|
| |
|
225 | Cases 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. |
| |
226 | Requirement of consent of Charity Commission: companies that are charities |
| 5 |
For section 66 of the Charities Act 1993 (c. 10) substitute— |
| |
“66 | Consent of Commission required for approval etc by members of |
| |
| |
(1) | Where a company is a charity— |
| |
(a) | any approval given by the members of the company under any |
| 10 |
provision of Chapter 4 of Part 10 of the Company Law Reform |
| |
Act 2006 (transactions with directors requiring approval by |
| |
members) listed in subsection (2) below, and |
| |
(b) | any affirmation given by members of the company under |
| |
section 197 or 213 of that Act (affirmation of unapproved |
| 15 |
property transactions and loans), |
| |
| is ineffective without the prior written consent of the Commission. |
| |
| |
(a) | section 189 (directors’ long-term service contracts); |
| |
(b) | section 191 (substantial property transactions with directors |
| 20 |
| |
(c) | section 198 (loans and quasi-loans to directors etc); |
| |
(d) | section 200 (credit transactions for benefit of directors etc); |
| |
(e) | section 202 (related arrangements); |
| |
(f) | section 216 (payments to directors for loss of office); |
| 25 |
(g) | section 217 (payments to directors for loss of office: transfer of |
| |
| |
66A | Consent of Commission required for certain acts of charitable |
| |
| |
(1) | A company that is a charity may not do an act to which this section |
| 30 |
applies without the prior written consent of the Commission. |
| |
(2) | This section applies to an act that— |
| |
(a) | does not require approval under a listed provision of Chapter 4 |
| |
of Part 10 of the Company Law Reform Act 2006 (transactions |
| |
with directors) by the members of the company, but |
| 35 |
(b) | would require such approval but for an exemption in the |
| |
provision in question that disapplies the need for approval on |
| |
the part of the members of a body corporate which is a wholly- |
| |
owned subsidiary of another body corporate. |
| |
(3) | The reference to a listed provision is a reference to a provision listed in |
| 40 |
| |
(4) | If a company acts in contravention of this section, the exemption |
| |
referred to in subsection (2)(b) shall be treated as of no effect in relation |
| |
| |
|
| |
|
| |
|
| |
Directors’ service contracts |
| |
227 | Directors’ service contracts |
| |
(1) | For the purposes of this Part a director’s “service contract”, in relation to a |
| |
company, means a contract under which— |
| 5 |
(a) | a director of the company undertakes personally to perform services (as |
| |
director or otherwise) for the company, or for a subsidiary of the |
| |
| |
(b) | services (as director or otherwise) that a director of the company |
| |
undertakes personally to perform are made available by a third party |
| 10 |
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. |
| 15 |
228 | Copy of contract or memorandum of terms to be available for inspection |
| |
(1) | A company must keep available for inspection— |
| |
(a) | a copy of every director’s service contract with the company or with a |
| |
subsidiary of the company, or |
| |
(b) | if the contract is not in writing, a written memorandum setting out the |
| 20 |
| |
(2) | All the copies and memoranda must be kept available for inspection at— |
| |
(a) | the company’s registered office; |
| |
(b) | the place where its register of members is kept available for inspection |
| |
(if not at its registered office); or |
| 25 |
(c) | its principal place of business (if that is situated in the part of the United |
| |
Kingdom in which the company is registered). |
| |
(3) | The copies and memoranda must be retained by the company for at least one |
| |
year from the date of termination or expiry of the contract and must be kept |
| |
available for inspection during that time. |
| 30 |
(4) | The company must give notice to the registrar— |
| |
(a) | of the place at which the copies and memoranda are kept available for |
| |
| |
(b) | of any change in that place, |
| |
| unless they have at all times been kept at the company’s registered office. |
| 35 |
(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 |
| 40 |
continued contravention, a daily default fine not exceeding one-tenth of level |
| |
| |
|
| |
|
| |
|
(7) | The provisions of this section apply to a variation of a director’s service |
| |
contract as they apply to the original contract. |
| |
229 | Right 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. |
| 5 |
(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 |
| |
| |
| The copy must be provided within seven days after the request is received by |
| |
| 10 |
(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) | 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 |
| 15 |
continued contravention, a daily default fine not exceeding one-tenth of level |
| |
| |
(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. |
| 20 |
230 | Directors’ service contracts: application of provisions to shadow directors |
| |
| A shadow director is treated as a director for the purposes of the provisions of |
| |
| |
| |
Contracts with sole members who are directors |
| 25 |
231 | Contract 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 |
| |
| |
(b) | the sole member is also a director of the company, and |
| 30 |
(c) | the contract is not entered into in the ordinary course of the company’s |
| |
| |
(2) | The company must, unless the contract is in writing, ensure that the terms of |
| |
| |
(a) | set out in a written memorandum, or |
| 35 |
(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. |
| 5 |
(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 |
| |
| |
| |
| 10 |
Provision protecting directors from liability |
| |
232 | Provisions 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 |
| 15 |
| |
(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 |
| 20 |
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), |
| |
(c) | section 235 (qualifying pension scheme indemnity provision). |
| |
(3) | This section applies to any provision, whether contained in a company’s |
| 25 |
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. |
| |
233 | Provision of insurance |
| |
