Companies Act 2014 section 238

Substantial transactions in respect of non-cash assets and involving directors, etc.

Section 238 deals with the requirement for shareholder approval when a company enters into substantial non-cash asset transactions with its own directors or persons connected to them.

• A company must obtain shareholder approval before entering into arrangements involving significant non-cash assets with its directors, directors of its holding company, or persons connected with such directors, whether the company is buying from or selling to them.
• The approval requirement is triggered where the non-cash asset is valued at not less than €5,000 and exceeds the greater of €65,000 or 10 per cent of the company's net assets (or called-up share capital if no financial statements have been prepared).
• Arrangements entered into without the required approval are voidable by the company, unless the company has been compensated, innocent third-party rights would be affected, or the arrangement is subsequently affirmed by the shareholders within a reasonable period.
• Exemptions apply to intra-group transfers between wholly owned subsidiaries, companies being wound up (other than members' voluntary winding up), disposals by a receiver, and transactions where a person acquires an asset in their capacity as a member of the company.

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