Ultra Vires

By: Martin M. Shenkman, CPA, MBA, JD

An ultra vires act is an act by a corporation that is not permitted. An ultra vires act is an act beyond the power and authority of the corporation as granted under its certificate of incorporation (charter) and the laws of the state of incorporation. An action is ultra vires if the corporation has no authority to perform it in any circumstance or for any purpose. If a contract is made beyond the scope of corporate powers that contract would be unlawful.

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