Explain the reason why a third part dealing with the company may concern himself with the doctrine of ultra vires
The Companies Act of the Laws of Kenya imposes certain statutory limitations and obligations on directors.
List four of such limitations.
ANSWER
A third party may concern himself with the doctrine of ultra vires when dealing with the company as any such contracts will be considered void and unenforceable.
• It is imperative that third parties examine the contents of the memorandum of association.
• Third parties must be aware of the contents of the memorandum.
• Any transaction outside the objects clause will be ultra vires the company.
• Such a contract is void and cannot be ratified and nothing can be done to render it intra vires.