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Section 371: Enforcement of directors' liabilities by shareholder action: supplementary

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

Part 14: Control of political donations and expenditure

A group of members may not bring proceedings under section 370 in the name of a company unless—

the group has given written notice to the company stating—
the cause of action and a summary of the facts on which the proceedings are to be based,
the names and addresses of the members comprising the group, and
the grounds on which it is alleged that those members constitute an authorised group; and
not less than 28 days have elapsed between the date of the giving of the notice to the company and the bringing of the proceedings.

Where such a notice is given to a company, any director of the company may apply to the court within the period of 28 days beginning with the date of the giving of the notice for an order directing that the proposed proceedings shall not be brought, on one or more of the following grounds—

that the unauthorised amount has been made good to the company;
that proceedings to enforce the liability have been brought, and are being pursued with due diligence, by the company;
that the members proposing to bring proceedings under this section do not constitute an authorised group.

Where an application is made on the ground mentioned in subsection (2)(b), the court may as an alternative to directing that the proposed proceedings under section 370 are not to be brought, direct—

that such proceedings may be brought on such terms and conditions as the court thinks fit, and
that the proceedings brought by the company—
shall be discontinued, or
may be continued on such terms and conditions as the court thinks fit.

Proceedings brought under section 370 may not be discontinued or settled by the group except with the permission of the court, which may be given on such terms as the court thinks fit.

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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.