Regulation 6 Restriction on entering into contracts in which a director of the company has an interest

(1)

If the constitution of a school company permits it to enter into contracts in which a director of the company has an interest, then the constitution shall provide that the company may only enter into such a contract if:–

(a)

the goods or services supplied to the company under the contract are required by the company; and

(b)

the nature and level of consideration is no more than is reasonable in relation to the value of the goods or services.

(2)

For the purposes of paragraph (1), a director has an interest in a contract if the following conditions are met and one of the conditions in paragraph (3) is met:–

(a)

the contract is for the supply of goods or services in return for a payment or other material benefit; and

(b)

the contract is not for the supply of services within the scope of the ordinary duties of the director.

(3)

The conditions in this paragraph are that:–

(a)

the director is a party to the contract;

(b)

a firm of which the director is a partner is party to the contract; or

(c)

a company or unincorporated association of which he is a member, is a party to the contract and where the company of which he is a member is limited by shares, he is a member holding more than 1% of the issued share capital of the company.