Doctrine Of Ultra Vires In Administrative Law Philippines

There is ultra vires act on the part of the corporate officers when they perform acts which are not authorized by the bya laws and the articles of incorporation or not delegated to them by the board of directors.

Doctrine of ultra vires in administrative law philippines. There is ultra vires act on the part of the board of directors when it performs acts which are not delegated to it by the articles of incorporation or the bylaws. Doctrine of ultra vires. The ultra vires act is completely different from an illegal act. An act legal in itself but not authorized by the object clause of the memorandum of association of a company or statute is ultra vires the company.

The motive behind the doctrine of ultra vires is to protect the investors and creditors of the company. Having seen the rational behind the ultra vires doctrine and the rules developed by courts to temper this doctrine it should be understood that there is always a thin line separating what is incidental or consequential to a certain power already granted and what is clearly ultra vires and as a result there is a lot of subjectivity involved in deciding what is ultra vires and what is not. The doctrine of ultra vires and judicial review of administrative action. The company being an artificial person its objects and powers are specified in the memorandum of association moa of the company.

The doctrine of ultra vires is the basic doctrine in administrative law. An action of the authority is intra vires when it falls within the limits of the power conferred on it but ultra vires if it goes outside this limit. Hence it is null and void. See ultimate destination doctrine.

If the administrative authority fails to follow required procedure prescribed by parent act or by the general rule it is known as procedural ultra vires. Doctrine of ultra vires. The doctrine envisages that an authority can exercise only so much power as is conferred on it by law. An act ultra vires the company cannot be ratified even by the unanimous consent of all shareholders.

To apply the doctrine of ultra vires the first question for the courts to decide is whether the provision in the act prescribing the procedure is mandatory or directory. The ultra vires act is void act and therefore it cannot be ratified even if all the directors of the company want to ratify the same. The concept of ultra vires in the company law the ultra vires mean to go beyond the object clause of a memorandum of association of a company. It means beyond the powers so that if ultra vires is the basis in which courts will interfere on matters of public administration then the point is that court will intervene on matters of public administration if the bodies have acted.

Doctrine of unforeseen events. The doctrine in the law of 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 memorandum is the most crucial document for a company.