TITLE 8

Corporations

CHAPTER 1. GENERAL CORPORATION LAW

Subchapter II. Powers

§ 121. General powers.

(a) In addition to the powers enumerated in § 122 of this

title, every corporation, its officers, directors and stockholders

shall possess and may exercise all the powers and privileges

granted by this chapter or by any other law or by its certificate

of incorporation, together with any powers incidental thereto, so

far as such powers and privileges are necessary or convenient

to the conduct, promotion or attainment of the business or

purposes set forth in its certificate of incorporation.

(b) Every corporation shall be governed by the provisions and

be subject to the restrictions and liabilities contained in this

chapter. (8 Del. C. 1953, § 121; 56 Del. Laws, c. 50.)

§ 122. Specific powers.

Every corporation created under this chapter shall have power

to:

(1) Have perpetual succession by its corporate name,

unless a limited period of duration is stated in its certificate of

incorporation;

(2) Sue and be sued in all courts and participate, as a

party or otherwise, in any judicial, administrative, arbitrative or

other proceeding, in its corporate name;

(3) Have a corporate seal, which may be altered at

pleasure, and use the same by causing it or a facsimile thereof,

to be impressed or affixed or in any other manner reproduced;

(4) Purchase, receive, take by grant, gift, devise,

bequest or otherwise, lease, or otherwise acquire, own, hold,

improve, employ, use and otherwise deal in and with real or

personal property, or any interest therein, wherever situated,

and to sell, convey, lease, exchange, transfer or otherwise

dispose of, or mortgage or pledge, all or any of its property and

assets, or any interest therein, wherever situated;

(5) Appoint such officers and agents as the business of

the corporation requires and to pay or otherwise provide for

them suitable compensation;

(6) Adopt, amend and repeal bylaws;

(7) Wind up and dissolve itself in the manner provided in

this chapter;

(8) Conduct its business, carry on its operations and

have offices and exercise its powers within or without this

State;

(9) Make donations for the public welfare or for

charitable, scientific or educational purposes, and in time of war

or other national emergency in aid thereof;

(10) Be an incorporator, promoter or manager of other

corporations of any type or kind;

(11) Participate with others in any corporation,

partnership, limited partnership, joint venture or other

association of any kind, or in any transaction, undertaking or

arrangement which the participating corporation would have

power to conduct by itself, whether or not such participation

involves sharing or delegation of control with or to others;

(12) Transact any lawful business which the corporation's

board of directors shall find to be in aid of governmental

authority;

(13) Make contracts, including contracts of guaranty and

suretyship, incur liabilities, borrow money at such rates of

interest as the corporation may determine, issue its notes,

bonds and other obligations, and secure any of its obligations by

mortgage, pledge or other encumbrance of all or any of its

property, franchises and income, and make contracts of

guaranty and suretyship which are necessary or convenient to

the conduct, promotion or attainment of the business of (a) a

corporation all of the outstanding stock of which is owned,

directly or indirectly, by the contracting corporation, or (b) a

corporation which owns, directly or indirectly, all of the

outstanding stock of the contracting corporation, or (c) a

corporation all of the outstanding stock of which is owned,

directly or indirectly, by a corporation which owns, directly or

indirectly, all of the outstanding stock of the contracting

corporation, which contracts of guaranty and suretyship shall be

deemed to be necessary or convenient to the conduct,

promotion or attainment of the business of the contracting

corporation, and make other contracts of guaranty and

suretyship which are necessary or convenient to the conduct,

promotion or attainment of the business of the contracting

corporation;

(14) Lend money for its corporate purposes, invest and

reinvest its funds, and take, hold and deal with real and

personal property as security for the payment of funds so

loaned or invested;

(15) Pay pensions and establish and carry out pension,

profit sharing, stock option, stock purchase, stock bonus,

retirement, benefit, incentive and compensation plans, trusts

and provisions for any or all of its directors, officers and

employees, and for any or all of the directors, officers and

employees of its subsidiaries;

(16) Provide insurance for its benefit on the life of any of

its directors, officers or employees, or on the life of any

stockholder for the purpose of acquiring at such stockholder's

death shares of its stock owned by such stockholder.

