Applicability of the Doctrine of Ultra Vires on Private Commercial Companies in Ethiopia: Its Legal Significance
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Date
2020-05
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Addis Ababa University
Abstract
The principle of limited liability introduced into private companies makes it imperative to define
the powers and capacity of such companies, authority of their agents and the consequences and
effects of ultra vires acts. The doctrine of ultra vires applicable to private companies was the
invention of the judiciary which, subsequently, has been introduced in the commercial regime of
both civil and common law jurisdictions, but not in every country. In this thesis, it is argued that
the commercial regime of Ethiopia has given recognition to the applicability of the doctrine of
ultra vires to private commercial companies, though not comprehensively. It is incomprehensive
because the legal consequences and effects of ultra vires acts of private commercial companies
are indeterminate. Moreover, the commercial regime of Ethiopia is impugned for it lacks clarity
and specificity in regulating the consequences of acts ultra vires to company directors and
managers and their liabilities.