THE CORPORATIONS LAW

CHAPTER 2D - OFFICERS AND EMPLOYEES

PART 2D.3 - APPOINTMENT, REMUNERATION AND CESSATION OF APPOINTMENT OF DIRECTORS

Division 1 - Appointment of directors

SECTION 201M   EFFECTIVENESS OF ACTS BY DIRECTORS  

201M(1)  [Effectiveness of acts]  

An act done by a director is effective even if their appointment, or the continuance of their appointment, is invalid because the company or director did not comply with the company's constitution (if any) or any provision of this Law.

201M(2)  [Ramifications not addressed]  

Subsection (1) does not deal with the question whether an effective act by a director:

(a)  binds the company in its dealings with other people; or

(b)  makes the company liable to another person.

Note:

The kinds of acts that this section validates are those that are only legally effective if the person doing them is a director (for example, calling a meeting of the company's members or signing a document to be lodged with ASIC or minutes of a meeting). Sections 128-130 contain rules about the assumptions people are entitled to make when dealing with a company and its officers.