(17) Renounce, in its certificate of incorporation or by

action of its board of directors, any interest or expectancy of the

corporation in, or in being offered an opportunity to participate

in, specified business opportunities or specified classes or

categories of business opportunities that are presented to the

corporation or 1 or more of its officers, directors or

stockholders. (8 Del. C. 1953, § 122; 56 Del. Laws, c. 50; 57

Del. Laws, c. 148, § 3; 64 Del. Laws, c. 112, § 3; 65 Del. Laws,

c. 127, § 2; 71 Del. Laws, c. 339, § 7; 72 Del. Laws, c. 343, §

3.)

§ 123. Powers respecting securities of other corporations or

entities.

Any corporation organized under the laws of this State may

guarantee, purchase, take, receive, subscribe for or otherwise

acquire; own, hold, use or otherwise employ; sell, lease,

exchange, transfer or otherwise dispose of; mortgage, lend,

pledge or otherwise deal in and with, bonds and other

obligations of, or shares or other securities or interests in, or

issued by, any other domestic or foreign corporation,

partnership, association or individual, or by any government or

agency or instrumentality thereof. A corporation while owner of

any such securities may exercise all the rights, powers and

privileges of ownership, including the right to vote. (8 Del. C.

1953, § 123; 56 Del. Laws, c. 50.)

§ 124. Effect of lack of corporate capacity or power; ultra

vires.

No act of a corporation and no conveyance or transfer of real

or personal property to or by a corporation shall be invalid by

reason of the fact that the corporation was without capacity or

power to do such act or to make or receive such conveyance or

transfer, but such lack of capacity or power may be asserted:

(1) In a proceeding by a stockholder against the

corporation to enjoin the doing of any act or acts or the transfer

of real or personal property by or to the corporation. If the

unauthorized acts or transfer sought to be enjoined are being,

or are to be, performed or made pursuant to any contract to

which the corporation is a party, the court may, if all of the

parties to the contract are parties to the proceeding and if it

deems the same to be equitable, set aside and enjoin the

performance of such contract, and in so doing may allow to the

corporation or to the other parties to the contract, as the case

may be, such compensation as may be equitable for the loss or

damage sustained by any of them which may result from the

action of the court in setting aside and enjoining the

performance of such contract, but anticipated profits to be

derived from the performance of the contract shall not be

awarded by the court as a loss or damage sustained;

(2) In a proceeding by the corporation, whether acting

directly or through a receiver, trustee or other legal

representative, or through stockholders in a representative suit,

against an incumbent or former officer or director of the

corporation, for loss or damage due to such incumbent or

former officer's or director's unauthorized act;

(3) In a proceeding by the Attorney General to dissolve

the corporation, or to enjoin the corporation from the

transaction of unauthorized business. (8 Del. C. 1953, § 124;

56 Del. Laws, c. 50; 71 Del. Laws, c. 339, § 8.)

§ 125. Conferring academic or honorary degrees.

No corporation organized after April 18, 1945, shall have

power to confer academic or honorary degrees unless the

certificate of incorporation or an amendment thereof shall so

provide and unless the certificate of incorporation or an

amendment thereof prior to its being filed in the office of the

Secretary of State shall have endorsed thereon the approval of

the Department of Education of this State. No corporation

organized before April 18, 1945, any provision in its certificate

of incorporation to the contrary notwithstanding, shall possess

the power aforesaid without first filing in the office of the

Secretary of State a certificate of amendment so providing, the

filing of which certificate of amendment in the office of the

Secretary of State shall be subject to prior approval of the

Department of Education, evidenced as hereinabove provided.

Approval shall be granted only when it appears to the

reasonable satisfaction of the Department of Education that the

corporation is engaged in conducting a bona fide institution of

higher learning, giving instructions in arts and letters, science or

the professions, or that the corporation proposes, in good faith,

to engage in that field and has or will have the resources,

including personnel, requisite for the conduct of an institution of

higher learning. Upon dissolution, all such corporations shall

comply with § 8530 of Title 14. Notwithstanding any provision

herein to the contrary, no corporation shall have the power to

conduct a private business or trade school unless the certificate

of incorporation or an amendment thereof, prior to its being

filed in the office of the Secretary of State, shall have endorsed

thereon the approval of the Department of Education pursuant

to Chapter 85 of Title 14.

