Doctrine Of Ultra Vires In Company Law Notes

The ultra vires acts are null and void ab initio. This doctrine prohibits the company to use the money of the investors for the purpose other than that are stated in object clause of the company enumerated in memorandum of association. Section 20 1 provides no action prosecuted as an act of shall be invalid by reason only the fact that the company does not have the ability or authority to act.

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Doctrine Of Ultra Vires Company Law Common Law Private Law

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Doctrine Of Ultra Vires

This is called the doctrine of ultra vires.

Doctrine of ultra vires in company law notes. The doctrine of ultra vires could not be established firmly until 1875 when the directors c of the ashbury railway carriage and iron company limited v hector riche 1874 75 l r. The company being an artificial person its objects and powers are specified in the memorandum of association moa of the company. The motive behind the doctrine of ultra vires is to protect the investors and creditors of the company. The doctrine of ultra vires is produced by the constitutional principles of the rule of law the sovereignty of parliament and the independence of the judiciary.

These acts are not binding on the company. Get complete study material books syllabus ppt courses question paper questions and answers. Doctrine of ultra vires has been developed to protect the investors and creditors of the company. Contents alteration doctrine of ultra vires.

Contents alteration doctrine of indoor management constructive notice of memorandum and articles. Expression ultra vires means an act beyond the powers. Effects of ultra vires transactions doctrine of ultra vires. Ultra vires doctrine in the companies act 1965.

Download company law notes pdf 2020. The doctrine of ultra vires is a fundamental rule of company law. It states that the objects of a company as specified in its memorandum of association can be departed from only to the extent permitted by the act. In the case of ashbury railway carriage and iron company.

The memorandum is the most crucial document for a company. Here the expression ultra vires is used to indicate an act of the company which is beyond the powers conferred on the company by the objects clause of its memorandum. Section associated with the doctrine of ultra vires of the companies act is section 20 1 20 2 a b c and 20 3. Pdf doctrine of ultra vires in company law agrey.

Neither the company can sue nor it can be sued for such acts ashbury railway carriage and iron company v. The word ultra means beyond and vires means powers. This doctrine can be considered as the central principle in the whole of administrative law. 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.