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For other uses, see Ultra Vires (disambiguation).
Companies law
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K.K. · N.V. · OY · S.A. · Full list
Doctrines
Corporate governance
Limited liability · Ultra vires
Business judgment rule
Internal affairs doctrine
De facto corporation and
corporation by estoppel
Piercing the corporate veil
Rochdale Principles
Related areas of law
Contract · Civil procedure

Ultra vires is a Latin phrase that literally means "beyond the powers". Companies law (or the law of business associations) is the field of Law concerning business and other organizations Generally a company is a form of Business organization. The precise definition varies A business (also called firm or an enterprise) is a legally recognized organizational entity designed to provide goods and/or services to A sole proprietorship, or simply proprietorship ( Benjamen Clark For partnership in cricket terminology see List of cricket terms A partnership is a type of Business entity in which partners In the commercial and legal parlance of most countries a general partnership or simply a Partnership, refers to an association of persons or an unincorporated A limited partnership is a form of Partnership similar to a General partnership, except that in addition to one or more general partners (GPs there are A limited liability partnership (abbreviated as LLP) has elements of Partnerships and Corporations. A corporation is a separate legal entity usually used to conduct business An S corporation or S-corp, for United States federal income tax purposes is a Corporation that makes a valid election to be taxed under Subchapter S of A C corporation (or C corp) is a Corporation in the United States that for Federal income tax purposes, is Taxed under and Subchapter C ( et A limited liability company (abbreviated LLC or LLC) in the law of the vast majority of the United States is a legal form of business Company The limited liability limited partnership (LLLP is a relatively new modification of the limited partnership a form of Business entity recognized under U A Series LLC is a special form of a Limited liability company that provides liability protection across multiple "series" each of which is theoretically protected A Nevada Corporation is a Corporation chartered under the Laws of the U A Massachusetts business trust or MBT is a legal trust set up for the purposes of business but not necessarily in the state of Massachusetts. A limited company in the United Kingdom is a Corporation whose liability is limited by law A private company limited by shares is a type of company incorporated under the laws of England and Wales, Scotland, that of certain Commonwealth countries In British or Irish Company law, a company limited by guarantee is an alternative type of Corporation used primarily for Non-profit A Public Limited Company ( PLC, plc or plc or p l c is a type of Limited company in the United Kingdom or the Republic of Ireland which is A proprietary company is a form of Corporation in Australia that is limited by Shares. A community interest company (CIC is a new type of company introduced by the United Kingdom government in 2005 under The Community Interest Act 2004, designed The European Economic Area ( EEA) came into being on 1 January 1994 following an agreement between member states of European Free Trade Association (EFTAthe The Council Regulation on the Statute for a European Company of the European Union was adopted October 8 2001. TemplateExpert and TemplateExpert-subject, has been modified to include two WikiProjects and Portals (Expert-subject is limited to Aktiebolag (literally " share Company " or " Stock Company " is the Swedish term for " Limited Aktiengesellschaft ('aktsiəngəzεlʃaft abbreviated AG) is a German term that refers to a Corporation that is limited by shares i An ansvarlig selskap is a Norwegian personal responsibility Company model mainly used in small-to-medium businesses which translates directly into "Responsible An Aktieselskab (abbreviated A/S) is the Danish name for a Stock -based Corporation. Aksjeselskap is the Norwegian term for a Stock -based Company. Gesellschaft mit beschränkter Haftung ( GmbH) is a type of legal entity very common in Germany (where it was created in 1892 Austria nl '''''Naamloze Vennootschap''''' (usually abbreviated NV) is the Dutch term for a Public Limited liability Corporation. Osakeyhtiö, literally a " stock company " is the Finnish equivalent of a Limited company ( Ltd or LLC) or Gesellschaft For the art organization see Société Anonyme (art SA generally designates Corporations in various countries mostly those employing There are many types of business entity defined in the legal systems of various countries Corporate governance is the set of Processes customs Policies, laws and institutions affecting the way a Corporation is directed administered or controlled Limited liability is a concept whereby a person's financial Liability is limited to a fixed sum most commonly the value of a person's investment in a company or partnership The business judgment rule is an American Case law -derived concept in Corporations law whereby the "directors of a corporation. The internal affairs doctrine is a Choice of law rule in Corporations law. De facto corporation and corporation by estoppel are both terms that are used by Courts to describe circumstances in which a business organization that has The corporate law concept of piercing (lifting the corporate veil describes a legal decision where a shareholder or director of a Corporation is held liable for the The Rochdale Principles are a set of ideals for the operation of Cooperatives. A contract is an exchange of promises between two or more parties to do or refrain from doing an act which is enforceable in a court of law Civil procedure is the body of law that sets out the process that Courts will follow when hearing cases of a civil nature (a " Civil action " as opposed to Latin ( lingua Latīna, laˈtiːna is an Italic language, historically spoken in Latium and Ancient Rome. This page lists direct English Translations of common Latin phrases, such as veni vidi vici and Et cetera. Its inverse is called intra vires, meaning "within the powers".

