Vermont Statutes Title 11 Sec. 3-04
Terms Used In Vermont Statutes Title 11 Sec. 3-04
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Employee: includes an officer but not a director. See
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- Proceeding: includes civil suit and criminal, administrative, and investigatory action. See
- Shareholder: means the person in whose name shares are registered in the records of a corporation or upon presentation for registration are entitled to be registered in the records of a corporation. See
- Trustee: A person or institution holding and administering property in trust.
§ 3.04. Ultra vires
(a) Except as provided in subsection (b) of this 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) in a proceeding by a shareholder 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 section 14.30 of this title.
(c) In a shareholder’s proceeding under subdivision (b)(1) of this 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. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994.)