An action taken by a company outside its object clause is regarded as?

Assessment: JAMB UTME - Commerce - 2004 Subject: Commerce

Question 1 Report

An action taken by a company outside its object clause is regarded as?
Answer Details
An action taken by a company outside its object clause is regarded as "ultra vires". This means that the company has acted beyond the legal authority granted to it by its Memorandum of Association. In other words, the company has done something that is not allowed or authorized by its stated objectives or purpose. This can have legal consequences and may be challenged by shareholders or other stakeholders. Therefore, it is important for companies to ensure that their actions are always within the scope of their object clause.
Read lesson note on Legal Aspects Of Business (JAMB)
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