A validating provision in a company's constitution (such as one validating acts done bona fide by directors notwithstanding defects in appointment or continuance) operates as against outsiders to the company, not merely between the company and its members. The limitation in s 201M(2) of the Corporations Act 2001 (Cth), which confines that section to internal effectiveness, does not apply to equivalent provisions in a company's articles of association. Where directors have ceased to satisfy a membership qualification but were acting bona fide, their acts may be validated by such a provision.
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