Companies Act 2014

• (4) A resolution of a company approving a relevant term shall not be passed at a general meeting of the company unless a written memorandum, setting out the proposed agreement incorporating the term, is available for inspection by members of the company both—

• (a) at the registered office of the company for not less than the period of 15 days ending before the date of the meeting, and

• (b) at the meeting itself.

• (5) If it is proposed to use the means under section 193 or 194, in lieu of passing a resolution at a general meeting of the company, to approve a relevant term those means shall not be used unless a written memorandum setting out the proposed agreement incorporating the relevant term has been circulated to the members of the company (being those entitled to attend and vote at a general meeting of the company) with the proposal for the written resolution.

• (6) A term incorporated in an agreement in contravention of this section shall, to the extent that it contravenes this section, be void and the agreement shall be deemed to contain a term entitling the company to terminate it at any time by the giving of reasonable notice.

• (7) No approval is required to be given under this section by any body corporate unless it is a company formed and registered under this Act, an existing company or a wholly owned subsidiary of a body corporate.

• (8) For the purposes of this section—

“employment” includes employment under a contract for services;

“group”, in relation to a director of a holding company, means the group which consists of that company and its subsidiaries.

250. Anti-avoidance provision — section 249

250. (1) In any case where—

• (a) a person is or is to be employed with a company under an agreement which cannot be terminated by the company by the giving of notice or can be so terminated only in specified circumstances, and

• (b) more than 6 months before the expiration of the period for which he or she is or is to be so employed, the company enters into a further agreement (otherwise than in pursuance of a right conferred by or by virtue of the original agreement on the other party to it) under which he or she is to be employed with the company, or where he or she is a director of a holding company, within the group,

the definition of “relevant term” in section 249 shall apply as if to the period for which the person is to be employed under that further agreement there were added a further period equal to the unexpired period of the original agreement.

• (2) Where subsection (1) has effect in relation to the definition of “relevant term” in section 249, subsection (6) of that section has effect as if there were substituted “the agreement and the original agreement referred to in section 250(1) shall each be deemed to contain a term entitling the company to terminate it at any time by the giving of reasonable notice” for “the agreement shall be deemed to contain a term entitling the company to terminate it at any time by the giving of reasonable notice”.

• (3) For the purposes of this section “employment” and “group” have the same meaning as they have for the purposes of section 249.

251. Approval of company necessary for payment by it to director or directors’ dependants for loss of office

251. (1) It shall not be lawful for a company to make to any director of the company any payment by way of compensation for loss of office or as consideration for or in connection with his or her retirement from office, unless the following conditions are first satisfied.

• (2) Those conditions are—

• (a) particulars relating to the proposed payment (including the amount of it) are disclosed to the members of the company, and

• (b) the proposal is approved by resolution of the company in general meeting.

• (3) Without prejudice to the exceptions provided for by section 254(5), a payment made bona fide in discharge of an existing legal obligation does not fall within this section.

252. Approval of company necessary for payment to director of compensation in connection with transfer of property

252. (1) It shall not be lawful in connection with the transfer of the whole or any part of the undertaking or property of a company for any payment to be made to any director of the company by way of compensation for loss of office or as consideration for or in connection with his or her retirement from office, unless the following conditions are first satisfied.

• (2) Those conditions are—

• (a) particulars relating to the proposed payment (including the amount of it) are disclosed to the members of the company, and

• (b) the proposal is approved by resolution of the company in general meeting.

• (3) Where a payment which is not lawful under subsection (1) is made to a director of a company the amount received shall be deemed to have been received by him or her in trust for the company.

• (4) Without prejudice to the exceptions provided for by section 254(5), a payment made bona fide in discharge of an existing legal obligation does not fall within this section.

253. Duty of director to disclose to company payments to be made to him or her in connection with transfer of shares in company

253. (1) The following duty arises on the part of a director where, in connection with the transfer to any persons of all or any of the shares in a company being a transfer resulting from:

• (a) an offer made to the general body of shareholders, or

• (b) an offer made by or on behalf of some other body corporate with a view to the company becoming its subsidiary or a subsidiary of its holding company, or

• (c) an offer made by or on behalf of an individual with a view to his or her obtaining the right to exercise or control the exercise of not less than one-third of the voting power at any general meeting of the company, or

• (d) any other offer which is conditional on acceptance to a given extent,

a payment is to be made to that director of the company by way of compensation for loss of office or as a consideration for or in connection with his or her retirement from office.

• (2) That duty on the part of that director is to take all reasonable steps to secure that particulars of the proposed payment (including the amount of it) are included in or sent with any notice of the offer made for their shares which is given to any shareholders.

• (3) Without prejudice to the exceptions provided for by section 254(5), a payment to be made, or that is made, bona fide in discharge of an existing legal obligation does not fall within this section.

• (4) If—

• (a) any such director fails to take reasonable steps as mentioned in subsection (2), or

• (b) any person who has been properly required by any such director to include the particulars specified in that subsection in, or send them with, any such notice so mentioned fails to do so,

he or she shall be guilty of a category 3 offence.

• (5) Unless—

• (a) the requirements of subsections (1) and (2) are complied with in relation to any such payment as is mentioned in subsection (1), and

• (b) the making of the proposed payment is, before the transfer of any shares in pursuance of the offer, approved by a meeting summoned for the purpose of the holders of the shares to which the offer relates and of other holders of shares of the same class as any of those shares,

any sum received by the director on account of the payment shall be deemed to have been received by him or her in trust for any persons who have sold their shares as a result of the offer made and the expenses incurred by him or her in distributing that sum amongst those persons shall be borne by him or her and not retained out of that sum.

