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Y Ltd whose articles are similar to Table A, publish a weekly magazine. In one issue an article is critical of the policies of the...

      

Y Ltd whose articles are similar to Table A, publish a weekly magazine. In one issue an article is critical of the policies of the city commission. A number of Commissioners who are also members of the company requisition a general meeting and secure the passing of an ordinary resolution ordering the company to publish in the next issue a withdrawal of the criticism. The directors of the company are adamant.

The angry commissioners approach you for the purpose of filing an action to compel the directors to publish a withdrawal.

Advise them.

  

Answers


Martin
This doctrine is to the effect that persons who deal with the company are deemed to know the contents of its public documents, namely memorandum, articles special resolutions etc.

- They are deemed to know the company?s contractual capacity i.e. whether a
transaction is intra or ultra vires the company.

- This is because these documents are registrable with the registrar and are open for inspection by any person who cares to inspect them.
- This doctrine protects the company from persons who do not inquire.
- It is a modification to the doctrine of indoor management. i.e. rule in TurquandsCase
- This doctrine operates negatively in that although parties are deemed to know the contents of the public documents, a party can only rely on those contents if it has actual knowledge of their existence in the documents. It was so held in RamaCorporation v Proved Tins and General Investments where it was held that the plaintiff could not rely on the article permitting delegation since it had no notice of its existence. The company could not be held liable on the contract.

marto answered the question on February 6, 2019 at 06:26


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