Directors’ Transactions

The requirements also extend to shadow or de facto directors, and a breach may lead to criminal charges with penalties, including fines or imprisonment. Some exemptions apply, such as transfers between group companies, assets disposed of in a winding-up, or where a receiver is appointed. Transactions involving share options or certain member-specific arrangements are also exempt. Additionally, group company transactions and specific exemptions for wholly owned subsidiaries minimize the administrative burden for group structures.

Where a prohibited transaction causes insolvency, courts may impose personal liability on directors for company debts, particularly if the arrangement significantly affected the company’s financial standing.