The Articles of Association of Dee Ltd state that the company has power to borrow money and that the directors have authority to borrow up to £200,000 on behalf of the company. The board has resolved to purchase a piece of land for £300,000. The Midwest Bank plc has agreed to make a loan of £250,000 to Dee Ltd to acquire the land.
Which of the following statements is correct?
A . The loan is void as Dee Ltd has acted ultra virus.
B . As the directors have exceeded their authority, the bank cannot enforce the loan against Dee Ltd.
C . As the directors have resolved to obtain the loan they have acted in accordance with the company’s constitution.
D . The loan is ultra virus the directors who will be personally liable for any loss caused to the company, unless their actions are ratified by the shareholders.
Answer: D
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