Doctrine Of Ultra Vires In Company Law Slideshare

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. Ultra vires doctrine in the companies act 1965. The company being an artificial person its objects and powers are specified in the memorandum of association moa of the company.

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Doctrine Of Ultravires

Badar Uz Zaman

Doctrine Of Ultra Vires

Ppt Unit 3 18th Sep

653 as decided by the house of lords.

Doctrine of ultra vires in company law slideshare. Business company that ultra vires acts are invalid. The doctrine of ultra vires is a fundamental rule of company law. Doctrine of ultra vires under indiancompanies act 1956 presentation by mohit garg nischay bhargava bba 3rd sem a 2. It established its roots in 1875 when the directors and company of the ashbury railway carriage and iron company limited v hector riche 1874 75 l r.

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. Section associated with the doctrine of ultra vires of the companies act is section 20 1 20 2 a b c and 20 3. Investment acquired through ultra vires transaction. The doctrine of ultra vires.

According to company law. These acts are not binding on the company. 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. Effects of ultra vires transactions doctrine of ultra vires.

In ashbury railway carriage and iron company ltd v. An ultra vires act is void and cannot be ratified even if all the directors wish to ratify it. It appears to me to be important that the doctrine of ultra vires as it was explained in that case should be maintained. The lord chancellor lord selborne restated the doctrine as follows i assume that your lordships will not now recede from anything that was determined in the ashbury railway company vs.

The action transaction may be reviewed in two the position under common law and under the companies act 1965. Intra vires the company but not done in prescribed manner this can be validated by shareholders consent. Introduction ultra means beyond vires means powers an act of the company which beyond the objects clause. 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 ultra vires acts are null and void ab initio. Ultra vires the directors but intra vires the company can be ratified by shareholders in agm. The doctrine of ultra vires could not established its roots.

The company still has rights exceptions 7. The memorandum is the most crucial document for a company. Doctrine of ultra vires has provides protection to the investors and creditors o the company.