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Question
State whether the following statement is True or False:
Any act done by the company beyond the powers of Memorandum is Ultra Vires.
Options
True
False
Solution
True
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RELATED QUESTIONS
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Name clause
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The Articles of a company stated that while borrowing any money from outsiders. The document must have the signatures of the Managing Director (MD) and any one of the directors. The Articles of Association clearly stated the procedure to be followed while borrowing money. The Managing Director did not follow all the procedures but still borrowed money from Mr. X. Mr. X assumed that the MD has followed the required procedures:
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Study the following case/situation and express your opinion.
Mr. A entered into a contract with Star Limited company and as advance payment gave a cheque of ₹ 1 lac to a Director Mr. Sam. Mr. Sam is not the Managing Director. Articles state that only the MD is authorized to sign any contracts or receive any payments on behalf of the company.
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The doctrine of Indoor Management protects outsiders who are unaware of the correctness of internal proceedings of a company.
