Ultra Vires

  1. Law
  2. Georgia Code
  3. Corporations, Partnerships, and Associations
  4. Nonprofit Corporations
  5. Purposes and Powers
  6. Ultra Vires

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  1. Except as provided in subsection (b) of this Code section, the validity of corporate action may not be challenged on the ground that the corporation lacks or lacked power to act.
  2. A corporation's power to act may be challenged:
    1. In a proceeding by a member against the corporation to enjoin the act;
    2. In a proceeding by the corporation, directly, derivatively, or through a receiver, trustee, or other legal representative, against an incumbent or former director, officer, employee, or agent of the corporation; or
    3. In a proceeding by the Attorney General under Code Section 14-3-1430.
  3. In a member's proceeding under paragraph (1) of subsection (b) of this Code 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.

(Code 1981, §14-3-304, enacted by Ga. L. 1991, p. 465, § 1; Ga. L. 2004, p. 508, § 26.)

RESEARCH REFERENCES

Am. Jur. 2d.

- 18B Am. Jur. 2d, Corporations, §§ 1712 et seq.

C.J.S.

- 7 C.J.S., Associations, § 33. 19 C.J.S., Corporations, § 673 et seq.

ALR.

- Doctrine of ultra vires as applied to torts of private corporation, 57 A.L.R. 302.

Assumption of mortgage or lien by bank or other corporation as ultra vires, 91 A.L.R. 177.

Right of corporation to perform or to hold itself out as ready to perform functions in the nature of legal services, 157 A.L.R. 282.

Power of corporation to make political contribution or expenditure under state law, 29 A.L.R.2d 1262; 79 A.L.R.3d 491.


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