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Director's transactions requiring members approval
The Companies Act specifies a number of transactions that require shareholder approval.
1. Where a service contract is, or maybe, longer than two years.
This is a complicated area of the Act and we recommend that advice be sought with regard to long term service contracts.
2. Substantial property transactions.
A company may not enter into an arrangement under which a director of the company or its holding company, or a person connected with such director, acquires or is to acquire from the company (directly or indirectly) a substantial non-cash asset, or the company acquires or is to acquire a substantial non-cash asset (directly or indirectly) from such a director or a person so connected. These provisions apply unless the arrangement has been approved by a resolution of the members of the company or is conditional on such approval being obtained. Substantial is defined in section 191 as an asset that exceeds 10% of the company's asset value and is more than £5,000 or exceeds the sum of £100,000.
Introduction
Historical timetable
- Provisions commenced in January 2007
- Provisions commenced in April 2007
- Provisions commenced from 1 October 2007
- Provisions commenced from 6 April 2008
- Provisions commenced from 1 October 2008
- Provisions commenced from 1 October 2009
The Act in depth
General
- Forming a company
- Choosing a name for your company
- Changing the company name
- Registered office
- A company's members
- Shares and share capital
Directors
- Appointment of directors
- General duties of directors
- Directors transactions requiring members approval
- Loans to directors
- Related director agreements
- Directors' service contracts
- Directors' liabilities
- Records of directors meetings
- Company secretary