10-304. Validity of actions
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 either:
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 any receiver, trustee or other legal representative, against an incumbent or former director, officer, employee or agent of the corporation.
3. In a proceeding by the attorney general as provided in chapters 1 through 17 of this title to dissolve the corporation or in a proceeding by the attorney general to enjoin the corporation from the transaction of unauthorized business.
C. In a shareholder's proceeding under subsection B, paragraph 1 of this section to enjoin an unauthorized corporate act, the court may enjoin or set aside the act, if equitable and if all affected persons are parties to the proceeding, and may award damages for loss, other than anticipated profits, suffered by the corporation or another party because of enjoining the unauthorized act.
D. Except as provided in sections 10-831 and 10-845, any person who purports to act on behalf of a corporation as an officer or a director and who knew or should have known that the person did not have authority to act is liable for all debts and liabilities incurred by the act. This subsection does not apply to a person who acts on behalf of a corporation that has been administratively dissolved unless the person has actual knowledge of the dissolution.
Copyright ©2024 LegalFix. All rights reserved. LegalFix is not a law firm, is not licensed to practice law, and does not provide legal advice, services, or representation. The information on this website is an overview of the legal plans you can purchase—or that may be provided by your employer as an employee benefit or by your credit union or other membership group as a membership benefit.
LegalFix provides its members with easy access to affordable legal services through a network of independent law firms. LegalFix, its corporate entity, and its officers, directors, employees, agents, and contractors do not provide legal advice, services, or representation—directly or indirectly.
The articles and information on the site are not legal advice and should not be relied upon—they are for information purposes only. You should become a LegalFix member to get legal services from one of our network law firms.
You should not disclose confidential or potentially incriminating information to LegalFix—you should only communicate such information to your network law firm.
The benefits and legal services described in the LegalFix legal plans are not always available in all states or with all plans. See the legal plan Benefit Overview and the more comprehensive legal plan contract during checkout for coverage details in your state.
Use of this website, the purchase of legal plans, and access to the LegalFix networks of law firms are subject to the LegalFix Terms of Service and Privacy Policy.