Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Substantial property transaction definition

What does Substantial property transaction mean? In practice, this refers to a deal where a company and a director (or a person connected with that director) buy or sell a non-cash asset of significant value between them, a related-party transaction that generally requires prior shareholder approval. In the UK, it is a statutory concept under Companies Act 2006, section 190. A company must not enter into an arrangement for a director of the company or its holding company (or their connected persons) to acquire a substantial non-cash asset from the company, or for the company to acquire such an asset from them, unless approved by a resolution...

Companies Act 2006 (UK): Remedies, liabilities and exceptions for directors and connected persons where substantial property transactions proceed without members’ approval

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Practice notes

The Companies Act 2006 (CA 2006)

The Companies Act 2006 (CA 2006) sets out provisions that restrict and regulate Substantial property transactions entered into between a company and its Directors (see Practice Note: Substantial property transactions—requirement to obtain members’ approval). This Practice Note provides a summary of the CA 2006 provisions concerning the consequences where a company enters into a substantial property transaction without securing the requisite approval of the members, or without making the arrangement expressly conditional upon such approval being obtained, as required. For the purposes of these statutory provisions, ‘director’ includes any person occupying the office of director, by whatever name described, and also includes a Shadow Director. If the company undertaking a substantial property transaction has equity shares listed within the equity shares (commercial companies) category, the UK Listing Rules (UKLR), and notably UKLR 8 on related party transactions, may apply (see Practice Note: Equity shares (commercial companies) listing category—key continuing obligations)...

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Web page updated on 21/05/2026

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