Companies Act 2006, section 252

Persons connected with a director

Part 10 A company's directors

(1) This section defines what is meant by references in this Part to a person being “connected” with a director of a company (or a director being “connected” with a person).

(2)The following persons (and only those persons) are connected with a director of a company—

(a)members of the director's family (see section 253);

(b)a body corporate with which the director is connected (as defined in section 254);

(c)a person acting in his capacity as trustee of a trust—

(i)the beneficiaries of which include the director or a person who by virtue of paragraph (a) or (b) is connected with him, or

(ii)the terms of which confer a power on the trustees that may be exercised for the benefit of the director or any such person,

other than a trust for the purposes of an employees' share scheme or a pension scheme;

(d)a person acting in his capacity as partner—

(i)of the director, or

(ii)of a person who, by virtue of paragraph (a), (b) or (c), is connected with that director;

(e)a firm that is a legal person under the law by which it is governed and in which—

(i)the director is a partner,

(ii)a partner is a person who, by virtue of paragraph (a), (b) or (c) is connected with the director, or

(iii)a partner is a firm in which the director is a partner or in which there is a partner who, by virtue of paragraph (a), (b) or (c), is connected with the director.

(3)References in this Part to a person connected with a director of a company do not include a person who is himself a director of the company.

Read section 252 in the full Act → Definitions (7) Cases (6)

Definitions used in section 252

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
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
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
body corporate

“body corporate” and “corporation” include a body incorporated outside the United Kingdom, but do not include—

(a)

a corporation sole, or

(b)

a partnership that, whether or not a legal person, is not regarded as a body corporate under the law by which it is governed;

Defined in s.1173(1) · see it in the full Act
share

(1) In the Companies Acts “share”, in relation to a company, means share in the company's share capital.

Defined in s.540(1) · see it in the full Act
firm

“firm” means any entity, whether or not a legal person, that is not an individual and includes a body corporate, a corporation sole and a partnership or other unincorporated association;

Defined in s.1173(1) · see it in the full Act

Cases considering section 252 (6)

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

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

Provides the complete statutory list of persons connected with a director. The court held that a connected body corporate under section 252(2)(b) was not excluded merely because it held assets for charitable purposes (see paras [92]-[99]).

Lehtimäki and others v Cooper

[2020] UKSC 33 · 29 July 2020

The provision was applied, together with section 254(2)(b), in treating the recipient charity as connected with the departing director. That conclusion was common ground. (see para [20])

Turbo-K Ltd v Turbo-K International Ltd

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

Considers, without deciding, whether Mr Winter’s shareholding in TKIL made TKIL a person connected with him for the substantial non-cash asset rules. (see paras [64]-[65])

What each judgment says about section 252 is in the case-law panel in the full Act.

Explanatory note

469.This section sets out the definition of “connected person” which is used in many of the sections in this Part in relation to the regulation of directors. The persons who are “connected” for this purpose with a director include:

  • certain family members (see section 253);

  • certain companies with which the director is connected (see section 254);

  • trustees of a trust under which the director or a relative mentioned in section 253 or a company with which the director is connected is a beneficiary (but not if the trust exists for the purposes of an employees’ share scheme as defined in section 1166 or a pension scheme);

  • certain partners; and

  • certain firms with legal personality (such as a Scottish firm in which the director is a partner).

470.This section, together with sections 253 to 255, replaces section 346 of the 1985 Act.

All the explanatory notes for the Act

Amendments and notes

3 notes from legislation.gov.uk

Modifications

  1. C458S. 252 applied (26.7.2007) by Pensions Act 2007 (c. 22), ss. 20, 30(1)(c), Sch. 6 para. 13(6)
  2. C459S. 252 applied (5.7.2010) by Pensions Act 2008 (c. 30), ss. 75, 149, Sch. 1 para. 13(6); S.I. 2010/10, art. 2(a)
  3. C460Ss. 252-255 applied (with modifications) (1.8.2014) by Co-operative and Community Benefit Societies Act 2014 (c. 14), ss. 49(5), 154 (with Sch. 5)