§ 12:1-304 — Ultra vires

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 in any of the following:
(1) A proceeding by a shareholder against the corporation to enjoin the act.
(2) A proceeding by the corporation, directly, derivatively, or through a receiver, trustee, or other legal representative, against a current or former director, officer, employee, or agent of the corporation.
(3) A proceeding by the attorney general under R.S. 12:1-1430.
C. In a shareholder's proceeding under Paragraph (B)(1) of this Section to enjoin an unauthorized corporate act, the court may enjoin or set aside the act if equitable, and may award damages for loss, other than anticipated profits, suffered by the corporation or another party to the proceeding because of enjoining the unauthorized act. If an act to be enjoined in the proceeding is the performance of a duty owed by the corporation under the terms of a contract to which the corporation is a party, the court may enjoin the act only if the other parties to the contract are joined in the proceeding.

Legislative History

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.