtue of the regulations and who has not since attained the age of 16 years ceases to hold office.

4

The regulations may make different provision for different parts of the United Kingdom.

This is without prejudice to the general power to make different provision for different cases.

5

Regulations under this section are subject to negative resolution procedure.

159Existing under-age directors

1

This section applies where—

a

a person appointed a director of a company before section 157 (minimum age for appointment as director) comes into force has not attained the age of 16 when that section comes into force, or

b

the office of director of a company is held by a corporation sole, or otherwise by virtue of another office, and the person appointed to that other office has not attained the age of 16 years when that section comes into force,

and the case is not one excepted from that section by regulations under section 158.

2

That person ceases to be a director on section 157 coming into force.

3

The company must make the necessary consequential alteration in its register of directors but need not give notice to the registrar of the change.

4

If it appears to the registrar (from other information) that a person has ceased by virtue of this section to be a director of a company, the registrar shall note that fact on the register.

160Appointment of directors of public company to be voted on individually

1

At a general meeting of a public company a motion for the appointment of two or more persons as directors of the company by a single resolution must not be made unless a resolution that it should be so made has first been agreed to by the meeting without any vote being given against it.

2

A resolution moved in contravention of this section is void, whether or not its being so moved was objected to at the time.

But where a resolution so moved is passed, no provision for the automatic reappointment of retiring directors in default of another appointment applies.

3

For the purposes of this section a motion for approving a person's appointment, or for nominating a person for appointment, is treated as a motion for his appointment.

4

Nothing in this section applies to a resolution amending the company's articles.

161Validity of acts of directors

unless it has at all times been kept at the company's registered office.

5

The register must be open to the inspection—

a

of any member of the company without charge, and

b

of any other person on payment of such fee as may be prescribed.

6

If default is made in complying with subsection (1), (2) or (3) or if default is made for 14 days in complying with subsection (4), or if an inspection required under subsection (5) is refused, an offence is committed by—

a

the company, and

b

every officer of the company who is in default.

For this purpose a shadow director is treated as an officer of the company.

7

8

In the case of a refusal of inspection of the register, the court may by order compel an immediate inspection of it.

C7 C8163Particulars of directors to be registered: individuals

1

A company's register of directors must contain the following particulars in the case of an individual—

a

name and any former name;

b

a service address;

c

the country or state (or part of the United Kingdom) in which he is usually resident;

d

nationality;

e

business occupation (if any);

f

date of birth.

C92

For the purposes of this section “name” means a person's Christian name (or other forename) and surname, except that in the case of—

a

a peer, or

b

an individual usually known by a title,

the title may be stated instead of his Christian name (or other forename) and surname or in addition to either or both of them.

C93

ii

if applicable, the register in which it is entered (including details of the state) and its registration number in that register.

C12 C13 C14 C15 C16 C17165Register of directors' residential addresses

1

Every company must keep a register of directors' residential addresses.

2

The register must state the usual residential address of each of the company's directors.

3

If a director's usual residential address is the same as his service address (as stated in the company's register of directors), the register of directors' residential addresses need only contain an entry to that effect.

This does not apply if his service address is stated to be “The company's registered office”.

4

If default is made in complying with this section, an offence is committed by—

a

the company, and

b

every officer of the company who is in default.

For this purpose a shadow director is treated as an officer of the company.

5

6

This section applies only to directors who are individuals, not where the director is a body corporate or a firm that is a legal person under the law by which it is governed.

I4 C18166Particulars of directors to be registered: power to make regulations

1

The Secretary of State may make provision by regulations amending—

section 163 (particulars of directors to be registered: individuals),
section 164 (particulars of directors to be registered: corporate directors and firms), or
section 165 (register of directors' residential addresses),

so as to add to or remove items from the particulars required to be contained in a company's register of directors or register of directors' residential addresses.

2

Regulations under this section are subject to affirmative resolution procedure.

C19 C20 C21 C22 C23167Duty to notify registrar of changes

1

A company must, within the period of 14 days from—

a

a person becoming or ceasing to be a director, or

b

the occurrence of any change in the particulars contained in its register of directors or its register of directors' residential addresses,

give notice to the registrar of the change and of the date on which it occurred.

2

Notice of a person having become a director of the company must—

a

contain a statement of the particulars of the new director that are required to be included in the company's register of directors and its register of directors' residential addresses, and

b

be accompanied by a consent, by that person, to act in that capacity.

3

Where—

a

a company gives notice of a change of a director's service address as stated in the company's register of directors, and

b

the notice is not accompanied by notice of any resulting change in the particulars contained in the company's register of directors' residential addresses,

the notice must be accompanied by a statement that no such change is required.

4

If default is made in complying with this section, an offence is committed by—

a

the company, and

b

every officer of the company who is in default.

For this purpose a shadow director is treated as an officer of the company.

5 Removal

168Resolution to remove director

1

A company may by ordinary resolution at a meeting remove a director before the expiration of his period of office, notwithstanding anything in any agreement between it and him.

2

Special notice is required of a resolution to remove a director under this section or to appoint somebody instead of a director so removed at the meeting at which he is removed.

3

A vacancy created by the removal of a director under this section, if not filled at the meeting at which he is removed, may be filled as a casual vacancy.

4

A person appointed director in place of a person removed under this section is treated, for the purpose of determining the time at which he or any other director is to retire, as if he had become director on the day on which the person in whose place he is appointed was last appointed a director.

5

This section is not to be taken—

a

as depriving a person removed under it of compensation or damages payable to him in respect of the termination of his appointment as director or of any appointment terminating with that as director, or

b

as derogating from any power to remove a director that may exist apart from this section.

169Director's right to protest against removal

1

On receipt of notice of an intended resolution to remove a director under section 168, the company must forthwith send a copy of the notice to the director concerned.

2

The director (whether or not a member of the company) is entitled to be heard on the resolution at the meeting.

3

Where notice is given of an intended resolution to remove a director under that section, and the director concerned makes with respect to it representations in writing to the company (not exceeding a reasonable length) and requests their notification to members of the company, the company shall, unless the representations are received by it too late for it to do so—

a

in any notice of the resolution given to members of the company state the fact of the representations having been made; and

b

send a copy of the representations to every member of the company to whom notice of the meeting is sent (whether before or after receipt of the representations by the company).

