2006 Minnesota Statutes

322B.22 EFFECT OF LACK OF POWER AND ULTRA VIRES.
The doing, continuing, or performing by a limited liability company of an act, or an executed
or wholly or partially executory contract, conveyance or transfer to or by the limited liability
company, if otherwise lawful, is not invalid because the limited liability company 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:
(1) in a proceeding by a member against the limited liability company 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 limited liability company 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 limited liability company 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;
(2) in a proceeding by or in the name of the limited liability company, whether acting
directly or through a legal representative, or through members in a representative or derivative
suit, against the incumbent or former managers or governors of the limited liability company for
exceeding or otherwise violating their authority, or against a person having actual knowledge of
the lack of power; or
(3) in a proceeding by the attorney general, as provided in section 322B.843, to dissolve the
limited liability company, or in a proceeding by the attorney general to enjoin the limited liability
company from the transaction of unauthorized business.
History: 1992 c 517 art 2 s 23