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directors power

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA LW Exams › directors power

  • This topic has 1 reply, 2 voices, and was last updated 8 years ago by AvatarMikeLittle.
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  • November 22, 2017 at 10:38 am #417376
    Avataradarsh1997
    Participant
    • Topics: 646
    • Replies: 282
    • ☆☆☆☆

    Hi Mike!

    Could you explain what are the powers of individual directors?
    1.My confusion is that power is usually granted to the board and not to individual directors and thus individual directors cannot bind the firm.

    2. But what will happen if an individual makes a contract on behalf of the company and the third party genuinely believed that the director has the authority to do so.
    – Will the company or the individual director liable?

    November 22, 2017 at 11:02 am #417380
    AvatarMikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23368
    • ☆☆☆☆☆

    The company is liable … a director has the apparent authority to enter into transactions on behalf of the company so, as long as the third party does NOT know that the director lacks authority, the company will be liable

    OK?

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  • The topic ‘directors power’ is closed to new replies.

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