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S.B. 61

             1     

REVISED NONPROFIT CORPORATION ACT

             2     
2000 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: Lyle W. Hillyard

             5      AN ACT RELATING TO CORPORATIONS; ENACTING A NEW NONPROFIT
             6      CORPORATIONS ACT; ESTABLISHING GENERAL PROVISIONS; ADDRESSING
             7      INCORPORATION; ADDRESSING POWERS AND PURPOSES; ADDRESSING NAMES;
             8      ADDRESSING OFFICE AND AGENTS; ADDRESSING MEMBERSHIP; ADDRESSING
             9      MEETINGS AND VOTING OF MEMBERS; ADDRESSING DIRECTORS AND OFFICERS;
             10      ADDRESSING INDEMNIFICATION; ADDRESSING AMENDMENTS TO ARTICLES OF
             11      INCORPORATION OR BYLAWS; ADDRESSING MERGERS; ADDRESSING SALES OF
             12      PROPERTY; ADDRESSING DISTRIBUTIONS; ADDRESSING DISSOLUTION;
             13      ADDRESSING FOREIGN NONPROFIT CORPORATIONS; ADDRESSING RECORDS,
             14      INFORMATION, AND REPORTS; ADDRESSING TRANSITION; MAKING TECHNICAL
             15      CHANGES; AND PROVIDING AN EFFECTIVE DATE.
             16      This act affects sections of Utah Code Annotated 1953 as follows:
             17      AMENDS:
             18          3-1-25, as last amended by Chapter 66, Laws of Utah 1987
             19          3-1-30, as last amended by Chapter 203, Laws of Utah 1994
             20          3-1-31, as last amended by Chapter 203, Laws of Utah 1994
             21          3-1-44, as enacted by Chapter 204, Laws of Utah 1994
             22          7-5-2, as last amended by Chapter 6, Laws of Utah 1982
             23          9-13-201, as enacted by Chapter 76, Laws of Utah 1999
             24          11-32-3, as last amended by Chapter 235, Laws of Utah 1995
             25          11-32-8, as enacted by Chapter 143, Laws of Utah 1987
             26          16-7-13, as enacted by Chapter 48, Laws of Utah 1993
             27          16-7-14, as enacted by Chapter 48, Laws of Utah 1993


             28          17A-3-903, as renumbered and amended by Chapter 186, Laws of Utah 1990
             29          21-1-2, as last amended by Chapter 313, Laws of Utah 1994
             30          21-1-2.5, as last amended by Chapter 313, Laws of Utah 1994
             31          31A-5-101, as last amended by Chapter 6, Laws of Utah 1992, Third Special Session
             32          31A-5-102, as last amended by Chapter 131, Laws of Utah 1999
             33          31A-5-104, as last amended by Chapter 277, Laws of Utah 1992
             34          31A-5-203, as last amended by Chapter 344, Laws of Utah 1995
             35          31A-5-219, as last amended by Chapter 277, Laws of Utah 1992
             36          31A-5-404, as last amended by Chapter 277, Laws of Utah 1992
             37          31A-5-405, as last amended by Chapter 95, Laws of Utah 1987
             38          31A-5-407, as last amended by Chapter 277, Laws of Utah 1992
             39          31A-5-409, as last amended by Chapter 22, Laws of Utah 1989
             40          31A-5-410, as last amended by Chapter 277, Laws of Utah 1992
             41          31A-5-415, as last amended by Chapter 9, Laws of Utah 1996, Second Special Session
             42          31A-5-503, as enacted by Chapter 242, Laws of Utah 1985
             43          31A-5-504, as last amended by Chapter 277, Laws of Utah 1992
             44          31A-5-508, as last amended by Chapter 20, Laws of Utah 1995
             45          31A-7-103, as last amended by Chapter 277, Laws of Utah 1992
             46          31A-7-201, as last amended by Chapter 344, Laws of Utah 1995
             47          31A-7-202, as last amended by Chapter 91, Laws of Utah 1987
             48          31A-7-303, as last amended by Chapter 91, Laws of Utah 1987
             49          31A-7-304, as enacted by Chapter 242, Laws of Utah 1985
             50          31A-7-313, as enacted by Chapter 242, Laws of Utah 1985
             51          31A-8-103, as last amended by Chapter 44, Laws of Utah 1997
             52          31A-8-204, as last amended by Chapter 79, Laws of Utah 1996
             53          31A-8-406, as enacted by Chapter 204, Laws of Utah 1986
             54          31A-9-101, as last amended by Chapter 108, Laws of Utah 1990
             55          31A-9-105, as last amended by Chapter 277, Laws of Utah 1992
             56          31A-9-204, as last amended by Chapter 91, Laws of Utah 1987
             57          31A-9-212, as last amended by Chapter 91, Laws of Utah 1987
             58          31A-9-405, as enacted by Chapter 242, Laws of Utah 1985


             59          31A-9-406, as enacted by Chapter 242, Laws of Utah 1985
             60          31A-9-502, as enacted by Chapter 242, Laws of Utah 1985
             61          31A-11-105, as last amended by Chapter 277, Laws of Utah 1992
             62          31A-14-205, as last amended by Chapter 9, Laws of Utah 1996, Second Special Session
             63          31A-22-1305, as enacted by Chapter 204, Laws of Utah 1986
             64          31A-27-335, as last amended by Chapter 131, Laws of Utah 1999
             65          31A-34-105, No change since 1953
             66          31A-34-108, No change since 1953
             67          41-22-2, as last amended by Chapter 73, Laws of Utah 1999
             68          48-2b-106, as last amended by Chapter 38, Laws of Utah 1999
             69          53B-5-114, as enacted by Chapter 86, Laws of Utah 1998
             70          59-8-103, as last amended by Chapter 278, Laws of Utah 1995
             71          63-11-3.1, as enacted by Chapter 225, Laws of Utah 1998
             72      ENACTS:
             73          16-6a-101, Utah Code Annotated 1953
             74          16-6a-102, Utah Code Annotated 1953
             75          16-6a-103, Utah Code Annotated 1953
             76          16-6a-104, Utah Code Annotated 1953
             77          16-6a-105, Utah Code Annotated 1953
             78          16-6a-106, Utah Code Annotated 1953
             79          16-6a-107, Utah Code Annotated 1953
             80          16-6a-108, Utah Code Annotated 1953
             81          16-6a-109, Utah Code Annotated 1953
             82          16-6a-110, Utah Code Annotated 1953
             83          16-6a-111, Utah Code Annotated 1953
             84          16-6a-112, Utah Code Annotated 1953
             85          16-6a-113, Utah Code Annotated 1953
             86          16-6a-114, Utah Code Annotated 1953
             87          16-6a-115, Utah Code Annotated 1953
             88          16-6a-116, Utah Code Annotated 1953
             89          16-6a-117, Utah Code Annotated 1953


             90          16-6a-118, Utah Code Annotated 1953
             91          16-6a-201, Utah Code Annotated 1953
             92          16-6a-202, Utah Code Annotated 1953
             93          16-6a-203, Utah Code Annotated 1953
             94          16-6a-204, Utah Code Annotated 1953
             95          16-6a-205, Utah Code Annotated 1953
             96          16-6a-206, Utah Code Annotated 1953
             97          16-6a-207, Utah Code Annotated 1953
             98          16-6a-301, Utah Code Annotated 1953
             99          16-6a-302, Utah Code Annotated 1953
             100          16-6a-303, Utah Code Annotated 1953
             101          16-6a-304, Utah Code Annotated 1953
             102          16-6a-401, Utah Code Annotated 1953
             103          16-6a-402, Utah Code Annotated 1953
             104          16-6a-403, Utah Code Annotated 1953
             105          16-6a-501, Utah Code Annotated 1953
             106          16-6a-502, Utah Code Annotated 1953
             107          16-6a-503, Utah Code Annotated 1953
             108          16-6a-504, Utah Code Annotated 1953
             109          16-6a-601, Utah Code Annotated 1953
             110          16-6a-602, Utah Code Annotated 1953
             111          16-6a-603, Utah Code Annotated 1953
             112          16-6a-604, Utah Code Annotated 1953
             113          16-6a-605, Utah Code Annotated 1953
             114          16-6a-606, Utah Code Annotated 1953
             115          16-6a-607, Utah Code Annotated 1953
             116          16-6a-608, Utah Code Annotated 1953
             117          16-6a-609, Utah Code Annotated 1953
             118          16-6a-610, Utah Code Annotated 1953
             119          16-6a-611, Utah Code Annotated 1953
             120          16-6a-612, Utah Code Annotated 1953


             121          16-6a-613, Utah Code Annotated 1953
             122          16-6a-701, Utah Code Annotated 1953
             123          16-6a-702, Utah Code Annotated 1953
             124          16-6a-703, Utah Code Annotated 1953
             125          16-6a-704, Utah Code Annotated 1953
             126          16-6a-705, Utah Code Annotated 1953
             127          16-6a-706, Utah Code Annotated 1953
             128          16-6a-707, Utah Code Annotated 1953
             129          16-6a-708, Utah Code Annotated 1953
             130          16-6a-709, Utah Code Annotated 1953
             131          16-6a-710, Utah Code Annotated 1953
             132          16-6a-711, Utah Code Annotated 1953
             133          16-6a-712, Utah Code Annotated 1953
             134          16-6a-713, Utah Code Annotated 1953
             135          16-6a-714, Utah Code Annotated 1953
             136          16-6a-715, Utah Code Annotated 1953
             137          16-6a-716, Utah Code Annotated 1953
             138          16-6a-717, Utah Code Annotated 1953
             139          16-6a-718, Utah Code Annotated 1953
             140          16-6a-801, Utah Code Annotated 1953
             141          16-6a-802, Utah Code Annotated 1953
             142          16-6a-803, Utah Code Annotated 1953
             143          16-6a-804, Utah Code Annotated 1953
             144          16-6a-805, Utah Code Annotated 1953
             145          16-6a-806, Utah Code Annotated 1953
             146          16-6a-807, Utah Code Annotated 1953
             147          16-6a-808, Utah Code Annotated 1953
             148          16-6a-809, Utah Code Annotated 1953
             149          16-6a-810, Utah Code Annotated 1953
             150          16-6a-811, Utah Code Annotated 1953
             151          16-6a-812, Utah Code Annotated 1953


             152          16-6a-813, Utah Code Annotated 1953
             153          16-6a-814, Utah Code Annotated 1953
             154          16-6a-815, Utah Code Annotated 1953
             155          16-6a-816, Utah Code Annotated 1953
             156          16-6a-817, Utah Code Annotated 1953
             157          16-6a-818, Utah Code Annotated 1953
             158          16-6a-819, Utah Code Annotated 1953
             159          16-6a-820, Utah Code Annotated 1953
             160          16-6a-821, Utah Code Annotated 1953
             161          16-6a-822, Utah Code Annotated 1953
             162          16-6a-823, Utah Code Annotated 1953
             163          16-6a-824, Utah Code Annotated 1953
             164          16-6a-825, Utah Code Annotated 1953
             165          16-6a-826, Utah Code Annotated 1953
             166          16-6a-901, Utah Code Annotated 1953
             167          16-6a-902, Utah Code Annotated 1953
             168          16-6a-903, Utah Code Annotated 1953
             169          16-6a-904, Utah Code Annotated 1953
             170          16-6a-905, Utah Code Annotated 1953
             171          16-6a-906, Utah Code Annotated 1953
             172          16-6a-907, Utah Code Annotated 1953
             173          16-6a-908, Utah Code Annotated 1953
             174          16-6a-909, Utah Code Annotated 1953
             175          16-6a-910, Utah Code Annotated 1953
             176          16-6a-1001, Utah Code Annotated 1953
             177          16-6a-1002, Utah Code Annotated 1953
             178          16-6a-1003, Utah Code Annotated 1953
             179          16-6a-1004, Utah Code Annotated 1953
             180          16-6a-1005, Utah Code Annotated 1953
             181          16-6a-1006, Utah Code Annotated 1953
             182          16-6a-1007, Utah Code Annotated 1953


             183          16-6a-1008, Utah Code Annotated 1953
             184          16-6a-1009, Utah Code Annotated 1953
             185          16-6a-1010, Utah Code Annotated 1953
             186          16-6a-1011, Utah Code Annotated 1953
             187          16-6a-1012, Utah Code Annotated 1953
             188          16-6a-1013, Utah Code Annotated 1953
             189          16-6a-1014, Utah Code Annotated 1953
             190          16-6a-1101, Utah Code Annotated 1953
             191          16-6a-1102, Utah Code Annotated 1953
             192          16-6a-1103, Utah Code Annotated 1953
             193          16-6a-1104, Utah Code Annotated 1953
             194          16-6a-1105, Utah Code Annotated 1953
             195          16-6a-1201, Utah Code Annotated 1953
             196          16-6a-1202, Utah Code Annotated 1953
             197          16-6a-1301, Utah Code Annotated 1953
             198          16-6a-1302, Utah Code Annotated 1953
             199          16-6a-1401, Utah Code Annotated 1953
             200          16-6a-1402, Utah Code Annotated 1953
             201          16-6a-1403, Utah Code Annotated 1953
             202          16-6a-1404, Utah Code Annotated 1953
             203          16-6a-1405, Utah Code Annotated 1953
             204          16-6a-1406, Utah Code Annotated 1953
             205          16-6a-1407, Utah Code Annotated 1953
             206          16-6a-1408, Utah Code Annotated 1953
             207          16-6a-1409, Utah Code Annotated 1953
             208          16-6a-1410, Utah Code Annotated 1953
             209          16-6a-1411, Utah Code Annotated 1953
             210          16-6a-1412, Utah Code Annotated 1953
             211          16-6a-1413, Utah Code Annotated 1953
             212          16-6a-1414, Utah Code Annotated 1953
             213          16-6a-1415, Utah Code Annotated 1953


             214          16-6a-1416, Utah Code Annotated 1953
             215          16-6a-1417, Utah Code Annotated 1953
             216          16-6a-1418, Utah Code Annotated 1953
             217          16-6a-1419, Utah Code Annotated 1953
             218          16-6a-1501, Utah Code Annotated 1953
             219          16-6a-1502, Utah Code Annotated 1953
             220          16-6a-1503, Utah Code Annotated 1953
             221          16-6a-1504, Utah Code Annotated 1953
             222          16-6a-1505, Utah Code Annotated 1953
             223          16-6a-1506, Utah Code Annotated 1953
             224          16-6a-1507, Utah Code Annotated 1953
             225          16-6a-1508, Utah Code Annotated 1953
             226          16-6a-1509, Utah Code Annotated 1953
             227          16-6a-1510, Utah Code Annotated 1953
             228          16-6a-1511, Utah Code Annotated 1953
             229          16-6a-1512, Utah Code Annotated 1953
             230          16-6a-1513, Utah Code Annotated 1953
             231          16-6a-1514, Utah Code Annotated 1953
             232          16-6a-1515, Utah Code Annotated 1953
             233          16-6a-1516, Utah Code Annotated 1953
             234          16-6a-1517, Utah Code Annotated 1953
             235          16-6a-1518, Utah Code Annotated 1953
             236          16-6a-1601, Utah Code Annotated 1953
             237          16-6a-1602, Utah Code Annotated 1953
             238          16-6a-1603, Utah Code Annotated 1953
             239          16-6a-1604, Utah Code Annotated 1953
             240          16-6a-1605, Utah Code Annotated 1953
             241          16-6a-1606, Utah Code Annotated 1953
             242          16-6a-1607, Utah Code Annotated 1953
             243          16-6a-1608, Utah Code Annotated 1953
             244          16-6a-1609, Utah Code Annotated 1953


             245          16-6a-1701, Utah Code Annotated 1953
             246          16-6a-1702, Utah Code Annotated 1953
             247          16-6a-1703, Utah Code Annotated 1953
             248          16-6a-1704, Utah Code Annotated 1953
             249      REPEALS:
             250          16-6-18, as enacted by Chapter 17, Laws of Utah 1963
             251          16-6-19, as last amended by Chapter 108, Laws of Utah 1990
             252          16-6-20, as last amended by Chapter 48, Laws of Utah 1993
             253          16-6-21, as last amended by Chapter 143, Laws of Utah 1996
             254          16-6-22, as enacted by Chapter 17, Laws of Utah 1963
             255          16-6-23, as enacted by Chapter 17, Laws of Utah 1963
             256          16-6-24, as last amended by Chapter 86, Laws of Utah 1998
             257          16-6-25, as last amended by Chapter 48, Laws of Utah 1990
             258          16-6-25.1, as last amended by Chapter 108, Laws of Utah 1990
             259          16-6-25.2, as last amended by Chapter 108, Laws of Utah 1990
             260          16-6-25.3, as enacted by Chapter 178, Laws of Utah 1985
             261          16-6-26, as enacted by Chapter 17, Laws of Utah 1963
             262          16-6-27, as enacted by Chapter 17, Laws of Utah 1963
             263          16-6-28, as enacted by Chapter 17, Laws of Utah 1963
             264          16-6-29, as enacted by Chapter 17, Laws of Utah 1963
             265          16-6-30, as enacted by Chapter 17, Laws of Utah 1963
             266          16-6-31, as enacted by Chapter 17, Laws of Utah 1963
             267          16-6-32, as enacted by Chapter 17, Laws of Utah 1963
             268          16-6-33, as last amended by Chapter 66, Laws of Utah 1984
             269          16-6-34, as enacted by Chapter 17, Laws of Utah 1963
             270          16-6-35, as enacted by Chapter 17, Laws of Utah 1963
             271          16-6-36, as enacted by Chapter 17, Laws of Utah 1963
             272          16-6-37, as last amended by Chapter 79, Laws of Utah 1996
             273          16-6-38, as enacted by Chapter 17, Laws of Utah 1963
             274          16-6-39, as enacted by Chapter 17, Laws of Utah 1963
             275          16-6-40, as enacted by Chapter 17, Laws of Utah 1963


             276          16-6-41, as enacted by Chapter 17, Laws of Utah 1963
             277          16-6-42, as last amended by Chapter 222, Laws of Utah 1988
             278          16-6-43, as enacted by Chapter 17, Laws of Utah 1963
             279          16-6-44, as enacted by Chapter 17, Laws of Utah 1963
             280          16-6-45, as last amended by Chapter 178, Laws of Utah 1985
             281          16-6-46, as last amended by Chapter 178, Laws of Utah 1985
             282          16-6-47, as last amended by Chapter 178, Laws of Utah 1985
             283          16-6-48, as enacted by Chapter 17, Laws of Utah 1963
             284          16-6-49, as last amended by Chapter 277, Laws of Utah 1992
             285          16-6-50, as enacted by Chapter 17, Laws of Utah 1963
             286          16-6-51, as last amended by Chapter 178, Laws of Utah 1985
             287          16-6-52, as last amended by Chapter 178, Laws of Utah 1985
             288          16-6-53, as last amended by Chapter 66, Laws of Utah 1984
             289          16-6-53.5, as enacted by Chapter 97, Laws of Utah 1989
             290          16-6-54, as enacted by Chapter 17, Laws of Utah 1963
             291          16-6-55, as enacted by Chapter 17, Laws of Utah 1963
             292          16-6-56, as last amended by Chapter 68, Laws of Utah 1987
             293          16-6-57, as last amended by Chapter 178, Laws of Utah 1985
             294          16-6-58, as last amended by Chapter 66, Laws of Utah 1984
             295          16-6-59, as enacted by Chapter 17, Laws of Utah 1963
             296          16-6-60, as last amended by Chapter 277, Laws of Utah 1992
             297          16-6-61, as last amended by Chapter 68, Laws of Utah 1987
             298          16-6-62, as last amended by Chapter 68, Laws of Utah 1987
             299          16-6-63, as last amended by Chapter 222, Laws of Utah 1988
             300          16-6-64, as enacted by Chapter 17, Laws of Utah 1963
             301          16-6-65, as last amended by Chapter 66, Laws of Utah 1984
             302          16-6-66, as last amended by Chapter 178, Laws of Utah 1985
             303          16-6-67, as last amended by Chapter 178, Laws of Utah 1985
             304          16-6-68, as last amended by Chapter 108, Laws of Utah 1990
             305          16-6-69, as last amended by Chapter 30, Laws of Utah 1992
             306          16-6-70, as enacted by Chapter 17, Laws of Utah 1963


             307          16-6-71, as enacted by Chapter 17, Laws of Utah 1963
             308          16-6-72, as enacted by Chapter 17, Laws of Utah 1963
             309          16-6-73, as enacted by Chapter 17, Laws of Utah 1963
             310          16-6-74, as enacted by Chapter 17, Laws of Utah 1963
             311          16-6-75, as last amended by Chapter 66, Laws of Utah 1984
             312          16-6-76, as last amended by Chapter 10, Laws of Utah 1997
             313          16-6-77, as last amended by Chapter 66, Laws of Utah 1984
             314          16-6-78, as last amended by Chapter 66, Laws of Utah 1984
             315          16-6-79, as last amended by Chapter 66, Laws of Utah 1984
             316          16-6-80, as enacted by Chapter 17, Laws of Utah 1963
             317          16-6-82, as enacted by Chapter 17, Laws of Utah 1963
             318          16-6-83, as last amended by Chapter 178, Laws of Utah 1985
             319          16-6-84, as last amended by Chapter 108, Laws of Utah 1990
             320          16-6-85, as last amended by Chapter 66, Laws of Utah 1984
             321          16-6-86, as last amended by Chapter 66, Laws of Utah 1987
             322          16-6-87, as last amended by Chapter 108, Laws of Utah 1990
             323          16-6-88, as last amended by Chapter 178, Laws of Utah 1985
             324          16-6-89, as last amended by Chapter 66, Laws of Utah 1984
             325          16-6-90, as last amended by Chapter 66, Laws of Utah 1984
             326          16-6-91, as last amended by Chapter 178, Laws of Utah 1985
             327          16-6-92, as last amended by Chapter 66, Laws of Utah 1984
             328          16-6-93, as last amended by Chapter 178, Laws of Utah 1985
             329          16-6-94, as last amended by Chapter 222, Laws of Utah 1988
             330          16-6-95, as last amended by Chapter 66, Laws of Utah 1984
             331          16-6-96, as enacted by Chapter 17, Laws of Utah 1963
             332          16-6-97, as last amended by Chapter 66, Laws of Utah 1987
             333          16-6-98, as last amended by Chapter 108, Laws of Utah 1990
             334          16-6-99, as last amended by Chapter 28, Laws of Utah 1995
             335          16-6-99.1, as last amended by Chapter 313, Laws of Utah 1994
             336          16-6-100, as last amended by Chapter 313, Laws of Utah 1994
             337          16-6-100.5, as last amended by Chapter 313, Laws of Utah 1994


             338          16-6-101, as last amended by Chapter 313, Laws of Utah 1994
             339          16-6-102, as last amended by Chapter 66, Laws of Utah 1984
             340          16-6-103, as last amended by Chapter 161, Laws of Utah 1987
             341          16-6-104, as last amended by Chapter 66, Laws of Utah 1984
             342          16-6-105, as last amended by Chapter 66, Laws of Utah 1984
             343          16-6-106, as enacted by Chapter 17, Laws of Utah 1963
             344          16-6-107, as last amended by Chapter 166, Laws of Utah 1987
             345          16-6-108, as last amended by Chapter 10, Laws of Utah 1997
             346          16-6-109, as last amended by Chapter 66, Laws of Utah 1984
             347          16-6-110, as enacted by Chapter 17, Laws of Utah 1963
             348          16-6-112, as enacted by Chapter 66, Laws of Utah 1987
             349      Be it enacted by the Legislature of the state of Utah:
             350          Section 1. Section 3-1-25 is amended to read:
             351           3-1-25. Filing of annual reports.
             352          Domestic associations and foreign associations admitted to do business in this state shall
             353      file an annual report in accordance with [Sections 16-6-97 and 16-6-98 ] Section 16-6a-1607 .
             354          Section 2. Section 3-1-30 is amended to read:
             355           3-1-30. Authorization for merger or consolidation with other associations or
             356      corporations -- Laws governing surviving or new corporation.
             357          (1) Pursuant to a plan approved under this chapter, an agricultural cooperative association
             358      may merge or consolidate with:
             359          (a) one or more agricultural cooperative associations;
             360          (b) one or more domestic corporations governed by:
             361          (i) Title 16, Chapter 10a, Utah Revised Business Corporation Act; or
             362          (ii) Title 16, Chapter [6] 6a, Utah Revised Nonprofit Corporation [and Cooperative
             363      Association] Act; or
             364          (c) any combination of associations or corporations referred to in Subsection (1)(a) or (b).
             365          (2) The surviving or new corporation shall be governed by:
             366          (a) the Uniform Agricultural Cooperative Association Act; or
             367          (b) Title 16, Chapter [6] 6a, Utah Revised Nonprofit Corporation [and Cooperative
             368      Association] Act.


             369          Section 3. Section 3-1-31 is amended to read:
             370           3-1-31. Contents and approval of plan of merger or consolidation.
             371          (1) The board of directors, board of trustees, or other governing board of each party to the
             372      merger or consolidation shall, by resolution adopted by each board, approve a plan of merger or
             373      consolidation.
             374          (2) The plan shall contain:
             375          (a) the name of:
             376          (i) each association or corporation proposing to merge or consolidate; and
             377          (ii) (A) the association or corporation into which they propose to merge or consolidate,
             378      also referred to as the surviving corporation; or
             379          (B) the new corporation;
             380          (b) the terms and conditions of the proposed merger or consolidation;
             381          (c) the manner and basis of converting stock or shares of each party to the merger or
             382      consolidation, into stock, shares, or other securities or obligations of the surviving or new
             383      corporation;
             384          (d) the manner and basis of converting membership interests of each party to the merger
             385      into membership interests, stock, shares, or other securities or obligations of the surviving or new
             386      corporation;
             387          (e) the manner and basis of converting any certificates of interest, patronage refund
             388      certificates, or other interests in any fund, capital investment, savings, or reserve of each party to
             389      the merger or consolidation into stock, shares, or other securities or obligations of or certificates
             390      of interest, patronage refund certificates, or other interests in any fund, capital investment, savings
             391      or reserve of the surviving or new corporation, including any changes to be made in the time and
             392      manner of payment of the certificates or interests;
             393          (f) a statement electing whether the surviving or new corporation shall be governed by:
             394          (i) the Uniform Agricultural Cooperative Association Act; or [by]
             395          (ii) Title 16, Chapter [6] 6a, Utah Revised Nonprofit Corporation [and Cooperative
             396      Association] Act;
             397          (g) a statement of any changes in the articles of incorporation of the surviving or new
             398      corporation effected by the merger or consolidation, including changes required by the law
             399      governing the surviving or new corporation; and


             400          (h) any other provision relating to the proposed merger or consolidation considered to be
             401      necessary or desirable.
             402          Section 4. Section 3-1-44 is amended to read:
             403           3-1-44. Registered office and agent.
             404          (1) An association shall continuously maintain a registered office in this state. The
             405      registered office may be the principal place of business of the association.
             406          (2) (a) An association shall designate a registered agent.
             407          (b) The registered agent may be a person residing in this state, a domestic corporation, or
             408      a foreign corporation authorized to transact business in this state.
             409          (c) The registered agent's address shall be the same as that of the registered office.
             410          (3) (a) An association shall file a statement with the Division of Corporations and
             411      Commercial Code designating or changing its registered office, its registered agent, or both.
             412          (b) The statement in Subsection (3)(a) shall set forth:
             413          (i) the name of the association;
             414          (ii) the address of the association's registered office;
             415          (iii) the name of the association's registered agent and [his] the registered agent's address;
             416      and
             417          (iv) a statement that the designation or change was authorized by a resolution of the board
             418      of directors.
             419          (4) (a) A registered agent of an association may resign by filing with the division a signed
             420      written notice of resignation, including a statement that a signed copy of the notice has been given
             421      to the association at its principal place of business.
             422          (b) The appointment of the agent terminates 30 days after notice is filed with the division.
             423          (5) Service of process, notice, or any demand upon an association shall be made as
             424      provided in Section [ 16-6-25.3 ] 16-6a-504.
             425          Section 5. Section 7-5-2 is amended to read:
             426           7-5-2. Permit required to engage in trust business -- Exceptions.
             427          (1) No trust company shall accept any appointment to act in any agency or fiduciary
             428      capacity, such as but not limited to that of personal representative, executor, administrator,
             429      conservator, guardian, assignee, receiver, depositary, or trustee under order or judgment of any
             430      court or by authority of any law of this state or as trustee for any purpose permitted by law or


             431      otherwise engage in the trust business in this state, unless and until it has obtained from the
             432      commissioner a permit to act under this chapter. This provision shall not apply to any bank or other
             433      corporation authorized to engage and lawfully engaged in the trust business in this state before July
             434      1, 1981.
             435          (2) Nothing in this chapter prohibits:
             436          (a) any corporation organized under Title 16, Chapter [6] 6a or [10] 10a, from acting as
             437      trustee of any employee benefit trust established for the employees of the corporation or the
             438      employees of one or more other corporations affiliated with the corporation;
             439          (b) any corporation organized under Title 16, Chapter [6] 6a, Utah Revised Nonprofit
             440      Corporation Act, and owned or controlled by a charitable, benevolent, eleemosynary or religious
             441      organization from acting as a trustee for that organization or members of that organization but not
             442      offering trust services to the general public;
             443          (c) any corporation organized under Title 16, Chapter [6] 6a or [10] 10a, from holding in
             444      a fiduciary capacity the controlling shares of another corporation but not offering trust services to
             445      the general public; or
             446          (d) any depository institution from holding in an agency or fiduciary capacity individual
             447      retirement accounts or Keogh plan accounts established under Section 401 (a) or 408 (a) of Title
             448      26 of the United States Code.
             449          Section 6. Section 9-13-201 is amended to read:
             450           9-13-201. Utah Technology Finance Corporation -- Independent public corporation.
             451          (1) There is created an independent public corporation known as the "Utah Technology
             452      Finance Corporation."
             453          (2) (a) The corporation shall operate as a nonprofit corporation in accordance with Title
             454      16, Chapter [6] 6a, Utah Revised Nonprofit Corporation [and Cooperative Association] Act, to the
             455      extent that Title 16, Chapter [6] 6a, does not conflict with this chapter.
             456          (b) The corporation shall file with the Division of Corporations and Commercial Code:
             457          (i) articles of incorporation; and
             458          (ii) any amendment to its articles of incorporation.
             459          (c) In addition to the articles of incorporation, the corporation may adopt bylaws and
             460      operational policies that are consistent with this chapter.
             461          (3) This chapter is a recodification of the repealed Title 9, Chapter 2, Part 7, Utah


             462      Technology Finance Corporation Act, and does not create a new corporation. The corporation
             463      referred to in this chapter is the ongoing enterprise of the Utah Technology Finance Corporation
             464      and this recodification does not impair any existing contractual relationships of the corporation.
             465          Section 7. Section 11-32-3 is amended to read:
             466           11-32-3. Creation of county interlocal finance authority as nonprofit corporation --
             467      Organization -- Acquisition of delinquent tax receivables -- Personnel -- Duties of elected
             468      attorney and treasurer.
             469          (1) The governing body of any county within the state may, by resolution, organize a
             470      nonprofit corporation as the financing authority for the county on behalf of public bodies within
             471      the county under this chapter, following the procedures set out in Title 16, Chapter [6] 6a, Utah
             472      Revised Nonprofit Corporation [and Cooperative Association] Act, solely for the purpose of
             473      accomplishing the public purposes for which the public bodies exist by financing the sale or
             474      assignment of the delinquent tax receivables within the county to the financing authority. The
             475      authority shall be known as the "Interlocal Finance Authority of (name of county)."
             476          (2) If the governing body of any county creates an authority on behalf of any other public
             477      body within the county, the resolution shall further state the name or names of the other public
             478      bodies. A certified copy of the resolution creating the authority shall be delivered to the governing
             479      body of the other public bodies. The governing bodies of each of the other public bodies shall
             480      either approve or reject the creation of the authority, but if no action has been taken within 30 days
             481      of delivery of the certified copy of the resolution to the governing body it shall be deemed rejected.
             482          (3) Following the approval, rejection, or deemed rejection of the resolution by the
             483      governing bodies of each of the public bodies listed in the initial resolution, the county shall then
             484      amend the resolution to delete the public bodies rejecting the resolution and shall list the
             485      participant members of the authority.
             486          (4) The governing bodies of the participant members shall approve the articles of
             487      incorporation and bylaws of the authority. Members of governing bodies of each of the participant
             488      members, or a paid employee of the governing body designated by the member, shall be selected
             489      to form and shall act as the board of trustees of the authority. The powers of the board of trustees
             490      may be vested in an executive committee to be selected from among the board of trustees by the
             491      members of the board of trustees. The articles of incorporation and bylaws shall provide that the
             492      members of the board of trustees of the authority may be removed and replaced by the governing


             493      body from which such member was selected at any time in its discretion. A majority of the
             494      governing bodies of the participant members, based upon a percentage of the property taxes levied
             495      for the year preceding the then current year, within the county may, alter or change the structure,
             496      organization, programs, or activities of the financing authority, subject to the rights of the holders
             497      of the authority's bonds and parties to its other obligations.
             498          (5) Each financing authority may acquire by assignment the delinquent tax receivables of
             499      the participant members creating the financing authority, in accordance with the procedures and
             500      subject to the limitations of this chapter, in order to accomplish the public purposes for which the
             501      participant members exist.
             502          (6) Except as limited by Subsection (7), a financing authority may contract for or employ
             503      all staff and other personnel necessary for the purpose of performing its functions and activities,
             504      including contracting with the participant members within the county that created it to utilize any
             505      of the personnel, property, or facilities of any of the participant members for that purpose. The
             506      authority may be reimbursed for such costs by the participant member as provided in its articles
             507      of incorporation or bylaws.
             508          (7) (a) With respect to any county that creates a financing authority and which has an
             509      elected attorney or treasurer, or both, the elected attorney shall be the legal advisor to and provide
             510      all legal services for the authority, and the elected treasurer shall provide all accounting services
             511      for the authority. The authority shall reimburse the county for legal and accounting services so
             512      furnished by the county, based upon the actual cost of the services, including reasonable amounts
             513      allocated by the county for overhead, employee fringe benefits, and general and administrative
             514      expenses.
             515          (b) The provisions of Subsection (7) may not prevent the financing authority from
             516      obtaining the accounting or auditing services from outside accountants or auditors with the consent
             517      of the elected treasurer and the governing bodies or from obtaining legal services from outside
             518      attorneys with the consent of the elected attorney and the governing bodies. The provisions of this
             519      subsection may not prevent the authority from obtaining the opinions of outside attorneys or
             520      accountants which are necessary for the issuance of the bonds of the authority.
             521          (c) If 50% or more of the governing bodies of the participant members, based upon
             522      property taxes charged for the preceding year as a percentage of all of the property taxes charged
             523      within the county for that year, find it advisable that the authority retain legal or accounting


             524      services other than as described in Subsection (7)(a) they may direct the board of trustees to do so.
             525          Section 8. Section 11-32-8 is amended to read:
             526           11-32-8. Dissolution of financing authority.
             527          (1) The governing body of a county may at any time dissolve a financing authority created
             528      by the county in the manner then provided in Title 16, Chapter [6] 6a, Utah Revised Nonprofit
             529      Corporation [and Cooperative Association] Act, subject to the limitations of this chapter.
             530          (2) A financing authority may not be dissolved unless all outstanding bonds and other
             531      obligations of the authority are paid in full as to principal, interest, and redemption premiums, if
             532      any, or unless provision for the payment of them when due has been made.
             533          (3) Upon the dissolution of a financing authority all assets and moneys of the authority
             534      remaining after a provision has been made for the payment of all outstanding bonds and
             535      obligations of the authority shall be transferred to the participant members as described in Section
             536      11-32-15 or as agreed upon between the county and the other participant members.
             537          Section 9. Section 16-6a-101 is enacted to read:
             538     
CHAPTER 6a. UTAH REVISED NONPROFIT CORPORATION ACT

             539     
Part 1. General Provisions

             540          16-6a-101. Title.
             541          This chapter is known as the "Utah Revised Nonprofit Corporation Act."
             542          Section 10. Section 16-6a-102 is enacted to read:
             543          16-6a-102. Definitions.
             544          As used in this chapter:
             545          (1) (a) "Address" means a location where mail can be delivered by the United States Postal
             546      Service.
             547          (b) "Address" includes:
             548          (i) a post office box number;
             549          (ii) a rural free delivery route number; and
             550          (iii) a street name and number.
             551          (2) "Affiliate" means a person that directly or indirectly through one or more
             552      intermediaries controls, or is controlled by, or is under common control with, the person specified.
             553          (3) "Assumed corporate name" means the name assumed for use in this state:
             554          (a) by a:


             555          (i) foreign corporation pursuant to Section 16-10a-1506 ; or
             556          (ii) a foreign nonprofit corporation pursuant to Section 16-6a-1506 ; and
             557          (b) because the corporate name of the foreign corporation described in Subsection (3)(a)
             558      is not available for use in this state.
             559          (4) "Articles of incorporation" include:
             560          (a) amended articles of incorporation;
             561          (b) restated articles of incorporation;
             562          (c) articles of merger; and
             563          (d) a document of a similar import to the documents described in Subsection (4)(a) or (b).
             564          (5) (a) Except as provided in Subsection (5)(b), "board of directors" means the body
             565      authorized to manage the affairs of the domestic or foreign nonprofit corporation.
             566          (b) Notwithstanding Subsection (5)(a), a person may not be considered the board of
             567      directors because of powers delegated to that person pursuant to Subsection 16-6a-801 (2).
             568          (6) (a) "Bylaws" means the one or more codes of rules, other than the articles of
             569      incorporation, adopted pursuant to this chapter for the regulation or management of the affairs of
             570      the domestic or foreign nonprofit corporation irrespective of the name or names by which the
             571      codes of rules are designated.
             572          (b) "Bylaws" includes:
             573          (i) amended bylaws; and
             574          (ii) restated bylaws.
             575          (7) (a) "Cash" or "money" means:
             576          (i) legal tender;
             577          (ii) a negotiable instrument; or
             578          (iii) other cash equivalent readily convertible into legal tender.
             579          (b) "Cash" and "money" are used interchangeably in this chapter.
             580          (8) (a) "Class" refers to a group of memberships that have the same rights with respect to
             581      voting, dissolution, redemption, transfer, or other characteristics.
             582          (b) For purposes of Subsection (8)(a), rights are considered the same if they are determined
             583      by a formula applied uniformly to a group of memberships.
             584          (9) (a) "Conspicuous" means so written that a reasonable person against whom the writing
             585      is to operate should have noticed it.


