Ultra vires doctrine in Nigerian company law vis-a-vis positions in Ghana and the United Kingdom

Abstract

The doctrine of ultra vires is one of the English common law principles received in Nigeria as part of its company law. The doctrine was developed by the nineteenth century courts on grounds of both shareholder and creditor protection. Unfortunately, this doctrine became ‘a double edged sword’ that worked against the company and third parties dealing with it. This work examines the efficacy of the doctrine of ultra vires in modern corporate law practice in Nigeria vis-a-vis Ghana and United Kingdom. The key issue is whether the doctrine serves any useful purpose especially in the light of modern day economic realities. The paper adopts a doctrinaire methodology and relies on information in textbooks, journal articles, internet and other reliable sources. The paper finds that in the light of modern day economic realities, the doctrine has outlived its usefulness or relevance. It is suggested that the doctrine should be completely abolished in Nigeria to give all companies unrestricted capacity.

Keywords: Company Law, Ultra Vires, Unrestricted Capacity, Nigeria, United Kingdom, Ghana