4

If a copy of the representations is not sent as required by subsection (3) because received too late or because of the company's default, the director may (without prejudice to his right to be heard orally) require that the representations shall be read out at the meeting.

5

Copies of the representations need not be sent out and the representations need not be read out at the meeting if, on the application either of the company or of any other person who claims to be aggrieved, the court is satisfied that the rights conferred by this section are being abused.

6

The court may order the company's costs (in Scotland, expenses) on an application under subsection (5) to be paid in whole or in part by the director, notwithstanding that he is not a party to the application.

Chapter 2General duties of directors

Introductory

I5 C27170C24 C25 C26Scope and nature of general duties

1

The general duties specified in sections 171 to 177 are owed by a director of a company to the company.

2

A person who ceases to be a director continues to be subject—

a

to the duty in section 175 (duty to avoid conflicts of interest) as regards the exploitation of any property, information or opportunity of which he became aware at a time when he was a director, and

b

to the duty in section 176 (duty not to accept benefits from third parties) as regards things done or omitted by him before he ceased to be a director.

To that extent those duties apply to a former director as to a director, subject to any necessary adaptations.

3

The general duties are based on certain common law rules and equitable principles as they apply in relation to directors and have effect in place of those rules and principles as regards the duties owed to a company by a director.

4

The general duties shall be interpreted and applied in the same way as common law rules or equitable principles, and regard shall be had to the corresponding common law rules and equitable principles in interpreting and applying the general duties.

5

The general duties apply to shadow directors where, and to the extent that, the corresponding common law rules or equitable principles so apply.

The general duties

I6 C31171C28 C29 C30Duty to act within powers

A director of a company must—

a

act in accordance with the company's constitution, and

b

only exercise powers for the purposes for which they are conferred.

I7 C35172C32 C33 C34Duty to promote the success of the company

1

A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to—

a

the likely consequences of any decision in the long term,

b

the interests of the company's employees,

c

the need to foster the company's business relationships with suppliers, customers and others,

d

the matter was agreed to without their voting or would have been agreed to if their votes had not been counted.

7

Any reference in this section to a conflict of interest includes a conflict of interest and duty and a conflict of duties.

C51176C48 C49 C50Duty not to accept benefits from third parties

1

A director of a company must not accept a benefit from a third party conferred by reason of—

a

his being a director, or

b

his doing (or not doing) anything as director.

2

A “third party” means a person other than the company, an associated body corporate or a person acting on behalf of the company or an associated body corporate.

3

Benefits received by a director from a person by whom his services (as a director or otherwise) are provided to the company are not regarded as conferred by a third party.

4

This duty is not infringed if the acceptance of the benefit cannot reasonably be regarded as likely to give rise to a conflict of interest.

5

Any reference in this section to a conflict of interest includes a conflict of interest and duty and a conflict of duties.

C55177C52 C53 C54Duty to declare interest in proposed transaction or arrangement

1

If a director of a company is in any way, directly or indirectly, interested in a proposed transaction or arrangement with the company, he must declare the nature and extent of that interest to the other directors.

2

The declaration may (but need not) be made—

a

at a meeting of the directors, or

b

by notice to the directors in accordance with—

i

section 184 (notice in writing), or

ii

section 185 (general notice).

3

If a declaration of interest under this section proves to be, or becomes, inaccurate or incomplete, a further declaration must be made.

4

Any declaration required by this section must be made before the company enters into the transaction or arrangement.

5

This section does not require a declaration of an interest of which the director is not aware or where the director is not aware of the transaction or arrangement in question.

For this purpose a director is treated as being aware of matters of which he ought reasonably to be aware.

6

A director need not declare an interest—

a

if it cannot reasonably be regarded as likely to give rise to a conflict of interest;

b

if, or to the extent that, the other directors are already aware of it (and for this purpose the other directors are treated as aware of anything of which they ought reasonably to be aware); or

c

if, or to the extent that, it concerns terms of his service contract that have been or are to be considered—

i

by a meeting of the directors, or

ii

by a committee of the directors appointed for the purpose under the company's constitution.

Supplementary provisions

I10178Civil consequences of breach of general duties

1

The consequences of breach (or threatened breach) of sections 171 to 177 are the same as would apply if the corresponding common law rule or equitable principle applied.

2

The duties in those sections (with the exception of section 174 (duty to exercise reasonable care, skill and diligence)) are, accordingly, enforceable in the same way as any other fiduciary duty owed to a company by its directors.

I11179Cases within more than one of the general duties

Except as otherwise provided, more than one of the general duties may apply in any given case.

180Consent, approval or authorisation by members

1

In a case where—

a

section 175 (duty to avoid conflicts of interest) is complied with by authorisation by the directors, or

b

section 177 (duty to declare interest in proposed transaction or arrangement) is complied with,

the transaction or arrangement is not liable to be set aside by virtue of any common law rule or equitable principle requiring the consent or approval of the members of the company.

This is without prejudice to any enactment, or provision of the company's constitution, requiring such consent or approval.

C562

The application of the general duties is not affected by the fact that the case also falls within Chapter 4 (transactions requiring approval of members)F3or 4A, except that where F4either of those Chapters applies and—

a

approval is given under F5the Chapter concerned, or

b

the matter is one as to which it is provided that approval is not needed,

it is not necessary also to comply with section 175 (duty to avoid conflicts of interest) or section 176 (duty not to accept benefits from third parties).

3

Compliance with the general duties does not remove the need for approval under any applicable provision of Chapter 4 (transactions requiring approval of members)F6or 4A.

4

The general duties—

a

have effect subject to any rule of law enabling the company to give authority, specifically or generally, for anything to be done (or omitted) by the directors, or any of them, that would otherwise be a breach of duty, and

b

where the company's articles contain provisions for dealing with conflicts of interest, are not infringed by anything done (or omitted) by the directors, or any of them, in accordance with those provisions.

5

Otherwise, the general duties have effect (except as otherwise provided or the context otherwise requires) notwithstanding any enactment or rule of law.

I12181Modification of provisions in relation to charitable companies

1

In their application to a company that is a charity, the provisions of this Chapter have effect subject to this section.

