Tex. Business Organizations Code § 20.002
This is the official text of Tex. Business Organizations Code § 20.002, part of Texas’s Business Organizations Code — governs the formation and operation of corporations, LLCs, and partnerships.
Not legal advice. This page reproduces the official text of a government statute for reference only. Laws change, and how a statute applies depends on your specific facts. For advice about your situation, consult a licensed attorney in your state.
§ 20.002. ULTRA VIRES ACTS.
Official statutory text
(a) Lack of capacity of a corporation may not be the basis of any claim or defense at law or in equity.
(b) An act of a corporation or a transfer of property by or to a corporation is not invalid because the act or transfer was:
(1) beyond the scope of the purpose or purposes of the corporation as expressed in the corporation's certificate of formation; or
(2) inconsistent with a limitation on the authority of an officer or director to exercise a statutory power of the corporation, as that limitation is expressed in the corporation's certificate of formation.
(c) The fact that an act or transfer is beyond the scope of the expressed purpose or purposes of the corporation or is inconsistent with an expressed limitation on the authority of an officer or director may be asserted in a proceeding:
(1) by a shareholder or member against the corporation to enjoin the performance of an act or the transfer of property by or to the corporation;
(2) by the corporation, acting directly or through a receiver, trustee, or other legal representative, or through members or shareholders in a representative suit, against an officer or director or former officer or director of the corporation for exceeding that person's authority; or
(3) by the attorney general to:
(A) terminate the corporation;
(B) enjoin the corporation from performing an unauthorized act; or
(C) enforce divestment of real property acquired or held contrary to the laws of this state.
(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 corporation 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 corporation 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.
(b) An act of a corporation or a transfer of property by or to a corporation is not invalid because the act or transfer was:
(1) beyond the scope of the purpose or purposes of the corporation as expressed in the corporation's certificate of formation; or
(2) inconsistent with a limitation on the authority of an officer or director to exercise a statutory power of the corporation, as that limitation is expressed in the corporation's certificate of formation.
(c) The fact that an act or transfer is beyond the scope of the expressed purpose or purposes of the corporation or is inconsistent with an expressed limitation on the authority of an officer or director may be asserted in a proceeding:
(1) by a shareholder or member against the corporation to enjoin the performance of an act or the transfer of property by or to the corporation;
(2) by the corporation, acting directly or through a receiver, trustee, or other legal representative, or through members or shareholders in a representative suit, against an officer or director or former officer or director of the corporation for exceeding that person's authority; or
(3) by the attorney general to:
(A) terminate the corporation;
(B) enjoin the corporation from performing an unauthorized act; or
(C) enforce divestment of real property acquired or held contrary to the laws of this state.
(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 corporation 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 corporation 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.
Status: in_force · Read it on the official government site
Dealing with a business matter in Texas?
See all Texas Business lawyers
About this page: Statute text is reproduced from official government publishers via the
Open US Law dataset
(Vaquill AI, snapshot v2026.08, CC BY 4.0). Primary legislative text like this is public domain under the government-edicts doctrine
(Georgia v. Public.Resource.Org, 2020). We link every section back to its official source so you can verify it independently.