Companies Act 2014 section 251

Approval of company necessary for payment by it to director or directors' dependants for loss of office

Section 251 requires that a company must obtain member approval before making any compensation or retirement payment to a director for loss of office.

• A company cannot pay a director compensation for loss of office or in connection with retirement unless specific conditions are met beforehand.
• Full details of the proposed payment, including the amount, must be disclosed to the company's members.
• The proposed payment must be approved by a resolution of the company passed at a general meeting.
• A payment made in good faith to fulfil an existing legal obligation is exempt from this requirement, subject to the provisions of section 254.