TITLE 7
Corporations, Associations, and Partnerships

CHAPTER 7-6
Rhode Island Nonprofit Corporation Act

SECTION 7-6-10


§ 7-6-10 Defense of ultra vires.

No act of a corporation and no conveyance or transfer of real or personal property to or by a corporation shall be invalid because the corporation was without capacity or power to do the act or to make or receive the conveyance or transfer, but the lack of capacity or power may be asserted:

(1) In a proceeding by a member or a director against the corporation to enjoin the doing or continuation of unauthorized acts, or the transfer of real or personal property by or to the corporation. If the unauthorized acts or transfer sought to be enjoined are being, or are to be, performed pursuant to any contract to which the corporation is a party, the court may, if all of the parties to the contract are parties to the proceeding and if it deems it to be equitable, set aside and enjoin the performance of the contract, and in doing so may allow to the corporation or the other parties to the contract compensation for the loss or damage sustained by either of them which results from the action of the court in setting aside and enjoining the performance of the contract, but anticipated profits to be derived from the performance of the contract are not to be awarded by the court as a loss or damage sustained.

(2) In a proceeding by the corporation, whether acting directly or through a receiver, trustee, or other legal representative, or through members in a representative suit, against the officers or directors of the corporation for exceeding their authority.

(3) In a proceeding by the secretary of state, as provided in this chapter, to revoke the certificate of incorporation of the corporation, or in a proceeding by the secretary of state to enjoin the corporation from performing unauthorized acts, or in any other proceeding by the secretary of state.

History of Section.
(P.L. 1984, ch. 380, § 1; P.L. 1984, ch. 444, § 1.)