The word "ultra' means 'beyond' and the word 'vires' means

'ultra vires' a company means 'beyond the powers of a company'. The momentum of a company defines its powers. Any activity of a
company beyond its Memorandum is, therefore, ultra vires the company. Any act ultra vires the company is void and consequently, it does not bind the
company.The objects clause of the Memorandum of Association of a Company reveals the purposes for which a company has been' incorporated. The

company can, therefore, undertake such activities which are essential for such attainment. Everything else is beyond the powers of the company or is

ultra vires. Any person dealing with the company must ensure beforehand that the contractual relationship he contemplates with the company is within its

powers (i.e. intra vires) otherwise later on the courts will not enforce the rights and obligations arising out of such relationship.
The doctrine of ultra vires was first applied in the case of Ashbury Railway Carrige Co. v Riche. In this leading case, a company has been
formed with the object of carrying on business as mechanical engineers and general contractors. The directors entered into an agreement for financing

the construction of a railway line in Belgium, which was ultra vies the company. The company repudiated the contract itself later on. Riche sued the

company for breach of contract and claimed damages. Held, the contract being ultra vires, was null and void. It was not binding on the company and the

question of awarding damages did not arise.