Texas Business Organizations Code 200.004 – Ultra Vires Acts
Current as of: 2024 | Check for updates
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(a) Lack of capacity of a real estate investment trust may not be the basis of any claim or defense at law or in equity.
(b) An act of a real estate investment trust or a transfer of property by or to a real estate investment trust is not invalid because the act or transfer was:
(1) beyond the scope of the purpose or purposes of the real estate investment trust as expressed in the real estate investment trust’s certificate of formation; or
(2) inconsistent with a limitation on the authority of an officer or trust manager to exercise a statutory power of the real estate investment trust, as that limitation is expressed in the real estate investment trust’s certificate of formation.
Terms Used In Texas Business Organizations Code 200.004
- Certificate of formation: means :
(A) the document required to be filed with the filing officer under Chapter 3 to form a filing entity; and
(B) if appropriate, a restated certificate of formation and all amendments of an original or restated certificate of formation. See Texas Business Organizations Code 1.002 - Contract: A legal written agreement that becomes binding when signed.
- Law: means , unless the context requires otherwise, both statutory and common law. See Texas Business Organizations Code 1.002
- Manager: means a person designated as a manager of a limited liability company that is not managed by members of the company. See Texas Business Organizations Code 1.002
- Officer: means an individual elected, appointed, or designated as an officer of an entity by the entity's governing authority or under the entity's governing documents. See Texas Business Organizations Code 1.002
- Person: means an individual or a corporation, partnership, limited liability company, business trust, trust, association, or other organization, estate, government or governmental subdivision or agency, or other legal entity, or a protected series or registered series of a domestic limited liability company or foreign entity. See Texas Business Organizations Code 1.002
- Property: includes tangible and intangible property and an interest in that property. See Texas Business Organizations Code 1.002
- Real estate investment trust: means an entity governed as a real estate investment trust under Title 5. See Texas Business Organizations Code 1.002
- Trustee: A person or institution holding and administering property in trust.
(c) The fact that an act or transfer is beyond the scope of the expressed purpose or purposes of the real estate investment trust or is inconsistent with an expressed limitation on the authority of an officer or trust manager may be asserted in a proceeding:
(1) by a shareholder against the real estate investment trust to enjoin the performance of an act or the transfer of property by or to the real estate investment trust; or
(2) by the real estate investment trust, acting directly or through a receiver, trustee, or other legal representative, or through shareholders in a representative suit, against an officer or trust manager or former officer or trust manager of the real estate investment trust for exceeding that person‘s authority.
(d) If the unauthorized act or transfer sought to be enjoined under Subsection (c)(1) is being or is to be performed or made under a contract to which the real estate investment trust is a party and if each party to the contract is a party to the proceeding, the court may set aside and enjoin the performance of the contract. The court may award to the real estate investment trust or to another party to the contract, as appropriate, compensation for loss or damage resulting from the action of the court in setting aside and enjoining the performance of the contract, excluding loss of anticipated profits.