Declaration of Director’s Interest in Proposed Transaction (s.177)
This letter declaration is a director’s declaration of interest in relation to a specific transaction or arrangement that the company is proposing to enter into. This template has been updated to make it more comprehensive in light of the Government’s focus on corporate transparency and private limited companies. Reference has also been made to our Conflicts of Interests Policy.
The Companies Act 2006 places a requirement on directors to declare their interest (direct or indirect) in any transaction or arrangement that is proposed to be entered into by the company (section 177).
This declaration can be made in one of three ways:
- at a meeting of the directors, or
- by notice in writing (under section 184), or
- by general notice (under section 185).
The declaration must be made before the company enters into the transaction, and if a declaration proves to be, or becomes inaccurate or incomplete, a further declaration must be made.
This template covers the giving of the declaration in accordance with section 184, i.e. notice in writing. For a General Notice (s.185), please see below right.
A declaration of an interest of which the director is not aware, is not required. For this purpose a director is treated as being aware of matters of which he/she ought reasonably to be aware.
A director need not declare an interest in the following circumstances:
- if it cannot reasonably be regarded as likely to give rise to a conflict of interest;
- if the other directors are already aware of it (and for this purpose the other directors are treated as aware of anything of which they ought reasonably to be aware); or
- if it concerns terms of his/her service contract that have been or are to be considered by a meeting of the directors, or by a committee of the directors.
The director in question must send the notice to the other directors. The notice may be sent in hard copy form or in electronic form (if agreed by the other directors). The notice may be sent by hand or by post, or by electronic means (if agreed by the other directors). The declaration will automatically form part of the proceedings at the next board meeting after the declaration is given.
This letter is in open format. Fields should be completed where indicated. Wording in square brackets is optional and can be deleted or retained according to requirements.
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