N.C. Gen. Stat. » Chapter 55
NC General Statutes

N.C. Gen. Stat. § 55-3-04 (2026)

Ultra vires

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(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.

(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 G.S. 55-14-30.

(c) In a shareholder's proceeding under subsection (b)(1) 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. (Code, ss. 607, 686; 1901, c. 2, s. 107; Rev., s. 1197; C.S., s. 1143; G.S., 55-47; 1955, c. 1371, s. 1; 1989, c. 265, s. 1.)

 

§ 55-3-05.  Exercise of corporate franchises not granted.

The Attorney General may upon his own information or upon complaint of a private party bring an action in the name of the State to restrain any person from exercising corporate franchises not granted. (Code, ss. 607, 686; 1901, c. 2, s. 107; Rev., s. 1197; C.S., s. 1143; G.S., s. 55-47(2); 1955, c. 1371, s. 1; 1989, c. 265, s. 1.)

 

Article 4.

Name.

§§ 55-4-01 through 55-4-05: Transferred to §§ 55D-20 through 55D-27 by Session Laws 2001-358, ss. 14(a) and 14(b).

 

 

Article 5.

Office and Agent.

Notes of Decisions
Cited in 1 case, 2018–2018 · leading case: First Citizens Bancshares, Inc. v. Ks Bancorp, Inc., 2018 NCBC 23 (N.C. Bus. Ct. 2018).
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First Citizens Bancshares, Inc. v. Ks Bancorp, Inc., 2018 NCBC 23 (N.C. Bus. Ct. 2018). · cites it 8× “Plaintiff contends that it has standing to pursue an injunction because the KS Board’s adoption of the Shareholder Rights Plan was ultra vires, and that it has standing under G.S. § 55-3-04. Section 55-3-04, entitled “Ultra vires,” provides in pertinent part that a…”
N.C. Gen. Stat. § 55-3-04(b)(1): 1 case
First Citizens Bancshares, Inc. v. Ks Bancorp, Inc., 2018 NCBC 23 (N.C. Bus. Ct. 2018). “Plaintiff contends that it has standing to pursue an injunction because the KS Board’s adoption of the Shareholder Rights Plan was ultra vires, and that it has standing under G.S. § 55-3-04. Section 55-3-04, entitled “Ultra vires,” provides in pertinent part that a…”
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