C5Part 10A company's directors
Chapter 4Transactions with directors requiring approval of members
Substantial property transactions
I1C4190C1C2C3Substantial property transactions: requirement of members' approval
1
A company may not enter into an arrangement under which—
a
a director of the company or of its holding company, or a person connected with such a director, acquires or is to acquire from the company (directly or indirectly) a substantial non-cash asset, or
b
the company acquires or is to acquire a substantial non-cash asset (directly or indirectly) from such a director or a person so connected,
unless the arrangement has been approved by a resolution of the members of the company or is conditional on such approval being obtained.
For the meaning of “substantial non-cash asset” see section 191.
2
If the director or connected person is a director of the company's holding company or a person connected with such a director, the arrangement must also have been approved by a resolution of the members of the holding company or be conditional on such approval being obtained.
3
A company shall not be subject to any liability by reason of a failure to obtain approval required by this section.
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.
5
For the purposes of this section—
a
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 (payments requiring members' approval).
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