• (6) Where the shareholders referred to in paragraph (b) of subsection (5) are not all the members of the company and no provision is made by the constitution for summoning or regulating such a meeting as is mentioned in that paragraph, the provisions of—

• (a) this Part and the rest of Parts 1 to 14, and

• (b) the company’s constitution,

relating to general meetings of the company shall, for that purpose, apply to the meeting either without modification or with such modifications as the F107[Authority], on the application of any person concerned, may direct for the purpose of adapting them to the circumstances of the meeting.

• (7) If at a meeting summoned for the purpose of approving any payment as required by paragraph (b) of subsection (5), a quorum is not present and after the meeting has been adjourned to a later date a quorum is again not present, the payment shall be deemed for the purposes of that subsection to have been approved.

254. “Existing legal obligation”— definition and other provisions in relation to sections 251 to 253

254. (1) “Existing legal obligation” for the purposes of—

• (a) section 251(3), means an obligation of the company concerned, or any body corporate associated with it, that was not entered into in connection with, or in consequence of, the event giving rise to the payment for loss of office in question,

• (b) sections 252(4) and 253(3), means an obligation of the person making, or proposing to make, the payment that was not entered into for the purposes of, in connection with or in consequence of, the transfer in question.

• (2) In the case of a payment to which both sections 251 and 252 apply, or to which both sections 251 and 253 apply, paragraph (a) of subsection (1) and not paragraph (b) of it shall have effect.

• (3) Where in proceedings for the recovery of any payment which it is alleged is recoverable as having, by virtue of—

• (a) subsections (1) and (3) of section 252, or

• (b) subsections (1), (2) and (5) of section 253,

been received by any person in trust, it is shown that—

• (i) the payment was made in pursuance of any arrangement entered into as part of the agreement for the transfer in question or within one year before or 2 years after the date of that agreement or the offer leading to it, and

• (ii) the company or any person to whom the transfer was made was privy to that arrangement,

the payment shall be deemed, except in so far as the contrary is shown, to be one to which the subsections concerned apply.

• (4) If, in connection with any such transfer as is mentioned in section 252 or 253—

• (a) the price to be paid to a director of the company for any shares in the company held by him or her is in excess of the price which could at the time have been obtained by other holders of the like shares, or

• (b) any valuable consideration is given to any such director,

the excess or the money value of the consideration, as the case may be, shall, for the purposes of that section, be deemed to have been a payment made to him or her by way of compensation for loss of office or as consideration for or in connection with his or her retirement from office.

• (5) References in sections 251 to 253 to payments to any director of a company by way of compensation for loss of office or as consideration for or in connection with his or her retirement from office include references to payments to him or her by way of compensation for—

• (a) loss of office as director of the company,

• (b) the loss, while director of the company, or on or in connection with his or her ceasing to be a director of the company, of any other office in connection with the management of the company’s affairs or of any office as director or otherwise in connection with the management of the affairs of any subsidiary,

but do not include references to any bona fide payment by way of—

• (i) damages for breach of contract, or

• (ii) pension in respect of past services,

and, for the purposes of this subsection, “pension” includes any superannuation allowance, superannuation gratuity or similar payment.

• (6) Nothing in section 251 or 252 shall be taken to prejudice—

• (a) the operation of any rule of law requiring disclosure to be made with respect to any such payments as are mentioned in that section or with respect to any other like payments made or to be made to the directors of a company, or

• (b) the operation of any rule of law or enactment in relation to the accountability (if any) of any director for any such payment received by him or her.

• (7) References in sections 251 to 253 and this section to a director include references to a past director.

• (8) For the purposes of subsection (1)(a) a body corporate is associated with a company if one is the subsidiary of the other or both are subsidiaries of the same body corporate.

255. Contracts with sole members

255. (1) Subject to subsection (2), where a single-member company enters into a contract with the sole member of the company and the sole member also represents the company in the transaction, whether as a director or otherwise, the single-member company shall, unless the contract is in writing, ensure that the terms of the contract are forthwith set out in a written memorandum or are recorded in the minutes of the first meeting of the directors of the company following the making of the contract.

• (2) Subsection (1) shall not apply to contracts entered into in the ordinary course of the company’s business.

• (3) If a company fails to comply with subsection (1), the company and any officer of it who is in default shall be guilty of a category 3 offence.

• (4) Subject to subsection (5), nothing in this section shall be taken to prejudice the operation of any other enactment (including a provision of this Act) or rule of law applying to contracts between a company and a director of that company.

• (5) Failure to comply with subsection (1) with respect to a contract shall not affect the validity of that contract.

CHAPTER 5 Disclosure of interests in shares and debentures

256. Interpretation generally (Chapter 5)

256. (1) In this Chapter—

• (a) “body corporate of the same group” means, in relation to a company, a body corporate which belongs to the same group of companies as that company belongs to;

• (b) “child” does not include a person who has attained the age of majority; and

• (c) a reference to a child of a director or secretary shall be deemed to include a reference to a child of the director’s civil partner or (as the case may be) the secretary’s civil partner who is ordinarily resident with (as the case may be)—

• (i) the director and the civil partner, or

• (ii) the secretary and the civil partner.

• (2) For the avoidance of doubt, the use of the words “aggregate interest” in any provision of this Chapter, with reference to the interest of a director or secretary and the spouse (or civil partner) and children of the director or secretary in shares or debentures, does not operate to limit the provision’s effect (and, accordingly, does not prevent the director or secretary having the benefit of the provision) in either the situation where—

• (a) the director or secretary alone has an interest in shares or debentures reckonable for the purposes of the provision, or

• (b) one or more, but not all, of any foregoing class of persons has or have alone such a reckonable interest.

257. “Disclosable interest” — meaning of that term

257. (1) Subject to section 260, in this Chapter “disclosable interest” means, in relation to shares or debentures, any interest of any kind whatsoever in shares in, or debentures of, a body corporate.