             586          (b) "Conspicuous" includes printing or typing in:
             587          (i) italics;
             588          (ii) boldface;
             589          (iii) contrasting color;
             590          (iv) capitals; or
             591          (v) underlining.
             592          (10) "Control" or a "controlling interest" means the direct or indirect possession of the
             593      power to direct or cause the direction of the management and policies of an entity by:
             594          (a) the ownership of voting shares;
             595          (b) contract; or
             596          (c) means other than those specified in Subsection (10)(a) or (b).
             597          (11) "Cooperative nonprofit corporation" or "cooperative" means a nonprofit corporation
             598      organized or existing under this chapter subject to Section 16-6a-207 .
             599          (12) "Corporate name" means:
             600          (a) the name of a domestic corporation as stated in the domestic corporation's articles of
             601      incorporation;
             602          (b) the name of a domestic nonprofit corporation as stated in the domestic nonprofit
             603      corporation's articles of incorporation;
             604          (c) the name of a foreign corporation as stated in the foreign corporation's:
             605          (i) articles of incorporation; or
             606          (ii) document of similar import to articles of incorporation; or
             607          (d) the name of a foreign nonprofit corporation as stated in the foreign nonprofit
             608      corporation's:
             609          (i) articles of incorporation; or
             610          (ii) document of similar import to articles of incorporation.
             611          (13) "Corporation" or "domestic corporation" means a corporation for profit, which is not
             612      a foreign corporation, incorporated under or subject to Chapter 10a, Utah Revised Business
             613      Corporation Act.
             614          (14) "Delegate" means any person elected or appointed to vote in a representative
             615      assembly:
             616          (a) for the election of a director; or


             617          (b) on matters other than the election of a director.
             618          (15) "Deliver" includes delivery by mail and any other means of transmission authorized
             619      by Section 16-6a-103 , except that delivery to the division means actual receipt by the division.
             620          (16) "Director" means a member of the board of directors.
             621          (17) (a) "Distribution" means the payment of a dividend or any part of the income or profit
             622      of a nonprofit corporation to the nonprofit corporation's:
             623          (i) members;
             624          (ii) directors; or
             625          (iii) officers.
             626          (b) "Distribution" does not include fair-value payments for:
             627          (i) goods sold; or
             628          (ii) services received.
             629          (18) "Division" means the Division of Corporations and Commercial Code.
             630          (19) "Effective date," when referring to a document filed by the division, means the time
             631      and date determined in accordance with Section 16-6a-108 .
             632          (20) "Effective date of notice" means the date notice is effective as provided in Section
             633      16-6a-103 .
             634          (21) (a) "Employee" includes an officer but not a director of a nonprofit corporation.
             635          (b) Notwithstanding Subsection (21)(a), a director may accept duties that make that
             636      director an employee of a nonprofit corporation.
             637          (22) "Executive director" means the executive director of the Department of Commerce.
             638          (23) "Entity" includes:
             639          (a) a domestic or foreign corporation;
             640          (b) a domestic or foreign nonprofit corporation;
             641          (c) a limited liability company;
             642          (d) a profit or nonprofit unincorporated association;
             643          (e) a business trust;
             644          (f) an estate;
             645          (g) a partnership;
             646          (h) a trust;
             647          (i) two or more persons having a joint or common economic interest;


             648          (j) a state;
             649          (k) the United States; or
             650          (l) a foreign government.
             651          (24) "Foreign corporation" means a corporation for profit incorporated under a law other
             652      than the laws of this state.
             653          (25) "Foreign nonprofit corporation" means an entity:
             654          (a) incorporated under a law other than the laws of this state; and
             655          (b) that would be a nonprofit corporation if formed under the laws of this state.
             656          (26) "Governmental subdivision" means:
             657          (a) a county;
             658          (b) a city;
             659          (c) a town; or
             660          (d) any other type of governmental subdivision authorized by the laws of this state.
             661          (27) "Individual" means:
             662          (a) a natural person;
             663          (b) the estate of an incompetent individual; or
             664          (c) the estate of a deceased individual.
             665          (28) "Internal Revenue Code" means the federal "Internal Revenue Code of 1986," as
             666      amended from time to time, or to corresponding provisions of subsequent internal revenue laws
             667      of the United States of America.
             668          (29) (a) "Mail," "mailed," or "mailing" means deposit, deposited, or depositing in the
             669      United States mail, properly addressed, first class postage prepaid.
             670          (b) "Mail," "mailed," or "mailing" includes registered or certified mail for which the proper
             671      fee has been paid.
             672          (30) (a) "Member" means one or more persons identified as a member of a domestic or
             673      foreign nonprofit corporation in the articles of incorporation or bylaws of the nonprofit corporation
             674      pursuant to a procedure set forth:
             675          (i) in the articles of incorporation;
             676          (ii) in the bylaws; or
             677          (iii) by a resolution of the board of directors.
             678          (b) "Member" includes "voting member."


             679          (31) "Membership" refers to the rights and obligations of a member or members.
             680          (32) "Nonprofit corporation" or "domestic nonprofit corporation" means an entity, which
             681      is not a foreign nonprofit corporation, incorporated under or subject to the provisions of this
             682      chapter.
             683          (33) "Notice" is as provided in Section 16-6a-103 .
             684          (34) "Principal office" means:
             685          (a) the office, in or out of this state, designated by a domestic or foreign nonprofit
             686      corporation as its principal office in the most recent document on file with the division providing
             687      that information, including:
             688          (i) an annual report;
             689          (ii) an application for a certificate of authority; or
             690          (iii) a notice of change of principal office; or
             691          (b) if no principal office can be determined, a domestic or foreign nonprofit corporation's
             692      registered office.
             693          (35) "Proceeding" includes:
             694          (a) a civil suit;
             695          (b) arbitration;
             696          (c) mediation;
             697          (d) a criminal action;
             698          (e) an administrative action; or
             699          (f) an investigatory action.
             700          (36) "Receive," when used in reference to receipt of a writing or other document by a
             701      domestic or foreign nonprofit corporation, means the writing or other document is actually
             702      received:
             703          (a) by the domestic or foreign nonprofit corporation at:
             704          (i) its registered office in this state; or
             705          (ii) its principal office;
             706          (b) by the secretary of the domestic or foreign nonprofit corporation, wherever the
             707      secretary is found; or
             708          (c) by any other person authorized by the bylaws or the board of directors to receive the
             709      writing or other document, wherever that person is found.


             710          (37) (a) "Record date" means the date established under Part 6 or 7 on which a nonprofit
             711      corporation determines the identity of its members.
             712          (b) The determination described in Subsection (37)(a) shall be made as of the close of
             713      business on the record date unless another time for doing so is specified when the record date is
             714      fixed.
             715          (38) "Registered agent" means the registered agent of:
             716          (a) a domestic nonprofit corporation required to be maintained pursuant to Subsection
             717      16-6a-501 (1)(b); or
             718          (b) a foreign nonprofit corporation required to be maintained pursuant to Subsection
             719      16-6a-1508 (1)(b).
             720          (39) "Registered office" means the office within this state designated by a domestic or
             721      foreign nonprofit corporation as its registered office in the most recent document on file with the
             722      division providing that information, including:
             723          (a) articles of incorporation;
             724          (b) an application for a certificate of authority; or
             725          (c) a notice of change of registered office.
             726          (40) "Related party to a director" means:
             727          (a) the spouse of the director;
             728          (b) a child of the director;
             729          (c) a grandchild of the director;
             730          (d) a sibling of the director;
             731          (e) a parent of the director;
             732          (f) the spouse of an individual described in Subsections (40)(b) through (e);
             733          (g) an individual having the same home as the director;
             734          (h) a trust or estate of which the director or any other individual specified in this
             735      Subsection (40) is a substantial beneficiary; or
             736          (i) any of the following of which the director is a fiduciary:
             737          (i) a trust;
             738          (ii) an estate;
             739          (iii) an incompetent;
             740          (iv) a conservatee; or


             741          (v) a minor.
             742          (41) "Secretary" means the corporate officer to whom the bylaws or the board of directors
             743      has delegated responsibility under Subsection 16-6a-818 (3) for:
             744          (a) the preparation and maintenance of:
             745          (i) minutes of the meetings of:
             746          (A) the board of directors; or
             747          (B) the members; and
             748          (ii) the other records and information required to be kept by the nonprofit corporation
             749      pursuant to Section 16-6a-1601 ; and
             750          (b) authenticating records of the nonprofit corporation.
             751          (42) "State," when referring to a part of the United States, includes:
             752          (a) a state;
             753          (b) a commonwealth;
             754          (c) the District of Columbia;
             755          (d) an agency or governmental and political subdivision of a state, commonwealth, or
             756      District of Columbia;
             757          (e) territory or insular possession of the United States; or
             758          (f) an agency or governmental and political subdivision of a territory or insular possession
             759      of the United States.
             760          (43) "Street address" means:
             761          (a) (i) street name and number;
             762          (ii) city or town; and
             763          (iii) United States post office zip code designation; or
             764          (b) if, by reason of rural location or otherwise, a street name, number, city, or town does
             765      not exist, an appropriate description other than that described in Subsection (43)(a) fixing as nearly
             766      as possible the actual physical location but only if the information includes:
             767          (i) the rural free delivery route;
             768          (ii) the county; and
             769          (iii) the United States post office zip code designation.
             770          (44) "United States" includes any district, authority, office, bureau, commission,
             771      department, and any other agency of the United States of America.


             772          (45) "Vote" includes authorization by:
             773          (a) written ballot; and
             774          (b) written consent.
             775          (46) (a) "Voting group" means all the members of one or more classes of members or
             776      directors that, under this chapter, the articles of incorporation, or the bylaws, are entitled to vote
             777      and be counted together collectively on a matter.
             778          (b) All members or directors entitled by this chapter, the articles of incorporation, or the
             779      bylaws to vote generally on a matter are for that purpose a single voting group.
             780          (47) (a) "Voting member" means one or more persons who are entitled to vote for all
             781      matters required or permitted under this chapter to be submitted to a vote of the members, except
             782      as otherwise provided in the articles of incorporation or bylaws.
             783          (b) A person is not a voting member solely because of:
             784          (i) a right the person has as a delegate;
             785          (ii) a right the person has to designate a director; or
             786          (iii) a right the person has as a director.
             787          Section 11. Section 16-6a-103 is enacted to read:
             788          16-6a-103. Notice.
             789          (1) Notice given under this chapter shall be in writing unless oral notice is reasonable
             790      under the circumstances.
             791          (2) (a) Notice may be communicated:
             792          (i) in person;
             793          (ii) by telephone;
             794          (iii) by any form of electronic communication; or
             795          (iv) by mail or private carrier.
             796          (b) If the forms of personal notice described in Subsection (2)(a) are impracticable, notice
             797      may be communicated by:
             798          (i) a newspaper of general circulation in the county or similar governmental subdivision
             799      in which the corporation's principal or registered office is located; or
             800          (ii) radio, television, or other form of public broadcast communication in the county or
             801      similar governmental subdivision in which the corporation's principal or registered office is
             802      located.


             803          (3) Written notice to a domestic or foreign nonprofit corporation authorized to conduct
             804      affairs in this state may be addressed to:
             805          (a) its registered agent at its registered office; or
             806          (b) the corporation's secretary at its principal office.
             807          (4) (a) Written notice by a domestic or foreign nonprofit corporation to its members, is
             808      effective as to each member when mailed, if:
             809          (i) in a comprehensible form; and
             810          (ii) addressed to the member's address shown in the domestic or foreign nonprofit
             811      corporation's current record of members.
             812          (b) If three successive notices given to a member pursuant to Subsection (5) have been
             813      returned as undeliverable, further notices to that member are not necessary until another address
             814      of the member is made known to the nonprofit corporation.
             815          (5) Except as provided in Subsection (4), written notice, if in a comprehensible form, is
             816      effective at the earliest of the following:
             817          (a) when received;
             818          (b) five days after it is mailed; or
             819          (c) on the date shown on the return receipt if:
             820          (i) sent by registered or certified mail;
             821          (ii) sent return receipt requested; and
             822          (iii) the receipt is signed by or on behalf of the addressee.
             823          (6) Oral notice is effective when communicated if communicated in a comprehensible
             824      manner.
             825          (7) Notice by publication is effective on the date of first publication.
             826          (8) A written notice or report delivered as part of a newsletter, magazine, or other
             827      publication regularly sent to members shall constitute a written notice or report if:
             828          (a) addressed or delivered to the member's address shown in the nonprofit corporation's
             829      current list of members; or
             830          (b) if two or more members are residents of the same household and have the same address
             831      in the nonprofit corporation's current list of members, addressed or delivered to one of the
             832      members at the address appearing on the current list of members.
             833          (9) (a) If this chapter prescribes notice requirements for particular circumstances, the


             834      notice requirements for the particular circumstances govern.
             835          (b) If articles of incorporation or bylaws prescribe notice requirements not inconsistent
             836      with this section or other provisions of this chapter, the notice requirements of the articles of
             837      incorporation or bylaws govern.
             838          Section 12. Section 16-6a-104 is enacted to read:
             839          16-6a-104. Powers of the division.
             840          The division has the power reasonably necessary to perform the duties required of the
             841      division under this chapter.
             842          Section 13. Section 16-6a-105 is enacted to read:
             843          16-6a-105. Filing requirements.
             844          (1) To be entitled to filing by the division, a document shall satisfy the requirements of:
             845          (a) this section; and
             846          (b) any other section of this chapter that adds to or varies the requirements of this section.
             847          (2) This chapter shall require or permit filing the document with the division.
             848          (3) (a) A document shall contain the information required by this chapter.
             849          (b) In addition to the document information required by this chapter, it may contain other
             850      information.
             851          (4) A document shall be:
             852          (a) typewritten; or
             853          (b) machine printed.
             854          (5) (a) A document shall be in the English language.
             855          (b) A corporate name need not be in English if written in:
             856          (i) English letters; or
             857          (ii) Arabic or Roman numerals.
             858          (c) Notwithstanding Subsection (5)(a), a certificate of existence required of a foreign
             859      nonprofit corporation need not be in English if accompanied by a reasonably authenticated English
             860      translation.
             861          (6) (a) A document shall be:
             862          (i) executed by a person in Subsection (6)(b); or
             863          (ii) a true copy made by photographic, xerographic, electronic, or other process that
             864      provides similar copy accuracy of a document that has been executed by a person listed in


             865      Subsection (6)(b).
             866          (b) A document shall be executed by:
             867          (i) the chair of the board of directors of a domestic or foreign nonprofit corporation;
             868          (ii) all of the directors of a domestic or foreign nonprofit corporation;
             869          (iii) an officer of the domestic or foreign nonprofit corporation;
             870          (iv) if directors have not been selected or the domestic or foreign nonprofit corporation has
             871      not been formed, an incorporator;
             872          (v) if the domestic or foreign nonprofit corporation is in the hands of a receiver, trustee,
             873      or other court-appointed fiduciary, that receiver, trustee, or court-appointed fiduciary; or
             874          (vi) if the document is that of a registered agent:
             875          (A) the registered agent, if the person is an individual; or
             876          (B) a person authorized by the registered agent to execute the document, if the registered
             877      agent is an entity.
             878          (7) A document shall state beneath or opposite the signature of the person executing the
             879      document:
             880          (a) the signer's name; and
             881          (b) the capacity in which the document is signed.
             882          (8) A document may contain:
             883          (a) the corporate seal;
             884          (b) an attestation by the secretary or an assistant secretary; or
             885          (c) an acknowledgment, verification, or proof.
             886          (9) The signature of each person signing a document, whether or not the document
             887      contains an acknowledgment, verification, or proof permitted by Subsection (8), shall constitute
             888      the affirmation or acknowledgment of the person, under penalties of perjury, that:
             889          (a) the document is:
             890          (i) the person's act and deed; or
             891          (ii) the act and deed of the entity on behalf of which the document is executed; and
             892          (b) the facts stated in the document are true.
             893          (10) If the division has prescribed a mandatory form or cover sheet for the document under
             894      Section 16-6a-106 , a document shall be:
             895          (a) in or on the prescribed form; or


             896          (b) have the required cover sheet.
             897          (11) A document shall be:
             898          (a) delivered to the division for filing; and
             899          (b) accompanied by:
             900          (i) one exact or conformed copy, except as provided in Sections 16-6a-503 and
             901      16-6a-1510 ;
             902          (ii) the correct filing fee; and
             903          (iii) any franchise tax, license fee, or penalty required by this chapter or other law.
             904          (12) Except with respect to filings pursuant to Section 16-6a-503 or 16-6a-1510 , a
             905      document shall state, or be accompanied by a writing stating, the address to which the division may
             906      send a copy upon completion of the filing.
             907          Section 14. Section 16-6a-106 is enacted to read:
             908          16-6a-106. Forms.
             909          (1) (a) The division may prescribe forms or cover sheets for documents required or
             910      permitted to be filed by this chapter.
             911          (b) If the division prescribes a form or cover sheet pursuant to Subsection (1)(a), the
             912      division shall provide the form or cover sheet on request.
             913          (2) Notwithstanding Subsection (1):
             914          (a) the use of a form or cover sheet is not mandatory unless the division specifically
             915      requires the use of the form or cover sheet; and
             916          (b) a requirement that a form or cover sheet be used may not:
             917          (i) preclude in any way the inclusion in any document of any item that is not prohibited to
             918      be included by this chapter; or
             919          (ii) require the inclusion with the filed document of any item that is not otherwise required
             920      by this chapter.
             921          Section 15. Section 16-6a-107 is enacted to read:
             922          16-6a-107. Fees.
             923          (1) Unless otherwise provided by statute, the division shall charge and collect a fee for
             924      services established by the division in accordance with Section 63-38-3.2 including fees:
             925          (a) for furnishing a certified copy of any document, instrument, or paper relating to a
             926      domestic or foreign nonprofit corporation; and


             927          (b) for the certificate and affixing the seal to a certified copy described in Subsection
             928      (1)(a).
             929          (2) (a) The division shall provide expedited, 24-hour processing of any item under this
             930      section upon request.
             931          (b) The division shall charge and collect additional fees established by the division in
             932      accordance with Section 63-38-3.2 for expedited service provided under Subsection (2)(a).
             933          (3) (a) The division shall charge and collect a fee determined by the division in accordance
             934      with Section 63-38-3.2 at the time of any service of process on the director of the division as
             935      resident agent of a corporation.
             936          (b) The fee paid under Subsection (3)(a) may be recovered as taxable costs by the party
             937      to the suit or action causing the service to be made if the party prevails in the suit or action.
             938          Section 16. Section 16-6a-108 is enacted to read:
             939          16-6a-108. Effective time and date of filed documents.
             940          (1) (a) Except as provided in Subsection (2) and Subsection 16-6a-109 (4), a document
             941      submitted to the division for filing under this chapter is effective:
             942          (i) at the time of filing; and
             943          (ii) on the date it is filed.
             944          (b) The division's endorsement on the document as described in Subsection 16-6a-110 (2)
             945      is evidence of the time and date of filing.
             946          (2) (a) Unless otherwise provided in this chapter, a document, other than an application
             947      for a reserved or registered name, may specify conspicuously on its face:
             948          (i) a delayed effective time;
             949          (ii) a delayed effective date; or
             950          (iii) both a delayed effective time and date.
             951          (b) If in accordance with Subsection (2)(a), a delayed time, date, or both, is specified, the
             952      document becomes effective as provided in this Subsection (2).
             953          (c) If both a delayed effective time and date are specified, the document becomes effective
             954      as specified.
             955          (d) If a delayed effective time but no date is specified, the document is effective on the
             956      date it is filed, as that date is specified in the division's time and date endorsement on the
             957      document, at the later of:


             958          (i) the time specified on the document as its effective time; or
             959          (ii) the time specified in the time and date endorsement.
             960          (e) If a delayed effective date but no time is specified, the document is effective at the
             961      close of business on the date specified as the delayed effective date.
             962          (f) Notwithstanding the other provisions of this Subsection (2), a delayed effective date
             963      for a document may not be later than 90 days after the date the document is filed. If a document
             964      specifies a delayed effective date that is more than 90 days after the date the document is filed, the
             965      document is effective 90 days after the day the document is filed.
             966          (3) If a document specifies a delayed effective date pursuant to Subsection (2), the
             967      document may be prevented from becoming effective by the same domestic or foreign nonprofit
             968      corporation that originally submitted the document for filing delivering to the division, prior to the
             969      specified effective date of the document, a certificate of withdrawal:
             970          (a) executed:
             971          (i) on behalf of the same domestic or foreign nonprofit corporation that originally
             972      submitted the document for filing; and
             973          (ii) in the same manner as the document being withdrawn;
             974          (b) stating that:
             975          (i) the document has been revoked by:
             976          (A) appropriate corporate action; or
             977          (B) court order or decree pursuant to Section 16-6a-1007 ; and
             978          (ii) the document is void; and
             979          (c) if a court order or decree pursuant to Section 16-6a-1007 revokes the document, the
             980      court order or decree was entered by a court having jurisdiction of the proceeding for the
             981      reorganization of the nonprofit corporation under a specified statute of the United States.
             982          Section 17. Section 16-6a-109 is enacted to read:
             983          16-6a-109. Correcting filed documents.
             984          (1) A domestic or foreign nonprofit corporation may correct a document filed with the
             985      division if the document:
             986          (a) contains an incorrect statement; or
             987          (b) was defectively executed, attested, sealed, verified, or acknowledged.
             988          (2) A document is corrected by delivering to the division for filing articles of correction


             989      that:
             990          (a) (i) describe the document, including its filing date; or
             991          (ii) have attached a copy of the document;
             992          (b) specify:
             993          (i) (A) the incorrect statement; and
             994          (B) the reason it is incorrect; or
             995          (ii) the manner in which the execution, attestation, sealing, verification, or
             996      acknowledgment was defective; and
             997          (c) correct:
             998          (i) the incorrect statement; or
             999          (ii) defective execution, attestation, sealing, verification, or acknowledgment.
             1000          (3) Articles of correction may be executed by any person:
             1001          (a) designated in Subsection 16-6a-105 (6); or
             1002          (b) who executed the document that is corrected.
             1003          (4) (a) Articles of correction are effective on the effective date of the document they
             1004      correct except as to a person:
             1005          (i) relying on the uncorrected document; and
             1006          (ii) adversely affected by the correction.
             1007          (b) As to a person described in Subsection (4)(a), the articles of correction are effective
             1008      when filed.
             1009          Section 18. Section 16-6a-110 is enacted to read:
             1010          16-6a-110. Filing duty of division.
             1011          (1) If a document delivered to the division for filing satisfies the requirements of Section
             1012      16-6a-105 , the division shall file the document.
             1013          (2) (a) The division files a document by stamping or otherwise endorsing "Filed" together
             1014      with the name of the division and the date and time of acceptance for filing on both the document
             1015      and the accompanying copy.
             1016          (b) After filing a document, except as provided in Sections 16-6a-503 , 16-6a-1510 , and
             1017      16-6a-1608 , the division shall deliver the accompanying copy, with the receipt for any filing fees:
             1018          (i) (A) to the domestic or foreign nonprofit corporation for which the filing is made; or
             1019          (B) to the representative of the domestic or foreign nonprofit corporation for which the


             1020      filing is made; and
             1021          (ii) at the address:
             1022          (A) indicated on the filing; or
             1023          (B) that the division determines to be appropriate.
             1024          (3) (a) If the division refuses to file a document, the division within ten days after the day
             1025      the document is delivered to the division shall return to the person requesting the filing:
             1026          (i) the document; and
             1027          (ii) a written notice providing a brief explanation of the reason for the refusal to file.
             1028          (4) (a) The division's duty to file a document under this section is ministerial.
             1029          (b) Except as otherwise specifically provided in this chapter, the division's filing or refusal
             1030      to file a document does not:
             1031          (i) affect the validity or invalidity of the document in whole or in part;
             1032          (ii) relate to the correctness or incorrectness of information contained in the document; or
             1033          (iii) create a presumption that:
             1034          (A) the document is valid or invalid; or
             1035          (B) information contained in the document is correct or incorrect.
             1036          Section 19. Section 16-6a-111 is enacted to read:
             1037          16-6a-111. Appeal from division's refusal to file document.
             1038          If the division refuses to file a document delivered to it for filing, in accordance with Title
             1039      63, Chapter 46b, Administrative Procedures Act, the following may appeal the refusal to the
             1040      executive director:
             1041          (1) the domestic or foreign nonprofit corporation for which the filing was requested; or
             1042          (2) the representative of the domestic or foreign nonprofit corporation for which filing was
             1043      requested.
             1044          Section 20. Section 16-6a-112 is enacted to read:
             1045          16-6a-112. Evidentiary effect of copy of filed document.
             1046          One or more of the following is conclusive evidence that the original document has been
             1047      filed with the division:
             1048          (1) a certificate attached to a copy of a document filed by the division; or
             1049          (2) an endorsement, seal, or stamp placed on the copy by the division.
             1050          Section 21. Section 16-6a-113 is enacted to read:


             1051          16-6a-113. Certificates issued by the division.
             1052          (1) Any person may apply to the division for:
             1053          (a) a certificate of existence for a domestic nonprofit corporation;
             1054          (b) a certificate of authorization for a foreign nonprofit corporation; or
             1055          (c) a certificate that sets forth any facts of record in the division.
             1056          (2) A certificate of existence or certificate of authorization sets forth:
             1057          (a) (i) the domestic nonprofit corporation's corporate name; or
             1058          (ii) the foreign nonprofit corporation's corporate name registered in this state;
             1059          (b) that:
             1060          (i) (A) (I) the domestic nonprofit corporation is incorporated under the law of this state;
             1061      and
             1062          (II) the date of its incorporation; or
             1063          (B) the foreign nonprofit corporation is authorized to conduct affairs in this state;
             1064          (c) that all fees, taxes, and penalties owed to this state have been paid, if:
             1065          (i) payment is reflected in the records of the division; and
             1066          (ii) nonpayment affects the existence or authorization of the domestic or foreign nonprofit
             1067      corporation;
             1068          (d) that the domestic or foreign nonprofit corporation's most recent annual report required
             1069      by Section 16-6a-1607 has been filed by the division;
             1070          (e) that articles of dissolution have not been filed by the division; and
             1071          (f) other facts of record in the division that may be requested by the applicant.
             1072          (3) Subject to any qualification stated in the certificate, a certificate issued by the division
             1073      may be relied upon as conclusive evidence of the facts set forth in the certificate.
             1074          Section 22. Section 16-6a-114 is enacted to read:
             1075          16-6a-114. Penalty for signing false documents.
             1076          (1) It is unlawful for a person to sign a document:
             1077          (a) knowing it to be false in any material respect; and
             1078          (b) with intent that the document be delivered to the division for filing.
             1079          (2) An offense under this section is a class A misdemeanor punishable by a fine not to
             1080      exceed the fine specified in Section 76-3-301 .
             1081          Section 23. Section 16-6a-115 is enacted to read:


             1082          16-6a-115. Liability to third parties.
             1083          The directors, officers, employees, and members of a nonprofit corporation are not,
             1084      personally liable in their capacity as directors, officers, employees, and members for the acts,
             1085      debts, liabilities, or obligations of a nonprofit corporation.
             1086          Section 24. Section 16-6a-116 is enacted to read:
             1087          16-6a-116. Private foundations.
             1088          Except as otherwise specified in the articles of incorporation, a nonprofit corporation that
             1089      is a private foundation as defined in Section 509(a), Internal Revenue Code:
             1090          (1) shall make distributions for each taxable year at the time and in the manner as not to
             1091      subject the nonprofit corporation to tax under Section 4942, Internal Revenue Code;
             1092          (2) may not engage in any act of self-dealing as defined in Section 4941(d), Internal
             1093      Revenue Code;
             1094          (3) may not retain any excess business holdings as defined in Section 4943(c), Internal
             1095      Revenue Code;
             1096          (4) may not make any investments that would subject the nonprofit corporation to taxation
             1097      under Section 4944, Internal Revenue Code; and
             1098          (5) may not make any taxable expenditures as defined in Section 4945(d), Internal
             1099      Revenue Code.
             1100          Section 25. Section 16-6a-117 is enacted to read:
             1101          16-6a-117. Judicial relief.
             1102          (1) (a) A director, officer, delegate, or member may petition the applicable district court
             1103      to take an action provided in Subsection (1)(b) if for any reason it is impractical or impossible for
             1104      a nonprofit corporation in the manner prescribed by this chapter, its articles of incorporation, or
             1105      bylaws to:
             1106          (i) call or conduct a meeting of its members, delegates, or directors; or
             1107          (ii) otherwise obtain the consent of its members, delegates, or directors.
             1108          (b) If a petition is filed under Subsection (1)(a) the applicable district court, in the manner
             1109      it finds fair and equitable under the circumstances, may order that:
             1110          (i) a meeting be called; or
             1111          (ii) a written consent or other form of obtaining the vote of members, delegates, or
             1112      directors be authorized.


             1113          (c) For purposes of this section, the applicable district court is:
             1114          (i) the district court of the county in this state where the nonprofit corporation's principal
             1115      office is located; or
             1116          (ii) if the nonprofit corporation has no principal office in this state:
             1117          (A) the district court of the county in which the registered office is located; or
             1118          (B) if the nonprofit corporation has no registered office in this state, the district court in
             1119      and for Salt Lake County.
             1120          (2) (a) A court specified in Subsection (1) shall, in an order issued pursuant to this section,
             1121      provide for a method of notice reasonably designed to give actual notice to all persons who would
             1122      be entitled to notice of a meeting held pursuant to this chapter, the articles of incorporation, or
             1123      bylaws.
             1124          (b) The method of notice described in Subsection (1) complies with this section whether
             1125      or not the method of notice:
             1126          (i) results in actual notice to all persons described in Subsection (2)(a); or
             1127          (ii) conforms to the notice requirements that would otherwise apply.
             1128          (c) In a proceeding under this section, the court may determine who are the members or
             1129      directors of a nonprofit corporation.
             1130          (3) An order issued pursuant to this section may dispense with any requirement relating
             1131      to the holding of or voting at meetings or obtaining votes that would otherwise be imposed by this
             1132      chapter, the articles of incorporation, or bylaws, including any requirement as to:
             1133          (a) quorums; or
             1134          (b) the number or percentage of votes needed for approval.
             1135          (4) (a) Whenever practical, any order issued pursuant to this section shall limit the subject
             1136      matter of a meeting or other form of consent authorized to items the resolution of which will or
             1137      may enable the nonprofit corporation to continue managing its affairs without further resort to this
             1138      section, including amendments to the articles of incorporation or bylaws.
             1139          (b) Notwithstanding Subsection (4)(a), an order under this section may authorize the
             1140      obtaining of whatever votes and approvals are necessary for the dissolution, merger, or sale of
             1141      assets of a nonprofit corporation.
             1142          (5) A meeting or other method of obtaining the vote of members, delegates, or directors
             1143      conducted pursuant to and that complies with an order issued under this section:


             1144          (a) is for all purposes a valid meeting or vote, as the case may be; and
             1145          (b) shall have the same force and effect as if it complied with every requirement imposed
             1146      by this chapter, the articles of incorporation, or bylaws.
             1147          (6) In addition to a meeting held under this section, a court ordered meeting may be held
             1148      pursuant to Section 16-6a-703 .
             1149          Section 26. Section 16-6a-118 is enacted to read:
             1150          16-6a-118. Electronic documents.
             1151          (1) Notwithstanding the other requirements of this chapter except subject to Section
             1152      16-6a-106 , the division may by rule permit a writing required or permitted to be filed with the
             1153      division under this chapter:
             1154          (a) to be delivered, mailed, or filed:
             1155          (i) in an electronic medium; or
             1156          (ii) by electronic transmission; or
             1157          (b) to be signed by photographic, electronic, or other means prescribed by rule, except that
             1158      a writing signed in an electronic medium shall be signed by digital signature in accordance with
             1159      Title 46, Chapter 3, Utah Digital Signature Act.
             1160          (2) The division may by rule provide for any writing required or permitted to be prepared,
             1161      delivered, or mailed by the division under this chapter to be prepared, delivered, or mailed:
             1162          (a) in an electronic medium; or
             1163          (b) by electronic transmission.
             1164          Section 27. Section 16-6a-201 is enacted to read:
             1165     
Part 2. Incorporation

             1166          16-6a-201. Incorporators.
             1167          (1) One or more persons may act as incorporators of a nonprofit corporation by delivering
             1168      to the division for filing articles of incorporation meeting the requirements of Section 16-6a-202 .
             1169          (2) An incorporator who is a natural person shall be 18 years of age or older.
             1170          Section 28. Section 16-6a-202 is enacted to read:
             1171          16-6a-202. Articles of incorporation.
             1172          (1) The articles of incorporation shall set forth:
             1173          (a) one or more purposes for which the nonprofit corporation is organized;
             1174          (b) a corporate name for the nonprofit corporation that satisfies the requirements of Section


             1175      16-6a-401 ;
             1176          (c) the street address of the nonprofit corporation's initial registered office;
             1177          (d) the name and signature of its initial registered agent at the office listed in Subsection
             1178      (1)(c), which registered agent shall meet the requirements of Section 16-6a-501 ;
             1179          (e) the name and address of each incorporator;
             1180          (f) whether or not the nonprofit corporation will have voting members;
             1181          (g) if the nonprofit corporation is to issue shares of stock evidencing membership in the
             1182      nonprofit corporation or interests in water or other property rights:
             1183          (i) the aggregate number of shares that the nonprofit corporation has authority to issue; and
             1184          (ii) if the shares are to be divided into classes:
             1185          (A) the number of shares of each class;
             1186          (B) the designation of each class; and
             1187          (C) a statement of the preferences, limitations, and relative rights of the shares of each
             1188      class; and
             1189          (h) provisions not inconsistent with law regarding the distribution of assets on dissolution.
             1190          (2) The articles of incorporation may but need not set forth:
             1191          (a) the names and addresses of the one or more individuals who are to serve as the initial
             1192      directors;
             1193          (b) provisions not inconsistent with law regarding:
             1194          (i) managing the business and regulating the affairs of the nonprofit corporation;
             1195          (ii) defining, limiting, and regulating the powers of:
             1196          (A) the nonprofit corporation;
             1197          (B) the board of directors of the nonprofit corporation; and
             1198          (C) the members of the nonprofit corporation or any class of members;
             1199          (iii) whether cumulative voting will be permitted; and
             1200          (iv) the characteristics, qualifications, rights, limitations, and obligations attaching to each
             1201      or any class of members; and

             1202          (c) any provision that under this chapter is permitted to be in the articles of incorporation
             1203      or required or permitted to be set forth in the bylaws, including elective provisions that in
             1204      accordance with this chapter shall be included in the articles of incorporation to be effective.

             1205          (3) (a) It is sufficient under Subsection (1)(a) to state, either alone or with other purposes,


             1206      that the purpose of the corporation is to engage in any lawful act for which a nonprofit corporation
             1207      may be organized under this chapter.

             1208          (b) If the articles of incorporation include the statement described in Subsection (3)(a) all
             1209      lawful acts and activities shall be within the purposes of the nonprofit corporation, except for
             1210      express limitations, if any.
             1211          (4) The articles of incorporation need not set forth any corporate power enumerated in this
             1212      chapter.

             1213          (5) The articles of incorporation shall:
             1214          (a) be signed by each incorporator; and
             1215          (b) meet the filing requirements of Section 16-6a-105 .
             1216          (6) The appointment of the registered agent shall be signed by the registered agent on:
             1217          (a) the articles of incorporation; or
             1218          (b) an acknowledgment attached to the articles of incorporation.
             1219          (7) (a) If this chapter conditions any matter upon the presence of a provision in the bylaws,
             1220      the condition is satisfied if the provision is present either:
             1221          (i) in the articles of incorporation; or
             1222          (ii) the bylaws.
             1223          (b) If this chapter conditions any matter upon the absence of a provision in the bylaws, the
             1224      condition is satisfied only if the provision is absent from both:
             1225          (i) the articles of incorporation; and
             1226          (ii) the bylaws.
             1227          Section 29. Section 16-6a-203 is enacted to read:
             1228          16-6a-203. Incorporation.
             1229          (1) A nonprofit corporation is incorporated, and its corporate existence begins:
             1230          (a) when the articles of incorporation are filed by the division; or
             1231          (b) if a delayed effective date is specified pursuant to Subsection 16-6a-108 (2), on the
             1232      delayed effective date, unless a certificate of withdrawal is filed prior to the delayed effective date.
             1233          (2) The filing of the articles of incorporation by the division is conclusive proof that all
             1234      conditions precedent to incorporation have been satisfied, except in a proceeding by the state to:
             1235          (a) cancel or revoke the incorporation; or
             1236          (b) involuntarily dissolve the nonprofit corporation.


             1237          Section 30. Section 16-6a-204 is enacted to read:
             1238          16-6a-204. Liability for preincorporation transactions.
             1239          All persons purporting to act as or on behalf of a nonprofit corporation, knowing there is
             1240      no incorporation under this chapter, are jointly and severally liable for all liabilities created while
             1241      so acting.
             1242          Section 31. Section 16-6a-205 is enacted to read:
             1243          16-6a-205. Organization of the corporation.
             1244          (1) After incorporation:
             1245          (a) if initial directors are named in the articles of incorporation, the initial directors may
             1246      hold an organizational meeting, at the call of a majority of the initial directors, to complete the
             1247      organization of the nonprofit corporation by:
             1248          (i) appointing officers;
             1249          (ii) adopting bylaws, if desired; and
             1250          (iii) carrying on any other business brought before the meeting; or
             1251          (b) if initial directors are not named in the articles of incorporation, until directors are
             1252      elected, the incorporators may hold an organizational meeting at the call of a majority of the
             1253      incorporators to do whatever is necessary and proper to complete the organization of the nonprofit
             1254      corporation, including:
             1255          (i) the election of directors and officers;
             1256          (ii) the appointment of members; and
             1257          (iii) the adoption and amendment of bylaws.
             1258          (2) Action required or permitted by this chapter to be taken by incorporators at an
             1259      organizational meeting may be taken without a meeting if the action taken is evidenced by one or
             1260      more written consents that:
             1261          (a) describe the action taken; and
             1262          (b) are signed by each incorporator.
             1263          (3) An organizational meeting may be held in or out of this state.
             1264          Section 32. Section 16-6a-206 is enacted to read:
             1265          16-6a-206. Bylaws.
             1266          (1) (a) The board of directors of a nonprofit corporation may adopt initial bylaws for the
             1267      nonprofit corporation.


             1268          (b) If no directors of the nonprofit corporation have been elected, the incorporators may
             1269      adopt initial bylaws for the nonprofit corporation.
             1270          (c) If neither the incorporators nor the board of directors have adopted initial bylaws, the
             1271      members, if any, may adopt initial bylaws.
             1272          (2) The bylaws of a nonprofit corporation may contain any provision for managing the
             1273      business and regulating the affairs of the nonprofit corporation that is not inconsistent with law or
             1274      the articles of incorporation, including management and regulation of the nonprofit corporation
             1275      in the event of an emergency.
             1276          Section 33. Section 16-6a-207 is enacted to read:
             1277          16-6a-207. Incorporation of co-operative association.
             1278          (1) (a) If a co-operative association meets the requirements of Subsection (1)(b), it may:
             1279          (i) be incorporated under this chapter; and
             1280          (ii) use the word "co-operative" as part of its corporate or business name.
             1281          (b) A co-operative association described in Subsection (1)(a):
             1282          (i) may not be:
             1283          (A) an association subject to the insurance or credit union laws of this state;
             1284          (B) a health insurance purchasing association as defined in Section 31A-34-103 ; or
             1285          (C) a health insurance purchasing alliance licensed under Title 31A, Chapter 34, Voluntary
             1286      Health Insurance Purchasing Alliance Act; and
             1287          (ii) shall state in its articles of incorporation that:
             1288          (A) a member may not have more than one vote regardless of the number or amount of
             1289      stock or membership capital owned by the member unless voting is based in whole or in part on
             1290      the volume of patronage of the member with the co-operative association; and
             1291          (B) savings in excess of dividends and additions to reserves and surplus shall be
             1292      distributed or allocated to members or patrons on the basis of patronage.
             1293          (2) (a) Any co-operative association incorporated in accordance with Subsection (1):
             1294          (i) shall have all the rights and be subject to the limitations provided in Section 3-1-11 ; and
             1295          (ii) may pay dividends on its stock, if it has stock, subject to the limitations of Section
             1296      3-1-11 .
             1297          (b) The articles of incorporation or the bylaws of a co-operative association incorporated
             1298      in accordance with Subsection (1) may provide for:


             1299          (i) the establishment and alteration of voting districts;
             1300          (ii) the election of delegates to represent:
             1301          (A) the districts described in Subsection (2)(b)(i); and
             1302          (B) the members of the districts described in Subsection (2)(b)(i);
             1303          (iii) the establishment and alteration of director districts; and
             1304          (iv) the election of directors to represent the districts described in Subsection (2)(b)(ii)
             1305      by:
             1306          (A) the members of the districts; or
             1307          (B) delegates elected by the members.
             1308          (3) (a) A corporation organized under Title 3, Chapter 1, Uniform Agricultural
             1309      Co-operative Association Act, may convert itself into a co-operative association subject to this
             1310      chapter by adopting appropriate amendments to its articles of incorporation by which:
             1311          (i) it elects to become subject to this chapter; and
             1312          (ii) makes changes in its articles of incorporation that are:
             1313          (A) required by this chapter; and
             1314          (B) any other changes permitted by this chapter.
             1315          (b) The amendments described in Subsection (3)(a) shall be adopted and filed in the
             1316      manner provided by the law then applicable to the co-operative nonprofit corporation.
             1317          (4) Notwithstanding Subsection (1), a health insurance purchasing association may not use
             1318      the word "co-operative" or "alliance" but may use the word "association."
             1319          (5) Except as otherwise provided in this Section 16-6a-207 , a co-operative nonprofit
             1320      corporation shall be subject to this chapter.
             1321          Section 34. Section 16-6a-301 is enacted to read:
             1322     
Part 3. Purposes And Powers

             1323          16-6a-301. Purposes.
             1324          (1) Every nonprofit corporation incorporated under this chapter that in its articles of
             1325      incorporation has a statement meeting the requirements of Subsection 16-6a-202 (3)(a) may engage
             1326      in any lawful activity except for express limitations set forth in the articles of incorporation.
             1327          (2) (a) A nonprofit corporation engaging in an activity that is subject to regulation under
             1328      another statute of this state may incorporate under this chapter only if permitted by, and subject
             1329      to all limitations of, the other statute.


