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Companies Act 2006

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This is the original version (as it was originally enacted).

263Whether permission to be given

This section has no associated Explanatory Notes

(1)The following provisions have effect where a member of a company applies for permission (in Northern Ireland, leave) under section 261 or 262.

(2)Permission (or leave) must be refused if the court is satisfied—

(a)that a person acting in accordance with section 172 (duty to promote the success of the company) would not seek to continue the claim, or

(b)where the cause of action arises from an act or omission that is yet to occur, that the act or omission has been authorised by the company, or

(c)where the cause of action arises from an act or omission that has already occurred, that the act or omission—

(i)was authorised by the company before it occurred, or

(ii)has been ratified by the company since it occurred.

(3)In considering whether to give permission (or leave) the court must take into account, in particular—

(a)whether the member is acting in good faith in seeking to continue the claim;

(b)the importance that a person acting in accordance with section 172 (duty to promote the success of the company) would attach to continuing it;

(c)where the cause of action results from an act or omission that is yet to occur, whether the act or omission could be, and in the circumstances would be likely to be—

(i)authorised by the company before it occurs, or

(ii)ratified by the company after it occurs;

(d)where the cause of action arises from an act or omission that has already occurred, whether the act or omission could be, and in the circumstances would be likely to be, ratified by the company;

(e)whether the company has decided not to pursue the claim;

(f)whether the act or omission in respect of which the claim is brought gives rise to a cause of action that the member could pursue in his own right rather than on behalf of the company.

(4)In considering whether to give permission (or leave) the court shall have particular regard to any evidence before it as to the views of members of the company who have no personal interest, direct or indirect, in the matter.

(5)The Secretary of State may by regulations—

(a)amend subsection (2) so as to alter or add to the circumstances in which permission (or leave) is to be refused;

(b)amend subsection (3) so as to alter or add to the matters that the court is required to take into account in considering whether to give permission (or leave).

(6)Before making any such regulations the Secretary of State shall consult such persons as he considers appropriate.

(7)Regulations under this section are subject to affirmative resolution procedure.

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