Q.Explain the Objects Clause of the Memorandum of Association. How is it connected with the doctrine of ultra vires?

The Objects Clause is the clause every other topic in this chapter ultimately connects back to.

The Objects Clause, required by Section 4(1)(c) of the Companies Act, 2013, states the objects for which the company is proposed to be incorporated, together with any matter considered necessary in furtherance of those objects. Of the six clauses that make up the Memorandum of Association, this is the one most directly concerned with what the company actually does, and it serves three audiences simultaneously: it tells members what business their invested capital is committed to; it tells creditors and other outside parties the field within which the company can validly transact; and it tells the Registrar of Companies, at the point of incorporation, the very purpose for which registration is being granted.

The connection between the Objects Clause and the doctrine of ultra vires is direct and definitional: ultra vires literally means an act beyond the objects this clause states. Because the doctrine holds that such an act is void and cannot be cured by shareholder ratification, the Objects Clause is effectively the boundary line the doctrine polices. A company genuinely wishing to expand or change its line of business cannot simply start the new activity; it must first alter the Objects Clause itself, following the special-resolution procedure (and, where the company has raised public money still unutilised for the original purpose, the additional exit-opportunity safeguard under Section 13(8)) discussed later in this chapter. …