MARVIN MANDEL, Governor

1515

(2)   IF THE ACT OR TRANSFER SOUGHT TO BE
ENJOINED IS BASED ON A CONTRACT TO WHICH THE CORPORATION
IS A PARTY AND IF ALL PARTIES TO THE CONTRACT ARE PARTIES
TO THE PROCEEDING, THE COURT MAY SET THE CONTRACT ASIDE
AND ENJOIN ITS PERFORMANCE.

(3)    THE COURT MAY AWARD COMPENSATORY DAMAGES
TO ANY PARTY TO THE CONTRACT WHO SUFFERS A LOSS BECAUSE
OF THE ACTION OF THE COURT. HOWEVER, THE COURT MAY NOT
AWARD COMPENSATORY DAMAGES FOR LOSS OF ANTICIPATED
PROFITS TO BE DERIVED FROM PERFORMANCE OF THE CONTRACT.

(C) PROCEEDING BY CORPORATION THROUGH FIDUCIARY OR
STOCKHOLDER.

LACK OF CORPORATE POWER OR CAPACITY MAY BE ASSERTED
BY THE CORPORATION IN A SUIT BROUGHT IN ITS NAME BY THE
CORPORATION OR ITS RECEIVER, TRUSTEE, OTHER LEGAL
REPRESENTATIVE, OR IN A REPRESENTATIVE SUIT BROUGHT BY A
STOCKHOLDER AGAINST ITS PRESENT OR FORMER OFFICERS OR
DIRECTORS.

CD) QUO WARRANTO.

LACK OF CORPORATE POWER OR CAPACITY MAY BE ASSERTED
BY THE ATTORNEY GENERAL IN A PROCEEDING FOR THE
FORFEITURE OF THE CHARTER OF THE CORPORATION OR TO ENJOIN
IT FROM TRANSACTING UNAUTHORIZED BUSINESS.

REVISOR'S NOTE: This section is new language derived
without substantive change from Art. 23, §124.

The section, as drafted, clarifies who may
plead ultra vires under permissible
circumstances. Although the present law
appears to allow either party to plead ultra
vires, actually only the party bringing the
action on behalf of the corporation or the
Attorney General may interpose this defense.

In subsection (b) (2) of this section, the more
succinct "based on a contract" is substituted
for "is being, or is to be, performed or made
pursuant to any contract."

The only other changes are in style.

1-404. IMPROPER USE OF CORPORATE INDICATION.

ANY PERSON WHO OWNS, OPERATES, OR DIRECTS AN
UNINCORPORATED ORGANIZATION, FIRM, ASSOCIATION, OR OTHER
ENTITY WHICH INCLUDES IN ITS NAME THE WORD "CORPORATION,"
"INCORPORATED," OR "LIMITED" OR AN ABBREVIATION OF ANY OF
THESE WORDS OR WHICH HOLDS ITSELF OUT TO THE PUBLIC AS A