The Memorandum of Association
The contents of the memorandum of association were discussed in Chapter 2 above. One problem which caused extensive debate over many years was an issue arising from the setting out of the objects of association in the memorandum. The courts held that the company was unable to create legally binding contracts or act outside the scope of the objects of association as they were set out in the memorandum. The law has been substantially changed following the Companies Act 1989 and it will be in rare circumstances that the old law will be relevant. However, the reforms did not completely get rid of the necessity for an understanding of the common law rules. This chapter will examine first the background and justification behind the common law rules, then the new rules and finally indicate briefly the difficulties which may be encountered by anyone seeking to raise an issue of ultra vires in the limited situations where it may still be relevant.
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Bibliography and Further Reading
- Drury, ‘The Relative Nature of the Shareholder’s Rights to Enforce the Company Contract’ (1986) CLJ 219.Google Scholar
- Leader and Dine in Perspectives on Company Law, I, Patfield (ed.), Kluwer, 1995.Google Scholar
- Wedderburn, ‘Shareholders’ Rights and the Rule in Foss v. Harbottle’ (1958) CLJ 193.Google Scholar