• (2) For that purpose there shall be disregarded any restraints or restrictions to which the exercise of any right attached to the interest is or may be subject.

• (3) It is also immaterial—

• (a) whether or not the interest is held alone, jointly or in common with any other person, or

• (b) whether the shares or debentures are identifiable or not.

258. Circumstances in which person is to be regarded as having disclosable interest in shares or debentures

258. (1) Without prejudice to the other circumstances in which a person may have such an interest, a person shall, for the purposes of this Chapter, be regarded as having a disclosable interest in shares or debentures if—

• (a) the person enters into a contract for the purchase by him or her of them (whether for cash or other consideration),

• (b) the person is the registered holder or joint holder of them,

• (c) not being the registered holder, the person is entitled to exercise any right conferred by the holding of those shares or debentures or is entitled to control the exercise of any such right,

• (d) a body corporate is interested in them and—

• (i) that body corporate or its directors are accustomed to act in accordance with the person’s directions or instructions, or

• (ii) the person is entitled to exercise or control the exercise of one third or more of the voting power at general meetings of that body corporate,

• (e) otherwise than by virtue of having an interest under a trust—

• (i) the person has a right to call for delivery of the shares or debentures to himself or herself or to his or her order, or

• (ii) the person has a right to acquire an interest in shares or debentures, or is under an obligation to take an interest in shares or debentures,

whether in any case the right or obligation is conditional or absolute,

• (f) the person is a beneficiary of a trust and—

• (i) the property held on trust for that beneficiary includes any interest in shares or debentures, and

• (ii) that person, apart from this paragraph, does not have an interest in the shares or debentures.

• (2) For the purpose of subsection (1)(c), a person shall be taken to be entitled to exercise or control the exercise of any right conferred by the holding of shares or debentures if he or she—

• (a) has a right (whether subject to conditions or not), the exercise of which would make him or her so entitled, or

• (b) is under an obligation (whether so subject or not), the fulfilment of which would make him or her so entitled.

• (3) For the purpose of subsection (1)(d)—

• (a) “voting power” does not include any power to vote which arises only in specified circumstances,

• (b) where a person is entitled to exercise or control the exercise of one third or more of the voting power at general meetings of a body corporate and that body corporate is entitled to exercise or control the exercise of any of the voting power at general meetings of another body corporate (the “relevant voting power”), then, for the purposes of that provision, the relevant voting power shall be taken to be exercisable by that person.

259. Circumstances in which person shall be regarded as having ceased to have disclosable interest

259. A person shall, amongst other circumstances, be taken to have ceased to have a disclosable interest in shares or debentures for the purposes of this Chapter upon—

• (a) delivery to another person’s order of the shares or debentures in fulfilment of a contract for the purchase of them by that other person or in satisfaction of a right of his or her to call for delivery of them, or

• (b) failure by another person to deliver the shares or debentures in accordance with the terms of a contract or pursuant to a right to call for delivery of them, or

• (c) the lapse of that person’s right to call for delivery of the shares or debentures.

260. Interests that are not disclosable interests for the purposes of this Chapter

260. The following interests shall not constitute disclosable interests for the purposes of this Chapter—

• (a) where property is held on trust and an interest in shares or debentures is comprised in that property—

• (i) an interest in reversion or remainder,

• (ii) an interest of a bare trustee, or

• (iii) any discretionary interest,

• (b) an interest of a person subsisting by virtue of—

• (i) his or her holding—

• (I) units in an authorised unit trust scheme within the meaning of the Unit Trusts Act 1990,

• (II) units in an undertaking for collective investment in transferable securities within the meaning of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (S.I. No. 352 of 2011), or

• (III) shares in an investment company within the meaning of Part 24,

or

• (ii) a scheme made under section 46 of the Charities Act 1961,

• (c) an interest for the life of himself or herself or of another person under a settlement in the case of which the property comprised in the settlement consists of or includes shares or debentures, and—

• (i) the settlement is irrevocable, and

• (ii) the settlor (within the meaning of section 10 of the Taxes Consolidation Act 1997) has no interest in any income arising under, or property comprised in, the settlement,

• (d) an interest in shares or debentures held by a member of an authorised market operator carrying on business as a stock broker which is held by way of security only for the purposes of a transaction entered into by the person or other body concerned in the ordinary course of business of such person or other body,

• (e) any power or discretion vested in a person by virtue only of such person having been duly appointed as or acting as—

• (i) an attorney of a person with an interest in shares or debentures,

• (ii) a proxy of a member of, or holder of debentures in, a company or a representative of a body corporate which is a member of the holder of debentures of a company,

• (f) any interest in shares in, or debentures of, a body corporate where the aggregate interest of the director or secretary and spouse (or civil partner) and children of such director or secretary is in—

• (i) shares representing 1 per cent or less, in nominal value, of the body corporate’s issued share capital of a class carrying rights to vote in all circumstances at general meetings of the body corporate (provided that the temporary suspension of voting rights in respect of shares comprised in issued share capital of a body corporate of any such class shall be disregarded), or

• (ii) shares or debentures not carrying the right to vote at general meetings of the body corporate, save a right to vote which arises only in specified circumstances,

• (g) as regards circumstances in which an offer is made in relation to shares in a body corporate, being an offer—

• (i) to which the Irish Takeover Panel Act 1997 or the European Communities (Takeover Bids (Directive 2004/25/EC)) Regulations 2006 (S.I. No. 255 of 2006) applies or apply, and

• (ii) which is conditional on acceptance to a given extent,

an interest in those shares that would have arisen but for the offer not being accepted to the required extent,

• (h) such interests, or interests of such a class, as may be prescribed for the purposes of this subsection.

