Virginia Code 13.1-629: Lack of power to act.
A. Except as provided in subsection B, the validity of corporate action may not be challenged on the ground that the corporation lacks or lacked power to act.
Terms Used In Virginia Code 13.1-629
- Commission: means the State Corporation Commission of Virginia. See Virginia Code 13.1-603
- 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 , unless otherwise provided in the bylaws, an officer but not a director. See Virginia Code 13.1-603
- 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 Virginia Code 13.1-603
- Shareholder: means a record shareholder. See Virginia Code 13.1-603
- Trustee: A person or institution holding and administering property in trust.
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 against the corporation before the Commission.
C. In a shareholder’s proceeding under subdivision 1 of subsection B to enjoin an unauthorized corporate act, if equitable and if all affected persons are parties to the proceeding, the court may enjoin or set aside the act and may award damages for loss, except anticipated profits, suffered by the corporation or another party because of enjoining the unauthorized act.
Code 1950, § 13.1-5; 1956, c. 428; 1985, c. 522; 2019, c. 734.