Ultra vires is a Latinphrase that literally means "beyond the power." It is used as legaljargon in a number of contexts:
In corporate law, ultra vires describes acts attempted by a corporation that are beyond the scope of powers granted by the corporation's charter, the laws authorizing its formation, or similar founding documents. Acts attempted by a corporation that are beyond the scope of is charter are void or voidable. Except in the case of non-profit corporations, this legal doctrine is obsolescent; within recent years, almost all business corporations are chartered to allow them to transact any lawful business. The doctrine may still have some life among non-profit corporations or state-created corporate bodies established for a specific public purpose, like universities.
In municipal law, ultra vires describes attempts at local legislation that go beyond the powers granted to those bodies. Within the federal system of the United States, municipal bodies are created by the several states, and have only those powers to legislate on local matters that are conferred by the state legislature; attempts by local governments to exceed those grants are ultra vires.
Ultravires is a Latin phrase that literally means "beyond the power." Its inverse is called intra vires, meaning "within the power".
In corporate law, ultravires describes acts attempted by a corporation that are beyond the scope of powers granted by the corporation's charter, the laws authorizing its formation, or similar founding documents.
Broad ultravires applies if there is an abuse of power (e.g., Wednesbury unreasonableness or bad faith) or a failure to exercise an administrative discretion (e.g., acting at the behest of another or unlawfully applying a government policy).
First, because unlawful acts are ultravires, such activities become subject to the enforcement powers of corporate law, in addition to the enforcement powers of whatever governmental or private entity is charged with enforcing the underlying, substantive legal requirement.
Because the ultravires doctrine is alive in a form that makes general law compliance an enforceable obligation within corporate law its continuing life also has implications for the duty of corporations and their managers to maximize profits.
The remaining vestige of the ultravires doctrine imports into corporate law a concern about general law compliance, and the "lawfulness" that matters is not merely the laws of the incorporating jurisdiction.
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