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Companies Act 2006

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Companies Act 2006, Section 205 is up to date with all changes known to be in force on or before 15 August 2018. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations. Help about Changes to Legislation

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  • Act amendment to earlier affecting provision S.I. 2008/373 reg. 11(1) by S.I. 2013/1971 reg. 9(a) (This amendment not applied to legislation.gov.uk. Amending Regulations revoked (1.10.2013) without ever being in force by S.I. 2013/2224, reg. 2)
  • Act amendment to earlier affecting provision S.I. 2008/373 reg. 3(4) by S.I. 2013/1971 reg. 4 (This amendment not applied to legislation.gov.uk. Amending Regulations revoked (1.10.2013) without ever being in force by S.I. 2013/2224, reg. 2)

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205Exception for expenditure on defending proceedings etcE+W+S+N.I.
This section has no associated Explanatory Notes

(1)Approval is not required under section 197, 198, 200 or 201 (requirement of members' approval for loans etc) for anything done by a company—

(a)to provide a director of the company or of its holding company with funds to meet expenditure incurred or to be incurred by him—

(i)in defending any criminal or civil proceedings in connection with any alleged negligence, default, breach of duty or breach of trust by him in relation to the company or an associated company, or

(ii)in connection with an application for relief (see subsection (5)), or

(b)to enable any such director to avoid incurring such expenditure,

if it is done on the following terms.

(2)The terms are—

(a)that the loan is to be repaid, or (as the case may be) any liability of the company incurred under any transaction connected with the thing done is to be discharged, in the event of—

(i)the director being convicted in the proceedings,

(ii)judgment being given against him in the proceedings, or

(iii)the court refusing to grant him relief on the application; and

(b)that it is to be so repaid or discharged not later than—

(i)the date when the conviction becomes final,

(ii)the date when the judgment becomes final, or

(iii)the date when the refusal of relief becomes final.

(3)For this purpose a conviction, judgment or refusal of relief becomes final—

(a)if not appealed against, at the end of the period for bringing an appeal;

(b)if appealed against, when the appeal (or any further appeal) is disposed of.

(4)An appeal is disposed of—

(a)if it is determined and the period for bringing any further appeal has ended, or

(b)if it is abandoned or otherwise ceases to have effect.

(5)The reference in subsection (1)(a)(ii) to an application for relief is to an application for relief under—

  • section 661(3) or (4) (power of court to grant relief in case of acquisition of shares by innocent nominee), or

  • section 1157 (general power of court to grant relief in case of honest and reasonable conduct).

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Modifications etc. (not altering text)

C1Ss. 197-214 modified (22.2.2008) by The Northern Rock plc Transfer Order 2008 (S.I. 2008/432), art. 17(1), Sch. para. 2(i)

C2Ss. 197-214 modified (8.00 a.m. on 29.9.2008) by the The Bradford & Bingley plc Transfer of Securities and Property etc. Order 2008 (S.I. 2008/2546), art. 13(1)(3), Sch. 1 para. 2(i)

C3Ss. 197-214 modified (9.30 a.m. on 7.10.2008) by The Heritable Bank plc Transfer of Certain Rights and Liabilities Order 2008 (S.I. 2008/2644), art. 26, Sch. 2 para. 2(i)

C4Ss. 197-214 modified (retrospective to 30.3.2009 at 8.00 a.m.) by The Amendments to Law (Resolution of Dunfermline Building Society) Order 2009 (S.I. 2009/814), arts. 1(2), 7, Sch. para. 2(i)

Commencement Information

I1S. 205 wholly in force at 1.10.2007; s. 205 not in force at Royal Assent see s. 1300; s. 205 in force at 1.10.2007 by S.I. 2007/2194, art. 2(1)(d) (with saving in art. 12 and subject to transitional adaptations specified in Sch. 1 para. 11 (as amended by S.I. 2007/3495, art. 10(2), S.I. 2008/674, art. 5, Sch. 3 para. 1 and S.I. 2008/2860, art. 6) with transitional provisions and savings in Sch. 3 para. 8, and subject to transitional adaptations (6.4.2008) by S.I. 2007/3495, Sch. 1 para. 1- omitted by virtue of S.I. 2008/674, Sch. 3 para. 5 and revoked by S.I. 2008/2860, art. 6 (subject to Sch. 2 of that Order) (as amended by S.I. 2009/1802, art. 18))

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