Transactions with directors

Copyright © 2026 LexisNexis

The Companies Act 2006 (CA 2006) sets out four types of transactions with directors that require member approval:

  1. •

    long-term service contracts

  2. •

    substantial property transactions

  3. •

    loans, quasi-loans, credit transactions and related arrangements, and

  4. •

    payments for a director’s loss of office

Approval is required for such transactions because they involve directors (or their connected persons) and are considered to be particularly open to abuse.

In addition to the requirements of CA 2006, if the company is listed it will also have to comply with the UK Listing Rules (UKLR) governing related party transactions.

Long-term service contracts

A company may not agree to a provision within a director’s service contract pursuant to which the guaranteed term of the director’s employment:

  1. •

    with a company of which they are a director, or

  2. •

    where they are a director of a holding company, within the group consisting of the company and its subsidiaries

is, or may be, for a guaranteed term of longer than two years unless it has been approved:

  1. •

    by a resolution of the members of the company, and

  2. •

    in...

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

Existing user? Sign-in TAKE A FREE TRIAL
Powered by Lexis+®
Latest Corporate News

DUAA 2025 provisions establishing new Information Commission come into force on 30 September 2026

The Data (Use and Access) Act 2025 (Commencement No 9 and Transitional and Saving Provisions) Regulations 2026, SI 2026/1015, bring into force on 30...

Corporate weekly highlights—10 September 2026

This week's edition of Corporate weekly highlights includes: ESMA's consultation on updated disclosure requirements under the EU Prospectus Regulation...

EU Prospectus Regulation: ESMA consults on disclosure requirements and updates guidelines and Q&As

The European Securities and Markets Authority (ESMA) has published a consultation paper, and updated two final reports and Q&As under the EU...

BIST launches consultation on modernising UK corporate reporting

The Department for Business, Innovation, Science and Trade (BIST) has launched a consultation on proposals to simplify and modernise the UK’s...

View Corporate by content type :  
News
Practice notes
Precedents
Q&As

Popular documents

Can a director be removed for failure to attend board meetings for several months?

Can a director be removed for failure to attend board meetings for several months?The reasons why a director may not have attended or otherwise taken part in board meetings may be various. However in this context it is assumed that the particular board meetings have been properly called and

Appointment, retirement and resignation of a director

Appointment, retirement and resignation of a directorThis Practice Note focuses on the law and practice relating to the appointment of directors and how a director can retire or resign. It examines the role of a director and the different types of director. It also covers the notifications and other

Can a sole director of a company hold a board meeting with themself as the sole attendee?

Can a sole director of a company hold a board meeting with themself as the sole attendee?This Q&A considers the situation where a private company limited by shares has only one director and whether that director is required to hold board meetings to make decisions in relation to the company’s

Loans to directors, connected persons and related arrangements—requirement to obtain members’ approval

Loans to directors, connected persons and related arrangements—requirement to obtain members’ approvalThe Companies Act 2006 (CA 2006) contains provisions that require loans from a company to its directors or persons connected with its directors and related arrangements to be approved by the members
Can a director be removed for failure to attend board meetings for several months?

Can a director be removed for failure to attend board meetings for several months?

Can a director be removed for failure to attend board meetings for several months?The reasons why a director may not have attended or otherwise taken part in board meetings may be various. However in this context it is assumed that the particular board meetings have been properly called and

Appointment, retirement and resignation of a director

Appointment, retirement and resignation of a director

Appointment, retirement and resignation of a directorThis Practice Note focuses on the law and practice relating to the appointment of directors and how a director can retire or resign. It examines the role of a director and the different types of director. It also covers the notifications and other

Can a sole director of a company hold a board meeting with themself as the sole attendee?

Can a sole director of a company hold a board meeting with themself as the sole attendee?

Can a sole director of a company hold a board meeting with themself as the sole attendee?This Q&A considers the situation where a private company limited by shares has only one director and whether that director is required to hold board meetings to make decisions in relation to the company’s

Loans to directors, connected persons and related arrangements—requirement to obtain members’ approval

Loans to directors, connected persons and related arrangements—requirement to obtain members’ approval

Loans to directors, connected persons and related arrangements—requirement to obtain members’ approvalThe Companies Act 2006 (CA 2006) contains provisions that require loans from a company to its directors or persons connected with its directors and related arrangements to be approved by the members