CORPORATE CAPACITY AND THE ULTRA VIRES RULE UNDER NIGERIAN LAW
CORPORATE CAPACITY AND THE ULTRA VIRES RULE UNDER NIGERIAN LAW
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Date
2000-11
Authors
AESE, ,JOSEPH TSE
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Abstract
Any act of a company outside the Memorandum and Articles of Association of the
company or the statute(s) creating the company are Ultra Vires. Traditionally, such
acts are VOID and neither the company nor third parties derive any benefits from
such transactions.
Attempts to moderate the harsh consequences of the Ultra Vires Rule have failed to
yield results that satisfy all the parties in corporate practice.
The result is that, the Ultra Vires Rule is dreaded by many. As a follow up, the
company, a potential instrument for investment and development, is equally dreaded
by investors and/or creditors or third parties dealing with the company.
This thesis investigates the Ultra Vires Rule and corporate capacity in theoretical and
practical terms against the background of connected matters, with a view to arriving
at recommendations for further reforms that will attain the best of results for Nigeria.
This work strives to contribute immensely in ridding the dangerous propensities
relative to investors and creditors of the company, as to corporate capacity and the
Utra Vres Rule. This should render or make companies a more attractive medium for
doing business to be fully, freely, and fearlessly embraced by all for speedier
development.
The research is basically doctrinal, based on available literature on the subject, and
establishes among other things that the Ultra Vires Rule otherwise called, doctrine of
limited capacity of companies, does not serve the interest of justice or best interest of
all the parties to corporate practice. Rather, the rule is a nuisance to investors and a
trap to unwary creditors or third parties. In the same vein the concept of limited
liability, and the distinction between the Memorandum and Articles of Association are
undesirable. Also, it is
more practicable to treat issues of company law as distinct rather than as logically
following from other branches of law, say agency.
The overall implication of findings of the research is that the law as now obtains
needs to be reformulated in line with recommendations made in the thesis to attain
the best of results for Nigeria
Description
NOVEMBER, 2000
CORPORATE CAPACITY AND THE ULTRA VIRES
RULE UNDER NIGERIAN LAW
THESIS SUBMITTED TO THE POSTGRADUATE SCHOOL,
AHMADU BELLO UNIVERSITY , ZARIA, IN PARTIAL
FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF
THE DEGREE OF MASTER OF LAWS (LL.M)
THE DEPARTMENT OF COMMERCIAL LAW, FACULTY OF
LAW
Keywords
CORPORATE, CAPACITY, ULTRA, VIRES, RULE, UNDER, NIGERIAN, LAW