5/11/2011 Where company does have objects Company must comply with objects clause:s 5B(1). Member may bring proceedings to restrain it from acting contrary to objects:s 5B(2)(subject to proviso). Action contrary to objects clause is not invalid by reason only of the contravention:s 5B(3). Effect of ss 5A,5B:examples Objects clause:restriction to business of running a restaurant. Directors wish to venture into retailing clothes. Scenario 1:directors have not yet acted on intentions. Scenario 2:directors have caused company to contract with clothing manufacturer. 10 65/11/2011 5 9 Where company does have objects • Company must comply with objects clause: s 5B(1). • Member may bring proceedings to restrain it from acting contrary to objects: s 5B(2) (subject to proviso). • Action contrary to objects clause is not invalid by reason only of the contravention: s 5B(3). 10 Effect of ss 5A, 5B: examples • Objects clause: restriction to business of running a restaurant. • Directors wish to venture into retailing clothes. • Scenario 1: directors have not yet acted on intentions. • Scenario 2: directors have caused company to contract with clothing manufacturer