Companies Act 2014 section 252

Approval of company necessary for payment to director of compensation in connection with transfer of property

Section 252 requires that a company must formally approve any compensation or retirement payment made to a director in connection with the transfer of all or part of the company's undertaking or property.

• When a company transfers all or part of its undertaking or property, any compensation or retirement payment to a director in connection with that transfer is unlawful unless the company first approves it
• Approval requires that full details of the proposed payment, including the amount, are disclosed to the members, and that the proposal is passed by resolution at a general meeting
• If a payment is made without the required approval, the director is deemed to hold the amount received on trust for the company and must return it
• A payment made in good faith to fulfil an existing legal obligation is exempt from these requirements