3.3 Doctrine of Ultra Vires

The classical doctrine: the company's acts beyond its objects (the memorandum's stated purposes — Unit 5.1) are VOID — not merely voidable: Ashbury Railway Carriage v. Riche (the company's contract outside its objects incapable of ratification). The rationale (the old logic): the creditor's and shareholder's reliance on the stated objects (the capital dedicated to the declared businesses); the majority's inability to authorise the undeclared (the objects as the investors' bargain). The doctrine's modern relaxation: the reform era's reaction (the abuses — the company escaping its own contracts by pleading its own memorandum; the innocent third party's ruin) — the modern statutes confine the doctrine: the objects as the capacity's general statement; the third party's protection (the outsider's right to assume validity unless the excess is plain); the indoor-management complement (3.4); the shareholders' internal remedies (the excess restrained by injunction; the directors' accountability). The current Nepali frame: the Companies Act 2063's scheme (the objects-and-powers architecture; the shareholders' and directors' internal remedies; the third party's protection — described functionally). The ultra viires lesson for the exam: the doctrine's journey — from the strict voidness to the modern liability-shift (the company bound, the directors answerable).