Textual Amendments
F1Ss. 7A-7F and cross-heading inserted (1.4.2004) by Co-operatives and Community Benefit Societies Act 2003 (c. 15), ss. 3, 7(1); S.I. 2003/2678, art. 2(1)
(1)In favour of a person dealing with a registered society in good faith, the power of the committee to bind the society, or authorise others to do so, shall be deemed to be free of any limitation under the society’s registered rules.
(2)For this purpose—
(a)a person “deals with” a society if he is a party to any transaction or other act to which the society is a party;
(b)a person shall not be regarded as acting in bad faith by reason only of his knowing that an act is beyond the powers of the committee under the society’s registered rules; and
(c)a person shall be presumed to have acted in good faith unless the contrary is proved.
(3)The references above to limitations on the powers of the committee under the society’s registered rules include limitations deriving—
(a)from a resolution of the society in general meeting or a meeting of any class of members; or
(b)from any agreement between the members of the society or of any class of members.
(4)Subsection (1) of this section does not affect any right of a member of the society to bring proceedings to restrain the doing of an act which is beyond the powers of the committee; but no such proceedings shall lie in respect of an act to be done in fulfilment of a legal obligation arising from a previous act of the society.
(5)Nor does subsection (1) affect any liability incurred by a member of the committee, or any other person, by reason of the committee’s exceeding its powers.
(6)The operation of this section is restricted by section 7D of this Act (application to charitable societies); and section 7E of this Act (transactions with members of the committee and connected persons in excess of powers) has effect notwithstanding this section. ]