Notwithstanding the foregoing provisions, any corporation

conducting a law school, which has its principal place of

operation in Delaware, and which intends to meet the standards

of approval of the American Bar Association, may, after it has

been in actual operation for not less than 1 year, retain at its

own expense a dean or dean emeritus of a law school fully

approved by the American Bar Association to make an on-site

inspection and report concerning the progress of the corporation

toward meeting the standards for approval by the American Bar

Association. Such dean or dean emeritus shall be chosen by the

Attorney General from a panel of 3 deans whose names are

presented to the Attorney General as being willing to serve. One

such dean on this panel shall be nominated by the trustees of

said law school corporation; another dean shall be nominated by

a committee of the Student Bar Association of said law school;

and the other dean shall be nominated by a committee of

lawyers who are parents of students attending such law school.

If any of the above-named groups cannot find a dean, it may

substitute 2 full professors of accredited law schools for the

dean it is entitled to nominate, and in such a case if the

Attorney General chooses 1 of such professors, such professor

shall serve the function of a dean as herein prescribed. If the

dean so retained shall report in writing that, in such dean's

professional judgment, the corporation is attempting, in good

faith, to comply with the standards for approval of the American

Bar Association and is making reasonable progress toward

meeting such standards, the corporation may file a copy of the

report with the Secretary of Education and with the Attorney

General. Any corporation which complies with these provisions

by filing such report shall be deemed to have temporary

approval from the State and shall be entitled to amend its

certificate of incorporation to authorize the granting of standard

academic law degrees. Thereafter, until the law school operated

by the corporation is approved by the American Bar Association,

the corporation shall file once during each academic year a new

report, in the same manner as the first report. If, at any time,

the corporation fails to file such a report, or if the dean retained

to render such report states that, in such dean's opinion, the

corporation is not continuing to make reasonable progress

toward accreditation, the Attorney General, at the request of the

Secretary of Education, may file a complaint in the Court of

Chancery to suspend said temporary approval and degreegranting

power until a further report is filed by a dean or dean

emeritus of an accredited law school that the school has

resumed its progress towards meeting the standards for

approval. Upon approval of the law school by the American Bar

Association, temporary approval shall become final, and shall no

longer be subject to suspension or vacation under this section.

(8 Del. C. 1953, § 125; 56 Del. Laws, c. 50; 59 Del. Laws, c.

207, § 1; 59 Del. Laws, c. 377, § 1; 65 Del. Laws, c. 103, § 2;

71 Del. Laws, c. 339, § 9; 72 Del. Laws, c. 433, § 1; 73 Del.

Laws, c. 65, § 7; 74 Del. Laws, c. 249, § 1.)

§ 126. Banking power denied.

(a) No corporation organized under this chapter shall possess

the power of issuing bills, notes, or other evidences of debt for

circulation as money, or the power of carrying on the business

of receiving deposits of money.

(b) Corporations organized under this chapter to buy, sell and

otherwise deal in notes, open accounts and other similar

evidences of debt, or to loan money and to take notes, open

accounts and other similar evidences of debt as collateral

security therefor, shall not be deemed to be engaging in the

business of banking. (8 Del. C. 1953, § 126; 56 Del. Laws, c.

50; 57 Del. Laws, c. 148, § 4.)

§ 127. Private foundation; powers and duties.

A corporation of this State which is a private foundation under

the United States internal revenue laws and whose certificate of

incorporation does not expressly provide that this section shall

not apply to it is required to act or to refrain from acting so as

not to subject itself to the taxes imposed by 26 U.S.C. § 4941

(relating to taxes on self-dealing), 4942 (relating to taxes on

failure to distribute income), 4943 (relating to taxes on excess

business holdings), 4944 (relating to taxes on investments

which jeopardize charitable purpose), or 4945 (relating to

taxable expenditures), or corresponding provisions of any

subsequent United States internal revenue law. (8 Del. C. 1953,

§ 127; 58 Del. Laws, c. 87.)

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