Doctrine Of Ultra Vires Simple Explanation Company Law

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Demystifying the Doctrine of Ultra Vires: Your Essential Guide to Corporate Law | Explained with Clarity 🏛️ • 🔎 Ever wondered what the Doctrine of Ultra Vires really means in the world of corporate law? 🤔 In this must-watch YouTube video, we're unraveling the complexities surrounding this crucial legal principle to equip you with the knowledge you need! 💼 • What is 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. 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’. In legal terms, it is applicable only to the acts performed in excess of the legal powers of the doer. This works on an assumption that the powers are limited in nature. Since the Doctrine of Ultra Vires limits the company to the objects specified in the memorandum, the company can be: • Restrained from using its funds for purposes other than those specified in the Memorandum • Restrained from carrying on trade different from the one authorized. • The company cannot sue on an ultra vires transaction. Further, it cannot be sued too. If a company supplies goods or offers service or lends money on an ultra vires contract, then it cannot obtain payment or recover the loan. • However, if a lender loans money to a company which has not been extended yet, then he can stop the company from parting with it via an injunction. The lender has this right because the company does not become the owner of the money as it is ultra vires to the company and the lender remains the owner. • Further, if the company borrows money in an ultra vires transaction to repay a legal loan, then the lender is entitled to recover his loan from the company. • Sometimes an act which is ultra vires can be regularized by the shareholders of the company. For example, • If an act is ultra vires the power of directors, then the shareholders can ratify it. • If an act is ultra vires the Articles of the company, then the company can alter the Articles. • Remember, you cannot bind a company through an ultra vires contract. Estoppel, acquiescence, lapse of time, delay, or ratification cannot make it ‘Intravires’. • 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. • If an act is ultra vires the directors of a company, but intra vires the company itself, then the members of the company can pass a resolution to ratify it. • If an act is Ultra Vires the Articles of Association of a company, then the same can be ratified by a special resolution at a general meeting. • • 💡 Join us as we dive deep into the heart of the Doctrine of Ultra Vires, breaking it down into simple terms that anyone can grasp. 📚 From its historical origins to its modern-day applications, we leave no stone unturned in this comprehensive explanation. 📈 • 🎓 Whether you're a law student, a business professional, or simply curious about corporate law, this video is designed for all levels of expertise! 🌟 Discover how this doctrine shapes the powers and limitations of companies, impacting their decisions and obligations. 💼 • 🚀 Ready to become a corporate law pro? Click now and get ready to master the Doctrine of Ultra Vires like never before! 🎥 Don't forget to like, subscribe, and share this video with fellow legal enthusiasts and professionals to foster a community of knowledge seekers! 📢 #company #companylaw #cafoundation #cainter #youtubeshorts #pubgmobile #pubg #bgmi #cricket #makeup #xbox #cmafoundation #cmainter #law #judiciary #cuet #clatclassesonline #freeclasses #oneshot #pw #unacademy #upsc #mostimportantquestions #exam #examstrategy #legal #vlogging #beauty #video #gaming #pubgmobile #technology #update #upscmotivation #gamer #girl #UltraViresExplained #CorporateLawMadeEasy #LegalPrinciplesDemystified #EmpowerYourKnowledge #ugcnetcommercepaper2 #stream #streamer #makeup #tutorial #vlog #viral #beautiful #nature #iphone #itunes #success #motivation #journey j

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