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Section 34 of The Companies Act No. 17 of 2015: Power of directors to bind company

    

(1) In favour of a person dealing with a company in good faith, the power of
the directors to bind the company, or authorise others to do so, is free of any is
limitation contained in the company's constitution.
(2) For purposes of subsection (1)—
(a) a person deals with a company if the person is a party to a transaction
or other act to which the company is a party; and
(b) a person dealing with a company—
(i) is not bound to enquire as to any limitation on the powers of the
directors to bind the company or to authorise others to do so;
(ii) is presumed to have acted in good faith unless the contrary is
proved; and
(iii) is not to be regarded as having acted in bad faith only because
the person knew that a particular act is beyond the powers of
the directors under the constitution of the company.
(3) The references in subsection (2) to limitations on the directors' powers under
the company's constitution include limitations deriving—
(a) from a resolution of the company or of any class of shareholders of
the company; or
(b) from an agreement between the members of the company or of any
class of shareholders of the company.
(4) This section does not affect a right of a member of the company to bring
proceedings to restrain the doing of an act that is beyond the powers of the
directors, but no such proceedings lie in respect of an act to be done in fulfilment
of a legal obligation arising from a previous act of the company.
(5) This section does not affect a liability incurred by the directors, or by any
other person, because the directors have exceeded their powers.
(6) This section has effect subject to section 36.

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Disclaimer: This document is not to be taken as legal advise.

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