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2.9
We agree with the Jenkins Committee that there should be no
general repeal of the ultra vires doctrine, and recommend that changes
in the existing law of ultra vires in relation to companies should be
limited to the enactment of a section similar to section 9(1) of the
European Communities Act 1972."
14.3
When the Companies (Amendment) Bill was published as a
White Paper in 1980 it contained a proposed new Section 6A implementing
the Companies Law Revision Committee's recommendation, but in a
considerably revised form, as follows:
"6A. (1) The validity of a transaction entered into by
a company after the commencement of the Companies
(Amendment) Ordinance 1980 shall not be impugned
by the company by reason of the fact
(a) that the transaction was not
within the capacity of the
company; or
(b) that the directors of the company
have exceeded their powers under
the memorandum or articles,
unless the other party to the transaction had
actual notice of the existence of that fact.
(2) Where a party to such a transaction has actual
notice of provisions of the company's memorandum
or articles which give rise to any such fact as is
mentioned in subsection (1) he shall nevertheless
be treated for the purposes of that subsection as
not having actual notice of the existence of that
fact if he shows that he did not understand those
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