Memorandum of Association Doctrine of Ultra Vires Doctrine

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Memorandum of Association Doctrine of Ultra Vires

Memorandum of Association Doctrine of Ultra Vires

Doctrine Of Ultra Vires • Ultra means ‘beyond’ and Vires means ‘powers’ • The

Doctrine Of Ultra Vires • Ultra means ‘beyond’ and Vires means ‘powers’ • The purpose of these restrictions is to protect: – Investors of the company – Creditors of the company An act that is ultra vires the company cannot be ratified even by the whole body of shareholders.

Doctrine Of Ultra Vires – Ashbury Rly. Carriage and Iron Co. Ltd. V. Richie

Doctrine Of Ultra Vires – Ashbury Rly. Carriage and Iron Co. Ltd. V. Richie (1875): A company was incorporated with the following objectives: • To make, sell or lend on hire, railway carriages and wagons • To carry on the business of mechanical engineers and general contractors • To purchase , lease, work and sell mines, minerals, land buildings The company entered into a contract with Richie for the financing of the construction of a railway line in Belgium.

Doctrine Of Ultra Vires • A telephone company put up telephone wires in a

Doctrine Of Ultra Vires • A telephone company put up telephone wires in a certain area. The company had no power in the memorandum to put up these wires there. The defendants cut them down. • Held that the company could sue for the damages.

Doctrine Of Ultra Vires – Acts Ultra Vires the directors • If an act

Doctrine Of Ultra Vires – Acts Ultra Vires the directors • If an act is within the power of the company but ultra vires the power of the directors, it can be ratified by the resolution in a general meeting. – Acts Ultra Vires the Articles • Any act ultra vires the articles can be ratified by altering the articles in a special resolution.