261. Duty to notify disclosable interests — first of the 5 cases in which duty arises — interests held at commencement of Chapter

261. (1) Subject to subsection (3) and section 264, a person who, at the commencement of this Chapter—

• (a) is a director or secretary of a company, and

• (b) is aware of—

• (i) the person’s having, or

• (ii) the person’s spouse or civil partner or a child of the person’s having,

a disclosable interest in shares in, or debentures of, that company (the “relevant company”) or a body corporate of the same group,

has the following duty.

• (2) That duty is to notify the relevant company in writing of the particulars specified in section 265 of the disclosable interest and the fact of its being so held.

• (3) That duty does not arise if—

• (a) the nature of the disclosable interest concerned is such as to constitute an interest of the kind specified in section 54 of the Act of 1990, and

• (b) the relevant company has—

• (i) before the commencement of this section, been notified, in accordance with Part IV of the Act of 1990, of the particulars required by that Part in relation to that interest, or

• (ii) received, not later than 5 days after the commencement of this section, such particulars in relation to that interest by way of such a notification (being a notification sent not later than that commencement).

262. Second and third cases in which duty to notify arises — interests acquired or ceasing to be held

262. (1) Subject to section 264, a person who—

• (a) is a director or secretary of a company, and

• (b) becomes aware of—

• (i) the person’s having acquired or having ceased to have, or

• (ii) the person’s spouse or civil partner, or a child of the person’s, having acquired or having ceased to have,

a disclosable interest in shares in, or debentures of, that company (the “relevant company”) or any body corporate of the same group,

has the following duty.

• (2) That duty is to notify the relevant company in writing of the particulars specified in section 265 of the disclosable interest and the fact of its being so acquired or, as the case may be, of its so ceasing to be held.

• (3) Subject to section 264, a person who—

• (a) becomes aware of—

• (i) the person’s having, or

• (ii) the person’s spouse or civil partner or a child of the person’s having,

a disclosable interest in shares in, or debentures of, a company (the “relevant company”) or a body corporate of the same group, and

• (b) becomes a director or secretary of the relevant company (not being the secretary of the relevant company at the time of so becoming a director or not being a director at the time of so becoming the secretary of the relevant company),

has the following duty.

• (4) That duty is to notify the relevant company in writing of the particulars specified in section 265 of the disclosable interest and the fact of its being so held.

263. Fourth and fifth cases in which duty to notify arises — grant or assignment of subscription rights, etc.

263. (1) Subject to section 264, a director or secretary of a company (the “relevant company”) who—

• (a) (i) is granted by another body corporate of the same group a right to subscribe for shares in, or debentures of, that other body corporate, or

• (ii) exercises such a right so granted,

or

• (b) becomes aware of a spouse or civil partner of the director’s or secretary’s or a child of the director’s or secretary’s—

• (i) having been granted by such a body corporate such a right of subscription, or

• (ii) having exercised such a right so granted,

has, subject to subsection (3) and (5), the following duty.

• (2) That duty is to notify the relevant company in writing of—

• (a) the grant of the right of subscription, or the exercise of it, referred to in paragraph (a) or (b) of the preceding subsection (or, as the case may be, both the things referred to in those paragraphs),

• (b) the number or amount, and class, of shares or debentures involved and the consideration payable, and

• (c) if section 265(6) applies, the address there mentioned.

• (3) If a director or secretary, at the time of the thing referred to in subsection (1)(a) being done, is not aware of the fact of the thing being done (the “relevant fact”) by reason of—

• (a) in the case of the thing referred to in subsection (1)(a)(i), the grantor of the right not informing the director or secretary immediately of the grant,

• (b) in the case of the thing referred to in subsection (1)(a)(ii), the thing being done on behalf of the director or secretary by another person pursuant to an authority conferred on the person by the director or secretary, or

• (c) in either such case, other exceptional circumstances,

then the duty under subsection (2), with respect to that thing, only arises on the director or secretary becoming aware of the relevant fact.

• (4) However, in any proceedings (civil or criminal) it shall be presumed, unless the contrary is shown, that none of the circumstances referred to in subsection (3) applies.

• (5) If the aggregate interest of the director or secretary and spouse (or civil partner) and children of such director or secretary in shares in the body corporate concerned (both before and after the occurrence of the event or events referred to in subsection (2)(a)) is such as to fall within section 260(f)(i), then the duty of notification under subsection (2) does not arise.

• (6) Subject to section 264, a director or secretary of a company (the “relevant company”) who—

• (a) enters into a contract to sell shares in, or debentures of, the relevant company or any body corporate of the same group,

• (b) assigns a right granted to him or her by the relevant company or a body corporate of the same group to subscribe for shares in, or debentures of, the relevant company or such body corporate, or

• (c) becomes aware of a spouse or civil partner of the director’s or secretary’s or a child of the director’s or secretary’s—

• (i) having entered into a contract to sell such shares or debentures, or

• (ii) having assigned a right that has been granted to the spouse, civil partner or child by the relevant company or such body corporate to subscribe for shares in, or debentures of, the relevant company or such body corporate,

has, subject to subsection (8) and (10), the following duty.

• (7) That duty is to notify the relevant company in writing of—

• (a) the entering into of the contract or the assigning of the right referred to in paragraph (a), (b) or (c) of the preceding subsection (or, as the case may be, the doing of 2 or more of the things referred to in those paragraphs),

• (b) the number or amount, and class, of shares or debentures involved and the consideration payable, and

• (c) if section 265(6) applies, the address there mentioned.

• (8) If a director or secretary, at the time of the thing referred to in subsection (6)(a) or (b) being done, is not aware of the fact of the thing being done (the “relevant fact”) by reason of—

• (a) the thing being done on behalf of the director or secretary by another person pursuant to an authority conferred on the person by the director or secretary, or

• (b) other exceptional circumstances,

then the duty under subsection (7), with respect to that thing, only arises on the director or secretary becoming aware of the relevant fact.

