(1)A company may not—
(a)take part in an arrangement under which—
(i)another person enters into a transaction that, if it had been entered into by the company, would have required approval under section 197, 198, 200 or 201, and
(ii)that person, in pursuance of the arrangement, obtains a benefit from the company or a body corporate associated with it, or
(b)arrange for the assignment to it, or assumption by it, of any rights, obligations or liabilities under a transaction that, if it had been entered into by the company, would have required such approval,
unless the arrangement in question has been approved by a resolution of the members of the company.
(2)If the director or connected person for whom the transaction is entered into is a director of its 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.
(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—
(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—
(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 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 a body corporate that—
(a)is not a UK-registered company, or
(b)is a wholly-owned subsidiary of another body corporate.
(6)In determining for the purposes of this section whether a transaction is one that would have required approval under section 197, 198, 200 or 201 if it had been entered into by the company, the transaction shall be treated as having been entered into on the date of the arrangement.