| Section 232(2) (voidness of provisions for indemnifying directors) does not |
| 30 |
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. |
| |
234 | Qualifying third party indemnity provision |
| |
(1) | Section 232(2) (voidness of provisions for indemnifying directors) does not |
| 35 |
apply to qualifying third party indemnity provision. |
| |
(2) | Third party indemnity provision means provision for indemnity against |
| |
liability incurred by the director to a person other than the company or an |
| |
| |
|
| |
|
| |
|
| Such provision is qualifying third party indemnity provision if the following |
| |
| |
(3) | The provision must not provide any indemnity against— |
| |
(a) | any liability of the director to pay— |
| |
(i) | a fine imposed in criminal proceedings, or |
| 5 |
(ii) | a sum payable to a regulatory authority by way of a penalty in |
| |
respect of non-compliance with any requirement of a regulatory |
| |
nature (however arising); or |
| |
(b) | any liability incurred by the director— |
| |
(i) | in defending criminal proceedings in which he is convicted, or |
| 10 |
(ii) | in defending civil proceedings brought by the company, or an |
| |
associated company, in which judgment is given against him, or |
| |
(iii) | in connection with an application for relief (see subsection (6)) |
| |
in which the court refuses to grant him relief. |
| |
(4) | The references in subsection (3)(b) to a conviction, judgment or refusal of relief |
| 15 |
are to the final decision in the proceedings. |
| |
| |
(a) | a conviction, judgment or refusal of relief becomes final— |
| |
(i) | if not appealed against, at the end of the period for bringing an |
| |
| 20 |
(ii) | if appealed against, at the time when the appeal (or any further |
| |
appeal) is disposed of; and |
| |
(b) | an appeal is disposed of— |
| |
(i) | if it is determined and the period for bringing any further |
| |
| 25 |
(ii) | if it is abandoned or otherwise ceases to have effect. |
| |
(6) | The reference in subsection (3)(b)(iii) to an application for relief is to an |
| |
application for relief under— |
| |
section 1123 (general power of court to grant relief in case of honest and |
| |
| 30 |
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). |
| |
235 | Qualifying pension scheme indemnity provision |
| |
(1) | Section 232(2) (voidness of provisions for indemnifying directors) does not |
| |
apply to qualifying pension scheme indemnity provision. |
| 35 |
(2) | Pension scheme indemnity provision means provision indemnifying a director |
| |
of a company that is a trustee of an occupational pension scheme against |
| |
liability incurred in connection with the company’s activities as trustee of the |
| |
| |
| Such provision is qualifying pension scheme indemnity provision if the |
| 40 |
following requirements are met. |
| |
(3) | The provision must not provide any indemnity against— |
| |
(a) | any liability of the director to pay— |
| |
(i) | a fine imposed in criminal proceedings, or |
| |
|
| |
|
| |
|
(ii) | a sum payable to a regulatory authority by way of a penalty in |
| |
respect of non-compliance with any requirement of a regulatory |
| |
nature (however arising); or |
| |
(b) | any liability incurred by the director in defending criminal proceedings |
| |
in which he is convicted. |
| 5 |
(4) | The reference in subsection (3)(b) to a conviction is to the final decision in the |
| |
| |
| |
(a) | a conviction becomes final— |
| |
(i) | if not appealed against, at the end of the period for bringing an |
| 10 |
| |
(ii) | if appealed against, at the time when the appeal (or any further |
| |
appeal) is disposed of; and |
| |
(b) | an appeal is disposed of— |
| |
(i) | if it is determined and the period for bringing any further |
| 15 |
| |
(ii) | if it is abandoned or otherwise ceases to have effect. |
| |
(6) | In this section “occupational pension scheme” means an occupational pension |
| |
scheme as defined in section 150(5) of the Finance Act 2004 (c. 12) that is |
| |
established under a trust. |
| 20 |
236 | Qualifying 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 |
| 25 |
| |
(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 |
| |
| 30 |
(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 |
| |
| |
(4) | If when a directors’ report is approved qualifying indemnity provision made |
| 35 |
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 |
| 40 |
| |
237 | Copy of qualifying indemnity provision to be available for inspection |
| |
(1) | This section has effect where qualifying indemnity provision is made for a |
| |
director of a company, and applies— |
| |
|
| |
|
| |
|
(a) | to the company of which he is a director (whether the provision is made |
| |
by that company or an associated company), and |
| |
(b) | where the provision is made by an associated company, to that |
| |
| |
(2) | That company or, as the case may be, each of them must keep available for |
| 5 |
| |
(a) | a copy of the qualifying indemnity provision, or |
| |
(b) | if the provision is not in writing, a written memorandum setting out its |
| |
| |
(3) | The copy or memorandum must be kept available for inspection at— |
| 10 |
(a) | the company’s registered office; |
| |
(b) | the place where its register of members is kept available for inspection |
| |
(if not at its registered office); or |
| |
(c) | its principal place of business (if that is situated in the part of the United |
| |
Kingdom in which the company is registered). |
| 15 |
(4) | The copy or memorandum must be retained by the company for at least one |
| |
year from the date of termination or expiry of the provision and must be kept |
| |
available for inspection during that time. |
| |
(5) | The company must give notice to the registrar— |
| |
(a) | of the place at which the copy or memorandum is kept available for |
| 20 |
| |
(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 |
| 25 |
officer of the company who is in default. |
| |
(7) | 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 |
| |
| 30 |
(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. |
| 35 |
238 | Right 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 |
| 40 |
| |
| The copy must be provided within seven days after the request is received by |
| |
| |
|
| |
|