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questions :Ultra vires transactions
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[Visitor (120.204.*.*)]answers [Chinese ]Time :2021-08-07
Overstepping the authority of the transaction
It is generally believed that the principle of corporate excess was established by the House of Lords in 1875 in Ashbury Railways v. Riech. That is, the company is only established for a limited purpose, all they can do is within the scope of their authorization, the company engaged in the scope of the articles of association outside the scope of the transaction is invalid, the counterparty of the transaction may not request the court to enforce, the company's general meeting of shareholders may not be recognized afterwards.From the historical background, the principle of overstepping is the product of the early corporate charter theory, that is, the scope of purpose contained in the articles of association is also the scope of government license, the company only enjoys the freedom to engage in business activities within this scope, beyond the scope of business is not allowed by law, and the law itself does not allow matters can not be approved by the general meeting of shareholders and become lawful.However, as the company enters the period of free establishment from the period of establishment of the franchise, the company registered according to the company law is established, the scope of the company's business is not limited to a specific industry or industry, the establishment of the company to engage in commercial transactions is no longer considered a privilege, at this time adhere to the strict principle of overstepping the authority of the law will be difficult to adapt to the certainty and convenience of commercial transactions requirements, and will lead to unfair consequences. When a company has become a common form of commercial operation, strict adherence to the principle of overstepping the authority of the law is bound to lead to the logical result that it allows the company to accept contractual benefits, and the company can use the act as an overstepping of authority to refuse to perform the contractual obligations...

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