-As the company is a legal person, it can enter into contracts with persons inside and outside the company-No such restriction under the CA 2006 unless otherwise specified in the AOA (Articles of Association)
Features of a company: (Contractual Capacity)
The Companies Act 2006 permits a company to enter into contracts with individuals both inside and outside the company. This means that a company can legally enter into a contract with one or more individuals to buy or sell goods or services, or to do any other transaction which might be necessary for the operation of the business.
However, it’s important to note that even though there’s no specific restriction under the Companies Act 2006, the Articles of Association (AOA) of a company may impose some limitations on the company’s ability to enter into contracts. The AOA is essentially a set of rules that govern the way in which a company conducts its affairs, including how it can enter into contracts.
For example, the AOA may specify that the company cannot enter into certain types of contracts without the approval of the board of directors or the shareholders. Alternatively, it may spell out the powers of directors to enter into certain types of contracts on behalf of the company.
Therefore, while the Companies Act 2006 doesn’t place any restrictions on a company’s ability to enter into contracts, the AOA of the company must be consulted to determine if any limitations exist.
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