|
| |
|
the arrangement must also have been approved by a resolution of the members |
| |
| |
(3) | A resolution approving an arrangement to which this section applies must not |
| |
be passed unless a memorandum setting out the matters mentioned in |
| |
subsection (4) is made available to members— |
| 5 |
(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— |
| 10 |
(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 matters that would have to be disclosed if the company were |
| 15 |
seeking approval of the transaction to which the arrangement relates, |
| |
(b) | the nature of the arrangement, and |
| |
(c) | the extent of the company’s liability under the arrangement or any |
| |
transaction connected with it. |
| |
(5) | No approval is required under this section on the part of the members of— |
| 20 |
(a) | a body corporate that is not— |
| |
(i) | a company as defined in section 1 of this Act, or |
| |
(ii) | a body registered under the Companies Acts by virtue of |
| |
section 1006 (bodies not formed under Companies Acts but |
| |
| 25 |
(b) | a body corporate that is a wholly-owned subsidiary of another body |
| |
| |
(6) | In determining for the purposes of this section whether a transaction is one that |
| |
would have required approval under section 198 or 200 if it had been entered |
| |
into by the company, the transaction shall be treated as having been entered |
| 30 |
into on the date of the arrangement. |
| |
203 | Exception for expenditure on company business |
| |
(1) | Approval is not required under section 198 or 200 (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, or a |
| 35 |
person connected with any such director, with funds to meet |
| |
expenditure incurred or to be incurred by him— |
| |
(i) | for the purposes of the company, or |
| |
(ii) | for the purpose of enabling him properly to perform his duties |
| |
as an officer of the company, or |
| 40 |
(b) | to enable any such person to avoid incurring such expenditure. |
| |
(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, |
| 45 |
| |
|
| |
|
| |
|
204 | Exception for expenditure on defending proceedings etc |
| |
(1) | Approval is not required under section 198 or 200 (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— |
| 5 |
(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)), |
| |
| 10 |
(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 |
| 15 |
| |
(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— |
| 20 |
(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; |
| 25 |
(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 |
| |
| 30 |
(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 1123 (general power of court to grant relief in case of honest and |
| |
| 35 |
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). |
| |
205 | Exception for expenditure in connection with regulatory action or |
| |
| |
Approval is not required under section 198 or 200 (requirement of members’ |
| 40 |
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 |
| |
| |
(i) | in an investigation by a regulatory authority, or |
| 45 |
(ii) | against action proposed to be taken by a regulatory authority, |
| |
|
| |
|
| |
|
| in connection with any alleged negligence, default, breach of duty or |
| |
breach of trust by him in relation to the company, or |
| |
(b) | to enable any such director to avoid incurring such expenditure. |
| |
206 | Exceptions for minor and business transactions |
| |
(1) | Approval is not required under section 198 for a company to make a loan or |
| 5 |
quasi-loan, or to give a guarantee or provide security in connection with a loan |
| |
or quasi-loan, if the aggregate of— |
| |
(a) | the value of the transaction, and |
| |
(b) | the value of any other relevant transactions or arrangements, |
| |
| 10 |
(2) | Approval is not required under section 200 for a company to enter into a credit |
| |
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 |
| |
| 15 |
(b) | the value of any other relevant transactions or arrangements, |
| |
| |
(3) | Approval is not required under section 200 for a company to enter into a credit |
| |
transaction, or to give a guarantee or provide security in connection with a |
| |
| 20 |
(a) | the transaction 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 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 |
| 25 |
financial standing but unconnected with the company. |
| |
207 | Exceptions for intra-group transactions |
| |
(1) | Approval is not required under section 198 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 |
| 30 |
loan or quasi-loan made to an associated body corporate. |
| |
(2) | Approval is not required under section 200— |
| |
(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 |
| 35 |
transaction entered into by any person for the benefit of an associated |
| |
| |
208 | Exceptions for money-lending companies |
| |
(1) | Approval is not required under section 198 for the making of a loan or quasi- |
| |
loan, or the giving of a guarantee or provision of security in connection with a |
| 40 |
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 |
| |
| |
|
| |
|
| |
|
(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 |
| 5 |
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 |
| 10 |
(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— |
| 15 |
(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- |
| 20 |
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. |
| |
209 | Other relevant transactions or arrangements |
| |
(1) | This section has effect for determining what are “other relevant transactions or |
| 25 |
arrangements” for the purposes of any exception to section 198 or 200. |
| |
| 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 |
| 30 |
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 |
| 35 |
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, |
| |
| 40 |
(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. |
| |
(5) | A transaction or arrangement entered into by a company that at the time it was |
| 45 |
| |
|
| |
|
| |
|
(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, |
| |
| 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 |
| 5 |
exception, it is no longer such a subsidiary. |
| |
210 | The value of transactions and arrangements |
| |
(1) | For the purposes of sections 198 to 213 (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 |
| 10 |
be the value so determined reduced by any amount by which the |
| |
liabilities of the person for whom the transaction or arrangement was |
| |
| |
(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 |
| 15 |
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 |
| 20 |
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 202 (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 |
| 25 |
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, |
| |
| |
(b) | whether or not any liability under the transaction or arrangement has |
| 30 |
| |
| its value is deemed to exceed £50,000. |
| |
211 | The person for whom a transaction or arrangement is entered into |
| |
For the purposes of sections 198 to 213 (loans etc) the person for whom a |
| |
transaction or arrangement is entered into is— |
| 35 |
(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 |
| |
| |
(c) | in the case of a guarantee or security, the person for whom the |
| 40 |
transaction is made in connection with which the guarantee or security |
| |
| |
(d) | in the case of an arrangement within section 202 (related |
| |
arrangements), the person for whom the transaction is made to which |
| |
| 45 |
|
| |
|