Companies Act 2014 section 266

Enforcement of notification obligation

Section 266 deals with the enforcement of the obligation on directors, secretaries and other persons to notify the company of their interests in its shares and debentures, including the consequences of failing to do so and the available remedies.

• Where an agent is authorised to buy or sell shares or debentures on a person's behalf, that person must ensure the agent immediately notifies them of any transactions that could trigger a disclosure duty under this Chapter.
• Failure to notify within the required timeframe renders any rights or interests in the relevant shares or debentures unenforceable, though the court may grant relief where the default was accidental, inadvertent or where it is just and equitable to do so — but not where the default was deliberate.
• Directors and secretaries are exempt from the unenforceability sanction if their identity and the details of their shareholding, acquisition or disposal (including the consideration paid) have been apparent from the company's registers and documents within 30 days of the duty arising; a special resolution can also protect third parties by allowing them to assume that all disclosure requirements have been met.
• Failure to ensure an agent provides the necessary notifications, or failure to fulfil the disclosure duties under sections 261, 262 or 263, is a category 3 offence; the board may also lift restrictions carried over from the Companies Act 1990 where the original default was inadvertent.