HC Deb 26 October 1989 vol 158 c1198

Amendments made: No. 94, in page 102, line 48, leave out from 'or to end of line 50 and insert 'anything in the company's memorandum.'

No. 95, in page 103, leave out lines 1 to 8 and insert—

`(2) A member of a company may bring proceedings to restrain the doing of an act which but for subsection (1) would be beyond the company's capacity; but no such proceedings shall lie in respect of an act to be done in fulfilment of a legal obligation arising from a previous act of the company.

(3) It remains the duty of the directors to observe any limitations on their powers flowing from the company's memorandum; and action by the directors which but for subsection (1) would be beyond the company's capacity may only be ratified by the company by special resolution.

A resolution ratifying such action shall not affect any liability incurred by the directors or any other person; relief from any such liability must be agreed to separately by special resolution.

(4) The operation of this section is restricted b) section 30B(1) of the Charities Act 1960 and section 105(3) of the Companies Act 1989 in relation to companies which are charities; and section 322A below (invalidity of certain transactions to which directors or their associates are parties) has effect notwithstanding this section.'.

No. 96, in page 103, line 21, at end insert— `(c) a person shall be presumed to have acted in good faith unless the contrary is proved.'.

No. 97, in page 103, leave out lines 22 to 26 and insert— '(2A) The references above to limitations on the directors' powers under the company's constitution include limitations deriving—

  1. (a) from a resolution of the company in general meeting or a meeting of any class of shareholders, or
  2. (b) from any agreement between the members of the company or of any class of shareholders.'

No. 98, in page 103, line 29, leave out from `directors;' to end of line 31 and insert 'but no such proceedings shall lie in respect of an act to be done in fulfilment of a legal obligation arising from a previous act of the company.

(3A) Nor does that subsection affect any liability incurred by the directors, or any other person, by reason of the directors' exceeding their powers.'.

No. 99, page 103, leave out lines 32 to 41.

No. 100, in page 103, line 41, at end insert— '(4) The operation of this section is restricted by section 30B(1) of the Charities Act 1960 and section 105(3) of the Companies Act 1989 in relation to companies which are charities; and section 322A below (invalidity of certain transactions to which directors or their associates are parties) has effect notwithstanding this section.'.

No. 101, in page 103, line 43, leave out from 'is' to 'or' in line 44 and insert 'permitted by the company's memorandum'.

No. 102, in page 103, line 46, at end insert— '(1A) In Schedule 21 to the Companies Act 1985 (effect of registration of companies not formed under that Act), in paragraph 6 (general application of provisions of Act), after sub-paragraph (5) insert— (6) Where by virtue of sub-paragraph (4) or (5) a company does not have power to alter a provision, it does not have power to ratify acts of the directors in contravention of the provision.".'.—[Mr. Redwood.]

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