What is the Turquand rule?
The Turquand rule relates to the presumption of the authority of an agent of a company, and has a number of requirements and subtleties. The general rule is that if an agent is unauthorised, he does not validly bind the principal and accordingly no valid contract is concluded with the principal.
What is the meaning of indoor management explain with examples?
The doctrine of indoor management, also known as the Turquand rule is a 150-year old concept, which protects outsiders against the actions done by the company. Any person who enters into a contract with the company shall ensure that the transaction is authorised by the articles and memorandum of the company.
What is the rule of constructive notice?
A legal presumption that a party has notice when it can discover certain facts by due diligence or inquiry into the public records. A party found to have constructive notice cannot deny knowledge of a fact because that party did not have actual knowledge, since there is a duty to conduct due investigation.
What is doctrine of indoor management in simple words?
In simple words, the doctrine of indoor management means that a company’s indoor affairs are the company’s problem. Therefore, this rule of indoor management is important to people dealing with a company through its directors or other persons.
Who does the Turquand rule protect?
The Turquand rule has essentially been codified in section 20(7) of the Companies Act, 2008 which provides that a person dealing with a company in good faith, other than a director, prescribed officer or shareholder of the company, is entitled to presume that the company, in making any decision in the exercise of its …
What are the exceptions of the Turquand rule?
The Turquand rule protects only bona fide third parties. Ex-employees who are reasonably presumed to be aware of the internal affairs of the erstwhile companies are not protected.
What is Turquand rule exception?
Knowledge Of Irregularity: This is the foremost exception to Turquand’s Rule, as the advantage of Turquand’s rule cannot be gained by persons, who has already have a knowledge of irregularity in company’s internal management.
What is a constructive notice example?
The constructive notice simply means that notice was given, even without an actual notice existing. A common example of this is when a court is unable to directly reach someone and publishes a summons in the public newspaper. This is considered to be a constructive notice.
What is doctrine of constructive notice with example?
Constructive notice is an idea in the legal world that a person may be notified by public posting of a pending legal action. For example when a court is unable to directly reach someone and publishes a summon in the public newspaper.
What is the Turquand rule Ito Companies Act 2008?
Why is the Turquand rule adopted in corporate law?
The common-law Turquand rule in South African law protects persons from being affected by a company’s non-compliance with an internal formality pertaining to the authority of its representatives.
What is doctrine of ultra vires?
The Doctrine of Ultra Vires is a fundamental rule of Company Law. It states that the objects of a company, as specified in its Memorandum of Association, can be departed from only to the extent permitted by the Act.
What is the difference between constructive and actual notice?
Constructive notice is a legal concept. It is an acknowledgment that a person should be aware of something, even though no verbal or written notice takes place. Actual notice is a legal term that suggests that there is some form of notice that a person has been made aware of something.
What is the difference between actual and constructive?
The law provides for two different charges: Actual possession of drugs is when the police find the drugs on you, in your hand, and no one else had equal access to the drugs found. Constructive possession of drugs occurs when law enforcement believes there are multiple people with knowledge and access to drugs.
What is the doctrine of notice?
Under the doctrine of notice, a bona fide purchaser of a legal estate for value takes priority over any pre-existing equitable interest which is not registrable as a land charge, provided they did not have actual, constructive or imputed notice of their existence.
What is the difference between actual notice and constructive notice?
What does RF in a company name mean?
Ring Fenced
RF is the abbreviation for “Ring Fenced” and section 11 (3) (b) requires every company to use “(RF)” as part of its name “if the company’s Memorandum of Incorporation includes any provision contemplated in sections 15 (2) (b) or (c) restricting or prohibiting the amendment of any particular provision of the Memorandum” …
Where does the Turquand rule apply?
What are the types of ultra vires?
Ultra-vires acts can be generally of four types:
- Acts which are ultra-vires to the Companies Act.
- Acts which are ultra-vires to the Memorandum of the company.
- Acts which are ultra-vires to the Articles of the company but intra-vires the company.
What is Turquand rule?
This Doctrine is also termed as ‘Turquand Rule’ and was enunciated in the famous and leading case of Royal British Bank v Turquand in 1856. It provides a shelter and protection to the outsiders dealing with the company that are, in no way, bound to judge the regularity of the internal procedures of a company.
What is the difference between the statutory and common law Turquand rule?
Another difference between the statutory and common law Turquand rule is that, while the common law Turquand rule will not apply to someone who knew or suspected that an internal formality had not been complied with, – Section 20 (7) excludes a third party who ‘reasonably ought to have known’ that the formality had not been complied with.
Does the statutory Turquand rule protect an innocent party?
The statutory Turquand rule seemingly protects an innocent party not only when the procedural requirements are laid down by the company’s constitution but also when they are laid down by the Act.