What is company

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Assignment- 1

Company Law











Date of Submission:24 August,2015
Submitted by:Sonali
Class:BBA
Roll No: BBA/13/913
Email:[email protected]

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1. What is company? Explain various kinds of company with examples and brief intro about that
company?

a. Definition

i. Any entity engaging in business, such as a proprietorship, partnership, or corporation.
ii. A voluntary association formed and organized to carry on a business. Types of
companies include sole proprietorship, partnership, limited liability, corporation, and
public limited company.
b. Meaning

i. A company is an association or collection of individuals, whether natural persons,
legal persons, or a mixture of both. Company members share a common purpose and
unite in order to focus their various talents and organize their collectively available
skills or resources to achieve specific, declared goals. Companies take various forms
such as:

 Voluntary associations which may include nonprofits organization
 A group of soldiers
 Business entities with an aim of gaining a profit
 Financial entities and banks
ii. In the other words, A company or association of persons can be created at law as
legal person so that the company in itself can accept Limited liability for civil
responsibility and taxation incurred as members perform (or fail) to discharge their
duty within the publicly declared "birth certificate" or published policy.

Because companies are legal persons, they also may associate and register themselves
as companies – often known as a corporate group. When the company closes it may
need a "death certificate" to avoid further legal obligations.

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c. Types of registered companies

The following are the various types of registered company. Apart from these, a business may
be set up as a sole trader (self-employed person), as a partnership or as a limited liability
partnership (LLP). Each format has its advantages and disadvantages. Incorporation Services
Limited provides an expert service for all your company formation and company law
requirements and there are more details about these types of companies on the ISL website.
i. Private companies limited by shares
ii. Public limited companies (PLCs)
iii. Property management companies
iv. Companies Limited by guarantee
v. Unlimited companies
vi. Limited Liability Partnerships (LLPs)
vii. Community Interest Companies (CICs)
viii. Charitable Incorporated Organisation (CIO)
ix. Right to manage (RTM) companies
x. Conversion from one type of company to another

I. Private companies limited by shares

The vast majority of trading companies are private companies limited by shares. There are over
two million such companies registered at Companies House. A private company limited by shares
must have the word 'Limited' or 'Ltd' at the end of its name. The main advantage of trading through
a limited company is to have limited liability.
Many private companies are very small. There is no minimum capital requirement for a private
company and it is commonly less than £100. Approximately 90% of private companies are small
or medium sized companies which means that they can file modified (i.e. simplified) accounts at
Companies House, rather than full accounts.
A private company may not offer shares or debentures to the public: CA 2006, sec755, only a
public company (PLC) may do so.
For more advice on the practical aspects of forming a private limited company go to the
Incorporation Services Limited website.

II. Public Limited Companies (PLC)

A small proportion of companies are public companies. Such a company must have a name ending
in the words 'public limited company' or 'PLC'. This type of company is appropriate for larger
businesses where shares are intended to be available to the general public. Most public companies
are not set up as such but are converted from private ones.

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A public company must have a minimum share capital of £50,000, of which at least one-quarter
plus any share premium must be paid up before the company can obtain its trading certificate from
Companies House and start trading. This is the only type of company which may raise capital by
offering securities (shares or debentures) to the public. This is usually done by obtaining a listing
on the Stock Exchange or another public market such as the Alternative Investment Market.
Public companies are subject to more stringent legal requirements than private companies on a
wide range of matters, but especially in relation to share capital, directors and accounts.
For more advice on the practical aspects of setting up a PLC, or converting an existing private
company into a PLC, go to the Incorporation Services Limited website.

III. Property Management Companies

A property management company is a type of private limited company. Such a company will be
set up in order to hold an interest in property which is divided into units, each unit being owned
separately. A typical example is a large house divided into a number of flats, each flat being
owned by one or two people. There will usually be a need for somebody to own the building as a
whole, including common parts such as stairways, gardens, access paths etc. Unless there is a
landlord retaining this interest, the simplest legal device is for a company to be set up to own the
freehold of the property, and for each owner of a flat to have an interest in the company.
Most property management companies are private companies limited by shares with appropriate
articles of association, though some are limited by guarantee.
Some property management companies will do no more than hold the title to property and so can
be considered as dormant companies under the Companies Acts, allowing pro forma dormant
company accounts to be registered at Companies House. This helps keep administration costs to a
minimum and is useful where where the property is small with little or no routine maintenance
which can be arranged between the owners of the flats without involving the company.
For more advice on the practical aspects of forming a property management company and running
it once registered, go to the Incorporation Services Limited website.

IV. Companies Limited by Guarantee

The Community Companies website has much more detailed information about companies limited
by guarantee, charitable companies, community businesses, community interest companies and
related topics.

A company limited by guarantee is private company, very like a private company limited by
shares, but it does not have a share capital. It is widely used for charities, clubs, community
enterprises and some co-operatives. The vast majority of such companies are non-profit
distributing, but they do not have to be.

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A company limited by guarantee is registered at Companies House, has articles of association,
directors, etc., and is subject to all the requirements of the Companies Acts (except those relating
to shares). There are no shares and so no shareholders, but such a company does have members,
who meet and control the company through general meetings. The directors are often called a
management committee or council of management, etc. but in law are still company directors and
subject to all the rules that affect other directors.
A company limited by guarantee confers limited liability as effectively as a company limited by
shares. The articles state that the members guarantee to pay its debts, but only up to a fixed amount
each. Usually that sum is £1, and no member can be liable for more than that amount if the
company fails.
For more advice on the practical aspects of forming a company limited by guarantee, and the uses
of such companies, go to the Community Companies website.

V. Unlimited companies

Many people refer to a sole trader's business or a partnership as an unlimited company, but such
businesses are not in fact companies. It is possible to register at Companies House a private
company which is unlimited, that is the members accept complete liability for the company's debts.
If the company needs money to pay its debts a call can be made on each of the shareholders to
contribute a fixed amount on each share held by them.

An unlimited company has all the other features of a private company limited by shares. It is
registered at Companies House, has members (usually shareholders), directors, articles, etc. Its one
major advantage is that it is not required to register annual accounts at Companies House. This
type of company is suitable for a business where the risk of insolvency is very low or non-existent,
or where it is important not to put the company's accounts on the public register at Companies
House. There are few unlimited companies, but this may be because their existence and advantage
are not widely appreciated.
For more advice on the practical aspects of forming an unlimited company company and running it
once registered, contact Incorporation Services Limited.

