HF 3700

as introduced - 86th Legislature (2009 - 2010) Posted on 03/17/2010 10:50am

A bill for an act
relating to corporations; providing that business corporations do not have
the power to make corporate independent political expenditures; amending
Minnesota Statutes 2008, section 302A.165; proposing coding for new law in
Minnesota Statutes, chapter 302A.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2008, section 302A.165, is amended to read:

302A.165 EFFECT OF LACK OF POWER; ULTRA VIRES.

new text begin Except as otherwise provided in section 302A.167, new text end the doing, continuing, or
performing by a corporation of an act, or an executed or wholly or partially executory
contract, conveyance or transfer to or by the corporation, if otherwise lawful, is not invalid
because the corporation was without the power to do, continue, or perform the act, contract,
conveyance, or transfer, unless the lack of power is established in a court in this state:

(a) In a proceeding by a shareholder against the corporation to enjoin the doing,
continuing, or performing of the act, contract, conveyance, or transfer. If the unauthorized
act, continuation, or performance sought to be enjoined is being, or to be, performed
or made pursuant to a contract to which the corporation is a party, the court may, if
just and reasonable in the circumstances, 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 for the loss or damage sustained as a result of the action of the court in
setting aside and enjoining the performance of the contract;

(b) In a proceeding by or in the name of the corporation, whether acting directly or
through a legal representative, or through shareholders in a representative or derivative
suit, against the incumbent or former officers or directors of the corporation for exceeding
or otherwise violating their authority, or against a person having actual knowledge of
the lack of power; or

(c) In a proceeding by the attorney general, as provided in section 302A.757,
to dissolve the corporation, or in a proceeding by the attorney general to enjoin the
corporation from the transaction of unauthorized business.

Sec. 2.

new text begin [302A.167] INDEPENDENT CORPORATE EXPENDITURES
PROHIBITED.
new text end

new text begin A corporation organized under this chapter does not have the power to make
corporate independent political expenditures.
new text end