ABSTRACT
This chapter explores the rise and fall of corporate capacity or the doctrine of ultra vires and its current state in law. It traces how the doctrine of ultra vires arose as an expression of the company' own emergence as an entity with an identifiable character and capacity. There has since followed two periods of reform of ultra vires, one in 1985 and the other in 2006. The first reform followed the First Companies Directive in which the underlying purpose was to harmonize company law and help trade between Member States. The reforms of the 2006 Act went in shaping the company as a single function entity that need have no ex ante restrictions written into it, and is guided solely by the directors' section 172 duty to act in the interest of its members. These reforms effectively give the power to determine issues relating to capacity to controlling shareholders and management.
