Section 254 | Director “connected with” a body corporate

(1)This section defines what is meant by references in this Part to a director being “connected with” a body corporate.

(2)A director is connected with a body corporate if, but only if, he and the persons connected with him together—

(a)are interested in shares comprised in the equity share capital of that body corporate of a nominal value equal to at least 20% of that share capital, or

(b)are entitled to exercise or control the exercise of more than 20% of the voting power at any general meeting of that body.

(3)The rules set out in Schedule 1 (references to interest in shares or debentures) apply for the purposes of this section.

(4)References in this section to voting power the exercise of which is controlled by a director include voting power whose exercise is controlled by a body corporate controlled by him.

(5)Shares in a company held as treasury shares, and any voting rights attached to such shares, are disregarded for the purposes of this section.

(6)For the avoidance of circularity in the application of section 252 (meaning of “connected person”) —

(a)a body corporate with which a director is connected is not treated for the purposes of this section as connected with him unless it is also connected with him by virtue of subsection (2)(c) or (d) of that section (connection as trustee or partner); and

(b)a trustee of a trust the beneficiaries of which include (or may include) a body corporate with which a director is connected is not treated for the purposes of this section as connected with a director by reason only of that fact.