connected person

connected person
The scope of this phrase differs according to the legal context and the statutory definition which applies. Broadly it covers family members trusts, companies controlled by individuals and similar entities.

Easyform Glossary of Law Terms. — UK law terms.


connected person
Persons who are considered to be connected with the company or its directors or its persons discharging managerial responsibilities (PDMRs):
• Certain prohibitions in Part 10 of the Companies Act 2006 place restrictions on transactions with persons connected to directors. Under section 252 of the Companies Act 2006, a person is connected with a director if they are a member of the director's family (that is, the director's spouse, civil partner, any person with whom the director lives as a partner in an enduring family relationship, a child or stepchild of the director, a child or step-child of a director's partner (if living with the director and under the age of 18), or the director's parents). A company is connected with a director if the director (and persons connected with him) is interested in 20% or more of the equity share capital of the company, or can exercise more than 20% of the voting power at a general meeting of the company. There are similar provisions which serve to connect persons to a director in relation to trusts set up for the benefit of that director or his family, and in relation to partners of a director.
• The Disclosure Rules and the Listing Rules contain certain requirements in relation to transactions by persons connected with PDMRs within the issuer. Under the Financial Services and Markets Act 2000, a person is connected with a PDMR if that person:
• falls within the meaning of section 346 of the Companies Act 1985 (despite its repeal) reading that section as if any reference to a director of the company is a reference to a PDMR within an issuer. This includes the spouse, civil partner, child or step-child of a PDMR; a body corporate with which the PDMR is "associated" (that is, a body corporate where the PDMR and persons connected with him together control, or can exercise, more than 20% of the voting power in general meeting (excluding votes attached to treasury shares) or are interested in at least 20% (in nominal value) of the shares (excluding treasury shares) comprised in the equity share capital); the trustee of a trust (excluding an employee's share scheme or a pension scheme) of which the beneficiaries or potential beneficiaries include the PDMR, his spouse or any of his children or step-children aged under 18 years, or a body corporate with which he is associated; any partner of the PDMR, or a partner of any person who is connected with the PDMR.
• is a relative of a PDMR who has shared the same household as the PDMR for at least 12 months; or
• is a body corporate which a PDMR or any connected person within the preceding categories is a director or senior executive who has power to make management decisions affecting the future development and business prospects of that body corporate (section 96B, Financial Services and Markets Act 2000).
• Under the Insolvency Act 1986, certain transactions between the company and connected persons may be set aside. For the purposes of this Act, persons connected with the company are directors, shadow directors, associates of such directors or shadow directors and associates of the company (section 249, Insolvency Act 1986).
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Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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