             1330          (b) Without limiting Subsection (2)(a) and subject to Subsection (2)(c), an organization
             1331      may not be organized under this chapter if the organization is subject to the:
             1332          (i) insurance laws of this state; or
             1333          (ii) laws governing depository institutions as defined in Section 7-1-103 .
             1334          (c) Notwithstanding Subsection (2)(b), the following may be organized under this
             1335      chapter:
             1336          (i) a health insurance purchasing association as defined in Section 31A-34-103 ; and
             1337          (ii) a health insurance purchasing alliance licensed under Title 31A, Chapter 34, Voluntary
             1338      Health Insurance Purchasing Alliance Act.
             1339          Section 35. Section 16-6a-302 is enacted to read:
             1340          16-6a-302. General powers.
             1341          Unless its articles of incorporation provide otherwise, and except as restricted by the Utah
             1342      Constitution, every nonprofit corporation has:
             1343          (1) perpetual duration and succession in its corporate name; and
             1344          (2) the same powers as an individual to do all things necessary or convenient to carry out
             1345      its permitted activities and affairs, including without limitation the power to:
             1346          (a) sue and be sued, complain and defend in its corporate name;
             1347          (b) (i) have a corporate seal, that may be altered at will; and
             1348          (ii) use the corporate seal, or a facsimile of the corporate seal, by impressing or affixing
             1349      it or in any other manner reproducing it;
             1350          (c) make and amend bylaws, not inconsistent with its articles of incorporation or with the
             1351      laws of this state, for managing and regulating the affairs of the nonprofit corporation;
             1352          (d) purchase, receive, lease, or otherwise acquire, and own, hold, improve, use, and
             1353      otherwise deal with, real or personal property, or any legal or equitable interest in property,
             1354      wherever located;
             1355          (e) sell, convey, mortgage, pledge, lease, exchange, and otherwise dispose of all or any part
             1356      of its property and assets;
             1357          (f) purchase, receive, subscribe for, or otherwise acquire, own, hold, vote, use, sell,
             1358      mortgage, lend, pledge, or otherwise dispose of, and deal in and with shares or other interests in,
             1359      or obligations of, any other entity;
             1360          (g) make contracts and guarantees, incur liabilities, borrow money, issue its notes, bonds,


             1361      and other obligations and secure any of its obligations by mortgage or pledge of any of its property,
             1362      assets, franchises, or income;
             1363          (h) lend money, invest and reinvest its funds, and receive and hold real and personal
             1364      property as security for repayment, except that a nonprofit corporation may not lend money to or
             1365      guarantee the obligation of a director or officer of the nonprofit corporation;
             1366          (i) be an agent, associate, fiduciary, manager, member, partner, promoter, or trustee of, or
             1367      to hold any similar position with, any entity;
             1368          (j) conduct its business, locate offices, and exercise the powers granted by this chapter
             1369      within or without this state;
             1370          (k) (i) elect directors and appoint officers, employees, and agents of the nonprofit
             1371      corporation;
             1372          (ii) define the duties of the directors, officers, employees, and agents; and
             1373          (iii) fix the compensation of the directors, officers, employees, and agents;
             1374          (l) pay compensation in a reasonable amount to its directors, officers, or members for
             1375      services rendered, including:
             1376          (i) payment of advances for expenses reasonably expected to be incurred; and
             1377          (ii) expenses relating to relocation of directors, officers, or employees of a nonprofit
             1378      corporation;
             1379          (m) pay pensions and establish pension plans, pension trusts, profit sharing plans, share
             1380      bonus plans, share option plans, and benefit or incentive plans for any or all of its current or former
             1381      directors, officers, employees, and agents;
             1382          (n) make contributions to or for any person for:
             1383          (i) the public welfare;
             1384          (ii) charitable, religious, scientific, or educational purposes; or
             1385          (iii) for other purposes that further the corporate interest;
             1386          (o) pursue any lawful activity that will aid governmental policy;
             1387          (p) make payments or do any other act, not inconsistent with law, that furthers the business
             1388      and affairs of the nonprofit corporation;
             1389          (q) establish rules governing the conduct of the business and affairs of the nonprofit
             1390      corporation in the event of an emergency;
             1391          (r) impose dues, assessments, admission fees, and transfer fees upon its members;


             1392          (s) (i) establish conditions for admission of members;
             1393          (ii) admit members; and
             1394          (iii) issue or transfer membership;
             1395          (t) carry on a business;
             1396          (u) indemnify current or former directors, officers, employees, fiduciaries, or agents as
             1397      provided in this chapter;
             1398          (v) limit the liability of its directors as provided in Subsection 16-6a-823 (1);
             1399          (w) cease its corporate activities and dissolve; and
             1400          (x) issue certificates or stock evidencing:
             1401          (i) membership in the nonprofit corporation; or
             1402          (ii) interests in water or other property rights.
             1403          Section 36. Section 16-6a-303 is enacted to read:
             1404          16-6a-303. Emergency powers.
             1405          (1) In anticipation of or during an emergency defined in Subsection (4), the board of
             1406      directors may:
             1407          (a) modify lines of succession to accommodate the incapacity of any director, officer,
             1408      employee, or agent;
             1409          (b) adopt bylaws to be effective only in an emergency; and
             1410          (c) (i) relocate the principal office;
             1411          (ii) designate an alternative principal office or regional office; or
             1412          (iii) authorize officers to relocate or designate an alternative principal office or regional
             1413      office.
             1414          (2) During an emergency as defined in Subsection (4), unless emergency bylaws provide
             1415      otherwise:
             1416          (a) notice of a meeting of the board of directors:
             1417          (i) need be given only to those directors whom it is practicable to reach; and
             1418          (ii) may be given in any practicable manner, including by publication or radio; and
             1419          (b) the officers of the nonprofit corporation present at a meeting of the board of directors
             1420      may be considered to be directors for the meeting, in order of rank and within the same rank in
             1421      order of seniority, as necessary to achieve a quorum.
             1422          (3) Corporate action taken in good faith during an emergency under this section to further


             1423      the ordinary business affairs of the nonprofit corporation:
             1424          (a) binds the nonprofit corporation; and
             1425          (b) may not be the basis for the imposition of liability on any director, officer, employee,
             1426      or agent of the nonprofit corporation on the ground that the action was not an authorized corporate
             1427      action.
             1428          (4) An emergency exists for purposes of this section if a quorum of the directors cannot
             1429      readily be obtained because of a catastrophic event.
             1430          Section 37. Section 16-6a-304 is enacted to read:
             1431          16-6a-304. Ultra vires.
             1432          (1) Except as provided in Subsection (2), the validity of corporate action may not be
             1433      challenged on the ground that the nonprofit corporation lacks or lacked power to act.
             1434          (2) A nonprofit corporation's power to act may be challenged:
             1435          (a) in a proceeding against the nonprofit corporation to enjoin the act brought by:
             1436          (i) a director; or
             1437          (ii) one or more voting members in a derivative proceeding;
             1438          (b) in a proceeding by or in the right of the nonprofit corporation, whether directly,
             1439      derivatively, or through a receiver, trustee, or other legal representative, against an incumbent or
             1440      former director, officer, employee, or agent of the nonprofit corporation; or
             1441          (c) in a proceeding by the attorney general under Section 16-6a-1414 .
             1442          (3) In a proceeding under Subsection (2)(a) to enjoin an unauthorized corporate act, the
             1443      court may:
             1444          (a) enjoin or set aside the act, if:
             1445          (i) it would be equitable to do so; and
             1446          (ii) all affected persons are parties to the proceeding; and
             1447          (b) award damages for loss, including anticipated profits, suffered by the nonprofit
             1448      corporation or another party because of an injunction issued under this section.
             1449          Section 38. Section 16-6a-401 is enacted to read:
             1450     
Part 4. Name

             1451          16-6a-401. Corporate name.
             1452          (1) The corporate name of a nonprofit corporation:
             1453          (a) may, but need not contain:


             1454          (i) the word "corporation," "incorporated," or "company"; or
             1455          (ii) an abbreviation of "corporation," "incorporated," or "company";
             1456          (b) may not contain any word or phrase that indicates or implies that it is organized for any
             1457      purpose other than one or more of the purposes contained in Section 16-6a-301 and its articles of
             1458      incorporation;
             1459          (c) except as authorized by the division under Subsection (2), shall be distinguishable, as
             1460      defined in Section 16-10a-401 , from:
             1461          (i) the name of any domestic corporation incorporated in this state;
             1462          (ii) the name of any foreign corporation authorized to conduct affairs in this state;
             1463          (iii) the name of any domestic nonprofit corporation incorporated in this state;
             1464          (iv) the name of any foreign nonprofit corporation authorized to conduct affairs in this
             1465      state;
             1466          (v) the name of any domestic limited liability company formed in this state;
             1467          (vi) the name of any foreign limited liability company authorized to conduct affairs in this
             1468      state;
             1469          (vii) the name of any limited partnership formed or authorized to conduct affairs in this
             1470      state;
             1471          (viii) any name that is reserved under Section 16-6a-402 or 16-10a-402 ;
             1472          (ix) the name of any entity that has registered its name under Section 42-2-5 ;
             1473          (x) the name of any trademark or service mark registered by the division; or
             1474          (xi) any assumed name filed under Section 42-2-5 ;
             1475          (d) shall be, for purposes of recordation, either translated into English or transliterated into
             1476      letters of the English alphabet if it is not in English;
             1477          (e) without the written consent of the United States Olympic Committee, may not contain
             1478      the words:
             1479          (i) "Olympic";
             1480          (ii) "Olympiad"; or
             1481          (iii) "Citius Altius Fortius"; and
             1482          (f) without the written consent of the State Board of Regents issued in accordance with
             1483      Section 53B-5-114 , may not contain the words:
             1484          (i) "university";


             1485          (ii) "college"; or
             1486          (iii) "institute."
             1487          (2) The division may authorize the use of the name applied for if:
             1488          (a) the name is distinguishable from one or more of the names and trademarks described
             1489      in Subsection (1)(c) that are on the division's records; or
             1490          (b) if the applicant delivers to the division a certified copy of the final judgment of a court
             1491      of competent jurisdiction establishing the applicant's right to use the name applied for in this state
             1492      registered or reserved with the division pursuant to the laws of this state.
             1493          (3) A corporation may use the name of another domestic or foreign corporation that is used
             1494      in this state if:
             1495          (a) the other corporation is incorporated or authorized to conduct affairs in this state; and
             1496          (b) the proposed user corporation:
             1497          (i) has merged with the other corporation;
             1498          (ii) has been formed by reorganization of the other corporation; or
             1499          (iii) has acquired all or substantially all of the assets, including the corporate name, of the
             1500      other corporation.
             1501          (4) (a) A nonprofit corporation may apply to the division for authorization to file its
             1502      articles of incorporation under, or to register or reserve, a name that is not distinguishable upon
             1503      the division's records from one or more of the names described in Subsection (1).
             1504          (b) The division shall approve the application filed under Subsection (4)(a) if:
             1505          (i) the other person whose name is not distinguishable from the name under which the
             1506      applicant desires to file, or which the applicant desires to register or reserve:
             1507          (A) consents to the filing, registration, or reservation in writing; and
             1508          (B) submits an undertaking in a form satisfactory to the division to change its name to a
             1509      name that is distinguishable from the name of the applicant; or
             1510          (ii) the applicant delivers to the division a certified copy of the final judgment of a court
             1511      of competent jurisdiction establishing the applicant's right to make the requested filing in this state
             1512      under the name applied for.
             1513          (5) Only names of corporations may contain the:
             1514          (a) words "corporation," or "incorporated"; or
             1515          (b) abbreviation "corp." or "inc."


             1516          (6) The division may not issue a certificate of incorporation to any association violating
             1517      the provisions of this section.
             1518          Section 39. Section 16-6a-402 is enacted to read:
             1519          16-6a-402. Reserved name.
             1520          (1) (a) Any person may apply for the reservation of the exclusive use of a corporate name
             1521      by delivering an application for reservation of name to the division for filing, setting forth:
             1522          (i) the name and address of the applicant; and
             1523          (ii) the name proposed to be reserved.
             1524          (b) (i) If the division finds that the name applied for would be available for corporate use,
             1525      the division shall reserve the name for the applicant's exclusive use for 120 days from the day the
             1526      division receives the application under Subsection (1)(a).
             1527          (ii) A reservation may be renewed.
             1528          (2) The owner of a reserved corporate name may transfer the reservation to any other
             1529      person by delivery to the division for filing of a notice of the transfer that has been executed by the
             1530      owner and states:
             1531          (a) the reserved name;
             1532          (b) the name of the owner; and
             1533          (c) the name and address of the transferee.
             1534          (3) (a) The corporate name set forth in a document described in Subsection (3)(b) is
             1535      reserved until the document:
             1536          (i) becomes effective pursuant to Subsection 16-6a-108 (2); or
             1537          (ii) is withdrawn under Subsection 16-6a-108 (3).
             1538          (b) Subsection (3)(a) applies to a document that:
             1539          (i) is one of the following:
             1540          (A) articles of incorporation;
             1541          (B) articles of amendment to articles of incorporation;
             1542          (C) restated articles of incorporation; or
             1543          (D) articles of merger;
             1544          (ii) specifies a delayed effective date pursuant to Subsection 16-6a-108 (2);
             1545          (iii) sets forth a new corporate name; and
             1546          (iv) is filed by the division.


             1547          Section 40. Section 16-6a-403 is enacted to read:
             1548          16-6a-403. Corporate name -- Limited rights.
             1549          The authorization granted by the division to file articles of incorporation under a corporate
             1550      name or to reserve a name does not:
             1551          (1) abrogate or limit the law governing unfair competition or unfair trade practices;
             1552          (2) derogate from the common law the principles of equity or the statutes of this state or
             1553      of the United States with respect to the right to acquire and protect names and trademarks; or
             1554          (3) create an exclusive right in geographic or generic terms contained within a name.
             1555          Section 41. Section 16-6a-501 is enacted to read:
             1556     
Part 5. Office and Agent

             1557          16-6a-501. Registered office and registered agent.
             1558          (1) A nonprofit corporation shall continuously maintain in this state:
             1559          (a) a registered office; and
             1560          (b) a registered agent.
             1561          (2) The registered agent required under Subsection (1) shall be:
             1562          (a) an individual:
             1563          (i) who resides in this state; and
             1564          (ii) whose business office is identical with the registered office;
             1565          (b) a domestic corporation or domestic nonprofit corporation whose business office is
             1566      identical with the registered office;
             1567          (c) a foreign corporation or foreign nonprofit corporation:
             1568          (i) authorized to conduct affairs in this state; and
             1569          (ii) whose business office is identical with the registered office; or
             1570          (iii) a domestic limited liability company or foreign limited liability company:
             1571          (A) authorized to conduct affairs in this state; and
             1572          (B) whose business office is identical with the registered office.
             1573          (3) A corporation may not serve as its own registered agent.
             1574          Section 42. Section 16-6a-502 is enacted to read:
             1575          16-6a-502. Change of registered office or registered agent.
             1576          (1) (a) A nonprofit corporation may change its registered office or registered agent by
             1577      delivering to the division for filing a statement of change that sets forth:


             1578          (i) the name of the nonprofit corporation;
             1579          (ii) the street address of its current registered office;
             1580          (iii) if the registered office is to be changed, the street address of the new registered office;
             1581          (iv) the name of its current registered agent;
             1582          (v) if the registered agent is to be changed:
             1583          (A) the name of the new registered agent; and
             1584          (B) the new registered agent's signed written consent to the appointment; and
             1585          (vi) that, after the change or changes are made, the street addresses of its registered office
             1586      and the business office of its registered agent will be identical.
             1587          (b) Notwithstanding Subsection (1)(a)(v), the new registered agent's signed written consent
             1588      to the appointment may be:
             1589          (i) on the statement of change; or
             1590          (ii) in a document accompanying the statement of change.
             1591          (2) If the street address of a registered agent's business office is changed, the street address
             1592      of the registered office of any nonprofit corporation for which the person is the registered agent
             1593      may be changed by:
             1594          (a) giving written notice to the nonprofit corporation of the change; and
             1595          (b) delivering to the division for filing a statement of change that:
             1596          (i) complies with the requirements of Subsection (1);
             1597          (ii) recites that the nonprofit corporation has been notified of the change, as provided in
             1598      Section 16-6a-103 ; and
             1599          (iii) is signed by the registered agent.
             1600          Section 43. Section 16-6a-503 is enacted to read:
             1601          16-6a-503. Resignation of registered agent.
             1602          (1) (a) A registered agent of a nonprofit corporation may resign the agency appointment
             1603      by delivering to the division for filing a statement of resignation pursuant to this section.
             1604          (b) The statement of resignation required by Subsection (1)(a) shall be:
             1605          (i) signed by the resigning registered agent; and
             1606          (ii) accompanied by two exact or conformed copies of the statement of resignation.
             1607          (c) The statement of resignation may include a statement that the registered office is also
             1608      discontinued.


             1609          (d) The statement of resignation shall include a declaration that notice of the resignation
             1610      has been given to the nonprofit corporation at the principal office shown on the most recent annual
             1611      report of the nonprofit corporation on file with the division.
             1612          (2) After filing the statement of resignation required by Subsection (1), the division shall
             1613      mail:
             1614          (a) one copy of the statement of resignation to the registered office of the corporation; and
             1615          (b) one copy of the statement of resignation to the nonprofit corporation at the principal
             1616      office if known by the division.
             1617          (3) Thirty-one days after the date on which the statement of resignation is filed:
             1618          (a) the agency appointment is terminated; and
             1619          (b) the registered office is discontinued, if so provided.
             1620          Section 44. Section 16-6a-504 is enacted to read:
             1621          16-6a-504. Service on corporation.
             1622          (1) A nonprofit corporation's registered agent is the nonprofit corporation's agent for
             1623      service of process, notice, or demand required or permitted by law to be served on the nonprofit
             1624      corporation.
             1625          (2) (a) If a nonprofit corporation has no registered agent, or the agent cannot with
             1626      reasonable diligence be served, the nonprofit corporation may be served by registered or certified
             1627      mail, return receipt requested, addressed to the nonprofit corporation at its principal office, if
             1628      known by the division.
             1629          (b) Service is perfected under this Subsection (2) at the earliest of:
             1630          (a) the date the nonprofit corporation receives the process, notice, or demand;
             1631          (b) the date shown on the return receipt, if signed on behalf of the nonprofit corporation;
             1632      or
             1633          (c) five days after mailing.
             1634          (3) This section does not prescribe the only means, or necessarily the required means, of
             1635      serving a nonprofit corporation.
             1636          Section 45. Section 16-6a-601 is enacted to read:
             1637     
Part 6. Members

             1638          16-6a-601. No requirement of members.
             1639          A nonprofit corporation is not required to have members.


             1640          Section 46. Section 16-6a-602 is enacted to read:
             1641          16-6a-602. Number and classes.
             1642          (1) A nonprofit corporation may have:
             1643          (a) one or more classes of voting or nonvoting members; and
             1644          (b) one or more members in each class described in Subsection (1)(a).
             1645          (2) The bylaws may designate:
             1646          (a) the class or classes of members; and
             1647          (b) the qualifications and rights of the members of each class of members including the
             1648      matters or items for which voting members may vote.
             1649          Section 47. Section 16-6a-603 is enacted to read:
             1650          16-6a-603. Admission.
             1651          (1) The bylaws may establish criteria or procedures for admission of members.
             1652          (2) A person may not be admitted as a member without the person's consent.
             1653          (3) A nonprofit corporation may issue certificates evidencing membership in the nonprofit
             1654      corporation.
             1655          Section 48. Section 16-6a-604 is enacted to read:
             1656          16-6a-604. Consideration.
             1657          Unless otherwise provided by the bylaws, a nonprofit corporation may admit members:
             1658          (1) for no consideration; or
             1659          (2) for such consideration as is determined by the board of directors.
             1660          Section 49. Section 16-6a-605 is enacted to read:
             1661          16-6a-605. Differences in rights and obligations of members.
             1662          Unless otherwise provided by this chapter or the bylaws:
             1663          (1) all voting members shall have the same rights and obligations with respect to voting
             1664      and all other matters that this chapter specifically reserves to voting members; and
             1665          (2) with respect to matters not reserved under Subsection (1), all members, including
             1666      voting members, shall have the same rights and obligations.
             1667          Section 50. Section 16-6a-606 is enacted to read:
             1668          16-6a-606. Transfers.
             1669          (1) Unless otherwise provided by the bylaws, a member of a nonprofit corporation may
             1670      not transfer:


             1671          (a) a membership; or
             1672          (b) any right arising from a membership.
             1673          (2) Where transfer rights have been provided, a restriction on transfer rights may not be
             1674      binding with respect to a member holding a membership issued prior to the adoption of the
             1675      restriction, unless the restriction is approved by the affected member.
             1676          Section 51. Section 16-6a-607 is enacted to read:
             1677          16-6a-607. Creditor's action against member.
             1678          A proceeding may not be brought by a creditor to reach the liability, if any, of a member
             1679      to the nonprofit corporation unless:
             1680          (1) (a) final judgment has been rendered in favor of the creditor against the nonprofit
             1681      corporation; and
             1682          (b) execution has been returned unsatisfied in whole or in part; or
             1683          (2) a proceeding described in Subsection (1) would be useless.
             1684          Section 52. Section 16-6a-608 is enacted to read:
             1685          16-6a-608. Resignation.
             1686          (1) Unless otherwise provided by the bylaws, a member may resign at any time.
             1687          (2) The resignation of a member does not relieve the member from any obligation or
             1688      commitment the member may have to the nonprofit corporation incurred or made prior to
             1689      resignation.
             1690          Section 53. Section 16-6a-609 is enacted to read:
             1691          16-6a-609. Termination, expulsion, or suspension.
             1692          (1) Unless otherwise provided by the bylaws, except pursuant to a procedure that is fair
             1693      and reasonable:
             1694          (a) a member of a nonprofit corporation may not be expelled or suspended; and
             1695          (b) membership in a nonprofit corporation may not be terminated or suspended.
             1696          (2) For purposes of this section, a procedure is fair and reasonable when either:
             1697          (a) the bylaws or a written policy of the board of directors set forth a procedure that
             1698      provides:
             1699          (i) not less than 15 days prior written notice of:
             1700          (A) the expulsion, suspension, or termination; and
             1701          (B) the reasons for the expulsion, suspension, or termination; and


             1702          (ii) an opportunity for the member to be heard:
             1703          (A) orally or in writing;
             1704          (B) not less than five days before the effective date of the expulsion, suspension, or
             1705      termination; and
             1706          (C) by one or more persons authorized to decide that the proposed expulsion, termination,
             1707      or suspension not take place; or
             1708          (b) it is fair and reasonable taking into consideration all of the relevant facts and
             1709      circumstances.
             1710          (3) For purposes of this section, any written notice given by mail shall be given by
             1711      first-class or certified mail sent to the last address of the member shown on the nonprofit
             1712      corporation's records.
             1713          (4) Unless otherwise provided by the bylaws, any proceeding challenging an expulsion,
             1714      suspension, or termination, including a proceeding in which defective notice is alleged, shall be
             1715      commenced within one year after the effective date of the expulsion, suspension, or termination.
             1716          (5) Unless otherwise provided by the bylaws, a member who has been expelled or
             1717      suspended may be liable to the nonprofit corporation for dues, assessments, or fees as a result of
             1718      an obligation incurred or commitment made prior to the effective date of the expulsion or
             1719      suspension.
             1720          Section 54. Section 16-6a-610 is enacted to read:
             1721          16-6a-610. Purchase of memberships.
             1722          (1) Unless otherwise provided by the bylaws, a nonprofit corporation may not purchase
             1723      the membership of a member:
             1724          (a) who resigns; or
             1725          (b) whose membership is terminated.
             1726          (2) (a) If so authorized, a nonprofit corporation may purchase the membership of a member
             1727      who resigns or whose membership is terminated for the amount and pursuant to the conditions set
             1728      forth in or authorized by:
             1729          (i) its bylaws; or
             1730          (ii) agreement with the affected member.
             1731          (b) A payment permitted under Subsection (2)(a) may not violate:
             1732          (i) Section 16-6a-1301 ; or


             1733          (ii) any other provision of this chapter.
             1734          Section 55. Section 16-6a-611 is enacted to read:
             1735          16-6a-611. No property right.
             1736          A member does not have a vested property right resulting from any provision in the articles
             1737      of incorporation or the bylaws, including any provision relating to management, control, purpose,
             1738      or duration of the nonprofit corporation.    
             1739          Section 56. Section 16-6a-612 is enacted to read:
             1740          16-6a-612. Derivative suits.
             1741          (1) Without affecting the right of a member or director to bring a proceeding against a
             1742      nonprofit corporation or its directors or officers, a proceeding may be brought in the right of a
             1743      nonprofit corporation to procure a judgment in its favor by:
             1744          (a) a voting member; or
             1745          (b) a director.
             1746          (2) In a proceeding described in Subsection (1), each complainant shall be a voting
             1747      member or director at the time of bringing the proceeding.
             1748          (3) (a) A complaint in a proceeding brought in the right of a nonprofit corporation shall
             1749      be verified and allege with particularity:
             1750          (i) the demand made, if any, to obtain action by the directors; and
             1751          (ii) (A) why the complainant could not obtain the action; or
             1752          (B) why the complainant did not make the demand.
             1753          (b) If a demand for action was made and the nonprofit corporation's investigation of the
             1754      demand is in progress when the proceeding is filed, the court may stay the suit until the
             1755      investigation is completed.
             1756          (4) (a) (i) In any action instituted in the right of a nonprofit corporation by one or more
             1757      voting members, the court having jurisdiction over the matter may, at any time before final
             1758      judgment, require the plaintiff to give security for the costs and reasonable expenses that may be:
             1759          (A) directly attributable to and incurred by the nonprofit corporation in the defense of the
             1760      action; or
             1761          (B) incurred by other parties named as defendant for which the nonprofit corporation may
             1762      become legally liable.
             1763          (ii) Notwithstanding Subsection (4)(a)(i) the security for the costs and reasonable expenses


             1764      may not include fees of attorneys.
             1765          (b) The amount of the security permitted under this Subsection (4) may from time to time
             1766      be increased or decreased, in the discretion of the court, upon showing that the security provided
             1767      has or may become inadequate or excessive.
             1768          (c) If the court finds that the action was commenced without reasonable cause, the
             1769      nonprofit corporation shall have recourse to the security permitted under this Subsection (4) in the
             1770      amount the court shall determine upon the termination of the action.
             1771          (5) A procedure pursuant to this section shall comply with the applicable rules set forth
             1772      in the Utah Rules of Civil Procedure, as amended from time to time.
             1773          (6) An action may not be commenced in this state by a member of a foreign nonprofit
             1774      corporation in the right of a foreign nonprofit corporation unless the action is permitted by the laws
             1775      of the state under which the foreign nonprofit corporation is incorporated.
             1776          Section 57. Section 16-6a-613 is enacted to read:
             1777          16-6a-613. Delegates.
             1778          (1) A nonprofit corporation may provide in its bylaws for delegates having some or all of
             1779      the authority of members.
             1780          (2) The bylaws may set forth provisions relating to:
             1781          (a) the characteristics, qualifications, rights, limitations, and obligations of delegates,
             1782      including their selection and removal;
             1783          (b) calling, noticing, holding, and conducting meetings of delegates; and
             1784          (c) carrying on corporate activities during and between meetings of delegates.
             1785          Section 58. Section 16-6a-701 is enacted to read:
             1786     
Part 7. Member Meetings and Voting

             1787          16-6a-701. Annual and regular meetings.
             1788          (1) Unless the bylaws eliminate the requirement for holding an annual meeting, a nonprofit
             1789      corporation that has voting members shall hold a meeting of the voting members annually:
             1790          (a) at a time and date stated in or fixed in accordance with the bylaws; or
             1791          (b) if a time and date is not stated in or fixed in accordance with the bylaws, at a time and
             1792      date stated in or fixed in accordance with a resolution of the board of directors.
             1793          (2) A nonprofit corporation with members may hold regular membership meetings at:
             1794          (a) a time and date stated in or fixed in accordance with the bylaws; or


             1795          (b) if a time and date is not stated in or fixed in accordance with the bylaws, at a time and
             1796      date stated in or fixed in accordance with a resolution of the board of directors.
             1797          (3) (a) Annual and regular membership meetings may be held in or out of this state:
             1798          (i) at the place stated in or fixed in accordance with the bylaws; or
             1799          (ii) if no place is stated in or fixed in accordance with the bylaws, at a place stated in or
             1800      fixed in accordance with a resolution of the board of directors.
             1801          (b) If no place is stated or fixed in accordance with Subsection (3)(a), annual and regular
             1802      meetings shall be held at the nonprofit corporation's principal office.
             1803          (4) The failure to hold an annual or regular meeting at the time and date determined
             1804      pursuant to Subsection (1) does not:
             1805          (a) affect the validity of any corporate action; or
             1806          (b) work a forfeiture or dissolution of the nonprofit corporation.
             1807          Section 59. Section 16-6a-702 is enacted to read:
             1808          16-6a-702. Special meetings.
             1809          (1) A nonprofit corporation shall hold a special meeting of its members:
             1810          (a) on call of:
             1811          (i) its board of directors; or
             1812          (ii) the person or persons authorized by the bylaws or resolution of the board of directors
             1813      to call a special meeting; or
             1814          (b) unless otherwise provided by the bylaws, if the nonprofit corporation receives one or
             1815      more written demands for the meeting, that:
             1816          (i) state the purpose or purposes for which the meeting is to be held; and
             1817          (ii) are signed and dated by members holding at least 10% of all the votes entitled pursuant
             1818      to the bylaws to be cast on any issue proposed to be considered at the meeting.
             1819          (2) If not otherwise fixed under Section 16-6a-703 or 16-6a-706 , the record date for
             1820      determining the members entitled to demand a special meeting pursuant to Subsection (1)(b) is the
             1821      later of the date of:
             1822          (a) the earliest of any of the demands pursuant to which the meeting is called; or
             1823          (b) the date that is 60 days before the date the first of the demands is received by the
             1824      nonprofit corporation.
             1825          (3) If a notice for a special meeting demanded pursuant to Subsection (1)(b) is not given


             1826      pursuant to Section 16-6a-704 within 30 days after the date the written demand is delivered to a
             1827      corporate officer, regardless of the requirements of Subsection (4), a person signing the demand
             1828      may:
             1829          (a) set the time and place of the meeting; and
             1830          (b) give notice pursuant to Section 16-6a-704 .
             1831          (4) (a) A special meeting of the members may be held in or out of this state:
             1832          (i) at the place stated in or fixed in accordance with the bylaws; or
             1833          (ii) if a place is not stated in or fixed in accordance with the bylaws, at a place stated in
             1834      or fixed in accordance with a resolution of the board of directors.
             1835          (b) If no place is stated or fixed in accordance with Subsections (3)(a) or (4)(a), a special
             1836      meeting of the members shall be held at the nonprofit corporation's principal office.
             1837          (5) Unless otherwise provided by the bylaws, only business within the purposes described
             1838      in the notice of the meeting required by Subsection 16-6a-704 (3) may be conducted at a special
             1839      meeting of the members.
             1840          Section 60. Section 16-6a-703 is enacted to read:
             1841          16-6a-703. Court-ordered meeting.
             1842          (1) (a) Upon an application described in Subsection (1)(b) the holding of a meeting of the
             1843      members may be summarily ordered by:
             1844          (i) the district court of the county in this state where the nonprofit corporation's principal
             1845      office is located; or
             1846          (ii) if the nonprofit corporation has no principal office in this state:
             1847          (A) by the district court of the county in which its registered office is located; or
             1848          (B) if the nonprofit corporation has no registered office, by the district court in and for Salt
             1849      Lake County.
             1850          (b) Subsection (1)(a) applies to an application by:
             1851          (i) any voting member entitled to participate in an annual meeting if an annual meeting
             1852      was required to be held and was not held within 15 months after:
             1853          (A) the corporation's last annual meeting; or
             1854          (B) if there has been no annual meeting, the date of incorporation; or
             1855          (ii) any person who participated in a call of or demand for a special meeting effective
             1856      under Subsection 16-6a-702 (1), if:


             1857          (A) notice of the special meeting was not given within 30 days after:
             1858          (I) the date of the call; or
             1859          (II) the date the last of the demands necessary to require the calling of the meeting was
             1860      received by the nonprofit corporation pursuant to Subsection 16-6a-702 (1)(b); or
             1861          (B) the special meeting was not held in accordance with the notice.
             1862          (2) A court that orders a meeting under Subsection (1) may:
             1863          (a) fix the time and place of the meeting;
             1864          (b) determine the members entitled to participate in the meeting;
             1865          (c) specify a record date for determining members entitled to notice of and to vote at the
             1866      meeting;
             1867          (d) prescribe the form and content of the notice of the meeting;
             1868          (e) (i) fix the quorum required for specific matters to be considered at the meeting; or
             1869          (ii) direct that the votes represented at the meeting constitute a quorum for action on the
             1870      specific matters to be considered at the meeting; and
             1871          (f) enter other orders necessary or appropriate to accomplish the holding of the meeting.
             1872          Section 61. Section 16-6a-704 is enacted to read:
             1873          16-6a-704. Notice of meeting.
             1874          (1) A nonprofit corporation shall give to each member entitled to vote at the meeting
             1875      notice consistent with its bylaws of meetings of members in a fair and reasonable manner.
             1876          (2) Any notice that conforms to the requirements of Subsection (3) is fair and reasonable,
             1877      but other means of giving notice may also be fair and reasonable when all the circumstances are
             1878      considered.
             1879          (3) Notice is fair and reasonable if:
             1880          (a) the nonprofit corporation notifies its members of the place, date, and time of each
             1881      annual, regular, and special meeting of members:
             1882          (i) no fewer than ten days before the meeting;
             1883          (ii) if notice is mailed by other than first class or registered mail, no fewer than 30 days,
             1884      nor more than 60 days before the meeting date; and
             1885          (iii) if notice is given by newspaper as provided in Subsection 16-6a-103 (2), by publication
             1886      three separate times with:
             1887          (A) the first of the publications no more than 60 days before the meeting date; and


             1888          (B) the last of the publications no fewer than ten days before the meeting date;
             1889          (b) the notice of an annual or regular meeting includes a description of any matter or
             1890      matters that:
             1891          (i) must be approved by the members; or
             1892          (ii) for which the members' approval is sought under Sections 16-6a-825 , 16-6a-910 ,
             1893      16-6a-1003 , 16-6a-1010 , 16-6a-1102 , 16-6a-1202 , and 16-6a-1402 ; and
             1894          (c) unless otherwise provided by this chapter or the bylaws, the notice of a special meeting
             1895      includes a description of the purpose or purposes for which the meeting is called.
             1896          (4) (a) Unless otherwise provided by the bylaws, if an annual, regular, or special meeting
             1897      of members is adjourned to a different date, time, or place, notice need not be given of the new
             1898      date, time, or place, if the new date, time, or place is announced at the meeting before adjournment.
             1899          (b) Notwithstanding Subsection (4)(a), if a new record date for the adjourned meeting is
             1900      or shall be fixed under Section 16-6a-617 , notice of the adjourned meeting shall be given under
             1901      this section to the members of record as of the new record date.
             1902          (5) When giving notice of an annual, regular, or special meeting of members, a nonprofit
             1903      corporation shall give notice of a matter a member intends to raise at the meeting if:
             1904          (a) requested in writing to do so by a person entitled to call a special meeting; and
             1905          (b) the request is received by the secretary or president of the nonprofit corporation at least
             1906      ten days before the nonprofit corporation gives notice of the meeting.
             1907          Section 62. Section 16-6a-705 is enacted to read:
             1908          16-6a-705. Waiver of notice.
             1909          (1) (a) A member may waive any notice required by this chapter or by the bylaws, whether
             1910      before or after the date or time stated in the notice as the date or time when any action will occur
             1911      or has occurred.
             1912          (b) A waiver described in Subsection (1) shall be:
             1913          (i) in writing;
             1914          (ii) signed by the member entitled to the notice; and
             1915          (iii) delivered to the nonprofit corporation for:
             1916          (A) inclusion in the minutes; or
             1917          (B) filing with the corporate records.
             1918          (c) The delivery and filing required under Subsection (1)(b) may not be conditions of the


             1919      effectiveness of the waiver.
             1920          (2) A member's attendance at a meeting:
             1921          (a) waives objection to lack of notice or defective notice of the meeting, unless the
             1922      member at the beginning of the meeting objects to holding the meeting or transacting business at
             1923      the meeting because of lack of notice or defective notice; and
             1924          (b) waives objection to consideration of a particular matter at the meeting that is not within
             1925      the purpose or purposes described in the meeting notice, unless the member objects to considering
             1926      the matter when it is presented.
             1927          Section 63. Section 16-6a-706 is enacted to read:
             1928          16-6a-706. Record date -- Determining members entitled to notice and vote.
             1929          (1) (a) The bylaws may fix or provide the manner of fixing a date as the record date for
             1930      determining the members entitled to notice of a members' meeting.
             1931          (b) If the bylaws do not fix or provide for fixing a record date described in Subsection
             1932      (1)(a), the board of directors may fix a future date as the record date.
             1933          (c) If a record date is not fixed in accordance with Subsection (1)(a) or (b), members
             1934      entitled to notice of the meeting are the members of the nonprofit corporation:
             1935          (i) at the close of business on the business day preceding the day on which notice is given;
             1936      or
             1937          (ii) if notice is waived, at the close of business on the business day preceding the day on
             1938      which the meeting is held.
             1939          (2) (a) The bylaws may fix or provide the manner of fixing a date as the record date for
             1940      determining the members entitled to vote at a members' meeting.
             1941          (b) If the bylaws do not fix or provide for fixing a record date described in Subsection
             1942      (2)(a), the board may fix a future date as the record date.
             1943          (c) If a record date is not fixed in accordance with Subsection (2)(a) or (b), members
             1944      entitled to vote at the meeting are the members of the nonprofit corporation:
             1945          (i) on the date of the meeting; and
             1946          (ii) who are otherwise eligible to vote.
             1947          (3) (a) The bylaws may fix or provide the manner for determining a date as the record date
             1948      for the purpose of determining the members entitled to exercise any rights in respect of any other
             1949      lawful action.