• (9) However, in any proceedings (civil or criminal) it shall be presumed, unless the contrary is shown, that none of the circumstances referred to in subsection (8) applies.

• (10) If the aggregate interest of the director or secretary and spouse (or civil partner) and children of such director or secretary in shares in the body corporate concerned (before the occurrence of the event or events referred to in subsection (7)(a)) is such as to fall within section 260(f)(i), then the duty of notification under subsection (7) does not arise.

264. Application of sections 261 to 263 and exceptions to them

264. (1) With respect to the application of sections 261 to 263 (by virtue of sections 221 and 222) to shadow directors and de facto directors, the making of a notification by a person under section 261, 262 or 263 shall not, in itself, be proof that the person making the notification is a shadow director or de facto director.

• (2) Nothing in sections 261 to 263 shall operate so as to impose an obligation with respect to shares in a body corporate which is the wholly owned subsidiary of another body corporate.

• (3) Nothing in sections 261 to 263 shall operate to impose an obligation on a director or secretary of a company who is granted an option to subscribe for shares in, or debentures of, that company to make any notification to that company in respect of such grant.

265. Mode of notification by directors and secretaries under this Chapter

265. (1) In relation to the acquisition or disposal by a director or secretary of a company of shares or debentures the means specified in subsection (2) shall, if the director or secretary opts to use them, constitute a sufficient notification in writing to the company, for the purposes of this Chapter, of the fact of their acquisition or disposal and the particulars of the disclosable interest.

• (2) Those means are the delivery, within 30 days after the date of the instrument, to the company of an instrument of transfer in respect of the shares or debentures, being an instrument that identifies—

• (a) the director or secretary by name,

• (b) the shares or debentures in question,

• (c) the purchase or sale price therefor, and

• (d) if subsection (6) applies, the address there mentioned.

• (3) In any case not falling within subsection (1) or where the director or secretary opts not to use the foregoing means in a case falling within subsection (1), the following means shall be used to notify in writing, for the purpose of section 261 or 262, the fact of a disclosable interest being held or of its being acquired or being ceased to be held (as the case may be) and the particulars thereof.

• (4) Those means are the delivery to the company concerned (within 8 days after the date of the event giving rise to the duty to make the notification) of a statement in writing by or on behalf of the director or secretary containing the following particulars:

• (a) a statement that the director or secretary, or his or her spouse or civil partner or a child of the director or secretary (as the case may be) has, has acquired or has ceased to have (as the case may be) a disclosable interest in shares in, or debentures of, the company or a body corporate of the same group,

• (b) the number of shares or debentures and their class, and a statement of the names of the registered holders of the shares or debentures,

• (c) in the case of an acquisition or disposal of shares or debentures, the consideration payable therefor, and

• (d) if subsection (6) applies, the address there mentioned.

• (5) The notification referred to in section 263(2) or (7) shall be made to the company within 5 days after the date of the event giving rise to the duty to make the notification; in a case where the circumstances referred to in subsection (3) or (8) of section 263 apply, the date of the event giving rise to the duty to make the notification is the date on which the director or secretary becomes aware of the relevant fact referred to in that subsection (3) or (8).

• (6) A shadow director or de facto director shall, in any notification made by him or her under this Chapter, specify his or her address and this applies whether the notification is in respect of himself or herself or a spouse or civil partner of such director or a child of such director.

266. Enforcement of notification obligation

266. (1) Where a person authorises any other person (the “agent”) to acquire or dispose of, on his or her behalf, interests in shares in, or debentures of, a company, the person shall secure that the agent notifies him or her immediately of acquisitions or disposals of interests in such shares or debentures effected by the agent which will or may give rise to any duty on the person’s part to make a notification under this Chapter with respect to his or her interest in those shares or debentures.

• (2) Subject to the subsequent provisions of this section, where a person fails to fulfil, within the period specified by this Chapter in that behalf, a duty to which he or she is, by virtue of section 261, 262 or 263, subject, no right or interest of any kind whatsoever in respect of the shares or debentures concerned shall be enforceable by him or her, whether directly or indirectly, by action or legal proceeding.

• (3) Where any right or interest is restricted under subsection (2)—

• (a) any person in default as is mentioned in that subsection or any other person affected by such restriction may apply to the court for relief against a disability imposed by or arising out of that subsection,

• (b) the court, on being satisfied that the default was accidental or due to inadvertence or some other sufficient cause or that on other grounds it is just and equitable to grant relief, may grant such relief either generally or as respects any particular right or interest, on such terms and conditions as it sees fit,

• (c) where an applicant for relief under this subsection is a person referred to in subsection (2), the court may not grant such relief if it appears that the default has arisen as a result of any deliberate act or omission on the part of the applicant.

• (4) Where a director or secretary is in default as mentioned in subsection (2), then, notwithstanding that default, that subsection shall not apply in respect of the shares or debentures concerned if the following condition is satisfied.

• (5) That condition is that the identity of the director or secretary and his or her holding, acquisition and disposal (as the case may be) of the shares or debentures in question and the consideration paid or payable therefor has, from not later than 30 days after the date the duty arose, been apparent on the face of all or any of the following registers or documents of the company concerned (including some or all of them when consulted together), namely—

• (a) the register of members,

• (b) the register of directors and secretaries,

• (c) the register of interests under section 267,

• (d) documents made available by that company with those registers.

• (6) If a company in general meeting passes a special resolution providing that the following protection shall apply in favour of a third party having the following dealing in relation to shares in, or debentures of, the company specified in the resolution then, upon production of a copy of such resolution by the secretary of the company to the third party, a third party having any dealing with the company or the registered holder of the shares or debentures in question shall be entitled to presume, without further enquiry, that—

• (a) the provisions of this Chapter have been complied with in relation to the shares or debentures, and

• (b) the registered holder is entitled to deal with the shares or debentures registered in his or her name.

