The objects clause in the memorandum of association of a limited liability company and the doctrine of ultra vires

Abstract

Section 69 Companies Act 1995 lays down the sine qua non elements for the constitution of a valid memorandum of association. Paragraph ( e) deals with the "objects of the company". By section 4(3) Companies Act 1995 "a company may be formed for any lawful purpose." This means that anything may form the object of a company provided it is lawful. However the legislator provides that "the objects of a company may not be simply stated to be any lawful purpose or trade in general." This means that the objects of a company cannot be drafted in vague terms but must be specifically spelled out in the memorandum of association.