Section 146 Investments and Securities Act

Section 146 of the Investments and Securities Act 2025 is about No payment for loss of office. It is under Part XII (Mergers, Take-overs and Corporate Restructuring) of the Act. It provides as follows:

(1) A payment for loss of office may not be made by any person to a director of a company in connection with a transfer of shares in the company, or in a subsidiary of the company, resulting from a merger, take-over, or other form of corporate restructuring unless the payment has been approved by a resolution of the relevant shareholders.

(2) For the purpose of subsection (1), the relevant shareholders are the holders of the shares to which the bid relates and any holder of shares of the same class as any of those shares.

(3) A resolution approving a payment to which this section applies shall not be passed unless a memorandum setting out particulars of the proposed payment, including its amount, is made available for inspection by the members of the company whose approval is sought at the —

(a) company’s registered office for at least 15 days ending with the date of the meeting; and
(b) meeting itself.

(4) A person making the offer or any related party of such person shall not be entitled to vote on the resolution:
Provided that at any meeting to consider the resolution, such persons shall be
entitled to be given notice of the meeting, to attend and speak and if present, in
person or by proxy, count towards the quorum.

(5) A payment made under an arrangement —
(a) entered into as part of the agreement for the transfer in question, or within one year before or two years after that agreement, and
(b) to which the company whose shares are the subject of the offer, or any person to whom the transfer is made, is privy, is presumed, except in so far as the contrary is shown, to be a payment to which this section applies.