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Sir,
if the articles allow to appoint a CEO/MD and also restrict that the directors need ordinary resolution if they want to borrow sums more than, say, $50,000 AND CEO entered into contract for borrowing $100,000: BPP says that the company is bound to this contract.
What if another directors (not CEO) entered in this contract – will the company be bound to such contract?
My point is that it looks that owners of the company wanted to limit director’s actions, but as it turned out in this case – they couldn’t.Thank you
I believe that BPP are correct – it is within the apparent scope of a director’s powers to enter into a contract for borrowing funds for company business.
The bank, if they knew of the director’s excess use of power, then the bank would not be able to hold the company liable. But if the bank doesn’t ask ( and there is no requirement that they should ask ) then the company will be liable
Thank you.
So there is no way for owners to limit directors’ actions like to limit borrowing funds?
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