Part 14

Control of political donations and expenditure

Remedies in case of unauthorised donations or expenditure

Liability of directors in case of unauthorised donation or expenditure
369
1
This section applies where a company has made a political donation or incurred political expenditure without the authorisation required by this Part.
2
The directors in default are jointly and severally liable—
a
to make good to the company the amount of the unauthorised donation or expenditure, with interest, and
b
to compensate the company for any loss or damage sustained by it as a result of the unauthorised donation or expenditure having been made.
3
The directors in default are—
a
those who, at the time the unauthorised donation was made or the unauthorised expenditure was incurred, were directors of the company by which the donation was made or the expenditure was incurred, and
b
where—
i
that company was a subsidiary of a relevant holding company, and
ii
the directors of the relevant holding company failed to take all reasonable steps to prevent the donation being made or the expenditure being incurred,
the directors of the relevant holding company.
4
For the purposes of subsection (3)(b) a “relevant holding company” means a company that, at the time the donation was made or the expenditure was incurred—
a
was a holding company of the company by which the donation was made or the expenditure was incurred,
b
was a UK-registered company, and
c
was not a subsidiary of another UK-registered company.
5
The interest referred to in subsection (2)(a) is interest on the amount of the unauthorised donation or expenditure, so far as not made good to the company—
a
in respect of the period beginning with the date when the donation was made or the expenditure was incurred, and
b
at such rate as the Secretary of State may prescribe by regulations.
Section 379(2) (construction of references to date when donation made or expenditure incurred) does not apply for the purposes of this subsection.
6
Where only part of a donation or expenditure was unauthorised, this section applies only to so much of it as was unauthorised.
S. 369 wholly in force at 1.11.2007; s. 369 not in force at Royal Assent, see s. 1300; s. 369 in force for specified purposes at 20.1.2007 by S.I. 2006/3428, art. 3(3) (subject to art. 5, Sch. 1 and with arts. 6, 8, Sch. 5); s. 369 in force at 1.10.2007 (E.W.S.) and at 1.11.2007 (N.I.) by S.I. 2007/2194, arts. 2(2), 3(1), (with saving in art. 12 and with transitional provisions and savings in Sch. 3)
Pt. 14 applied (with modifications) (1.10.2009) by The Unregistered Companies Regulations 2009 (S.I. 2009/2436), regs. 3-5, Sch. 1 para. 16 (with transitional provisions and savings in regs. 7, 9, Sch. 2)
Ss. 362-379 applied (with modifications) (1.10.2009) by The Unregistered Companies Regulations 2009 (S.I. 2009/2436), regs. 3-5, Sch. 1 para. 9 (with transitional provisions and savings in regs. 7, 9, Sch. 2)
Pts. 1-39 (except for Pt. 7 and ss. 662-669), 45-47 extended (12.5.2011) by The Companies Act 2006 (Consequential Amendments and Transitional Provisions) Order 2011 (S.I. 2011/1265), art. 5(1), Sch. 1 para. 2
Pts. 1-39 modified (31.12.2020) by Regulation (EC) No. 2157/2001, Art. AAA1(3) (as inserted by The European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2018 (S.I. 2018/1298), regs. 1, 97 (with regs. 140-145) (as amended by S.I. 2020/523, regs. 1(2), 5(a)-(f)); 2020 c. 1, Sch. 5 para. 1(1))