It is used as a legal term in a number of common law contexts:

Contents

Corporate Law

In corporate law, ultra vires describes acts attempted by a corporation that are beyond the scope of powers granted by the corporation's Charter or in a clause in its Memorandum of Association; in the laws authorizing its formation, or similar founding documents. Law is a system of rules enforced through a set of Institutions used as an instrument to underpin civil obedience politics economics and society Common law refers to law and the corresponding legal system developed through decisions of courts and similar tribunals rather than through legislative statutes or executive Corporate law (also "company" or "corporations" law is the Law of the most dominant kind of business enterprise in the modern world A charter is the grant of authority or rights stating that the granter formally recognizes the prerogative of the recipient to exercise the rights specified Acts attempted by a corporation that are beyond the scope of its charter are void or voidable. In Law, void means of no legal effect The Latin phrase void ab initio means "to be treated as invalid from the outset" In law a transaction or action which is voidable is valid but may be annulled by one of the parties to the transaction Even though dicta supporting the view that ultra vires acts were totally void appeared in many cases, most courts adopted the view that such acts were voidable rather than void. In common law legal terminology a dictum (plural dicta) is any statement that forms a part of the Judgment of a court in particular a court whose decisions have value The doctrine continued to be grounded on the notion that a corporation possesses only limited power, but an elaborate body of principles developed defining when ultra vires might be asserted. Basic principles included the following:

  1. An ultra vires transaction might be ratified by all the shareholders.
  2. The doctrine of estoppel usually precluded reliance on the defense of ultra vires where the transaction was fully performed by one party
  3. A fortiori, a transaction which was fully performed by both parties could not be attacked. Estoppel is a legal doctrine recognized both at Common law and in equity in various forms The Latin phrase la argumentum a fortiori literally means one of the following "from the stronger" "even more so" "with even
  4. If the contract was fully executory, the defense of ultra vires might be raised by either party.
  5. If the contract was partially performed, and the performance was held to be insufficient to bring the doctrine of estoppel into play, a suit for quasi contract for recovery of benefits conferred was available. A quasi-contract, also called an implied-in-law contract, is a legal substitute for a Contract.
  6. If an agent of the corporation committed a tort within the scope of his or her employment, the corporation could not defend on the ground the act was ultra vires. For other uses of the word Agent see Agent (disambiguation This is correct An Agent in Commercial Law is a person who is authorised Tort law is the name given to a body of law that creates and provides remedies for civil wrongs that do not arise out of Contractual duties
Several modern developments relating to corporate formation have limited the probability that ultra vires acts will occur. Except in the case of non-profit corporations (including municipal corporations), this legal doctrine is obsolescent; within recent years, almost all business corporations are chartered to allow them to transact any lawful business. A municipal corporation is the legal term for a local governing body, including (but not necessarily limited to cities, counties, Towns In Law, desuetude (from the Latin word desuetudo outdated no longer custom is a doctrine that causes Statutes similar legislation or legal principles to lapse and The Model Business Corporation Act of US says exactly in the following language The validity of corporate action may not be challenged on the ground that the corporation lacks or lacked power to act. The Model Business Corporation Act of 1950 (MBCA is an model set of law prepared by the Committee on Corporate Laws of the Section of Business Law of the American Bar Association The doctrine still has some life among non-profit corporations or state-created corporate bodies established for a specific public purpose, like universities or charities. A university is an institution of Higher education and Research, which grants Academic degrees in a variety of subjects The definition of charitable organization, and of charity varies according to the country and in some instances the region of the country in which the charitable organization operates In many jurisdictions, such as Australia, legislation provides that a corporation has all the powers of a natural person plus others; also, the validity of acts which are made ultra vires is preserved.
However, certain other types of legal entity are not covered by such legislation. Note This Wikipedia entry deals with the legal concept legal person. In the United Kingdom in Hammersmith and Fulham London Borough Council v Hazell [1992] 2 AC 1 the House of Lords held that interest rate swaps entered into by local authorities (a popular method of circumventing statutory restrictions on local authorities borrowing money at that time) were all ultra vires and void, sparking a raft of satellite litigation. The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom, the UK or Britain,is a Sovereign state located The House of Lords, in addition to having a legislative function has a judicial function as a Court of last resort within the United Kingdom. An interest rate swap is a derivative in which one party exchanges a stream of Interest payments for another party's stream of cash flows Local governments are administrative offices that are smaller than a State. In Law, void means of no legal effect The Latin phrase void ab initio means "to be treated as invalid from the outset"
  1. Charitable or political contributions
  2. Pensions, bonuses, stock option plans, job severance payments, and other fringe benefits
  3. The power to enter into a partnership
  4. The power to acquire shares of other corporations
  5. Guaranty of indebtedness of another
  6. Loans to officers or directors

