§ 10-33-23 — Defense of ultra vires

North Dakota § 10-33-23

• Jurisdiction: North Dakota
• Title 10: Corporations
• Ch. 10-33: Nonprofit Corporations

Text

No act of a corporation and no conveyance or transfer of real or personal property to or by a
corporation is invalid by reason of the fact that the corporation was without capacity or power to
do such act or to make or receive such conveyance or transfer but such lack of capacity or
power may be asserted:
1. In a proceeding by a member against the corporation to enjoin the doing of any act or
acts or the transfer of real or personal property by or to the corporation. If the
unauthorized acts or transfers sought to be enjoined are being, or are to be, performed
or made pursuant to any contract to which the corporation is a party, the court, if all of
the parties to the contract are parties to the proceeding and if it deems the same to be
equitable, may set aside and enjoin the performance of the contract, and in so doing
may allow to the corporation or to the other parties to the contract, as the case may
be, compensation for the loss or damage sustained by either of them which may result
from the action of the court in setting aside and enjoining the performance of the
contract. However, anticipated profits to be derived from the performance of the
contract may not be awarded by the court as a loss or damage sustained.
2. In a proceeding by the corporation, whether acting directly or through a receiver,
trustee or other legal representative, or through members in a representative suit,
against the incumbent or former officers or directors of the corporation.
3. In a proceeding by the attorney general, as provided in this chapter, to dissolve the
corporation or to enjoin the corporation from the transaction of unauthorized activities.