BUSA 690 Lecture Notes - Royal British Bank, Ultra Vires, Natural Person
25 Apr 2013
School
Department
Course
Professor
Document Summary
Historically, because companies are artificial persons created by operation of law, the law prescribed what the company could and could not do. Usually this was an expression of the commercial purpose which the company was formed for, and came to be referred to as the company"sobjects, and the extent of the objects are referred to as the company"s capacity. If an activity fell outside of the company"s capacity it was said to be ultra vires and void. By way of distinction, the organs of the company were expressed to have various corporate powers. If the objects were the things that the company was able to do, then the powers were the means by which it could do them. Usually expressions of powers were limited to methods of raising capital, although from earlier times distinctions between objects and powers have caused lawyers difficulty. However, references to corporate capacity and powers have not quite been consigned to the dustbin of legal history.