             1950          (b) If the bylaws do not fix or provide for fixing a record date described in Subsection
             1951      (3)(a), the board of directors may fix a future date as the record date.
             1952          (c) If a record date is not fixed in accordance with Subsection (3)(a) or (b), members
             1953      entitled to exercise the right are members of the corporation at the later of:
             1954          (i) the close of business on the day on which the board adopts the resolution relating to the
             1955      exercise of the right; or
             1956          (ii) the close of business on the 60th day before the date of the exercise of the right.
             1957          (4) A record date fixed under this section may not be more than 70 days before the meeting
             1958      or action requiring a determination of members occurs.
             1959          (5) (a) A determination of members entitled to notice of or to vote at a meeting of
             1960      members is effective for any adjournment of the meeting unless the board of directors fixes a new
             1961      date for determining the right to notice or the right to vote.
             1962          (b) The board of directors shall fix a new date for determining the right to notice or the
             1963      right to vote if the meeting is adjourned to a date more than 120 days after the record date for
             1964      determining members entitled to notice of the original meeting.
             1965          (6) If a court orders a meeting adjourned to a date more than 120 days after the date fixed
             1966      for the original meeting, the court may:
             1967          (a) provide that the original record date for notice or voting continues in effect; or
             1968          (b) fix a new record date for notice or voting.
             1969          Section 64. Section 16-6a-707 is enacted to read:
             1970          16-6a-707. Action without meeting.
             1971          (1) Unless otherwise provided in the articles of incorporation and Subsection (5), and
             1972      subject to the limitations of Subsection 16-6a-1705 (3), any action that may be taken at any annual
             1973      or special meeting of members may be taken without a meeting and without prior notice, if one
             1974      or more consents in writing, setting forth the action taken, are signed by the members having not
             1975      less than the minimum voting power that would be necessary to authorize or take the action at a
             1976      meeting at which all members entitled to vote on the action were present and voted.
             1977          (2) (a) Unless the written consents of all members entitled to vote have been obtained,
             1978      notice of any member approval without a meeting shall be given at least ten days before the
             1979      consummation of the transaction, action, or event authorized by the member action to:
             1980          (i) those members entitled to vote who have not consented in writing; and


             1981          (ii) those members:
             1982          (A) not entitled to vote; and
             1983          (B) to whom this chapter requires that notice of the proposed action be given.
             1984          (b) The notice required pursuant to Subsection (2)(a) shall contain or be accompanied by
             1985      the same material that under this chapter would have been required to be sent in a notice of
             1986      meeting at which the proposed action would have been submitted to the members for action.
             1987          (3) Any member giving a written consent, or the member's proxyholder or a personal
             1988      representative of the member or their respective proxyholder, may revoke the consent by a signed
             1989      writing:
             1990          (a) describing the action;
             1991          (b) stating that the member's prior consent is revoked; and
             1992          (c) that is received by the nonprofit corporation prior to the effectiveness of the action.
             1993          (4) (a) A member action taken pursuant to this section is not effective unless all written
             1994      consents on which the nonprofit corporation relies for the taking of an action pursuant to
             1995      Subsection (1) are:
             1996          (i) received by the nonprofit corporation within a 60-day period; and
             1997          (ii) not revoked pursuant to Subsection (3).
             1998          (b) Action taken by the members pursuant to this section is effective:
             1999          (i) as of the date the last written consent necessary to effect the action is received by the
             2000      nonprofit corporation; or
             2001          (ii) if all of the written consents necessary to effect the action specify a later date as the
             2002      effective date of the action, the later date specified in the consents.
             2003          (c) If the nonprofit corporation has received written consents in accordance with
             2004      Subsection (1) signed by all members entitled to vote with respect to the action, the effective date
             2005      of the member action may be any date that is specified in all the written consents as the effective
             2006      date of the member action.
             2007          (d) Unless otherwise provided by the bylaws, a written consent under this Subsection (4)
             2008      may be received by the nonprofit corporation by electronically transmitted facsimile or other form
             2009      of communication providing the corporation with a complete copy of the written consent,
             2010      including a copy of the signature to the written consent.
             2011          (5) Notwithstanding Subsection (1), directors may not be elected by written consent except


             2012      by unanimous written consent of all shares entitled to vote for the election of directors.
             2013          (6) If not otherwise determined under Section 16-6a-703 or 16-6a-706 , the record date for
             2014      determining the members entitled to take action without a meeting or entitled to be given notice
             2015      under Subsection (2) of action taken without a meeting is the date the first member delivers to the
             2016      nonprofit corporation a writing upon which the action is taken pursuant to Subsection (1).
             2017          (7) Action taken under this section has the same effect as action taken at a meeting of
             2018      members and may be so described in any document.
             2019          Section 65. Section 16-6a-708 is enacted to read:
             2020          16-6a-708. Meetings by telecommunication.
             2021          (1) Unless otherwise provided in the bylaws, any or all of the members may participate in
             2022      an annual, regular, or special meeting of the members by, or the meeting may be conducted
             2023      through the use of, any means of communication by which all persons participating in the meeting
             2024      may hear each other during the meeting.
             2025          (2) A member participating in a meeting by a means permitted under Subsection (1) is
             2026      considered to be present in person at the meeting.
             2027          Section 66. Section 16-6a-709 is enacted to read:
             2028          16-6a-709. Action by written ballot.
             2029          (1) Unless otherwise provided by the bylaws, any action that may be taken at any annual,
             2030      regular, or special meeting of members may be taken without a meeting if the nonprofit
             2031      corporation delivers a written ballot to every member entitled to vote on the matter.
             2032          (2) A written ballot described in Subsection (1) shall:
             2033          (a) set forth each proposed action; and
             2034          (b) provide an opportunity to vote for or against each proposed action.
             2035          (3) Approval by written ballot pursuant to this section shall be valid only when:
             2036          (a) the number of votes cast by ballot equals or exceeds the quorum required to be present
             2037      at a meeting authorizing the action; and
             2038          (b) the number of approvals equals or exceeds the number of votes that would be required
             2039      to approve the matter at a meeting at which the total number of votes cast was the same as the
             2040      number of votes cast by ballot.
             2041          (4) All solicitations for votes by written ballot shall:
             2042          (a) indicate the number of responses needed to meet the quorum requirements;


             2043          (b) state the percentage of approvals necessary to approve each matter other than election
             2044      of directors;
             2045          (c) specify the time by which a ballot must be received by the nonprofit corporation in
             2046      order to be counted; and
             2047          (d) be accompanied by written information sufficient to permit each person casting the
             2048      ballot to reach an informed decision on the matter.
             2049          (5) Unless otherwise provided by the bylaws, a written ballot may not be revoked.
             2050          (6) Action taken under this section has the same effect as action taken at a meeting of
             2051      members and may be described as such in any document.
             2052          Section 67. Section 16-6a-710 is enacted to read:
             2053          16-6a-710. Members list for meeting and action by written ballot.
             2054          (1) (a) Unless otherwise provided by the bylaws, after fixing a record date for a notice of
             2055      a meeting or for determining the members entitled to take action by written ballot, a nonprofit
             2056      corporation shall prepare a list of the names of all its members who are:
             2057          (i) (A) entitled to notice of the meeting; and
             2058          (B) to vote at the meeting; or
             2059          (ii) to take the action by written ballot.
             2060          (b) The list required by Subsection (1) shall:
             2061          (i) be arranged by voting group;
             2062          (ii) be alphabetical within each voting group;
             2063          (iii) show the address of each member entitled to notice of, and to vote at, the meeting or
             2064      to take such action by written ballot; and
             2065          (iv) show the number of votes each member is entitled to vote at the meeting or by written
             2066      ballot.
             2067          (2) (a) If prepared in connection with a meeting of the members, the members' list required
             2068      by Subsection (1) shall be available for inspection by any member entitled to vote at the meeting:
             2069          (i) (A) beginning the earlier of:
             2070          (I) ten days before the meeting for which the list was prepared; or
             2071          (II) two business days after notice of the meeting is given; and
             2072          (B) continuing through the meeting, and any adjournment of the meeting; and
             2073          (ii) (A) at the nonprofit corporation's principal office; or


             2074          (B) at a place identified in the notice of the meeting in the city where the meeting will be
             2075      held.
             2076          (b) (i) The nonprofit corporation shall make the members' list required by Subsection (1)
             2077      available at the meeting.
             2078          (ii) Any member entitled to vote at the meeting or an agent or attorney of a member
             2079      entitled to vote at the meeting is entitled to inspect the members' list at any time during the meeting
             2080      or any adjournment.
             2081          (c) A member entitled to vote at the meeting, or an agent or attorney of a member entitled
             2082      to vote at the meeting, is entitled on written demand to inspect and, subject to Subsections
             2083      16-6a-1602 (3), 16-6a-1603 (2), and 16-6a-1603 (3), to copy a members' list required by Subsection
             2084      (1):
             2085          (i) during:
             2086          (A) regular business hours; and
             2087          (B) the period it is available for inspection; and
             2088          (ii) at the member's expense.
             2089          (3) (a) On application of a member a nonprofit corporation, the applicable district court
             2090      may take an action described in Subsection (3)(b) if the nonprofit corporation refuses to allow a
             2091      member entitled to vote at the meeting or by the written ballot, or an agent or attorney of a member
             2092      entitled to vote at the meeting or by the written ballot, to inspect or copy the members' list during
             2093      the period it is required to be available for inspection under Subsection (2).
             2094          (b) Under Subsection (3)(a), the applicable court may:
             2095          (i) summarily order the inspection or copying of the members' list at the nonprofit
             2096      corporation's expense; and
             2097          (ii) until the inspection or copying is complete:
             2098          (A) postpone or adjourn the meeting for which the members list was prepared; or
             2099          (B) postpone the time when the nonprofit corporation must receive written ballots in
             2100      connection with which the members' list was prepared.
             2101          (c) For purposes of this Subsection (3), the applicable court is:
             2102          (i) the district court of the county in this state where the nonprofit corporation's principal
             2103      office is located; or
             2104          (ii) if the nonprofit corporation has no principal office in this state:


             2105          (A) the district court of the county where its registered office is located; or
             2106          (B) if the nonprofit corporation has no registered office in this state, the district court in
             2107      and for Salt Lake County.
             2108          (4) If a court orders inspection or copying of a members' list pursuant to Subsection (3),
             2109      unless the nonprofit corporation proves that it refused inspection or copying of the list in good faith
             2110      because it had a reasonable basis for doubt about the right of the member or the agent or attorney
             2111      of the member to inspect or copy the members' list:
             2112          (a) the court shall order the nonprofit corporation to pay the member's costs, including
             2113      reasonable counsel fees, incurred in obtaining the order;
             2114          (b) the court may order the nonprofit corporation to pay the member for any damages the
             2115      member incurred; and
             2116          (c) the court may grant the member any other remedy afforded the member by law.
             2117          (5) If a court orders inspection or copying of a members' list pursuant to Subsection (3),
             2118      the court may impose reasonable restrictions on the use or distribution of the list by the member.
             2119          (6) Failure to prepare or make available the members' list does not affect the validity of
             2120      action taken at the meeting or by means of the written ballot.
             2121          Section 68. Section 16-6a-711 is enacted to read:
             2122          16-6a-711. Voting entitlement generally.
             2123          (1) Unless otherwise provided by the bylaws:
             2124          (a) only voting members shall be entitled to vote with respect to any matter required or
             2125      permitted under this chapter to be submitted to a vote of the members;
             2126          (b) all references in this chapter to votes of or voting by the members shall be considered
             2127      to permit voting only by the voting members; and
             2128          (c) voting members shall be entitled to vote with respect to all matters required or
             2129      permitted under this chapter to be submitted to a vote of the members.
             2130          (2) Unless otherwise provided by the bylaws, each member entitled to vote shall be
             2131      entitled to one vote on each matter submitted to a vote of members.
             2132          (3) Unless otherwise provided by the bylaws, if a membership stands of record in the
             2133      names of two or more persons, the membership's acts with respect to voting shall have the
             2134      following effect:
             2135          (a) if only one votes, the act binds all; and


             2136          (b) if more than one votes, the vote shall be divided on a pro-rata basis.
             2137          Section 69. Section 16-6a-712 is enacted to read:
             2138          16-6a-712. Proxies.
             2139          (1) Unless otherwise provided by the bylaws, a member entitled to vote may vote or
             2140      otherwise act in person or by proxy.
             2141          (2) Without limiting the manner in which a member may appoint a proxy to vote or
             2142      otherwise act for the member, Subsections (2)(a) and (b) constitute valid means of appointing a
             2143      proxy:
             2144          (a) A member may appoint a proxy by signing an appointment form, either personally or
             2145      by the member's attorney-in-fact.
             2146          (b) (i) Subject to Subsection (2)(b)(ii) a member may appoint a proxy by transmitting or
             2147      authorizing the transmission of a telegram, teletype, facsimile or other electronic transmission
             2148      providing a written statement of the appointment to:
             2149          (A) the proxy;
             2150          (B) a proxy solicitor;
             2151          (C) a proxy support service organization;
             2152          (D) another person duly authorized by the proxy to receive appointments as agent for the
             2153      proxy; or
             2154          (E) the nonprofit corporation.
             2155          (ii) An appointment transmitted under Subsection (2)(b)(i) shall set forth or be transmitted
             2156      with written evidence from which it can be determined that the member transmitted or authorized
             2157      the transmission of the appointment.
             2158          (3) (a) An appointment of a proxy is effective against the nonprofit corporation when
             2159      received by the nonprofit corporation, including receipt by the nonprofit corporation of an
             2160      appointment transmitted pursuant to Subsection (2)(b).
             2161          (b) An appointment is valid for 11 months unless a different period is expressly provided
             2162      in the appointment form.
             2163          (4) Any complete copy, including an electronically transmitted facsimile, of an
             2164      appointment of a proxy may be substituted for or used in lieu of the original appointment for any
             2165      purpose for which the original appointment could be used.
             2166          (5) An appointment of a proxy is revocable by the member.


             2167          (6) An appointment of a proxy is revoked by the person appointing the proxy:
             2168          (a) attending any meeting and voting in person; or
             2169          (b) signing and delivering to the secretary or other officer or agent authorized to tabulate
             2170      proxy votes:
             2171          (i) a writing stating that the appointment of the proxy is revoked; or
             2172          (ii) a subsequent appointment form.
             2173          (7) The death or incapacity of the member appointing a proxy does not affect the right of
             2174      the nonprofit corporation to accept the proxy's authority unless notice of the death or incapacity
             2175      is received by the secretary or other officer or agent authorized to tabulate votes before the proxy
             2176      exercises the proxy's authority under the appointment.
             2177          (8) Subject to Section 16-6a-713 and to any express limitation on the proxy's authority
             2178      appearing on the appointment form, a nonprofit corporation is entitled to accept the proxy's vote
             2179      or other action as that of the member making the appointment.
             2180          Section 70. Section 16-6a-713 is enacted to read:
             2181          16-6a-713. Nonprofit corporation's acceptance of votes.
             2182          (1) If the name signed on any of the following corresponds to the name of a member, the
             2183      nonprofit corporation, if acting in good faith, may accept and give the following effect as the act
             2184      of the member:
             2185          (a) a vote;
             2186          (b) a consent;
             2187          (c) a written ballot;
             2188          (d) a waiver;
             2189          (e) a proxy appointment; or
             2190          (f) a proxy appointment revocation.
             2191          (2) If the name signed on any writing listed in Subsection (1) does not correspond to the
             2192      name of a member, the nonprofit corporation, if acting in good faith, may accept the writing and
             2193      give it effect as the act of the member if:
             2194          (a) (i) the member is an entity; and
             2195          (ii) the name signed purports to be that of an officer or agent of the entity;
             2196          (b) (i) the name signed purports to be that of an administrator, executor, guardian, or
             2197      conservator representing the member; and


             2198          (ii) evidence of fiduciary status acceptable to the nonprofit corporation with respect to the
             2199      writing listed in Subsection (1) that:
             2200          (A) has been requested by the nonprofit corporation; and
             2201          (B) is presented to the nonprofit corporation;
             2202          (c) (i) the name signed purports to be that of a receiver or trustee in bankruptcy of the
             2203      member; and
             2204          (ii) evidence of this status acceptable to the nonprofit corporation with respect to the
             2205      writing listed in Subsection (1) that:
             2206          (A) has been requested by the nonprofit corporation; and
             2207          (B) is presented to the nonprofit corporation;
             2208          (d) (i) the name signed purports to be that of a pledgee, beneficial owner, or
             2209      attorney-in-fact of the member; and
             2210          (ii) evidence acceptable to the nonprofit corporation of the signatory's authority to sign for
             2211      the member has been presented with respect to the writing listed in Subsection (1) that:
             2212          (A) has been requested by the nonprofit corporation; and
             2213          (B) is presented to the nonprofit corporation;
             2214          (e) (i) two or more persons are the member as cotenants or fiduciaries;
             2215          (ii) the name signed purports to be the name of at least one of the cotenants or fiduciaries;
             2216      and
             2217          (iii) the person signing appears to be acting on behalf of all the cotenants or fiduciaries;
             2218      or
             2219          (f) the acceptance of the writing listed in Subsection (1) is otherwise proper under rules
             2220      established by the nonprofit corporation that are not inconsistent with this Subsection (2).
             2221          (3) The nonprofit corporation is entitled to reject a writing listed in Subsection (1) if the
             2222      secretary or other officer or agent authorized to tabulate votes, acting in good faith, has reasonable
             2223      basis for doubt about:
             2224          (a) the validity of the signature on it; or
             2225          (b) the signatory's authority to sign for the member.
             2226          (4) The nonprofit corporation and its officer or agent who accepts or rejects a writing listed
             2227      in Subsection (1) in good faith and in accordance with the standards of this section are not liable
             2228      in damages for the consequences of the acceptance or rejection.


             2229          (5) Corporate action based on the acceptance or rejection of a writing listed in Subsection
             2230      (1) under this section is valid unless a court of competent jurisdiction determines otherwise.
             2231          Section 71. Section 16-6a-714 is enacted to read:
             2232          16-6a-714. Quorum and voting requirements for voting groups.
             2233          (1) (a) Members entitled to vote as a separate voting group may take action on a matter at
             2234      a meeting only if a quorum of those members exists with respect to that matter.
             2235          (b) Unless otherwise provided in this chapter or the bylaws, a majority of the votes entitled
             2236      to be cast on the matter by the voting group constitutes a quorum of that voting group for action
             2237      on that matter.
             2238          (2) Once a member is represented for any purpose at a meeting, including the purpose of
             2239      determining that a quorum exists, the member is considered present for quorum purposes:
             2240          (a) for the remainder of the meeting; and
             2241          (b) for any adjournment of that meeting, unless:
             2242          (i) otherwise provided in the bylaws; or
             2243          (ii) a new record date is or shall be set for that adjourned meeting.
             2244          (3) Action on a matter other than the election of directors by a voting group is approved
             2245      if:
             2246          (a) a quorum exists;
             2247          (b) the votes cast within the voting group favoring the action exceed the votes cast within
             2248      the voting group opposing the action; and
             2249          (c) a greater number of affirmative votes is not required by this chapter or the bylaws.
             2250          (4) The election of directors is governed by Section 16-6a-717 .
             2251          Section 72. Section 16-6a-715 is enacted to read:
             2252          16-6a-715. Action by single and multiple voting groups.
             2253          (1) If this chapter or the bylaws provide for voting by a single voting group on a matter,
             2254      action on that matter is taken when voted upon by that voting group as provided in Section
             2255      16-6a-714 .
             2256          (2) (a) If this chapter or the bylaws provide for voting by two or more voting groups on
             2257      a matter, action on that matter is taken only when voted upon by each of those voting groups
             2258      counted separately as provided in Section 16-6a-714 .
             2259          (b) One voting group may vote on a matter even though no action is taken by another


             2260      voting group entitled to vote on the matter.
             2261          Section 73. Section 16-6a-716 is enacted to read:
             2262          16-6a-716. Greater quorum or voting requirements.
             2263          (1) The articles of incorporation or bylaws may provide for a greater:
             2264          (a) quorum requirement for members or voting groups than is provided for by this chapter;
             2265      or
             2266          (b) voting requirement for members or voting groups than is provided by this chapter.
             2267          (2) An amendment to the articles of incorporation or the bylaws that adds, changes, or
             2268      deletes a greater quorum or voting requirement shall meet the same quorum requirement and be
             2269      adopted by the same vote and voting groups required to take action under the greater of the quorum
             2270      and voting requirements:
             2271          (a) then in effect; or
             2272          (b) proposed to be adopted.
             2273          Section 74. Section 16-6a-717 is enacted to read:
             2274          16-6a-717. Voting for directors -- Cumulative voting.
             2275          (1) If the bylaws provide for cumulative voting for directors by the voting members, voting
             2276      members may cumulatively vote, by:
             2277          (a) multiplying the number of votes the voting members are entitled to cast by the number
             2278      of directors for whom they are entitled to vote; and
             2279          (b) (i) casting the product for a single candidate; or
             2280          (ii) distributing the product among two or more candidates.
             2281          (2) Cumulative voting is not authorized at a particular meeting unless:
             2282          (a) the meeting notice or statement accompanying the notice states that cumulative voting
             2283      will take place; or
             2284          (b) (i) a voting member gives notice during the meeting and before the vote is taken of the
             2285      voting member's intent to cumulate votes; and
             2286          (ii) if one voting member gives this notice, all other voting members participating in the
             2287      election are entitled to cumulate their votes without giving further notice.
             2288          (3) (a) In an election of multiple directors, that number of candidates equaling the number
             2289      of directors to be elected, having the highest number of votes cast in favor of their election, are
             2290      elected to the board of directors.


             2291          (b) When only one director is being voted upon, the affirmative vote of a majority of the
             2292      members constituting a quorum at the meeting at which the election occurs shall be required for
             2293      election to the board of directors.
             2294          Section 75. Section 16-6a-718 is enacted to read:
             2295          16-6a-718. Voting agreements.
             2296          (1) Two or more members may provide for the manner in which they will vote by signing
             2297      an agreement for that purpose.
             2298          (2) A voting agreement created under this section is specifically enforceable.
             2299          Section 76. Section 16-6a-801 is enacted to read:
             2300     
Part 8. Directors and Officers

             2301          16-6a-801. Requirement for board of directors.
             2302          (1) A nonprofit corporation shall have a board of directors.
             2303          (2) (a) Except as provided in this chapter or Subsection (2)(b), all corporate powers shall
             2304      be exercised by or under the authority of, and the business and affairs of the nonprofit corporation
             2305      managed under the direction of, the board of directors.
             2306          (b) (i) The articles of incorporation may authorize one or more persons to exercise some
             2307      or all of the powers that would otherwise be exercised by the board of directors.
             2308          (ii) To the extent the articles of incorporation authorize a person other than the board of
             2309      directors to have the authority and perform a duty of the board of directors, the directors shall be
             2310      relieved to that extent from such authority and duty.
             2311          Section 77. Section 16-6a-802 is enacted to read:
             2312          16-6a-802. Qualifications of directors.
             2313          (1) A director shall be:
             2314          (a) a natural person; and
             2315          (b) 18 years of age or older.
             2316          (2) The bylaws may prescribe other qualifications for directors in addition to the
             2317      requirements under Subsection (1).
             2318          (3) A director need not be a resident of this state or a member of the nonprofit corporation
             2319      unless required by the bylaws.
             2320          Section 78. Section 16-6a-803 is enacted to read:
             2321          16-6a-803. Number of directors.


             2322          (1) A board of directors shall consist of three or more directors, with the number specified
             2323      in, or fixed in accordance with, the bylaws.
             2324          (2) (a) The bylaws may establish, or permit the voting members or the board of directors
             2325      to establish, a range for the size of the board of directors by fixing a minimum and maximum
             2326      number of directors.
             2327          (b) If a range for the size of the board of directors is established in accordance with
             2328      Subsection (2)(a), the number of directors may be fixed or changed from time to time within the
             2329      range by:
             2330          (i) the voting members; or
             2331          (ii) the board of directors.
             2332          Section 79. Section 16-6a-804 is enacted to read:
             2333          16-6a-804. Election, appointment, and designation of directors.
             2334          (1) (a) All directors except the initial directors shall be elected, appointed, or designated
             2335      as provided in the bylaws.
             2336          (b) If no method of election, appointment, or designation is set forth in the bylaws, the
             2337      directors other than the initial directors shall be elected as follows:
             2338          (i) if the nonprofit corporation has voting members, all directors except the initial directors
             2339      shall be elected by the voting members at each annual meeting of the voting members; and
             2340          (ii) if the nonprofit corporation does not have voting members, all directors except the
             2341      initial directors shall be elected by the board of directors.
             2342          (2) (a) The bylaws may authorize the election of all or a specified number or portion of
             2343      directors, except the initial directors, by:
             2344          (i) the members of one or more voting groups of voting members; or
             2345          (ii) the directors of one or more authorized classes of directors.
             2346          (b) A class of voting members or directors entitled to elect one or more directors is a
             2347      separate voting group for purposes of the election of directors.
             2348          (3) The bylaws may authorize the appointment of one or more directors by one or more
             2349      persons, or by the holder of the office or position, as the bylaws shall specify.
             2350          (4) The bylaws may provide for election of directors by voting members or delegates:
             2351          (a) on the basis of chapter or other organizational unit;
             2352          (b) by region or other geographic unit;


             2353          (c) by preferential voting; or
             2354          (d) by any other reasonable method.
             2355          (5) For purposes of this chapter, designation occurs when the bylaws:
             2356          (a) name an individual as a director; or
             2357          (b) designate the holder of some office or position as a director.
             2358          Section 80. Section 16-6a-805 is enacted to read:
             2359          16-6a-805. Terms of directors generally.
             2360          (1) (a) The bylaws may specify the terms of directors.
             2361          (b) In the absence of any term specified in the bylaws, the term of each director shall be
             2362      one year.
             2363          (c) Unless otherwise provided in the bylaws, directors may be elected for successive terms.
             2364          (2) Unless otherwise provided in the bylaws, the terms of the initial directors of a nonprofit
             2365      corporation expire at the first meeting at which directors are elected or appointed.
             2366          (3) A decrease in the number of directors or in the term of office does not shorten an
             2367      incumbent director's term.
             2368          (4) Unless otherwise provided in the bylaws, the term of a director filling a vacancy
             2369      expires at the end of the unexpired term that the director is filling, except that if a director is
             2370      elected to fill a vacancy created by reason of an increase in the number of directors, the term of the
             2371      director shall expire on the later of:
             2372          (a) the next meeting at which directors are elected; or
             2373          (b) the term, if any, designated for the director at the time of the creation of the position
             2374      being filled.
             2375          (5) Despite the expiration of a director's term, a director continues to serve until:
             2376          (a) the director's successor is elected, appointed, or designated and qualifies; or
             2377          (b) there is a decrease in the number of directors.
             2378          (6) A director whose term has expired may deliver to the division for filing a statement to
             2379      that effect pursuant to Section 16-6a-1608 .
             2380          Section 81. Section 16-6a-806 is enacted to read:
             2381          16-6a-806. Staggered terms for directors.
             2382          (1) The bylaws may provide for staggering the terms of directors by dividing the total
             2383      number of directors into any number of groups.


             2384          (2) The terms of office of the several groups permitted under Subsection (1) need not be
             2385      uniform.
             2386          Section 82. Section 16-6a-807 is enacted to read:
             2387          16-6a-807. Resignation of directors.
             2388          (1) A director may resign at any time by giving written notice of resignation to the
             2389      nonprofit corporation.
             2390          (2) A resignation of a director is effective when the notice is received by the nonprofit
             2391      corporation unless the notice specifies a later effective date.
             2392          (3) A director who resigns may deliver to the division for filing a statement that the
             2393      director resigns pursuant to Section 16-6a-1608 .
             2394          (4) The failure to attend or meet obligations shall be effective as a resignation at the time
             2395      of the board of director vote to confirm the failure if:
             2396          (a) at the beginning of a director's term on the board, the bylaws provide that a director
             2397      may be considered to have resigned for failing to:
             2398          (i) attend a specified number of board meetings; or
             2399          (ii) meet other specified obligations of directors; and
             2400          (b) the failure to attend or meet obligations is confirmed by an affirmative vote of the
             2401      board of directors.
             2402          Section 83. Section 16-6a-808 is enacted to read:
             2403          16-6a-808. Removal of directors.
             2404          (1) Directors elected by voting members or directors may be removed as provided in
             2405      Subsections (1)(a) through (g).
             2406          (a) The voting members may remove one or more directors elected by them with or
             2407      without cause unless the bylaws provide that directors may be removed only for cause.
             2408          (b) If a director is elected by a voting group, only that voting group may participate in the
             2409      vote to remove that director.
             2410          (c) A director may be removed only if the number of votes cast to remove the director
             2411      would be sufficient to elect the director at a meeting to elect directors.
             2412          (d) A director elected by voting members may be removed by the voting members only:
             2413          (i) at a meeting called for the purpose of removing that director; and
             2414          (ii) if the meeting notice states that the purpose, or one of the purposes, of the meeting is


             2415      removal of the director.
             2416          (e) An entire board of directors may be removed under Subsections (1)(a) through (d).
             2417          (f) (i) Except as provided in Subsection (1)(f)(ii), a director elected by the board of
             2418      directors may be removed with or without cause by the vote of a majority of the directors then in
             2419      office or such greater number as is set forth in the bylaws.
             2420          (ii) A director elected by the board of directors to fill the vacancy of a director elected by
             2421      the voting members may be removed without cause by the voting members but not the board of
             2422      directors.
             2423          (g) A director who is removed pursuant to this section may deliver to the division for filing
             2424      a statement to that effect pursuant to Section 16-6a-1608 .
             2425          (2) Unless otherwise provided in the bylaws:
             2426          (a) an appointed director may be removed without cause by the person appointing the
             2427      director;
             2428          (b) the person described in Subsection (2)(a) shall remove the director by giving written
             2429      notice of the removal to:
             2430          (i) the director; and
             2431          (ii) the nonprofit corporation; and
             2432          (c) unless the written notice described in Subsection (2)(b) specifies a future effective date,
             2433      a removal is effective when the notice is received by both:
             2434          (i) the director to be removed; and
             2435          (ii) the nonprofit corporation.
             2436          (3) A designated director, as provided in Subsection 16-6a-804 (5), may be removed by an
             2437      amendment to the bylaws deleting or changing the designation.
             2438          Section 84. Section 16-6a-809 is enacted to read:
             2439          16-6a-809. Removal of directors by judicial proceeding.
             2440          (1) (a) The applicable court may remove a director in a proceeding commenced either by
             2441      the nonprofit corporation or by voting members holding at least 10% of the votes entitled to be cast
             2442      in the election of the director's successor if the court finds that:
             2443          (i) the director engaged in:
             2444          (A) fraudulent or dishonest conduct; or
             2445          (B) gross abuse of authority or discretion with respect to the nonprofit corporation; or


             2446          (ii) (A) a final judgment has been entered finding that the director has violated a duty set
             2447      forth in Part 4; and
             2448          (B) removal is in the best interests of the nonprofit corporation.
             2449          (b) For purposes of this Subsection (1), the applicable court is the:
             2450          (i) district court of the county in this state where a nonprofit corporation's principal office
             2451      is located; or
             2452          (ii) if the nonprofit corporation has no principal office in this state:
             2453          (A) the district court of the county in which its registered office is located; or
             2454          (B) if the nonprofit corporation has no registered office, the district court for Salt Lake
             2455      County.
             2456          (2) The court that removes a director may bar the director from reelection for a period
             2457      prescribed by the court.
             2458          (3) If voting members commence a proceeding under Subsection (1), the voting members
             2459      shall make the nonprofit corporation a party defendant.
             2460          (4) A director who is removed pursuant to this section may deliver to the division for filing
             2461      a statement to that effect pursuant to Section 16-6a-1608 .
             2462          Section 85. Section 16-6a-810 is enacted to read:
             2463          16-6a-810. Vacancy on board.
             2464          (1) Unless otherwise provided in the bylaws, if a vacancy occurs on a board of directors,
             2465      including a vacancy resulting from an increase in the number of directors:
             2466          (a) the voting members, if any, may fill the vacancy;
             2467          (b) the board of directors may fill the vacancy; or
             2468          (c) if the directors remaining in office constitute fewer than a quorum of the board of
             2469      directors, the remaining directors may fill the vacancy by the affirmative vote of a majority of all
             2470      the directors remaining in office.
             2471          (2) Notwithstanding Subsection (1), unless otherwise provided in the bylaws, if the vacant
             2472      office was held by a director elected by a voting group of voting members:
             2473          (a) if one or more of the remaining directors were elected by the same voting group of
             2474      voting members:
             2475          (i) only the directors elected by the same voting group of voting members are entitled to
             2476      vote to fill the vacancy if it is filled by directors; and


             2477          (ii) the directors elected by the same voting group of voting members may fill the vacancy
             2478      by the affirmative vote of a majority of the directors remaining in office; and
             2479          (b) only that voting group is entitled to vote to fill the vacancy if it is filled by the voting
             2480      members.
             2481          (3) Notwithstanding Subsection (1) and unless otherwise provided in the bylaws, only the
             2482      directors elected by the same voting group of directors are entitled to vote to fill the vacancy if:
             2483          (a) the vacant office was held by a director elected by a voting group of directors; and
             2484          (b) any persons in that voting group remain as directors.
             2485          (4) Unless otherwise provided in the bylaws, if a vacant office was held by an appointed
             2486      director, only the person who appointed the director may fill the vacancy.
             2487          (5) (a) If a vacant office was held by a designated director, as provided in Subsection
             2488      16-6a-804 (5), the vacancy shall be filled as provided in the bylaws.
             2489          (b) In the absence of an applicable bylaw provision, the vacancy may not be filled by the
             2490      board.
             2491          (6) A vacancy that will occur at a specific later date by reason of a resignation effective
             2492      at a later date under Subsection 16-6a-807 (2) or otherwise, may be filled before the vacancy
             2493      occurs, but the new director may not take office until the vacancy occurs.
             2494          Section 86. Section 16-6a-811 is enacted to read:
             2495          16-6a-811. Compensation of directors.
             2496          Unless otherwise provided in the bylaws, the board of directors may authorize and fix the
             2497      compensation of directors.
             2498          Section 87. Section 16-6a-812 is enacted to read:
             2499          16-6a-812. Meetings.
             2500          (1) The board of directors may hold regular or special meetings in or out of this state.
             2501          (2) (a) Unless otherwise provided in the bylaws, the board of directors may permit any
             2502      director to participate in a regular or special meeting by, or conduct the meeting through the use
             2503      of, any means of communication by which all directors participating may hear each other during
             2504      the meeting.
             2505          (b) A director participating in a meeting by a means permitted under Subsection (1) is
             2506      considered to be present in person at the meeting.
             2507          Section 88. Section 16-6a-813 is enacted to read:


             2508          16-6a-813. Action without meeting.
             2509          (1) Unless otherwise provided in the bylaws, any action required or permitted by this
             2510      chapter to be taken at a board of directors' meeting may be taken without a meeting if each and
             2511      every member of the board in writing either:
             2512          (a) votes for the action; or
             2513          (b) (i) (A) votes against the action; or
             2514          (B) abstains from voting; and
             2515          (ii) waives the right to demand that action not be taken without a meeting.
             2516          (2) Action is taken under this section only if the affirmative vote for the action equals or
             2517      exceeds the minimum number of votes that would be necessary to take the action at a meeting at
             2518      which all of the directors then in office were present and voted.
             2519          (3) (a) An action taken pursuant to this section may not be effective unless the nonprofit
             2520      corporation receives writings:
             2521          (i) describing the action taken;
             2522          (ii) otherwise satisfying the requirements of Subsection (1);
             2523          (iii) signed by all directors; and
             2524          (iv) not revoked pursuant to Subsection (4).
             2525          (b) Unless otherwise provided by the bylaws, a writing described in Subsection (3)(a) may
             2526      be received by the nonprofit corporation by electronically transmitted facsimile or other form of
             2527      wire or wireless communication providing the nonprofit corporation with a complete copy of the
             2528      document, including a copy of the signature on the document.
             2529          (c) A director's right to demand that action not be taken without a meeting shall be
             2530      considered to have been waived if the nonprofit corporation receives a writing satisfying the
             2531      requirements of Subsection (1) that has been signed by the director and not revoked pursuant to
             2532      Subsection (4).
             2533          (d) Action taken pursuant to this section shall be effective when the last writing necessary
             2534      to effect the action is received by the nonprofit corporation, unless the writings describing the
             2535      action taken set forth a different effective date.
             2536          (4) If the writing is received by the nonprofit corporation before the last writing necessary
             2537      to effect the action is received by the nonprofit corporation, any director who has signed a writing
             2538      pursuant to this section may revoke the writing by a writing signed and dated by the director:


             2539          (a) describing the action; and
             2540          (b) stating that the director's prior vote with respect the writing is revoked.
             2541          (5) Action taken pursuant to this section:
             2542          (a) has the same effect as action taken at a meeting of directors; and
             2543          (b) may be described as an action taken at a meeting of directors in any document.
             2544          Section 89. Section 16-6a-814 is enacted to read:
             2545          16-6a-814. Notice of meeting.
             2546          (1) Unless otherwise provided in this chapter or in the bylaws, regular meetings of the
             2547      board of directors may be held without notice of the date, time, place, or purpose of the meeting.
             2548          (2) (a) Unless the bylaws provide for a longer or shorter period, special meetings of the
             2549      board of directors shall be preceded by at least two days notice of the date, time, and place of the
             2550      meeting.
             2551          (b) The notice required by Subsection (2)(a) need not describe the purpose of the special
             2552      meeting unless otherwise required by this chapter or the bylaws.
             2553          Section 90. Section 16-6a-815 is enacted to read:
             2554          16-6a-815. Waiver of notice.
             2555          (1) (a) A director may waive any notice of a meeting before or after the time and date of
             2556      the meeting stated in the notice.
             2557          (b) Except as provided by Subsection (2), the waiver shall:
             2558          (i) be in writing;
             2559          (ii) signed by the director entitled to the notice;
             2560          (iii) be delivered to the nonprofit corporation for filing with the corporate records.
             2561          (c) The delivery and filing required by Subsection (1)(b) may not be conditions of the
             2562      effectiveness of the waiver.
             2563          (2) A director's attendance at or participation in a meeting waives any required notice to
             2564      that director of the meeting unless:
             2565          (a) (i) at the beginning of the meeting or promptly upon the director's later arrival, the
             2566      director objects to holding the meeting or transacting business at the meeting because of lack of
             2567      notice or defective notice; and
             2568          (ii) after objecting, the director does not vote for or assent to action taken at the meeting;
             2569      or


             2570          (b) if special notice was required of a particular purpose pursuant to Subsection
             2571      16-6a-814 (2):
             2572          (i) the director objects to transacting business with respect to the purpose for which the
             2573      special notice was required; and
             2574          (ii) after objecting, the director does not vote for or assent to action taken at the meeting
             2575      with respect to the purpose.
             2576          Section 91. Section 16-6a-816 is enacted to read:
             2577          16-6a-816. Quorum and voting.
             2578          (1) Unless a greater or lesser number is required by the bylaws, a quorum of a board of
             2579      directors consists of a majority of the number of directors in office immediately before the meeting
             2580      begins.
             2581          (2) The bylaws may authorize a quorum of a board of directors to consist of:
             2582          (a) no fewer than one-third of the number of directors fixed if the corporation has a fixed
             2583      board size; or
             2584          (b) if a range for the size of the board is established pursuant to Subsection 16-6a-803 (2),
             2585      no fewer than one-third of the number of directors:
             2586          (i) fixed in accordance with Subsection 16-6a-803 (2); or
             2587          (ii) in office immediately before the meeting begins, if no number is fixed in accordance
             2588      with Subsection 16-6a-803 (2).
             2589          (3) If a quorum is present when a vote is taken, the affirmative vote of a majority of
             2590      directors present is the act of the board of directors unless the vote of a greater number of directors
             2591      is required by this chapter or the bylaws.
             2592          (4) (a) If provided in the bylaws, for purposes of determining a quorum with respect to a
             2593      particular proposal, and for purposes of casting a vote for or against a particular proposal, a
             2594      director may be considered to be present at a meeting and to vote if the director has granted a
             2595      signed written proxy:
             2596          (i) to another director who is present at the meeting; and
             2597          (ii) authorizing the other director to cast the vote that is directed to be cast by the written
             2598      proxy with respect to the particular proposal that is described with reasonable specificity in the
             2599      proxy.
             2600          (b) Except as provided in this Subsection (4) and as permitted by Section 16-6a-813 ,


             2601      directors may not vote or otherwise act by proxy.
             2602          (5) A director who is present at a meeting of the board of directors when corporate action
             2603      is taken is considered to have assented to all action taken at the meeting unless:
             2604          (a) (i) the director objects at the beginning of the meeting, or promptly upon the director's
             2605      arrival, to holding the meeting or transacting business at the meeting; and
             2606          (ii) after objecting, the director does not vote for or assent to any action taken at the
             2607      meeting;
             2608          (b) the director contemporaneously requests that the director's dissent or abstention as to
             2609      any specific action taken be entered in the minutes of the meeting; or
             2610          (c) the director causes written notice of the director's dissent or abstention as to any
             2611      specific action to be received by:
             2612          (i) the presiding officer of the meeting before adjournment of the meeting; or
             2613          (ii) the nonprofit corporation promptly after adjournment of the meeting.
             2614          (6) The right of dissent or abstention pursuant to Subsection (5) as to a specific action is
             2615      not available to a director who votes in favor of the action taken.
             2616          Section 92. Section 16-6a-817 is enacted to read:
             2617          16-6a-817. Committees of the board.
             2618          (1) Unless otherwise provided in the bylaws and subject to the provisions of Section
             2619      16-6a-906 , the board of directors may:
             2620          (a) create one or more committees of the board; and
             2621          (b) appoint one or more directors to serve on the committees created under Subsection
             2622      (1)(a).
             2623          (2) Unless otherwise provided in the bylaws, the creation of a committee of the board and
             2624      appointment of directors to it shall be approved by the greater of:
             2625          (a) a majority of all the directors in office when the action is taken; or
             2626          (b) the number of directors required by the bylaws to take action under Section 16-6a-816 .
             2627          (3) Unless otherwise provided in the bylaws, a committee of the board and the members
             2628      of the committee are subject to Sections 16-6a-812 through 16-6a-816 , which govern:
             2629          (a) meetings;
             2630          (b) action without meeting;
             2631          (c) notice;


             2632          (d) waiver of notice; and
             2633          (e) quorum and voting requirements.
             2634          (4) To the extent specified in the bylaws or by the board of directors, each committee of
             2635      the board shall have the authority of the board of directors under Section 16-6a-801 .
             2636          (5) The creation of, delegation of authority to, or action by a committee does not alone
             2637      constitute compliance by a director with the standards of conduct described in Section 16-6a-822 .
             2638          (6) (a) Subject to Subsection (6)(b), nothing in this part shall prohibit or restrict a nonprofit
             2639      corporation from establishing in its bylaws or by action of the board of directors or otherwise one
             2640      or more committees, advisory boards, auxiliaries, or other bodies of any kind:
             2641          (i) having the members and rules of procedure as the bylaws or board of directors may
             2642      provide;
             2643          (ii) established to provide the advice, service, and assistance to the nonprofit corporation
             2644      as may be specified in the bylaws or by the board of directors; and
             2645          (iii) established to carry out the duties and responsibilities for the nonprofit corporation,
             2646      as may be specified in the bylaws or by the board of directors.
             2647          (b) Notwithstanding Subsection (6)(a), if any committee or other body established under
             2648      Subsection (6)(a) has one or more members who are entitled to vote on committee matters and who
             2649      are not then also directors, the committee or other body may not exercise any power or authority
             2650      reserved to the board of directors, in this chapter or in the bylaws.
             2651          Section 93. Section 16-6a-818 is enacted to read:
             2652          16-6a-818. Officers.
             2653          (1) (a) A nonprofit corporation shall have the officers designated:
             2654          (i) in its bylaws; or
             2655          (ii) by the board of directors in a manner not inconsistent with the bylaws.
             2656          (b) An officer shall be:
             2657          (i) a natural person; and
             2658          (ii) 18 years of age or older.
             2659          (c) An officer need not be a director or a member of the nonprofit corporation, unless the
             2660      bylaws so prescribe.
             2661          (2) (a) An officer may be appointed by the board of directors or in such other manner as
             2662      the board of directors or bylaws may provide.


