|
| |
|
(2) | This section does not authorise a company to enter into a transaction if the |
| |
| |
(a) | the value of the transaction in question, and |
| |
(b) | the value of any other relevant transactions or arrangements, |
| |
| 5 |
189 | Exception for expenditure on defending proceedings etc |
| |
(1) | Approval is not required under section 183 or 185 (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— |
| 10 |
(i) | in defending any criminal or civil proceedings in connection |
| |
with any alleged negligence, default, breach of duty or breach |
| |
of trust by him in relation to the company, or |
| |
(ii) | in connection with an application for relief (see subsection (5)), |
| |
| 15 |
(b) | to enable any such director to avoid incurring such expenditure, |
| |
| if it is done on the following terms. |
| |
| |
(a) | that the loan is to be repaid, or (as the case may be) any liability of the |
| |
company incurred in connection with the matter is to be discharged, in |
| 20 |
| |
(i) | the director being convicted in the proceedings, |
| |
(ii) | judgment being given against him in the proceedings, or |
| |
(iii) | the court refusing to grant him relief on the application; and |
| |
(b) | that it is to be so repaid or discharged not later than— |
| 25 |
(i) | the date when the conviction becomes final, |
| |
(ii) | the date when the judgment becomes final, or |
| |
(iii) | the date when the refusal of relief becomes final. |
| |
(3) | For this purpose a conviction, judgment or refusal of relief becomes final— |
| |
(a) | if not appealed against, at the end of the period for bringing an appeal; |
| 30 |
(b) | if appealed against, when the appeal (or any further appeal) is disposed |
| |
| |
(4) | An appeal is disposed of— |
| |
(a) | if it is determined and the period for bringing any further appeal has |
| |
| 35 |
(b) | if it is abandoned or otherwise ceases to have effect. |
| |
(5) | The reference in subsection (1)(a)(ii) to an application for relief is to an |
| |
application for relief under— |
| |
section 804 (general power of court to grant relief in case of honest and |
| |
| 40 |
section 144(3) or (4) of the Companies Act 1985 (c. 6) (power of court to |
| |
grant relief in case of acquisition of shares by innocent nominee). |
| |
|
| |
|
| |
|
190 | Exception for expenditure in connection with regulatory action or |
| |
| |
Approval is not required under section 183 or 185 (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 |
| 5 |
funds to meet expenditure incurred or to be incurred by him in |
| |
| |
(i) | in an investigation by a regulatory authority, or |
| |
(ii) | against action proposed to be taken by a regulatory authority, |
| |
| in connection with any alleged negligence, default, breach of duty or |
| 10 |
breach of trust by him in relation to the company, or |
| |
(b) | to enable any such director to avoid incurring such expenditure. |
| |
191 | Exceptions for minor and business transactions |
| |
(1) | Approval is not required under section 183 for a company to make a loan or |
| |
quasi-loan, or to give a guarantee or provide security in connection with a loan |
| 15 |
or quasi-loan, if the aggregate of— |
| |
(a) | the value of the transaction, and |
| |
(b) | the value of any other relevant transactions or arrangements, |
| |
| |
(2) | Approval is not required under section 185 for a company to enter into a credit |
| 20 |
transaction, or to give a guarantee or provide security in connection with a |
| |
credit transaction, if the aggregate of— |
| |
(a) | the value of the transaction (that is, of the credit transaction, guarantee |
| |
| |
(b) | the value of any other relevant transactions or arrangements, |
| 25 |
| |
(3) | Approval is not required under section 185 for a company to enter into a credit |
| |
transaction, or to give a guarantee or provide security in connection with a |
| |
| |
(a) | the transaction is entered into by the company in the ordinary course of |
| 30 |
the company’s business, and |
| |
(b) | the value of the transaction is not greater, and the terms on which it is |
| |
entered into are not more favourable, than it is reasonable to expect the |
| |
company would have offered to, or in respect of, a person of the same |
| |
financial standing but unconnected with the company. |
| 35 |
192 | Exceptions for intra-group transactions |
| |
(1) | Approval is not required under section 183 for— |
| |
(a) | 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. |
| 40 |
(2) | Approval is not required under section 185— |
| |
(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 |
| |
| |
193 | Exceptions for money-lending companies |
| |
(1) | Approval is not required under section 183 for the making of a loan or quasi- |
| 5 |
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 |
| |
| 10 |
(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 |
| |
| |
(2) | A “money-lending company” means a company whose ordinary business |
| 15 |
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 |
| 20 |
(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— |
| 25 |
(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 |
| |
| |
(b) | for the purpose of improving a dwelling-house or part of a dwelling- |
| 30 |
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) above. |
| |
194 | Other relevant transactions or arrangements |
| |
(1) | This section has effect for determining what are “other relevant transactions or |
| 35 |
arrangements” for the purposes of any exception to section 183 or 185. |
| |
| In the following provisions “the relevant exception” means the exception for |
| |
the purposes of which that falls to be determined. |
| |
(2) | Other relevant transactions or arrangements are those previously entered into, |
| |
or entered into at the same time as the transaction or arrangement in question |
| 40 |
in relation to which the following conditions are met. |
| |
(3) | Where the transaction or arrangement in question is entered into— |
| |
(a) | for a director of the company entering into it, or |
| |
(b) | for a person connected with such a director, |
| |
|
| |
|
| |
|
| the conditions are that the transaction or arrangement was (or is) entered into |
| |
for that director, or a person connected with him, by virtue of the relevant |
| |
exception by that company or by any of its subsidiaries. |
| |
(4) | Where the transaction or arrangement in question is entered into— |
| |
(a) | for a director of the holding company of the company entering into it, |
| 5 |
| |
(b) | for a person connected with such a director, |
| |
| the conditions are that the transaction or arrangement was (or is) entered into |
| |
for that director, or a person connected with him, by virtue of the relevant |
| |
exception by the holding company or by any of its subsidiaries. |
| 10 |
(5) | A transaction or arrangement entered into by a company that at the time it was |
| |
| |
(a) | was a subsidiary of the company entering into the transaction or |
| |
arrangement in question, or |
| |
(b) | was a subsidiary of that company’s holding company, |
| 15 |
| 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. |
| |
195 | The value of transactions and arrangements |
| |
(1) | For the purposes of sections 183 to 198 (loans etc)— |
| 20 |
(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 |
| |
| 25 |
(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 |
| 30 |
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 187 (related arrangements) |
| 35 |
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, |
| 40 |
| |
(b) | whether or not any liability under the transaction or arrangement has |
| |
| |
| its value is deemed to exceed £50,000. |
| |
|
| |
|