Companies Act, 1990

Substantial contracts, etc., with directors and others to be disclosed in accounts.

41.—(1) Subject to subsections (5) and (6) and to section 45 , group accounts prepared by a holding company in accordance with the requirements of section 150 of the Principal Act in respect of the relevant period shall contain the particulars specified in section 42 of—

(a) any transaction or arrangement of a kind described in section 31 entered into by the company or by a subsidiary of the company for a person who at any time during the relevant period was a director of the company or its holding company or was connected with such a director;

(b) any agreement by the company or by a subsidiary of the company to enter into any such transaction or arrangement for a person who at any time during the relevant period was a director of the company or its holding company or was connected with such a director;

(c) any other transaction or arrangement with the company or with a subsidiary of the company in which a person who at any time during the relevant period was a director of the company or its holding company had, directly or indirectly, a material interest.

(2) Subject as aforesaid, accounts prepared by any company other than a holding company in respect of the relevant period shall contain the particulars specified in section 42 of—

(a) any transaction or arrangement of a kind described in section 31 entered into by the company for a person who at any time during the relevant period was a director of the company or of its holding company or was connected with such a director;

(b) any agreement by the company to enter into any such transaction or arrangement for a person who at any time during the relevant period was a director of the company or of its holding company or was connected with such a director;

(c) any other transaction or arrangement with the company in which a person who at any time during the relevant period was a director of the company or of its holding company had, directly or indirectly, a material interest.

(3) Particulars which are required by subsection (1) or (2) to be contained in any accounts shall be given by way of notes to those accounts.

(4) Where by virtue of sections 150 (2) and 154 of the Principal Act a company does not produce group accounts in relation to any financial year, subsection (1) shall have effect in relation to the company and that financial year as if the word “group” were omitted.

(5) For the purposes of subsections (1) (c) and (2) (c)

(a) a transaction or arrangement between a company and a director of the company or of its holding company or a person connected with such a director shall (if it would not otherwise be so treated) be treated as a transaction, arrangement or agreement in which that director is interested; and

(b) an interest in such a transaction or arrangement is not material if in the opinion of the majority of the directors (other than that director) of the company which is preparing the accounts in question it is not material (but without prejudice to the question whether or not such an interest is material in any case where those directors have not considered the matter).

(6) Subsections (1) and (2) do not apply, for the purposes of any accounts prepared by any company which is, or is the holding company of, a licensed bank, in relation to a transaction or arrangement of a kind described in section 31 , or an agreement to enter into such a transaction or arrangement, to which that licensed bank is a party.

(7) Subsections (1) and (2) do not apply in relation to the following transactions, arrangements and agreements—

(a) a transaction, arrangement or agreement between one company and another in which a director of the first company or of its subsidiary or holding company is interested only by virtue of his being a director of the other;

(b) a contract of service between a company and one of its directors or a director of its holding company or between a director of a company and any of that company's subsidiaries;

(c) a transaction, arrangement or agreement which was not entered into during the relevant period for the accounts in question and which did not subsist at any time during that period; and

(d) a transaction, arrangement or agreement which was made before the commencement of this section and which does not subsist thereafter.

(8) Subsections (1) and (2) apply whether or not—

(a) the transaction or arrangement was prohibited by section 31 ;

(b) the person for whom it was made was a director of the company or was connected with a director of the company at the time it was made;

(c) in the case of a transaction or arrangement made by a company which at any time during a relevant period is a subsidiary of another company, it was a subsidiary of that other company at the time the transaction or arrangement was made.

(9) In this section and in sections 43 and 45 , “relevant period”, in relation to a company, means a financial year of the company ending not earlier than 6 months after the commencement of the section concerned.