Part 11 Derivative Claims and Proceedings by Members (ss 260-269)
Part 11 Derivative Claims and Proceedings by Members (ss 260-269)
Companies Act 2006 | Legislation

260 Derivative claims

(1)     This Chapter applies to proceedings in England and Wales or Northern Ireland by a member of a company—

(a)     in respect of a cause of action vested in the company, and

(b)     seeking relief on behalf of the company.

This is referred to in this Chapter as a “derivative claim”.

(2)     A derivative claim may only be brought—

(a)     under this Chapter, or

(b)     in pursuance of an order of the court in proceedings under section 994 (proceedings for protection of members against unfair prejudice).

(3)     A derivative claim under this Chapter may be brought only in respect of a cause of action arising from an actual or proposed act or omission involving negligence, default, breach of duty or breach of trust by a director of the company.

The cause of action may be against the director or another person (or both).

(4)     It is immaterial whether the cause of action arose before or after the person seeking to bring or continue the derivative claim became a member of the company.

(5)     For the purposes of this Chapter—

(a)     “director” includes a former director;

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

(c)     references to a member of a company include a person who is not a member but to whom shares in the company have been transferred or transmitted by operation of law.


261 Application for permission to continue derivative claim

(1)     A member of a company who brings a derivative claim under this Chapter must apply to the court for permission (in Northern Ireland, leave) to continue it.

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