Ishaan Deepak Joshi, MIT-WPU Faculty of Law
ABSTRACT
In Company Law, there lies the fundamental Doctrine of ‘Ultra Vires’. It is stated in it that the contents of the Object Clause of the Company, contained in it’s Memorandum of Association are to be departed from only if so, is done as per the provisions of the Companies Act prevalent at the time. Therefore, where a company enters into a contract or commits an act beyond the powers of the company itself or its directors, such a contract or act will be deemed to be void and will not be binding on the company legally. Ashbury Railway Carriage and Iron Co Ltd v Riche (1875) LR 7 HL 653 is a landmark case in the United Kingdom’s company law that is the key proponent of the Ultra Vires Doctrine. However, Section 31 of the Companies Act 2006 (UK) has diminished the importance of this case law as it allows a company to have unlimited objects for a company to pursue in its existence. It is also to be noted that the limitations a company may have on its object clause have no bearing on the outsiders to a company as per Section 39 of Companies Act 2006 (UK), except relating to general issues regarding the authority of a company’s agents.
