Companies Act 2014 section 255

Contracts with sole members

Section 255 deals with the documentation requirements that apply when a single-member company enters into a contract with its sole member, particularly where that member also represents the company in the transaction.

• Where the sole member of a single-member company also represents the company in a contract between them (e.g. as director), and the contract is not in writing, the terms must be promptly recorded in a written memorandum or in the minutes of the next directors' meeting.
• This documentation requirement does not apply to contracts entered into in the ordinary course of the company's business.
• Failure to comply is a category 3 offence for both the company and any officer in default, but non-compliance does not invalidate the contract itself.
• This section does not override any other legislation or legal rules that apply to contracts between a company and its directors.