Companies Act 1993

129 Major transactions
  • (1) A company must not enter into a major transaction unless the transaction is—

    • (a) approved by special resolution; or

    • (b) contingent on approval by special resolution.

    (2) In this section,—

    assets includes property of any kind, whether tangible or intangible

    major transaction, in relation to a company, means:

    • (a) the acquisition of, or an agreement to acquire, whether contingent or not, assets the value of which is more than half the value of the company's assets before the acquisition; or

    • (b) the disposition of, or an agreement to dispose of, whether contingent or not, assets of the company the value of which is more than half the value of the company's assets before the disposition; or

    • (c) a transaction that has or is likely to have the effect of the company acquiring rights or interests or incurring obligations or liabilities, including contingent liabilities, the value of which is more than half the value of the company's assets before the transaction.

    (2A) Nothing in paragraph (b) or paragraph (c) of the definition of the term major transaction in subsection (2) applies by reason only of the company giving, or entering into an agreement to give, a charge secured over assets of the company the value of which is more than half the value of the company's assets for the purpose of securing the repayment of money or the performance of an obligation.

    (2B) In assessing the value of any contingent liability for the purposes of paragraph (c) of the definition of major transaction in subsection (2), the directors—

    • (a) must have regard to all circumstances that the directors know, or ought to know, affect, or may affect, the value of the contingent liability; and

    • (b) may rely on estimates of the contingent liability that are reasonable in the circumstances; and

    • (c) may take account of—

      • (i) the likelihood of the contingency occurring; and

      • (ii) any claim the company is entitled to make and can reasonably expect to be met to reduce or extinguish the contingent liability.

    (3) Nothing in this section applies to a major transaction entered into by a receiver appointed pursuant to an instrument creating a charge over all or substantially all of the property of a company.

    Section 129(2) major transaction: replaced, on 1 July 1994, by section 17(1) of the Companies Act 1993 Amendment Act 1994 (1994 No 6).

    Section 129(2) major transaction paragraph (c): amended, on 15 April 2004, by section 8(1) of the Companies Amendment Act (No 2) 2004 (2004 No 24).

    Section 129(2A): inserted, on 1 July 1994, by section 17(2) of the Companies Act 1993 Amendment Act 1994 (1994 No 6).

    Section 129(2A): amended, on 3 May 2001, by section 10 of the Companies Act 1993 Amendment Act 2001 (2001 No 18).

    Section 129(2A): amended, on 30 June 1997, by section 10 of the Companies Act 1993 Amendment Act 1997 (1997 No 27).

    Section 129(2B): inserted, on 15 April 2004, by section 8(2) of the Companies Amendment Act (No 2) 2004 (2004 No 24).