2

Section 175 (duty to avoid conflicts of interest) has effect as if—

a

for subsection (3) (which disapplies the duty to avoid conflicts of interest in the case of a transaction or arrangement with the company) there were substituted—

3
This duty does not apply to a conflict of interest arising in relation to a transaction or arrangement with the company if or to the extent that the company's articles allow that duty to be so disapplied, which they may do only in relation to descriptions of transaction or arrangement specified in the company's articles.

b

for subsection (5) (which specifies how directors of a company may give authority under that section for a transaction or arrangement) there were substituted—

5
Authorisation may be given by the directors where the company's constitution includes provision enabling them to authorise the matter, by the matter being proposed to and authorised by them in accordance with the constitution.

3

Section 180(2)(b) (which disapplies certain duties under this Chapter in relation to cases excepted from requirement to obtain approval by members under Chapter 4) applies only if or to the extent that the company's articles allow those duties to be so disapplied, which they may do only in relation to descriptions of transaction or arrangement specified in the company's articles.

4

F1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5

This section does not extend to Scotland.

Chapter 3Declaration of interest in existing transaction or arrangement

C60182C57 C58 C59Declaration of interest in existing transaction or arrangement

1

Where a director of a company is in any way, directly or indirectly, interested in a transaction or arrangement that has been entered into by the company, he must declare the nature and extent of the interest to the other directors in accordance with this section.

This section does not apply if or to the extent that the interest has been declared under section 177 (duty to declare interest in proposed transaction or arrangement).

2

The declaration must be made—

a

at a meeting of the directors, or

b

by notice in writing (see section 184), or

c

by general notice (see section 185).

3

If a declaration of interest under this section proves to be, or becomes, inaccurate or incomplete, a further declaration must be made.

4

Any declaration required by this section must be made as soon as is reasonably practicable.

Failure to comply with this requirement does not affect the underlying duty to make the declaration.

5

This section does not require a declaration of an interest of which the director is not aware or where the director is not aware of the transaction or arrangement in question.

For this purpose a director is treated as being aware of matters of which he ought reasonably to be aware.

6

A director need not declare an interest under this section—

a

if it cannot reasonably be regarded as likely to give rise to a conflict of interest;

b

if, or to the extent that, the other directors are already aware of it (and for this purpose the other directors are treated as aware of anything of which they ought reasonably to be aware); or

c

if, or to the extent that, it concerns terms of his service contract that have been or are to be considered—

i

by a meeting of the directors, or

ii

by a committee of the directors appointed for the purpose under the company's constitution.

C64183C61 C62 C63Offence of failure to declare interest

1

A director who fails to comply with the requirements of section 182 (declaration of interest in existing transaction or arrangement) commits an offence.

2

A person guilty of an offence under this section is liable—

a

on conviction on indictment, to a fine;

b

on summary conviction, to a fine not exceeding the statutory maximum.

C68184C65 C66 C67Declaration made by notice in writing

1

This section applies to a declaration of interest made by notice in writing.

2

The director must send the notice to the other directors.

3

The notice may be sent in hard copy form or, if the recipient has agreed to receive it in electronic form, in an agreed electronic form.

4

The notice may be sent—

a

by hand or by post, or

b

if the recipient has agreed to receive it by electronic means, by agreed electronic means.

5

Where a director declares an interest by notice in writing in accordance with this section—

a

the making of the declaration is deemed to form part of the proceedings at the next meeting of the directors after the notice is given, and

b

the provisions of section 248 (minutes of meetings of directors) apply as if the declaration had been made at that meeting.

C72185C69 C70 C71General notice treated as sufficient declaration

1

General notice in accordance with this section is a sufficient declaration of interest in relation to the matters to which it relates.

2

General notice is notice given to the directors of a company to the effect that the director—

a

has an interest (as member, officer, employee or otherwise) in a specified body corporate or firm and is to be regarded as interested in any transaction or arrangement that may, after the date of the notice, be made with that body corporate or firm, or

b

is connected with a specified person (other than a body corporate or firm) and is to be regarded as interested in any transaction or arrangement that may, after the date of the notice, be made with that person.

3

The notice must state the nature and extent of the director's interest in the body corporate or firm or, as the case may be, the nature of his connection with the person.

4

General notice is not effective unless—

a

it is given at a meeting of the directors, or

b

the director takes reasonable steps to secure that it is brought up and read at the next meeting of the directors after it is given.

C76186C73 C74 C75Declaration of interest in case of company with sole director

1

Where a declaration of interest under section 182 (duty to declare interest in existing transaction or arrangement) is required of a sole director of a company that is required to have more than one director—

a

the declaration must be recorded in writing,

a

by resolution of the members of the company, and

b

in the case of a director of a holding company, by resolution of the members of that company.

3

The guaranteed term of a director's employment is—

a

the period (if any) during which the director's employment—

i

is to continue, or may be continued otherwise than at the instance of the company (whether under the original agreement or under a new agreement entered into in pursuance of it), and

ii

cannot be terminated by the company by notice, or can be so terminated only in specified circumstances, or

b

in the case of employment terminable by the company by notice, the period of notice required to be given,

an arrangement involving more than one non-cash asset, or

b

an arrangement that is one of a series involving non-cash assets,

shall be treated as if they involved a non-cash asset of a value equal to the aggregate value of all the non-cash assets involved in the arrangement or, as the case may be, the series.

6

This section does not apply to a transaction so far as it relates—

a

to anything to which a director of a company is entitled under his service contract, or

b

to payment for loss of office as defined in section 215 F8(payments to which the requirements of Chapter 4 or 4A apply).

for a transaction between—

i

a holding company and its wholly-owned subsidiary, or

ii

two wholly-owned subsidiaries of the same holding company.

I18 C100193C97 C98 C99Exception in case of company in winding up or administration

1

This section applies to a company—

a

c

rights acquired in good faith, for value and without actual notice of the contravention by a person who is not a party to the arrangement or transaction would be affected by the avoidance.

3

Whether or not the arrangement or any such transaction has been avoided, each of the persons specified in subsection (4) is liable—

a

to account to the company for any gain that he has made directly or indirectly by the arrangement or transaction, and

b

(jointly and severally with any other person so liable under this section) to indemnify the company for any loss or damage resulting from the arrangement or transaction.

