Vidhigya: The Journal of Legal Awareness
Year : 2009, Volume : 4, Issue : 1

Print ISSN : 0973-3825.

Doctrine of ultra vires a changining attitude in company law

Joshi Vimal*, Professor, Yadav HR**, Research Scholar

* Department of Law, B. P. S. Woman University, Khanpur Kalan, Sonepat, Haryana.

** Department of Law, M.D. University, Rohtak, Haryana.

Abstract

Doctrine of ultra vires in companies prevents the business community to dissipate the corporate capital in those objects which are not contained in the objects clause of memorandum of association of the company. Its application in companies was for the first time demonstrated by House of lords in Ashbury's case. However the Directors of the companies have been attempting to evade this doctrine since long time and the Courts have applied ejusdem Genris rule while interpreting the objects clause. In 1945 cohen committee and in 1967 jenkin committee in England recommended its abolition/protection to third party dealing with company which were not accepted. However the European community act 1972 incorporated in English companies act 1985 protects an outsider dealing with company in good faith. Hence there is need in our country also to carry out necessary amendment in our companies act 1956.

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Keywords

Ultra vires, Intra vires, Ejusdem Genris, Pari-passu.

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