VI. Limited Liability Partnerships (LLPs)

VII. Incorporation Services Limited registers LLPs

The limited liability partnership is a comparatively new type of business structure which became
available in 2001. It is a hybrid between a private company limited by shares and a partnership. An
LLP is a separate legal entity conferring full limited liability on its members. It is created by
registration at Companies House. There must be at least two members, but there is no upper limit.
An LLP is subject to the same rules as a private limited company for the registration of accounts at

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Companies House, and the auditing of its accounts. The same exemptions from these requirements
are available.
The Act does not impose a structure for the management of an LLP. There are no statutory
provisions for general meetings, directors, company secretary, share allotments, etc. As with a
common law partnership, these are matters for the LLP agreement. There is no statutory
requirement to register (or even to have) a written LLP agreement, but such an agreement is
essential in practice. The LLP is treated for tax purposes as an ordinary partnership: i.e. each
partner is liable to income tax for his or her share of the profits, and to Capital Gains Tax in
respect of any gains made on the disposal of assets by the LLP. Click here for more details on
LLPs. For the formation of an LLP, go to the Incorporation Services Limited website. For LLP
agreements go to the Company Law Solutions website.

VIII. Community Interest Companies (CICs)

The Community Companies website has much more detailed information about CICs as well as
companies limited by guarantee, charitable companies, community businesses and related topics.

Community Interest Companies are a relatively new type of company (from 2005) which can only
be registered for objects which are for the good of the community. The Companies (Audit,
Investigations and Community Enterprise) Act 2004 ('the Act'), and The Community Interest
Company Regulations made under the Act, establish the legislative framework for CICs.
Apart from having to have objects that benefit the community, the two main features that
distinguish CICs from 'normal' companies are the asset lock and the Community Interest Statement
and Report. Under the asset lock provisions, the assets and profits must be permanently retained
within the CIC, and used solely for community benefit, or transferred to another organisation
which itself has an asset lock, such as a charity, or another CIC. With every application to form a
CIC, a Community Interest Statement must be lodged, with the usual documents, when seeking
company registration. This statement, signed by all the directors, must describe the company's
objects and certify that the company is formed to serve the community rather than for private
profit. CICs can be limited by shares or by guarantee. For more information about CICs, go to the
Community Companies website.

IX. Charitable Incorporated Organisations (CIOs)

This new type of company became available for registration in England and Wales from 10th.
December 2012.It has been available in Scotland since 1st. April 2011. Charitable Incorporated
Organisations (CIOs) were brought into being by the Charities Act 2006. Detailed regulations are
in the Charitable Incorporated Organisations (General) Regulations 2012 SI 3012. It became
possible to submit applications for registration from 10th. December 2012 in England and 1st.
April 2011. CIOs are designed to be a more efficient way to register an incorporated charity. Until

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CIOs became available a charity that wished to be incorporated (and so have limited liability) had
to register as both a company limited by guarantee and as a charity. Using a CIO should be simpler
to incorporate and run as it will be registered with just one body (the Charity Commission) and
will only have to submit one annual return and one set of accounts per year. Further details are on
the Charity Commission's CIO Page for CIOs in England and Wales and from the Office of the
Scottish Charity Regulator for CIOs in Scotland. Community Companies CIC offers a full package
of services for CIOs, from first registration to secretarial and other drafting work.


X. Private limited company

All companies that are not public companies are defined by law as private. Being a private
company is the default position. Private companies can range from a small family company to a
subsidiary in a large group that is a substantial trading entity in its own right. Sometimes, they will
simply be trading vehicles for one or two individuals who want the benefit of limited liability or
the added kudos of trading as a company.
As such, the private company is a very flexible format that can be adapted to fit numerous different
requirements. But the one thing that a private company cannot do as a matter of law is offer its
shares to the public. Any private company that wants to issue shares to the public must first
become a plc or public limited company.
Private companies will, therefore, usually have fewer shareholders than a public company, and
there will often be restrictions on the transfer of their shares. Those with a very small number of
shareholders, including those that are subsidiaries, might ban all transfers of shares that are not
first approved by the board of directors. This allows the board to control who becomes a
shareholder and, ultimately, who controls the company.
Companies with a larger shareholder base might have more sophisticated rules that allow the
transfer of shares by a shareholder but first require that they are offered to existing shareholders
(under ‘preemption provisions’), thereby giving them the opportunity to keep ownership within the
existing group and to exclude new shareholders
.
XI. Public limited company

If you want to be a public rather than a private company, you must take a number of steps. You
will need:
A name that ends with the words ‘public limited company’ (or the Welsh equivalent); permitted
abbreviations are PLC, plc or Plc.
An issued share capital with a nominal value of at least £50,000 and paid up share capital of at
least £12,500 (or the equivalent in euros). You could, for example, issue 50,000 £1 shares, or
250,000 20p shares, each paid up at least to one quarter of its nominal value – 50,000 £1shares
paid up as to 25p on each share, or 250,000 20p shares paid up

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as to 5p on each. (There is no equivalent minimum for a private company.)
A public company is subject to more stringent controls than a private one in a number of areas.
Some of them are listed below.
The rules on making loans to directors are more restrictive for all companies in a group where one
of the members is a public company. (See: Loans to directors, an OUT-LAW guide.)
A public company can purchase or redeem its own shares, but it can only pay for them by using
those profits from which dividends can be paid. A private company, on the other hand, has the
option of using its capital if distributable profits fall short.
It is a criminal offence for a public company to give financial assistance for the purchase of its
own shares, for example by lending money to someone buying a stake in the company. Since
October 2008, there has been no equivalent ban for private companies.
Many private companies are allowed to prepare abbreviated accounts each year. Public companies,
on the other hand, have to prepare and file with Companies House a full set of accounts, and pay
the added costs that may involve.
A public company must have a company secretary and hold an AGM each year; a private company
can dispense with both.

XII. Listed companies
A public company may have its shares admitted to the Official List of the UK Listing Authority
(part of the Financial Services Authority), with its shares traded on the London Stock Exchange. It
will then be said to be a ‘listed’ company. One may also talk about a company’s shares being
‘quoted’ or traded on other markets in London – including the Alternative Investment Market
(AIM) and PLUS – or anywhere else in the world.
Having your shares traded on a public market will inevitably bring increased obligations for
directors – be they statutory or regulatory.

XIII. Holding companies and subsidiaries

If company A owns more than 50 per cent of the issued shares of company B, it is clear that A is
B’s holding company and B is therefore a subsidiary of A. But the definition of 'subsidiary' and
'holding company' in the Companies Act goes beyond that simple example and covers a number of
other situations. B will be a subsidiary of A if:
A holds a majority of voting rights in B – it is voting rights, not just shares, that are important;
A is a shareholder of B and has the right to appoint and remove a majority of the directors;
A is a shareholder of B and controls a majority of the voting rights in B as a result of an agreement
it has with other shareholders.
Other key points include:
If C is a subsidiary of B, it also counts as a subsidiary of A.
B will be a 'wholly owned subsidiary' of A if it has no shareholders other than A and A’s other
subsidiaries, or nominees acting on A’s behalf.

