Question

1.

A company's articles can contain provisions that cannot be altered

True

False

2.

In relation to a company's contractual capacity, the ultra vires doctrine has been abolished.

True

False

3.

Breach of any term in the statutory contract will allow either the company or a member to sue for breach of contract.

True

False

4.

Under the Companies Act 2006, you find the objects of a company set out in the Memorandum of Association.

True

False

5.

Companies incorporated under the Companies Act 2006 are not required to have a memorandum of association.

True

False

Answer 1

1. A. FALSE. A company's articles cannot contain provisions that can not be altered. But in Companies Act, 2006 made it more difficult to alter the provisions because the Companies Act permits companies to entrench article provisions, which makes them more difficult to alter.

2. A. FALSE. Companies Act 2006 provides that a company's objects are unrestricted by default. Companies can still restrict its objectives. If a company breaches its objects, the transaction will be valid, but the directors will be in breach of duty which means the DOCTRINE OF ULTRA VIRES still exist.

3. A. FALSE. Not all the terms of a statutory comtract are enforcible by a member. A member can only sue for breach of those provisions that provide 'Membership Rights'.

4. A. FALSE. Under Companies Act, 2006 the Articles are now the most important constitutional document of the company. In Companies Act, 1985, the objects would be found in the company's memorandum. But it was  decided that the powers of a company would be clearer if all limitations on its power were placed in one document. So, a company's objects clause is located in the articles of association Under Companies Act 2006

5. A. FALSE. Even though the Companies Act, 2006 decreases the importance of Memorandum significantly, the companies are still required to have a Memorandum.