Section 10.06.015. Defense of ultra vires.

   (a) An act of a corporation or a transfer of real or personal property to or by a corporation, otherwise lawful, is not invalid because the corporation was without capacity or power to do the act or to make or receive the transfer, but the lack of capacity or power may be asserted
        (1) in an action by a shareholder against the corporation to enjoin the doing of an 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 a contract to which the corporation is a party, the court may, if all of the parties to the contract are parties to the action, 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, 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 the contract; however, anticipated profits to be derived from the contract may not be awarded by the court as a loss or damage sustained;
        (2) in an action by or in the right of the corporation to obtain a judgment in its favor against an incumbent or former officer, director, or incorporator of the corporation for loss or damage due to that individual's unauthorized act;
        (3) in an action or special proceeding by the commissioner to annul or dissolve the corporation or to enjoin it from the doing of unauthorized business.
   (b) This section applies to contracts and conveyances made by foreign corporations in this state and to conveyances by foreign corporations of real property situated in this state.

Notes

History

(Sec. 1 ch 166 SLA 1988)