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Shares held in B on behalf of A are treated as being held by A.
Shares held in a trust for others do not count: if B holds shares in A as trustee of, say, A’s pension
fund, it will not be treated as owning shares in A. (Generally, a subsidiary cannot hold shares in its
own holding company.)
A company with more than one trading activity has the choice of carrying on all its trades under
the umbrella of one company or splitting them between a number of trading subsidiaries. Its
decision will probably depend on the factors below.
Risk mitigation – having a number of companies in the group with the benefits of limited liability
can be an advantage. If one subsidiary gets into financial difficulties there is nothing in law that
obliges its parent to continue supporting it, unless it has guaranteed the subsidiary’s liabilities or
otherwise agreed to help.
Tax – as a general rule, whatever trading structure is used, the effect should be tax neutral, but
there are numerous examples where some advantage, or disadvantage, can arise from putting
separate activities into separate subsidiaries and carrying out transactions between them. Tax relief
may depend on whether there is a 51 per cent or 75 per cent relationship with the group companies
involved.
Administration – the more companies you have, the greater the administrative burden, the greater
the cost and the more paper is generated.
Complexity – there can also be a conflict between the way a court will look at a group of
companies and the everyday practicalities of running the group: the court will see a number of
distinct legal entities, each with its own legal rights and obligations; the executives running the
group may view the lot as one business with reporting
lines and managerial responsibilities crossing those legal boundaries. Superimposing a different
management structure on an existing corporate group structure can cause problems if those
boundaries are not respected.
In addition to its definitions of subsidiary and holding company, the Companies Act introduces
definitions, for accounting purposes, of 'subsidiary undertaking' and 'parent undertaking'. These are
wider definitions and encompass not only ordinary subsidiaries and holding companies but also
other situations where there is effective control and the accounts of two or more companies should
be consolidated. They can also include entities other than companies – such as partnerships and
unincorporated associations.

XIV. Guarantee and unlimited companies and limited liability partnerships

Companies limited by guarantee are often found in the not-for-profit, charity or non-trading
sectors, though there is no restriction on the use to which they can be put. Such companies have
guarantors rather than shareholders. These guarantors are members who agree to make a limited
contribution towards the payment of the company’s debts in the event of a winding up. That limit
is usually fixed at a nominal £1 and is only required if the company’s assets fall short.

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A guarantee company may drop the word 'limited' from its name if, but only if, it exists for
charitable purposes or to promote other good causes and there is a ban on the payment of any
dividends to its members (and, on a winding up, any surplus goes to a body with a similar
purpose).
Different again are unlimited companies. Here, the liability of members is truly unlimited and they
can be required to pay the company’s debts without limit if it defaults and is wound up. Of course,
for the shareholders of many small companies the concept of limited liability is at times notional –
banks and landlords will often require personal guarantees of a company’s liabilities. So an
unlimited company may be no more than an acceptance of a reality, and it will carry the big
advantage of secrecy: there is generally no obligation to file accounts at Companies House.
Since 2000, there has been an entirely new legal entity – a limited liability partnership. An LLP is
often the vehicle used by large firms of lawyers and accountants to enjoy both the tax benefits of a
partnership and the limited liability of a company. In most respects, it is more akin to a company
than anything else, but legally it is a new concept and is governed solely by statute. The main quid
pro quo for limited liability is the obligation to file annual accounts at Companies House.

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2. What is memorandum of association? Explain the memorandum of Indian company in detail?
a. Definition of Memorandum of Association
by Paul Merchant, Demand Media

A Memorandum of Association (MOA) is a legal document prepared in the formation and
registration process of a limited liability company to define its relationship with shareholders.
The MOA is accessible to the public and describes the company's name, physical address of
registered office, names of shareholders and the distribution of shares. The MOA and the
Articles of Association serve as the constitution of the company. The MOA is not applied in
the U.S. but is a legal requirement for limited liability companies in European countries
including the United Kingdom, France and Netherlands, as well as some Commonwealth
nations.

 Name Clause

The name clause requires you to state the legal and recognized name of the company. You are
allowed to register a company name only if it does not bear any similarities with the name of
an existing company. Your company name must end with the word "limited" because the
preparation of an MOA is a legal requirement for limited liability companies only.

 Registered Office Clause

The registered office clause requires you to show the physical location of the registered office
of the company. You are required to keep all the company registers in this office in addition to
using the office in handling all the outgoing and incoming communication correspondence.
You must establish a registered office prior to commencing business activities.

 Objective Clause

The objective clause requires you to summarize the main objectives for establishing the
company with reference to the requirements for shareholding and use of financial resources.
You also need to state ancillary objectives; that is, those objectives that are required to
facilitate the achievement of the main objectives. The objectives should be free of any
provisions or declarations that contravene laws or public good.

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 Liability Clause

The liability clause requires you to state the extent to which shareholders of the company are
liable to the debt obligations of the company in the event of the company dissolving. You
should show that shareholders are liable only their shareholding and/or to their commitment to
contribute to the dissolution costs upon liquidation of a company limited by guarantee.

 Capital Clause

The capital clause requires you to state the company's authorized share capital, the different
categories of shares and the nominal value (the minimum value per share) of the shares. You
are also required to list the company's assets under this clause.

 Association Clause

The association clause confirms that shareholders bound by the MOA are willingly
associating and forming a company. You require seven members to sign an MOA for a public
company and not less than two people for a MOA of a private company. You must conduct
the signing in the presence of witness who must also append his signature.

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There is detailed MEMORANDUM OF ASSOCIATION of TATA CONSULTANCY SERVICES LIMITED

THE COMPANIES ACT, 1956
COMPANY LIMITED BY SHARES
MEMORANDUM OF ASSOCIATION
OF
TATA CONSULTANCY SERVICES LIMITED

I. The name of the Company is TATA CONSULTANCY SERVICES LIMITED.
II. The Registered Office of the Company will be situated in the State of Maharashtra.
III. Objects for which the Company is established are:-

A. THE MAIN OBJECTS OF THE COMPANY TO BE PURSUED BY THE COMPANY
ON ITS INCORPORATION:
1. To advise, provide consultancy services, develop and implement products for customers on all matters
regarding implementation of computer software and hardware systems, management of data processing and
information systems and data communication systems whether in India/abroad.
2. To design, develop, manufacture, assemble, buy, sell, distribute, import, export, alter, remodel, lease, install,
repair, service, provide consulting and otherwise to deal in all classes and types of telecommunication,
computing and related apparatus, instruments, machinery, fixtures, devices, and contrivances and parts thereof
including, but not limited to telecommunications electronic test and measurement equipment analytical
equipment, data processing equipment, electronic calculators, equipment services, electrical and electronic
components of every description and mini computer and micro computer products, mainframe and super
computers, computer networking products and services, computer software, firmware and programmers,
electronic and mechanical computer and their peripherals of every kind, equipment and terminals and
workstations (including intelligent terminals), speech and other signal processing equipment and services, test
equipment and parts, assemblies and sub assemblies related to all of the above used in connection therewith, and
to deal in all other machines, machinery, appliances apparatus devices, materials, substances, articles or things
of a character similar or analogous to the foregoing or any of them or connected therewith.
New Sub-clauses 1 to 81 substituted for existing sub-clause 1 to 64 in clause III - A, III-B and III-C vide special
resolution passed at the Extra-Ordinary General Meeting of the Company held on October 7, 2002.
3. To design, develop, improve, manufacture market, distribute, sell, license, lease, install, alter, import, export,
or otherwise deal in or with all software, hardware and programs of any and all kinds and description, including,
but not limited to those used in, for or in connection with electronic data processing equipment, products and
services including computers and micro processor based systems, mini and microcomputers based products,
switches mainframe and super computers and telecommunications peripheral equipment and terminals including
intelligent terminals speech or signal processing equipment, test equipment, office and factory automation
equipment.

