LAW2480 Chap.8 Company Registration, Internal Rules and Authority
Company Registration, Internal Rules and Authority
This chapter follows a company from registration to internal governance and external contracting. Registration creates the corporate person and establishes its basic attributes. A constitution and replaceable rules regulate internal relationships, while statutory contracts give those rules a defined operation. Corporate capacity must be distinguished from the authority of the human actor who signs.
Actual authority arises internally; apparent authority rests on a representation attributable to the company. Outsider protections may affect what assumptions a contracting party can make.
What this chapter covers
- 01
Registration and corporate attributes
- 02
Constitution
- 03
Replaceable rules
- 04
Statutory contract
- 05
Corporate capacity
- 06
Actual and apparent authority
- 07
Outsider assumptions
Worked example · free
Trace a contract through capacity and authority
- +1Separate the company's legal capacity from the manager's authority to act for it.
- +2Test express and implied actual authority against the role and internal limit.
- +3Identify any company representation supporting apparent authority and the landlord's reliance.
- +2Consider statutory assumptions, warning signs and the consequence of any lack of authority.
Key terms
- Constitution
- A document containing rules for a company's internal governance and relationships.
- Replaceable rules
- Statutory default governance rules applying unless displaced or modified where permitted.
- Corporate capacity
- The legal ability of the company itself to exercise powers and enter transactions.
- Actual authority
- Authority expressly or impliedly conferred through the principal-agent relationship.
- Apparent authority
- Authority arising from a principal's representation on which an outsider relies.
Company Registration, Internal Rules and Authority FAQ
Are replaceable rules part of every constitution?
Treat the constitution and statutory replaceable rules as distinct sources that may interact. Determine which rules apply to the company and whether a constitution replaces or modifies a default rule rather than assuming they are one document.
Can an agent create their own apparent authority?
No. The representation must be attributable to the principal, though it may arise through authorised conduct, position or dealing. The agent's unsupported claim that they are authorised is not enough.
Does an internal breach automatically invalidate an external contract?
Not necessarily. Internal governance, actual authority, apparent authority and statutory outsider protections must be analysed separately. A company may have internal remedies even where the outsider can still enforce the transaction.
What documents matter in an authority dispute?
Collect the contract, delegation, board resolutions, constitution, applicable replaceable rules, position description and prior correspondence with the outsider. Those records may show express or implied actual authority, the scope of the officer's role, and any company-attributable representation supporting apparent authority. Also identify what the outsider knew or suspected about internal limits.
Apply statutory assumptions separately. The external conclusion should say whether the company is bound and through which route; a second conclusion can address the officer's internal breach and any company remedy.
Exam move
Use a four-level contracting checklist: company capacity, actual authority, apparent authority and outsider assumptions. Write a distinct conclusion at each level. For internal-rules problems, identify the source of the rule and the relationship in which it operates before discussing breach. Practise with the same transaction but change the actor's job title, prior dealings and the outsider's knowledge.
Those variations reveal exactly which facts support representation and reliance. Build a registration fact sheet containing company type, membership, officeholders, registered office and the internal rules actually adopted. This prevents assumptions based only on the company name.
When a governance dispute arises, identify whether the asserted rule comes from legislation, replaceable rules, a constitution or a separate agreement, and who can enforce it in the relationship at issue. For corporate contracts, start by naming the human actor and the act said to bind the company. Test express actual authority, implied actual authority and apparent authority without collapsing them.
Under apparent authority, write the precise company-attributable representation and the outsider's reliance. Then run statutory assumptions and any knowledge or suspicion issue. Preserve contracts, delegations, board resolutions, position descriptions and prior correspondence as evidence. In timed writing, use a conclusion after every authority level.
A final statement that the company is bound should rest on a visible route, while an internal breach can be addressed separately without confusing it with enforceability against the outsider.
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