Section 261: Application for permission to continue derivative claim

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

Part 11: Derivative claims and proceedings by members — Chapter 1: Derivative claims in England and Wales or Northern Ireland

A member of a company who brings a derivative claim under this Chapter must apply to the court for permission (in Northern Ireland, leave) to continue it.

If it appears to the court that the application and the evidence filed by the applicant in support of it do not disclose a prima facie case for giving permission (or leave), the court—

must dismiss the application, and
may make any consequential order it considers appropriate.

If the application is not dismissed under subsection (2), the court—

may give directions as to the evidence to be provided by the company, and
may adjourn the proceedings to enable the evidence to be obtained.

On hearing the application, the court may—

give permission (or leave) to continue the claim on such terms as it thinks fit,
refuse permission (or leave) and dismiss the claim, or
adjourn the proceedings on the application and give such directions as it thinks fit.

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