Doctrine of Ultra Vires
The Doctrine of Ultra Vires Illustrated and Explained by Selected Cases Classified and Fully Annotated Classic Reprint. Ultra vires is a Latin phrase used in law to describe an act which requires legal authority but is done without it.
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An act may be lawful but it may not be in the best interests of people who will be affected by that act.
. The doctrine of ultra vires sideration that if the examination were made only a lawyer would be able to render a reliable opinion on the matter and even he. This doctrine prevents the company from employing the money of the investors and creditors elsewhere which is outside the scope of the object clause of the memorandum of the. In legal parlance it is used to describe when a person whether natural or artificial or a body have acted beyond the power granted to them by law.
Thus the expression ultra vires means an act beyond the. This implies that somebody is acting on the far side of the scope of the authority or power thats granted to him by law contract or agreement. The doctrine of ultra vires is one of the key principles in company law.
Its opposite an act done under proper authority is intra vires. An ultra vires act is one beyond the purposes or powers of a corporation. The doctrine of ultra vires provides a safeguard for the relationships between a company and its members.
The expression ultra vires consists of two words. Doctrine of ultra vires has been developed to protect the investors and creditors of the company. The concept of the doctrine of ultra vires enables the men to determine whether the action is legitimate or illegitimate.
The object of declaring such acts as ultra vires is to protect the interests of shareholders and all others who deal with the company. Ultra Vires is a Latin word which literally means beyond the power. The Doctrine Of Ultra Vires.
This is called the doctrine of ultra vires which has been firmly established in the case of Ashtray Railway Carriage and Iron Company Ltd v. The companys activities are confined strictly to the objects mentioned in its memorandum and if they go beyond these objects then such acts will be ultra vires. Ultra vires is a Latin phrase that interprets to beyond the powers.
As a doctrine it limits the actions of a company to the ones authorized under the Objects Clause of the Memorandum of Association MOA. Though largely obsolete in modern private corporation law the doctrine remains in full force for government entities. The doctrine of ultra vires protects the interest of the lenders by giving them assurance that their money would be returned if the company acts outside the authority given by their object clause.
The company being an artificial person its objects and powers are specified in the memorandum of association of the company. Legal issues relating to ultra vires can arise in a variety of contexts. Companies and other legal.
Doctrine of Ultra Vires The Memorandum being the constitution of the company sets out the principal objectives powers scope and its area of operation both internal and external. A company therefore can do anything within the scope of. Literally the term ultra vires signifies beyond powers.
The doctrine of ultra vires is the basic doctrine in the area of administrative law. Overview of Doctrine of Ultra Vires The National Companies Act establishes the notion of ultra vires as a fundamental law. The Ultra Vires Doctrine was intended to safeguard the companys creditors and investors.
The doctrine intends to provide that an authority can exercise only so much power as is conferred on it by law. Ultra means beyond and Vires means powers. The ultra vires debate started in the context of a review of non-statutory power but the debate quickly moved on to become one about the radical English doctrine of parliamentary sovereignty.
Whereas an action of the concerned authority is said to be intra vires when it falls within the limits of the power conferred on it but ultra vires if it goes outside this. This concept has been elaborated by the judges in various judgments over a given period. This book should contain text in eng.
The doctrine of ultra vires played an important role in the development of corporate powers. In Administrative law it is mainly. The concept of ultra vires forbids the company from using money from investors who are not listed in the memorandums object clause.
This doctrine prevents a company to employ the money of the investors for a purpose other than those stated in the objects clause of its memorandum. Meaning of Doctrine of Ultra Vires. The main aim of the doctrine of ultra vires is to protect the investors and the creditors of the company from suffering any kind of loss for which the company is responsible to pay.
A high degree of consensus on that doctrine and a rather surreal choice of premises by the common law and legislative intent camps. This phrase is widely used in different branches of law. The term Doctrine of Ultra-Vires denotes the set of principles that determines which acts are Beyond the power of the company.
Acts that are intra vires may equivalently be termed valid and those that are ultra vires termed invalid. Ultra vires is opposite from intra vires that is Latin for within the powers. The concept of the doctrine of ultra vires was first introduced in the United Kingdom in 1612.
It states that every act of the business or any agreement entered into it on the account of a client by the administrators is worthless and invalid if it exceeds the powers granted in the members and business by the MOAs scope. Considering the company any transaction or act performed by the company or its directors which is beyond their power or legal authority or which is external to the scope of its objects would be regarded as ultra vires.
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