Part 4 A Company's Capacity and Related Matters (ss 39-52)
Part 4 A Company's Capacity and Related Matters (ss 39-52)
Companies Act 2006 | Legislation

39 A company's capacity

(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 constitution.

(2)     This section has effect subject to section 42 (companies that are charities).


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.

(2)     For this purpose—

(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,

(ii)     is presumed to have acted in good faith unless the contrary is proved, and

(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.

(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 class of shareholders.