ultra vires

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Ultra Vires Activities

Activities in which a publicly-traded company engages that are outside the powers delegated to it in its charter and/or bylaws. Every publicly-traded company has a charter and bylaws, which both outline the powers of executives and the board of directors and actions they are allowed to take. While both the charter and the bylaws can be amended by shareholders, companies sometimes take actions outside the scope of their charters without first receiving permission to do so. If shareholders deem ultra vires activities to be harmful to them or to have the potential of harm, they may sue the company for damages.

ultra vires

(of an action by a JOINT-STOCK COMPANY) exceeding its powers as defined in its MEMORANDUM OF ASSOCIATION. For example, if a company's memorandum authorizes it to trade in the motorcar business, and its directors then set up an ice-cream business, then they may be regarded as trading ultra vires and the company's CONTRACTS with ice-cream suppliers and customers may be regarded as void. To avoid falling foul of the ultra vires doctrine, companies now tend to draw up very wide-ranging business powers in the MEMORANDUM OF ASSOCIATION.
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In both Malmo-Levine and RJR-MacDonald, the Court subsequently considered whether the federal legislation, having been declared intra vires Parliament with regard to federalism, nevertheless violated the Canadian Charter of Rights and Freedoms (Part I of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (UK), 1982, c 11 [Charter]).
It did challenge the prohibitions contained in ss 8-9, but Cromwell J found them intra vires as they "fall within the traditional boundaries of criminal law": Re AHRA, supra note 2 at para 289.
No matter how the conclusion is drawn, one wonders whether any useful purpose is served by qualifying intra vires acts and ultra vires acts equally as acts of the state, if, all other conditions being equal, different legal consequences ensue in terms of state responsibility.