The Companies Act requires that a company may not take part in an arrangement under which another person enters into a transaction that, if it had been entered into by the company, would have required approval under sections 197, 198, 200 or 201, and that person, in pursuance of the arrangement obtains a benefit from the company or a body corporate associated with it, or arrange for the assignment to it of any rights, obligations or liabilities under a transaction that, if it had been entered into by the company, would have required such approval, unless the arrangement in question has been approved by a resolution of the members of the company.

Exceptions apply, subject to satisfying qualifying conditions, some of which relate to levels of expenditure, in the following:

• Expenditure on company business
• Expenditure on defending proceedings
• Expenditure in connection with regulatory action or investigation
• Expenditure for minor and business transactions
• Certain intra-group transactions