5/11/2011 Rationale and practical effects of ultra vires doctrine Rationale of doctrine:protection of shareholders and creditors. Injustices of doctrine in practice. Circumventing the doctrine:very wide objects clauses drawn up. Abolition of ultra vires doctrine: 1997 amendments Company has capacity as a natural person:s 5A. Stating objects is optional:s 5(1A)(b). Unless members want to dispense with "Limited"in the name:s 5(1A)(a). 45/11/2011 4 7 Rationale and practical effects of ultra vires doctrine • Rationale of doctrine: protection of shareholders and creditors. • Injustices of doctrine in practice. • Circumventing the doctrine: very wide objects clauses drawn up. 8 Abolition of ultra vires doctrine: 1997 amendments • Company has capacity as a natural person: s 5A. • Stating objects is optional: s 5(1A)(b). - Unless members want to dispense with “Limited” in the name: s 5(1A)(a)