Section 226E

An obligation (however arising) to make a payment which would be in contravention of section 226B or 226C has no effect. If a payment is made in contravention of section 226B or 226C— it is held by the recipient on trust for the company or other person making the payment, and in the case of a payment by a company, any director who authorised the payment is jointly and severally liable to indemnify the company that made the payment for any loss resulting from it. If a payment for loss of office is made in contravention of section 226C to a director of a quoted company ... in connection with the transfer of the whole or any part of the undertaking or property of the company or a subsidiary of the company— subsection (2) does not apply, and the payment is held by the recipient on trust for the company whose undertaking or property is or is proposed to be transferred. If a payment for loss of office is made in contravention of section 226C to a director of a quoted company ... in connection with a transfer of shares in the company, or in a subsidiary of the company, resulting from a takeover bid— subsection (2) does not apply, the payment is held by the recipient on trust for persons who have sold their shares as a result of the offer made, and the expenses incurred by the recipient in distributing that sum amongst those persons shall be borne by the recipient and not retained out of that sum. If in proceedings against a director for the enforcement of a liability under subsection (2)(b)— the court may relieve the director, either wholly or in part, from liability on such terms as the court thinks fit. the director shows that he or she has acted honestly and reasonably, and the court considers that, having regard to all the circumstances of the case, the director ought to be relieved of liability,

← 7 · All articles · 1 →

Source: legislation.gov.uk · retrieved 2026-09-04