{"id":34628,"date":"2024-04-15T09:33:31","date_gmt":"2024-04-15T09:33:31","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=34628"},"modified":"2024-04-15T09:33:31","modified_gmt":"2024-04-15T09:33:31","slug":"the-judgement-in-the-case-of-foss-vs-harbottle-lays-down-the-following-principle","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/the-judgement-in-the-case-of-foss-vs-harbottle-lays-down-the-following-principle\/","title":{"rendered":"The judgement in the case of Foss Vs. Harbottle lays down the following principle:"},"content":{"rendered":"

[amp_mcq option1=”Doctrine of Constructive Notice” option2=”Rule of Majority” option3=”Doctrine of Indoor Management” option4=”Doctrine of Ultra Vires” correct=”option4″]<\/p>\n

The correct answer is: D. Doctrine of Ultra Vires<\/strong><\/p>\n

The doctrine of ultra vires is a legal principle that states that a corporation can only do those things that are expressly authorized by its articles of incorporation. If a corporation acts outside of its authority, its actions are said to be ultra vires and are void.<\/p>\n

The doctrine of ultra vires was first established in the case of Foss v. Harbottle (1843). In this case, the shareholders of a company brought a lawsuit against the directors for allegedly mismanaging the company’s affairs. The court held that the shareholders did not have standing to bring the lawsuit, because the company was the only entity that could sue on its own behalf. The court also held that the directors were not liable for their actions, because they had acted within the scope of their authority.<\/p>\n

The doctrine of ultra vires has been criticized for being too restrictive and for preventing shareholders from holding directors accountable for their actions. However, the doctrine remains an important part of corporate law, and it continues to be applied by courts today.<\/p>\n

The other options are incorrect because they do not accurately describe the doctrine of ultra vires.<\/p>\n