DOCTORINE OF ULTRA

VIRES
BUSINESS LAW

BY: SALONI SHUKLA

BBA II year “B”
  The Doctrine of Ultra Vires is a
fundamental rule of Company Law. It
states that the objects of a company,
But what is ultra as specified in its Memorandum of
vires? Association, can be departed from
only to the extent permitted by the
Act.
 In the context of company law, “ultra
vires” – “beyond the powers” in Latin –
describes a doctrine whereby a
company cannot do anything which is
beyond the objects clauses contained
in its memorandum of association

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.
Purpose of Doctrine of Ultra Vires
The Ultra Vires Doctrine was
intended to safeguard the
company's creditors and
investors. The concept of ultra
vires forbids the company from
using money from investors who
are not listed in the memorandum's
object clause.
 Radhabari Tea Company Private
Limited vs. Mridul Kumar
Bhattacharjee and Other, 2009
Indlaw GUW 44
The doctrine of ultra vires provides that an action, taken by the
board of directors of a company or the company itself beyond
the powers conferred on the company and/or its directors by the
memorandum of association of the company, is ultra vires.
The appellant-company is in the business of manufacture and sale of tea and owns a Tea
Estate, which is run under the name and style of Radhabari Tea Estate, situated in the
district of Golaghat, Assam

For the last few years, the appellant's Tea Estate ran into losses

According to the plaintiff, he had expressed the desire to buy the shares of the other
shareholders of the appellant-company at the maximum price, which might be offered
by an outsider, and the appellant-company denies the same, the admitted position is this.

Therefore, the plaintiff-respondent's claim that his offer to purchase shares at the same
rate, which had been offered by an outsider had not been heeded to by the board of
directors, the materials on record, in the face of the communication dated November 27,
2007
Thank You