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Ultra Vires
Practical Law Glossary Item 5-510-3750 (Approx. 2 pages)
Glossary
Ultra Vires
An act of a corporation is ultra vires when the corporation acts beyond the scope of the powers and purposes provided to it by:
- Its charter document.
- The laws authorizing its formation.
Historically, ultra vires acts performed by a corporation were generally void or voidable. Over time, the doctrine of ultra vires as applied to corporations has become rare because of:
- The use of general clauses in certificates of incorporation that permit a corporation to engage in any lawful business.
- The ability of a corporation to amend its certificate of incorporation.
- The Revised Model Business Corporation Act (and similar state statutes), which states that the validity of a corporate action may not be challenged on the ground that the corporation lacks or lacked the power to act, except under very limited circumstances.
For examples of a certificate of incorporation, see Standard Documents, Certificate of Incorporation (Short Form DE) and Certificate of Incorporation (NY). For information on forming and organizing a corporation, see the Corporate Formation and Housekeeping Toolkit.