“After a company is incorporated, the memorandum becomes the charter of its activities and at the same time defines its field of operation; Apart from statutory powers, anything done outside the stated objects is ultra vires the company; it is invalid and cannot be ratified by the members: Ashbury Railway Carriage and Iron Co. v. Riche (1875) L.R. 7 H.L. 653, in which Lord Cairns said (at 667) that the rule served the dual purpose of protecting both investors and creditors. But the rule is applied liberally so that whatever is fairly incidental to the objects stated in the memorandum (unless expressly prohibited) is regarded as intra vires: Attorney-General v. Great Eastern Railway Co. (1880) 5 App. Cas. 473.”
COMPANY LAW – Memorandum and Articles of Association – Importance of the memorandum of association after incorporation of a company; effect of going outside the scope of the stated objects in the memorandum
COMPANY LAW – Memorandum and Articles of Association – Principles guiding construction of the objects of a memorandum of associationCOMPANY LAW – Directors – Effect where the directors of a company do not exercise their rights to decline to register a transfer of shares where the Articles of the Company grants such powers