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4. To provide software, hardware or programmes consultancy, information processing and business advisory
services related to the preparation and maintenance of the accounting, statistical, scientific or mathematical
information and reports data processing, preparing, collection and data of every kind and description, systems or
aiding commerce, industry, scientific and research problems and for all other related businesses whether in
India/ abroad.
5. To undertake all activities relating to software development for any industry, business, application, product,
device, computer, microprocessor, including design and implementation of hardware and software for all such
services whether in India/abroad.
6. To carry on the business of development, marketing, import, export, maintenance and service of all kinds of
manufactured goods and products for all kinds of business including manufacturers and dealers in modem and
accessories, hardware and accessories of every description for use in providing Internet, Intranets, Private
Telecommunication Networks, or by any other means, E-mail service, facsimile service, education and training
services, web sites, electronic market places, integral service digital networks, video conferencing, including
renting, maintaining, repairing and, for the purpose, to set up plants, purchase, import or otherwise acquire the
same and to run, maintain all such plants, machinery and to undertake all activities, directly or indirectly related
to electronic commerce right from conception to transition, training, implementation, and modification and
services related to Electronic-Commerce business, including developing content-based programs to exploit the
Internet, Intranets and Private Telecommunication Networks or any other means for serving the cause of
companies, groups of companies, industries, service organizations and government and quasi-government
undertakings whether in India/ abroad.
7. To initiate, undertake, carry on, engage in, promote, assist encourage, finance and conduct scientific and
technical research, developments, experiments, investigations, inquiries, studies, projects, analysis,
examinations, surveys and test of all kinds including, but not limited to those related to telecommunications,
computers, electronic data processing equipment, software, hardware and programmers of all kinds and
description and any equipment, parts, components, assemblies or sub assemblies thereof whether in India/
abroad.
B. THE OBJECTS INCIDENTAL OR ANCILLARY TO THE ATTAINMENT OF THE MAIN OBJECTS:
8. To establish or promote or concur in establishing or promoting any Company or Companies for the purpose
of acquiring all or any of the property, rights and liabilities of the Company or for any other purpose which may
seem directly or indirectly calculated to benefit the Company.
9. To carry on the business of manufacturers, designers, processors, assemblers, dealers, traders, distributors,
importers, exporters, agents, consultants, systems designers, and contractors for erection and commissioning on
turn-key basis or to deal in any other manner including storing, packing, transporting, converting, repairing,
installing, training, servicing, maintenance of all types, varieties, and kinds of products, manufactured goods
and equipment whether on behalf of clients or for business of the Company.
*9A. To manufacture, purchase, sell or otherwise transfer, lease, import, export, hire, license, use, dispose of,
operate, fabricate, construct, distribute, assemble, design, charter, acquire, market, recondition, work upon or
otherwise, generally deal in any electronic, electrical, mechanical and electromechanical product, machine,
apparatus, appliance, custom products, merchandise, systems, software procedure, peripheral products,
computers, tabulators, data processing machines and systems and components thereof, electronic calculators,
electric and electromechanical accounting systems, terminal products and systems, machines for registering,
data preparation, recording, perforation, tabulating, sorting printing, typewriting, products which possess an
internal intelligence for recognition and correlating any type of data or information to be processed, recognition
and memory systems, optical scanning machine, transmission lines, transmission equipment, terminals,
copying, reproducing and distributing machines, check signing, protecting and disbursing equipment, machines
for facsimile reproduction, facsimile transmission and word processing, facilities and accessories and devices of
all kinds, and for all purposes, and any products and component parts thereof or materials or articles used in

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connection therewith, and any and all other machinery, appliances, apparatus, devices, materials, substances,
business forms and supplies articles or things of a character similar or analogous to the foregoing, or any of
them or connected therewith.
*9B.To establish and conduct programmes for the training of any personnel including members of public in the
fields enumerated in the aforementioned objects and or training any personnel in any educational fields
including any technology, banking, insurance, management, bio-technology, behavioural sciences etc., and
develop systems for use in connection therewith and for all industrial and business applications of computer,
hardware, software, firmware, computer programme and systems.
10. To amalgamate, enter into partnership or into any arrangement for sharing profits, union of interests, co-
operation, joint venture or reciprocal concession, or for limiting competition with any individual, person or
Company carrying on or engaged in, or about to carry on or engage in, any business or transaction, which the
Company is authorized to carry on or engage in, or which can be carried on in conjunction therewith or which is
capable of being conducted so as directly or indirectly to benefit the Company.
11. To undertake or participate in the formation, management, Supervision or control of the business operations
of any other Company, firm or person.
12. To purchase, take on lease, tenancy or in exchange hire or otherwise acquire any estate or interest and to
take options over any property, whether movable or immovable and any rights or privileges which may be
convenient for the purpose of its business or may enhance the value of any other property of the company.
* Inserted vide Resolution passed on 18.10.2005 at a Court Convened Meeting approving the Scheme of
Amalgamation which was approved by the Bombay High Court on 27.1.2006 & effective from 1.2.2006
*12A To sell, mortgage, exchange, grant leases, licenses, easements and other rights in respect of improve,
manage, develop and turn to account or deal with in any manner the whole of the property, assets, investments,
undertakings, rights and effects of the Company or any part thereof for such consideration as may be thought fit,
including by way of shares, debentures, or securities of any other Company, whether partly paid up or fully paid
up.
13. To receive money on deposit or loan and borrow or raise in such manner as the Company shall think fit, and
in particular by the issue of debentures or debenture-stock, (perpetual or otherwise) and to secure the repayment
of and, money borrowed, raised or owing by mortgage, charge or lien upon all or any of the property or assets of
the Company (both present and future) including its uncalled Capital, and also by a similar mortgage, charge or
lien to secure and guarantee the performance by the Company or any other person or Company of any obligation
undertaken by the Company or any other person or Company as the case may be but shall not carry on the
business of banking as defined in the banking regulation act. 1949, subject to section 58A of the Companies Act,
1956, and R.B.I. directives.
14. To purchase, acquire, or undertake over the whole or any part of the business, profession, goodwill,
property, contracts, agreements, rights, privileges, effects and liabilities of any person, firm or Company
catering on or proposing to carry on or ceasing to carry on any business, profession, or activity which the
Company is authorised to carry on, or possessed of property or rights suitable for the purpose of the Company
and upon such terms and subject to such stipulations and conditions and at or for such price or consideration (if
any) in money, Shares, debentures, money‟s worth or otherwise as may be deemed fit.
15. To enter into any arrangements with any Governments or authorities that may seem conductive to the
attainment of the Company, object or any of them, and to obtain from any such Government or authority any
rights, privileges, licences and concessions, which the Company may consider necessary or desirable to obtain,
and to carry out, use or comply with any such arrangement rights, privileges or concessions.