             2663          (b) An appointed officer may appoint one or more officers or assistant officers if
             2664      authorized by:
             2665          (i) the bylaws; or
             2666          (ii) the board of directors.
             2667          (3) The bylaws or the board of directors shall delegate to the secretary or to one or more
             2668      other persons responsibility for:
             2669          (a) the preparation and maintenance of:
             2670          (i) minutes of the directors' and members' meetings; and
             2671          (ii) other records and information required to be kept by the nonprofit corporation under
             2672      Section 16-6a-1601 ; and
             2673          (b) authenticating records of the nonprofit corporation.
             2674          (4) The same individual may simultaneously hold more than one office in a nonprofit
             2675      corporation.
             2676          Section 94. Section 16-6a-819 is enacted to read:
             2677          16-6a-819. Duties of officers.
             2678          Each officer shall have the authority and shall perform the duties set forth with respect to
             2679      the office:
             2680          (1) in the bylaws; or
             2681          (2) to the extent not inconsistent with the bylaws, prescribed with respect to the office by:
             2682          (a) the board of directors; or
             2683          (b) an officer authorized by the board of directors.
             2684          Section 95. Section 16-6a-820 is enacted to read:
             2685          16-6a-820. Resignation and removal of officers.
             2686          (1) An officer may resign at any time by giving written notice of resignation to the
             2687      nonprofit corporation.
             2688          (2) A resignation of an officer is effective when the notice is received by the nonprofit
             2689      corporation unless the notice specifies a later effective date.
             2690          (3) If a resignation is made effective at a later date, the board of directors may:
             2691          (a) (i) permit the officer to remain in office until the effective date; and
             2692          (ii) fill the pending vacancy before the effective date if the successor does not take office
             2693      until the effective date; or


             2694          (b) (i) remove the officer at any time before the effective date; and
             2695          (ii) fill the vacancy created by the removal.
             2696          (4) (a) Unless otherwise provided in the bylaws, the board of directors may remove any
             2697      officer at any time with or without cause.
             2698          (b) The bylaws or the board of directors may make provisions for the removal of officers
             2699      by:
             2700          (i) other officers; or
             2701          (ii) the voting members.
             2702          (5) An officer who resigns, is removed, or whose appointment has expired may deliver to
             2703      the division for filing a statement to that effect pursuant to Section 16-6a-1608 .
             2704          Section 96. Section 16-6a-821 is enacted to read:
             2705          16-6a-821. Contract rights with respect to officers.
             2706          (1) The appointment of an officer does not itself create contract rights.
             2707          (2) (a) An officer's removal does not affect the officer's contract rights, if any, with the
             2708      nonprofit corporation.
             2709          (b) An officer's resignation does not affect the nonprofit corporation's contract rights, if
             2710      any, with the officer.
             2711          Section 97. Section 16-6a-822 is enacted to read:
             2712          16-6a-822. General standards of conduct for directors and officers.
             2713          (1) (a) A director shall discharge the director's duties as a director, including the director's
             2714      duties as a member of a committee of the board, in accordance with Subsection (2).
             2715          (b) An officer with discretionary authority shall discharge the officer's duties under that
             2716      authority in accordance with Subsection (2).
             2717          (2) A director or an officer described in Subsection (1) shall discharge the director or
             2718      officer's duties:
             2719          (a) in good faith;
             2720          (b) with the care an ordinarily prudent person in a like position would exercise under
             2721      similar circumstances; and
             2722          (c) in a manner the director or officer reasonably believes to be in the best interests of the
             2723      nonprofit corporation.
             2724          (3) In discharging duties, a director or officer is entitled to rely on information, opinions,


             2725      reports, or statements, including financial statements and other financial data, if prepared or
             2726      presented by:
             2727          (a) one or more officers or employees of the nonprofit corporation whom the director or
             2728      officer reasonably believes to be reliable and competent in the matters presented;
             2729          (b) legal counsel, a public accountant, or another person as to matters the director or
             2730      officer reasonably believes are within the person's professional or expert competence;
             2731          (c) religious authorities or ministers, priests, rabbis, or other persons:
             2732          (i) whose position or duties in the nonprofit corporation, or in a religious organization with
             2733      which the nonprofit corporation is affiliated, the director or officer believes justify reliance and
             2734      confidence; and
             2735          (ii) who the director or officer believes to be reliable and competent in the matters
             2736      presented; or
             2737          (d) in the case of a director, a committee of the board of directors of which the director is
             2738      not a member if the director reasonably believes the committee merits confidence.
             2739          (4) A director or officer is not acting in good faith if the director or officer has knowledge
             2740      concerning the matter in question that makes reliance otherwise permitted by Subsection (3)
             2741      unwarranted.
             2742          (5) A director, regardless of title, may not be considered to be a trustee with respect to:
             2743          (a) the nonprofit corporation; or
             2744          (b) any property held or administered by the nonprofit corporation including property that
             2745      may be subject to restrictions imposed by the donor or transferor of the property.
             2746          (6) A director or officer is not liable to the nonprofit corporation, its members, or any
             2747      conservator or receiver, or any assignee or successor-in-interest of the nonprofit corporation or
             2748      member, for any action taken, or any failure to take any action, as an officer or director, as the case
             2749      may be, unless:
             2750          (a) the director or officer has breached or failed to perform the duties of the office as set
             2751      forth in this section; and
             2752          (b) the breach or failure to perform constitutes:
             2753          (i) gross negligence;
             2754          (ii) willful misconduct; or
             2755          (iii) intentional infliction of harm on:


             2756          (A) the nonprofit corporation; or
             2757          (B) the members of the nonprofit corporation.
             2758          Section 98. Section 16-6a-823 is enacted to read:
             2759          16-6a-823. Limitation of liability of directors.
             2760          (1) (a) Except as provided in Subsection (1)(b) and without limiting the generality of
             2761      Subsection 16-6a-822 (6), a nonprofit corporation may eliminate or limit the liability of a director
             2762      to the nonprofit corporation or to its members for monetary damages for any action taken or any
             2763      failure to take any action as a director, if:
             2764          (i) so provided in:
             2765          (A) the articles of incorporation;
             2766          (B) the bylaws; or
             2767          (C) a resolution; and
             2768          (ii) to the extent permitted in Subsection (3).
             2769          (b) Subsection (1)(a) does not permit a nonprofit corporation from eliminating or limiting
             2770      the liability of a director for:
             2771          (i) the amount of a financial benefit received by a director to which the director is not
             2772      entitled;
             2773          (ii) an intentional infliction of harm on:
             2774          (A) the nonprofit corporation; or
             2775          (B) the members of a nonprofit corporation;
             2776          (iii) an intentional violation of criminal law; or
             2777          (iv) a violation of Section 16-6a-824 .
             2778          (2) A provision authorized under this section may not eliminate or limit the liability of a
             2779      director for any act or omission occurring prior to the date when the provision becomes effective.
             2780          (3) Any provision authorized under this section to be included in the articles of
             2781      incorporation may be adopted in the bylaws or by resolution, but only if the provision is approved
             2782      by the same percentage of members of each voting group as would be required to approve an
             2783      amendment to the articles of incorporation including the provision.
             2784          Section 99. Section 16-6a-824 is enacted to read:
             2785          16-6a-824. Liability of directors for unlawful distributions.
             2786          (1) (a) A director who votes for or assents to a distribution made in violation of Section


             2787      16-6a-1301 or the articles of incorporation is personally liable to the corporation for the amount
             2788      of the distribution that exceeds what could have been distributed without violating Section
             2789      16-6a-1301 or the articles of incorporation, if it is established that the director's duties were not
             2790      performed in compliance with Section 16-6a-822 .
             2791          (b) In any proceeding commenced under this section, a director has all of the defenses
             2792      ordinarily available to a director.
             2793          (2) A director held liable under Subsection (1) for an unlawful distribution is entitled to
             2794      contribution:
             2795          (a) from every other director who could be held liable under Subsection (1) for the
             2796      unlawful distribution; and
             2797          (b) from each member who accepted the distribution knowing the distribution was made
             2798      in violation of Section 16-6a-1301 or the articles of incorporation.
             2799          (3) The amount of the contribution from each member under Subsection (2)(b) is the
             2800      amount of the distribution to the member multiplied by the percentage of the amount of
             2801      distribution to all members that exceeded what could have been distributed to members without
             2802      violating Section 16-6a-1301 or the articles of incorporation.
             2803          Section 100. Section 16-6a-825 is enacted to read:
             2804          16-6a-825. Conflicting interest transaction.
             2805          (1) As used in this section, "conflicting interest transaction" means a contract, transaction,
             2806      or other financial relationship between a nonprofit corporation and:
             2807          (a) a director of the nonprofit corporation;
             2808          (b) a party related to a director; or
             2809          (c) an entity in which a director of the nonprofit corporation:
             2810          (i) is a director or officer; or
             2811          (ii) has a financial interest.
             2812          (2) Except as otherwise provided in this section, upon the finding of a conflicting interest
             2813      transaction, in an action properly brought before it, a court may:
             2814          (a) rule that the conflicting interest transaction is void or voidable;
             2815          (b) enjoin or set aside the conflict of interest transaction; or
             2816          (c) determine that the conflicting interest transaction gives rise to an award of damages or
             2817      other sanctions.


             2818          (3) (a) A loan may not be made by a corporation to its directors or officers.
             2819          (b) A director or officer who assents to or participates in the making of a loan in violation
             2820      of Subsection (3)(a) shall be liable to the corporation for the amount of the loan until the
             2821      repayment of the loan.
             2822          (4) (a) If the conditions of Subsection (4)(b) are met, a conflicting interest transaction may
             2823      not be void or voidable or be enjoined, set aside, or give rise to an award of damages or other
             2824      sanctions in a proceeding by a member or by or in the right of the nonprofit corporation, solely
             2825      because:
             2826          (i) the conflicting interest transaction involves:
             2827          (A) a director of the nonprofit corporation;
             2828          (B) a party related to a director; or
             2829          (C) an entity in which a director of the nonprofit corporation is a director or officer or has
             2830      a financial interest;
             2831          (ii) the director is present at or participates in the meeting of the nonprofit corporation's
             2832      board of directors or of the committee of the board of directors that authorizes, approves, or ratifies
             2833      the conflicting interest transaction; or
             2834          (iii) the director's vote is counted for the purpose described in Subsection (4)(a)(ii).
             2835          (b) Subsection (4)(a) applies if:
             2836          (i) (A) the material facts as to the director's relationship or interest and as to the conflicting
             2837      interest transaction are disclosed or are known to the board of directors or the committee; and
             2838          (B) the board of directors or committee in good faith authorizes, approves, or ratifies the
             2839      conflicting interest transaction by the affirmative vote of a majority of the disinterested directors,
             2840      even though the disinterested directors are less than a quorum;
             2841          (ii) (A) the material facts as to the director's relationship or interest and as to the
             2842      conflicting interest transaction are disclosed or are known to the members entitled to vote on the
             2843      conflicting interest transaction; and
             2844          (B) the conflicting interest transaction is specifically authorized, approved, or ratified in
             2845      good faith by a vote of the members entitled to vote thereon; or
             2846          (iii) the conflicting interest transaction is fair as to the nonprofit corporation.
             2847          (5) Common or interested directors may be counted in determining the presence of a
             2848      quorum at a meeting of the board of directors or of a committee that authorizes, approves, or


             2849      ratifies the conflicting interest transaction.
             2850          Section 101. Section 16-6a-826 is enacted to read:
             2851          16-6a-826. Common members, directors or officers.
             2852          (1) Two or more nonprofit corporations may have members, directors or officers that are
             2853      common to each nonprofit corporation.
             2854          (2) The fact of common members, directors or officers in one or more nonprofit
             2855      corporations may not, by itself, create an inference that the nonprofit corporations individually or
             2856      collectively:
             2857          (a) are agents or alter egos of one another; or
             2858          (b) have been formed or availed of for an improper purpose.
             2859          (3) The doctrine of "piercing the corporate veil" may not be applied to one or more
             2860      nonprofit corporations solely because of the fact of common members, directors or officers.
             2861          Section 102. Section 16-6a-901 is enacted to read:
             2862     
Part 9. Indemnification

             2863          16-6a-901. Indemnification definitions.
             2864          As used in this part:
             2865          (1) (a) "Director" means an individual who:
             2866          (i) is or was a director of a nonprofit corporation; or
             2867          (ii) while a director of a nonprofit corporation at the nonprofit corporation's request, is or
             2868      was serving as a director, officer, partner, member, manager, trustee, employee, fiduciary, or agent
             2869      of:
             2870          (A) another domestic or foreign corporation;
             2871          (B) another nonprofit corporation;
             2872          (C) another person; or
             2873          (D) an employee benefit plan.
             2874          (b) A director is considered to be serving an employee benefit plan at the nonprofit
             2875      corporation's request if the director's duties to the nonprofit corporation also impose duties on, or
             2876      otherwise involve services by, the director to the employee benefit plan or to participants in or
             2877      beneficiaries of the employee benefit plan.
             2878          (c) "Director" includes, unless the context requires otherwise, the estate or personal
             2879      representative of a director.


             2880          (2) "Expenses" includes attorneys' fees.
             2881          (3) "Liability" means the obligation incurred with respect to a proceeding to pay a
             2882      judgment, settlement, penalty, or fine, including:
             2883          (a) an excise tax assessed with respect to an employee benefit plan; or
             2884          (b) reasonable expenses.
             2885          (4) "Nonprofit corporation" includes any domestic or foreign entity that is a predecessor
             2886      of a nonprofit corporation by reason of a merger or other transaction in which the predecessor's
             2887      existence ceased upon consummation of the transaction.
             2888          (5) (a) "Officer," "employee," "fiduciary," and "agent" include any person who, while
             2889      serving the indicated relationship to the nonprofit corporation, at the nonprofit corporation's
             2890      request, is or was serving as a director, officer, partner, trustee, employee, fiduciary, or agent of:
             2891          (i) another domestic or foreign corporation;
             2892          (ii) another person; or
             2893          (iii) an employee benefit plan.
             2894          (b) An officer, employee, fiduciary, or agent is considered to be serving an employee
             2895      benefit plan at the nonprofit corporation's request if that person's duties to the nonprofit
             2896      corporation also impose duties on, or otherwise involve services by, that person to the plan or
             2897      participants in, or beneficiaries of the plan.
             2898          (c) Unless the context requires otherwise, "officer," "employee," "fiduciary," and "agent"
             2899      include the estates or personal representatives of the officer, employee, fiduciary, or agent.
             2900          (6) (a) "Official capacity" means:
             2901          (i) when used with respect to a director, the office of director in a corporation; and
             2902          (ii) when used with respect to a person other than a director, as contemplated in Section
             2903      16-6a-907 , the office in a corporation held by the officer or the employment, fiduciary, or agency
             2904      relationship undertaken by the person on behalf of the corporation.
             2905          (b) "Official capacity" does not include service for any:
             2906          (i) other foreign or domestic corporation;
             2907          (ii) other person; or
             2908          (iii) employee benefit plan.
             2909          (7) "Party" includes an individual who was, is, or is threatened to be made a named
             2910      defendant or respondent in a proceeding.


             2911          (8) "Proceeding" means any threatened, pending, or completed action, suit, or proceeding,
             2912      whether civil, criminal, administrative, or investigative and whether formal or informal.
             2913          Section 103. Section 16-6a-902 is enacted to read:
             2914          16-6a-902. Authority to indemnify directors.
             2915          (1) Except as provided in Subsection (4), a nonprofit corporation may indemnify an
             2916      individual made a party to a proceeding because the individual is or was a director, against liability
             2917      incurred in the proceeding if:
             2918          (a) the individual's conduct was in good faith;
             2919          (b) the individual reasonably believed that the individual's conduct was in, or not opposed
             2920      to, the corporation's best interests; and
             2921          (c) in the case of any criminal proceeding, the individual had no reasonable cause to
             2922      believe the individual's conduct was unlawful.
             2923          (2) A director's conduct with respect to any employee benefit plan for a purpose the
             2924      director reasonably believed to be in or not opposed to the interests of the participants in and
             2925      beneficiaries of the plan is conduct that satisfies the requirement of Subsection (1)(b).
             2926          (3) The termination of a proceeding by judgment, order, settlement, conviction, or upon
             2927      a plea of nolo contendere or its equivalent is not, of itself, determinative that the director did not
             2928      meet the standard of conduct described in this section.
             2929          (4) A nonprofit corporation may not indemnify a director under this section:
             2930          (a) in connection with a proceeding by or in the right of the nonprofit corporation in which
             2931      the director was adjudged liable to the nonprofit corporation; or
             2932          (b) in connection with any other proceeding charging that the director derived an improper
             2933      personal benefit, whether or not involving action in the director's official capacity, in which
             2934      proceeding the director was adjudged liable on the basis that the director derived an improper
             2935      personal benefit.
             2936          (5) Indemnification permitted under this section in connection with a proceeding by or in
             2937      the right of the nonprofit corporation is limited to reasonable expenses incurred in connection with
             2938      the proceeding.
             2939          Section 104. Section 16-6a-903 is enacted to read:
             2940          16-6a-903. Mandatory indemnification of directors.
             2941          (1) Unless limited by its articles of incorporation, a nonprofit corporation shall indemnify


             2942      a director described in Subsection (2) against reasonable expenses incurred by the director in
             2943      connection with the proceeding or claim with respect to which the director has been successful.
             2944          (2) Subsection (1) applies to a director who was successful, on the merits or otherwise, in
             2945      the defense of:
             2946          (a) any proceeding to which the director was a party because the director is or was a
             2947      director of the nonprofit corporation; or
             2948          (b) any claim, issue, or matter in the proceeding, to which the director was a party because
             2949      the director is or was a director of the nonprofit corporation.
             2950          Section 105. Section 16-6a-904 is enacted to read:
             2951          16-6a-904. Advance of expenses for directors.
             2952          (1) A nonprofit corporation may pay for or reimburse the reasonable expenses incurred by
             2953      a director who is a party to a proceeding in advance of final disposition of the proceeding if:
             2954          (a) the director furnishes the nonprofit corporation a written affirmation of the director's
             2955      good faith belief that the director has met the applicable standard of conduct described in Section
             2956      16-6a-902 ;
             2957          (b) the director furnishes the nonprofit corporation a written undertaking, executed
             2958      personally or on the director's behalf, to repay the advance if it is ultimately determined that the
             2959      director did not meet the standard of conduct; and
             2960          (c) a determination is made that the facts then known to those making the determination
             2961      would not preclude indemnification under this part.
             2962          (2) The undertaking required by Subsection (1)(b):
             2963          (a) shall be an unlimited general obligation of the director;
             2964          (b) need not be secured; and
             2965          (c) may be accepted without reference to financial ability to make repayment.
             2966          (3) Determinations and authorizations of payments under this section shall be made in the
             2967      manner specified in Section 16-6a-906 .
             2968          Section 106. Section 16-6a-905 is enacted to read:
             2969          16-6a-905. Court-ordered indemnification of directors.
             2970          (1) Unless a nonprofit corporation's articles of incorporation provide otherwise, a director
             2971      of the nonprofit corporation who is or was a party to a proceeding may apply for indemnification
             2972      to:


             2973          (a) the court conducting the proceeding; or
             2974          (b) another court of competent jurisdiction.
             2975          (2) On receipt of an application described in Subsection (1), the court, after giving any
             2976      notice the court considers necessary, may order indemnification in the following manner:
             2977          (a) if the court determines that the director is entitled to mandatory indemnification under
             2978      Section 16-6a-903 , the court shall:
             2979          (i) order indemnification; and
             2980          (ii) order the nonprofit corporation to pay the director's reasonable expenses incurred to
             2981      obtain court-ordered indemnification; and
             2982          (b) if the court determines that the director is fairly and reasonably entitled to
             2983      indemnification in view of all the relevant circumstances, whether or not the director met the
             2984      applicable standard of conduct set forth in Section 16-6a-902 or was adjudged liable as described
             2985      in Subsection 16-6a-902 (4), the court may order indemnification as the court determines to be
             2986      proper, except that the indemnification with respect to any proceeding in which liability has been
             2987      adjudged in the circumstances described in Subsection 16-6a-902 (4) is limited to reasonable
             2988      expenses incurred.
             2989          Section 107. Section 16-6a-906 is enacted to read:
             2990          16-6a-906. Determination and authorization of indemnification of directors.
             2991          (1) (a) A nonprofit corporation may not indemnify a director under Section 16-6a-902
             2992      unless authorized in the specific case after a determination has been made that indemnification of
             2993      the director is permissible in the circumstances because the director has met the standard of
             2994      conduct set forth in Section 16-6a-902 .
             2995          (b) A nonprofit corporation may not advance expenses to a director under Section
             2996      16-6a-904 unless:
             2997          (i) authorized in the specific case after the written affirmation and undertaking required
             2998      by Subsections 16-6a-904 (1)(a) and (1)(b) are received; and
             2999          (ii) the determination required by Subsection 16-6a-904 (1)(c) has been made.
             3000          (2) (a) The determinations required by Subsection (1) shall be made:
             3001          (i) by the board of directors by a majority vote of those present at a meeting at which a
             3002      quorum is present if only those directors not parties to the proceeding are counted in satisfying the
             3003      quorum;


             3004          (ii) if a quorum cannot be obtained under Subsection (2)(a)(i), by a majority vote of a
             3005      committee of the board of directors:
             3006          (A) designated by the board of directors; and
             3007          (B) consisting of two or more directors not parties to the proceeding; or
             3008          (iii) by persons listed in Subsection (3).
             3009          (b) The directors who are parties to the proceeding may participate in the designation of
             3010      directors for the committee described in Subsection (2)(a)(ii).
             3011          (3) (a) The determination required to be made by Subsection (1) shall be made by a person
             3012      described in Subsection (3)(a) if:
             3013          (i) (A) a quorum cannot be obtained in accordance with Subsection (2)(a)(i); and
             3014          (B) a committee cannot be established under Subsection (2)(a)(ii); or
             3015          (ii) even if a quorum is obtained or a committee is designated, a majority of the directors
             3016      constituting the quorum or committee directs.
             3017          (b) If a condition described in Subsection (3)(a) is met, the determination required to be
             3018      made by Subsection (1) shall be made:
             3019          (i) by independent legal counsel selected by:
             3020          (A) a vote of the board of directors or the committee in the manner specified in Subsection
             3021      (2)(a)(i) or (ii); or
             3022          (B) if a quorum of the full board cannot be obtained and a committee cannot be
             3023      established, by independent legal counsel selected by a majority vote of the full board of directors;
             3024      or
             3025          (ii) by the voting members, but a voting member may not vote on the determination if the
             3026      voting member is:
             3027          (A) a director; and
             3028          (B) at the time seeking indemnification.
             3029          (4) (a) Except as provided in Subsection (4)(b), an authorization of indemnification and
             3030      advance of expenses shall be made in the same manner as the determination that indemnification
             3031      or advance of expenses is permissible.
             3032          (b) Notwithstanding Subsection (4)(a), if the determination that indemnification or
             3033      advance of expenses is permissible is made by independent legal counsel, authorization of
             3034      indemnification and advance of expenses shall be made by the body that selected the independent


             3035      legal counsel.
             3036          Section 108. Section 16-6a-907 is enacted to read:
             3037          16-6a-907. Indemnification of officers, employees, fiduciaries, and agents.
             3038          Unless a nonprofit corporation's articles of incorporation provide otherwise:
             3039          (1) to the same extent as a director, an officer of the nonprofit corporation is entitled to:
             3040          (a) mandatory indemnification under Section 16-6a-903 ; and
             3041          (b) apply for court-ordered indemnification under Section 16-6a-905 ;
             3042          (2) the nonprofit corporation may indemnify and advance expenses to an officer,
             3043      employee, fiduciary, or agent of the corporation to the same extent as to a director; and
             3044          (3) a nonprofit corporation may indemnify and advance expenses to an officer, employee,
             3045      fiduciary, or agent who is not a director to a greater extent if:
             3046          (a) not inconsistent with public policy; and
             3047          (b) provided for by:
             3048          (i) its articles of incorporation or bylaws;
             3049          (ii) general or specific action of its board of directors; or
             3050          (iii) contract.
             3051          Section 109. Section 16-6a-908 is enacted to read:
             3052          16-6a-908. Insurance.
             3053          (1) A nonprofit corporation may purchase and maintain liability insurance:
             3054          (a) on behalf of a person who:
             3055          (i) is or was a director, officer, employee, fiduciary, or agent of the nonprofit corporation;
             3056      or
             3057          (ii) while serving as a director, officer, employee, fiduciary, or agent of the nonprofit
             3058      corporation at the request of the nonprofit corporation, is or was serving as a director, officer,
             3059      partner, trustee, employee, fiduciary, or agent of:
             3060          (A) another foreign or domestic nonprofit corporation;
             3061          (B) other person; or
             3062          (C) an employee benefit plan; and
             3063          (b) against liability asserted against or incurred by the person in that capacity or arising
             3064      from the person's status as a director, officer, employee, fiduciary, or agent, whether or not the
             3065      nonprofit corporation would have power to indemnify the person against the same liability under


             3066      Section 16-6a-902 , 16-6a-903 , or 16-6a-907 .
             3067          (2) Insurance may be procured from any insurance company designated by the board of
             3068      directors, whether the insurance company is formed under the laws of this state or any other
             3069      jurisdiction of the United States or elsewhere, including any insurance company in which the
             3070      nonprofit corporation has an equity or any other interest through stock ownership or otherwise.
             3071          Section 110. Section 16-6a-909 is enacted to read:
             3072          16-6a-909. Limitations on indemnification of directors.
             3073          (1) (a) A provision treating a nonprofit corporation's indemnification of, or advance for
             3074      expenses to, directors that is contained in the following is valid only if and to the extent the
             3075      provision is not inconsistent with this part:
             3076          (i) the articles of incorporation or bylaws of the nonprofit corporation;
             3077          (ii) a resolution of the nonprofit corporation's members or board of directors;
             3078          (iii) a contract, except an insurance policy; or
             3079          (iv) other writing.
             3080          (b) If the articles of incorporation limit indemnification or advance of expenses,
             3081      indemnification and advance of expenses are valid only to the extent not inconsistent with the
             3082      articles of incorporation.
             3083          (2) This part does not limit a nonprofit corporation's power to pay or reimburse expenses
             3084      incurred by a director in connection with the director's appearance as a witness in a proceeding at
             3085      a time when the director has not been made a named defendant or respondent to the proceeding.
             3086          Section 111. Section 16-6a-910 is enacted to read:
             3087          16-6a-910. Notice to voting members of indemnification of director.
             3088          (1) If a nonprofit corporation indemnifies or advances expenses to a director under this part
             3089      in connection with a proceeding by or in the right of the nonprofit corporation, the nonprofit
             3090      corporation shall give written notice of the indemnification or advance to the voting members with
             3091      or before the notice of the next voting members' meeting.
             3092          (2) If the next voting member action after the indemnification or advance is taken without
             3093      a meeting at the instigation of the board of directors, the notice shall be given to the voting
             3094      members at or before the time the first voting member signs a writing consenting to the action.
             3095          Section 112. Section 16-6a-1001 is enacted to read:
             3096     
Part 10. Amendment of Articles of Incorporation and Bylaws


             3097          16-6a-1001. Authority to amend articles of incorporation.
             3098          (1) A nonprofit corporation may amend its articles of incorporation at any time to:
             3099          (a) add or change a provision that is required or permitted in the articles of incorporation;
             3100      or
             3101          (b) delete a provision not required in the articles of incorporation.
             3102          (2) Whether a provision is required or permitted in the articles of incorporation is
             3103      determined as of the effective date of the amendment.
             3104          Section 113. Section 16-6a-1002 is enacted to read:
             3105          16-6a-1002. Amendment of articles of incorporation by board of directors or
             3106      incorporators.
             3107          (1) Unless otherwise provided in the articles of incorporation, the board of directors may
             3108      adopt, without member approval, one or more amendments to the articles of incorporation to:
             3109          (a) delete the names and addresses of the initial directors;
             3110          (b) delete the name and address of the initial registered agent or registered office, if a
             3111      statement of change is on file with the division;
             3112          (c) change the corporate name by:
             3113          (i) substituting the word "corporation," "incorporated," "company," "limited," or an
             3114      abbreviation of any such word for a similar word or abbreviation in the name; or
             3115          (ii) adding, deleting, or changing a geographical attribution; or
             3116          (d) make any other change expressly permitted by this chapter to be made without member
             3117      action.
             3118          (2) The board of directors may adopt, without member action, one or more amendments
             3119      to the articles of incorporation to change the corporate name, if necessary, in connection with the
             3120      reinstatement of a nonprofit corporation pursuant to Section 16-6a-1412 .
             3121          (3) (a) Subject to any approval required pursuant to Section 16-6a-1012 , if a nonprofit
             3122      corporation has no members, no members entitled to vote on amendments, or no members yet
             3123      admitted to membership, one or more amendments to the nonprofit corporation's articles of
             3124      incorporation may be adopted by:
             3125          (i) its incorporators until directors have been chosen; or
             3126          (ii) its directors after the directors have been chosen.
             3127          (b) A nonprofit corporation described in Subsection (3)(a) shall provide notice of any


             3128      meeting at which an amendment is to be voted upon.
             3129          (c) The notice required by Subsection (3)(b) shall:
             3130          (i) be in accordance with Section 16-6a-814 ;
             3131          (ii) state that the purpose, or one of the purposes, of the meeting is to consider a proposed
             3132      amendment to the articles of incorporation; and
             3133          (iii) (A) contain or be accompanied by a copy or summary of the amendment; or
             3134          (B) state the general nature of the amendment.
             3135          (d) An amendment described in Subsection (3)(a) shall be approved:
             3136          (i) by a majority of the incorporators, until directors have been chosen; or
             3137          (ii) after directors are chosen by a majority of the directors in office at the time the
             3138      amendment is adopted.
             3139          Section 114. Section 16-6a-1003 is enacted to read:
             3140          16-6a-1003. Amendment of articles of incorporation by board of directors and
             3141      members.
             3142          (1) The board of directors or the members representing at least 10% of all of the votes
             3143      entitled to be cast on the amendment may propose an amendment to the articles of incorporation
             3144      for submission to the members unless a different vote or voting class is required by:
             3145          (a) this chapter;
             3146          (b) the articles of incorporation;
             3147          (c) the bylaws; or
             3148          (d) the members or the board of directors acting pursuant to Subsection (5).
             3149          (2) For an amendment to the articles of incorporation to be adopted pursuant to Subsection
             3150      (1):
             3151          (a) the board of directors shall recommend the amendment to the members unless:
             3152          (i) the amendment is proposed by members; or
             3153          (ii) the board of directors:
             3154          (A) determines that because of conflict of interest or other special circumstances it should
             3155      make no recommendation; and
             3156          (B) communicates the basis for its determination to the members with the amendment; and
             3157          (b) the members entitled to vote on the amendment shall approve the amendment as
             3158      provided in Subsection (5).


             3159          (3) The proposing board of directors or the proposing members may condition the
             3160      effectiveness of the amendment on any basis.
             3161          (4) (a) The nonprofit corporation shall give notice, in accordance with Section 16-6a-704 ,
             3162      to each member entitled to vote on the amendment of the members' meeting at which the
             3163      amendment will be voted upon.
             3164          (b) The notice required by Subsection (4)(a) shall:
             3165          (i) state that the purpose, or one of the purposes, of the meeting is to consider the
             3166      amendment; and
             3167          (ii) (A) contain or be accompanied by a copy or a summary of the amendment; or
             3168          (B) shall state the general nature of the amendment.
             3169          (5) The amendment shall be approved by the votes required by Sections 16-6a-714 and
             3170      16-6a-715 by every voting group entitled to vote on the amendment unless a greater vote is
             3171      required by:
             3172          (a) this chapter;
             3173          (b) the articles of incorporation;
             3174          (c) bylaws adopted by the members; or
             3175          (d) the proposing board of directors or the proposing members acting pursuant to
             3176      Subsection (3).
             3177          (6) If the board of directors or the members seek to have the amendment approved by the
             3178      members by written consent, the material soliciting the approval shall contain or be accompanied
             3179      by a copy or summary of the amendment.
             3180          Section 115. Section 16-6a-1004 is enacted to read:
             3181          16-6a-1004. Voting on amendments of articles of incorporation by voting groups.
             3182          (1) Unless otherwise provided by this chapter or the articles of incorporation, if
             3183      membership voting is otherwise required by this chapter, the members of a class who are entitled
             3184      to vote are entitled to vote as a separate voting group on an amendment to the articles of
             3185      incorporation if the amendment would:
             3186          (a) affect the rights, privileges, preferences, restrictions, or conditions of that class as to
             3187      voting, dissolution, redemption, or transfer of memberships in a manner different than the
             3188      amendment would affect another class;
             3189          (b) change the rights, privileges, preferences, restrictions, or conditions of that class as to


             3190      voting, dissolution, redemption, or transfer by changing the rights, privileges, preferences,
             3191      restrictions, or conditions of another class;
             3192          (c) increase or decrease the number of memberships authorized for that class;
             3193          (d) increase the number of memberships authorized for another class;
             3194          (e) effect an exchange, reclassification, or termination of the memberships of that class;
             3195      or
             3196          (f) authorize a new class of memberships.
             3197          (2) If a class is to be divided into two or more classes as a result of an amendment to the
             3198      articles of incorporation, the amendment shall be approved by the members of each class that
             3199      would be created by the amendment.
             3200          Section 116. Section 16-6a-1005 is enacted to read:
             3201          16-6a-1005. Articles of amendment to articles of incorporation.
             3202          A nonprofit corporation amending its articles of incorporation shall deliver to the division
             3203      for filing articles of amendment setting forth:
             3204          (1) the name of the nonprofit corporation;
             3205          (2) the text of each amendment adopted;
             3206          (3) the date of each amendment's adoption;
             3207          (4) if the amendment was adopted by the board of directors or incorporators without
             3208      member action, a statement to that effect and that:
             3209          (a) the nonprofit corporation does not have members; or
             3210          (b) member action was not required;
             3211          (5) if the amendment was adopted by the members, a statement that the number of votes
             3212      cast for the amendment by the members or by each voting group entitled to vote separately on the
             3213      amendment was sufficient for approval by the members or voting group respectively; and
             3214          (6) if approval of the amendment by some person or persons other than the members, the
             3215      board of directors, or the incorporators is required pursuant to Section 16-6a-1013 , a statement that
             3216      the approval was obtained.
             3217          Section 117. Section 16-6a-1006 is enacted to read:
             3218          16-6a-1006. Restated articles of incorporation.
             3219          (1) (a) The board of directors may restate the articles of incorporation at any time with or
             3220      without member action.


             3221          (b) The incorporators of a nonprofit corporation may restate the articles of incorporation
             3222      at any time if the nonprofit corporation:
             3223          (i) has no members; and
             3224          (ii) no directors have been chosen.
             3225          (2) (a) The restatement may include one or more amendments to the articles of
             3226      incorporation.
             3227          (b) Notwithstanding Subsection (1), if the restatement includes an amendment requiring
             3228      member approval, it shall be adopted as provided in Section 16-6a-1003 .
             3229          (3) (a) If the board of directors submits a restatement for member action, the nonprofit
             3230      corporation shall give notice, in accordance with Section 16-6a-704 , to each member entitled to
             3231      vote on the restatement of the members' meeting at which the restatement will be voted upon.
             3232          (b) The notice required by Subsection (3)(a) shall:
             3233          (i) state that the purpose, or one of the purposes, of the meeting is to consider the
             3234      restatement; and
             3235          (ii) contain or be accompanied by a copy of the restatement that identifies any amendment
             3236      or other change it would make in the articles of incorporation.
             3237          (4) A nonprofit corporation restating its articles of incorporation shall deliver to the
             3238      division for filing articles of restatement setting forth:
             3239          (a) the name of the nonprofit corporation;
             3240          (b) the text of the restated articles of incorporation;
             3241          (c) if the restatement contains an amendment to the articles of incorporation that was
             3242      adopted by the members, the information required by Subsection 16-6a-1005 (1)(e); and
             3243          (d) if the restatement was adopted by the board of directors or incorporators without
             3244      member action, a statement to that effect and that member action was not required.
             3245          (5) Upon filing by the division or at any later effective date determined pursuant to Section
             3246      16-6a-108 , restated articles of incorporation supersede the original articles of incorporation and
             3247      all prior amendments to the original articles of incorporation.
             3248          Section 118. Section 16-6a-1007 is enacted to read:
             3249          16-6a-1007. Amendment of articles of incorporation pursuant to reorganization.
             3250          (1) Articles of incorporation may be amended, without action by the board of directors or
             3251      members, to carry out a plan of reorganization ordered or decreed by a court of competent


             3252      jurisdiction under a statute of this state or of the United States if the articles of incorporation after
             3253      amendment contain only provisions required or permitted by Section 16-6a-202 .
             3254          (2) For an amendment to the articles of incorporation to be made pursuant to Subsection
             3255      (1), one or more individuals designated by the court shall deliver to the division for filing articles
             3256      of amendment setting forth:
             3257          (a) the name of the nonprofit corporation;
             3258          (b) the text of each amendment approved by the court;
             3259          (c) the date of the court's order or decree approving the articles of amendment;
             3260          (d) the title of the reorganization proceeding in which the order or decree was entered; and
             3261          (e) a statement that the court had jurisdiction of the proceeding under a specified statute
             3262      of this state or of the United States.
             3263          (3) This section does not apply after entry of a final decree in the reorganization
             3264      proceeding even though the court retains jurisdiction of the proceeding for limited purposes
             3265      unrelated to consummation of the reorganization plan.
             3266          Section 119. Section 16-6a-1008 is enacted to read:
             3267          16-6a-1008. Conversion to a corporation.
             3268          (1) (a) A domestic nonprofit corporation may convert to a corporation subject to Title 16,
             3269      Chapter 10a, Utah Revised Business Corporation Act, by filing amendment of its articles of
             3270      incorporation with the division pursuant to this section.
             3271          (b) The day on which a nonprofit domestic corporation files amendments under this
             3272      section, the domestic nonprofit corporation becomes a corporation subject to Title 16, Chapter 10a,
             3273      Utah Revised Business Corporation Act.
             3274          (2) (a) The amendment of the articles of incorporation to convert to a corporation shall:
             3275          (i) revise the statement of purpose;
             3276          (ii) delete:
             3277          (A) the authorization for members; and
             3278          (B) any other provisions relating to memberships;
             3279          (iii) authorize shares:
             3280          (A) stating the number of shares; and
             3281          (B) including the information required by Section 16-10a-601 with respect to each class
             3282      of shares the corporation is to be authorized to issue;


             3283          (iv) make such other changes as may be necessary or desired; and
             3284          (v) if the corporation has any members, provide for:
             3285          (A) the cancellation of the memberships; or
             3286          (B) the conversion of the memberships to shares of the corporation.
             3287          (3) If the nonprofit corporation has any voting members, an amendment to convert to a
             3288      corporation shall be approved by all of the members regardless of limitations or restrictions on the
             3289      voting rights of the members.
             3290          (4) If an amendment to the articles of incorporation filed pursuant to this section is
             3291      included in a merger agreement, this section applies, except that any provisions for cancellation
             3292      or conversion of memberships:
             3293          (a) shall be in the merger agreement; and
             3294          (b) may not be in the amendment of the articles of incorporation.
             3295          Section 120. Section 16-6a-1009 is enacted to read:
             3296          16-6a-1009. Effect of amendment of articles of incorporation.
             3297          (1) An amendment to the articles of incorporation does not affect:
             3298          (a) any existing right of persons other than members;
             3299          (b) any cause of action existing against or in favor of the nonprofit corporation; or
             3300          (c) any proceeding to which the nonprofit corporation is a party.
             3301          (2) An amendment changing a nonprofit corporation's corporate name does not abate a
             3302      proceeding brought by or against a nonprofit corporation in its former corporate name.
             3303          Section 121. Section 16-6a-1010 is enacted to read:
             3304          16-6a-1010. Amendment of bylaws by board of directors or members.
             3305          (1) The board of directors may amend the bylaws at any time to add, change, or delete a
             3306      provision, unless:
             3307          (a) this chapter or the articles of incorporation or bylaws:
             3308          (i) reserve the power exclusively to the members in whole or part; or
             3309          (ii) otherwise prohibit the board of directors from amending the bylaws to add, change,
             3310      or delete a provision; or
             3311          (b) it would result in a change of the rights, privileges, preferences, restrictions, or
             3312      conditions of a membership class as to voting, dissolution, redemption, or transfer by changing the
             3313      rights, privileges, preferences, restrictions, or conditions of another class.


