Doctrine Of Ultra Vires Meaning

The doctrine of ultra vires is a fundamental rule of company law.

Doctrine of ultra vires meaning. The doctrine of ultra vires played an important role in the development of corporate powers. 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. The ultra vires doctrine is a kind of insurance policy that reassures a company s shareholders and creditors that the company will not use their assets or funds for any purposes other than those that are afforded to it and specified within the ultra vires doctrine. Ultra vires acts fall outside the powers that are specifically listed in a corporate charter or law.

Acts that are intra vires may equivalently be termed valid and those that are ultra vires termed invalid. The doctrine in the law of corporations that holds that if a corporation enters into a contract that is beyond the scope of its corporate powers the contract is illegal. The expression ultra vires consists of two words. It may or may not be.

Beyond the powers is a latin phrase used in law to describe an act which requires legal authority but is done without it. Beyond the scope or in excess of legal power or authority as of a corporation the agency acted ultra vires the agreement was ultra vires compare intra vires history and etymology for ultra vires latin beyond the power or means of. Its opposite an act done under proper authority is intra vires within the powers. Legal definition of ultra vires.

The term ultra vires implies absence of capacity or power of the person to do any act. This is called the doctrine of ultra vires. The doctrine of ultra vires is a fundamental rule of company law. Ultra means beyond and vires means powers.

It is not necessary that an act to be ultra vires must be illegal. Thus the expression ultra vires means an act beyond the powers. Ultra vires latin.