A Critical Analysis of the Doctrine of Ultra Vires
Downloads
Abstract
The Memorandum of Association (MOA), also referred to as a company's constitution, encompasses the powers, scope of work, and crucial objectives of the company. It serves as a guideline for employees to ensure they understand the boundaries to which they must adhere. Any action taken by the company beyond the powers outlined in the MOA is considered an ultra vires act. The Doctrine of Ultra Vires provides assurance to shareholders and creditors that funds and assets will not be misused for activities outside the scope defined in the company's Memorandum.
This doctrine is foundational in corporate law, stipulating that a company's activities must align with its stated purposes in the Articles of Association, as permitted by the law. Any action or contract undertaken beyond the authority granted to the directors or the company itself is considered void and not legally binding.
In legal terms, Ultra Vires denotes actions performed beyond one's legal authority. The doctrine prevents the company from engaging in trades or using funds for purposes not specified in the Memorandum. The company cannot sue or be sued for actions that are ultra vires. If the company engages in activities outside its authority, it cannot receive payment or reclaim loans associated with those activities. However, an investor can seek an injunction to prevent the company from disposing of funds involved in ultra vires transactions because the investor remains the rightful owner.
In some cases, shareholders may legalize ultra vires actions, such as when they approve actions that exceed the authority of the directors or amend the company's Articles to accommodate such actions. (Garg, n.d.)
External References to this Article
Loading reference data...
License Terms
Ownership and Licensing:
Authors of research papers submitted to any journal published by The Law Brigade Publishers retain the copyright of their work while granting the journal specific rights. Authors maintain ownership of the copyright and grant the journal the right of first publication. Simultaneously, authors agree to license their research papers under the Creative Commons Attribution-ShareAlike 4.0 International (CC BY-SA 4.0) License.
License Permissions:
Under the CC BY-SA 4.0 License, others are permitted to share and adapt the work, even for commercial purposes, provided that appropriate attribution is given to the authors, and acknowledgment is made of the initial publication by The Law Brigade Publishers. This license encourages the broad dissemination and reuse of research papers while ensuring that the original work is properly credited.
Additional Distribution Arrangements:
Authors are free to enter into separate, non-exclusive contractual arrangements for distributing the published version of the work (e.g., posting it to institutional repositories or publishing it in books), provided that the original publication by The Law Brigade Publishers is acknowledged.
Online Posting:
Authors are encouraged to share their work online (e.g., in institutional repositories or on personal websites) both prior to submission and after publication. This practice can facilitate productive exchanges and increase the visibility and citation of the work.
Responsibility and Liability:
Authors are responsible for ensuring that their submitted research papers do not infringe on the copyright, privacy, or other rights of third parties. The Law Brigade Publishers disclaims any liability for any copyright infringement or violation of third-party rights within the submitted research papers.
Published
Issue
Section
License
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
Copyright © 2026 by Asbah Khan, Anshu Kumari, Harprab Johar
The copyright and license terms mentioned on this page take precedence over any other license terms mentioned on the article full text PDF or any other material associated with the article.
