Company Directors/Secretaries

[JustinP1]

Eric Mc said:

But can the minor enter a contract on behalf of the company and, if he/she does, could the contract be enforced?

I don't think there is any case law with this, and might be surprised if there were!

My guess would be if the minor is a sole trader the existing case law would apply. However, in the case of a Ltd co. then the fact that the company is a separate legal entity and the contract is with the Ltd co. and not the minor would might mean that the contract would stand.

Of course there might be some exceptions and ridiculous and hypothetical ones, and I am guessing that these would be a test case. For example a nine year old company director viewing a sweet manufacturer and placing a verbal order for a million quid's worth of sweets. In that kind of situation it may well be said that that some of the responsibility was down to the factory in not assessing the validity of the deal.

In *any* case though in practical terms the company could have a ten year old director who then employs and authorises someone on behalf of the company to do the day to day running.

An interesting tax situation, no doubt!

Edited by JustinP1 on Monday 29th October 10:52

[Eric Mc]

Shades of Willie Wonka .

[JustinP1]

Eric Mc said:

Shades of Willie Wonka .

Indeed. It must be a fairy story as otherwise I am sure Charlie Bucket would have been royally shafted by the taxman inheriting that!

[trunnie]

Sorry if I wasn't clear in the earlier posting, but yes, the minor can bind the company. It would be illogical otherwise as the company has chosen to appoint the minor as a director to act on its behalf.

I appreciate that it seems bizarre in that the minor wearing his director's hat can enter into a valid contract, but not on his own behalf, but as I mentioned, the contracting party in the first case is the company, not its minor director.

[Eric Mc]

Isn't law wonderful.