HC Deb 26 October 1989 vol 158 c1200

Amendments made: No. 105, in page 105, line 37, leave out from beginning to end of line 12 on page 106 and insert— '30B.—(1) Section 35 of the Companies Act 1985 (capacity of company not limited by its memorandum), and section 35A of that Act (power of directors to bind company) so far as it relates to acts which but for section 35 would be beyond the capacity of the company, do not apply to the acts of a company which is a charity except in favour of a person who—

  1. (a) gives full consideration in money or money's worth in relation to the act in question, and
  2. (b) does not know that the act is not permitted by the company's memorandum or, as the case may be, is beyond the powers of the directors, or who does not know at the time the act is done that the company is a charity.

(2) However, where such a company purports to transfer or grant an interest in property, the fact that the act was not permitted by the company's memorandum or, as the case may be, that 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.

(3) In any proceedings arising out of subsection (1) the burden of proving—

  1. (a) that a person knew that an act was not permitted by the company's memorandum or was beyond the powers of the directors, or
  2. (b) that a person knew that the company was a charity, lies on the person making that allegation.

(4) Where a company is a charity, the ratification of an act under section 35(3) of the Companies Act 1985, or the ratification of a transaction to which section 322A of that Act applies (invalidity of certain transactions to which directors or their associates are parties), is ineffective without the prior written consent of the Commissioners.'.

No. 106, in page 106, line 22, after 'company,' insert— '(cc) in all conveyances purporting to be executed by the company,'.

No. 107, in page 106, line 24, at end insert— '(1A) In subsection (l)(cc) "conveyance" means any instrument creating, transferring, varying or extinguishing an interest in land.'—[Mr. Redwood.]

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