Thursday, July 25, 2019
Corporate law for managers Essay Example | Topics and Well Written Essays - 500 words
Corporate law for managers - Essay Example The courts had found that contracts which were subsequently ratified in a general meeting were not valid as well. (Ashbury Railway & Iron Co v Riche) The Parliament tried to reform such tensions and debates in respect of the objects clause by specifying a provision under the Companies Act 1985.Under section 3A of the Companies Act 1985, a company could carry out business of any nature and could do anything that was incidental or conduct to such business. However, the problem in respect of the objects clause remained and there were cases whereby on the basis of the objects clause the acts of a company were challenged and it was said that the actions of the company were ultra vires. The sole reason for such action was the fact that the company could do acts which were incidental or conductive, however, acts, which were completely separate from such business were still caught for being ultra vires thereby creating problems for companies and their directors for actions which could be hit by way of such an objects clause. In lieu of the problems the Companies Act 2006, by way of section 1295 repealed section 3A and in section stated that unless there were restrictions placed on the objects of the company, the company could indulge in any actions whatsoever.