Companies Act 2006, section 215

Payments for loss of office

Part 10 A company's directors

(1) In this Chapter a “payment for loss of office” means a payment made to a director or past director of a company—

(a)by way of compensation for loss of office as director of the company,

(b)by way of compensation for loss, while director of the company or in connection with his ceasing to be a director of it, of—

(i)any other office or employment in connection with the management of the affairs of the company, or

(ii)any office (as director or otherwise) or employment in connection with the management of the affairs of any subsidiary undertaking of the company,

(c)as consideration for or in connection with his retirement from his office as director of the company, or

(d)as consideration for or in connection with his retirement, while director of the company or in connection with his ceasing to be a director of it, from—

(i)any other office or employment in connection with the management of the affairs of the company, or

(ii)any office (as director or otherwise) or employment in connection with the management of the affairs of any subsidiary undertaking of the company.

(2)The references to compensation and consideration include benefits otherwise than in cash and references in this Chapter to payment have a corresponding meaning.

(3)For the purposes of sections 217 to 221 (payments requiring members' approval)—

(a)payment to a person connected with a director, or

(b)payment to any person at the direction of, or for the benefit of, a director or a person connected with him,

is treated as payment to the director.

(4)References in those sections to payment by a person include payment by another person at the direction of, or on behalf of, the person referred to.

[F169 (5)Nothing in this section or sections 216 to 222 applies in relation to a payment for loss of office to a director of a quoted company F170... other than a payment to which section 226C does not apply by virtue of section 226D(6).F169]

F171(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Read section 215 in the full Act → Definitions (6) Cases (4)

Definitions used in section 215

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
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
subsidiary undertaking

(1) This section (together with Schedule 7) defines “parent undertaking” and “subsidiary undertaking” for the purposes of the Companies Acts.

Defined in s.1162(1) · see it in the full Act
cash

For this purpose “cash” includes foreign currency.

Defined in s.1163(1) · 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
connected with

(1) This section defines what is meant by references in this Part to a director being “connected with” a body corporate.

Defined in s.254(1) · see it in the full Act

Cases considering section 215 (4)

The Children's Investment Fund Foundation (UK) v Attorney General & Ors

[2017] EWHC 1379 (Ch) · 9 June 2017Interprets

Defines a payment for loss of office to include payment as consideration for or in connection with retirement from office. The grant fell within that definition because it was linked to Ms Cooper’s retirement (see paras [80]; [84]-[90]; [101]). Treats payments to a connected person as payments to the director for the approval regime. The court held that payment to BWP was caught because BWP was a body corporate connected with Ms Cooper (see paras [91]-[101]).

Lehtimäki and others v Cooper

[2020] UKSC 33 · 29 July 2020Defines

The grant was a payment made in connection with a director’s retirement from office and therefore fell within the statutory definition of a payment for loss of office. (see paras [10]; [20]) A payment to a person connected with a director is treated as a payment to the director. This brought the grant to the connected charity within the member-approval regime. (see paras [10]; [20])

Lehtimäki v The Children's Investment Fund Foundation (UK) & Ors

[2018] EWCA Civ 1605 · 6 July 2018Defines

The judgment uses the statutory concept of payment for loss of office to explain the unchallenged background to the member-approval issue. The appeal concerned the direction to vote, not this classification. (see para [18]) The judgment records that consideration for or connection with a director’s retirement is included within payment for loss of office. This forms part of the unchallenged statutory background. (see para [18]) The judgment records the statutory treatment of a payment to a person connected with a director as a payment to the director. This forms part of the unchallenged statutory background. (see para [18])

What each judgment says about section 215 is in the case-law panel in the full Act.

Amendments and notes

10 notes from legislation.gov.uk

Amendments

  1. F169S. 215(5) inserted (1.10.2013) by Enterprise and Regulatory Reform Act 2013 (c. 24), ss. 81(4), 103(3) (with s. 82(5)); S.I. 2013/2227, art. 2(h)
  2. F170Words in s. 215(5) omitted (11.5.2025 in relation to a financial year of a company beginning on or after that date) by virtue of The Companies (Directors' Remuneration and Audit) (Amendment) Regulations 2025 (S.I. 2025/439), regs. 1(2), 2(2), 4(1)(a)
  3. F171S. 215(6) omitted (11.5.2025 in relation to a financial year of a company beginning on or after that date) by virtue of The Companies (Directors' Remuneration and Audit) (Amendment) Regulations 2025 (S.I. 2025/439), regs. 1(2), 2(2), 4(1)(b)

Modifications

  1. C388Ss. 215-222 modified (22.2.2008) by The Northern Rock plc Transfer Order 2008 (S.I. 2008/432), art. 17(1), Sch. para. 2(j)
  2. C389Ss. 215-222 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(j)
  3. C390Ss. 215-222 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(j)
  4. C391Ss. 215-222 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(j)
  5. C392Ss. 215-222 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(j)
  6. C393Ss. 215-222 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

Commencement

  1. I74S. 215 wholly in force at 1.10.2007; s. 215 not in force at Royal Assent see s. 1300; s. 215 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.