21-229. Ultra vires.

198 words·~1 min read·/ne/chapter-21/21-229

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(MBCA 3.04)

(a)Except as provided in subsection

(b)of this section, the validity of corporate action may not be challenged on the ground that the corporation lacks or lacked power to act.

(b)A corporation's power to act may be challenged:

(1)In a proceeding by a shareholder against the corporation to enjoin the act;

(2)In a proceeding by the corporation, directly, derivatively, or through a receiver, trustee, or other legal representative, against an incumbent or former director, officer, employee, or agent of the corporation; or

(3)In a proceeding by the Attorney General under section 21-2,197 .

(c)In a shareholder's proceeding under subdivision (b)(1) of this section to enjoin an unauthorized corporate act, the court may enjoin or set aside the act, if equitable and if all affected persons are parties to the proceeding, and may award damages for loss, other than anticipated profits, suffered by the corporation or another party because of enjoining the unauthorized act.

(d)Venue for a proceeding under subdivision (b)(1) or (b)(2) of this section lies in the district court of the county where the corporation's principal office, or, if none in this state, its registered office, is located.