What are the Consequences of doctrine of ultravires ?

Question

Diksha · Answer

The consequences of doctrine of ultra vires is that if an act made by the company or contract entered into by the company travels beyond the powers of not only the directors but also the company it is ultra vires and not binding upon the company and thus inoperative in the eye of law. The company can be restrained from employing the funds other than those sanctioned in the memorandum. The company can be restrained from carrying on a trade other than those mentioned in the memorandum. The impact of doctrine of ultra vires is neither the company can sue or can be sued for an ultra vires transaction. An act done by the company which is ultra vires cannot be ratified even with the consent of all the shareholders

mariam · Answer

Act of ultra virus to company law nd moa will be void nd can not b ratified by the members of the company......... Ultra virus act of memorandum of association and Director.....theere is no liability of directors....the can ratified the act by passing general resolution to the company nd amendment in aoa then company will be liable

Priya · Answer

Okay thanks

Jay · Answer

But aoa the ultra virus can be ratified after passing sp resolution

Jay · Answer

And if moa the ultra virus cannot be ratified

Jay · Answer

If company makes any profit out of that contract shall return it to other party

Jay · Answer

Contract will be void

What are the Consequences of doctrine of ultravires ?

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