|
| |
|
purporting to give a person a right to participate in the divisible profits of the |
| |
company otherwise than as a member is void. |
| |
38 | Application to single member companies of enactments and rules of law |
| |
| Any enactment or rule of law applicable to companies formed by two or more |
| |
persons or having two or more members applies with any necessary |
| 5 |
modification in relation to a company formed by one person or having only |
| |
| |
| |
A company’s capacity and related matters |
| |
Capacity of company and power of directors to bind it |
| 10 |
| |
(1) | The validity of an act done by a company shall not be called into question on |
| |
the ground of lack of capacity by reason of anything in the company’s |
| |
| |
(2) | This section has effect subject to section 42 (companies that are charities). |
| 15 |
40 | Power of directors to bind the company |
| |
(1) | In favour of a person dealing with a company in good faith, the power of the |
| |
directors to bind the company, or authorise others to do so, is deemed to be free |
| |
of any limitation under the company’s constitution. |
| |
| 20 |
(a) | a person “deals with” a company if he is a party to any transaction or |
| |
other act to which the company is a party, |
| |
(b) | a person dealing with a company— |
| |
(i) | is not bound to enquire as to any limitation on the powers of the |
| |
directors to bind the company or authorise others to do so, |
| 25 |
(ii) | is presumed to have acted in good faith unless the contrary is |
| |
| |
(iii) | is not to be regarded as acting in bad faith by reason only of his |
| |
knowing that an act is beyond the powers of the directors under |
| |
the company’s constitution. |
| 30 |
(3) | The references above to limitations on the directors’ powers under the |
| |
company’s constitution include limitations deriving— |
| |
(a) | from a resolution of the company or of any class of shareholders, or |
| |
(b) | from any agreement between the members of the company or of any |
| |
| 35 |
(4) | This section does not affect any right of a member of the company to bring |
| |
proceedings to restrain the doing of an action that is beyond the powers of the |
| |
| |
| But no such proceedings lie in respect of an act to be done in fulfilment of a |
| |
legal obligation arising from a previous act of the company. |
| 40 |
|
| |
|
| |
|
(5) | This section does not affect any liability incurred by the directors, or any other |
| |
person, by reason of the directors’ exceeding their powers. |
| |
(6) | This section has effect subject to— |
| |
section 41 (transactions with directors or their associates), and |
| |
section 42 (companies that are charities). |
| 5 |
41 | Constitutional limitations: transactions involving directors or their associates |
| |
(1) | This section applies to a transaction if or to the extent that its validity depends |
| |
on section 40 (power of directors deemed to be free of limitations under |
| |
company’s constitution in favour of person dealing with company in good |
| |
| 10 |
| Nothing in this section shall be read as excluding the operation of any other |
| |
enactment or rule of law by virtue of which the transaction may be called in |
| |
question or any liability to the company may arise. |
| |
| |
(a) | a company enters into such a transaction, and |
| 15 |
(b) | the parties to the transaction include— |
| |
(i) | a director of the company or of its holding company, or |
| |
(ii) | a person connected with any such director, |
| |
| the transaction is voidable at the instance of the company |
| |
(3) | Whether or not it is avoided, any such party to the transaction as is mentioned |
| 20 |
in subsection (2)(b)(i) or (ii), and any director of the company who authorised |
| |
the transaction, is liable— |
| |
(a) | to account to the company for any gain he has made directly or |
| |
indirectly by the transaction, and |
| |
(b) | to indemnify the company for any loss or damage resulting from the |
| 25 |
| |
(4) | The transaction ceases to be voidable if— |
| |
(a) | restitution of any money or other asset which was the subject-matter of |
| |
the transaction is no longer possible, or |
| |
(b) | the company is indemnified for any loss or damage resulting from the |
| 30 |
| |
(c) | rights acquired bona fide for value and without actual notice of the |
| |
directors’ exceeding their powers by a person who is not party to the |
| |
transaction would be affected by the avoidance, or |
| |
(d) | the transaction is affirmed by the company. |
| 35 |
(5) | A person other than a director of the company is not liable under subsection (3) |
| |
if he shows that at the time the transaction was entered into he did not know |
| |
that the directors were exceeding their powers. |
| |
(6) | Nothing in the preceding provisions of this section affects the rights of any |
| |
party to the transaction not within subsection (2)(b)(i) or (ii), but the court may, |
| 40 |
on the application of the company or any such party, make such order |
| |
affirming, severing or setting aside the transaction on such terms as appear to |
| |
| |
| |
(a) | “transaction” includes any act; and |
| 45 |
|
| |
|
| |
|
(b) | the reference to a person connected with a director has the same |
| |
meaning as in Part 10 (company directors). |
