New 55% Off on All Courses - Enroll Now! Click Here

    Question

      In which of the following case it was held that if a

    company pursues objects beyond the scope of the memorandum of association, the company's actions are ultra vires and void?
    A Salomon v Salomon & Co. Ltd. Correct Answer Incorrect Answer
    B Ashbury Railway Carriage and Iron Co Ltd v Riche Correct Answer Incorrect Answer
    C The State Trading Corporation of India Ltd. & Others V. The Commercial Tax Officer, Visakhapatnam & Others Correct Answer Incorrect Answer
    D None of the above Correct Answer Incorrect Answer

    Solution

    Facts: Ashbury Railway Carriage and Iron Company Ltd’s memorandum stated that its objects were "to make and sell, or lend on hire, railway-carriages…" and that the activities beyond this needed a special resolution. But the company agreed to give Riche and his brother a loan to build a railway in Belgium. Later, the company repudiated the agreement. Riche sued, and the company pleaded that the action was ultra vires.

    Practice Next