A Discussion on the current position on the ultra vires docyrine of ultra vires under the companies Act chapter 388 of the laws of Zambia
Date
2013-04-18
Authors
Simutenda, Suwilanji
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Abstract
The aim of this study shall be to set out the provisions of the Companies Act relating to the ultra vires doctrine and cases that have attempted to construe such provisions so as to determine the clear attitude towards this doctrine in this jurisdiction. This paper endeavours to investigate and determine the effect and true standing of the ultra vires principle under the Companies Act, Chapter 388 of the laws of Zambia so as to ascertain whether the ultra vires principle still possesses any regulatory function under company application. The importance of such clarification cannot be understated as it provides a solution to many disputes that can arise both under the issue of good governance and contracts entered into by companies. This is especially important as company transactions form the fulcrum of commercial transactions in any jurisdiction. And seeing that companies can right fully be said to be at the heart of the proper functionality of the wheels of commerce then it is rightfully and importantly so that the importance of good governance and the role the ultra vires doctrine plays can in no way be understated nor ignored. The paper concludes by observing that though the ultra vires principle is still in existence in regards to company law in Zambia, it has been greatly watered down to encompass and thus apply only to situations of internal dealings of the company and not those involving third parties.
Furthermore the paper goes onto highlight that the application of the ultra vires principle in Zambian courts has to a great extent been done in a manner that can be said to be in conformity with what has historically been termed the 'classical ultra vires' principle. This is so for the courts in their rulings have tended to focus on issues regarding the breach of directors' powers.
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Ultra Vires(company Law) - Zambia