Companies Act 2014 section 1012

Capacity not limited by a PLC's constitution

Section 1012 deals with the legal validity of actions taken by a public limited company (PLC) that may fall outside the scope of its stated objects, and the protections and responsibilities that flow from this.

• A PLC's actions cannot be invalidated simply because they fall outside the company's stated objects — the old ultra vires doctrine is effectively set aside for external dealings
• Members may seek to restrain future ultra vires acts, but not where the PLC is already legally obligated to complete them due to a prior commitment
• Directors remain personally responsible for respecting the limitations in the PLC's objects, and any action beyond those objects can only be ratified by the company passing a special resolution
• Third parties dealing with a PLC are not required to check whether a transaction falls within the company's objects, removing the old doctrine of constructive notice