In case of the companies other than trading corporations whose objects are not confined to one state, the states to whose territories the objects of the company extend must be specified.
Doctrine of the ultra-vires Any transaction which is outside the scope of the powers specified in the objects clause of the MA and are not reasonable incidentally or necessary to the attainment of objects is ultra-vires the company and therefore void. No rights and liabilities on the part of the company arise out of such transactions and it is a nullity even if every member agrees to it.
Consequences of an Ultra vires transaction :-1. The company cannot sue any person for enforcement of any of its rights.
2. No person can sue the company for enforcement of its rights.
3. The directors of the company may be held personally liable to outsiders for an ultra vires.
Note the following case
Ashbury Rly. Carriage & Iron Co. Ltd. V. Riche. (1875) l. R. 7 H.L 653. A company was incorporated with the following objects.
(a) To make, sell, or lend on hire, railway carriages and wagons.
(b) To carry on the business of mechanical engineers and general contractors.
(c) To purchase, lease, work, and sell mines, minerals, land and buildings.
Doctrine of the ultra-vires Any transaction which is outside the scope of the powers specified in the objects clause of the MA and are not reasonable incidentally or necessary to the attainment of objects is ultra-vires the company and therefore void. No rights and liabilities on the part of the company arise out of such transactions and it is a nullity even if every member agrees to it.
Consequences of an Ultra vires transaction :-1. The company cannot sue any person for enforcement of any of its rights.
2. No person can sue the company for enforcement of its rights.
3. The directors of the company may be held personally liable to outsiders for an ultra vires.
Note the following case
Ashbury Rly. Carriage & Iron Co. Ltd. V. Riche. (1875) l. R. 7 H.L 653. A company was incorporated with the following objects.
(a) To make, sell, or lend on hire, railway carriages and wagons.
(b) To carry on the business of mechanical engineers and general contractors.
(c) To purchase, lease, work, and sell mines, minerals, land and buildings.