Valid from 01/10/2007
371Enforcement of directors' liabilities by shareholder action: supplementaryU.K.
(1)A group of members may not bring proceedings under section 370 in the name of a company unless—
(a)the group has given written notice to the company stating—
(i)the cause of action and a summary of the facts on which the proceedings are to be based,
(ii)the names and addresses of the members comprising the group, and
(iii)the grounds on which it is alleged that those members constitute an authorised group; and
(b)not less than 28 days have elapsed between the date of the giving of the notice to the company and the bringing of the proceedings.
(2)Where such a notice is given to a company, any director of the company may apply to the court within the period of 28 days beginning with the date of the giving of the notice for an order directing that the proposed proceedings shall not be brought, on one or more of the following grounds—
(a)that the unauthorised amount has been made good to the company;
(b)that proceedings to enforce the liability have been brought, and are being pursued with due diligence, by the company;
(c)that the members proposing to bring proceedings under this section do not constitute an authorised group.
(3)Where an application is made on the ground mentioned in subsection (2)(b), the court may as an alternative to directing that the proposed proceedings under section 370 are not to be brought, direct—
(a)that such proceedings may be brought on such terms and conditions as the court thinks fit, and
(b)that the proceedings brought by the company—
(i)shall be discontinued, or
(ii)may be continued on such terms and conditions as the court thinks fit.
(4)The members by whom proceedings are brought under section 370 owe to the company in whose name they are brought the same duties in relation to the proceedings as would be owed by the company's directors if the proceedings were being brought by the company.
But proceedings to enforce any such duty may be brought by the company only with the permission of the court.
(5)Proceedings brought under section 370 may not be discontinued or settled by the group except with the permission of the court, which may be given on such terms as the court thinks fit.
Modifications etc. (not altering text)
C1Ss. 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)
Commencement Information
I1S. 371 wholly in force at 1.11.2007; s. 371 not in force at Royal Assent see s. 1300; s. 371 in force at 1.10.2007 (E.W.S.) and s. 371 in force 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)