Abstract

In this article the writer intends to consider recent developments concerning the doctrine of ultra vires J Reference will be made to common law developments and developments under the Companies Code 19812 brought about by virtue of the Companies and Securities Legislation (Miscellaneous Amendments) Act 1985.3

Highlights

  • Reference will be made to common law developments and developments under the Companies Code 19812 brought about by virtue of the Companies and Securities Legislation (Miscellaneous Amendments) Act 1 9 8 5 . 3 A

  • It has been suggested that the reason why a transaction which is ultra vires in the 'wider sense' is equated with one which is ultra vires in the 'narrow sense' is that neither transaction is capable of being made binding on the company by assent of all the members.[6]

  • It has been suggested that there is a crucial difference between the two types of transaction since a transaction which is ultra vires in the 'narrow sense' is altogether void and cannot confer rights on third parties, whereas a transaction which is ultra vires in the 'wider sense' may confer rights on a third party who can show that he dealt with the company in good faith and for valuable consideration, and did not have notice of the fact that the transaction was entered into in futherance of a purpose which was an unauthorised purpose.[7]

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Summary

Introduction

Reference will be made to common law developments and developments under the Companies Code 19812 brought about by virtue of the Companies and Securities Legislation (Miscellaneous Amendments) Act 1 9 8 5 . 3 A.

Results
Conclusion

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