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The Companies (Northern Ireland) Order 1986

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CHAPTER IIIN.I.A COMPANY'S CAPACITY; FORMALITIES OF CARRYING ON BUSINESS

[F1A company's capacity not limited by its memorandumN.I.

[F145.(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 memorandum.

(2) A member of a company may bring proceedings to restrain the doing of an act which but for paragraph (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 paragraph (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 Article is restricted by Article 9A of the Charities (Northern Ireland) Order 1987 in relation to companies which are charities; and Article 330A below (invalidity of certain transactions to which directors or their associates are parties) has effect notwithstanding this Article.]

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Modifications etc. (not altering text)

Power of directors to bind the companyN.I.

45A.(1) In favour of a person dealing with a company in good faith, the power of the board of directors to bind the company, or authorise others to do so, shall be 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 shall not 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; and

(c)a person shall be presumed to have acted in good faith unless the contrary is proved.

(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 in general meeting or a meeting of any class of shareholders, or

(b)from any agreement between the members of the company or of any class of shareholders.

(4) Paragraph (1) does not affect any right of a member of the company to bring proceedings to restrain the doing of an act which is beyond the powers of the directors; 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.

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

(6) The operation of this Article is restricted by Article 9A of the Charities (Northern Ireland) Order 1987 in relation to companies which are charities; and Article 330A below (invalidity of certain transactions to which directors or their associates are parties) has effect notwithstanding this Article.

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Modifications etc. (not altering text)

No duty to enquire as to capacity of company or authority of directorsN.I.

45B.  A party to a transaction with a company is not bound to enquire as to whether it is permitted by the company's memorandum or as to any limitation on the powers of the board of directors to bind the company or authorise others to do so.

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Form of company contractsN.I.

46 .F2  F3A contract may be made—

(a)by a company, by writing under its common seal, or

(b)on behalf of a company, by any person acting under its authority, express or implied;

and any formalities required by law in the case of a contract made by an individual also apply, unless a contrary intention appears, to a contract made by or on behalf of a company.

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F2mod. by SR 2003/5

F3mod. by SR 2004/307

Execution of documentsN.I.

46A .F4(1) The following provisions have effect with respect to the execution of documents by a company.

(2) F5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) A company need not have a common seal, F6. . .

(4) F5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) F5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) F5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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F4mod. by SR 2003/5

Pre-incorporation contracts and deedsN.I.

46B .F7(1) A contract which purports to be made by or on behalf of a company at a time when the company has not been formed has effect, subject to any agreement to the contrary, as one made with the person purporting to act for the company or as agent for it, and he is personally liable on the contract accordingly.

(2) Paragraph (1) applies to the making of a deed as it applies to the making of a contract.

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F7mod. by SR 2004/307

Bills of exchange and promissory notesN.I.

47 .F8  A bill of exchange or promissory note is deemed to have been made, accepted or endorsed on behalf of a company if made, accepted or endorsed in the name of, or by or on behalf or on account of, the company by a person acting under its authority.

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F8mod. by SR 2004/307

Execution of deeds abroadN.I.

48 .F9(1) A company may, by writing under its common seal, empower any person, either generally or in respect of any specified matters, as its attorney, to execute deeds on its behalf in any place elsewhere than in the United Kingdom.

[F10(2) A deed executed by such an attorney on behalf of the company has the same effect as if it were executed under the company's common seal.]

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F9mod. by SR 2004/307

Power of company to have official seal for use abroadN.I.

49.(1 )F11 A company[F12 which has a common seal and] whose objects require or comprise the transaction of business in foreign countries may, if authorised by its articles, have for use in any territory, district, or place elsewhere than in the United Kingdom, an official seal, which shall be a facsimile of[F12 its common seal], with the addition on its face of the name of every territory, district or place where it is to be used.

[F12(2) The official seal when duly affixed to a document has the same effect as the company's common seal.]

(3) A company having an official seal for use in any such territory, district or place may, by writing under its common seal, authorise any person appointed for the purpose in that territory, district or place to affix the official seal to any deed or other document to which the company is party in that territory, district or place.

(4) As between the company and a person dealing with such an agent, the agent's authority continues during the period (if any) mentioned in the instrument conferring the authority, or if no period is there mentioned, then until notice of the revocation or determination of the agent's authority has been given to the person dealing with him.

(5) The person affixing the official seal shall certify in writing on the deed or other instrument to which the seal is affixed the date on which and the place at which it is affixed.

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F11mod. by SR 2004/307

Official seal for share certificates, etc.N.I.

50.  F13A company[F14 which has a common seal] may have, for use for sealing securities issued by the company and for sealing documents creating or evidencing securities so issued, an official seal which is a facsimile of[F14 its common seal] with the addition on its face of the word “Securities”.[F14 The official seal when duly affixed to a document has the same effect as the company's common seal.]

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F13mod. by SR 1986/305

Authentication of documentsN.I.

51.  F15. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Events affecting a company's statusN.I.

52.  F16. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

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