(1)A director of a company must not accept a benefit from a third party conferred by reason of—
(a)his being a director, or
(b)his doing (or not doing) anything as director.
(2) A “third party” means a person other than the company, an associated body corporate or a person acting on behalf of the company or an associated body corporate.
(3)Benefits received by a director from a person by whom his services (as a director or otherwise) are provided to the company are not regarded as conferred by a third party.
(4)This duty is not infringed if the acceptance of the benefit cannot reasonably be regarded as likely to give rise to a conflict of interest.
(5)Any reference in this section to a conflict of interest includes a conflict of interest and duty and a conflict of duties.
Cases considering section 176 (28)
[2026] EWHC 1906 (Ch) · 24 July 2026
The court refused permission for the section 176 claim because no benefit was shown to have been received by reason of the first defendant’s office as an OIL director. Any fees or dividends from Cobogo would arise from his position in Cobogo. (see para [131])
[2026] EWHC 77 (Ch) · 19 January 2026
The court treated the directors’ duties under section 176, together with sections 171 to 175 and 177, as applying to the handling of the claimant SPVs and found breaches arising from improper payments and conflicts of interest (see paras [308]-[309]).
[2021] EWHC 765 (Ch) · 31 March 2021
The court applied the prohibition on receiving benefits from third parties where the receipt could reasonably be regarded as likely to give rise to a conflict. The Alpine Fund commission was treated as an account-bearing profit and a company asset (see paras [64(h)]; [364]).
8 more judgments, and what each says about section 176, are in the
case-law panel in the full Act.
344.This section codifies the rule prohibiting the exploitation of the position of director for personal benefit. This duty prohibits the acceptance of benefits (including bribes). The acceptance of a benefit giving rise to an actual or potential conflict of interest will fall within the duty to avoid conflicts of interest (section 175) as well as this duty. This specific duty dealing with benefits from third parties is not subject to any provision for board authorisation.
345.Any current ability of the members of a company to authorise the acceptance of benefits which would otherwise be a breach of this duty is preserved by section 180(4).
346.The duty is not infringed if the acceptance of the benefit cannot reasonably be regarded as likely to give rise to a conflict of interest. Benefits conferred by the company (and its holding company or subsidiaries) do not fall within this duty.