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    Question

    Which of the following best represents the meaning of

    term ‘ultra vires’?
    A Illegal Correct Answer Incorrect Answer
    B Immoral Correct Answer Incorrect Answer
    C Beyond the powers of Correct Answer Incorrect Answer
    D Void ab initio Correct Answer Incorrect Answer
    E Voidable Correct Answer Incorrect Answer

    Solution

    Ultra vires is a Latin term made up of two words “ultra” which means beyond and “vires” meaning power or authority. So we can say that anything which is beyond the authority or power is called ultra-vires. Ultra vires contract is the void ab initio which implies that it cannot be provided with a legal status even by ratification or estoppel. The Doctrine of Ultra Vires is introduced to safeguard the creditors and investors of the company. The doctrine of Ultra vires prevents the company from using the money of the investors other than those mentioned in the object clause of the memorandum. Hence, both the investors and company must be assured that their investment will not be used for the objects or activities which they did not have specified at the time of investing money in the company.

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