§ 55-3-04. Ultra vires. - North Carolina Statutes - USA Laws Searching

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§ 55-3-04. Ultra vires.

§55‑3‑04.  Ultra vires.

(a)        Except as providedin subsection (b), the validity of corporate action may not be challenged onthe ground that the corporation lacks or lacked power to act.

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

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

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

(3)        In a proceeding bythe Attorney General under G.S. 55‑14‑30.

(c)        In a shareholder'sproceeding under subsection (b)(1) to enjoin an unauthorized corporate act, thecourt may enjoin or set aside the act, if equitable and if all affected personsare parties to the proceeding, and may award damages for loss (other thananticipated profits) suffered by the corporation or another party because ofenjoining the unauthorized act. (Code, ss. 607, 686; 1901, c.2, s. 107; Rev., s. 1197; C.S., s. 1143; G.S., 55‑47; 1955, c. 1371, s.1; 1989, c. 265, s. 1.)