Maryland § 1-403
Full text of Maryland Maryland Code § 1-403, with citation guidance and answers to common questions.
§ 1-403.
(a) Unless a lack of power or capacity is asserted in a proceeding described in this section, an act of a corporation or a transfer of real or personal property by or to the corporation is not invalid or unenforceable solely because the corporation lacked the power or capacity to take the action.
(b) (1) Lack of corporate power or capacity may be asserted by a stockholder in a proceeding to enjoin the corporation from doing an act or from transferring or acquiring real or personal property.
(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) 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.
(d) 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.
Frequently Asked Questions About Maryland § 1-403
What does Maryland Code § 1-403 cover?
Section 1-403 is part of the Maryland Code, the codified statutory law of Maryland. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite Maryland § 1-403?
A common citation format is "Maryland Code § 1-403" (Maryland). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of Maryland law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the Maryland official source linked on this page or consult a licensed Maryland attorney.
How does Maryland § 1-403 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in Maryland can advise on how this section applies to you. Contact your state or local bar association for a referral.
Sources & Verification
Not legal advice. Verify against the official source and consult a licensed attorney in Maryland.