Legal English – Peter’s Pills – Lesson 40 – The Objects Clause

Legal English for Notaries - By Federnotizie

The Objects Clause



Before the Companies Act 2006 (CA 2006), every company was required to include an objects clause (oggetto sociale) in its memorandum of association (atto costitutivo). This objects clause set out the purpose for which the company was formed and limited the activities of the company to those set out (stabilite) in its objects clause. Any transaction that fell outside the objects clause was ultra vires, which means “outside the capacity of the company”, and therefore void (nulla). Today UK companies are no longer required to have an objects clause.

Furthermore, the ultra vires doctrine was abolished by s 39(1) CA 2006 as far as transactions with outsiders, or third parties to the company, are concerned but it still has some relevance with respect to the internal management of companies with restricted objects. Charities are excluded from this statute (articolo).

Please note that we say “objects clause”, but however we speak about the “subject of an email”, and not the object of an email.

Likewise, we also speak about the “subject of a trust”, and not the object of a trust. We also say that that something is “subject to taxation” and not object to taxation.

Thank you very much and see you next time for more Peter’s Pills to improve your Legal English!

Read more about the power od directors to bind the company in s40 of the CA2006: “Company Act 2006 / Section 40“.

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