             3314          (2) (a) The members may amend the bylaws even though the bylaws may also be amended
             3315      by the board of directors.
             3316          (b) Amendments to the bylaws by members shall be made in accordance with Sections
             3317      16-6a-1003 and 16-6a-1004 as if each reference in Sections 16-6a-1003 and 16-6a-1004 to the
             3318      article of incorporation was a reference to the bylaws.
             3319          Section 122. Section 16-6a-1011 is enacted to read:
             3320          16-6a-1011. Bylaw changing quorum or voting requirement for members.
             3321          (1) (a) If authorized by the articles of incorporation, the members may adopt, amend, or
             3322      repeal bylaws that fix a greater quorum or voting requirement for members, or voting groups of
             3323      members, than is required by this chapter.
             3324          (b) An action by the members under Subsection (1)(a) is subject to Parts 6 and 7.
             3325          (2) Bylaws that fix a lesser or greater quorum requirement or a greater voting requirement
             3326      for members pursuant to Section 16-6a-716 may not be amended by the board of directors.
             3327          Section 123. Section 16-6a-1012 is enacted to read:
             3328          16-6a-1012. Bylaw changing quorum or voting requirement for directors.
             3329          (1) Bylaws that fix a greater quorum or voting requirement for the board of directors may
             3330      be amended:
             3331          (a) if adopted by the members, only by the members; or
             3332          (b) if adopted by the board of directors, by:
             3333          (i) the members; or
             3334          (ii) the board of directors.
             3335          (2) Bylaws adopted or amended by the members that fix a greater quorum or voting
             3336      requirement for the board of directors may provide that the bylaws may be amended only by a
             3337      specified vote of:
             3338          (a) the members; or
             3339          (b) the board of directors.
             3340          (3) Action by the board of directors under Subsection (1)(b) to adopt or amend bylaws that
             3341      change the quorum or voting requirement for the board of directors shall meet the greater of the
             3342      quorum and voting requirement for taking the action:
             3343          (a) then in effect; or
             3344          (b) proposed to be adopted.


             3345          Section 124. Section 16-6a-1013 is enacted to read:
             3346          16-6a-1013. Approval by third persons.
             3347          (1) The articles of incorporation may require an amendment to the articles of incorporation
             3348      or bylaws to be approved in writing by a specified person or persons other than the board of
             3349      directors.
             3350          (2) A provision permitted under Subsection (2) may only be amended with the approval
             3351      in writing of the person or persons specified in the provision.
             3352          Section 125. Section 16-6a-1014 is enacted to read:
             3353          16-6a-1014. Amendment terminating members or redeeming or canceling
             3354      memberships.
             3355          (1) An amendment to the articles of incorporation or bylaws of a nonprofit corporation
             3356      shall meet the requirements of this chapter and this section if the amendment would:
             3357          (a) terminate all members or any class of members; or
             3358          (b) redeem or cancel all memberships or any class of memberships.
             3359          (2) Before adopting a resolution proposing an amendment as described in Subsection (1),
             3360      the board of directors of a nonprofit corporation shall give notice of the general nature of the
             3361      amendment to the members.
             3362          Section 126. Section 16-6a-1101 is enacted to read:
             3363     
Part 11. Merger

             3364          16-6a-1101. Merger.
             3365          (1) One or more nonprofit corporations may merge into another nonprofit corporation if:
             3366          (a) the board of directors of each nonprofit corporation adopts a plan of merger; and
             3367          (b) required by Section 16-6a-1102 , the members of the nonprofit corporation entitled to
             3368      vote on the plan of merger, approve the plan of merger.
             3369          (2) The plan of merger required by Subsection (1) shall set forth:
             3370          (a) the name of each nonprofit corporation planning to merge;
             3371          (b) the name of the surviving nonprofit corporation into which each nonprofit corporation
             3372      plans to merge;
             3373          (c) the terms and conditions of the merger;
             3374          (d) the manner and basis of converting in whole or part the memberships of each nonprofit
             3375      corporation, if any, into memberships, obligations, or other interests of:


             3376          (i) the surviving nonprofit corporation;
             3377          (ii) any other entity; or
             3378          (iii) into money or other property; and
             3379          (e) any amendments to the articles of incorporation of the surviving nonprofit corporation
             3380      to be effected by the merger.
             3381          (3) In addition to the provisions required by Subsection (2), the plan of merger may set
             3382      forth other provisions relating to the merger.
             3383          Section 127. Section 16-6a-1102 is enacted to read:
             3384          16-6a-1102. Action on plan of merger.
             3385          (1) After adopting the plan of merger, the board of directors of each nonprofit corporation
             3386      that is a party to the merger shall submit the plan of merger to its members, if any are entitled to
             3387      vote on the plan of merger, for approval.
             3388          (2) If the nonprofit corporation has members entitled to vote with respect to the approval
             3389      of a plan of merger, a plan of merger is approved by the members if:
             3390          (a) (i) the board of directors recommends the plan of merger to the members entitled to
             3391      vote on the plan of merger; or
             3392          (ii) (A) the board of directors determines that, because of conflict of interest or other
             3393      special circumstances, it should make no recommendation; and
             3394          (B) communicates the basis for its determination to the members with the plan; and
             3395          (b) the members entitled to vote on the plan of merger approve the plan as provided in
             3396      Subsection (7).
             3397          (3) After adopting the plan of merger, the board of directors of each nonprofit corporation
             3398      party to the merger shall submit the plan of merger for written approval by any person or persons:
             3399          (a) whose approval is required by the articles of incorporation of the nonprofit corporation;
             3400      and
             3401          (b) as required by Section 16-6a-1013 for an amendment to the articles of incorporation
             3402      or bylaws.
             3403          (4) (a) If the nonprofit corporation does not have members entitled to vote on a merger,
             3404      the merger shall be approved and adopted by a majority of the directors elected and in office at the
             3405      time the plan of merger is considered by the board of directors.
             3406          (b) The nonprofit corporation shall provide notice of any meeting of the board of directors


             3407      at which the approval described in Subsection (4)(a) is to be obtained in accordance with Section
             3408      16-6a-814 .
             3409          (c) The notice required by Subsection (4)(b) shall state that the purpose, or one of the
             3410      purposes, of the meeting is to consider the proposed merger.
             3411          (5) The board of directors may condition the effectiveness of the plan of merger on any
             3412      basis.
             3413          (6) (a) The nonprofit corporation shall give notice, in accordance with Section 16-6a-704 ,
             3414      to each member entitled to vote on the plan of merger of the members' meeting at which the plan
             3415      will be voted on.
             3416          (b) The notice required by Subsection (6)(a) shall:
             3417          (i) state that the purpose, or one of the purposes, of the meeting is to consider the plan of
             3418      merger; and
             3419          (ii) contain or be accompanied by a copy of the plan of merger or a summary of the plan
             3420      of merger.
             3421          (7) The plan of merger shall be approved by the votes required by Sections 16-6a-714 and
             3422      16-6a-715 by every voting group entitled to vote on the plan of merger unless a greater vote is
             3423      required by:
             3424          (a) this chapter;
             3425          (b) the articles of incorporation;
             3426          (c) bylaws adopted by the members; or
             3427          (d) the board of directors acting pursuant to Subsection (5).
             3428          (8) Separate voting by voting groups is required on a plan of merger if the plan contains
             3429      a provision that, if contained in an amendment to the articles of incorporation, would require action
             3430      by one or more separate voting groups on the amendment.
             3431          Section 128. Section 16-6a-1103 is enacted to read:
             3432          16-6a-1103. Articles of merger.
             3433          (1) After a plan of merger is approved, pursuant to Section 16-6a-1102 , the surviving
             3434      nonprofit corporation shall deliver to the division for filing articles of merger setting forth:
             3435          (a) the plan of merger;
             3436          (b) if member approval was not required:
             3437          (i) a statement to the effect that member approval was not required; and


             3438          (ii) a statement that the plan of merger was approved by a sufficient vote of the board of
             3439      directors of the nonprofit corporation;
             3440          (c) if approval of the members of one or more nonprofit corporations party to the merger
             3441      was required, a statement that the number of votes cast for the plan by each voting group entitled
             3442      to vote separately on the merger was sufficient for approval by that voting group; and
             3443          (d) if approval of the plan by some person or persons other than the members or the board
             3444      of directors is required pursuant to Subsection 16-6a-1102 (3), a statement that the approval was
             3445      obtained.
             3446          (2) A merger takes effect upon the effective date stated in the articles of merger, which
             3447      may not be prior to the date the articles of merger are filed.
             3448          (3) Articles of merger shall be executed by each party to the merger.
             3449          Section 129. Section 16-6a-1104 is enacted to read:
             3450          16-6a-1104. Effect of merger.
             3451          (1) When a merger takes effect:
             3452          (a) every other nonprofit corporation party to the merger merges into the surviving
             3453      nonprofit corporation;
             3454          (b) the separate existence of every nonprofit corporation party to the merger except the
             3455      surviving nonprofit corporation ceases;
             3456          (c) the title to all real estate and other property owned by each other nonprofit corporation
             3457      party to the merger is transferred to and vested in the surviving nonprofit corporation without
             3458      reversion or impairment;
             3459          (d) the surviving nonprofit corporation has all liabilities of each nonprofit corporation
             3460      party to the merger;
             3461          (e) (i) a proceeding pending by or against any nonprofit corporation party to the merger
             3462      may be continued as if the merger did not occur; or
             3463          (ii) the surviving nonprofit corporation may be substituted in the proceeding for the
             3464      nonprofit corporation whose existence ceased;
             3465          (f) the articles of incorporation of the surviving nonprofit corporation are amended to the
             3466      extent provided in the plan of merger; and
             3467          (g) the memberships of each nonprofit corporation party to the merger that are to be
             3468      converted into memberships, obligations, or other interests of the surviving nonprofit corporation


             3469      or into money or other property are converted, and the former holders of the memberships are
             3470      entitled only to the rights provided in the articles of merger.
             3471          (2) (a) A transfer to and vesting in the surviving nonprofit corporation described in
             3472      Subsection (1)(c) occurs by operation of law.
             3473          (b) Consent or approval of any other person may not be required in connection with any
             3474      transfer or vesting unless the consent or approval is specifically required in the event of merger by:
             3475          (i) law; or
             3476          (ii) express provision in any contract, agreement, decree, order, or other instrument to
             3477      which any of the nonprofit corporations so merged is a party or by which it is bound.
             3478          Section 130. Section 16-6a-1105 is enacted to read:
             3479          16-6a-1105. Merger with foreign nonprofit corporation.
             3480          (1) One or more domestic nonprofit corporations may merge with one or more foreign
             3481      nonprofit corporations if:
             3482          (a) the merger is permitted by the law of the state or country under whose law each foreign
             3483      nonprofit corporation is incorporated;
             3484          (b) each foreign nonprofit corporation complies with the provisions of the law described
             3485      in Subsection (1)(a) in effecting the merger;
             3486          (c) if the foreign corporation is the surviving nonprofit corporation of the merger, the
             3487      foreign corporation:
             3488          (i) complies with Section 16-6a-1103 ; and
             3489          (ii) in addition to the information required by Section 16-6a-103 , provides the address of
             3490      its principal office; and
             3491          (d) each domestic nonprofit corporation complies with:
             3492          (i) the applicable provisions of Sections 16-6a-1101 and 16-6a-1102 ; and
             3493          (ii) if it is the surviving nonprofit corporation of the merger, with Section 16-6a-1103 .
             3494          (2) Upon the merger taking effect, a surviving foreign nonprofit corporation of a merger
             3495      shall:
             3496          (a) (i) maintain a registered agent to accept service in any proceeding based on a cause of
             3497      action arising with respect to any domestic nonprofit corporation that is merged into the foreign
             3498      nonprofit corporation; or
             3499          (ii) be considered to have authorized service of process on it in connection with any


             3500      proceeding described in Subsection (2)(a)(i) by registered or certified mail, return receipt
             3501      requested, to the address of its principal office as:
             3502          (A) set forth in the articles of merger; or
             3503          (B) last change in a notice delivered to the division; and
             3504          (b) shall comply with this chapter if it is to conduct affairs in this state.
             3505          (3) Service effected pursuant to Subsection (2)(a)(ii) is perfected at the earliest of:
             3506          (a) the date the foreign nonprofit corporation receives the process, notice, or demand;
             3507          (b) the date shown on the return receipt, if signed on behalf of the foreign nonprofit
             3508      corporation; or
             3509          (c) five days after mailing.
             3510          (4) Subsection (2) does not prescribe the only means, or necessarily the required means,
             3511      of serving a surviving foreign nonprofit corporation of a merger.
             3512          Section 131. Section 16-6a-1201 is enacted to read:
             3513     
Part 12. Sale of Property

             3514          16-6a-1201. Sale of property.
             3515          (1) Unless the bylaws otherwise provide, a nonprofit corporation may, as authorized by
             3516      the board of directors:
             3517          (a) sell, lease, exchange, or otherwise dispose of all or substantially all of its property in
             3518      the usual and regular course of business; or
             3519          (b) mortgage, pledge, dedicate to the repayment of indebtedness, whether with or without
             3520      recourse, or otherwise encumber all or substantially all of its property whether or not in the usual
             3521      and regular course of business.
             3522          (2) Unless otherwise provided in the bylaws, approval of a transaction described in this
             3523      section by the members is not required.
             3524          Section 132. Section 16-6a-1202 is enacted to read:
             3525          16-6a-1202. Sale of property other than in regular course of activities.
             3526          (1) (a) A nonprofit corporation may sell, lease, exchange, or otherwise dispose of all, or
             3527      substantially all, of its property, with or without its good will, other than in the usual and regular
             3528      course of business on the terms and conditions and for the consideration determined by the board
             3529      of directors, if:
             3530          (i) the board of directors proposes the transaction; and


             3531          (ii) the members entitled to vote on the transaction approve the transaction.
             3532          (b) A sale, lease, exchange, or other disposition of all, or substantially all, of the property
             3533      of a nonprofit corporation, with or without its good will, in connection with its dissolution, other
             3534      than in the usual and regular course of business, and other than pursuant to a court order, shall be
             3535      subject to this section.
             3536          (c) A sale, lease, exchange, or other disposition of all, or substantially all, of the property
             3537      of a nonprofit corporation, with or without its good will, pursuant to a court order is not subject
             3538      to this section.
             3539          (2) (a) A nonprofit corporation shall comply with Subsection (2)(b) to vote or otherwise
             3540      consent with respect to the sale, lease, exchange, or other disposition of all, or substantially all, of
             3541      the property with or without the good will of another entity that the nonprofit corporation controls
             3542      if:
             3543          (i) the nonprofit corporation is entitled to vote or otherwise consent; and
             3544          (ii) the property interests held by the nonprofit corporation in the other entity constitute
             3545      all, or substantially all, of the property of the nonprofit corporation.
             3546          (b) A nonprofit corporation may vote or otherwise consent to a transaction described in
             3547      Subsection (2)(a) only if:
             3548          (i) the board of the directors of the nonprofit corporation proposes the vote or consent; and
             3549          (ii) the members, if any are entitled to vote on the vote or consent, approve giving the vote
             3550      or consent.
             3551          (3) For a transaction described in Subsection (1) or a consent described in Subsection (2)
             3552      to be approved by the members:
             3553          (a) (i) the board of directors shall recommend the transaction or the consent to the
             3554      members; or
             3555          (ii) the board of directors shall:
             3556          (A) determine that because of a conflict of interest or other special circumstance it should
             3557      make no recommendation; and
             3558          (B) communicate the basis for its determination to the members at a membership meeting
             3559      with the submission of the transaction or consent; and
             3560          (b) the members entitled to vote on the transaction or the consent shall approve the
             3561      transaction or the consent as provided in Subsection (6).


             3562          (4) The board of directors may condition the effectiveness of the transaction or the consent
             3563      on any basis.
             3564          (5) (a) The nonprofit corporation shall give notice, in accordance with Section 16-6a-704
             3565      to each member entitled to vote on the transaction described in Subsection (1) or the consent
             3566      described in Subsection (2), of the members' meeting at which the transaction or the consent will
             3567      be voted upon.
             3568          (b) The notice required by Subsection (1) shall:
             3569          (i) state that the purpose, or one of the purposes, of the meeting is to consider:
             3570          (A) in the case of action pursuant to Subsection (1), the sale, lease, exchange, or other
             3571      disposition of all, or substantially all, of the property of the nonprofit corporation; or
             3572          (B) in the case of action pursuant to Subsection (2), the nonprofit corporation's consent to
             3573      the sale, lease, exchange, or other disposition of all, or substantially all, of the property of another
             3574      entity, the property interests of which:
             3575          (I) are held by the nonprofit corporation; and
             3576          (II) constitute all, or substantially all, of the property of the nonprofit corporation;
             3577          (ii) contain or be accompanied by a description of:
             3578          (A) the transaction, in the case of action pursuant to Subsection (1); or
             3579          (B) the transaction underlying the consent, in the case of action pursuant to Subsection (2);
             3580      and
             3581          (iii) in the case of action pursuant to Subsection (2), identify the entity whose property is
             3582      the subject of the transaction.
             3583          (6) The transaction described in Subsection (1) or the consent described in Subsection (2)
             3584      shall be approved by the votes required by Sections 16-6a-714 and 16-6a-715 by every voting
             3585      group entitled to vote on the transaction or the consent unless a greater vote is required by:
             3586          (a) this chapter;
             3587          (b) the articles of incorporation;
             3588          (c) bylaws adopted by the members; or
             3589          (d) the board of directors acting pursuant to Subsection (4).
             3590          (7) After a transaction described in Subsection (1) or a consent described in Subsection
             3591      (2) is authorized, the transaction may be abandoned or the consent withheld or revoked, subject
             3592      to any contractual rights or other limitations on such abandonment, withholding, or revocation,


             3593      without further action by the members.
             3594          (8) A transaction that constitutes a distribution is governed by Part 13 and not by this
             3595      section.
             3596          Section 133. Section 16-6a-1301 is enacted to read:
             3597     
Part 13. Distributions

             3598          16-6a-1301. Distributions prohibited.
             3599          Except as authorized by Section 16-6a-1302 , a nonprofit corporation may not make a
             3600      distribution.
             3601          Section 134. Section 16-6a-1302 is enacted to read:
             3602          16-6a-1302. Authorized distributions.
             3603          (1) A nonprofit corporation may:
             3604          (a) make distributions of its income or assets to a member that is a domestic or foreign
             3605      nonprofit corporation;
             3606          (b) pay compensation in a reasonable amount to its members, directors, or officers for
             3607      services rendered;
             3608          (c) if a co-operative nonprofit corporation, make distributions consistent with its purposes;
             3609      and
             3610          (d) confer benefits upon its members in conformity with its purposes.
             3611          (2) A nonprofit corporation may make distributions upon dissolution in conformity with
             3612      this chapter.
             3613          Section 135. Section 16-6a-1401 is enacted to read:
             3614     
Part 14. Dissolution

             3615          16-6a-1401. Dissolution by incorporators or directors if no members.
             3616          (1) If a nonprofit corporation has no members, the following may authorize the dissolution
             3617      of the nonprofit corporation:
             3618          (a) a majority of its directors; or
             3619          (b) if it has no directors, a majority of its incorporators.
             3620          (2) The directors or incorporators in approving dissolution shall adopt a plan of dissolution
             3621      indicating to whom the assets owned or held by the nonprofit corporation will be distributed after
             3622      all creditors have been paid.
             3623          Section 136. Section 16-6a-1402 is enacted to read:


             3624          16-6a-1402. Dissolution by directors and members.
             3625          (1) If a nonprofit corporation has members, dissolution of a nonprofit corporation may be
             3626      authorized in the manner provided in Subsection (2).
             3627          (2) For a proposal to dissolve the nonprofit corporation to be authorized:
             3628          (a) the board of directors shall adopt the proposal to dissolve;
             3629          (b) the board of directors shall:
             3630          (i) recommend the proposal to dissolve to the members; or
             3631          (ii) (A) determine that because of a conflict of interest or other special circumstance, it
             3632      should make no recommendation; and
             3633          (B) communicate the basis for its determination to the members; and
             3634          (c) the members entitled to vote on the proposal to dissolve shall approve the proposal to
             3635      dissolve as provided in Subsection (5).
             3636          (3) The board of directors may condition the effectiveness of the dissolution, and the
             3637      members may condition their approval of the dissolution, on any basis.
             3638          (4) (a) The nonprofit corporation shall give notice, in accordance with Section 16-6a-704 ,
             3639      to each member entitled to vote on the proposal of the members' meeting at which the proposal to
             3640      dissolve will be voted on.
             3641          (b) The notice required by Subsection (4)(a) shall:
             3642          (i) state that the purpose, or one of the purposes, of the meeting is to consider the proposal
             3643      to dissolve the nonprofit corporation; and
             3644          (ii) contain or be accompanied by a copy of the proposal or a summary of the proposal.
             3645          (5) The proposal to dissolve shall be approved by the votes required by Sections 16-6a-714
             3646      and 16-6a-715 by every voting group entitled to vote on the proposal to dissolve unless a greater
             3647      vote is required by:
             3648          (a) this chapter;
             3649          (b) the articles of incorporation;
             3650          (c) bylaws adopted by the members; or
             3651          (d) the board of directors acting pursuant to Subsection (3).
             3652          (6) The plan of dissolution shall indicate to whom the assets owned or held by the
             3653      nonprofit corporation will be distributed after all creditors have been paid.
             3654          Section 137. Section 16-6a-1403 is enacted to read:


             3655          16-6a-1403. Articles of dissolution.
             3656          (1) At any time after dissolution is authorized, the nonprofit corporation may dissolve by
             3657      delivering to the division for filing articles of dissolution setting forth:
             3658          (a) the name of the nonprofit corporation;
             3659          (b) (i) (A) the address of the nonprofit corporation's principal office; or
             3660          (B) if a principal office is not to be maintained, a statement that the nonprofit corporation
             3661      will not maintain a principal office; and
             3662          (ii) if different from the address of the principal office or if no principal office is to be
             3663      maintained, the address to which service of process may be mailed pursuant to Section 16-6a-1409 ;
             3664          (c) the date dissolution was authorized;
             3665          (d) if dissolution was authorized by the directors or the incorporators pursuant to Section
             3666      16-6a-1401 , a statement to that effect;
             3667          (e) if dissolution was approved by the members pursuant to Section 16-6a-1402 , a
             3668      statement that the number of votes cast for the proposal to dissolve by each voting group entitled
             3669      to vote separately on the proposal was sufficient for approval by that voting group; and
             3670          (f) any additional information as the division determines is necessary or appropriate.
             3671          (2) A nonprofit corporation is dissolved upon the effective date of its articles of
             3672      dissolution.
             3673          (3) Articles of dissolution need not be filed by a nonprofit corporation that is dissolved
             3674      pursuant to Section 16-6a-1418 .
             3675          Section 138. Section 16-6a-1404 is enacted to read:
             3676          16-6a-1404. Revocation of dissolution.
             3677          (1) A nonprofit corporation may revoke its dissolution within 120 days after the effective
             3678      date of the dissolution.
             3679          (2) (a) Except as provided in Subsection (2)(b) revocation of dissolution shall be
             3680      authorized in the same manner as the dissolution was authorized.
             3681          (b) The board of directors may revoke the dissolution without member action if:
             3682          (i) the dissolution is authorized pursuant to Section 16-6a-1402 ; and
             3683          (ii) the authorization permitted revocation by action of the board of directors alone.
             3684          (3) (a) After the revocation of dissolution is authorized, the nonprofit corporation may
             3685      revoke the dissolution by delivering to the division for filing, within 120 days after the effective


             3686      date of dissolution:
             3687          (i) articles of revocation of dissolution; and
             3688          (ii) a copy of its articles of dissolution.
             3689          (b) The articles of revocation of dissolution shall set forth:
             3690          (i) the name of the nonprofit corporation;
             3691          (ii) the effective date of the dissolution that was revoked;
             3692          (iii) the date that the revocation of dissolution was authorized;
             3693          (iv) if, pursuant to Subsection (2), the directors or the incorporators revoked a dissolution
             3694      authorized under Section 16-6a-1401 , a statement that the revocation of dissolution was authorized
             3695      by the directors or the incorporators, as the case may be;
             3696          (v) if, pursuant to Subsection (2), the directors revoked a dissolution approved by the
             3697      members, a statement that the revocation was permitted by action of the directors pursuant to that
             3698      approval; and
             3699          (vi) if the revocation of dissolution was approved pursuant to Subsection (2) by the
             3700      members, a statement that the number of votes cast for revocation of dissolution by each voting
             3701      group entitled to vote separately on the proposal to dissolve was sufficient for approval by that
             3702      voting group.
             3703          (4) (a) Revocation of dissolution is effective as provided in Subsection 16-6a-108 (1).
             3704          (b) A delayed effective date may not be specified pursuant to Subsection 16-6a-108 (2).
             3705          (5) When the revocation of dissolution is effective:
             3706          (a) the revocation relates back to and takes effect as of the effective date of the dissolution;
             3707      and
             3708          (b) the nonprofit corporation may carry on its activities and use its corporate name as if
             3709      dissolution had never occurred.
             3710          Section 139. Section 16-6a-1405 is enacted to read:
             3711          16-6a-1405. Effect of dissolution.
             3712          (1) A dissolved nonprofit corporation continues its corporate existence but may not carry
             3713      on any activities except as is appropriate to wind up and liquidate its affairs, including:
             3714          (a) collecting its assets;
             3715          (b) returning, transferring, or conveying assets held by the nonprofit corporation upon a
             3716      condition requiring return, transfer, or conveyance, which condition occurs by reason of the


             3717      dissolution, in accordance with the condition;
             3718          (c) transferring, subject to any contractual or legal requirements, its assets as provided in
             3719      or authorized by its articles of incorporation or bylaws;
             3720          (d) discharging or making provision for discharging its liabilities; and
             3721          (e) doing every other act necessary to wind up and liquidate its assets and affairs.
             3722          (2) (a) Unless otherwise provided in the articles of incorporation or bylaws, upon
             3723      dissolution of a nonprofit corporation described under Section 501(c)(3), Internal Revenue Code,
             3724      and exempt from tax under Section 501(a), Internal Revenue Code, or corresponding section of
             3725      any future federal tax code, the assets of the nonprofit corporation shall be distributed:
             3726          (i) for one or more exempt purposes under Section 501, Internal Revenue Code;
             3727          (ii) to the federal government for a public purpose; or
             3728          (iii) to a state or local government, for a public purpose.
             3729          (b) Any assets not disposed of under Subsection (2)(a) shall be disposed of by the district
             3730      court for the county in which the principal office of the nonprofit corporation is then located,
             3731      exclusively as determined by the court:
             3732          (i) for one or more exempt purposes under Section 501, Internal Revenue Code; or
             3733          (ii) to organizations that are organized and operated exclusively for exempt or public
             3734      purposes.
             3735          (3) Dissolution of a nonprofit corporation does not:
             3736          (a) transfer title to the nonprofit corporation's property;
             3737          (b) subject its directors or officers to standards of conduct different from those prescribed
             3738      in this chapter;
             3739          (c) change quorum or voting requirements for its board of directors or members;
             3740          (d) change provisions for selection, resignation, or removal of its directors or officers, or
             3741      both;
             3742          (e) change provisions for amending its bylaws or its articles of incorporation;
             3743          (f) prevent commencement of a proceeding by or against the nonprofit corporation in its
             3744      corporate name; or
             3745          (g) abate or suspend a proceeding pending by or against the nonprofit corporation on the
             3746      effective date of dissolution.
             3747          Section 140. Section 16-6a-1406 is enacted to read:


             3748          16-6a-1406. Disposition of known claims by notification.
             3749          (1) A dissolved nonprofit corporation may dispose of the known claims against it by
             3750      following the procedures described in this section.
             3751          (2) A dissolved nonprofit corporation electing to dispose of known claims pursuant to this
             3752      section may give written notice of the dissolution to known claimants at any time after the effective
             3753      date of the dissolution. The written notice shall:
             3754          (a) describe the information that shall be included in a claim;
             3755          (b) provide an address to which written notice of any claim shall be given to the nonprofit
             3756      corporation;
             3757          (c) state the deadline by which the dissolved nonprofit corporation shall receive a claim,
             3758      which may not be fewer than 120 days after the effective date of the notice; and
             3759          (d) state that unless sooner barred by any other state statute limiting actions, a claim will
             3760      be barred if not received by the deadline stated in Subsection (2)(d).
             3761          (3) Unless sooner barred by any other statute limiting actions, a claim against the dissolved
             3762      nonprofit corporation is barred if:
             3763          (a) (i) a claimant was given notice under Subsection (2); and
             3764          (ii) the claim is not received by the dissolved nonprofit corporation by the deadline stated
             3765      in the notice; or
             3766          (b) (i) the dissolved nonprofit corporation delivers to the claimant written notice of
             3767      rejection of the claim within 90 days after receipt of the claim; and
             3768          (ii) the claimant whose claim was rejected by the dissolved nonprofit corporation does not
             3769      commence a proceeding to enforce the claim within 90 days after the effective date of the rejection
             3770      notice.
             3771          (4) Claims that are not rejected by the dissolved nonprofit corporation in writing within
             3772      90 days after receipt of the claim by the dissolved nonprofit corporation shall be considered
             3773      accepted.
             3774          (5) The failure of the dissolved nonprofit corporation to give notice to any known claimant
             3775      pursuant to Subsection (2) does not affect the disposition under this section of any claim held by
             3776      any other known claimant.
             3777          (6) For purposes of this section:
             3778          (a) "claim" does not include:


             3779          (i) a contingent liability; or
             3780          (ii) a claim based on an event occurring after the effective date of dissolution; and
             3781          (b) an action to enforce a claim includes:
             3782          (i) any civil action; and
             3783          (ii) any arbitration under any agreement for binding arbitration between the dissolved
             3784      nonprofit corporation and the claimant.
             3785          Section 141. Section 16-6a-1407 is enacted to read:
             3786          16-6a-1407. Disposition of claims by publication.
             3787          (1) A dissolved nonprofit corporation may publish notice of its dissolution and request that
             3788      persons with claims against the nonprofit corporation present them in accordance with the notice.
             3789          (2) The notice described in Subsection (1) shall:
             3790          (a) be published one time in a newspaper of general circulation in the county where:
             3791          (i) the dissolved nonprofit corporation's principal office is located; or
             3792          (ii) if the dissolved nonprofit corporation has no principal office in this state, its registered
             3793      office is or was last located;
             3794          (b) describe the information that shall be included in a claim;
             3795          (c) provide an address at which any claim shall be given to the nonprofit corporation; and
             3796          (d) state that unless sooner barred by any other statute limiting actions, a claim will be
             3797      barred if an action to enforce the claim is not commenced within three years after publication of
             3798      the notice.
             3799          (3) If the dissolved nonprofit corporation publishes a newspaper notice in accordance with
             3800      Subsection (2), then unless sooner barred under Section 16-6a-1406 or under any other statute
             3801      limiting actions, the claim of any claimant against the dissolved nonprofit corporation is barred
             3802      unless the claimant commences an action to enforce the claim against the dissolved nonprofit
             3803      corporation within three years after the publication date of the notice.
             3804          (4) For purposes of this section:
             3805          (a) "claim" means any claim, including claims of this state, whether:
             3806          (i) known;
             3807          (ii) due or to become due;
             3808          (iii) absolute or contingent;
             3809          (iv) liquidated or unliquidated;


             3810          (v) founded on contract, tort, or other legal basis; or
             3811          (vi) otherwise; and
             3812          (b) an action to enforce a claim includes:
             3813          (i) any civil action; and
             3814          (ii) any arbitration under any agreement for binding arbitration between the dissolved
             3815      nonprofit corporation and the claimant.
             3816          Section 142. Section 16-6a-1408 is enacted to read:
             3817          16-6a-1408. Enforcement of claims against dissolved nonprofit corporation.
             3818          (1) Subject to Subsection (2), a claim may be enforced under Section 16-6a-1406 or
             3819      16-6a-1407 :
             3820          (a) against the dissolved nonprofit corporation to the extent of its undistributed assets; and
             3821          (b) if assets have been distributed in liquidation, against any person, other than a creditor
             3822      of the nonprofit corporation, to whom the nonprofit corporation distributed its property.
             3823          (2) Notwithstanding Subsection (1), a distributee's total liability for all claims under this
             3824      section may not exceed the total value of assets distributed to the distributee, as the value is
             3825      determined at the time of distribution.
             3826          (3) (a) A distributee required to return any portion of the value of assets received by the
             3827      distributee in liquidation shall be entitled to contribution from all other distributees.
             3828          (b) Each contribution under Subsection (3)(a):
             3829          (i) shall be in accordance with the contributing distributee's rights and interests; and
             3830          (ii) may not exceed the value of the assets received by the contributing distributee in
             3831      liquidation.
             3832          Section 143. Section 16-6a-1409 is enacted to read:
             3833          16-6a-1409. Service on dissolved nonprofit corporation.
             3834          (1) A dissolved nonprofit corporation shall:
             3835          (a) maintain a registered agent to accept service of process on its behalf; or
             3836          (b) be considered to have authorized service of process on it by registered or certified mail,
             3837      return receipt requested, to:
             3838          (i) the address of its principal office, if any:
             3839          (A) as set forth in its articles of dissolution; or
             3840          (B) as last changed by notice delivered to the division for filing; or


             3841          (ii) the address for service of process that:
             3842          (A) is stated in its articles of dissolution; or
             3843          (B) as last changed by notice delivered to the division for filing.
             3844          (2) Service effected pursuant to Subsection (1)(b) is perfected at the earliest of:
             3845          (a) the date the dissolved nonprofit corporation receives the process, notice, or demand;
             3846          (b) the date shown on the return receipt, if signed on behalf of the dissolved nonprofit
             3847      corporation; or
             3848          (c) five days after mailing.
             3849          (3) Subsection (1) does not prescribe the only means, or necessarily the required means,
             3850      of serving a dissolved nonprofit corporation.
             3851          Section 144. Section 16-6a-1410 is enacted to read:
             3852          16-6a-1410. Grounds for administrative dissolution.
             3853          The division may commence a proceeding under Section 16-6a-1411 for administrative
             3854      dissolution of a nonprofit corporation if:
             3855          (1) the nonprofit corporation does not pay when they are due any taxes, fees, or penalties
             3856      imposed by this chapter or other applicable laws of this state;
             3857          (2) the nonprofit corporation does not deliver its annual report to the division when it is
             3858      due;
             3859          (3) the nonprofit corporation is without:
             3860          (a) a registered agent; or
             3861          (b) a registered office;
             3862          (4) the nonprofit corporation does not give notice to the division that:
             3863          (a) its registered agent or registered office has been changed;
             3864          (b) its registered agent has resigned;
             3865          (c) its registered office has been discontinued; or
             3866          (d) the nonprofit corporation's period of duration stated in its articles of incorporation
             3867      expires.
             3868          Section 145. Section 16-6a-1411 is enacted to read:
             3869          16-6a-1411. Procedure for and effect of administrative dissolution.
             3870          (1) If the division determines that one or more grounds exist under Section 16-6a-1410 for
             3871      dissolving a nonprofit corporation, the division shall mail to the nonprofit corporation written


             3872      notice of the determination, stating the one or more grounds for administrative dissolution.
             3873          (2) (a) If the nonprofit corporation does not correct each ground for dissolution, or
             3874      demonstrate to the reasonable satisfaction of the division that each ground determined by the
             3875      division does not exist, within 60 days after mailing of the notice contemplated in Subsection (1),
             3876      the division shall administratively dissolve the nonprofit corporation.
             3877          (b) If a nonprofit corporation is dissolved under Subsection (2)(a), the division shall mail
             3878      written notice of the administrative dissolution to the dissolved nonprofit corporation stating the
             3879      date of dissolution specified in Subsection (2)(d).
             3880          (c) The division shall mail written notice of the administrative dissolution to:
             3881          (i) the last registered agent of the dissolved nonprofit corporation; or
             3882          (ii) if there is no registered agent of record, at least one officer of the nonprofit corporation.
             3883          (d) A nonprofit corporation's date of dissolution is five days after the date the division
             3884      mails written notice of dissolution under Subsection (2)(b).
             3885          (3) A nonprofit corporation administratively dissolved continues its corporate existence
             3886      but may not carry on any activities except as is appropriate to:
             3887          (a) wind up and liquidate its affairs under Section 16-6a-1405 ; and
             3888          (b) to give notice to claimants in the manner provided in Sections 16-6a-1406 and
             3889      16-6a-1407 .
             3890          (4) The administrative dissolution of a nonprofit corporation does not terminate the
             3891      authority of its registered agent.
             3892          (5) (a) Upon the administrative dissolution of a nonprofit corporation, the division shall
             3893      be the dissolved nonprofit corporation's agent for service of process.
             3894          (b) Service of process on the division under this Subsection (5) is service on the dissolved
             3895      nonprofit corporation.
             3896          (c) Upon receipt of process, the division shall deliver a copy of the process to the dissolved
             3897      nonprofit corporation at its principal office.
             3898          (6) A notice mailed under this section shall be:
             3899          (a) mailed first class, postage prepaid; and
             3900          (b) addressed to the most current mailing address appearing on the records of the division
             3901      for:
             3902          (i) the registered agent of the nonprofit corporation, if the notice is required to be mailed


             3903      to the registered agent; or
             3904          (ii) the officer of the nonprofit corporation that is mailed the notice if the notice is required
             3905      to be mailed to an officer of the nonprofit corporation.
             3906          Section 146. Section 16-6a-1412 is enacted to read:
             3907          16-6a-1412. Reinstatement following administrative dissolution.
             3908          (1) A nonprofit corporation administratively dissolved under Section 16-6a-1411 may
             3909      apply to the division for reinstatement within two years after the effective date of dissolution by
             3910      delivering to the division for filing an application for reinstatement that states:
             3911          (a) the effective date of its administrative dissolution and its corporate name on the
             3912      effective date of dissolution;
             3913          (b) that the ground or grounds for dissolution:
             3914          (i) did not exist; or
             3915          (ii) have been eliminated;
             3916          (c) (i) The corporate name under which the nonprofit corporation is being reinstated; and
             3917          (ii) the corporate name that satisfies the requirements of Section 16-6a-401 ;
             3918          (d) that all taxes, fees, or penalties imposed pursuant to this chapter, otherwise owed by
             3919      the nonprofit corporation to the State Tax Commission, or otherwise imposed by the applicable
             3920      laws of this state have been paid;
             3921          (e) the address of its registered office;
             3922          (f) the name of its registered agent at the office stated in Subsection (1)(e); and
             3923          (g) the additional information as the division determines is necessary or appropriate.
             3924          (2) The nonprofit corporation shall include in or with the application for reinstatement:
             3925          (a) the written consent to appointment by the designated registered agent; and
             3926          (b) a certificate from the State Tax Commission reciting that all taxes owed by the
             3927      nonprofit corporation have been paid.
             3928          (3) (a) The division shall revoke the administrative dissolution if:
             3929          (i) the division determines that the application for reinstatement contains the information
             3930      required by Subsections (1) and (2); and
             3931          (ii) that the information is correct.
             3932          (b) The division shall mail written notice of the revocation to the nonprofit corporation in
             3933      the manner provided in Subsection 16-6a-1411 (6) stating the effective date of the dissolution.


