JD Wetherspoon has been accused of breaching the Companies Act 2006 (CA 2006) after failing to seek shareholder approval for spending on pro-Brexit messaging ahead of the 2016 referendum.
Chairman Tim Martin reportedly used company funds to finance over £90,000 worth of pro-Brexit material. In doing so, Mr Martin is likely to have been in breach of the Companies Act 2006 (CA 2006) because pursuant to s 366 of CA 2006, political expenditure must be authorised (in the case of a company that is not a subsidiary of another company) by a resolution of the members prior to the political expenditure being incurred.
The definition of political expenditure is found in s 365 and is expenditure incurred by a company on:
‘(a) the preparation, publication or dissemination of advertising or other promotional or publicity material (i) of whatever nature; and (ii) however published or otherwise disseminated, that at the time of publication or dissemination, is capable of being reasonably regarded
