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Question
Justify the following statement.
Ultra Vires acts are null and void
Solution
(i) A Memorandum of Association of a company lays down the boundaries within which the company must conduct its activities. It also defines the scope or the extent of the company’s powers. The term ‘Ultra Vires’ means beyond the legal power or authority of a person, corporation, agent, etc. Any act of the company whether it is legal or illegal done outside the permitted range of activities as laid down in the Memorandum is said to be Ultra Vires. Ultra Vires acts are null and void, Le. It will be invalid and legally ineffective and therefore, not binding on the company.
(ii) Any act of the company which is ultra Vires. Is declared void and cannot be ratified later on even by the whole body of the shareholders. On the contrary, any act which is ultra Vires the Articles but Intra Vires the Memorandum can be ratified by the shareholders.
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