15A:3-2 - Ultra vires transactions - New Jersey Statutes

15A:3-2.  Ultra vires transactions    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 that act or to make or receive the conveyance or transfer, but the lack of capacity or power may be asserted:

    a.  In a proceeding by a member or trustee against the corporation to enjoin  the doing of any act or the transfer of real or personal property by or to the  corporation.  If the unauthorized act or transfer sought to be enjoined is or  is to be performed or made 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 the same to be equitable, 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, as the case may be, compensation for  the loss or damage sustained by either of them which may result 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  shall not be awarded by the court as a loss or damage sustained;

    b.  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 incumbent or former officers or trustees of the corporation;

    c.  In a proceeding by the Attorney General, as provided in this act, to dissolve the corporation, or in a proceeding by the Attorney General to enjoin the corporation from the transaction of unauthorized activities.

     L.1983, c. 127, s. 15A:3-2, eff. Oct. 1, 1983.