Search OpenLegislation Statutes
This entry was published on 2014-09-22
The selection dates indicate all change milestones for the entire volume, not just the location being viewed. Specifying a milestone date will retrieve the most recent version of the location before that date.
Defense of ultra vires
Not-for-Profit Corporation (NPC) CHAPTER 35, ARTICLE 2
§ 203. Defense of ultra vires.

(a) No act of a corporation and no transfer of real or personal
property to or by a corporation, otherwise lawful, shall, if duly
approved or authorized by a judge, court or administrative department or
agency as required, be invalid by reason of the fact that the
corporation was without capacity or power to do such act or to make or
receive such transfer, but such lack of capacity or power may be

(1) In an action by a member against the corporation to enjoin the
doing of any act or the transfer of real or personal property by or to
the corporation. If the unauthorized act or transfer sought to be
enjoined is being, or is to be, performed or made under any contract to
which the corporation is a party, the court may, if all of the parties
to the contract are parties to the action and if it deems the same to be
equitable, set aside and enjoin the performance of such contract, and in
so doing may allow to the corporation or to the other parties to the
contract, as the case may be, such compensation as may be equitable for
the loss or damage sustained by any of them from the action of the court
in setting aside and enjoining the performance of such contract;
provided that anticipated profits to be derived from the performance of
the contract shall not be awarded by the court as a loss or damage

(2) In an action by or in the right of the corporation to procure a
judgment in its favor against an incumbent or former officer or director
of the corporation for loss or damage due to his unauthorized act.

(3) In an action or special proceeding by the attorney-general to
annul or dissolve the corporation or to enjoin it from the carrying on
of unauthorized activities.