Ultra vires the company
This query is : Resolved
21 March 2012
Hi friends,
I need your valuable advise for the following case.
The object clause of the company is authorized to trade in mangoes. The co. entered into partnership with Mr. A and trading in mangoes. On that the co. incurred liability of Rs.20000/- to Mr.A but it refuses the liability on the ground of ultra vires the company.
kindly tel me whether the company is liable or not with provisions
I need your valuable advise for the following case.
The object clause of the company is authorized to trade in mangoes. The co. entered into partnership with Mr. A and trading in mangoes. On that the co. incurred liability of Rs.20000/- to Mr.A but it refuses the liability on the ground of ultra vires the company.
kindly tel me whether the company is liable or not with provisions
Akshay Nagarkar
(Expert)
21 March 2012
The Company entering into a partnership for expansion of its existing business (trading in mangoes). It is not invalid merely because the MOA does not authorize it. Expanding the existing business of the Company is inherent power of the Company and therefore does not require for any specific permission in object clause. Hence the transaction does not become ultra vires the Company as the Company has inherent power for expansion of business. Therefore the Company cannot refuse the liability on the ground of ultra vires act.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Tax on Amount transferred in HUF Account
- WRONG GSTR7 ENTRIES ACCEPTED ERRONEOUSLY
- Nursery business
- GST input credit on commercial property
- GST REFUND ISSUE ON PURCHASE OF PLANT AND MACHINERY
- TDS on Dashcam rent and allied services
- Working on Gold wastage during Melting of old gold jewellery
- IMS (import of goods) ITC related
- How do you manage client document collection and follow-ups in your CA/CS practice?
- Royalty payments to the Mining Department for procurement of murum - GST input
- Subject: Legal Remedy for Removal of Income Tax Demand for AY 2024–25 – Charitable Trust
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
