Define: Ultra Vires

Latin for “beyond powers.” It refers to conduct by a corporation or its officers that exceeds the powers granted by law.

The term ‘ultra vires’ means ‘beyond the powers’. It refers to an act that requires legal authority or power but is carried out outside of or without that authority. In the context of corporations, the term ‘ultra vires’ refers to an act or transaction by a corporation that, while not illegal or contrary to public policy if carried out by an individual, exceeds the corporation’s legitimate powers as defined by the statute under which it was formed, the statutes that apply to it, or its constitution, although the scope of the ultra vires doctrine as it applies to companies and corporations has been limited by statute.

Traditionally, the purpose of a corporation was closely spelt out in its articles of incorporation. If the corporation acted beyond its described purposes these actions were unenforceable against the corporation or by the corporation. However, most modern statutes allow corporate purposes to be any lawful activity.

The term is not appropriate in relation to any act or transaction which is beyond the lawful powers of any person. Thus the term is used in two senses:

• • beyond the powers of the company; and
• • beyond the powers of the directors under the authority conferred on them by the company or its constitution

This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

This glossary post was last updated: 29th March, 2024.