Company Law Help Needed!Watch
I'm confused about the difference between s 177 and s 182.
From my understanding, if you *know* of a conflict of interest before the contract has been entered into, and don't declare this then you are in breach of s 177. Regardless of whether the contract has been entered into yet or not.
And if you know of your conflict of interest only **after** the contract has been entered into, or for example, you become a director after the transaction has been entered into and don't declare it, then you are in breach of s 182.
Is my understanding of this correct? Thanks in advance!
To answer your question, you are correct:
s.177 deals with a declaration before the transaction or arrangement is entered into and s.182 dealing with a declaration to a transaction or
arrangement to which the company is already a party.
If they are aware of their interest a director must declare their interest before the arrangement is entered into under s.177. However if the director only becomes aware of their interest (or the interest only arises) after the company has entered into the arrangement then a director must declare as soon as possible under s.182.
Otherwise the director will be in breach of either 177 (in dealings not yet completed) and 182 (in current dealings).
Importantly though, there is no breach of these duties if a director is unaware of their interest or the transaction or arrangement to which the company is a party. In addition a director need not declare an interest if they are unaware of a possible conflict or if their interest cannot reasonably be regarded as giving rise to a conflict.
Hope this helps!