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Companies (Single Member Private Limited Companies) Regulations (Northern Ireland) 1992

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Contracts with sole members

3.—(1) In Part XI of the 1986 Order, after Article 330A(1) insert—

Contracts with sole members who are directors

330B.(1) Subject to paragraph (2), where a private company limited by shares or by guarantee having only one member enters into a contract with the sole member of the company and the sole member is also a director of the company, the company shall, unless the contract is in writing, ensure that the terms of the contract are either 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) Paragraph (1) shall not apply to contracts entered into the ordinary course of the company’s business.

(3) For the purposes of this Article a sole member who is a shadow director is treated as a director.

(4) If a company fails to comply with paragraph (1), the company and every officer of it who is in default is liable to a fine.

(5) Subject to paragraph (6), nothing in this Article shall be construed as excluding the operation of any other statutory provision or rule of law applying to contracts between a company and a director of that company.

(6) Failure to comply with paragraph (1) with respect to a contract shall not affect the validity of that contract..

(2) In Article 9 of the 1986 Order (“director” and “shadow director”), in paragraph (3) after “Article 328 to 330 (substantial property transactions involving directors);” delete “and” and insert “Article 330B (contracts with sole members who are directors); and”.

(3) In Schedule 23 to the 1986 Order (punishment of offences), after the entry relating to Article 326(8) insert—

330B(4)Terms of unwritten contract between sole member of a private company limited by shares or by guarantee and the company not set out in a written memorandum or recorded in minutes of a directors' meeting.Summary.A fine of £2,000..
(1)

Article 330A was inserted into the 1986 Order by Article 45 of the Companies (No. 2) (Northern Ireland) Order 1990 (S.I. 1990/1504 (N.I. 10))

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