Corporate acts/ activities that are beyond, or at odds with, (ultra vires) its charter (memorandum of association/ object clause). If such activities are undertaken, whereby negatively affecting its performance and that of its stock, a corporation can be exposed to liability (e.g., shareholder lawsuits). Ultra vires activities go beyond the powers and scope that are defined and set out in a corporate charter or law. This includes anything that is done by a company or its directors beyond their legal authority or outside the scope of the object of the company. Ultra vires activities can also imply any action that is specifically sanctioned by the corporate charter.
An example is the so-called ultra vires borrowings- that is, borrowing money by a company despite its restricted ability to borrower by virtue of its charter.
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