Ultra vires translates to ‘beyond the powers’. It is used to describe an act which requires legal authority or power but is then completed outside of or without the requisite authority. In relation to corporations 'ultra vires' denotes some act or transaction on the part of a corporation which, although not unlawful or contrary to public policy if done by an individual, is yet beyond the corporation's legitimate powers as defined by the statute under which it is formed, or the statutes which are applicable to it, or by its constitution, although the scope of the ultra vires doctrine as it applies to companies and corporations is now restricted by statute.
The term is not appropriate in relation to any act or transaction which is beyond the lawful powers of any person. Thus the term is used in two senses:
• beyond the powers of the company; and
• beyond the powers of the directors under the authority conferred on them by the company or its constitution