Memorandum of Association — SPCC STD 11 Commerce — Question

Doctrine of Ultravires:

• A company can operate within the scope of the goal stated in the application form.
• The company cannot do any work other than the purpose stated in the application form and if it does such work, it is void.
• Such actions are considered "Ultravires".
• Actions outside of power do not raise any kind of legal relationship. Although the members of the company (shareholders) have a consensus according to this principle
• Actions outside of purpose cannot be ratified unanimously.
• If outsourced work is done as follows
• Effects occur:

1. Administrators become personally responsible for such actions.
2. The court may prevent such acts.
3. Agreements out of power are void.
4. The Company becomes responsible for out-of-authority actions performed by a Company employee.
5. Administrators are responsible to third parties for actions outside of power.

• In order to avoid the above situation, the company usually covers most of the scope of work in this section under the heading of other purposes.