Conflict of interest waivers
4 Oct 07
Supporting evidence that will be required with any conflict of interest waiver application in relation to provisions of the Companies Act 2006
Section 190 of the Companies Act 2006 came into force on 1 October 2007. It requires "substantial" property transactions (defined in s 191) between companies and any of their directors to be formally approved by members of the company.
Bruce Ritchie, Director of Professional Practice at the Law Society of Scotland, advises solicitors that this will need to be dealt with, and a copy of the members' resolution produced, with any waiver application under rule 9 of the 1986 Practice Rules (the Conflict of Interest Rules) from now on. If the client company claims that the transaction is not "substantial", or is exempt under s 192 or 193, evidence to substantiate that claim will also be required.
Similarly, if the transaction is between a company and its sole shareholder who is also a director, evidence of compliance with s 231 will be required with any request for a waiver.