16. 16

16. To procure the registration, incorporation or recognition of the Company under the lawsor regulations of any
other country and to do all acts necessary for carrying on any business or activity of the Company in any
foreign country.
17. To donate or gift, in cash or kind, for any national charitable, benevolent, public, purposes or to any
institutions, club, society, research association, fund, university, college or any other person or body.
18. To apply for, secure, acquire by grant, legislative enactment, assignment, transfer, purchase or otherwise,
and to exercise, carry out and enjoy any charter, licence, power, authority, franchise, concession, right or
privilege, which any government or authority or any corporation or other public body may be empowered to
grant, and to pay for, aid in, and contribute towards carrying out the charter, licence, power, authority,
franchise, concession, right or privilege into effect.
* Inserted vide Resolution passed on 18.10.2005 at a Court Convened Meeting approving the Scheme of
Amalgamation which was approved by the Bombay High Court on 27.1.2006 & effective from 1.2.2006
19. To apply for, promote, and obtain any statute, order, regulation, or other authorization or enactment which
may seem calculated directly or indirectly to benefit the Company, and to oppose any bills proceedings or
applications which may seem calculated directly or indirectly to prejudice the Company‟s interests.
20. To apply for, purchase or otherwise acquire any patents, patent rights, copyrights, trade marks, formulae,
licences, concessions and the like or any secret or other information, the acquisition of which may seem
calculated directly or indirectly to benefit the Company in any jurisdiction.
21. To establish and maintain or procure the establishment and maintenance of any contributory or non-
contributory pension or superannuation funds, or Trusts for the benefit of, and give or procure the giving of
donations, gratuities, pensions, allowances or emoluments or stock options to any persons who are or were at
any time in the employment or service of the Company, or, of any Company which is a subsidiary of the
Company or is allied to or associated with the Company or with any such subsidiary Company, or who are or
were at any time directors or officers of the Company or of any such other Company as aforesaid, and the wives,
widows, families and dependents of any such persons, and also establish and subsidise and subscribe to any
institutions, associations, clubs or funds calculated to be for the benefit of or to or towards the insurance of any
such persons as aforesaid and do any of the matters aforesaid, either alone or in conjunction with any such other
Company as aforesaid.
22. To open bank accounts of all kinds including overdraft accounts, and to operate the same.
23. To distribute amongst the members of the Company in specie or kind any property of the Company, or any
proceeds of sale or disposal of any property of the Company in the event of the winding up, of the Company,
subject to the provisions of the Companies Act, 1956.
24. To invest and deal with the moneys of the Company not immediately required in any manner.
25. To adopt such means of making known and advertising the business of the Company as may seem
expedient.
26. To accept gifts, bequests, devices and donations from members and others and to make gifts to members and
others of money, assets and properties of any kind.
27. To become members of other bodies of persons and associations, including societies, clubs and Companies
limited by guarantee, whether formed for profit or non-profit activities.
28. To carry on the business of undertaking and setting up project on turn key basis.

17. 17

29. To carry out the objects of the Company and do things in any part of the world and either as principal, agent,
contractor or trustee or otherwise & rid by or through trustees or agents or otherwise, and either alone or in
conjunction with other.
30. In accordance with the law for the time being in force to reserve or to issue as bonus shares to the members
or otherwise to apply as the Company deems fit any money received by way of premium on any shares stock,
mortgage, debentures stock of the Company.
31. In connection with the business of the Company to guarantee the performance of any Company, firm or
persons and to guarantee the payment and repayment of the capital and principal and of dividend interest or
premium payable on any stock, mortgage, loan or other securities, issued by any Company, Corporation, firm or
persons, including (without prejudice to the said generally), bank overdrafts, bill of exchange and promissory
notes and generally to give guarantee and indemnities.
C. OTHER OBJECTS:
32. To carry on, establish, organize, manage, promote, provide, operate, conduct and develop life insurance and
general assurance business in all its branches & manifestations in India or elsewhere and for this purpose to
operate various schemes including whole life insurance, endowment insurance, double benefit and multiple
benefit insurance, medical insurance, fire, riot, earth-quake, natural calamity or crop insurance, loss of profit
insurance, theft insurance, transit insurance, accidental insurance, limbs and organ insurance, annuity plans,
gratuity plans, fixed income plans and such other schemes and plans as may be considered expedient and
necessary from time to time.
33. To act as agents, representatives, surveyors, sub-insurance agents, franchisers, consultants, advisors,
collaborators, in life and general insurance.
34. To engage in all activities which are incidental and allied or related to insurance business and for this
purpose to apply, approach acquire, hold and procure such rights, titles entitlements, licences and permissions
from Government, Semi-Government, local authorities, public bodies, undertaking and from such other
authorities as may be necessary and expedient.
35. To acquire, take up, manage, invest, hold, sell and deal in investments and other property of any kind and
advise in relation thereto on behalf of individuals, trusts, pension funds, charities, associations, registered
societies, unit trusts, mutual funds, offshore funds, investments pool and other persons of bodies of persons
whether incorporated or not and to promote, establish, manage and carry on any trust scheme, mutual fund
operations, investment or pool (whether fixed or flexible or a combination thereof) or concerning any shares,
stocks, debenture, debenture stock, bonus, unit, loans, obligations, securitised debt, money market investments
securities of the Government, State, Company,
Corporation, Municipal or local or other Body or Authority or obligations or local or other securities or
investments of any kind or description whether in India or any foreign country.
36. To carry on the business of managing investments of pension funds or any superannuation schemes or any
other funds of similar nature.
37. To carry on business in all its branches and elsewhere as an investment advisor and asset management
company and to undertake and carry on and execute all kinds of financial, advisory and investment supervisory
services to any clients, and to generally carry commercial trading and other operations.
38. To act as financial advisors and investment advisors and to render such financial and advisory services to
individuals, companies, corporations, trusts and other entities so as supplement the activities of the Company
and as so not conflict with the activities of the Company.

