corporate capacity(One of the things which determines whether a transaction entered into by a company is valid and binding on the company is the company's legal capacity to enter into that particular transaction. In the case of individuals, the question of capacity is determined by the person's age and by their ability to understand the nature of the obligation undertaken. Thus, a lack of capacity is seldom raised in contracts entered into between most normal adults. Although a company is not a person, it is nevertheless conferred legal personality and status by the Companies Act (Cap 50). Section 19(5) provides that upon incorporation, a company shall be capable of ‘suing and being sued and having perpetual succession and a common seal with power to hold land'. But what determines a company's legal capacity? The answer depends on the provisions of the company's memorandum of association, the operation of the doctrine of ultra vires, and the impact of relevant statutory provisions. accaglobal.comAlexander Demidov)
