§ 7-1.2-303 - Defense of ultra vires.
SECTION 7-1.2-303
§ 7-1.2-303 Defense of ultra vires. –No act of a corporation and no conveyance or transfer of real or personalproperty to or by a corporation is invalid because the corporation was withoutcapacity or power to do the act or to make or receive the conveyance ortransfer, but the lack of capacity or power may be asserted:
(a) In a proceeding by a shareholder against the corporationto enjoin the doing of any act or the transfer of real or personal property byor to the corporation. If the unauthorized act or transfer sought to beenjoined is being, or is to be, performed or made pursuant to a contract towhich the corporation is a party, the court may, if all of the parties to thecontract are parties to the proceeding and if it deems the same to beequitable, set aside and enjoin the performance of the contract, and in sodoing may allow to the corporation or to the other parties to the contract, asthe case may be, compensation for the loss or damage sustained by either ofthem which may result from the action of the court in setting aside andenjoining the performance of the contract, but anticipated profits to bederived from the performance of the contract shall not be awarded by the courtas a loss or damage sustained.
(b) In a proceeding by the corporation, whether actingdirectly or through a receiver, trustee, or other legal representative, orthrough shareholders in a representative suit, against the incumbent or formerofficers or directors of the corporation.
(c) In a proceeding by the attorney general, as provided inthis chapter, to dissolve the corporation, or in a proceeding by the attorneygeneral to enjoin the corporation from the transaction of unauthorized business.