§ 13.1-629

Ultra vires

A. Except as provided in subsection B of this section, 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 shareholder 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 against a corporation before the Commission.

C. In a shareholder’s proceeding under subdivision 1 of subsection B of this section to enjoin an unauthorized corporate act, the court may enjoin or set aside the act and may award damages for loss, except anticipated profits, suffered by the corporation or another party because of enjoining the unauthorized act.

History

Code 1950, § 13.1-5; 1956, c. 428; 1985, c. 522.

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