2012 Louisiana Laws
Revised Statutes
TITLE 12 — Corporations and associations
RS 12:42 — Defense of ultra vires

§42. Defense of ultra vires

A. No act of a corporation, and no conveyance or transfer of movable or immovable property to or by a corporation, shall be invalid by reason of the fact that the corporation was without capacity or power to perform such act or to make or receive such conveyance or transfer; but such lack of capacity or power may be asserted:

(1) In an action by a shareholder against the corporation to enjoin the performance of any act or the transfer of movable or immovable property by or to the corporation; but in any such action the plaintiff shall sustain the burden of proof that he has not at any time prior thereto assented to the act, conveyance or transfer in question, and that in bringing the action he is not acting in collusion with officials of the corporation. If the unauthorized act, conveyance or transfer sought to be enjoined is being, 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 action, if the corporation is without capacity or power to perform the act or make or receive the transfer sought to be enjoined, and if the court considers such relief to be equitable--enjoin the performance of such contract, and in so doing may allow to the corporation, or to the other parties to the contract, compensation for any loss or damage sustained by any of them which may result from the action of the court in enjoining the performance of such contract, but anticipated profits to be derived from the performance of the contract shall not be awarded by the court as loss or damage sustained;

(2) In an action in damages by the corporation or by its receiver, trustee or other legal representative, or by its shareholders in a derivative or representative suit, against the incumbent or former officers or directors of the corporation;

(3) In an action by the state to dissolve the corporation, to enjoin the corporation from the transaction of unauthorized business, or to revoke a certificate of authority of a foreign corporation.

B. This section applies to acts performed by, and conveyances and transfers made by or to, a foreign corporation in this state, and to all conveyances to or by a foreign corporation of real property situated in this state.

Acts 1968, No. 105, §1.