Section 19 - Limits of authority of company

(1) Where the registered constitution of a company sets out the nature of business or objects of the company, there is deemed to be a restriction in the registered constitution on the business or activities in which the company may engage, unless the registered constitution expressly provides otherwise.

(2) Where the registered constitution of a company provides for any restriction on the business or activities in which the company may engage

(a) the capacity and powers of the company shall not be affected by that restriction; and

(b) an act of the company, a contract or other obligation entered into by the company and a transfer of property to or by the company shall not be invalid by reason only of the fact that it was done in contravention of that restriction.

(3) Subsection (1) shall not affect the application of the provisions of subsection (5) and sections 200, 219 and 275.

(4) Despite subsection (1), an act of a company and a conveyance or transfer of property to, or by, a company is not invalid by reason of the fact that the act, conveyance or transfer was not done or made for the furtherance of any of the authorised businesses or that the company was otherwise exceeding its objects or powers.

(5) On the application of

(a) a member of the company, or

(b) the holder of a debenture secured by a floating charge over all or any of the property of the company or by the trustee for the holders of those debentures,

the Court may prohibit, by injunction, the doing of an act or the conveyance or transfer of a property in breach of subsection (1).

(6) Where the transactions sought to be prohibited in proceedings under subsection (5) are being, or are to be, performed or made in accordance with a contract to which the company is a party, the Court may,

(a) if the Court considers it equitable and if all the parties to the contract are parties to the proceedings, set aside and prohibit the performance of the contract, and

(b) allow for the payment of compensation to the company or to the other parties to the contract for the loss or damage sustained by the company or the other parties by reason of the setting aside or prohibition of the performance of the contract, but not compensation for loss of anticipated profits to be derived from the performance of the contract.

(7) The capacity of the company to do an act shall not be affected by the fact that the act is not, or would not be, in the best interests of a company.