In the United Kingdom, the Companies Act 2006 (S. The Companies Act 2006 (c46 is a Statute of the United Kingdom regulating companies within that jurisdiction 31 and S. 39) greatly reduced the applicability of ultra vires in corporate law, although it can still apply in relation to charities and a shareholder may apply for an injunction, in advance only, to prevent an act which is claimed to be ultra vires. The definition of charitable organization, and of charity varies according to the country and in some instances the region of the country in which the charitable organization operates An injunction is an Equitable remedy in the form of a Court order, whereby a party is required to do or interact with in certain ways all right or to refrain from

Constitutional Law

Under constitutional law, particularly in Canada and the United States, constitutions give federal and provincial or state governments various powers. Constitutional law is the study of foundational or basic Laws of nation states and other political organizations Country to "Dominion of Canada" or "Canadian Federation" or anything else please read the Talk Page The United States of America —commonly referred to as the To go outside those powers would be ultra vires; for example, although the court did not use the term, in striking down a federal law in United States v. Lopez on the grounds that it exceeded the Constitutional authority of Congress, the Supreme Court effectively declared the law to be ultra vires. United States v Lopez, was the first United States Supreme Court case since the Great Depression to set limits to Congress's power under the

In British constitutional law, ultra vires describes patents, ordinances and the like enacted under the prerogative powers of the Crown that contradict statutes enacted by the King-in-Parliament. The constitution of the United Kingdom is the set of laws and principles under which the United Kingdom is governed The Royal Prerogative is a body of customary authority privilege and immunity recognised in Common law and sometimes in Civil law jurisdictions possessing a monarchy The Queen-in-Parliament (or during the reign of a male monarch King-in-Parliament) sometimes referred to as the Crown-in-Parliament, is a technical term of Almost unheard of in modern times, ultra vires acts by the Crown or its servants were previously a major threat to the rule of law. The rule of law, in its most basic form is the principle that no one is above the law

Boddington v British Transport Police is an example of an appeal heard by House of Lords which contested that a byelaw was beyond the powers conferred to it under section 67 of the Transport Act 1962. [1]

Administrative Law

In administrative law, an act may be judicially reviewable ultra vires in a narrow or broad sense. Administrative law is the body of Law that governs the activities of administrative agencies of Government. Judicial review is the power of the courts to annul the acts of the executive and/or the legislative power where it finds them incompatible with a higher norm Narrow ultra vires applies if an administrator did not have the substantive power to make a decision or it was wrought with procedural defects. Broad ultra vires applies if there is an abuse of power (e. g. , Wednesbury unreasonableness or bad faith) or a failure to exercise an administrative discretion (e. In English law, Wednesbury unreasonableness is unreasonableness of an administrative decision that is so extreme that courts may intervene to correct it g. , acting at the behest of another or unlawfully applying a government policy). Either doctrine may entitle a claimant to various prerogative writs, equitable remedies or statutory orders if they are satisfied.

In the seminal case of Anisminic v Foreign Compensation Commission [1969] 2 WLR 163, Lord Reid is accredited with formulating the doctrine of ultra vires. Facts of the case As a result of the Suez Crisis some mining properties of the appellant Anisminic located in the Sinai peninsula Further cases such as Bromley LBC v Greater London Council [1983] AC 768 (see Lord Wilberforce's judgment) and Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374 (see Lord Diplock's judgment) have sought to refine the doctrine. Council of Civil Service Unions v Minister for the Civil Service AC 374 or the GCHQ case is an important case in English administrative law.

See also

References

Footnotes

  1. ^ Boddington v British Transport Police

Notations

Dictionary

ultra vires

-adjective

  1. beyond the legal power or authority of a person or body
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