What is the ratio in Royal British Bank v Turquand?

Third parties dealing with a company in good faith are entitled to assume that all internal management procedures have been properly complied with, creating the 'indoor management rule'.

What did the court decide in Royal British Bank v Turquand?

The court held that the bank could recover the loan despite the lack of proper shareholder authorization, as third parties can presume internal procedures were followed.

Why is Royal British Bank v Turquand important for company law?

It protects third parties dealing with companies by creating a presumption that internal procedures were followed, enabling confident commercial dealings without investigating every internal matter.

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