Companies Act 2006, section 239

Ratification of acts of directors

Part 10 A company's directors

(1)This section applies to the ratification by a company of conduct by a director amounting to negligence, default, breach of duty or breach of trust in relation to the company.

(2)The decision of the company to ratify such conduct must be made by resolution of the members of the company.

(3)Where the resolution is proposed as a written resolution neither the director (if a member of the company) nor any member connected with him is an eligible member.

(4)Where the resolution is proposed at a meeting, it is passed only if the necessary majority is obtained disregarding votes in favour of the resolution by the director (if a member of the company) and any member connected with him.

This does not prevent the director or any such member from attending, being counted towards the quorum and taking part in the proceedings at any meeting at which the decision is considered.

(5)For the purposes of this section—

(a) “conduct” includes acts and omissions;

(b) “director” includes a former director;

(c)a shadow director is treated as a director; and

(d) in section 252 (meaning of “connected person”), subsection (3) does not apply (exclusion of person who is himself a director).

(6)Nothing in this section affects—

(a)the validity of a decision taken by unanimous consent of the members of the company, or

(b)any power of the directors to agree not to sue, or to settle or release a claim made by them on behalf of the company.

(7)This section does not affect any other enactment or rule of law imposing additional requirements for valid ratification or any rule of law as to acts that are incapable of being ratified by the company.

Read section 239 in the full Act → Definitions (7) Cases (15)

Definitions used in section 239

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
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
written resolution

(1) In the Companies Acts a “written resolution” means a resolution of a private company proposed and passed in accordance with this Chapter.

Defined in s.288(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
shadow director

(1) In the Companies Acts “shadow director”, in relation to a company, means a person in accordance with whose directions or instructions the directors of the company are accustomed to act.

Defined in s.251(1) · 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

Cases considering section 239 (15)

John McCarthy v Ivor Desmond Marshall & Anor

[2026] EWHC 1585 (Ch) · 26 June 2026

Confirms that shareholder approval may ratify a director’s breach, subject to the applicable limits. The court treated positive agreement by all members as sufficient in principle, while holding that acquiescence alone was insufficient. (see paras [46]-[47]; [125]; [130]-[131])

Northern Powerhouse Developments Limited & Ors v Gavin Lee Woodhouse

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

Limits reliance on member ratification. Ratification was unavailable because there was no member independent of the defendant or a person connected with him who could pass the necessary resolution. (see paras [175], [190], [227])

Anthony Davidson and Andrew McTear (acting as Joint Liquidators of Kieran Looney & Co Ltd) v Kieran Joseph Looney

[2023] EWHC 197 (Ch) · 2 February 2023

Ratification ordinarily requires a member resolution excluding the interested director’s vote. The court held that no informed ratification had occurred and that the unlawful distributions were incapable of ratification. (see paras [78]-[81]) The provision preserves unanimous informal consent. The court applied the requirement that members must have considered, understood and decided to approve the relevant conduct. (see paras [79]-[81])

What each judgment says about section 239 is in the case-law panel in the full Act.

Explanatory note

441.This section preserves the current law on ratification of acts of directors, but with one significant change. Any decision by a company to ratify conduct by a director amounting to negligence, default, breach of duty or breach of trust in relation to the company must be taken by the members, and without reliance on the votes in favour by the director or any connected person. Section 252 defines what is meant by a person being connected with a director. For the purposes of this section it may also include fellow directors ( subsection (5)(d) ).

442.If the ratification decision is taken by way of a written resolution (see Chapter 2 of Part 13) the director and his connected persons may not take part in the written resolution procedure ( subsection (3) ). This means that the company does not need to send them a copy of the written resolution, and they are not counted when determining the number of votes required for the written resolution to be passed.

443.If the ratification decision is taken at a meeting, those members whose votes are to be disregarded may still attend the meeting, take part in the meeting and count towards the quorum for the meeting (if their membership gives them the right to do so).

444.Subsection (6) makes clear that nothing in this section changes the law on unanimous consent, so the restrictions imposed by this section as to who may vote on a ratification resolution will not apply when every member votes (informally or otherwise) in favour of the resolution. The subsection also makes clear that nothing in this section removes any powers of the directors that they may have to manage the affairs of the company.

445.Subsection (7) explains that the requirements imposed by this section are in addition to any other limitations or restrictions imposed by the law as to what may or may not be ratified and when.

All the explanatory notes for the Act

Amendments and notes

1 notes from legislation.gov.uk

Commencement

  1. I93S. 239 wholly in force at 1.10.2007; s. 239 not in force at Royal Assent see s. 1300, s. 239 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 para. 15) this amendment is subject to savings and/or transitional provisions, see the commentary.