4

The persons so liable are—

a

any director of the company or of its holding company with whom the company entered into the arrangement in contravention of section 190,

b

any person with whom the company entered into the arrangement in contravention of that section who is connected with a director of the company or of its holding company,

c

the director of the company or of its holding company with whom any such person is connected, and

d

any other director of the company who authorised the arrangement or any transaction entered into in pursuance of such an arrangement.

5

i

at the company's registered office for not less than 15 days ending with the date of the meeting, and

ii

at the meeting itself.

4

The matters to be disclosed are—

a

the nature of the transaction,

at the company's registered office for not less than 15 days ending with the date of the meeting, and

ii

at the meeting itself.

5

The matters to be disclosed are—

a

b

give a guarantee or provide security in connection with a loan or quasi-loan made by any person to a person connected with such a director,

unless the transaction has been approved by a resolution of the members of the company.

3

If the connected person is a person connected with a director of the company's holding company, the transaction must also have been approved by a resolution of the members of the holding company.

4

A resolution approving a transaction to which this section applies must not be passed unless a memorandum setting out the matters mentioned in subsection (5) is made available to members—

a

in the case of a written resolution, by being sent or submitted to every eligible member at or before the time at which the proposed resolution is sent or submitted to him;

b

in the case of a resolution at a meeting, by being made available for inspection by members of the company both—

i

at the company's registered office for not less than 15 days ending with the date of the meeting, and

ii

at the meeting itself.

5

The matters to be disclosed are—

a

the nature of the transaction,

at the company's registered office for not less than 15 days ending with the date of the meeting, and

ii

at the meeting itself.

5

The matters to be disclosed are—

a

the nature of the transaction,

b

the value of the credit transaction and the purpose for which the land, goods or services sold or otherwise disposed of, leased, hired or supplied under the credit transaction are required, and

c

the extent of the company's liability under any transaction connected with the credit transaction.

6

No approval is required under this section on the part of the members of a body corporate that—

a

is not a UK-registered company, or

b

is a wholly-owned subsidiary of another body corporate.

I27 C136202C133 C134 C135Meaning of “credit transaction”

1

A “credit transaction” is a transaction under which one party (“the creditor”)—

a

supplies any goods or sells any land under a hire-purchase agreement or a conditional sale agreement,

b

leases or hires any land or goods in return for periodical payments, or

c

otherwise disposes of land or supplies goods or services on the understanding that payment (whether in a lump sum or instalments or by way of periodical payments or otherwise) is to be deferred.

2

Any reference to the person for whose benefit a credit transaction is entered into is to the person to whom goods, land or services are supplied, sold, leased, hired or otherwise disposed of under the transaction.

3

In this section—

“conditional sale agreement” has the same meaning as in the Consumer Credit Act 1974 (c. 39); and
“services” means anything other than goods or land.

I28 C140203C137 C138 C139Related arrangements: requirement of members' approval

1

A company may not—

a

take part in an arrangement under which—

i

another person enters into a transaction that, if it had been entered into by the company, would have required approval under section 197, 198, 200 or 201, and

ii

that person, in pursuance of the arrangement, obtains a benefit from the company or a body corporate associated with it, or

b

I29 C144204C141 C142 C143Exception for expenditure on company business

1

in connection with an application for relief (see subsection (5)), or

b

b

if it is abandoned or otherwise ceases to have effect.

C1495

The reference in subsection (1)(a)(ii) 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).

I31 C153206C150 C151 C152Exception for expenditure in connection with regulatory action or investigation

Approval is not required under section 197, 198, 200 or 201 (requirement of members' approval for loans etc) for anything done by a company—

a

to provide a director of the company or of its holding company with funds to meet expenditure incurred or to be incurred by him in defending himself—

i

in an investigation by a regulatory authority, or

ii

against action proposed to be taken by a regulatory authority,

the making of a loan or quasi-loan to an associated body corporate, or

b

the giving of a guarantee or provision of security in connection with a loan or quasi-loan made to an associated body corporate.

2

Approval is not required under section 201—

a

to enter into a credit transaction as creditor for the benefit of an associated body corporate, or

b

to give a guarantee or provide security in connection with a credit transaction entered into by any person for the benefit of an associated body corporate.

I34 C165209C162 C163 C164Exceptions for money-lending companies

1

Approval is not required under section 197, 198 or 200 for the making of a loan or quasi-loan, or the giving of a guarantee or provision of security in connection with a loan or quasi-loan, by a money-lending company if—

a

the transaction (that is, the loan, quasi-loan, guarantee or security) is entered into by the company in the ordinary course of the company's business, and

b

the value of the transaction is not greater, and its terms are not more favourable, than it is reasonable to expect the company would have offered to a person of the same financial standing but unconnected with the company.

2

A “money-lending company” means a company whose ordinary business includes the making of loans or quasi-loans, or the giving of guarantees or provision of security in connection with loans or quasi-loans.

3

The condition specified in subsection (1)(b) does not of itself prevent a company from making a home loan—

a

to a director of the company or of its holding company, or

b

to an employee of the company,

if loans of that description are ordinarily made by the company to its employees and the terms of the loan in question are no more favourable than those on which such loans are ordinarily made.

4

For the purposes of subsection (3) a “home loan” means a loan—

a

for the purpose of facilitating the purchase, for use as the only or main residence of the person to whom the loan is made, of the whole or part of any dwelling-house together with any land to be occupied and enjoyed with it,

b

for the purpose of improving a dwelling-house or part of a dwelling-house so used or any land occupied and enjoyed with it, or

c

in substitution for any loan made by any person and falling within paragraph (a) or (b).

I35 C169210C166 C167 C168Other relevant transactions or arrangements

1

This section has effect for determining what are “other relevant transactions or arrangements” for the purposes of any exception to section 197, 198, 200 or 201.

In the following provisions “the relevant exception” means the exception for the purposes of which that falls to be determined.

was a subsidiary of that company's holding company,

is not a relevant transaction or arrangement if, at the time the question arises whether the transaction or arrangement in question falls within a relevant exception, it is no longer such a subsidiary.

I36 C173211C170 C171 C172The value of transactions and arrangements

1

For the purposes of sections 197 to 214 (loans etc)—

a

the value of a transaction or arrangement is determined as follows, and

b

the value of any other relevant transaction or arrangement is taken to be the value so determined reduced by any amount by which the liabilities of the person for whom the transaction or arrangement was made have been reduced.