18. 18

39. To pay out of the funds of the Company all expenses which the Company may lawfully pay with respect to
the formation and registration of the Company or the issue of its Capital including brokerage and commission
for obtaining applications, for or taking, placing or underwriting or procuring the underwriting of Shares,
debentures or other securities of the Company.
40. To promote, subscribe to, purchase, acquire by exchange or otherwise any share (whether fully paid or partly
paid), stock, debentures, debenture-stock in or of any other body corporate or other securities of all kinds and to
hold the same as investment or stock in trade and realize or sell the same.
41. To employ expel to investigate and examine into the conditions, prospects, value, character, and
circumstances of any business, concerns and undertakings and generally of any assets, concessions, properties or
rights.
42. *To sell, mortgage, exchange, grant leases, licences, easements arid other rights in respect of improve,
manage, develop and turn to account or deal with in any manner the whole of the property, assets, investments,
undertakings, rights and effects of the Company or any part thereof for such consideration as may be though fit,
including shares, debentures or securities of any other Company, whether partly paid up or fully paid up.
43. To draw, make, accept, endorse, discount, negotiate, execute and issue bills of exchange, promissory notes
and other negotiable or transferable instruments.
44. To undertake, aid or promote research in economic, fiscal, commercial, financial, agricultural, medical
industrial, mining, technical and scientific problems and matters.
45. To carry on the business of mining, refining and preparing for market ores, minerals, metals and substances
of every kind and description, and processing them and trading in them and their products and by products.
46. To carry on the business of engineers, founders, smelters, fabricators, smiths, metal, workers, metallurgists,
electric and chromium platers, polishers, painters, in smiths, locksmiths, iron mongers, alloy makers and
machinists and manufacturers of and dealers in machinery, tools, instruments and equipment of all kinds used in
mining, refining, manufacturing and processing of ores, mineral goods and materials.
47. To carry on the business of manufacturers and fabricators of and dealers in machinery, machine tools,
implements, engineering products, machinery spares and components of all types and in particular to
manufacture, produce, repair, alter, convert, recondition, prepare for sale, buy, sell, hire import, export let out on
hire, trade and deal in machine tools and implements other machinery, plant, equipment, article, apparatus
appliances, component parts, accessories, fittings, and things in any stage or degree of manufacture, process or
refinement.
* Omitted vide Resolution passed on 18.10.2005 at a Court Convened Meeting approving the Scheme of
Amalgamation which was approved by the Bombay High Court on 27.1.2006 & effective from 1.2.2006
48. To carry on business as financiers, guarantee, brokers and of hire purchase financing agency, investors, and
to undertake, carry on and execute all kinds of financial business whatsoever, to advance money on personal
security or on the security of leasehold and freehold land, shares, securities, stocks, merchandise and other
property and assets and generally to lend and advance money to such persons, firms or companies and upon
such terms and subject to such conditions as may be expedient.
49. To carry on the businesses as exporters, stockists, distributors, agents, traders and dealers in all kinds of
products and articles of merchandise and to undertake, carry on or acquire agencies of all kinds for all type of
products and articles of merchandise and to act as agents (selling and purchasing), brokers, commission agents,
indentures and manufacturers‟ representatives and to set up import and export houses for all these of products
required or ordered by the customers and to carry on the business in India or elsewhere in the world by itself or
through agents.

19. 19

50. To manufacture, import, buy, sell, exchange, distribute, fabricate, mould, extrude, expand, compress, bond,
laminate, reinforce, well, shape, coat, print, treat, spin, weave, electroplate, vulcanize, melt, matallize, strength
split, to adopt any of processes for foaming, fibrillation, cocooning and to manipulate, prepare for market or
otherwise deal in polyethylene and polyethylene products, bye products, and variations, woven sacks, all kinds
of tapes tarpaulins, sheets, carpets, tents, wires, ropes, roofing sheets, containers, and any other products which
may be usually and conveniently combined with the business of the company.
51. To manufacture, import, export, buy, sell, exchange, and distribute, fabricate, process, print, weave, or
otherwise deal in with synthetic rubber including silicone, rubber, synthetic leather, synthetic fibres, resins,
pellets, and powders or in liquid from or any other form, cellulose bakelite, celluloid and other celluloid ester
solutions chemicals and all kinds of adhesives.
52. To carry on the business of manufacturers of, importers, exporters and dealers in, hirers, repairers, and ware-
housers of aeroplanes, helicopters, cars, lorries, buses, vans, cycles, tractors, motor cycles, scooters, wagons,
locomotives, earth moving equipments, ships, boats, barges, trawlers, submarines and aircraft, vehicles and
vessels of every description and their components and accessories.
53. To carry on the business of manufacturers of, importers, exporters, and dealers in forgings, castings, and
stampings, of metals, tools, bolts, nuts, nails, rivets, hinges, hooks, handles, buckets, bath tubs, tanks, trunks,
metal, future, sewing machines, safes, chimneys, pipes, locks, dies, jigs, measuring, tapes, automobile, parts,
agricultural implements, armaments, tanks, guns and parts and components of all kinds of machinery.
54. To carry on business of manufacturing, processing and doing in iron and steel, ferro alloys, special steels,
aluminium, copper, lead, zinc, and their alloys and productivity and manufacturing and dealing in industrial
machinery, boilers, internal combustion engines, ball, roller, and tapered bearings, tubes cables, wires, pipes,
cookers, printing machinery and textile machinery and their components and accessories.
55. To carry on the business of spinners, weavers, cloth manufacturers, furriers, hosiers, dressmakers, tailors,
hatters, outfitters, glovers, shoe makers, carpet, makers and makers of jute goods, umbrellas, brushes, combs,
razors, blades and scissors.
56. To carry on the business of manufacturers of, importers, exporters and dealers in glass, glass-products,
including sheet and plate glass, optical glass, glass wool, laboratory ware, bottles, jars, containers, thermo-
bottles, enamelware and receptacles of all kinds and wood products, including plywood, matches, furniture,
boxes, windows, doors, tools and other articles and products in which timber or wood is used and to act as
timber and lumber merchants and proprietors of saw mills.
57. To carry on the business of manufacturers of, importers, exporters and dealers in, hirers and repairers of
electrical machinery, equipment and appliances of all kinds and descriptions including motors, batteries,
dynamos, bulbs, armatures, magnets, conductors, insulators, transformers, converters, switch, board,
airconditioners, refrigerators, domestic appliances and electronic equipments, including radars, computers,
business machines, radios, televisions acts, tape recorders, gramophones, records, tapes and telecommunication
equipment and telephone equipment and their components and accessories, including transistors, resistors,
condensers and coils.
58. To carry on the business of manufacturers, importers, exporters and dealers in all types of rubber, leather,
plastic latex, celluloid, bakelite and similar goods and their accessories and fittings, including tyres, tubes, rolls,
rollers, shoes and packaging items.
59. To carry on the business of manufacturers of exporters, importers and dealers and workers in cement, lime,
plasters, ceramic, sanitary fittings, asbestos sheets, chinaware, whiting clay, gravel, sand minerals, earth, coke,
fuel and stone and builders‟ requisites and conveniences of all kinds.
60. To carry on the business of makers of and dealers, importers, exporters in scientific and industrial
instruments of all kinds for indicating, recording, controlling, measuring and timing and machine tools,

