Draft the Memorandum of Association for a new company called Green Energy Services Limited, outlining its name, registered office, objects, liability, and share capital.

Under the repealed Companies and Allied Matters Act (CAMA) 1990, the objects clause in the Memorandum of Association was crucial. A company was deemed to have capacity only to carry out the objects stated in its memorandum. Any act or transaction by the company that fell outside its stated objects was considered ultra vires (beyond its powers) and was generally void and unenforceable, even if all members consented. This was established in cases like Ashbury Railway Carriage and Iron Co. Ltd v. Riche (1875) LR 7 HL 653.

The Companies and Allied Matters Act (CAMA) 2020 has significantly reformed the doctrine of ultra vires.

• Section 38(1) of CAMA 2020 states that a company shall, for the furtherance of its authorized business or objects, have all the powers of a natural person. This grants companies broad general capacity.
• Section 38(2) of CAMA 2020 explicitly provides that the validity of an act done by a company shall not be called into question on the ground that the company was without capacity or power to do such act. This provision effectively abolishes the doctrine of ultra vires as it relates to third parties dealing with the company in good faith.

Given the proposed business of "Green Energy Services Limited" is "to exploit renewable energy sources and provide reliable electricity throughout Nigeria," engaging in the "production of beverages" would clearly fall outside its primary stated objects.

• External Validity: If Green Energy Services Limited enters into a contract for the production of beverages with a third party, that contract will be valid and enforceable against the company. The third party cannot challenge the contract on the grounds that it is ultra vires the company's objects, nor can the company use the ultra vires doctrine as a defence against the third party.
• Internal Implications: While externally valid, the objects clause still has internal significance for the company's management and members:
  • Section 38(3) of CAMA 2020 states that the fact that a company's act is not in the furtherance of its business or objects may be relied on and enforced by a member of the company.
  • Section 38(4) of CAMA 2020 allows a member to bring an action to restrain the company from doing an act that is ultra vires its objects.
  • Section 38(5) of CAMA 2020 provides that the directors who authorize an ultra vires act may be liable to the company for any loss or damage arising from such act.

Conclusion:
Under CAMA 2020, Green Energy Services Limited can legally engage in the business of production of beverages, and any such transaction with a third party would be valid and binding on the company. However, internally, this act would be considered ultra vires its stated objects. Consequently, Ali, Musa, Zainab, or Grace (as members) could seek an injunction to stop the company from engaging in beverage production, and the directors who authorized such a venture could be held personally liable to the company for any losses incurred.