Companies Act 2014

1183.

Capacity not limited by a CLG’s constitution

1183. (1) The validity of an act done by a CLG shall not be called into question on the ground of lack of capacity by reason of anything contained in the CLG’s objects.

(2) A member of a CLG may bring proceedings to restrain the doing of an act which, but for subsection (1), would be beyond the CLG’s capacity but no such proceedings shall lie in respect of any act to be done in fulfilment of a legal obligation arising from a previous act of the CLG.

(3) Notwithstanding the enactment of subsection (1), it remains the duty of the directors to observe any limitations on their powers flowing from the CLG’s objects and action by the directors which, but for subsection (1), would be beyond the CLG’s capacity may only be ratified by the CLG by special resolution.

(4) A resolution ratifying such action shall not affect any liability incurred by the directors or any other person; if relief from any such liability is to be conferred by the CLG it must be agreed to separately by a special resolution of it.

(5) A party to a transaction with a CLG is not bound to enquire as to whether it is permitted by the CLG’s objects.