• (7) Subsection (2) shall not apply to a duty relating to a person ceasing to be interested in shares in, or debentures of, a company.

• (8) A person who fails without reasonable excuse to comply with subsection (1) shall be guilty of a category 3 offence.

• (9) A person who fails to fulfil, within the period specified in this Chapter in that behalf, a duty to which he or she is, by virtue of section 261, 262 or 263, subject shall be guilty of a category 3 offence.

• (10) Where before the commencement of this section, default has been made in complying with section 53 of the Act of 1990 in relation to shares in, or debentures of, a company, the board of directors of the company, at any time before the expiry of 18 months after that commencement, may, if authorised by an ordinary resolution of the company in that behalf, resolve that any restrictions that continue to operate (by virtue of section 58(3) of the Act of 1990) in relation to the shares or debentures shall, on and from the time of their so resolving, cease to operate if—

• (a) the person upon whom the duty to make the notification concerned under that section 53 fell presents evidence (by way of affidavit or such other satisfactory means as the board may specify) to the board that the default concerned was inadvertent, and

• (b) the board is satisfied from that evidence that the default was inadvertent,

and, where the board so resolves, such restrictions shall cease to operate accordingly.

267. Register of interests: contents and entries

267. (1) A company shall keep a register of interests (the “register of interests”) for the purposes of this Chapter.

• (2) Sections 215 to 217 (rights of inspection, requests for copies, etc.) apply to the register of interests.

• (3) Whenever the company receives information from a director or secretary of the company in consequence of the fulfilment of a duty to which he or she is, by virtue of section 261, 262 or 263, subject, the company shall within 3 days after the date of such receipt enter in the register of interests that information and the date of the entry.

• (4) A company shall, whenever it grants to a director or secretary of the company a right to subscribe for shares in, or debentures of, the company, enter in the register of interests against his or her name—

• (a) the date on which the right is granted,

• (b) the period during which or time at which it is exercisable,

• (c) the consideration for the grant (or, if it be the case that there is no consideration, that fact), and

• (d) the description of shares or debentures involved and the number or amount thereof, and the price to be paid therefor.

• (5) Whenever such a right as is mentioned in subsection (4) is exercised by a director or secretary, the company shall enter in the register of interests against his or her name—

• (a) that fact (identifying the right),

• (b) the number or amount of shares or debentures in respect of which it is exercised, and

• (c) if it be the case that they were registered in his or her name, that fact, and if not, the name or names of the person or persons in whose name or names they were registered, together (if they were registered in the names of 2 persons or more) with the number or amount thereof registered in the name of each of them.

• (6) The register of interests shall be so made up that the entries in it against the several names inscribed in it appear in chronological order.

• (7) The nature and extent of an interest recorded in the register of interests of a director or secretary in any shares or debentures shall, if he or she so requires, be recorded in that register.

• (8) A company shall not, by virtue of anything done for the purposes of this section, be affected with notice of, or put upon inquiry as to, the rights of any person in relation to any shares or debentures.

• (9) If default is made by a company in complying with subsection (1) or any of subsections (3) to (7), the company and any officer of it who is in default shall be guilty of a category 3 offence.

268. Supplemental provisions in relation to section 267

268. (1) Unless the register under section 267 is in such a form as to constitute in itself an index, the company shall keep an index of the names entered in it which shall—

• (a) in respect of each name, contain a sufficient indication to enable the information inscribed against it to be readily found, and

• (b) be kept at the same place as the register,

and the company shall, within 14 days after the date on which a name is entered in the register, make any necessary alteration in the index.

• (2) In addition to the requirements of section 216, the register shall be, and remain, open and accessible to any person attending an annual general meeting of the company concerned at least one quarter hour before the appointed time for the commencement of the meeting and during the continuance of the meeting.

• (3) If default is made by a company in complying with subsection (1) or (2), the company and any officer of it who is in default shall be guilty of a category 3 offence.

269. Register of interests: removal of entries from it

269. (1) A company may remove an entry against a person’s name from the register required to be kept by it under section 267 (the “register”) if more than 6 years have elapsed after the date of the entry being made, and either—

• (a) that entry recorded the fact that the person in question has ceased to have an interest notifiable under this Chapter in shares in, or debentures of, the company, or

• (b) it has been superseded by a later entry made under section 267 against the same person’s name,

and, in a case falling within paragraph (a), the company may also remove that person’s name from the register.

• (2) Where a company removes a name from the register pursuant to subsection (1), the company shall, within 14 days after the date of that removal, make any necessary alterations in any associated index.

• (3) Entries in the register shall not be deleted except in accordance with subsections (1) and (2).

• (4) If an entry is deleted from the register in contravention of subsection (1), the company concerned shall restore that entry to the register as soon as is reasonable and practicable.

• (5) If default is made by a company in complying with subsection (2), (3) or (4), the company and any officer of it who is in default shall be guilty of a category 3 offence.

CHAPTER 6 Responsibilities of officers of company — provisions explaining what being “in default” means and presumption regarding that matter

270. Meaning of “in default” in context of sanctions specified in respect of officers (whether directors or secretaries or not)

270. (1) For the purposes of any provision of this Act which provides that an officer of a company who is in default shall be guilty of an offence, an officer who is in default is any officer who authorises or who, in breach of his or her duty as such officer, permits the default mentioned in the provision.

• (2) In this section “default” includes a refusal to do a thing or a contravention of a provision.

