Official Code of Georgia Annotated

Title 14. CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS · Chapter 2. BUSINESS CORPORATIONS · Article 3. PURPOSES AND POWERS

14-2-304. Ultra vires.

Active

Current through: Including Acts of the 2025 Regular Session of the General Assembly.

(a)
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.#
(b)
A corporation’s power to act may be challenged:#
1. (1)
  In a proceeding by a shareholder against the corporation to enjoin the act;#
2. (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. (3)
  In a proceeding by the Attorney General under Code Section 14-2-1430.#
(c)
In a shareholder’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.#

The notes below are printed with the section but are not enacted law (O.C.G.A. § 1-1-1(c)). They are shown apart from the text.

History

Code 1981, § 14-2-304, enacted by Ga. L. 1988, p. 1070, § 1.

Law reviews

For article analyzing legal basis for corporate contributions to private educational institutions, see 5 Mercer L. Rev. 249 (1954). For article discussing liability of corporate directors, officers, and shareholders under the Georgia Business Corporation Code, and as affected by provisions of the Georgia Civil Practice Act, see 7 Ga. St. B. J. 277 (1971). For note, ‘‘Ultra Vires in Georgia,’’ see 16 Mercer L. Rev. 320 (1964).

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Current through: Including Acts of the 2025 Regular Session of the General Assembly.

Text read from t14-(v12)-2017-pdf.pdf, Volume V12, 2017 edition, pages 70 to 71; merge action: carried; file SHA-256 f2fad2b71b39.

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