A company has the legal capacity and powers of an individual, and is able to engage in any business or activity in the same way as a natural person.

The Corporations Act 2001 (Cth) (CA) abolished the historical doctrine of ultra vires, so that a company's act is no longer invalid merely because it is contrary to, or beyond, any of the objects in its constitution.

However, a company's exercise of certain corporate powers may be subject to the CA, such as a company's power to cancel or acquire its own shares.

The CA provides that a company may ratify a contract entered into by its agent prior to its formation or registration.

See Corporate capacity.

As a company is an artificial legal entity, it can only act through individual persons.

Some of these persons, due to their control over the company, are identified as being a company's directing mind and will. Where these persons act, their acts are deemed to be the acts of the company itself.

For other persons who are not deemed to be a company's directing mind and will, their capacity to bind a company stems from agency.

An agent may be able to bind a company by having express actual authority, implied actual authority, or apparent or ostensible authority.

If an agent has acted outside its authority, but the company wishes to be bound by the agent's act, the company is able to ratify the agent's actions.

See Who can bind the company?

Unlike other business structures, such as partnerships and trusts, a company as a separate legal entity may be subject to criminal and civil liability for its actions.

Companies may be vicariously liable for the acts or omissions of certain individuals, or have primary liability where certain persons' actions or omissions are imputed directly to the company.

A company may have primary criminal liability if the elements set out in the Criminal Code Act 1995 (Cth) are satisfied. The CA provides for strict and absolute liability offences where there is no need to even prove the fault element of an offence.

It is generally only under statute that a company may be found guilty of vicarious criminal liability, with the wording and intentions of the statute relevant as to whether or not vicarious criminal liability may be imposed on a company.

Companies may have primary civil liability for civil wrongs they commit. Under the CA, the mental state of the company's directors, employees or agents are attributed to the company, and the act is taken to have been engaged by the company itself.

Companies may also be vicariously liable for civil wrongs committed by its employees and agents under common law and the CA and other statutes.

Further, under the CA companies may:

• be guilty of criminal offences;

• liable for civil penalties; or

• liable for compensation orders.

See Criminal and civil liability.