2

The value of a loan is the amount of its principal.

3

The value of a quasi-loan is the amount, or maximum amount, that the person to whom the quasi-loan is made is liable to reimburse the creditor.

4

The value of a credit transaction is the price that it is reasonable to expect could be obtained for the goods, services or land to which the transaction relates if they had been supplied (at the time the transaction is entered into) in the ordinary course of business and on the same terms (apart from price) as they have been supplied, or are to be supplied, under the transaction in question.

5

The value of a guarantee or security is the amount guaranteed or secured.

6

The value of an arrangement to which section 203 (related arrangements) applies is the value of the transaction to which the arrangement relates.

7

If the value of a transaction or arrangement is not capable of being expressed as a specific sum of money—

a

whether because the amount of any liability arising under the transaction or arrangement is unascertainable, or for any other reason, and

b

whether or not any liability under the transaction or arrangement has been reduced,

its value is deemed to exceed £50,000.

I37 C177212C174 C175 C176The person for whom a transaction or arrangement is entered into

For the purposes of sections 197 to 214 (loans etc) the person for whom a transaction or arrangement is entered into is—

a

in the case of a loan or quasi-loan, the person to whom it is made;

b

in the case of a credit transaction, the person to whom goods, land or services are supplied, sold, hired, leased or otherwise disposed of under the transaction;

c

in the case of a guarantee or security, the person for whom the transaction is made in connection with which the guarantee or security is entered into;

d

in the case of an arrangement within section 203 (related arrangements), the person for whom the transaction is made to which the arrangement relates.

i

any other office or employment in connection with the management of the affairs of the company, or

ii

any office (as director or otherwise) or employment in connection with the management of the affairs of any subsidiary undertaking of the company,

c

as consideration for or in connection with his retirement from his office as director of the company, or

d

as consideration for or in connection with his retirement, while director of the company or in connection with his ceasing to be a director of it, from—

i

any other office or employment in connection with the management of the affairs of the company, or

ii

any office (as director or otherwise) or employment in connection with the management of the affairs of any subsidiary undertaking of the company.

2

The references to compensation and consideration include benefits otherwise than in cash and references in this Chapter to payment have a corresponding meaning.

3

For the purposes of sections 217 to 221 (payments requiring members' approval)—

a

payment to a person connected with a director, or

b

payment to any person at the direction of, or for the benefit of, a director or a person connected with him,

is treated as payment to the director.

4

References in those sections to payment by a person include payment by another person at the direction of, or on behalf of, the person referred to.

F95

Nothing in this section or sections 216 to 222 applies in relation to a payment for loss of office to a director of a quoted company other than a payment to which section 226C does not apply by virtue of section 226D(6).

I41 C193216C190 C191 C192Amounts taken to be payments for loss of office

1

This section applies where in connection with any such transfer as is mentioned in section 218 or 219 (payment in connection with transfer of undertaking, property or shares) a director of the company—

a

is to cease to hold office, or

b

is to cease to be the holder of—

i

any other office or employment in connection with the management of the affairs of the company, or

ii

any office (as director or otherwise) or employment in connection with the management of the affairs of any subsidiary undertaking of the company.

2

If in connection with any such transfer—

a

the price to be paid to the director for any shares in the company held by him is in excess of the price which could at the time have been obtained by other holders of like shares, or

b

any valuable consideration is given to the director by a person other than the company,

the excess or, as the case may be, the money value of the consideration is taken for the purposes of those sections to have been a payment for loss of office.

I42 C197217C194 C195 C196Payment by company: requirement of members' approval

1

A company may not make a payment for loss of office to a director of the company unless the payment has been approved by a resolution of the members of the company.

2

A company may not make a payment for loss of office to a director of its holding company unless the payment has been approved by a resolution of the members of each of those companies.

3

A resolution approving a payment to which this section applies must not be passed unless a memorandum setting out particulars of the proposed payment (including its amount) is made available to the members of the company whose approval is sought—

a

in the case of a written resolution, by being sent or submitted to every eligible member at or before the time at which the proposed resolution is sent or submitted to him;

b

in the case of a resolution at a meeting, by being made available for inspection by the members both—

i

at the company's registered office for not less than 15 days ending with the date of the meeting, and

ii

at the meeting itself.

4

No approval is required under this section on the part of the members of a body corporate that—

a

is not a UK-registered company, or

b

is a wholly-owned subsidiary of another body corporate.

I43 C201218C198 C199 C200Payment in connection with transfer of undertaking etc: requirement of members' approval

1

No payment for loss of office may be made by any person to a director of a company in connection with the transfer of the whole or any part of the undertaking or property of the company unless the payment has been approved by a resolution of the members of the company.

2

No payment for loss of office may be made by any person to a director of a company in connection with the transfer of the whole or any part of the undertaking or property of a subsidiary of the company unless the payment has been approved by a resolution of the members of each of the companies.

entered into as part of the agreement for the transfer in question, or within one year before or two years after that agreement, and

b

to which the company whose undertaking or property is transferred, or any person to whom the transfer is made, is privy,

is presumed, except in so far as the contrary is shown, to be a payment to which this section applies.

I44 C205219C202 C203 C204Payment in connection with share transfer: requirement of members' approval

1

No payment for loss of office may be made by any person to a director of a company in connection with a transfer of shares in the company, or in a subsidiary of the company, resulting from a takeover bid unless the payment has been approved by a resolution of the relevant shareholders.

2

The relevant shareholders are the holders of the shares to which the bid relates and any holders of shares of the same class as any of those shares.

3

a

in the case of a written resolution, by being sent or submitted to every eligible member at or before the time at which the proposed resolution is sent or submitted to him;

b

in the case of a resolution at a meeting, by being made available for inspection by the members both—

i

In the case of a payment within both section 217 and section 218, or within both section 217 and section 219, subsection (2) above applies and not subsection (3).

5

A payment part of which falls within subsection (1) above and part of which does not is treated as if the parts were separate payments.

b

sections 190 to 196 (property transactions),

c

sections 197 to 214 (loans etc), and

d

sections 215 to 222 (payments for loss of office),

a shadow director is treated as a director.