             3934          (4) When the reinstatement is effective:
             3935          (a) it relates back to and takes effect as of the effective date of the administrative
             3936      dissolution; and
             3937          (b) the nonprofit corporation may carry on its activities, under the name stated pursuant
             3938      to Subsection (1)(c), as if the administrative dissolution had never occurred.
             3939          Section 147. Section 16-6a-1413 is enacted to read:
             3940          16-6a-1413. Appeal from denial of reinstatement.
             3941          (1) If the division denies a nonprofit corporation's application for reinstatement following
             3942      administrative dissolution under Section 16-6a-1411 , the division shall mail to the nonprofit
             3943      corporation in the manner provided in Subsection 16-6a-1411 (6) written notice:
             3944          (a) setting forth the reasons for denying the application; and
             3945          (b) stating that the nonprofit corporation has the right to appeal the division's
             3946      determination to the executive director as provided in Subsection (2).
             3947          (2) If the division denies a nonprofit corporation's application for reinstatement following
             3948      administrative dissolution, in accordance with Title 63, Chapter 46b, Administrative Procedures
             3949      Act, the following may appeal the denial to the executive director:
             3950          (a) the nonprofit corporation for which the reinstatement was requested; or
             3951          (b) the representative of the nonprofit corporation for which reinstatement.
             3952          Section 148. Section 16-6a-1414 is enacted to read:
             3953          16-6a-1414. Grounds for judicial dissolution.
             3954          (1) A nonprofit corporation may be dissolved in a proceeding by the attorney general or
             3955      the division director if it is established that:
             3956          (a) the nonprofit corporation obtained its articles of incorporation through fraud; or
             3957          (b) the nonprofit corporation has continued to exceed or abuse the authority conferred
             3958      upon it by law.
             3959          (2) A nonprofit corporation may be dissolved in a proceeding by a member or director if
             3960      it is established that:
             3961          (a) (i) the directors are deadlocked in the management of the corporate affairs;
             3962          (ii) the members, if any, are unable to break the deadlock; and
             3963          (iii) irreparable injury to the nonprofit corporation is threatened or being suffered;
             3964          (b) the directors or those in control of the nonprofit corporation have acted, are acting, or


             3965      will act in a manner that is illegal, oppressive, or fraudulent;
             3966          (c) the members are deadlocked in voting power and have failed, for a period that includes
             3967      at least two consecutive annual meeting dates, to elect successors to directors whose terms have
             3968      expired or would have expired upon the election of their successors; or
             3969          (d) the corporate assets are being misapplied or wasted.
             3970          (3) A nonprofit corporation may be dissolved in a proceeding by a creditor if it is
             3971      established that:
             3972          (a) (i) the creditor's claim has been reduced to judgment;
             3973          (ii) the execution on the judgment has been returned unsatisfied; and
             3974          (iii) the nonprofit corporation is insolvent; or
             3975          (b) (i) the nonprofit corporation is insolvent; and
             3976          (ii) the nonprofit corporation has admitted in writing that the creditor's claim is due and
             3977      owing.
             3978          (4) (a) If a nonprofit corporation has been dissolved by voluntary or administrative action
             3979      taken under this part:
             3980          (i) the nonprofit corporation may bring a proceeding to wind up and liquidate its business
             3981      and affairs under judicial supervision in accordance with Section 16-6a-1405 ; and
             3982          (ii) the attorney general, a director, a member, or a creditor may bring a proceeding to wind
             3983      up and liquidate the affairs of the nonprofit corporation under judicial supervision in accordance
             3984      with Section 16-6a-1405 , upon establishing the grounds set forth in Subsections (1) through (3).
             3985          (b) As used in Sections 16-6a-1415 through 16-6a-1417 :
             3986          (i) a "judicial proceeding to dissolve the nonprofit corporation" includes a proceeding
             3987      brought under this Subsection (4); and
             3988          (ii) a "decree of dissolution" includes an order of court entered in a proceeding under this
             3989      Subsection (4) that directs that the affairs of a nonprofit corporation shall be wound up and
             3990      liquidated under judicial supervision.
             3991          Section 149. Section 16-6a-1415 is enacted to read:
             3992          16-6a-1415. Procedure for judicial dissolution.
             3993          (1) (a) A proceeding by the attorney general or director of the division to dissolve a
             3994      nonprofit corporation shall be brought in:
             3995          (i) the district court of the county in this state where the nonprofit corporation's principal


             3996      office or registered office is located; or
             3997          (ii) if the nonprofit corporation has no principal or registered office in this state, in the
             3998      district court in and for Salt Lake County.
             3999          (b) A proceeding brought by a party that is not listed in Subsection (1)(a) but is named in
             4000      Section 16-6a-1414 shall be brought in:
             4001          (i) the district court of the county in this state where the nonprofit corporation's principal
             4002      office is located; or
             4003          (ii) if it has no principal office in this state, in the district court of the county where its
             4004      registered office is or was last located.
             4005          (2) It is not necessary to make directors or members parties to a proceeding to dissolve a
             4006      nonprofit corporation unless relief is sought against the directors or members individually.
             4007          (3) A court in a proceeding brought to dissolve a nonprofit corporation may:
             4008          (a) issue injunctions;
             4009          (b) appoint a receiver or custodian pendente lite with all powers and duties the court
             4010      directs; or
             4011          (c) take other action required to preserve the corporate assets wherever located, and carry
             4012      on the activities of the nonprofit corporation until a full hearing can be held.
             4013          Section 150. Section 16-6a-1416 is enacted to read:
             4014          16-6a-1416. Receivership or custodianship.
             4015          (1) (a) A court in a judicial proceeding brought to dissolve a nonprofit corporation may
             4016      appoint:
             4017          (i) one or more receivers to wind up and liquidate the affairs of the nonprofit corporation;
             4018      or
             4019          (ii) one or more custodians to manage the affairs of the nonprofit corporation.
             4020          (b) Before appointing a receiver or custodian, the court shall hold a hearing, after giving
             4021      notice to:
             4022          (i) all parties to the proceeding; and
             4023          (ii) any interested persons designated by the court.
             4024          (c) The court appointing a receiver or custodian has exclusive jurisdiction over the
             4025      nonprofit corporation and all of its property, wherever located.
             4026          (d) The court may appoint as a receiver or custodian:


             4027          (i) an individual;
             4028          (ii) a domestic or foreign corporation authorized to conduct affairs in this state; or
             4029          (iii) a domestic or foreign nonprofit corporation authorized to conduct affairs in this state.
             4030          (e) The court may require the receiver or custodian to post bond, with or without sureties,
             4031      in an amount specified by the court.
             4032          (2) The court shall describe the powers and duties of the receiver or custodian in its
             4033      appointing order that may be amended from time to time. Among other powers the receiver shall
             4034      have the power to:
             4035          (a) dispose of all or any part of the property of the nonprofit corporation, wherever located:
             4036          (i) at a public or private sale; and
             4037          (ii) if authorized by the court; and
             4038          (b) sue and defend in the receiver's own name as receiver of the nonprofit corporation in
             4039      all courts.
             4040          (4) The custodian may exercise all of the powers of the nonprofit corporation, through or
             4041      in place of its board of directors or officers, to the extent necessary to manage the affairs of the
             4042      nonprofit corporation in the best interests of its members and creditors.
             4043          (5) If doing so is in the best interests of the nonprofit corporation and its members and
             4044      creditors, the court may:
             4045          (a) during a receivership, redesignate the receiver as a custodian; and
             4046          (b) during a custodianship, redesignate the custodian as a receiver.
             4047          (6) The court from time to time during the receivership or custodianship may order
             4048      compensation paid and expense disbursements or reimbursements made from the assets of the
             4049      nonprofit corporation or proceeds from the sale of the assets to:
             4050          (a) the receiver;
             4051          (b) the custodian; or
             4052          (c) the receiver's or custodian's attorney.
             4053          Section 151. Section 16-6a-1417 is enacted to read:
             4054          16-6a-1417. Decree of dissolution.
             4055          (1) If after a hearing the court determines that one or more grounds for judicial dissolution
             4056      described in Section 16-6a-1414 exist:
             4057          (a) the court may enter a decree:


             4058          (i) dissolving the nonprofit corporation; and
             4059          (ii) specifying the effective date of the dissolution; and
             4060          (b) the clerk of the court shall deliver a certified copy of the decree to the division which
             4061      shall file it accordingly.
             4062          (2) After entering the decree of dissolution, the court shall direct:
             4063          (a) the winding up and liquidation of the nonprofit corporation's affairs in accordance with
             4064      Section 16-6a-1405 ; and
             4065          (b) the giving of notice to:
             4066          (i) (A) the nonprofit corporation's registered agent; or
             4067          (B) the division if it has no registered agent; and
             4068          (ii) to claimants in accordance with Sections 16-6a-1406 and 16-6a-1407 .
             4069          (3) The court's order or decision may be appealed as in other civil proceedings.
             4070          Section 152. Section 16-6a-1418 is enacted to read:
             4071          16-6a-1418. Dissolution upon expiration of period of duration.
             4072          (1) A nonprofit corporation shall be dissolved upon and by reason of the expiration of its
             4073      period of duration, if any, stated in its articles of incorporation.
             4074          (2) For purposes of this section:
             4075          (a) a provision in the articles of incorporation is considered a provision for a period of
             4076      duration if it is to the effect that the nonprofit corporation or its existence shall be terminated:
             4077          (i) at a specified date;
             4078          (ii) after a stated period of time;
             4079          (iii) upon a contingency; or
             4080          (iv) any event similar to those described in Subsections (2)(a)(i) through (iii); and
             4081          (b) the following shall be considered to be the expiration of the nonprofit corporation's
             4082      period of duration:
             4083          (i) the occurrence of the specified date;
             4084          (ii) the expiration of the stated period of time;
             4085          (iii) the occurrence of the contingency; or
             4086          (iv) the satisfaction of the provision described in Subsection (2)(a)(iv).
             4087          Section 153. Section 16-6a-1419 is enacted to read:
             4088          16-6a-1419. Deposit with state treasurer.


             4089          Assets of a dissolved nonprofit corporation that should be transferred to a creditor,
             4090      claimant, or member of the nonprofit corporation shall be reduced to cash and deposited with the
             4091      state treasurer in accordance with Title 67, Chapter 4a, Unclaimed Property Act, if the creditor,
             4092      claimant or member:
             4093          (1) cannot be found; or
             4094          (2) is not legally competent to receive the assets.
             4095          Section 154. Section 16-6a-1501 is enacted to read:
             4096     
Part 15. Foreign Nonprofit Corporations

             4097          16-6a-1501. Authority to conduct affairs required.
             4098          (1) (a) A foreign nonprofit corporation may not conduct affairs in this state until its
             4099      application for authority to conduct affairs is filed by the division.
             4100          (b) This part shall be applicable to foreign nonprofit corporations that conduct affairs
             4101      governed by other statutes of this state only to the extent this part is not inconsistent with such
             4102      other statutes.
             4103          (2) A foreign nonprofit corporation may not be considered to be conducting affairs in this
             4104      state within the meaning of Subsection (1) by reason of carrying on in this state any one or more
             4105      of the following activities:
             4106          (a) maintaining, defending, or settling in its own behalf any proceeding or dispute;
             4107          (b) holding meetings of its board of directors or members or carrying on other activities
             4108      concerning internal corporate affairs;
             4109          (c) maintaining bank accounts;
             4110          (d) maintaining offices or agencies for the transfer, exchange, and registration of
             4111      memberships or securities;
             4112          (e) maintaining trustees or depositaries with respect to the memberships or securities
             4113      described in Subsection (2)(d);
             4114          (f) selling through independent contractors;
             4115          (g) soliciting or obtaining orders, if the orders require acceptance outside this state before
             4116      they become contracts, whether by mail or through employees or agents or otherwise;
             4117          (h) creating, as borrower or lender, or acquiring indebtedness, mortgages, or other security
             4118      interests in real or personal property;
             4119          (i) securing or collecting debts in its own behalf or enforcing mortgages or security


             4120      interests in property securing the debts;
             4121          (j) owning, without more, real or personal property;
             4122          (k) conducting an isolated transaction that is:
             4123          (i) completed within 30 days; and
             4124          (ii) not one in the course of repeated transactions of a like nature;
             4125          (l) conducting affairs in interstate commerce;
             4126          (m) granting funds;
             4127          (n) distributing information to its members; or
             4128          (o) any other activity not considered to constitute conducting affairs in this state in the
             4129      discretion of the division.
             4130          (3) The list of activities in Subsection (2) is not exhaustive.
             4131          (4) Nothing in this section shall limit or affect the right to subject a foreign nonprofit
             4132      corporation that does not, or is not required to, have authority to conduct affairs in this state:
             4133          (a) to the jurisdiction of the courts of this state; or
             4134          (b) to serve upon any foreign nonprofit corporation any process, notice, or demand
             4135      required or permitted by law to be served upon a nonprofit corporation pursuant to:
             4136          (i) any applicable provision of law; or
             4137          (ii) any applicable rules of civil procedure.
             4138          Section 155. Section 16-6a-1502 is enacted to read:
             4139          16-6a-1502. Consequences of conducting affairs without authority.
             4140          (1) A foreign nonprofit corporation, its successor, or anyone acting on its behalf,
             4141      conducting affairs in this state without authority may not be permitted to maintain a proceeding
             4142      in any court in this state until an application for authority to conduct affairs is filed.
             4143          (2) (a) A foreign nonprofit corporation or successor that conducts affairs in this state
             4144      without authority shall be liable to this state in an amount equal to the sum of:
             4145          (i) all fees imposed by this chapter or prior law that would have been paid for all years or
             4146      portions of years during which it conducted affairs in this state without authority; and
             4147          (ii) all penalties imposed by the division for failure to pay the fees described in Subsection
             4148      (2)(a)(i).
             4149          (b) An application for authority to conduct affairs may not be filed until payment of the
             4150      amounts due under this Subsection (2) is made.


             4151          (3) (a) A court may stay a proceeding commenced by a foreign nonprofit corporation, its
             4152      successor, or assignee until it determines whether the foreign corporation, its successor, or assignee
             4153      is required to file an application for authority to conduct affairs.
             4154          (b) If the court determines that a foreign nonprofit corporation, its successor, or assignee
             4155      is required to file an application for authority to conduct affairs, the court may further stay the
             4156      proceeding until the required application for authority to conduct affairs has been filed with the
             4157      division.
             4158          (4) (a) A foreign nonprofit corporation that conducts affairs in this state without authority
             4159      is subject to a civil penalty, payable to this state, of $100 for each day in which it transacts business
             4160      in this state without authority.
             4161          (b) Notwithstanding Subsection (4)(a), the civil penalty imposed under Subsection (4)(a)
             4162      may not exceed a total of $5,000 for each year.
             4163          (c) The following are subject to a civil penalty payable to the state not exceeding $1,000:
             4164          (i) each officer of a foreign nonprofit corporation who authorizes, directs, or participates
             4165      in the conducting of affairs in this state without authority; and
             4166          (ii) each agent of a foreign nonprofit corporation who transacts business in this state on
             4167      behalf of a foreign nonprofit corporation that is not authorized.
             4168          (d) The division may make rules to carry out the provisions of this Subsection (4),
             4169      including procedures to request the division to abate a penalty imposed.
             4170          (e) If the division imposes a civil penalty under this Subsection (4) on a foreign nonprofit
             4171      corporation, in accordance with Title 63, Chapter 46b, Administrative Procedures Act, the
             4172      following may appeal the civil penalty to the executive director:
             4173          (i) the foreign nonprofit corporation; or
             4174          (ii) the representative of the foreign nonprofit corporation.
             4175          (5) (a) The civil penalties set forth in Subsection (4) may be recovered in an action
             4176      brought:
             4177          (i) in an appropriate court in Salt Lake County; or
             4178          (ii) in any other county in this state in which the foreign nonprofit corporation:
             4179          (A) has a registered, principal, or business office; or
             4180          (B) has conducted affairs.
             4181          (b) Upon a finding by the court that a foreign nonprofit corporation or any of its officers


             4182      or agents have conducted affairs in this state in violation of this part, in addition to or instead of
             4183      a civil penalty, the court shall issue an injunction restraining:
             4184          (i) the further conducting of affairs of the foreign nonprofit corporation; and
             4185          (ii) the further exercise of any corporate rights and privileges in this state.
             4186          (c) Upon issuance of the injunction described in Subsection (5)(b), the foreign nonprofit
             4187      corporation shall be enjoined from conducting affairs in this state until:
             4188          (i) all civil penalties have been paid, plus any interest and court costs assessed by the court;
             4189      and
             4190          (ii) the foreign nonprofit corporation has otherwise complied with the provisions of this
             4191      part.
             4192          (6) Notwithstanding Subsections (1) and (2), the failure of a foreign corporation to have
             4193      authority to conduct affairs in this state does not:
             4194          (a) impair the validity of its corporate acts; or
             4195          (b) prevent the foreign nonprofit corporation from defending any proceeding in this state.
             4196          Section 156. Section 16-6a-1503 is enacted to read:
             4197          16-6a-1503. Application for authority to conduct affairs.
             4198          (1) A foreign nonprofit corporation may apply for authority to conduct affairs in this state
             4199      by delivering to the division for filing an application for authority to conduct affairs setting forth:
             4200          (a) its corporate name and its assumed corporate name, if any;
             4201          (b) the name of the state or country under whose law it is incorporated;
             4202          (c) its date of incorporation;
             4203          (d) its period of duration;
             4204          (e) the street address of its principal office;
             4205          (f) the address of its registered office;
             4206          (g) the name of its registered agent at the office listed in Subsection (1)(f);
             4207          (h) the names and usual business addresses of its current directors and officers;
             4208          (i) the date it commenced or expects to commence conducting affairs in this state; and
             4209          (j) such additional information as the division determines is necessary or appropriate to
             4210      determine whether the application for authority to conduct affairs should be filed.
             4211          (2) With the completed application required by Subsection (1) the foreign nonprofit
             4212      corporation shall deliver to the division for a certificate of existence, or a document of similar


             4213      import that is:
             4214          (a) authenticated by the division or other official having custody of corporate records in
             4215      the state or country under whose law it is incorporated; and
             4216          (b) dated within 90 days before the filing of the application for authority to conduct affairs.
             4217          (3) The foreign nonprofit corporation shall include in the application for authority to
             4218      conduct affairs, or in an accompanying document, written consent to appointment by its designated
             4219      registered agent.
             4220          Section 157. Section 16-6a-1504 is enacted to read:
             4221          16-6a-1504. Amended application for authority to conduct affairs.
             4222          (1) A foreign nonprofit corporation authorized to conduct affairs in this state shall deliver
             4223      an amended application for authority to conduct affairs to the division for filing if the foreign
             4224      nonprofit corporation changes:
             4225          (a) its corporate name;
             4226          (b) its assumed corporate name;
             4227          (c) the period of its duration; or
             4228          (d) the state or country of its incorporation.
             4229          (2) The requirements of Section 16-6a-1503 for filing an original application for authority
             4230      to conduct affairs apply to filing an amended application for authority to conduct affairs under this
             4231      section.
             4232          Section 158. Section 16-6a-1505 is enacted to read:
             4233          16-6a-1505. Effect of filing an application for authority to conduct affairs.
             4234          (1) Filing an application for authority to conduct affairs authorizes the foreign nonprofit
             4235      corporation to conduct affairs in this state, subject to the right of the state to revoke the authority
             4236      as provided in this part.
             4237          (2) A foreign nonprofit corporation that has authority to conduct affairs in this state:
             4238          (a) has the same rights and privileges as, but no greater rights or privileges than, a
             4239      domestic nonprofit corporation of like character; and
             4240          (b) except as otherwise provided by this chapter, is subject to the same duties, restrictions,
             4241      penalties, and liabilities imposed on or later to be imposed on, a domestic nonprofit corporation
             4242      of like character.
             4243          (3) This chapter does not authorize this state to regulate the organization or internal affairs


             4244      of a foreign nonprofit corporation authorized to conduct affairs in this state.
             4245          Section 159. Section 16-6a-1506 is enacted to read:
             4246          16-6a-1506. Corporate name and assumed corporate name of foreign nonprofit
             4247      corporation.
             4248          (1) (a) Except as provided in Subsection (2), if the corporate name of a foreign nonprofit
             4249      corporation does not satisfy the requirements of Section 16-6a-401 , to obtain authority to conduct
             4250      affairs in this state, the corporation shall assume for use in this state a name that satisfies the
             4251      requirements of Section 16-6a-401 .
             4252          (b) Section 16-6a-401 applies to domestic corporations.
             4253          (2) A foreign nonprofit corporation may obtain authority to conduct affairs in this state
             4254      with a name that does not meet the requirements of Subsection (1) because it is not distinguishable
             4255      as required under Subsection 16-6a-401 (2), if the foreign nonprofit corporation delivers to the
             4256      division for filing either:
             4257          (a) (i) a written consent to the foreign nonprofit corporation's use of the name, given and
             4258      signed by the other person entitled to the use of the name; and
             4259          (ii) a written undertaking by the other person, in a form satisfactory to the division, to
             4260      change its name to a name that is distinguishable from the name of the applicant; or
             4261          (b) a certified copy of a final judgment of a court of competent jurisdiction establishing
             4262      the prior right of the foreign nonprofit corporation to use the requested name in this state.
             4263          (3) A foreign nonprofit corporation may use in this state the name, including the fictitious
             4264      name, of another domestic or foreign nonprofit corporation that is used or registered in this state
             4265      if:
             4266          (a) the other corporation is incorporated or authorized to conduct affairs in this state; and
             4267          (b) the foreign nonprofit corporation:
             4268          (i) has merged with the other corporation; or
             4269          (ii) has been formed by reorganization of the other corporation.
             4270          (4) If a foreign nonprofit corporation authorized to conduct affairs in this state, whether
             4271      under its corporate name or an assumed corporate name, changes its corporate name to one that
             4272      does not satisfy the requirements of Subsections (1) through (3), or the requirements of Section
             4273      16-10a-401 , the foreign nonprofit corporation:
             4274          (a) may not conduct affairs in this state under the changed name;


             4275          (b) shall use an assumed corporate name that does meet the requirements of this section;
             4276      and
             4277          (c) shall deliver to the division for filing an amended application for authority to conduct
             4278      affairs pursuant to Section 16-10a-1504 .
             4279          Section 160. Section 16-6a-1507 is enacted to read:
             4280          16-6a-1507. Registered name of foreign nonprofit corporation.
             4281          (1) (a) A foreign nonprofit corporation may register its corporate name as provided in this
             4282      section if the name would be available for use as a corporate name for a domestic nonprofit
             4283      corporation under Section 16-10a-401 .
             4284          (b) If the foreign nonprofit corporation's corporate name would not be available for use
             4285      as a corporate name for a domestic nonprofit corporation, the foreign nonprofit corporation may
             4286      register its corporate name modified by the addition of any of the following words or
             4287      abbreviations, if the modified name would be available for use under Section 16-6a-401 :
             4288          (i) "corporation";
             4289          (ii) "incorporated";
             4290          (iii) "company";
             4291          (iv) "corp.";
             4292          (v) "inc."; or
             4293          (vi) "co."
             4294          (2) A foreign nonprofit corporation registers its corporate name, or its corporate name with
             4295      any addition permitted by Subsection (1), by delivering to the division for filing an application for
             4296      registration:
             4297          (a) setting forth:
             4298          (i) its corporate name;
             4299          (ii) the name to be registered that shall meet the requirements of Section 16-10a-401 that
             4300      apply to domestic nonprofit corporations;
             4301          (iii) the state or country and date of incorporation; and
             4302          (iv) a brief description of the nature of the business in which it is engaged; and
             4303          (b) accompanied by a certificate of existence, or a document of similar import from the
             4304      state or country of incorporation as evidence that the foreign corporation is in existence or has
             4305      authority to conduct affairs under the laws of the state or country in which it is organized.


             4306          (3) (a) A name is registered for the applicant upon the effective date of the application.
             4307          (b) An initial registration is effective for one year.
             4308          (4) (a) A foreign nonprofit corporation that has in effect a registration of its corporate
             4309      name as permitted by Subsection (1) may renew the registration by delivering to the division for
             4310      filing a renewal application for registration, that complies with the requirements of Subsection (2).
             4311          (b) When filed, the renewal application for registration renews the registration for the year
             4312      following filing.
             4313          (5) (a) A foreign nonprofit corporation that has in effect registration of its corporate name
             4314      may:
             4315          (i) apply for authority to conduct affairs in this state under the registered name in
             4316      accordance with the procedure set forth in this part; or
             4317          (ii) assign the registration to another foreign nonprofit corporation by delivering to the
             4318      division for filing an assignment of the registration that states:
             4319          (A) the registered name;
             4320          (B) the name of the assigning foreign nonprofit corporation; and
             4321          (C) the name of the assignee; and
             4322          (D) the assignee's application for registration of the name.
             4323          (b) The assignee's application for registration of the name required by Subsection (5)(a)
             4324      shall meet the requirements of this part.
             4325          (6) (a) A foreign nonprofit corporation that has in effect registration of its corporate name
             4326      may terminate the registration at any time by delivering to the division for filing a statement of
             4327      termination:
             4328          (i) setting forth the corporate name; and
             4329          (ii) stating that the registration is terminated.
             4330          (b) A registration automatically terminates upon the filing of an application for authority
             4331      to conduct affairs in this state under the registered name.
             4332          (7) The registration of a corporate name under Subsection (1) constitutes authority by the
             4333      division to file an application meeting the requirements of this part for authority to conduct affairs
             4334      in this state under the registered name, but the authorization is subject to the limitations applicable
             4335      to corporate names as set forth in Section 16-6a-403 .
             4336          Section 161. Section 16-6a-1508 is enacted to read:


             4337          16-6a-1508. Registered office and registered agent of foreign nonprofit corporation.
             4338          (1) Each foreign nonprofit corporation authorized to conduct affairs in this state shall
             4339      continuously maintain in this state:
             4340          (a) a registered office; and
             4341          (b) a registered agent, who shall be:
             4342          (i) an individual:
             4343          (A) who resides in this state; and
             4344          (B) whose business office is identical with the registered office;
             4345          (ii) a domestic corporation or domestic nonprofit corporation whose business office is
             4346      identical with the registered office;
             4347          (iii) a foreign corporation or foreign nonprofit corporation:
             4348          (A) authorized to conduct affairs in this state; and
             4349          (B) whose business office is identical with the registered office; or
             4350          (iv) a domestic limited liability company or foreign limited liability company:
             4351          (A) authorized to conduct affairs in this state; and
             4352          (B) whose business office is identical with the registered office.
             4353          (2) A foreign nonprofit corporation may not serve as its own registered agent.
             4354          Section 162. Section 16-6a-1509 is enacted to read:
             4355          16-6a-1509. Change of registered office or registered agent of foreign nonprofit
             4356      corporation.
             4357          (1) A foreign nonprofit corporation authorized to conduct affairs in this state may change
             4358      its registered office or its registered agent by delivering to the division for filing a statement of
             4359      change that sets forth:
             4360          (a) its corporate name and its assumed corporate name, if any;
             4361          (b) the street addresses of its current registered office;
             4362          (c) the street address of the new registered office if the registered office is to be changed;
             4363          (d) the name of its current registered agent;
             4364          (e) if the registered agent is to be changed:
             4365          (i) the name of the new registered agent; and
             4366          (ii) the new registered agent's written consent to the appointment, either on the statement
             4367      of change or in an accompanying document; and


             4368          (f) that the street addresses of its registered office and the business office of its registered
             4369      agent will be identical after the change or changes reflected in the statement are made.
             4370          (2) If the street address of a registered agent's business office is changed, the registered
             4371      agent may change the street address of the registered office of any foreign nonprofit corporation
             4372      for which the registered agent is the registered agent by:
             4373          (a) giving written notice to the foreign nonprofit corporation of the change; and
             4374          (b) signing and delivering to the division for filing a statement of change that:
             4375          (i) complies with the requirements of Subsection (1); and
             4376          (ii) recites that the foreign nonprofit corporation has been given notice of the change.
             4377          Section 163. Section 16-6a-1510 is enacted to read:
             4378          16-6a-1510. Resignation of registered agent of foreign nonprofit corporation.
             4379          (1) (a) The registered agent of a foreign nonprofit corporation authorized to conduct affairs
             4380      in this state may resign the agency appointment by delivering to the division for filing a statement
             4381      of resignation, that shall:
             4382          (i) be signed by the resigning registered agent; and
             4383          (ii) be accompanied by two exact or conformed copies of the statement of resignation; and
             4384          (iii) include a declaration that notice of the resignation has been given to the foreign
             4385      nonprofit corporation.
             4386          (b) The statement of resignation may include a statement that the registered office is also
             4387      discontinued.
             4388          (2) After filing the statement of resignation, the division shall deliver:
             4389          (a) one copy of the statement of resignation to the registered office of the foreign nonprofit
             4390      corporation; and
             4391          (b) one copy of the statement of resignation to its principal office, if known.
             4392          (3) The agency appointment terminates, and the registered office discontinues if so
             4393      provided, 31 days after the filing date of the statement of resignation.
             4394          Section 164. Section 16-6a-1511 is enacted to read:
             4395          16-6a-1511. Service on foreign nonprofit corporation.
             4396          (1) The registered agent of a foreign nonprofit corporation authorized to conduct affairs
             4397      in this state is the foreign corporation's agent for service of process, notice, or demand required or
             4398      permitted by law to be served on the foreign nonprofit corporation.


             4399          (2) (a) If a foreign nonprofit corporation authorized to conduct affairs in this state has no
             4400      registered agent or if the registered agent cannot with reasonable diligence be served, the foreign
             4401      nonprofit corporation may be served by registered or certified mail, return receipt requested,
             4402      addressed to the foreign nonprofit corporation at its principal office.
             4403          (b) Service is perfected under this Subsection (2) at the earliest of:
             4404          (i) the date the foreign nonprofit corporation receives the process, notice, or demand;
             4405          (ii) the date shown on the return receipt, if signed on behalf of the foreign nonprofit
             4406      corporation; or
             4407          (iii) five days after mailing.
             4408          (3) This section does not prescribe the only means, or necessarily the required means, of
             4409      serving a foreign nonprofit corporation authorized to conduct affairs in this state.
             4410          Section 165. Section 16-6a-1512 is enacted to read:
             4411          16-6a-1512. Merger of foreign nonprofit corporations authorized to conduct affairs
             4412      in this state.
             4413          (1) If two or more foreign nonprofit corporations authorized to conduct affairs in this state
             4414      are a party to a statutory merger permitted by the laws of the state or country under the laws of
             4415      which they are incorporated within 30 days after the merger becomes effective, the surviving
             4416      nonprofit corporation shall file with the division a certificate of fact of merger certified by the
             4417      proper officer of the state or country under the laws of which the statutory merger was effected.
             4418          (2) It is not necessary for a foreign nonprofit corporation authorized to conduct affairs in
             4419      this state that is a party to a statutory merger described in Subsection (1) to procure a new or
             4420      amended certificate of authority to conduct affairs in this state unless the name of the surviving
             4421      nonprofit corporation is changed by the statutory merger.
             4422          Section 166. Section 16-6a-1513 is enacted to read:
             4423          16-6a-1513. Withdrawal of foreign nonprofit corporation.
             4424          (1) A foreign nonprofit corporation authorized to conduct affairs in this state may not
             4425      withdraw from this state until its application for withdrawal has been filed by the division.
             4426          (2) A foreign nonprofit corporation authorized to conduct affairs in this state may apply
             4427      for withdrawal by delivering to the division for filing an application for withdrawal setting forth:
             4428          (a) its corporate name and its assumed name, if any;
             4429          (b) the name of the state or country under whose law it is incorporated;


             4430          (c) (i) (A) the address of its principal office; or
             4431          (B) if a principal office is not to be maintained, a statement that the foreign nonprofit
             4432      corporation will not maintain a principal office; and
             4433          (ii) if different from the address of the principal office or if no principal office is to be
             4434      maintained, the address to which service of process may be mailed pursuant to Section 16-6a-1514 ;
             4435          (d) that the foreign nonprofit corporation is not conducting affairs in this state;
             4436          (e) that it surrenders its authority to conduct affairs in this state;
             4437          (f) whether its registered agent will continue to be authorized to accept service on its
             4438      behalf in any proceeding based on a cause of action arising during the time it was authorized to
             4439      conduct affairs in this state; and
             4440          (g) any additional information that the division determines is necessary or appropriate to:
             4441          (i) determine whether the foreign nonprofit corporation is entitled to withdraw; and
             4442          (ii) determine and assess any unpaid taxes, fees, and penalties payable by the foreign
             4443      nonprofit corporation as prescribed by this chapter.
             4444          (3) A foreign nonprofit corporation's application for withdrawal may not be filed by the
             4445      division until:
             4446          (a) all outstanding fees and state tax obligations have been paid; and
             4447          (b) the division has received a certificate from the State Tax Commission reciting that all
             4448      taxes owed by the foreign nonprofit corporation have been paid.
             4449          Section 167. Section 16-6a-1514 is enacted to read:
             4450          16-6a-1514. Service on withdrawn foreign nonprofit corporation.
             4451          (1) A foreign nonprofit corporation that has withdrawn from this state pursuant to Section
             4452      16-6a-1513 shall:
             4453          (a) maintain a registered agent in this state to accept service on its behalf in any proceeding
             4454      based on a cause of action arising during the time it was authorized to conduct affairs in this state,
             4455      in which case:
             4456          (i) the continued authority of the registered agent shall be specified in the application for
             4457      withdrawal; and
             4458          (ii) any change shall be governed by the procedure set forth in Section 16-6a-1509 which
             4459      applies to foreign nonprofit corporations authorized to conduct affairs in this state; or
             4460          (b) be considered to have authorized service of process on it in connection with any cause


             4461      of action by registered or certified mail, return receipt requested, to:
             4462          (i) the address of its principal office, if any:
             4463          (A) set forth in its application for withdrawal; or
             4464          (B) as last changed by notice delivered to the division for filing; or
             4465          (ii) the address for service of process:
             4466          (A) that is stated in its application for withdrawal; or
             4467          (B) as last changed by notice delivered to the division for filing.
             4468          (2) Service effected pursuant to Subsection (1)(b) is perfected at the earliest of:
             4469          (a) the date the withdrawn foreign nonprofit corporation receives the process, notice, or
             4470      demand;
             4471          (b) the date shown on the return receipt, if signed on behalf of the withdrawn foreign
             4472      nonprofit corporation; or
             4473          (c) five days after mailing.
             4474          (3) Subsection (1) does not prescribe the only means, or necessarily the required means,
             4475      of serving a withdrawn foreign nonprofit corporation.
             4476          Section 168. Section 16-6a-1515 is enacted to read:
             4477          16-6a-1515. Grounds for revocation.
             4478          The division may commence a proceeding under Section 16-6a-1516 to revoke the
             4479      authority of a foreign nonprofit corporation to conduct affairs in this state if:
             4480          (1) the foreign nonprofit corporation does not deliver its annual report to the division when
             4481      it is due;
             4482          (2) the foreign nonprofit corporation does not pay when they are due any taxes, fees, or
             4483      penalties imposed by this chapter or other applicable laws of this state;
             4484          (3) the foreign nonprofit corporation is without a registered agent or registered office in
             4485      this state;
             4486          (4) the foreign nonprofit corporation does not inform the division under Section
             4487      16-6a-1509 or 16-6a-1510 that:
             4488          (a) its registered agent or registered office has changed;
             4489          (b) its registered agent has resigned; or
             4490          (c) its registered office has been discontinued;
             4491          (5) an incorporator, director, officer, or agent of the foreign nonprofit corporation signs


             4492      a document knowing it is false in any material respect with intent that the document be delivered
             4493      to the division for filing; or
             4494          (6) the division receives a duly authenticated certificate from the division or other official
             4495      having custody of corporate records in the state or country under whose law the foreign nonprofit
             4496      corporation is incorporated stating that the foreign nonprofit corporation has dissolved or
             4497      disappeared as the result of a merger.
             4498          Section 169. Section 16-6a-1516 is enacted to read:
             4499          16-6a-1516. Procedure for and effect of revocation.
             4500          (1) If the division determines that one or more grounds exist under Section 16-6a-1515 for
             4501      revoking the authority of a foreign nonprofit corporation to conduct affairs in this state, the
             4502      division shall mail to the foreign nonprofit corporation with written notice of the division's
             4503      determination stating the grounds.
             4504          (2) (a) If the foreign nonprofit corporation does not correct each ground for revocation or
             4505      demonstrate to the reasonable satisfaction of the division that each ground determined by the
             4506      division does not exist, within 60 days after mailing of the notice under Subsection (1), the
             4507      division shall revoke the foreign nonprofit corporation's authority to conduct affairs in this state.
             4508          (b) If a foreign corporation's authority to conduct affairs in this state is revoked under
             4509      Subsection (2)(a), the division shall:
             4510          (i) mail a written notice of the revocation to the foreign nonprofit corporation stating the
             4511      effective date of the revocation; and
             4512          (ii) mail a copy of the notice to:
             4513          (A) the last registered agent of the foreign nonprofit corporation; or
             4514          (B) if there is no registered agent of record, at least one officer of the corporation.
             4515          (3) The authority of a foreign nonprofit corporation to conduct affairs in this state ceases
             4516      on the date shown on the division's certificate revoking the foreign nonprofit corporation's
             4517      certificate of authority.
             4518          (4) Revocation of a foreign nonprofit corporation's authority to conduct affairs in this state
             4519      does not terminate the authority of the registered agent of the foreign nonprofit corporation.
             4520          (5) (a) Upon the revocation of a foreign nonprofit corporation's authority to conduct affairs
             4521      in this state, the division becomes an agent for the foreign nonprofit corporation for service of
             4522      process in any proceeding based on a cause of action which arose during the time the foreign


             4523      nonprofit corporation conducted affairs in this state or was authorized to conduct affairs in this
             4524      state.
             4525          (b) Service of process on the division under this Subsection (5) is service on the foreign
             4526      nonprofit corporation.
             4527          (c) Upon receipt of process, the division shall mail a copy of the process to the foreign
             4528      nonprofit corporation at its principal office, if known.
             4529          (6) A notice mailed under this section shall be:
             4530          (a) mailed first class, postage prepaid; and
             4531          (b) addressed to the most current mailing address appearing on the records of the division
             4532      for:
             4533          (i) the registered agent of the nonprofit corporation, if the notice is required to be mailed
             4534      to the registered agent; or
             4535          (ii) the officer of the nonprofit corporation that is mailed the notice if the notice is required
             4536      to be mailed to an officer of the nonprofit corporation.
             4537          Section 170. Section 16-6a-1517 is enacted to read:
             4538          16-6a-1517. Appeal from revocation.
             4539          If the division revokes the authority of a foreign nonprofit corporation to conduct affairs
             4540      in this state, in accordance with Title 63, Chapter 46b, Administrative Procedures Act, the
             4541      following may appeal the refusal to the executive director:
             4542          (1) the foreign nonprofit corporation; or
             4543          (2) the representative of the foreign nonprofit corporation.
             4544          Section 171. Section 16-6a-1518 is enacted to read:
             4545          16-6a-1518. Domestication of foreign nonprofit corporations.
             4546          (1) (a) Any foreign nonprofit corporation may become a domestic nonprofit corporation:
             4547          (i) by delivering to the division for filing articles of domestication meeting the
             4548      requirements of Subsection (2);
             4549          (ii) if the board of directors of the foreign nonprofit corporation adopts the articles of
             4550      domestication; and
             4551          (iii) its members, if any, approve, the domestication.
             4552          (b) The adoption and approval of the domestication shall be in accordance with the consent
             4553      requirements of Section 16-6a-1003 for amending articles of incorporation.


