| Commentary

8 Company’s capacity to charge

| Commentary

8 Company’s capacity to charge

The ability to borrow and the ability to charge a company’s property for the purpose of borrowing are, in strict terms, different. The power to borrow to a reasonable amount for the purposes of its business formerly implied in favour of a trading or commercial company extended to mortgaging or charging all or any part of its property to secure the money so borrowed1. However, under the Companies Act 1985, the memorandum of a company would have normally contained an express power to charge the company’s assets and the articles would usually have

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