ULTRA VIRES

The ultra vires is a Latin word which in simpler term means beyond the powers. The ultra vires doctrine plays a role in corporate powers development. The doctrine of ultra vires has full forces in all government entities. The ultra vires act beyond powers of the corporation. As the time passed, the body principle was formed that prevented the application of the doctrine of ultra vires. The principles give the shareholder power to ratify the ultra vires transaction. The doctrine of estoppel prevented defense of the ultra vires in cases where the transaction was performed by one party. In addition, the doctrine of estoppel prohibits the assertion of ultra vires when both parties performed the contract. The modern corporation law wants to remove ultra vires act that may occur. In the earlier ultra vires, the corporation which was manufacturing shoes could not be allowed to manufacture motorcycles. However, in the modern ultra vires, the corporation manufacturing shoes can be allowed to manufacture motorcycle. State laws have reduced the powers of the ultra vires.

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