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What does the term ultra vires doctrine mean?
beyond the powers
Ultra vires translates to ‘beyond the powers’. It is used to describe an act which requires legal authority or power but is then completed outside of or without the requisite authority.
What is the principle of ultra vires doctrine?
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 doctrine of ultra vires played an important role in the development of corporate powers.
What is ultra vires example?
An act of a corporation is ultra vires when the corporation acts beyond the scope of the powers and purposes provided to it by its statute of incorporation. Ultra vires acts performed by a corporation are void (see Communities Economic Development Fund v. Canadian Pickles Corp., 1991 CarswellMan 402 (S.C.C.)).
What is ultra vires act of the corporations?
The ultra vires doctrine. holds that certain legal consequences attach to an attempt by a corporation to carry out acts that are outside its lawful powers. Ultra vires (literally “beyond the powers”) is not limited to illegal acts, although it encompasses actions barred by statute as well as by the corporate charter.
What is doctrine of ultra vires and its effects?
The Doctrine of Ultra Vires. 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.
What are the effects of ultra vires agreement?
Effects of an Ultra Vires Act An ultra vires act will be wholly void and it will not bind the company; neither the company nor the outsider can enforce the contract. 2. Any member of the company can bring injunction against the company to prevent it from doing any ultra vires act.
What is the difference between intra vires and ultra vires?
The phrase Ultra vires is a combination of Latin words which refers to “beyond the powers”. If an act requires legal authority and it is done with such an authority, it is characterized in law as intra vires literally meaning “within the powers” and if it is done without such authority, it is ultra vires.
Are ultra vires act valid?
Summing up the Doctrine of Ultra Vires 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. Hence, it is null and void. An act ultra vires the company cannot be ratified even by the unanimous consent of all shareholders.
Are there exceptions to the doctrine of ultra vires?
Exceptions to the Doctrine of Ultra Vires Any act that is done in an irregular manner but is otherwise intra-vires the company, can be validated/ratified by the shareholders of the company. Any act which ultra-vires the directors of the company but is otherwise intra-vires the company can be ratified by the shareholders of the company.
What is the meaning of ultra vires act?
Meaning to go beyond the powers that were granted by parliament under the enabling act. Meaning of the latin term “Ultra vires” from the University of Kent: ‘Beyond the powers’ – Describing an act by a public authority, company, or other body that goes beyond limits of the powers conferred on it. Ultra vires acts are invalid (compare intra vires).
Is there a law against ultra vires of company?
However, there is nothing in law to prevent a company from protecting its property, though it is ultra vires the company. The acts done or contracts made beyond the powers given by the Articles but are within the powers of the Memorandum are called ultra vires the Articles but intra vires the company.
What are the legal principles of ultra virus?
These principles included the ability of shareholders to ratify an ultra vires transaction; the application of the doctrine of Estoppel, which prevented the defense of ultra vires when the transaction was fully performed by one party; and the prohibition against asserting ultra vires when both parties had fully performed the contract.