Multiple choice

Assertion (A): Doctrine of indoor management protects an outsider dealing with a company from irregularities inside a company. Reason (R): Doctrine of ultra vires protects an outsider dealing with a company for corporate capacity not mentioned in the objects clause.

  1. (A) is true, but (R) is false.

  2. (A) is false, but (R) is true.

  3. (A) and (R) are true, but (R) is not an explanation of (A).

  4. (A) and (R) are true, and (R) is an explanation of (A).
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The doctrine helps protect external members from the company and states that the people are entitled to presume that internal proceedings are as per documents submitted with the Registrar of Companies. In corporate law, ultra vires describes acts attempted by a corporation that are beyond the scope of powers granted by the corporation's objects clause.

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