2

Any reference in those provisions to loss of office as a director does not apply in relation to loss of a person's status as a shadow director.

I49224Approval by written resolution: accidental failure to send memorandum

1

Where—

a

approval under this Chapter is sought by written resolution, and

b

a memorandum is required under this Chapter to be sent or submitted to every eligible member before the resolution is passed,

any accidental failure to send or submit the memorandum to one or more members shall be disregarded for the purpose of determining whether the requirement has been met.

2

Subsection (1) has effect subject to any provision of the company's articles.

I50225Cases where approval is required under more than one provision

1

Approval may be required under more than one provision of this Chapter.

2

If so, the requirements of each applicable provision must be met.

3

This does not require a separate resolution for the purposes of each provision.

226Requirement of consent of Charity Commission: companies that are charities

F2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F7CHAPTER 4ADirectors of quoted companies: special provision

Annotations:

Amendments (Textual)

Pt. 10 Ch. 4A inserted (1.10.2013) by Enterprise and Regulatory Reform Act 2013 (c. 24), ss. 80, 103(3); S.I. 2013/2227, art. 2(h)

Interpretation

226AKey definitions

1

In this Chapter—

“directors' remuneration policy” means the policy of a quoted company with respect to the making of remuneration payments and payments for loss of office;
“ quoted company ” has the same meaning as in Part 15 of this Act;
“ remuneration payment ” means any form of payment or other benefit made to or otherwise conferred on a person as consideration for the person—
1. a
  holding, agreeing to hold or having held office as director of a company, or
2. b
  holding, agreeing to hold or having held, during a period when the person is or was such a director—
  1. i
    any other office or employment in connection with the management of the affairs of the company, or
  2. ii
    any office (as director or otherwise) or employment in connection with the management of the affairs of any subsidiary undertaking of the company,
other than a payment for loss of office;
“ payment for loss of office ” has the same meaning as in Chapter 4 of this Part.

2

Subsection (3) applies where, in connection with a relevant transfer, a director of a quoted company is—

a

to cease to hold office as director, or

b

to cease to be the holder of—

i

any other office or employment in connection with the management of the affairs of the company, or

ii

any office (as director or otherwise) or employment in connection with the management of the affairs of any subsidiary undertaking of the company.

3

If in connection with the transfer—

a

the price to be paid to the director for any shares in the company held by the director is in excess of the price which could at the time have been obtained by other holders of like shares, or

b

any valuable consideration is given to the director by a person other than the company,

b

the court considers that, having regard to all the circumstances of the case, the director ought to be relieved of liability,

the court may relieve the director, either wholly or in part, from liability on such terms as the court thinks fit.

226FRelationship with requirements under Chapter 4

1

This Chapter does not affect any requirement for approval by a resolution of the members of a company which applies in relation to the company under Chapter 4.

2

Where the making of a payment to which section 226B or 226C applies requires approval by a resolution of the members of the company concerned under Chapter 4, approval obtained for the purposes of that Chapter is to be treated as satisfying the requirements of section 226B(1)(b) or (as the case may be) 226C(1)(b).

Chapter 5Directors' service contracts

C221227C218 C219 C220Directors' service contracts

1

For the purposes of this Part a director's “service contract”, in relation to a company, means a contract under which—

a

a director of the company undertakes personally to perform services (as director or otherwise) for the company, or for a subsidiary of the company, or

b

services (as director or otherwise) that a director of the company undertakes personally to perform are made available by a third party to the company, or to a subsidiary of the company.

2

The provisions of this Part relating to directors' service contracts apply to the terms of a person's appointment as a director of a company.

They are not restricted to contracts for the performance of services outside the scope of the ordinary duties of a director.

of the place at which the copies and memoranda are kept available for inspection, and

b

of any change in that place,

unless they have at all times been kept at the company's registered office.

5

If default is made in complying with subsection (1), (2) or (3), or default is made for 14 days in complying with subsection (4), an offence is committed by every officer of the company who is in default.

6

A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.

7

The provisions of this section apply to a variation of a director's service contract as they apply to the original contract.

C229229I51 C226 C227 C228Right of member to inspect and request copy

1

Every copy or memorandum required to be kept under section 228 must be open to inspection by any member of the company without charge.

2

Any member of the company is entitled, on request and on payment of such fee as may be prescribed, to be provided with a copy of any such copy or memorandum.

The copy must be provided within seven days after the request is received by the company.

3

If an inspection required under subsection (1) is refused, or default is made in complying with subsection (2), an offence is committed by every officer of the company who is in default.

4

5

In the case of any such refusal or default the court may by order compel an immediate inspection or, as the case may be, direct that the copy required be sent to the person requiring it.

C233230C230 C231 C232Directors' service contracts: application of provisions to shadow directors

A shadow director is treated as a director for the purposes of the provisions of this Chapter.

Chapter 6Contracts with sole members who are directors

C234 C235 C236 C237231Contract with sole member who is also a director

1

This section applies where—

a

a limited company having only one member enters into a contract with the sole member,

b

the sole member is also a director of the company, and

c

the contract is not entered into in the ordinary course of the company's business.

2

The company must, unless the contract is in writing, ensure that the terms of the contract are either—

a

set out in a written memorandum, or

b

recorded in the minutes of the first meeting of the directors of the company following the making of the contract.

3

If a company fails to comply with this section an offence is committed by every officer of the company who is in default.

4

A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 5 on the standard scale.

5

For the purposes of this section a shadow director is treated as a director.

6

Failure to comply with this section in relation to a contract does not affect the validity of the contract.

7

Nothing in this section shall be read as excluding the operation of any other enactment or rule of law applying to contracts between a company and a director of the company.

Chapter 7Directors' liabilities

Provision protecting directors from liability

C238 C239 C240 I52 C241232Provisions protecting directors from liability

1

Any provision that purports to exempt a director of a company (to any extent) from any liability that would otherwise attach to him in connection with any negligence, default, breach of duty or breach of trust in relation to the company is void.

2

Any provision by which a company directly or indirectly provides an indemnity (to any extent) for a director of the company, or of an associated company, against any liability attaching to him in connection with any negligence, default, breach of duty or breach of trust in relation to the company of which he is a director is void, except as permitted by—

a

section 233 (provision of insurance),

b

section 234 (qualifying third party indemnity provision), or

c

section 235 (qualifying pension scheme indemnity provision).

