What do you understand by the doctrine of Ultravires What are the effects of a Ultravires transactions?

What do you understand by the doctrine of Ultravires What are the effects of a Ultravires transactions?

The Doctrine of Ultra Vires is a fundamental rule of Company Law. Hence, if the company does an act, or enters into a contract beyond the powers of the directors and/or the company itself, then the said act/contract is void and not legally binding on the company. The term Ultra Vires means ‘Beyond Powers’.

What are the consequences of Ultravires acts of the company?

Effects of an Ultra Vires Act 1. 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 doctrine of Ultravires?

The doctrine of ultra vires is a fundamental law of the Indian Companies Act. It lays down that if any act of the company or any contract entered into by the directors, on behalf of the company, is beyond the powers vested in the directors and company by the object clause of the MOA, it is considered null and void.

What are statutory powers?

Statutory authority refers to the powers and duties assigned to a government official or agency through a law passed by Congress or a state legislature. It is also known as a statutory grant of authority.

What are the types of ultra vires act?

Ultra-vires acts can be generally of four types:

• Acts which are ultra-vires to the Companies Act.
• Acts which are ultra-vires to the Memorandum of the company.
• Acts which are ultra-vires to the Articles of the company but intra-vires the company.

How is MOA different from AOA?

The first difference between MOA and AOA while the MOA (Memorandum of Association) describes the powers and objects of the company, the AOA (Article of Association) defines its rules. The MOA is subordinate to the Companies Act, and the AOA (Articles of Association) is subordinate to the memorandum.

What is the difference between ultra vires and intra 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.

What is ultra vires borrowing?

A Company is said to resort to ultra vires borrowing if it exceeds the authority given to it in this respect by the Companies Act, the Memorandum and the Articles of the company. Thus, the lender cannot sue the company for the return of the loan and shall be under an obligation to return back the securities, if any.

What is meaning of statutory body?

Meaning of statutory body in English an organization with the authority to check that the activities of a business or organization are legal and follow official rules: We hope the creation of a single new regulator will consolidate regulation of the whole industry in one statutory body.

What is the function of statutory bodies?

Statutory bodies are authorized to pass the law and take the decision on the behalf of state or country. Statutory body has official permission for Legislation i.e process of enacting laws. Cabinet resolution should be passed to establish this body.

How do you use ultra vires?

If it performs acts beyond the terms of its charter these acts are said to be ultra vires. When the law of man conflicts with the law of God, the law of man is ultra vires. Their acts were vetoed on the ground that they were ultra vires.

What is MOA and AOA 11?

Memorandum of Association (MOA) is a document that contains all the fundamental data which are required for the company incorporation. Articles of Association (AOA) is a document containing all the rules and regulations that govern the company.

What is meant by MOA and AOA?

What is an example of ultra vires?

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 an example of intra vires?

The Latin phrase intra vires means “inside the powers,” and it’s often used to contrast something that’s ultra vires, “outside the powers.” Legally, an ultra vires action is anything that someone’s not authorized to do (imagine you decided to fire a co-worker, despite not being his supervisor), as opposed to an intra …

Who is liable for an ultra vires borrowing?

Borrowing ultra vires the directors, but within the power conferred by the memorandum, is voidable only and may be ratified by the company. If the borrowing is ratified, the company becomes liable to repay the money.

What is the purpose of statutory body?

What is another word for statutory?

In this page you can discover 16 synonyms, antonyms, idiomatic expressions, and related words for statutory, like: legal, lawful, rightful, regulation, regulatory, contractual, legislative, enforcement, provision, discretionary and disclosure.

What do you mean by statutory body?

What is ultra vires example?