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Companies Act 2006

Section 42: Constitutional limitations: companies that are charities

130.This section restates section 65 of the Charities Act 1993. It is a qualification of the rules in sections 39 and 40.

131.It provides that the protection afforded to an external party by sections 39 and 40 will not apply where the company in question is a charity, unless:

  • the external party was unaware (at the time that the act was done) that the company was a charity; or

  • the company has received full consideration in respect of the act done, and the external party was unaware that the act in question was beyond the company’s capacity or beyond the powers of the directors.

132.Corresponding provisions for charities that are registered in Scotland can be found in section 112 of the Companies Act 1989 (see subsection (5)).

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