THE DOCTRINE OF ULTRA VIRES IN NIGERIAN COMPANY LAW: SCOPE AND APPLICABILITY.

ABSTRACT A company that has been registered together with its memorandum and article of association at the corporate affairs commission (CAC) obtains the status of an artificial legal personality at law and will be treated as a natural person with rights and duties which are recognized and backed up at law. Although the registered company is described as a person at law it lacks the primary attributes of a natural person such as mobility, reasoning, and the ability to sign a contract and create legal relations with another person, therefore lacking the ability to exercise its rights which it owns and the duties which it owes to its creditors, shareholders, and members of the public at large. Consequently, the directors and other officials of the company carry out their rights and duties, especially the duty to enter into a contract and other transaction that has been stipulated by the memorandum of the company and nothing more. However, whereby the contract or transaction conducted is not provided for in the memorandum of the company, such transaction is called an ultra vires act of the company which means an act that is beyond the power of the company. Accordingly, this research makes an analysis of how the directors of a company bypass the ultra vires rule and by adopting the doctrinal method this research makes a discovery of what is obtainable in other jurisdiction and also highlights the provisions of the ultra vires in CAMA with the power of CAC to investigate into the affairs of a company and make recommendations that the sections of CAMA should be amended to enlarge the coat of the CAC in conducting investigations in regards to a company.`