Companies Act 2014 section 40

Persons authorised to bind company

Section 40 establishes who is deemed to have authority to bind a company in transactions with third parties, and sets out important exceptions where that deemed authority does not apply.

• The board of directors and any registered person are automatically deemed to have authority to exercise any power of the company and to authorise others to do so, regardless of limitations in the company's constitution.
• Directors remain subject to their duties, including respecting constitutional limitations, and can be held liable for any breach — the deemed authority protects outsiders dealing with the company, not the directors themselves.
• The protection does not extend to insiders: where the board has exceeded constitutional limitations, the deemed authority cannot be relied upon by directors, shadow directors, registered persons, or persons connected with any of them.
• When determining whether someone had apparent (ostensible) authority to act for the company, no reference may be made to the company's constitution, and this section supplements rather than replaces the established Turquand rule.