3

This section applies to any provision, whether contained in a company's articles or in any contract with the company or otherwise.

4

Nothing in this section prevents a company's articles from making such provision as has previously been lawful for dealing with conflicts of interest.

I53233Provision of insurance

Section 232(2) (voidness of provisions for indemnifying directors) does not prevent a company from purchasing and maintaining for a director of the company, or of an associated company, insurance against any such liability as is mentioned in that subsection.

I54234Qualifying third party indemnity provision

1

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

2

ii

if it is abandoned or otherwise ceases to have effect.

C2426

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).

I55235Qualifying pension scheme indemnity provision

1

Section 232(2) (voidness of provisions for indemnifying directors) does not apply to qualifying pension scheme indemnity provision.

2

I56236Qualifying indemnity provision to be disclosed in directors' report

1

This section requires disclosure in the directors' report of—

a

qualifying third party indemnity provision, and

b

qualifying pension scheme indemnity provision.

Such provision is referred to in this section as “qualifying indemnity provision”.

2

If when a directors' report is approved any qualifying indemnity provision (whether made by the company or otherwise) is in force for the benefit of one or more directors of the company, the report must state that such provision is in force.

3

If at any time during the financial year to which a directors' report relates any such provision was in force for the benefit of one or more persons who were then directors of the company, the report must state that such provision was in force.

4

If when a directors' report is approved qualifying indemnity provision made by the company is in force for the benefit of one or more directors of an associated company, the report must state that such provision is in force.

5

If at any time during the financial year to which a directors' report relates any such provision was in force for the benefit of one or more persons who were then directors of an associated company, the report must state that such provision was in force.

of the place at which the copy or memorandum is kept available for inspection, and

b

of any change in that place,

unless it has at all times been kept at the company's registered office.

6

If default is made in complying with subsection (2), (3) or (4), or default is made for 14 days in complying with subsection (5), an offence is committed by every officer of the company who is in default.

7

8

The provisions of this section apply to a variation of a qualifying indemnity provision as they apply to the original provision.

9

In this section “qualifying indemnity provision” means—

a

qualifying third party indemnity provision, and

b

qualifying pension scheme indemnity provision.

I58238Right of member to inspect and request copy

1

Every copy or memorandum required to be kept by a company under section 237 must be open to inspection by any member of the company without charge.

2

Any member of the company is entitled, on request and on payment of such fee as may be prescribed, to be provided with a copy of any such copy or memorandum.

The copy must be provided within seven days after the request is received by the company.

3

If an inspection required under subsection (1) is refused, or default is made in complying with subsection (2), an offence is committed by every officer of the company who is in default.

4

5

In the case of any such refusal or default the court may by order compel an immediate inspection or, as the case may be, direct that the copy required be sent to the person requiring it.

Ratification of acts giving rise to liability

I59239Ratification of acts of directors

1

This section applies to the ratification by a company of conduct by a director amounting to negligence, default, breach of duty or breach of trust in relation to the company.

2

The decision of the company to ratify such conduct must be made by resolution of the members of the company.

3

Where the resolution is proposed as a written resolution neither the director (if a member of the company) nor any member connected with him is an eligible member.

4

Where the resolution is proposed at a meeting, it is passed only if the necessary majority is obtained disregarding votes in favour of the resolution by the director (if a member of the company) and any member connected with him.

in accordance with section 244 (disclosure under court order).

2

Subsection (1) does not prohibit any use or disclosure of protected information with the consent of the director concerned.

in accordance with section 244 (disclosure under court order).

provide for a question to be referred to a person other than the registrar for the purposes of determining the application.

7

In this section—

“credit reference agency” means a person carrying on a business comprising the furnishing of information relevant to the financial standing of individuals, being information collected by the agency for that purpose; and
“public authority” includes any person or body having functions of a public nature.

8

Regulations under this section are subject to negative resolution procedure.

C251 C252244Disclosure under court order

1

The court may make an order for the disclosure of protected information by the company or by the registrar if—

a

there is evidence that service of documents at a service address other than the director's usual residential address is not effective to bring them to the notice of the director, or

b

it is necessary or expedient for the information to be provided in connection with the enforcement of an order or decree of the court,

and the court is otherwise satisfied that it is appropriate to make the order.

2

An order for disclosure by the registrar is to be made only if the company—

a

does not have the director's usual residential address, or

b

has been dissolved.

3

The order may be made on the application of a liquidator, creditor or member of the company, or any other person appearing to the court to have a sufficient interest.

4

The order must specify the persons to whom, and purposes for which, disclosure is authorised.

What is meant by putting the address on the public record is explained in section 246.

Provision for employees on cessation or transfer of business

247Power to make provision for employees on cessation or transfer of business

1

The powers of the directors of a company include (if they would not otherwise do so) power to make provision for the benefit of persons employed or formerly employed by the company, or any of its subsidiaries, in connection with the cessation or the transfer to any person of the whole or part of the undertaking of the company or that subsidiary.

2

This power is exercisable notwithstanding the general duty imposed by section 172 (duty to promote the success of the company).

3

In the case of a company that is a charity it is exercisable notwithstanding any restrictions on the directors' powers (or the company's capacity) flowing from the objects of the company.

4

The power may only be exercised if sanctioned—

a

by a resolution of the company, or

b

by a resolution of the directors,

in accordance with the following provisions.

5

A resolution of the directors—

a

must be authorised by the company's articles, and

b

is not sufficient sanction for payments to or for the benefit of directors, former directors or shadow directors.

6

Any other requirements of the company's articles as to the exercise of the power conferred by this section must be complied with.

7

Any payment under this section must be made—

a

before the commencement of any winding up of the company, and

b

out of profits of the company that are available for dividend.

Records of meetings of directors

248Minutes of directors' meetings

1

Every company must cause minutes of all proceedings at meetings of its directors to be recorded.

2

The records must be kept for at least ten years from the date of the meeting.

3

If a company fails to comply with this section, an offence is committed by every officer of the company who is in default.

4 249Minutes as evidence

1

Minutes recorded in accordance with section 248, if purporting to be authenticated by the chairman of the meeting or by the chairman of the next directors' meeting, are evidence (in Scotland, sufficient evidence) of the proceedings at the meeting.

