Tag: ultra

what is ultra vires in company law

what is ultra vires in company law插图

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UltraVires[Latin, Beyond the powers.] The doctrine in the lawof corporations that holds that if a corporation enters into a contract that is beyond the scope of its corporate powers, the contract is illegal. The doctrine of ultraviresplayed an important role in the development of corporate powers.

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  • What is doctrine of ultra vires in company law?

  • Such an act cannot be ratified by the directors even if they wish to and this is called the doctrine of ultra vires. The word 鈥榰ltra鈥?means beyond and 鈥榲ires鈥?means power. Hence 鈥榰ltra vires鈥?meaning is an act of the company which is beyond the powers given to the company via the objects specified in the MOA of the company.

  • What is 鈥榰ltra vires鈥?

  • The word 鈥榰ltra鈥?means beyond and 鈥榲ires鈥?means power. Hence 鈥榰ltra vires鈥?meaning is an act of the company which is beyond the powers given to the company via the objects specified in the MOA of the company. Let鈥檚 explain the doctrine of ultra vires in detail.

  • What happens if an act is ultra vires the articles?

  • If any act is ultra vires the articles of the company, then the articles of association of the company can be altered by a special resolution to validate the act. Even if a property acquisition by the company is ultra-vires, the right of the company over such property will stay secured.

  • What is the difference between ultra vires and illegal transactions?

  • The ultra vires act or transaction is different from an illegal act or transaction, although both are void. An act of a company which is beyond its objects clause is ultra vires and, therefore, void, even if it is illegal. Similarly an illegal act will be void even if it falls within the objects clause.