Companies Act 2006, section 180

Consent, approval or authorisation by members

Part 10 A company's directors

(1)In a case where—

(a)section 175 (duty to avoid conflicts of interest) is complied with by authorisation by the directors, or

(b)section 177 (duty to declare interest in proposed transaction or arrangement) is complied with,

the transaction or arrangement is not liable to be set aside by virtue of any common law rule or equitable principle requiring the consent or approval of the members of the company.

This is without prejudice to any enactment, or provision of the company's constitution, requiring such consent or approval.

(2)The application of the general duties is not affected by the fact that the case also falls within Chapter 4 (transactions requiring approval of members)[F163 or 4AF163] , except that where [F164either of those ChaptersF164] applies and—

(a)approval is given under [F165the Chapter concernedF165] , or

(b)the matter is one as to which it is provided that approval is not needed,

it is not necessary also to comply with section 175 (duty to avoid conflicts of interest) or section 176 (duty not to accept benefits from third parties).

(3)Compliance with the general duties does not remove the need for approval under any applicable provision of Chapter 4 (transactions requiring approval of members)[F166 or 4AF166] .

(4)The general duties—

(a)have effect subject to any rule of law enabling the company to give authority, specifically or generally, for anything to be done (or omitted) by the directors, or any of them, that would otherwise be a breach of duty, and

(b)where the company's articles contain provisions for dealing with conflicts of interest, are not infringed by anything done (or omitted) by the directors, or any of them, in accordance with those provisions.

(5)Otherwise, the general duties have effect (except as otherwise provided or the context otherwise requires) notwithstanding any enactment or rule of law.

Read section 180 in the full Act → Definitions (5) Cases (14)

Definitions used in section 180

director

In the Companies Acts “director” includes any person occupying the position of director, by whatever name called.

Defined in s.250 · see it in the full Act
member

(2) In sub-paragraph (1) “member” has the same meaning as it has by virtue of section 7(1) of that Act .

Defined in Sch.2 Pt.1 · see it in the full Act
company

“company” means a company formed and registered under this Act, that is—

(a)

a company so formed and registered after the commencement of this Part, or

(b)

a company that immediately before the commencement of this Part—

(i)

was formed and registered under the Companies Act 1985 (c. 6) or the Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)), or

(ii)

was an existing company for the purposes of that Act or that Order,

(which is to be treated on commencement as if formed and registered under this Act).

Defined in s.1(1) · see it in the full Act

(4) In this section and that Schedule “company” includes any body corporate.

Defined in s.1159(4) · see it in the full Act
enactment

In this Act, unless the context otherwise requires, “enactment” includes—

(a)an enactment contained in subordinate legislation within the meaning of the Interpretation Act 1978 (c. 30),

(aa)an enactment contained in, or in an instrument made under, a Measure or Act of the National Assembly for Wales,

(b)an enactment contained in, or in an instrument made under, an Act of the Scottish Parliament, and

(c)an enactment contained in, or in an instrument made under, Northern Ireland legislation within the meaning of the Interpretation Act 1978.

Defined in s.1293 · see it in the full Act
articles

(4) References in the Companies Acts to a company's “articles” are to its articles of association.

Defined in s.18(4) · see it in the full Act

Cases considering section 180 (14)

Jetivia SA and another v Bilta (UK) Limited (in liquidation) and others

[2015] UKSC 23 · 22 April 2015Limits

The section’s treatment of the effect and possible authorisation of directors’ duties formed part of the debate over whether statutory policy independently defeated the illegality defence (see paras [103]-[105]). The provisions recognise that a company may in principle authorise conduct which would otherwise breach directors’ general duties. Lord Sumption considered this relevant but insufficiently developed to establish an independent statutory-policy answer to illegality (see para [104]). The general duties have effect notwithstanding other enactments or rules of law. Read with section 172(3), this supported rejection of an illegality defence that would undermine directors’ duties protecting creditors of an insolvent company (see paras [125]; [128]-[130]).

Northern Powerhouse Developments Limited & Ors v Gavin Lee Woodhouse

[2023] EWHC 3124 (Ch) · 20 December 2023Limits

Limits reliance on statutory consent, approval, authorisation or ratification where the companies were insolvent or facing probable insolvency. The defendant could not rely on section 180 to avoid liability. (see paras [175], [190], [227])

Fairford Water Ski Club Ltd v Cohoon & Ors

[2020] EWHC 290 (Comm) · 28 February 2020Interprets

The court treated section 180(4) as requiring strict compliance with the company’s articles where those articles provide the relevant conflict procedure. Non-compliance did not permit a defence based on substantial or technical compliance (see paras [62]-[70]; [88]-[104]).

What each judgment says about section 180 is in the case-law panel in the full Act.

Amendments and notes

5 notes from legislation.gov.uk

Amendments

  1. F163Words in s. 180(2) substituted (1.10.2013) by Enterprise and Regulatory Reform Act 2013 (c. 24), ss. 81(2)(a)(i), 103(3); S.I. 2013/2227, art. 2(h)
  2. F164Words in s. 180(2) substituted (1.10.2013) by Enterprise and Regulatory Reform Act 2013 (c. 24), ss. 81(2)(a)(ii), 103(3); S.I. 2013/2227, art. 2(h)
  3. F165Words in s. 180(2)(a) substituted (1.10.2013) by Enterprise and Regulatory Reform Act 2013 (c. 24), ss. 81(2)(b), 103(3); S.I. 2013/2227, art. 2(h)
  4. F166Words in s. 180(3) inserted (1.10.2013) by Enterprise and Regulatory Reform Act 2013 (c. 24), ss. 81(2)(c), 103(3); S.I. 2013/2227, art. 2(h)

Modifications

  1. C248S. 180(2) modified (1.10.2008) by The Companies Act 2006 (Commencement No. 5, Transitional Provisions and Savings) Order 2007 (S.I. 2007/3495), art. 9, Sch. 4 para. 49 (with savings in arts. 7, 12)