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Doctrine of Ultra Vires & Doctrine of Constructive Notice Video Lecture - B Com

FAQs on Doctrine of Ultra Vires & Doctrine of Constructive Notice Video Lecture - B Com

1. What is the doctrine of ultra vires?

Ans. The doctrine of ultra vires refers to the principle that a company cannot perform any act or enter into any transaction that is beyond the scope of its stated objectives or powers as defined in its memorandum of association. Any act or transaction that falls outside the company's authorized powers is considered ultra vires and is deemed to be unlawful.

2. What are the consequences of ultra vires acts?

Ans. When a company engages in ultra vires acts, the consequences can vary. In some jurisdictions, the act may be void ab initio, meaning it is treated as if it never occurred. This can potentially invalidate any contracts or agreements made in relation to the ultra vires act. Shareholders may also have the right to challenge the act and seek remedies, such as injunctions or damages, against the company or its directors.

3. What is the doctrine of constructive notice?

Ans. The doctrine of constructive notice is a legal principle that assumes all parties dealing with a company are deemed to have knowledge of the company's memorandum and articles of association. This means that any person entering into a contract or transaction with a company is expected to have knowledge of the company's authorized powers and limitations, even if they have not actually read the documents.

4. How does the doctrine of constructive notice affect third parties?

Ans. The doctrine of constructive notice protects third parties who enter into transactions with a company. It establishes that third parties are bound by the company's memorandum and articles of association, regardless of whether they have actually read or understood the documents. This means that if a third party enters into a contract with a company that is ultra vires, they may not be able to enforce the contract against the company.

5. What measures can be taken to avoid ultra vires acts and issues related to constructive notice?

Ans. To avoid ultra vires acts and issues related to constructive notice, it is essential for companies to ensure that their memorandum and articles of association are drafted accurately and reflect the company's intended activities and powers. Regular review and updating of these documents is also recommended. Additionally, third parties should exercise due diligence and make reasonable efforts to review the company's authorized powers before entering into any contracts or transactions. It is advisable to consult legal professionals for guidance in these matters.

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Oct 15, 2025 Last updated

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