DOCTRINE OF CONSTRUCTIVE NOTICE- The memorandum and articles of association of every

company are registered with the Registrar of Companies. The office of the Registrar is a public office
and consequently the memorandum and articles become public documents. They are open and
accessible to all. It is therefore, the duty of every person dealing with a company to inspect its public
documents and make sure that his contract is in conformity with their provisions. But whether a
person actually reads them or not, he is to be in the same position as if he had read them. He will be
presumed to know the contents of those documents. Another effect of this rule is that a person
dealing with the company is taken not only to have read those documents but to have understood
them according to their proper meaning. He is presumed to have understood not merely the
company’s powers but also those of its officers. Further, there is a constructive notice not merely of
the memorandum and articles, but also of all the documents, such as special resolutions [S. 117] and
particulars of charges [S. 77] which are required by the Act to be registered with the Registrar. But
there is no notice of documents which are filed only for the sake of record, such as returns and
accounts. According to Palmer, the principle applies only to the documents which affect the powers
of the company.

DOCTRINE OF ULTRA VIRESIt is a Latin term made up of two words “ultra” which means beyond and
“vires” meaning power or authority. So we can say that anything which is beyond the authority or
power is called ultravires. In the context of the company, we can say that anything which is done by
the company or its directors which is beyond their legal authority or which was outside the scope of
the object of the company is ultra-vires. Memorandum of association is considered to be the
constitution of the company. It sets out the internal and external scope and area of company’s
operation along with its objectives, powers, scope. A company is authorized to do only that much
which is within the scope of the powers provided to it by the memorandum. A company can also do
anything which is incidental to the main objects provided by the memorandum. Anything which is
beyond the objects authorized by the memorandum is an ultra-vires act.

DOCTRINE OF INDOOR MANAGEMENT - The doctrine of indoor management was evolved 150 years
ago. It is also known as Turquand’s rule. The role of doctrine of indoor management is opposed to of
the role of doctrine of constructive notice. The doctrine of constructive notice protects company
against outsiders whereas the doctrine of indoor management protects outsiders against the actions
of company. This doctrine also is a possible safeguard against the possibility of abusing the doctrine
of constructive notice. The person entering into a transaction with the company only needed to
satisfy that his proposed transaction is not inconsistent with the articles and memorandum of the
company. He is not bound to see the internal irregularities of the company and if there are any
internal irregularities than company will be liable as the person has acted in the good faith and he
did not know about the internal arrangement of the company. The rule is based upon obvious
reason of convenience in business relations. Firstly, the articles of association and memorandum are
public documents and they are open to public for inspection. Hence an outsider “is presumed to
know the constitution of a company, but what may or may not have taken place within the doors
that are closed to him.”