clg t3 q1-q2

8/19/2019 CLG T3 Q1-Q2

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TUTORIAL 3

Corporate Law & Governance

8/19/2019 CLG T3 Q1-Q2


1) Explain the doctrine of ultra vires in company

law. To what extent is it applicable in alaysia.

• !ny act by the company that is beyond the co"s

ob#ect clause is re$arded as ultra vires%uv) .

• !t common law !shbury"s case state an uv

transaction is null and void.

•

'n alaysia a transaction is still bindin$ onthe co even if it is ultra vires. (ut there are

exceptions.

8/19/2019 CLG T3 Q1-Q2


3 Exceptions

• *ection +,%+)%a) – ! member can apply to court to stop an uv act.

• *ection +,%+)%b) – ! member or the company may sue the directors-

officers for uv if they breach the ob#ect clauses.

•*ection +,%+)%c) – The minister can petition to wind up the company

if the company acted uv.

8/19/2019 CLG T3 Q1-Q2


+) iscuss the effect of section of the

Companies !ct 1/0.

Effect of M&A (S33).

• ember can enforce provisions in the !! only in their

capacity as a member and not in any other capacity

such as director solicitor or promoter. – Eley v 2ositive Government *ecurity Life !ssurance Co

• The &! has the effect of bindin$ the members

amon$ themselves

– 3ayfield v 4ands

• 5utsiders are not privy to the contract and thus cannot

enforce any ri$ht.

–

Eley"s case.

clg t3 q1-q2

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