Capacity
Companies Act
CHAPTER 3
Corporate capacity and authority
Capacity of private company limited by shares
38. (1) Subject to subsection (2), notwithstanding anything contained in its constitution a company shall have, whether acting inside or outside of the State-
(a) full and unlimited capacity to carry on and undertake any business or activity, do any act or enter into any transaction; and
(b) for the purposes of paragraph (a), full rights, powers and privileges.
(2) Nothing in subsection (1) shall relieve a company from any duty or obligation under any enactment or the general law.
Persons authorised to bind company
40. (1) For the purposes of any question whether a transaction fails to bind a company because of an alleged lack of authority on the part of the person who exercised (or purported to exercise) the company’s powers, the following, namely-
(a) the board of directors of the company; and
(b) any registered person,
shall each be deemed to have authority to exercise any power of the company and to authorise others to do so.
(2) Subsection (1) applies regardless of any limitations in the company’s constitution on the board’s authority or a registered person’s authority, but subject to subsections (5) and (8).
(3) Subsection (1) is not to be read as preventing the exercise of a company’s powers otherwise than by the board, a registered person or a person authorised by the board or by a registered person, where authority for that exercise exists.
(4) Subsection (1) does not affect-
(a) a director’s duties (including a director’s duty to observe any limitations in the company’s constitution on the board’s authority), or his or her liability in respect of any breach of those duties; or
(b) any duty arising on the part of any other person concerned in the transaction (including the registered person) or his or her liability in respect of any breach of that duty.
(5) Where a company is purportedly a party to a transaction-
(a) in connection with which the board of directors exceeded limitations in the company’s constitution on their authority; and
(b) to which a person referred to in subsection (6) is also a party,
subsection (1) does not apply in favour of the person so referred to.
(6) Each of the following is a person mentioned in subsection (5)(b):
(a) a director or shadow director of the company or of its holding company;
(b) a person connected with such a director;
(c) a registered person;
(d) a person connected with a registered person,
and in this subsection references to a person’s being connected with-
(i) a director or shadow director are to be read in accordance with section 220 ; or
(ii) a registered person are to be read in accordance with section 220 as that section is applied by subsection (7).
(7) For the purpose of subsection (6)(ii), section 220 applies as if-
(a) for each reference in subsections (1), (2), (3) and (8) to a director of a company there were substituted a reference to the registered person;
(b) for the first reference and the third reference in subsection (5) to a director of a company there were substituted a reference to the registered person;
(c) the references in subsection (5) to another director or directors included references to one or more other registered persons; and
(d) the reference in subsection (6)(b) to a director included a reference to a registered person.
(8) In subsection (1) “power of the company” does not include-
(a) with reference to any registered person, the power of management referred to in section 39 (5)(a), and
(b) with reference to the board of directors or any registered person, the power referred to in section 39 (5)(b).
(9) Without prejudice to subsection (1), in determining any question whether a person had ostensible authority to exercise any of a company’s powers in a given case, no reference may be made to the company’s constitution.
(10) In this section a reference-
(a) to limitations in a company’s constitution includes a reference to limitations deriving from-
(i) a resolution of the company or of any class of its members; or
(ii) any agreement between the members of the company or of any class of its members;
(b) to a transaction includes a reference to any act or omission.
(11) This section is in addition to, and not in substitution for, the Rule in Royal British Bank v. Turquand.
Assisted Decision Making Capacity Act
Person’s capacity to be construed functionally
3. (1) Subject to subsections (2) to (6), for the purposes of this Act, a person’s capacity shall be assessed on the basis of his or her ability to understand, at the time that a decision is to be made, the nature and consequences of the decision to be made by him or her in the context of the available choices at that time.
(2) A person lacks the capacity to make a decision if he or she is unable—
(a) to understand the information relevant to the decision,
(b) to retain that information long enough to make a voluntary choice,
(c) to use or weigh that information as part of the process of making the decision, or
(d) to communicate his or her decision (whether by talking, writing, using sign language, assistive technology, or any other means) or, if the implementation of the decision requires the act of a third party, to communicate by any means with that third party.
(3) A person is not to be regarded as unable to understand the information relevant to a decision if he or she is able to understand an explanation of it given to him or her in a way that is appropriate to his or her circumstances (whether using clear language, visual aids or any other means).
(4) The fact that a person is able to retain the information relevant to a decision for a short period only does not prevent him or her from being regarded as having the capacity to make the decision.
(5) The fact that a person lacks capacity in respect of a decision on a particular matter at a particular time does not prevent him or her from being regarded as having capacity to make decisions on the same matter at another time.
(6) The fact that a person lacks capacity in respect of a decision on a particular matter does not prevent him or her from being regarded as having capacity to make decisions on other matters.
(7) For the purposes of this section, information relevant to a decision shall be construed as including information about the reasonably foreseeable consequences of—
(a) each of the available choices at the time the decision is made, or
(b) failing to make the decision.
Power of court to make declarations as to capacity, etc.
37. (1) The court, on application to it by a person entitled by virtue of section 36 to make the application, may make one or both of the following declarations:
(a) a declaration that the relevant person the subject of the application lacks capacity, unless the assistance of a suitable person as a co-decision-maker is made available to him or her, to make one or more than one decision specified in the declaration relating to his or her personal welfare or property and affairs, or both;
(b) a declaration that the relevant person the subject of the application lacks capacity, even if the assistance of a suitable person as a co-decision-maker were made available to him or her, to make one or more than one decision specified in the declaration relating to his or her personal welfare or property and affairs, or both.
(2) Where the court makes a declaration pursuant to subsection (1)(a), it shall, unless it is clear to the court at that time that the relevant person does not intend to enter into a co-decision-making agreement, allow the relevant person such period of time as the court considers necessary (and taking account of the time periods set out in Part 4 ) to register a co-decision-making agreement.
(3) Subject to subsection (4), the court, on application to it by a person entitled by virtue of section 36 to make the application, may make a declaration as to the lawfulness of an intervention proposed to be made in respect of the relevant person the subject of the application.
(4) Subsection (3) shall not apply to an intervention where—
(a) the intervener is the court or High Court, or
(b) the intervention is being taken pursuant to an order made, or a direction given, under this Act by the court or High Court.
Payment for necessary goods and services
137. (1) A person who lacks capacity to enter into a contract for the sale of goods or services shall pay the supplier a reasonable sum for goods or services supplied at his or her request only if the goods or services are suitable to the person’s—
(a) condition in life, and
(b) actual requirements,
at the time when the goods or services, as the case may be, are so supplied.
(2) Section 2 of the Sale of Goods Act 1893 is amended by deleting “mental incapacity or”.
Consent and capacity in specific matters
138. Unless otherwise expressly provided, nothing in this Act shall be construed as altering or amending the law in force on the coming into operation of this section relating to the capacity or consent required as respects a person in relation to any of the following:
(a) marriage;
(b) civil partnership;
(c) judicial separation, divorce or a non-judicial separation agreement;
(d) the dissolution of a civil partnership;
(e) the placing of a child for adoption;
(f) the making of an adoption order;
(g) guardianship;
(h) sexual relations;
(i) serving as a member of a jury.