§ 7-103-104 — Ultra vires

(1) Except as provided in subsection (2) of this
section, the validity of corporate action may not be challenged on the ground that
the corporation lacks or lacked power to act.

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

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

(b) In a proceeding by or in the right of the corporation, whether 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

(c) In a proceeding by the attorney general under section 7-114-301.

(3) In a shareholder's proceeding under paragraph (a) of subsection (2) of
this section to enjoin an unauthorized corporate act, the court may enjoin or set
aside the act, if it would be equitable to do so 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 the injunction.

Legislative History

Source: L. 93: Entire article added, p. 748, � 1, effective July 1, 1994. L. 96: (3) amended, p. 1313, � 11, effective June 1.