Lesson plan
Objects clause
An objects clause is a provision in a company's constitution stating the purpose and range of activities for which the company is carried on. In UK company law, until reforms enacted in the Companies Act 1989 and the Companies Act 2006, an objects clause circumscribed the capacity, or power, of a company to act. To avoid problems, long and unwieldy 'catch-all' objects clauses were often drafted to include as much potential activity as possible, and thus avoid dealings being found to be ultra vires: the legal position was that any contract entered into beyond the power, or ultra vires, would be deemed void ab initio. The legal problems concerning objects clauses are now largely historical artifacts. Newly registered companies no longer have to register objects under the Companies Act 2006 section 31, and that even if they do, the ultra vires doctrine has been abolished against third parties under section 39. A clause is only relevant in an action against a director for breach of duty under section 171 for failure to observe the limits of their constitutional power.
Article summary
An objects clause is a provision in a company's constitution stating the purpose and range of activities for which the company is carried on. In UK company law, until reforms enacted in the Companies Act 1989 and the Companies Act 2006, an objects clause circumscribed the capacity, or power, of a company to act. To avoid problems, long and unwieldy 'catch-all' objects clauses were often drafted to include as much potential activity as possible, and thus avoid dealings being found to be ultra vires: the legal position was that any contract entered into beyond the power, or ultra vires, would be deemed void ab initio. The legal problems concerning objects clauses are now largely historical artifacts. Newly registered companies no longer have to register objects under the Companies Act 2006 section 31, and that even if they do, the ultra vires doctrine has been abolished against third parties under section 39. A clause is only relevant in an action against a director for breach of duty under section 171 for failure to observe the limits of their constitutional power.
Key claims
No claims recorded.
Discussion questions
- Summarise the article in your own words. Which single claim would you verify first, and why?
- Which claim in this article is most likely to be revised as the sources update? How would you check its current status?
- If two sources disagreed about one of these facts, what would you need in order to trust one over the other?
Bibliography
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Key claims and bibliography are generated from the same tracked claims and sources as the article page.