2007 Minnesota Statutes

302A.165 EFFECT OF LACK OF POWER; ULTRA VIRES.
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.
History: 1981 c 270 s 23