Alabama § 10A-2A-3.04 Lack of Power to Act

Alabama Statutes

§ 10A-2A-3.04 — Lack of Power to Act

Alabama § 10A-2A-3.04

Title 10AAlabama Business and Nonprofit Entities Code

Ch. 2AAlabama Business Corporation Law

Art. 3Purposes and Powers

This text of Alabama § 10A-2A-3.04 (Lack of Power to Act) is published on Counsel Stack Legal Research, covering Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Ala. Code § 10A-2A-3.04 (2026).

Text

(a)Except as provided in subsection (b), 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 stockholder 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 10A-2A-14.10.

(c)In a stockholder’s proceeding under subsection (b)(1) 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, a

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(a) Except as provided in subsection (b), 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 stockholder 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 10A-2A-14.10.
(c) In a stockholder’s proceeding under subsection (b)(1) 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) Proceedings under subsection (b) shall be brought in the designated court, and if none, in the circuit court for the county in which the corporation’s principal office is located in this state, and if none in this state, in the circuit court for the county in which the corporation’s most recent registered office is located.