objects (noun, ob-jects, \ ˈɑːbdʒekts \) clause (noun, clause, \ klɔːz \)
Definition: is a part of a company’s memorandum of association describing the goals and objectives that the organization was formed to achieve, including the products and services it plans to offer to its clients. If a company performs actions or operations that aren’t included in this section, then the organization is considered to be acting beyond its powers (also known as ultra vires). As a result, the shareholders of an organization that has breached the objects clause can sue the directors for any losses that suffered from their ultra vires acts.
In a Sentence:
- Our objects clause clearly states that our operations are limited to computer hardware, so I have no idea why Madsen decided he can broaden the list of our products and include refrigerators.
- As it’s evident for the memorandum of association, the board had full right to pursue a deal with Vibro-Tonic as it doesn’t breach the objects clause.
- The judge confirmed the fact that Asthma Solution acted ultra vires, neglecting the objects clause included in their articles of association and trying to sell medication without a proper license.
Synonyms and related words: exclusion clause, memorandum of association, ultra vires, overreaching clause