Contracts & Obligations
Companies Act
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.
Registered person
39. (1) Where the board of directors of a company authorises any person as being a person entitled to bind the company (not being an entitlement to bind that is, expressly or impliedly, restricted to a particular transaction or class of transactions), the company may notify the Registrar in the prescribed form of the authorisation and the Registrar shall register the authorisation.
(2) A person so authorised, where his or her authorisation is registered in the foregoing manner, is referred to in this Act as a “registered person”; where, in a provision of this Act, that expression appears without qualification, it shall be taken as a reference to a registered person authorised by the board of the directors of the company to which the provision falls to be applied.
(3) Where the board of directors of a company revokes an authorisation of a person as a person entitled to bind the company (being an authorisation notified to the Registrar in the prescribed form), the person shall, notwithstanding that revocation, continue to be regarded for the purposes of this Act as a registered person unless and until the company notifies the Registrar in the prescribed form of that revocation.
(4) References in this section to a person’s entitlement to bind the company are references to his or her authority to exercise any power of the company and to authorise others to do so.
(5) In subsection (4) “power of the company” does not include—
(a) any power of management of the company exercisable by its board of directors (as distinct from any power of the board to enter into transactions with third parties), or
(b) a power of the company which this Act requires to be exercised otherwise than by its board of directors.
(6) For the avoidance of doubt, for the purposes of this section the provisions of a company’s constitution with regard to a person’s office or powers shall not, in themselves, be taken as an authorisation by the board of the directors of the company of the person as a person entitled to bind the company.
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.
Powers of attorney
41. (1) Notwithstanding anything in its constitution, a company may empower any person, either generally or in respect of any specified matters, as its attorney, to execute deeds or do any other matter on its behalf in any place whether inside or outside the State.
(2) A deed signed by such attorney on behalf of the company shall bind the company and have the same effect as if it were under its common seal. 4
Form of contracts
42. (1) Contracts on behalf of a company may be made as follows—
(a) a contract which, if made between natural persons, would be by law required to be in writing and to be under seal, may be made on behalf of the company in writing under the common seal of the company;
(b) a contract which, if made between natural persons, would be by law required to be in writing, signed by the parties to be charged therewith, may be made on behalf of the company in writing, signed by any person acting under its authority, express or implied;
(c) a contract which, if made between natural persons, would by law be valid although made by parol only, and not reduced into writing may be made by parol on behalf of the company by any person acting under its authority, express or implied.
(2) A contract made according to this section shall bind the company and its successors and all other parties to it.
(3) A contract made according to this section may be varied or discharged in the same manner in which it is authorised by this section to be made.
The common seal
43. (1) A company shall have a common seal or seals that shall state the company’s name, engraved in legible characters.
(2) Save as otherwise provided by this Act or by the constitution of the company—
(a) a company’s seal shall be used only by the authority of its directors, or of a committee of its directors authorised by its directors in that behalf; and
(b) any instrument to which a company’s seal shall be affixed shall be—
(i) signed by a director of it or by some other person appointed for the purpose by its directors or by a foregoing committee of them; and
(ii) be countersigned by the secretary or by a second (if any) director of it or by some other person appointed for the purpose by its directors or by a foregoing committee of them.
(3) Save as otherwise provided by the constitution of the company, if there be a registered person in relation to a company, the company’s seal may be used by such person and any instrument to which the company’s seal shall be affixed when it is used by the registered person shall be signed by that person and countersigned—
(a) by the secretary or a director of the company; or
(b) by some other person appointed for the purpose by its directors or a committee of its directors authorised by its directors in that behalf.
Power for company to have official seal for use abroad
44. (1) In this section—
“official seal”, in relation to a company, means the official seal referred to in subsection (2);
“place abroad” means any territory, district or place not situate in the State.
(2) A company may, if authorised by its constitution, have for use in any place abroad an official seal which shall resemble the common seal of the company with the addition on its face of the name of every place abroad where it is to be used.
(3) A deed or other document to which an official seal is duly affixed shall bind the company as if it had been sealed with the common seal of the company.
(4) A company having an official seal for use in any place abroad may, by writing under its common seal, authorise any person appointed for the purpose in that place (the “agent”) to affix the official seal to any deed or other document to which the company is party in that place.
(5) The authority of the agent shall, as between the company and any person dealing with the agent, continue during the period, if any, mentioned in the instrument conferring the authority, or, if no period is there mentioned, then until the notice of revocation or determination of the agent’s authority has been given to the person dealing with him or her.
(6) The person affixing an official seal shall, by writing under his or her hand, certify on the deed or other instrument to which the seal is affixed, the date on which and the place at which it is affixed.
Pre-incorporation contracts
45. (1) Any contract or other transaction (including any application to any lawful authority) purporting to be entered into by a company prior to its formation, or by any person on behalf of the company prior to its formation, may be ratified by the company after its formation.
(2) Upon such contract or other transaction being so ratified, the company shall become bound by it and entitled to the benefit of it as if the company had been in existence at the date of such contract or other transaction and had been a party to it.
(3) Prior to such ratification (if any) by the company, the person or persons who purported to act in the name or on behalf of the company shall, in the absence of express agreement to the contrary, be personally bound by the contract or other transaction and entitled to the benefit of it.
Bills of exchange and promissory notes
46. A bill of exchange or promissory note shall be deemed to have been made, accepted or endorsed on behalf of a company, if made, accepted or endorsed in the name of or by or on behalf or on account of, the company by a person acting under its authority.
Liability for use of incorrect company name
47. (1) If an officer of a company or any person on its behalf does any of the following things, the officer or person shall be guilty of a category 4 offence.
(2) Those things are:
(a) uses or authorises the use of any seal purporting to be a seal of the company on which its name is not engraved in legible characters;
(b) issues or authorises the issue of any business letter of the company or any notice or other official publication of the company, or signs or authorises to be signed on behalf of the company any bill of exchange, promissory note, endorsement, cheque or order for money or goods, in which its name is not mentioned in the manner described in section 49 ;
(c) issues or authorises the issue of any invoice, receipt or letter of credit of the company in which its name is not mentioned in the manner described in section 49 .
(3) In the circumstances of his or her doing a relevant thing mentioned in subsection (2) (b), the officer or other person shall be personally liable to the holder of the bill of exchange, promissory note, cheque or order for money or goods for the amount thereof unless—
(a) it is duly paid by the company; or
(b) it appears to the court that no injustice will be done by imposing liability for the amount on the company.
Authentication by company of documents
48. A document or proceeding requiring authentication by a company may be signed by a director, secretary, registered person or other authorised officer of the company, and need not be under its common seal.
The text in italics on this page is sourced from the Irish Statute Book and is re-published under the Licence for Re-Use of Public Sector Information made pursuant to Directive 2003/98/EC Directive 2013/37/EU of the European Parliament and of the Council on the re-use of public sector information transposed into Irish law by the European Communities (Re-Use of Public Sector Information) Regulations 2005 to 2015.