(a) Explain the circumstances under which directors of a company will be held personally liable for acts committed on behalf of the company.(12 marks)
(b) Rush,Fast and Speed are directors of Modern Technology Company Ltd.The company was formed with the main object of computer training.However,due to the power rationing,the company business has fallen below the expected productivity and is threatened with closure.In order to keep afloat,the three directors approached Money Bank Ltd.for an overdraft of Sh.2 million to establish an off-license bar and restaurant within the city centre.The credit manager asked the company to provide its copy of the memorandum of association and the company complied. Modern Technology was then given the overdraft.However,it has run into financial difficulties and is unable to repay the loan.
Can the bank successfully sue for recovering of the loan?
Discuss.(8 marks)
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