2

Where minutes have been made in accordance with that section of the proceedings of a meeting of directors, then, until the contrary is proved—

a

the meeting is deemed duly held and convened,

b

all proceedings at the meeting are deemed to have duly taken place, and

c

all appointments at the meeting are deemed valid.

Meaning of “director” and “shadow director”

250“Director”

In the Companies Acts “director” includes any person occupying the position of director, by whatever name called.

251“Shadow director”

1

In the Companies Acts “shadow director”, in relation to a company, means a person in accordance with whose directions or instructions the directors of the company are accustomed to act.

2

A person is not to be regarded as a shadow director by reason only that the directors act on advice given by him in a professional capacity.

3

A body corporate is not to be regarded as a shadow director of any of its subsidiary companies for the purposes of—

Chapter 2 (general duties of directors),
Chapter 4 (transactions requiring members' approval), or
Chapter 6 (contract with sole member who is also a director),

by reason only that the directors of the subsidiary are accustomed to act in accordance with its directions or instructions.

Other definitions

C257 C258252Persons connected with a director

1

This section defines what is meant by references in this Part to a person being “connected” with a director of a company (or a director being “connected” with a person).

2

The following persons (and only those persons) are connected with a director of a company—

a

members of the director's family (see section 253);

b

a body corporate with which the director is connected (as defined in section 254);

c

a person acting in his capacity as trustee of a trust—

i

the beneficiaries of which include the director or a person who by virtue of paragraph (a) or (b) is connected with him, or

ii

the terms of which confer a power on the trustees that may be exercised for the benefit of the director or any such person,

other than a trust for the purposes of an employees' share scheme or a pension scheme;

d

a person acting in his capacity as partner—

i

of the director, or

ii

of a person who, by virtue of paragraph (a), (b) or (c), is connected with that director;

e

a firm that is a legal person under the law by which it is governed and in which—

i

the director is a partner,

ii

a partner is a person who, by virtue of paragraph (a), (b) or (c) is connected with the director, or

iii

a partner is a firm in which the director is a partner or in which there is a partner who, by virtue of paragraph (a), (b) or (c), is connected with the director.

3

References in this Part to a person connected with a director of a company do not include a person who is himself a director of the company.

253Members of a director's family

1

This section defines what is meant by references in this Part to members of a director's family.

2

For the purposes of this Part the members of a director's family are—

a

the director's spouse or civil partner;

b

any other person (whether of a different sex or the same sex) with whom the director lives as partner in an enduring family relationship;

c

the director's children or step-children;

d

any children or step-children of a person within paragraph (b) (and who are not children or step-children of the director) who live with the director and have not attained the age of 18;

e

the director's parents.

3

Subsection (2)(b) does not apply if the other person is the director's grandparent or grandchild, sister, brother, aunt or uncle, or nephew or niece.

254Director “connected with” a body corporate

1

This section defines what is meant by references in this Part to a director being “connected with” a body corporate.

2

A director is connected with a body corporate if, but only if, he and the persons connected with him together—

a

are interested in shares comprised in the equity share capital of that body corporate of a nominal value equal to at least 20% of that share capital, or

b

are entitled to exercise or control the exercise of more than 20% of the voting power at any general meeting of that body.

3

The rules set out in Schedule 1 (references to interest in shares or debentures) apply for the purposes of this section.

4

References in this section to voting power the exercise of which is controlled by a director include voting power whose exercise is controlled by a body corporate controlled by him.

5

Shares in a company held as treasury shares, and any voting rights attached to such shares, are disregarded for the purposes of this section.

6

For the avoidance of circularity in the application of section 252 (meaning of “connected person”) —

a

a body corporate with which a director is connected is not treated for the purposes of this section as connected with him unless it is also connected with him by virtue of subsection (2)(c) or (d) of that section (connection as trustee or partner); and

b

a trustee of a trust the beneficiaries of which include (or may include) a body corporate with which a director is connected is not treated for the purposes of this section as connected with a director by reason only of that fact.

255Director “controlling” a body corporate

b

companies are associated if one is a subsidiary of the other or both are subsidiaries of the same body corporate.

257References to company's constitution

1

References in this Part to a company's constitution include—

a

any resolution or other decision come to in accordance with the constitution, and

b

any decision by the members of the company, or a class of members, that is treated by virtue of any enactment or rule of law as equivalent to a decision by the company.

2

This is in addition to the matters mentioned in section 17 (general provision as to matters contained in company's constitution).

General

I61258Power to increase financial limits

1

The Secretary of State may by order substitute for any sum of money specified in this Part a larger sum specified in the order.

2

An order under this section is subject to negative resolution procedure.

3

An order does not have effect in relation to anything done or not done before it comes into force.

Accordingly, proceedings in respect of any liability incurred before that time may be continued or instituted as if the order had not been made.

259Transactions under foreign law

For the purposes of this Part it is immaterial whether the law that (apart from this Act) governs an arrangement or transaction is the law of the United Kingdom, or a part of it, or not.

C259Part 10A company's directors

Chapter 1Appointment and removal of directors

Requirement to have directors

154Companies required to have directors

1

2

155Companies required to have at least one director who is a natural person

1

2

I1156Direction requiring company to make appointment

1

2

a

b

c

3

4

a

b

5

6

a

b

7

Appointment

157Minimum age for appointment as director

1

2

3

4

5

a

b

6

I2158Power to provide for exceptions from minimum age requirement

1

2

3

4

5

159Existing under-age directors

1

a

b

2

3

4

160Appointment of directors of public company to be voted on individually

1

2

3

4

161Validity of acts of directors

1

a

b

c

d

2

Register of directors, etc

I3C1C2C3C4C5C6162Register of directors

1

2

3

a

b

4

a

b

5

a

b

6

a

b

7

8

C7C8163Particulars of directors to be registered: individuals

1

a

I3 C1 C2 C3 C4 C5 C6162Register of directors

C7 C8163Particulars of directors to be registered: individuals

C10 C11164Particulars of directors to be registered: corporate directors and firms

C12 C13 C14 C15 C16 C17165Register of directors' residential addresses

I4 C18166Particulars of directors to be registered: power to make regulations

C19 C20 C21 C22 C23167Duty to notify registrar of changes