5/11/2011 Usual authority Hua Rong Finance Ltd v Mega Capital Enterprises Ltd Ors [2001]3 HKLRD 623 Insufficient as giving rise to apparent authority to obtain loan for co: >simply being director >simply being 1/3 shareholder >having custody of seal 15 Protection of outsiders Protection where actual authority lacking: apparent authority Protection where internal procedural irregularity of company might have invalidated act: -s 157:validity of acts of directors or managers where defect in appointment or in qualifications Indoor management rule or internal management rule-the rule in Turquand's case 16 85/11/2011 8 15 • Hua Rong Finance Ltd v Mega Capital Enterprises Ltd & Ors [2001] 3 HKLRD 623  Insufficient as giving rise to apparent authority to obtain loan for co: simply being director simply being 1/3 shareholder having custody of seal Usual authority 16 Protection of outsiders • Protection where actual authority lacking: - apparent authority • Protection where internal procedural irregularity of company might have invalidated act: - s 157: validity of acts of directors or managers where defect in appointment or in qualifications - lndoor management rule or internal management rule - the rule in Turquand’s case