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ACCA Applied Skills · Corporate and Business Law (Global) · Other company officers

Zentra Ltd's board appoints Amira as company secretary. Under the common law position as developed in the English authority of Panorama Developments v Fidelis Furnishing Fabrics (the company secretary as agent), which statement best describes Amira's authority when she enters into contracts on the company's behalf?

The company secretary can bind the company through ostensible authority for contracts relating to administration, such as hiring cars or staff for the office. Under Panorama, the role is no longer merely clerical, but it does not extend to commercial trading decisions that need board authority.

  1. AShe has no authority to bind the company because only directors can contract for it
  2. BShe has ostensible authority to bind the company in contracts relating to the administrative side of its businessCorrect
  3. CShe has unlimited authority to bind the company in all trading contracts

Explanation

Following Panorama, a company secretary is an officer with ostensible authority to make contracts connected with the administrative running of the company, such as hiring office cars. She is not limited to having no authority, and she cannot bind the company to trading contracts outside administration without further authority.

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