Section 238—background

The Companies Act 2014 (Ireland) (CA 2014 (IRL)) contains provisions that restrict and control substantial transactions entered into between a company and its directors in respect of non-cash assets.

CA 2014 (IRL), s 238 is a two-way valve. It regulates property transactions in which a director acquires non-cash assets from his company or where a company acquires non-cash assets from its director.

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

One of the general duties of directors set out in statute is the duty to declare if he is in any way, directly or indirectly, interested in a proposed transaction or arrangement with the company of which he is a director, and the nature and extent of that interest, to the other directors. The term ‘director’, for the purposes of these statutory provisions, includes any person occupying the position of director, by whatever name called, and a shadow director.

If the company entering into a substantial