271. Presumption that default permitted and certain defence

271. (1) In this section—

• (a) “basic facts concerning the default” means such of the facts, relating to the one or more acts or omissions that constituted the default, as can reasonably be regarded as indicating, at the relevant time, the general character of those acts or omissions,

• (b) “permitted”, in relation to the default, means permitted in breach of the defendant’s duty as an officer of the company concerned,

• (c) “relevant proceedings” means proceedings for an offence under a provision of this Act, being a provision which provides that an officer of a company who is in default shall be guilty of an offence,

• (d) a reference to a defendant in those proceedings is a reference to—

• (i) the defendant, or

• (ii) if there is more than one defendant, each of the one or more persons, other than the company, alleged to be in default,

being, in every case, a person who was an officer of the company at the relevant time.

• (2) In relevant proceedings, where it is proved that the defendant was aware of the basic facts concerning the default concerned, it shall be presumed that the defendant permitted the default unless the defendant shows that he or she took all reasonable steps to prevent it or that, by reason of circumstances beyond the defendant’s control, was unable to do so.

F108[Chapter 7 Early warning tools

271A. Early warning tools

271A. (1) A director may have regard to early warning tools.

• (2) For the purposes of this section, an early warning tool means a mechanism to alert the directors of the company to circumstances that could give rise to a likelihood that the company concerned will be unable to pay its debts (within the meaning of section 509(3)) and can identify the restructuring frameworks available to the company and signal to such directors the need to act without delay.]

PART 6 FINANCIAL STATEMENTS, ANNUAL RETURN AND AUDIT

CHAPTER 1 Preliminary

272. What this Part contains and use of prefixes — “Companies Act” and “IFRS”

272. (1) This Part contains the provisions regarding—

• (a) the accounting records to be kept, and the financial statements to be prepared, by companies,

• (b) the periodic returns to be made by companies to the Registrar, and

• (c) the auditing of financial statements of companies and matters related to the auditing of them and, in particular, the rules governing the appointment of statutory auditors to, and their removal from, office.

• (2) Those financial statements shall be prepared in accordance with (as this Part authorises)—

• (a) the requirements of F109[Schedule 3, 3A, 3B, 4 or 4A, as the case may be,] and the relevant requirements of this Part, or

• (b) international financial reporting standards and the relevant requirements of this Part,

and the prefix—

• (i) “Companies Act” is used in references in this Part to financial statements that must comply with the requirements referred to in paragraph (a), and

• (ii) “IFRS” is used in references in this Part to financial statements that must comply with the requirements referred to in paragraph (b).

273. Overall limitation on discretions with respect to length of financial year and annual return date

273. (1) The discretions of a company under this Part with respect to the length of its financial year or to its annual return date are subject to the overall limitation that those discretions must be exercised in a manner that results in compliance by the company with the following requirement.

• (2) That requirement is that which arises under section 347(4) relating to the earliest date to which the documents annexed to an annual return must be made up.

274. Interpretation (Part 6): provisions relating to financial statements

274. (1) In this Part—

“abridged financial statements”, in relation to a company, means the financial statements of the company F110[prepared in accordance with section 353], as appropriate;

“balance sheet”, in relation to a company, means a statement of assets, liabilities and financial position drawn up at a particular date showing the assets, liabilities and equity of the company at that date in a manner required by the financial reporting framework adopted by the company, and—

• (a) for the avoidance of doubt, where the financial statements are prepared in accordance with IFRS, the expression means the statement of financial position referred to in those standards, and

• (b) subsection (3) supplements this definition;

“Companies Act entity financial statements” shall be read in accordance with section 290;

“Companies Act financial statements” means Companies Act entity financial statements or Companies Act group financial statements;

“Companies Act group financial statements” shall be read in accordance with section 293;

“entity financial statements” means, in relation to a company, a summary (as at a particular date) respecting the company alone (as distinct from the company and any subsidiary undertakings) of its assets, liabilities and financial position, together with its profit or loss, since the date of its previous financial statements and generally comprises—

• (a) a balance sheet,

• (b) a profit and loss account, and

• (c) other statements and notes attached to the foregoing and forming part of them,

and the expression “entity”, where used in relation to such a balance sheet or profit and loss account, shall be read accordingly;

“financial reporting framework” means the collective provisions and requirements (and, in particular, the applicable accounting standards) applied in the preparation of financial statements;

“financial statements”, in relation to a company, means entity financial statements and any group financial statements;

“group” means a holding undertaking and all its subsidiary undertakings;

“group financial statements” means, in relation to a holding company, a summary (as at a particular date) respecting the assets, liabilities and financial position of the company and its subsidiary undertakings as a whole, together with the profit or loss of the company and its subsidiary undertakings as a whole, since the date of the previous financial statements and generally comprises—

• (a) a consolidated balance sheet,

• (b) a consolidated profit and loss account, and

• (c) other consolidated statements and notes attached to the foregoing and forming part of them,

and the expression “group”, where used in relation to such a balance sheet or profit and loss account, shall be read accordingly;

“IAS Regulation” means Regulation (EC) No. 1606/2002 of the European Parliament and of the Council of 19 July 2002 and a reference to Article 4 of that Regulation is, in the case of a private company limited by shares, a reference to Article 5 of that Regulation;

“IFRS” means international financial reporting standards;

“IFRS entity financial statements” shall be read in accordance with section 290;

“IFRS financial statements” means IFRS entity financial statements or IFRS group financial statements;

“IFRS group financial statements” shall be read in accordance with section 293;

“international financial reporting standards” means the international financial reporting standards, within the meaning of the IAS Regulation, adopted from time to time by the Commission of the European Union in accordance with the IAS Regulation;

“non-statutory financial statements”—

• (a) in relation to a company, means any balance sheet or profit and loss account, or summary or abstract of a balance sheet or profit and loss account, relating to a financial year of the company that is published by the company otherwise than as part of the statutory financial statements of the company for that financial year, and

