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Section 247: Power to make provision for employees on cessation or transfer of business

Companies Act 2006 · 2006 c. 46View on legislation.gov.uk

Part 10: A company's directors — Chapter 9: Supplementary provisions

The powers of the directors of a company include (if they would not otherwise do so) power to make provision for the benefit of persons employed or formerly employed by the company, or any of its subsidiaries, in connection with the cessation or the transfer to any person of the whole or part of the undertaking of the company or that subsidiary.

This power is exercisable notwithstanding the general duty imposed by section 172 (duty to promote the success of the company).

In the case of a company that is a charity it is exercisable notwithstanding any restrictions on the directors' powers (or the company's capacity) flowing from the objects of the company.

The power may only be exercised if sanctioned—

by a resolution of the company, or
by a resolution of the directors,

in accordance with the following provisions.

A resolution of the directors—

must be authorised by the company's articles, and
is not sufficient sanction for payments to or for the benefit of directors, former directors or shadow directors.

Any other requirements of the company's articles as to the exercise of the power conferred by this section must be complied with.

Any payment under this section must be made—

before the commencement of any winding up of the company, and
out of profits of the company that are available for dividend.

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This legislation text comes from legislation.gov.uk. Contains public sector information licensed under the Open Government Licence v3.0. These source and reuse terms cover the legislation text, not Remedy's commentary.

Reuse reviewed 21 August 2026 under Open Government Licence v3.0.