Definition Ultra Vires. Description.
Ultra Vires is a Latin phrase that literally means
"beyond the power." The acts of a corporation are ultra vires when they are
beyond the power or capacity of the corporation as granted by its
Corporate Charter, the laws
authorizing its formation, or similar founding documents.
Acts attempted by a corporation that are beyond the scope
of its charter are void or voidable. Even though dicta supporting the view
that ultra vires acts were totally void appeared in many cases, most courts
actually adopted the view that such acts were voidable rather than void.
Several modern developments relating to corporate formation
have limited the probability that ultra vires acts will occur. Except in the
case of non-profit corporations (including municipal corporations), this legal
doctrine is obsolescent. Within recent years, almost all business corporations
are chartered to allow them to transact any lawful business.
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Ultra Vires Special Interest Group
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Corporate Governance
| Corporate Charter
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