Diwakar Prakash Garg, BBA-LLB (Hons.), School of Law, University Petroleum and Energy Studies
MEANING
Ultra Vires word originated from a Latin phrase which basically means ‘beyond the powers of’ So, Ultra Vires basically means any activity or conduct that is beyond the limits of the company or power granted to the owner of the company.
INTRODUCTION
Memorandum of Association (MOA) which is also known as the constitution of a company So, basically MOA consists of company’s powers, its area of work and most importantly its objectives. MOA provides a overview to the people working in that corporate to make sure that they must be aware of what lines they shouldn’t and may not cross.
If the corporate performs or conducts any sort of activity which is far from the scope of powers given in the memorandum then that act will be called as an ultra vires act. The Doctrine of Ultra Vires is a kind of policy that reassures the shareholders of the company and the creditors of the company that there will be no misuse of funds or assets for any kind of function which beyond the power mentioned in the Memorandum of the corporate.
