Companies Act 2006, section 191

Meaning of “substantial”

Part 10 A company's directors

(1) This section explains what is meant in section 190 (requirement of approval for substantial property transactions) by a “substantial” non-cash asset.

(2)An asset is a substantial asset in relation to a company if its value—

(a)exceeds 10% of the company's asset value and is more than £5,000, or

(b)exceeds £100,000.

(3) For this purpose a company's “asset value” at any time is—

(a)the value of the company's net assets determined by reference to its most recent statutory accounts, or

(b)if no statutory accounts have been prepared, the amount of the company's called-up share capital.

(4) A company's “statutory accounts” means its annual accounts prepared in accordance with Part 15, and its “most recent” statutory accounts means those in relation to which the time for sending them out to members (see section 424) is most recent.

(5)Whether an asset is a substantial asset shall be determined as at the time the arrangement is entered into.

Read section 191 in the full Act → Definitions (4) Cases (7)

Definitions used in section 191

non-cash asset

(1) In the Companies Acts “non-cash asset” means any property or interest in property, other than cash.

Defined in s.1163(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
called-up share capital

“called-up share capital”, in relation to a company, means so much of its share capital as equals the aggregate amount of the calls made on its shares (whether or not those calls have been paid), together with—

(a)

any share capital paid up without being called, and

(b)

any share capital to be paid on a specified future date under the articles, the terms of allotment of the relevant shares or any other arrangements for payment of those shares; and

Defined in s.547 · 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

Cases considering section 191 (7)

Neil Leslie Humphrey & Anor v Paul Craig Bennett & Ors

[2025] EWHC 448 (Ch) · 28 February 2025Defines

The court applied the statutory definition of a substantial non-cash asset and found no dispute that the Wyken Grange Land satisfied it. (see paras [68]-[70])

Rudan Business Holding SA v Tridan Trusted Advisors AG & Ors

[2025] EWHC 3565 (Ch) · 17 February 2026

The court considered the issue whether the transactions were substantial within section 191. Because the issue had already been introduced before the original budget and the relevant valuation dates were known, additional expert costs were not treated as arising from a significant development (see paras [58], [61.1.1]).

Turbo-K Ltd v Turbo-K International Ltd

[2020] EWHC 2078 (Ch) · 5 August 2020Defines

Considers, without deciding, whether goodwill in the name and logo was a substantial non-cash asset by reference to the statutory value thresholds. (see paras [64]-[65])

What each judgment says about section 191 is in the case-law panel in the full Act.

Amendments and notes

7 notes from legislation.gov.uk

Modifications

  1. C287Ss. 190-196 modified (1.3.2016) by The NRAM plc (formerly Northern Rock plc) Consequential and Supplementary Provisions Order 2016 (S.I. 2016/114), arts. 1(1), 7(1), (3), Sch. para. 1(h)
  2. C288Ss. 190-196 modified (16.7.2026) by The Modification of the Law (British Steel Limited Property Transfer) Regulations 2026 (S.I. 2026/833), regs. 1(2), 6(2), Sch. para. 1
  3. C289Ss. 190-196 modified (22.2.2008) by The Northern Rock plc Transfer Order 2008 (S.I. 2008/432), art. 17(1), Sch. para. 2(h)
  4. C290Ss. 190-196 modified (8.00 a.m. on 29.9.2008) by the The Bradford & Bingley plc Transfer of Securities and Property etc. Order 2008 (S.I. 2008/2546), art. 13(1)(3), Sch. 1 para. 2(h)
  5. C291Ss. 190-196 modified (9.30 a.m. on 7.10.2008) by The Heritable Bank plc Transfer of Certain Rights and Liabilities Order 2008 (S.I. 2008/2644), art. 26, Sch. 2 para. 2(h)
  6. C292Ss. 190-196 modified (retrospective to 30.3.2009 at 8.00 a.m.) by The Amendments to Law (Resolution of Dunfermline Building Society) Order 2009 (S.I. 2009/814), arts. 1(2), 7, Sch. para. 2(h)

Commencement

  1. I50S. 191 wholly in force at 1.10.2007; s. 191 not in force at Royal Assent see s. 1300; s. 191 in force at 1.10.2007 by S.I. 2007/2194, art. 2(1)(d) (with saving in art. 12 and subject to transitional adaptations specified in Sch. 1 and with transitional provisions and savings in Sch. 3) this amendment is subject to savings and/or transitional provisions, see the commentary.