| |
42 | Constitutional limitations: companies that are charities |
| |
(1) | Sections 39 and 40 (company’s capacity and power of directors to bind |
| |
company) do not apply to the acts of a company that is a charity except in |
| 5 |
| |
(a) | does not know at the time the act is done that the company is a charity, |
| |
| |
(b) | gives full consideration in money or money’s worth in relation to the |
| |
act in question and does not know (as the case may be)— |
| 10 |
(i) | that the act is not permitted by the company’s constitution, or |
| |
(ii) | that the act is beyond the powers of the directors. |
| |
(2) | Where a company that is a charity purports to transfer or grant an interest in |
| |
property, the fact that (as the case may be)— |
| |
(a) | the act was not permitted by the company’s constitution, or |
| 15 |
(b) | the directors in connection with the act exceeded any limitation on their |
| |
powers under the company’s constitution, |
| |
| does not affect the title of a person who subsequently acquires the property or |
| |
any interest in it for full consideration without actual notice of any such |
| |
circumstances affecting the validity of the company’s act. |
| 20 |
(3) | In any proceedings arising out of subsection (1) or (2) the burden of proving— |
| |
(a) | that a person knew that the company was a charity, or |
| |
(b) | that a person knew that an act was not permitted by the company’s |
| |
constitution or was beyond the powers of the directors, |
| |
| lies on the person asserting that fact. |
| 25 |
(4) | In the case of a company that is a charity the affirmation of a transaction to |
| |
which section 41 applies (transactions with directors or their associates) is |
| |
ineffective without the prior written consent of— |
| |
(a) | in England and Wales, the Charity Commission; |
| |
(b) | in Northern Ireland, the Department for Social Development. |
| 30 |
(5) | This section does not extend to Scotland (but see section 112 of the Companies |
| |
| |
Formalities of doing business under the law of England and Wales or Northern Ireland |
| |
| |
(1) | Under the law of England and Wales or Northern Ireland a contract may be |
| 35 |
| |
(a) | by a company, by writing under its common seal, or |
| |
(b) | on behalf of a company, by a person acting under its authority, express |
| |
| |
(2) | Any formalities required by law in the case of a contract made by an individual |
| 40 |
also apply, unless a contrary intention appears, to a contract made by or on |
| |
| |
|
| |
|
| |
|
44 | Execution of documents |
| |
(1) | Under the law of England and Wales or Northern Ireland a document is |
| |
| |
(a) | by the affixing of its common seal, or |
| |
(b) | by signature in accordance with the following provisions. |
| 5 |
(2) | A document is validly executed by a company if it is signed on behalf of the |
| |
| |
(a) | by two authorised signatories, or |
| |
(b) | by one authorised signatory in the presence of a witness who attests the |
| |
| 10 |
| For the meaning of “authorised signatory”, see section 281. |
| |
(3) | A document signed in accordance with subsection (2) and expressed, in |
| |
whatever words, to be executed by the company has the same effect as if |
| |
executed under the common seal of the company. |
| |
(4) | In favour of a purchaser a document is deemed to have been duly executed by |
| 15 |
a company if it purports to be signed in accordance with subsection (2). |
| |
| A “purchaser” means a purchaser in good faith for valuable consideration and |
| |
includes a lessee, mortgagee or other person who for valuable consideration |
| |
acquires an interest in property. |
| |
(5) | Where a document is to be signed by a person as an authorised signatory of |
| 20 |
more than one company, it is not duly signed by that person for the purposes |
| |
of this section unless he signs it separately in each capacity. |
| |
(6) | References in this section to a document being (or purporting to be) signed by |
| |
an authorised signatory are to be read, in a case where the signature is that of |
| |
a director or secretary and that office is held by a firm, as references to its being |
| 25 |
(or purporting to be) signed by an individual authorised by the firm to sign on |
| |
| |
(7) | This section applies to a document that is (or purports to be) executed by a |
| |
company in the name of or on behalf of another person whether or not that |
| |
person is also a company. |
| 30 |
| |
(1) | A company may have a common seal, but need not have one. |
| |
(2) | A company which has a common seal shall have its name engraved in legible |
| |
| |
(3) | If a company fails to comply with subsection (2) an offence is committed by— |
| 35 |
| |
(b) | every officer of the company who is in default. |
| |
(4) | An officer of a company, or a person acting on behalf of a company, commits |
| |
an offence if he uses, or authorises the use of, a seal purporting to be a seal of |
| |
the company on which its name is not engraved as required by subsection (2). |
| 40 |
(5) | A person guilty of an offence under this section is liable on summary |
| |
conviction to a fine not exceeding level 3 on the standard scale. |
| |
(6) | This section does not form part of the law of Scotland. |
| |
|
| |
|