• (b) in relation to a holding company, includes any information purporting to be a consolidated balance sheet or consolidated profit and loss account, or a summary or abstract of a consolidated balance sheet or consolidated profit and loss account, of the group consisting of the holding company and its subsidiary undertakings that is published otherwise than as part of the statutory financial statements of that group for that financial year,

and “non-statutory entity financial statements” shall be read accordingly;

“profit and loss account”, in relation to a company, means a statement of performance of the company showing revenues, expenses, gains and losses earned and incurred by the company during a period in a manner required by the financial reporting framework adopted by the company, and—

• F111[(a) for the avoidance of doubt—

• (i) in the case where the financial statements are prepared in accordance with IFRS, the expression means a statement of profit or loss and other comprehensive income or equivalent term referred to in those standards, and

• (ii) in the case of a company not trading for the acquisition of gain by its members, the expression means an income and expenditure account, and references to—

• (I) a profit and loss account, and

• (II) in the case of group financial statements, a consolidated profit and loss account,

shall be read accordingly, and]

• (b) subsection (4) supplements this definition;

“statutory financial statements”, in relation to a company, means—

• (a) in the case of a company that is not a holding company or is a holding company that has availed itself of an exemption under this Part from the requirement to prepare group financial statements, the entity financial statements required by section 290, and

• (b) in the case of a holding company that prepares group financial statements, the group financial statements required by section 293 together with the entity financial statements required by section 290.

• (2) References in this Act to financial statements giving a true and fair view are references—

• (a) in the case of Companies Act entity financial statements, to the requirement under section 291 that the entity financial statements prepared in accordance with that section give a true and fair view of the assets, liabilities, financial position and profit or loss of the company alone (as distinct from the company and any subsidiary undertakings),

• (b) in the case of Companies Act group financial statements, to the requirement under section 294 that the group financial statements prepared in accordance with that section give a true and fair view of the assets, liabilities, financial position and profit or loss of the company and the subsidiary undertakings included in the consolidation taken as a whole, so far as concerns the members of the company, and

• (c) in the case of IFRS entity financial statements and IFRS group financial statements, to the equivalent requirement under international financial reporting standards to present fairly the assets, liabilities, financial position, financial performance and cash flows of the company or group concerned.

• (3) References in this Part to a company’s balance sheet include references to notes to the company’s financial statements giving information relating to the balance sheet, being information that is both—

• (a) required by any provision of this Act (including IFRS or other applicable accounting standards), and

• (b) required or permitted by any such provision to be given in a note to those financial statements.

• (4) References in this Part to a company’s profit and loss account include references to notes to the company’s financial statements giving information relating to the profit and loss account, being information that is both—

• (a) required by any provision of this Act (including IFRS or other applicable accounting standards), and

• (b) required or permitted by any such provision to be given in a note to those financial statements.

• (5) References in this Act to an undertaking being included in—

• (a) the consolidation in relation to group financial statements, or

• (b) consolidated group financial statements,

shall be read as references to the undertaking being included in the financial statements by the method of full (and not proportional) consolidation, and references to an undertaking being excluded from consolidation shall be read accordingly.

• (6) A requirement imposed on the directors of a company to prepare financial statements is satisfied by the financial statements being caused to be prepared by the directors.

275. Interpretation (Part 6): other definitions and construction provisions

275. (1) In this Part F112[and Part 26]—

F113["Accounting Directive" means Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013² on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC;]

“accounting standards” means—

• (a) statements of accounting standards, and

• (b) any written interpretation of those standards,

issued by a body or bodies prescribed for the purposes of this definition under section 943(1)(h);

F113["amount of turnover", in relation to a company, means the amount of the turnover shown in the company’s profit and loss account;]

“associated undertaking” has the meaning given to it by F114[paragraph 21 of Schedule 4 or 4A, as the case may be];

“audit committee” means the committee established under section 167;

“audit exemption”, unless expressly provided otherwise, means—

• (a) other than in Chapter 15, the audit exemption under that Chapter or Chapter 16, or

• (b) in Chapter 15, the audit exemption under that Chapter;

“audit of the statutory financial statements” means work required to fulfil the duties imposed under section 336 on a statutory auditor of a company;

F113["balance sheet total", in relation to a company, means the aggregate of the amounts shown as assets in the company’s balance sheet;]

“credit institution” means—

• (a) a company or undertaking that is the holder of a licence under section 9 of the Central Bank Act 1971,

• (b) a company or undertaking engaged solely in the making of hire purchase agreements F115[(within the meaning of the Consumer Credit Act 1995)] and credit sale agreements (within the meaning of that Act), in respect of goods owned by the company or undertaking,

• (c) a company or undertaking engaged in the business of accepting deposits F115[or other repayable funds from the public and] granting credit for its own account, or

• (d) a company or undertaking that is a trustee savings bank licensed under the Trustee Savings Banks Act 1989;

“equity share capital” or “equity shares” means, in relation to a company, its allotted share capital excluding any part of it which, neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution;

“fellow subsidiary undertakings” means 2 or more undertakings that are subsidiary undertakings of the same holding undertaking but which are not the holding undertaking or subsidiary undertaking of each other;

“group undertaking”, in relation to an undertaking, means an undertaking which is—

• (a) a holding undertaking or subsidiary undertaking of that undertaking, or

• (b) a subsidiary undertaking of any holding undertaking of that undertaking;

“higher holding undertaking” means an undertaking that is the holding undertaking of an undertaking that is itself a holding undertaking;

“holding undertaking” has the same meaning as “holding company” in section 8 has save that “company” in section 8 shall, for the purposes of this definition, include, as well as a body corporate—

• (a) a partnership, and

• (b) an unincorporated body of persons,

falling within the definition of “undertaking” in this subsection;

F113["ineligible entities" means undertakings that—