20. 20

precisions tools, surgical instruments, and appliances and artificial limbs, dental and optical equipment and
goods, anatomical, orthopaedic and surgical appliances of all kinds and providers of requisites for hospitals,
patients and invalids.
61. To carry on the business of manufacturers of and dealers, in, importers, exporters of pulp and paper of all
kinds, and articles made from paper or pulp and materials used in the manufacture or treatment of paper,
including packaging goods land materials such as bags, cartons, containers, and boxes whether made of paper,
plastic or any other materials and pens, pencils and ball pens.
62. To carry on the businesses of gold smiths, silver smiths, jewellery, gem and diamond merchants and of
manufacturing and dealing in clock, watches, jewellery and cutlery and their components and accessories and of
producing, acquiring an trading in metals, bullion, gold, ornaments, silver, silver, utensils, diamonds, precious
stones, paintings manuscripts, curios, antiques and objects of art.
63. To carry on business in India and elsewhere as manufacturers of and dealers in and importers and exporters
of all kinds of packaging and containers including cartons, boxes and cases wholly or partially of paper, board,
wood, glass, plastic, rubber, metal, gelatine, tin or otherwise and glass bottles, glass jars. Flasks, casks and glass
containers of every description, fibrite boxes, corrugated containers, corrugated folding boxes, display boxes,
aluminium, foils, and packing requisites of every kind and description.
64. To carry on the business of generating and distributing gas and heat and of manufacturing or dealing in all
kinds of machinery, equipment and appliances, required for generating, distributing, employing and consuming
electricity and of acting as electrical engineers and contractors and of purifying water.
65. To carry on the business of constructing building, roads, bridges, dams, ports and working as builders and
contractors, architects, decorators and manufacturers, and processors of and dealers in all kinds of building
materials including bricks, tiles, marbles, hardware, cement, sanitary goods, road making materials and of acting
as estate agents, brokers, managers of estates and properties and of acquiring promises on lease and giving them
or sublease.
66. To carry on the business of cultivating, producing and dealing in agricultural products including food grains,
cash, crops, oil, seeds, fruits, vines, vegetables, flowers, tea, coffee, cinchona, cotton, rubber, and the business of
dairy farming including making of condensed and powered milk, cream, cheese, butter and other milk products
and the business of poultry farming, live stock breeding and processing and canning of food articles, spices,
fruits, and vegetables and of cultivating and exploiting forests and utilizing forest products.
67. To carry on the business of brewers, distillers, millers, bakers, butchers, confectioners and makers and
manufacturers and dealers in flour, rava, maida, biscuits, bread, sugar, gur, khandsari, molasses, syrups, food
articles of all types and description, cigarettes, and other articles made of or with tobacco and aerated, mineral
and artificial water, alcohol, beer, ale, wines, whiskies, and liquors of every description.
68. To carry on the businesses of carriers of passengers and goods and merchandise by air, sea or surface
transport and to maintain airways, shipping lines, roadways and other transport service and to act as clearing
agents, forwarding, agents, travel agents, charterers, tour, agents, and freight contractors.
69. To carry on the business as selling agents, brokers, adatias, buyers, sellers, importers, exporters, dealers in,
collectors, manufacturers of or in any other capacity and to import, export, buy, sell, barter, exchange, pledge,
mortgage, advance upon or otherwise trade and deal in machinery, equipments, components spare parts, goods,
produce, articles and merchandise of any kind whatsoever and without prejudice to the generality of the
foregoing agricultural commodities, food grains, cash crops, cotton, tea jute coffee, fruits, vegetables, flowers,
milk, milk products, meat, seeds, raw materials required by industries semi-finished products of industries and
finished products of industries including machinery, equipment, chemicals, intermediates, electrical goods,
yarns, garments, furniture, minerals, ores and oils as wholesalers or retailers on the basis of ready delivery or
forward contracts or on commission basis.

21. 21

70. To purchase, hold, take on lease or exchange, take on mortgage and give on mortgage, hire or otherwise
acquire and hold or deal in any moveable or immovable property including, lands, buildings, houses, flats,
bungalows, shops, offices, godowns, patents, licences and any rights, interests and privileges therein and to
develop and turn them to account or let them out on rent.
71. To carry on the business of salt making, fishing, producing, distributing and exhibiting films of
manufacturing and dealing in cameras and photographic equipments and materials and of renting or hiring out
or dealing in all kinds of machinery, equipment, furniture, vehicles, ships, automobiles, aeroplanes, fans, sewing
machines and other things.
72. To carry on the businesses of running hotels, restaurants, lodging houses, milk and snack bars, laundries,
libraries, swimming pools, night clubs, hair dressing and beauty saloons, chemist shops, cold storages, cinemas,
theatres, studios, exhibition halls, amusement centers, wine and beer shops, department stores, hospitals, clinics,
nursing homes, maternity and family planning units, pathological laboratories, optician shops, massage houses,
concert and dancing halls, discotheques, schools, colleges and training institutions, circuses, sports clubs,
skating halls, boating and padding pool, radio and television stations, garage and service stations, repairs shops,
petrol pumps, gymnasiums,safe deposit vaults, warehouses, godowns, car parks, hangers and race courses.
73. To carry on the business of consultants, assessors, valuers, surveyors, mortgage brokers, and undertaking the
provision of hire purchase and credit sale finance and of acting as factors and brokers in any line or activity
(provided that nothing contained here shall enable the Company to carry on the business of banking as defined
in the banking Regulation Act, 1949).
74. To carry on the business and professors of providing services of all types including technical, administrative,
marketing and other office services and providing services of technicians, scientists, artists, administrators,
salesmen, economists, accountants, tax experts and of acting as recruitment agents, advertising agents,
organizers of conferences, auctioneers, trustees, executors, administrators, attorneys, nominees, and agents (and
to exercise the power of custodians, trustees and trust corporations) and of working as professional consultants,
on technical, management, productivity, taxation, employment, investment, marketing, banking and economic
problems and matters.
75. To carry on the business of procuring, developing and supplying technical know-how, patents, inventions,
drawings, designs and other scientific formulae, and processes for the manufacture or processing of goods, and
material and for the in installation or erection of machinery or plant for such manufacturing and processing and
for the working of mines, oil wells and other sources of minerals and deposits and for search and discovery and
testing of mineral deposits and for carrying out any operations relating to agriculture, animal husbandry, dairy or
poultry farming, forestry and fishing and of rendering services in connection with the provision of such
technical know-how.
76. To carry on the business of any contract or obligation of any Company, firm or persons and the payment and
repayment of the capital and principal or dividend, interest or premium, mortgage, loan and other securities
issued by any Company, corporation, firm or persons, including (without prejudice to the said generality) bank
overdrafts bills of exchange and promissory notes.
77. To carry on the business of undertaking or arranging for the writing and publication of books, magazines,
journals, or pamphlets on subjects relating to trade, commerce, industry, agriculture, medicine, banking,
insurance, investment, taxation, finance, economics, law and other subjects.
78. To carry on the business of dealers and or in metals, bullion, gold, silver, diamonds, precious, stones,
ornaments, and jewellery and paintings and coins and manuscripts and objects of art, obligations or securities by
original subscriptions, tender purchase, exchange or otherwise on the basis of forward contracts or ready
delivery and tosubscribe for the same or to guarantee the subscription thereof.
79. To carry on the trades or businesses of preparing, spinning doubling, weaving, combing, souring, sizing,
bleaching, colouring, dyeing, printing and finishing, working, or manufacturing, and/or dealing in any way

