What reporting obligations do private company directors have after approving bonuses?

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Private Company Directors Must Report Approved Bonuses to Shareholders Within 14 Days

Following the approval of directors' fees and any associated benefits by the Board of Directors in a private company, such as TH Properties, there is a mandatory reporting obligation to the shareholders. This notification must be completed within 14 days from the date the board grants its approval. All such approvals must also be meticulously documented in the minutes of the directors' meeting.
Approval Process for Directors' Fees in Private Companies

For private limited companies like TH Properties, the authority to approve directors' fees and any other benefits lies with the Board of Directors. This power is exercised subject to the specific provisions outlined in the company's constitution. Section 230(2) of the Companies Act 2016 governs this aspect, allowing the board to make such approvals.
Documentation and Notification Requirements

Once the Board of Directors has approved directors' fees or benefits, Section 230(3) mandates specific procedural steps. Firstly, the approval must be formally recorded in the minutes of the relevant directors' meeting. Secondly, the company's Board of Directors is required to inform the shareholders about this approval.
Shareholder Notification Timeline

The timeline for informing shareholders about approved directors' fees and benefits is strictly defined. Section 230(3) stipulates that the shareholders must be notified within a period of 14 days following the date on which the board's approval was granted. Failure to adhere to this timeline constitutes an offence.
Shareholder Rights to Challenge Payments

Shareholders who hold at least 10% of the total voting rights have recourse if they believe an approved payment was not fair to the company. According to Section 230(4), these shareholders can, within 30 days of becoming aware of the payment, request that the company pass a resolution to approve the payment. This can be done either through a written resolution or at a general meeting. If such approval is not obtained, the payment is considered a debt owed by the director to the company, as per Section 230(5).

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What reporting obligations do private company directors have after approving bonuses?

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