22. 22

whatever, cotton, wool, silk, flax, hemp, jute, artificial silk, rayon, nylon, and other fibrous or textile substances,
including synthetic, yarn, polyester yarn, man made fibres and cotton yarn.
80. To promote, organize, age or deal with unit trusts, or and to hold, dispose of or deal with their shares and
securities whether of fixed or variable return.
81. To make and cater into forward and speculative transactions and to accept and/or out double or single
options in jute, hessian, cloth, gunny bags, wheat cotton, linseed, shares, securities, gold, silver, bullion, yarn,
textile products and any other goods, things or commodities.
IV. The liability of the Members is limited.
V.* The present Authorized Share Capital of the Company is Rs.325,00,00,000/-(Rupees Three Hundred and
Twenty Five Crore only) divided into 225,00,00,000 (Two Hundred and Twenty Five Crore) Equity Shares of
Re.1/- (Rupee One only) each and 100,00,00,000 (One Hundred Crore) Redeemable Preference Shares of Re.1/-
(Rupee One only) each with power to increase or reduce the capital of the Company and / or the nominal value
of the shares and to divide the shares in the capital for the time being into several classes and to attach thereto
respectively such preferential, deferred, qualified or special rights, privileges or conditions with or without
voting rights as may be determined by or in accordance with the Articles of Association of the Company or as
may be decided by the Board of Directors of the Company or by the Company in General Meeting, as
applicable, in conformity with the provisions of the Companies Act, 1956 (“Act”) and to vary, modify,
amalgamate or abrogate any such rights, privileges or conditions and to consolidate or sub-divide the shares and
issue shares of higher or lower denominations in such manner as may be permitted by the Act or provided by the
Articles of Association of the Company for the time being.

23. 23

3. What is doctrine of ultra vires? Explain with judicial decision by Indian panel court?

The doctrine of ultra vires is said to have originated in Company law as a means of safeguarding the
interests of the shareholders of companies. In the past, it was a mandatory legal requirement for
companies to have what is called a “Memorandum” which invariably included an object clause. This
object clause reflected the object/s for which the company was formed. The company was always
required to perform its activities within the purview of the objects clause included in the Memorandum.
Any action which was outside the purview of the objects clause was ultra vires and, therefore, invalid.
The aforesaid principle which was firmly established by the House of Lords in the decision of Ashbury
Railway Carriage and Iron Company Ltd v. Riche was later borrowed in to Administrative law as the
courts found it difficult to question the power of the legislature due to the application of principles such
as separation of powers and parliamentary sovereignty.

The doctrine of ultra vires as used in Administrative law implies that discretionary powers must be
exercised for the purpose for which they were granted. At the inception, the application of the doctrine
was designed exclusively to ensure that administrative authorities do not exceed or abuse their legal
powers. If they did so, the courts declared such acts ultra vires and therefore, invalid. Administrative
power is generally derived from legislation. Legislation confer power on administrative authorities for
specified purposes, sometimes, laying down the procedure to be followed in respect of exercise of such
power. More often than not, these legislation stipulate the limits of such conferred power. If an
administrative authority acts without power, in excess of power or abuses power, such act/s are liable
to be rendered invalid on the ground of substantive ultra vires. When an administrative authority acts in
contravention of mandatory rules stipulated in the legislation or does not comply with the principles of
natural justice, such acts are liable to be rendered invalid on the ground of procedural ultra vires. The
aforesaid traditional ultra vires model is based on the assumption that judicial review is legitimated on
the ground that the courts are applying the intent of the legislature. In this regard Wade and Forsyth
observe, in relation to the constitutional framework of the United Kingdom, that:

“Having no written constitution on which he can fall back, the judge must in every case be able to
demonstrate that he is carrying out the will of Parliament as expressed in the statute conferring the
power. He is on safe ground only where he can show that the offending act is outside the power. The
only way in which he can do this, in the absence of an express provision, is by finding an implied term
or condition in the Act, violation of which then entails the condemnation of ultra vires .”

Thus, the general presumption is that the legislature, when conferring powers on administrative
authorities, does not intend that those authorities should exceed or abuse that power. As, Lord Acton
once said;
“Power tends to corrupt, and absolute power corrupts absolutely”.

24. 24

Therefore, the presumed intention of the legislature discards the notion of absolute power conferred on
administrative authorities. As such, courts may impute certain safeguards against abuse of power in to
the legislation which have conferred powers on administrative authorities, even in the absence of
specific provisions to that effect. The courts validate such imputation on the ground that, it is a general
principle embodied in the broad notion of rule of law that legislature is not expected to incorporate
such safeguards expressly in every piece legislation that is enacted.

Thus, the implied safeguards are taken as part and parcel of the legislation in concern, and violation of
any such safeguard would render the whole action of the administrative authority unlawful. It could be
seen, therefore, that the doctrine of ultra vires has been gradually but, steadily extended by courts, to
cover not only those orders or decisions made in excess of power, but also to cover numerous other
heads of judicial review, such as, failure to observe rules of natural justice, irregular delegation of
powers, breach of jurisdictional conditions, unreasonableness, irrelevant considerations, improper
motives, and such other inconsistencies that can be considered as amounting to ultra vires. Wade and
Forsyth observe thus; “
The technique by which the courts have extended the judicial control of powers is that of stretching the
doctrine of ultra vires. ………. They can readily find implied limitations in Acts of Parliament, as they
do when they hold that the exercise of a statutory power to revoke a license is void unless done in
accordance with the principles of natural justice. For this purpose they have only one weapon, the
doctrine of ultra vires ”

25. 25

Bibliography
1. http://www.investorwords.com/992/company.html
2. http://www.businessdictionary.com/definition/company.html’
3. https://en.wikipedia.org/wiki/Company
4. http://www.companylawclub.co.uk/types-of-registered-companies
5. http://www.out-law.com/page-8196
6. http://smallbusiness.chron.com/definition-memorandum-association-17475.html