             4554          (2) (a) The articles of domestication shall meet the requirements applicable to articles of
             4555      incorporation set forth in Sections 16-6a-105 and 16-6a-202 , except that:
             4556          (i) the articles of domestication need not name, or be signed by, the incorporators of the
             4557      foreign nonprofit corporation; and
             4558          (ii) any reference to the foreign nonprofit corporation's registered office, registered agent,
             4559      or directors shall be to:
             4560          (A) the registered office and agent in Utah; and
             4561          (B) the directors in office at the time of filing the articles of domestication.
             4562          (b) The articles of domestication shall set forth:
             4563          (i) the date on which and jurisdiction where the foreign nonprofit corporation was first
             4564      formed, incorporated, or otherwise came into being;
             4565          (ii) the name of the foreign nonprofit corporation immediately prior to the filing of the
             4566      articles of domestication;
             4567          (iii) any jurisdiction that constituted the seat, location of incorporation, principal place of
             4568      business, or central administration of the foreign nonprofit corporation immediately prior to the
             4569      filing of the articles of domestication; and
             4570          (iv) a statement that the articles of domestication were:
             4571          (A) adopted by the foreign nonprofit corporation's board of directors; and
             4572          (B) approved by its members, if any.
             4573          (3) (a) Upon the filing of articles of domestication with the division, the foreign nonprofit
             4574      corporation shall:
             4575          (i) be domesticated in this state;
             4576          (ii) be subject to all of the provisions of this chapter after the date of filing the articles of
             4577      domestication; and
             4578          (iii) continue as if it had been incorporated under this chapter.
             4579          (b) Notwithstanding any other provisions of this chapter, the existence of the foreign
             4580      nonprofit corporation shall be considered to have commenced on the date the foreign nonprofit
             4581      corporation commenced its existence in the jurisdiction in which the foreign nonprofit corporation
             4582      was first formed, incorporated, or otherwise came into being.
             4583          (4) The articles of domestication, upon filing with the division, shall:
             4584          (a) become the articles of incorporation of the foreign nonprofit corporation; and


             4585          (b) be subject to amendments or restatement the same as any other articles of incorporation
             4586      under this chapter.
             4587          (5) The domestication of any foreign nonprofit corporation in this state may not be
             4588      considered to affect any obligation or liability of the foreign nonprofit corporation incurred prior
             4589      to its domestication.
             4590          (6) The filing of the articles of domestication may not affect the choice of law applicable
             4591      to the foreign nonprofit corporation, except that from the date the articles of domestication are
             4592      filed, the law of Utah, including the provisions of this chapter, shall apply to the foreign nonprofit
             4593      corporation to the same extent as if the foreign nonprofit corporation had been incorporated as a
             4594      domestic nonprofit corporation of this state on that date.
             4595          Section 172. Section 16-6a-1601 is enacted to read:
             4596     
Part 16. Records, Information, and Reports

             4597          16-6a-1601. Corporate records.
             4598          (1) A nonprofit corporation shall keep as permanent records:
             4599          (a) minutes of all meetings of its members and board of directors;
             4600          (b) a record of all actions taken by the members or board of directors without a meeting;
             4601          (c) a record of all actions taken by a committee of the board of directors in place of the
             4602      board of directors on behalf of the nonprofit corporation; and
             4603          (d) a record of all waivers of notices of meetings of members and of the board of directors
             4604      or any committee of the board of directors.
             4605          (2) A nonprofit corporation shall maintain appropriate accounting records.
             4606          (3) A nonprofit corporation or its agent shall maintain a record of its members in a form
             4607      that permits preparation of a list of the name and address of all members:
             4608          (a) in alphabetical order, by class; and
             4609          (b) showing the number of votes each member is entitled to vote.
             4610          (4) A nonprofit corporation shall maintain its records in written form or in another form
             4611      capable of conversion into written form within a reasonable time.
             4612          (5) A nonprofit corporation shall keep a copy of each of the following records at its
             4613      principal office:
             4614          (a) its articles of incorporation;
             4615          (b) its bylaws;


             4616          (c) resolutions adopted by its board of directors relating to the characteristics,
             4617      qualifications, rights, limitations, and obligations of members or any class or category of members;
             4618          (d) the minutes of all members' meetings for a period of three years;
             4619          (e) records of all action taken by members without a meeting, for a period of three years;
             4620          (f) all written communications to members generally as members for a period of three
             4621      years;
             4622          (g) a list of the names and business or home addresses of its current directors and officers;
             4623          (h) a copy of its most recent annual report delivered to the division under Section
             4624      16-6a-1607 ; and
             4625          (i) all financial statements prepared for periods ending during the last three years that a
             4626      member could have requested under Section 16-6a-1606 .
             4627          Section 173. Section 16-6a-1602 is enacted to read:
             4628          16-6a-1602. Inspection of records by directors and members.
             4629          (1) A director or member is entitled to inspect and copy, any of the records of the nonprofit
             4630      corporation described in Subsection 16-6a-1601 (5):
             4631          (a) during regular business hours;
             4632          (b) at the nonprofit corporation's principal office; and
             4633          (c) if the director or member gives the nonprofit corporation written demand, at least five
             4634      business days before the date on which the member wishes to inspect and copy the records.
             4635          (2) In addition to the rights set forth in Subsection (1), a director or member is entitled to
             4636      inspect and copy any of the other records of the nonprofit corporation:
             4637          (a) during regular business hours;
             4638          (b) at a reasonable location specified by the nonprofit corporation; and
             4639          (c) at least five business days before the date on which the member wishes to inspect and
             4640      copy the records, if the director or member:
             4641          (i) meets the requirements of Subsection (3); and
             4642          (ii) gives the nonprofit corporation written demand.
             4643          (3) A director or member may inspect and copy the records described in Subsection (2)
             4644      only if:
             4645          (a) the demand is made:
             4646          (i) in good faith; and


             4647          (ii) for a proper purpose;
             4648          (b) the director or member describes with reasonable particularity the purpose and the
             4649      records the director or member desires to inspect; and
             4650          (c) the records are directly connected with the described purpose.
             4651          (4) Notwithstanding Section 16-6a-102 , for purposes of this section:
             4652          (a) "member" includes:
             4653          (i) a beneficial owner whose membership interest is held in a voting trust; and
             4654          (ii) any other beneficial owner of a membership interest who establishes beneficial
             4655      ownership; and
             4656          (b) "proper purpose" means a purpose reasonably related to the demanding member's
             4657      interest as a member.
             4658          (5) The right of inspection granted by this section may not be abolished or limited by the
             4659      articles of incorporation or bylaws.
             4660          (6) This section does not affect:
             4661          (a) the right of a director or member to inspect records under Section 16-6a-701 ;
             4662          (b) the right of a member to inspect records to the same extent as any other litigant if the
             4663      member is in litigation with the nonprofit corporation; or
             4664          (c) the power of a court, independent of this chapter, to compel the production of corporate
             4665      records for examination.
             4666          (7) A director or member may not use any information obtained through the inspection or
             4667      copying of records permitted by Subsection (2) for any purposes other than those set forth in a
             4668      demand made under Subsection (3).
             4669          Section 174. Section 16-6a-1603 is enacted to read:
             4670          16-6a-1603. Scope of member's inspection right.
             4671          (1) A director or member's agent or attorney has the same inspection and copying rights
             4672      as the director or member.
             4673          (2) The right to copy records under Section 16-6a-1602 includes, if reasonable, the right
             4674      to receive copies made by photographic, xerographic, electronic, or other means.
             4675          (3) Except as provided in Section 16-6a-1606 , the nonprofit corporation may impose a
             4676      reasonable charge, covering the costs of labor and material, for copies of any documents provided
             4677      to the director or member. The charge may not exceed the estimated cost of production and


             4678      reproduction of the records.
             4679          (4) The nonprofit corporation may comply with a director's or member's demand to inspect
             4680      the record of members under Subsection 16-6a-1601 (3) by furnishing to the director or member
             4681      a list of directors or members that:
             4682          (a) complies with Subsection 16-6a-1601 (3); and
             4683          (b) is compiled no earlier than the date of the director's or member's demand.
             4684          Section 175. Section 16-6a-1604 is enacted to read:
             4685          16-6a-1604. Court-ordered inspection of corporate records.
             4686          (1) (a) A director or member may petition the applicable court if:
             4687          (i) a nonprofit corporation refuses to allow a director or member, or the director's or
             4688      member's agent or attorney, to inspect or copy any records that the director or member is entitled
             4689      to inspect or copy under Subsection 16-6a-1602 (1); and
             4690          (ii) the director or member complies with Subsection 16-6a-1602 (1).
             4691          (b) If petitioned under Subsection (1)(a), the court may summarily order the inspection or
             4692      copying of the records demanded at the nonprofit corporation's expense on an expedited basis.
             4693          (2) (a) A director or member may petition the applicable court if:
             4694          (i) a nonprofit corporation refuses to allow a director or member, or the director's or
             4695      member's agent or attorney, to inspect or copy any records that the director or member is entitled
             4696      to inspect or copy pursuant to Subsections 16-6a-1602 (2) and (3) within a reasonable time
             4697      following the director's or member's demand; and
             4698          (ii) the director or member complies with Subsections 16-6a-1602 (2) and (3).
             4699          (b) If the court is petitioned under Subsection (2)(a), the court may summarily order the
             4700      inspection or copying of the records demanded.
             4701          (3) If a court orders inspection or copying of the records demanded under Subsection (1)
             4702      or (2), unless the nonprofit corporation proves that it refused inspection or copying in good faith
             4703      because it had a reasonable basis for doubt about the right of the director or member, or the
             4704      director's or member's agent or attorney, to inspect or copy the records demanded:
             4705          (a) the court shall also order the nonprofit corporation to pay the director's or member's
             4706      costs, including reasonable counsel fees, incurred to obtain the order;
             4707          (b) the court may order the nonprofit corporation to pay the director or member for any
             4708      damages the member incurred;


             4709          (c) if inspection or copying is ordered pursuant to Subsection (2), the court may order the
             4710      nonprofit corporation to pay the director's or member's inspection and copying expenses; and
             4711          (d) the court may grant the director or member any other remedy provided by law.
             4712          (4) If a court orders inspection or copying of records demanded, it may impose reasonable
             4713      restrictions on the use or distribution of the records by the demanding director or member.
             4714          (5) For purposes of this section, the applicable court is:
             4715          (a) the district court of the county in this state where the nonprofit corporation's principal
             4716      office is located; or
             4717          (b) if the nonprofit corporation has no principal office in this state:
             4718          (i) the district court of the county in which its registered office is located; or
             4719          (ii) if the nonprofit corporation has no registered office, the district court in and for Salt
             4720      Lake County.
             4721          Section 176. Section 16-6a-1605 is enacted to read:
             4722          16-6a-1605. Limitations on use of membership list.
             4723          (1) Without consent of the board of directors, a membership list or any part of a
             4724      membership list may not be obtained or used by any person for any purpose unrelated to a
             4725      member's interest as a member.
             4726          (2) Without limiting the generality of Subsection (1), without the consent of the board of
             4727      directors a membership list or any part of a membership list may not be:
             4728          (a) used to solicit money or property unless the money or property will be used solely to
             4729      solicit the votes of the members in an election to be held by the nonprofit corporation;
             4730          (b) used for any commercial purpose; or
             4731          (c) sold to or purchased by any person.
             4732          Section 177. Section 16-6a-1606 is enacted to read:
             4733          16-6a-1606. Financial statements.
             4734          Upon the written request of any member, a nonprofit corporation shall mail to the member
             4735      the following that show in reasonable detail the assets and liabilities and results of the operations
             4736      of the nonprofit corporation:
             4737          (1) its most recent annual financial statements, if any; and
             4738          (2) its most recently published financial statements, if any.
             4739          Section 178. Section 16-6a-1607 is enacted to read:


             4740          16-6a-1607. Annual report for division.
             4741          (1) Each domestic nonprofit corporation, and each foreign nonprofit corporation
             4742      authorized to conduct affairs in this state, shall deliver to the division for filing an annual report
             4743      on a form provided by the division that sets forth:
             4744          (a) (i) the corporate name of the domestic or foreign nonprofit corporation; and
             4745          (ii) any assumed corporate name of the foreign nonprofit corporation;
             4746          (b) the state or country under whose law it is incorporated;
             4747          (c) the street address of its registered office in this state;
             4748          (d) the name of its registered agent at the office listed in Subsection (1)(c);
             4749          (e) the street address of its principal office;
             4750          (f) the names and addresses of its directors and principal officers; and
             4751          (g) a brief description of the nature of its business.
             4752          (2) The division shall deliver a copy of the prescribed form of annual report to each
             4753      domestic nonprofit corporation and each foreign nonprofit corporation authorized to conduct
             4754      affairs in this state.
             4755          (3) Information in the annual report shall be current as of the date the annual report is
             4756      executed on behalf of the nonprofit corporation.
             4757          (4) (a) The annual report of a domestic or foreign nonprofit corporation shall be delivered
             4758      annually to the division no later than the end of the second calendar month following the calendar
             4759      month in which the report form is mailed by the division.
             4760          (b) Proof to the satisfaction of the division that the nonprofit corporation has mailed an
             4761      annual report form is considered in compliance with this Subsection (4).
             4762          (5) (a) If an annual report contains the information required by this section, the division
             4763      shall file it.
             4764          (b) If an annual report does not contain the information required by this section, the
             4765      division shall promptly notify the reporting domestic or foreign nonprofit corporation in writing
             4766      and return the annual report to it for correction.
             4767          (c) If an annual the report rejected under Subsection (5)(b) was otherwise timely filed and
             4768      is corrected to contain the information required by this section and delivered to the division within
             4769      30 days after the effective date of the notice of rejection, the annual report is considered to be
             4770      timely filed.


             4771          (6) The fact that an individual's name is signed on an annual report form is prima facie
             4772      evidence for division purposes that the individual is authorized to certify the report on behalf of
             4773      the nonprofit corporation.
             4774          (7) The annual report form provided by the division may be designed to provide a
             4775      simplified certification by the nonprofit corporation if no changes have been made in the required
             4776      information from the last preceding report filed.
             4777          (8) A domestic or foreign nonprofit corporation may, but may not be required to, deliver
             4778      to the division for filing an amendment to its annual report reflecting any change in the information
             4779      contained in its annual report as last amended.
             4780          Section 179. Section 16-6a-1608 is enacted to read:
             4781          16-6a-1608. Statement of person named as director or officer.
             4782          Any person named as a director or officer of a domestic or foreign nonprofit corporation
             4783      in an annual report or other document on file with the division may, if that person does not hold
             4784      the named position, deliver to the division for filing a statement setting forth:
             4785          (1) that person's name;
             4786          (2) the domestic or foreign nonprofit corporation's name;
             4787          (3) information sufficient to identify the report or other document in which the person is
             4788      named as a director or officer; and
             4789          (4) (a) the date on which the person ceased to be a director or officer of the domestic or
             4790      foreign nonprofit corporation; or
             4791          (b) a statement that the person did not hold the position for which the person was named
             4792      in the corporate report or other document.
             4793          Section 180. Section 16-6a-1609 is enacted to read:
             4794          16-6a-1609. Interrogatories by division.
             4795          (1) (a) The division may give interrogatories reasonably necessary to ascertain whether the
             4796      nonprofit corporation has complied with the provisions of this chapter applicable to the nonprofit
             4797      corporation to:
             4798          (i) any domestic or foreign nonprofit corporation subject to the provisions of this chapter;
             4799      and
             4800          (ii) to any officer or director of a corporation described in Subsection (1)(a)(i).
             4801          (b) The interrogatories described in Subsection (1) shall be answered within:


             4802          (i) 30 days after the mailing of the interrogatories; or
             4803          (ii) additional time as fixed by the division.
             4804          (c) The answers to the interrogatories shall be:
             4805          (i) full and complete; and
             4806          (ii) made in writing.
             4807          (d) (i) If the interrogatories are directed to an individual, the interrogatories shall be
             4808      answered by the individual.
             4809          (ii) If directed to a nonprofit corporation, the interrogatories shall be answered by:
             4810          (A) the chair of the board of directors of the nonprofit corporation;
             4811          (B) all of its directors;
             4812          (C) one of its officers; or
             4813          (D) any other person authorized to answer the interrogatories as the nonprofit corporation's
             4814      agent.
             4815          (e) (i) The division need not file any document to which the interrogatories relate until the
             4816      interrogatories are answered as provided in this section.
             4817          (ii) Notwithstanding Subsection (1)(e)(i), the division need not file a document to which
             4818      the interrogator relates if the answers to the interrogatory disclose that the document is not in
             4819      conformity with the provisions of this chapter.
             4820          (f) The division shall certify to the attorney general, for such action as the attorney general
             4821      considers appropriate, all interrogatories and answers to interrogatories that disclose a violation
             4822      of this chapter.
             4823          (2) (a) Interrogatories given by the division under Subsection (1), and the answers to
             4824      interrogatories, may not be open to public inspection.
             4825          (b) The division may not disclose any facts or information obtained from the
             4826      interrogatories or answers to the interrogatories, except:
             4827          (i) as the official duties of the division may require the facts or information to be made
             4828      public; or
             4829          (ii) in the event the interrogatories or the answers to the interrogatories are required for
             4830      evidence in any criminal proceedings or in any other action by this state.
             4831          (3) Each domestic or foreign nonprofit corporation that fails or refuses to answer truthfully
             4832      and fully, within the time prescribed by Subsection (1), interrogatories given to the domestic or


             4833      foreign nonprofit corporation by the division in accordance with Subsection (1) is guilty of a class
             4834      C misdemeanor and, upon conviction, shall be punished by a fine of not more than $500.
             4835          (4) Each officer and director of a domestic or foreign nonprofit corporation who fails or
             4836      refuses to answer truthfully and fully, within the time prescribed by Subsection (1), interrogatories
             4837      given to the officer or director by the division in accordance with Subsection (1) is guilty of a class
             4838      B misdemeanor and, upon conviction, shall be punished by a fine of not more than $1,000.
             4839          (5) The attorney general may enforce this section in an action brought in:
             4840          (a) the district court of the county in this state where the nonprofit corporation's principal
             4841      office or registered office is located; or
             4842          (b) if the nonprofit corporation has no principal or registered office in this state, in the
             4843      district court in and for Salt Lake County.
             4844          Section 181. Section 16-6a-1701 is enacted to read:
             4845     
Part 17. Transitional Provisions and Scope of Chapter

             4846          16-6a-1701. Application to existing domestic nonprofit corporations -- Reports
             4847      domestic and foreign nonprofit corporation.
             4848          (1) Except as otherwise provided in Section 16-6a-1704 , this chapter applies to domestic
             4849      nonprofit corporations as follows:
             4850          (a) domestic nonprofit corporations in existence on July 1, 2000, that were incorporated
             4851      under any general statute of this state providing for incorporation of nonprofit corporations,
             4852      including all nonprofit corporations organized under any former provisions of Title 16, Chapter
             4853      6;
             4854          (b) mutual irrigation, canal, ditch, reservoir, and water companies and water users'
             4855      associations organized and existing under the laws of this state on July 1, 2000;
             4856          (c) corporations organized under the provisions of Title 16, Chapter 7, Corporations Sole,
             4857      for purposes of applying all provisions relating to merger or consolidation; and
             4858          (d) to actions taken by the directors, officers, and members of the entities described in
             4859      Subsections (1)(a), (b) and (c) after July 1, 2000.
             4860          (2) Domestic nonprofit corporations to which this chapter applies, that are organized and
             4861      existing under the laws of this state on July 1, 2000:
             4862          (a) shall continue in existence with all the rights and privileges applicable to nonprofit
             4863      corporations organized under this chapter; and


             4864          (b) from July 1, 2000 shall have all the rights and privileges and shall be subject to all the
             4865      remedies, restrictions, liabilities, and duties prescribed in this chapter except as otherwise
             4866      specifically provided in this chapter.
             4867          (3) Every existing domestic nonprofit corporation and foreign nonprofit corporation
             4868      qualified to conduct affairs in this state on July 1, 2000 shall file an annual report with the division
             4869      setting forth the information prescribed by Section 16-6a-1607 . The annual report shall be filed
             4870      at such time as would have been required had this chapter not taken effect and shall be filed
             4871      annually thereafter as required in Section 16-6a-1607 .
             4872          Section 182. Section 16-6a-1702 is enacted to read:
             4873          16-6a-1702. Application to foreign nonprofit corporations.
             4874          (1) A foreign corporation authorized to conduct affairs in this state on July 1, 2000, is
             4875      subject to this chapter, but is not required to obtain a new certificate of authority to conduct affairs
             4876      under this chapter.
             4877          (2) Foreign nonprofit corporations that qualified to do business in this state under the
             4878      provisions of Title 16, Chapter 8, which provisions were repealed by Chapter 28, Laws of Utah
             4879      1961, shall be authorized to transact business in this state subject to all of the limitations,
             4880      restrictions, liabilities, and duties prescribed in this chapter.
             4881          (3) This chapter shall apply to all foreign corporations sole qualified to do business in this
             4882      state with respect to mergers and consolidations.
             4883          Section 183. Section 16-6a-1703 is enacted to read:
             4884          16-6a-1703. Nonapplicability of chapter.
             4885          This chapter does not apply to:
             4886          (1) corporations sole, except with respect to mergers and consolidations; or
             4887          (2) domestic or foreign nonprofit corporations governed by Title 3, Chapter 1, Uniform
             4888      Agricultural Cooperative Association Act.
             4889          Section 184. Section 16-6a-1704 is enacted to read:
             4890          16-6a-1704. Saving provisions.
             4891          (1) (a) Except as provided in Subsection (2), the repeal of any statute by this act does not
             4892      affect:
             4893          (i) the operation of the statute or any action taken under it before its repeal;
             4894          (ii) any ratification, right, remedy, privilege, obligation, or liability acquired, accrued, or


             4895      incurred under the statute before its repeal;
             4896          (iii) any violation of the statute, or any penalty, forfeiture, or punishment incurred because
             4897      of the violation of the statute before its repeal; or
             4898          (iv) any proceeding, reorganization, or dissolution commenced under the statute before its
             4899      repeal.
             4900          (b) A proceeding, reorganization, or dissolution described in Subsection (1)(a)(iv) may be
             4901      completed in accordance with the repealed statute as if the statute had not been repealed.
             4902          (2) If a penalty or punishment imposed for violation of a statute repealed by this act is
             4903      reduced by this act, the penalty or punishment if not already imposed shall be imposed in
             4904      accordance with this act.
             4905          (3) Section 16-6a-707 does not operate to permit a corporation in existence prior to July
             4906      1, 2000, to take action by the written consent of fewer than all of the members entitled to vote with
             4907      respect to the subject matter of the action, until the date a resolution providing otherwise is
             4908      approved either:
             4909          (a) by a consent in writing:
             4910          (i) setting forth the proposed resolution; and
             4911          (ii) signed by all of the members entitled to vote with respect to the subject matter of the
             4912      resolution; or
             4913          (b) at a duly convened meeting of members, by the vote of the same percentage of
             4914      members of each voting group as would be required to include the resolution in an amendment to
             4915      the corporation's articles of incorporation.
             4916          Section 185. Section 16-7-13 is amended to read:
             4917           16-7-13. Merger and consolidation.
             4918          (1) As long as the surviving corporation qualifies for tax exempt status under Internal
             4919      Revenue Code Section 501(c)(3), any corporation organized under this chapter may merge with
             4920      one or more domestic or foreign corporations organized or authorized to do business in this state
             4921      under this title, or with one or more nonprofit domestic or foreign corporations organized or
             4922      authorized to do business in this state under this title.
             4923          (2) (a) Articles of merger or consolidation shall be adopted by the appropriate incorporator
             4924      or the successor to an incorporator as described in Section 16-7-2 . If there is no such incorporator
             4925      or successor, the articles shall be signed by the officer or official authorized to administer the


             4926      affairs and property of the corporation according to the practices and procedures of the church,
             4927      denomination, or religious society.
             4928          (b) The articles of merger or consolidation shall be adopted by any merging or
             4929      consolidating corporation organized under Title 16, Chapter [6] 6a, Utah Revised Nonprofit
             4930      Corporation [and Cooperative Association] Act, as provided in [Section 16-6-56 ] Sections
             4931      16-6a-1101 and 16-6a-1102 .
             4932          (3) The effect of a merger or consolidation under this section is the same as provided in
             4933      Section [ 16-6-59 ] 16-6a-1104 .
             4934          Section 186. Section 16-7-14 is amended to read:
             4935           16-7-14. Restatement of articles of incorporation.
             4936          (1) A corporation sole organized under this chapter may restate its articles of incorporation
             4937      in the same manner allowed nonprofit corporations under Section [ 16-6-53.5 ] 16-6a-1006 .
             4938          (2) The restated articles shall be adopted on behalf of the corporation by the appropriate
             4939      incorporator or the successor to an incorporator as described in Section 16-7-2 . If there is no such
             4940      incorporator or successor, the articles shall be signed by the officer or official authorized to
             4941      administer the affairs and property of the corporation according to the practices and procedures of
             4942      the church, denomination, or religious society.
             4943          Section 187. Section 17A-3-903 is amended to read:
             4944           17A-3-903. Organization of non-profit corporation as building authority -- Powers
             4945      and duties.
             4946          (1) The governing body of a public body may organize a non-profit corporation as the
             4947      building authority for the public body under this part, following the procedures set out in [the] Title
             4948      16, Chapter 6a, Utah Revised Nonprofit Corporation [and Cooperative Association] Act [(Title
             4949      16, Chapter 6, Article 2)], solely for the purpose of accomplishing the public purposes for which
             4950      the public body exists by acquiring, improving, or extending one or more projects and financing
             4951      their costs on behalf of the public body. The authority shall be known as the "Municipal Building
             4952      Authority of (name of public body)." The governing body shall approve the articles of
             4953      incorporation and bylaws of the authority and shall act as the members of the board of trustees of
             4954      the authority. The articles of incorporation and bylaws shall provide that members of the board
             4955      of trustees of the authority may be removed and replaced by the governing authority at any time
             4956      in its discretion. The governing body may, at its sole discretion and at any time, alter or change


             4957      the structure, organization, programs, or activities of the building authority, subject to the rights
             4958      of holders of the authority's bonds and parties to its other obligations.
             4959          (2) Each building authority is authorized to acquire, improve, or extend one or more
             4960      projects and to finance their costs on behalf of the public body that created it, in accordance with
             4961      the procedures and subject to the limitations of this part, in order to accomplish the public purposes
             4962      for which the public body exists.
             4963          (3) Except as limited by Subsection (4), a building authority may contract for or employ
             4964      all staff and other personnel necessary for the purpose of performing its functions and activities,
             4965      including contracting with the public body that created it to utilize the personnel, property, or
             4966      facilities of the public body for that purpose, and may include the costs of the contracted services
             4967      and employed staff and personnel in the rentals and charges payable to it under leases or
             4968      agreements between it and the public body.
             4969          (4) (a) With respect to any public body that creates a building authority and which has an
             4970      elected attorney or auditor, or both, the elected attorney shall be the legal advisor to and provide
             4971      all legal services for the authority, and the elected auditor shall provide all accounting and auditing
             4972      services for the authority. The authority shall reimburse the public body for legal, accounting, and
             4973      auditing services so furnished by the public body, based upon the actual cost of the services
             4974      including reasonable amounts allocated by the public body for overhead, employee fringe benefits,
             4975      and general and administrative expenses.
             4976          (b) The provisions of this Subsection (4) shall not prevent the building authority from
             4977      obtaining accounting or auditing services from outside accountants or auditors with the consent
             4978      of the elected auditor and the governing body or from obtaining legal services from outside
             4979      attorneys with the consent of the elected attorney and the governing body, nor shall the provisions
             4980      of this Subsection (4) prevent the authority from obtaining the opinions of outside attorneys or
             4981      accountants which are necessary for the issuance of the bonds of the authority.
             4982          (c) Except those services that are paid for from bond proceeds, the building authority may
             4983      include the cost of legal, accounting, and auditing services in the rentals and charges payable to
             4984      it under leases or agreements between it and the public body.
             4985          Section 188. Section 21-1-2 is amended to read:
             4986           21-1-2. Fees of lieutenant governor.
             4987          In addition to the fees prescribed by Title 16, Chapter 6a, Utah Revised Nonprofit


             4988      Corporation Act, and Title 16, Chapter 10a, Utah Revised Business Corporation Act, [and Title
             4989      16, Chapter 6, Utah Nonprofit Corporation and Cooperative Association Act,] the lieutenant
             4990      governor shall receive and determine fees pursuant to Section 63-38-3.2 for the following:
             4991          (1) for a copy of any law, resolution, record, or other document or paper on file in [his] the
             4992      lieutenant governor's office, other than documents or papers filed under Title 16, Chapter 6a, Utah
             4993      Revised Nonprofit Corporation Act, and Title 16, Chapter 10a, Utah Revised Business Corporation
             4994      Act[, and Title 16, Chapter 6, Utah Nonprofit Corporation and Cooperative Association Act];
             4995          (2) for affixing certificate and the Great Seal of the state, except on documents filed under
             4996      Title 16, Chapter 6a, Utah Revised Nonprofit Corporation Act, and Title 16, Chapter 10a, Utah
             4997      Revised Business Corporation Act[, and Title 16, Chapter 6, Utah Nonprofit Corporation and
             4998      Cooperative Association Act];
             4999          (3) for each commission signed by the governor, except that no charge may be made for
             5000      commissions to public officers serving without compensation;
             5001          (4) for each warrant of arrest issued by the governor and attested by the lieutenant governor
             5002      upon the requisition of any other state or territory;
             5003          (5) for recording miscellaneous papers or documents;
             5004          (6) for filing any paper or document not otherwise provided for; and
             5005          (7) for searching records and archives of the state, except that no member of the
             5006      Legislature or other state or county officer may be charged for any search relative to matters
             5007      appertaining to the duties of his office or for a certified copy of any law or resolution relative to
             5008      his official duties passed by the Legislature.
             5009          Section 189. Section 21-1-2.5 is amended to read:
             5010           21-1-2.5. Fees of Division of Corporations and Commercial Code.
             5011          In addition to the fees prescribed by Title 16, Chapter 6a, Utah Revised Nonprofit
             5012      Corporation Act, and Title 16, Chapter 10a, Utah Revised Business Corporation Act, [and Title
             5013      16, Chapter 6, Utah Nonprofit Corporation and Cooperative Association Act,] the Division of
             5014      Corporations and Commercial Code shall receive and determine fees pursuant to Section 63-38-3.2
             5015      for filing articles of incorporation or amendments of insurance corporations, of canal or irrigation
             5016      corporations organized for furnishing water to lands owned by the members thereof exclusively,
             5017      or of water users' associations organized in conformity with the requirements of the United States
             5018      under the Reclamation Act of June 17, 1902, and which are authorized to furnish water only to


             5019      their stockholders. No license fee may be imposed on insurance corporations, canal or irrigation
             5020      corporations organized for furnishing water to lands owned by the members thereof exclusively,
             5021      or water users' associations organized in conformity with the requirements of the United States
             5022      under the Reclamation Act of June 17, 1902, and which are authorized to furnish water only to the
             5023      stockholders at the time any such corporation files its articles of incorporation, articles of
             5024      amendment increasing the number of authorized shares, or articles of merger or consolidation, any
             5025      provision of Title 16, Chapter 10a, Utah Revised Business Corporation Act, to the contrary
             5026      notwithstanding.
             5027          Section 190. Section 31A-5-101 is amended to read:
             5028           31A-5-101. Definitions.
             5029          In this chapter, unless the context requires otherwise:
             5030          (1) The definitions applicable to the Utah Revised Business Corporation Act in
             5031      Subsections 16-10a-102 (2), (22), and (23) apply to stock corporations.
             5032          (2) The definitions applicable to nonprofit corporations in Subsections [ 16-6-19 (1), (2),
             5033      (8), (10), and (12)] 16-6a-102 (4), (6), and (30) apply to mutuals.
             5034          (3) "Promoter securities" are securities issued by a stock insurer to the incorporators,
             5035      directors, officers, or their families or nominees at any time prior to, and up to one year following,
             5036      the issuance of a certificate of authority to the stock insurer.
             5037          Section 191. Section 31A-5-102 is amended to read:
             5038           31A-5-102. Scope and purposes.
             5039          (1) (a) Except as expressly provided otherwise in this title, this chapter applies to all
             5040      corporations organized under Utah law and doing an insurance business as defined under Section
             5041      31A-1-301 , except those expressly governed by other chapters of this title. This chapter applies
             5042      to corporations doing a reinsurance business, whether or not they do other insurance business.
             5043          (b) Except as expressly provided otherwise, this chapter does not apply to nondomestic
             5044      insurers.
             5045          (c) Except as provided otherwise in this title, Title 16, Chapter [6] 6a, Utah Revised
             5046      Nonprofit Corporation [and Co-operative Association] Act, and Title 16, Chapter 10a, Utah
             5047      Revised Business Corporation Act, apply to corporations under this chapter.
             5048          (d) If Title 16, Chapter [6] 6a, or Title 16, Chapter 10a, conflict with this title, this title
             5049      governs.


             5050          (2) The purposes of this chapter include:
             5051          (a) to provide a procedure for the formation of insurance corporations;
             5052          (b) to assure the solidity of insurance corporations by providing an organizational
             5053      framework to facilitate sound management, sound operation, and sound regulation;
             5054          (c) to provide fair means of corporate transformation; and
             5055          (d) where feasible, to strengthen internal corporate democracy through enhancing
             5056      shareholder and policyholder participation.
             5057          Section 192. Section 31A-5-104 is amended to read:
             5058           31A-5-104. General corporate powers and procedures.
             5059          (1) (a) Subject to other provisions of this code, Section 16-10a-302 applies to stock and
             5060      mutual insurance corporations.
             5061          (b) Subject to other specific provisions of this title, a domestic insurance corporation may
             5062      participate in any activity permitted as a promoter, partner, member, associate, or manager of any
             5063      partnership, joint venture, trust, or other enterprise.
             5064          (2) Subsections 16-10a-303 (2)(a) and (b) apply to stock corporations, and Section
             5065      16-10a-622 applies to mutuals.
             5066          (3) Whenever a seal is required on a corporate document, writing or printing the word
             5067      "Seal" constitutes a valid seal.
             5068          (4) In waiving notice and in informal actions by shareholders, members, or directors,
             5069      Sections 16-10a-704 , 16-10a-706 , and 16-10a-823 apply to stock corporations, and Sections
             5070      [ 16-6-32 ] 16-6a-705 and [ 16-6-33 ] 16-6a-707 apply to mutuals.
             5071          (5) A life insurance corporation may hold assets under Section 31A-22-410 as general
             5072      corporate assets or as trustee.
             5073          Section 193. Section 31A-5-203 is amended to read:
             5074           31A-5-203. Articles and bylaws.
             5075          (1) The articles of incorporation requirements in Section 16-10a-202 apply to the articles
             5076      of a stock corporation, except that:
             5077          (a) the name of the corporation shall comply with Sections 16-10a-401 and 31A-1-109 and
             5078      the name of any new or renamed corporation shall include the word "insurance" or a term of
             5079      equivalent meaning;
             5080          (b) authorized shares shall conform to Subsection 31A-5-305 (1) and the capital provided


             5081      for shall conform to Section 31A-5-211 ; and
             5082          (c) beginning on July 1, 1988, the purposes of the corporation are limited to those
             5083      permitted by Section 31A-4-107 .
             5084          (2) The articles of incorporation requirements in Section [ 16-6-46 ] 16-6a-202 , except
             5085      Subsections [ 16-6-46 (1)(e) and (f)] 16-6a-202 (1)(g) and (h), apply to the articles of a mutual
             5086      except that:
             5087          (a) The name of the corporation shall comply with Sections [ 16-6-24 ] 16-6a-401 and
             5088      31A-1-109 and the name of any new or renamed corporation shall include the words "mutual" and
             5089      "insurance" or terms of equivalent meaning.
             5090          (b) If any mutual bonds are authorized, they shall comply with Subsection
             5091      31A-5-305 (2)(a).
             5092          (c) The purposes of the corporation may not include doing a title insurance business, and
             5093      shall be limited to those purposes permitted by Section 31A-4-107 .
             5094          (d) If assessable policies are permitted, the articles shall contain provisions giving
             5095      assessment liabilities and procedures, including a provision specifying the classes of business on
             5096      which assessment may be separately levied.
             5097          (e) The articles may specify those classes of persons who may be policyholders, or
             5098      prescribe the procedure for establishing or removing restrictions on the classes of persons who may
             5099      be policyholders. The articles shall also state that each policyholder is a member of the
             5100      corporation.
             5101          (3) Sections 16-10a-830 and 16-10a-831 apply to stock corporations and Section [ 16-6-40 ]
             5102      16-6a-818 applies to mutuals. The articles or bylaws shall designate three or more principal
             5103      offices the principal officers of the corporation shall hold. The principal offices shall be held by
             5104      at least three separate natural persons.
             5105          (4) The bylaws of a domestic corporation shall comply with this chapter. A copy of the
             5106      bylaws, and any amendments to them, shall be filed with the commissioner within 60 days after
             5107      their adoption. Subject to Subsection (4), Subsections 31A-5-204 (2)(c) and (5), Subsection
             5108      31A-5-213 (4), and Section 16-10a-206 apply to stock corporations and Section [ 16-6-44 ]
             5109      16-6a-206 applies to mutuals.
             5110          Section 194. Section 31A-5-219 is amended to read:
             5111           31A-5-219. Amendment of articles.


             5112          (1) Subject to Subsection (3) and to the requirements of the Insurance Code, a stock
             5113      corporation may amend its articles under Sections 16-10a-1001 through 16-10a-1009 and a mutual
             5114      may amend its articles under Sections [ 16-6-49 ] 16-6a-1001 through [ 16-6-51 ] 16-6a-1005 in any
             5115      manner, including substantial changes of its original purposes. No amendment may be made
             5116      contrary to Subsections 31A-5-203 (1) through (3).
             5117          (2) An amendment becomes effective when the properly adopted and filed articles of
             5118      amendment are approved by the commissioner.
             5119          (3) Section 16-10a-1009 applies to stock corporations and the second paragraph of Section
             5120      [ 16-6-53 ] 16-6a-1009 applies to mutuals.
             5121          Section 195. Section 31A-5-404 is amended to read:
             5122           31A-5-404. Communications to shareholders, policyholders, and voting members --
             5123      Commissioner's attendance at meetings.
             5124          (1) (a) Sections 16-10a-1601 through 16-10a-1604 apply to the books and records and their
             5125      inspection by shareholders of stock corporations. Section [ 16-6-41 ] 16-6a-1602 applies to the
             5126      books and records and inspection rights of policyholders or voting members of mutuals. However,
             5127      the inspection of the records of the names and addresses of policyholders or voting members of
             5128      mutuals is permitted only to communicate with other policyholders or voting members regarding
             5129      the nomination and election of candidates for the board, or for other corporate matters which may
             5130      be submitted to a vote of the policyholders or voting members. No person may, directly or
             5131      indirectly, use any information obtained in an inspection for any other purpose.
             5132          (b) Any books, records, or minutes may be in written form or in any other form capable
             5133      of being converted into written form within a reasonable time.
             5134          (c) Any provision of this chapter or of any articles or bylaws of a mutual, which requires
             5135      keeping a record of the names and addresses of policyholders entitled to vote or voting members,
             5136      is complied with by keeping a record of the names of policyholders or voting members and the
             5137      names and addresses of insureds or persons paying premiums. This provision requires mailing or
             5138      sending of notices, reports, proposals, ballots, or other materials to policyholders or voting
             5139      members of record.
             5140          (2) Subject to Subsection (4), the commissioner may by rule prescribe that copies of
             5141      specified classes of communications circulated generally by a corporation to shareholders,
             5142      policyholders, or voting members be communicated to the commissioner at the same time.


             5143          (3) Subject to Subsection (4), the commissioner may attend any shareholders',
             5144      policyholders', or voting members' meeting as an observer.
             5145          (4) Subsection (3) and, so far as it relates to communications to shareholders, Subsection
             5146      (2) do not apply to stock corporations whose voting shares are owned by a single person, or whose
             5147      shareholders are either members of the board or are explicitly represented on it.
             5148          Section 196. Section 31A-5-405 is amended to read:
             5149           31A-5-405. Meetings of mutuals and mutual policyholders' and members' voting
             5150      rights.
             5151          (1) Subject to this section, Sections [ 16-6-27 ] 16-6a-701 , [ 16-6-28 ] 16-6a-702 , 16-6a-704 ,
             5152      and [ 16-6-29 ] 16-6a-714 apply to the meetings of members, the notice, and the voting in mutuals.
             5153      Subject to this section and Section 31A-5-409 , Section [ 16-6-30 ] 16-6a-711 applies to the voting
             5154      of members of mutuals.
             5155          (2) (a) Policyholders or voting members in all mutuals have the right to vote on
             5156      conversion, voluntary dissolution, amendment of the articles, and the election of directors except
             5157      public directors appointed under Subsection 31A-5-409 (1). The mutual may adopt reasonable
             5158      provisions in its bylaws to determine which individual among joint policyholders may exercise a
             5159      voting right and how to deal with cases where the same individual is one of several joint
             5160      policyholders in various policies.
             5161          (b) The articles of any mutual may give the policyholders or voting members additional
             5162      voting rights. These articles may require a greater percentage of affirmative votes to approve an
             5163      action than the statutes require.
             5164          (3) The articles or bylaws shall contain rules governing voting procedures and voting
             5165      eligibility consistent with Subsection (1). No amendment to these rules is effective until at least
             5166      30 days after it has been filed with the commissioner.
             5167          (4) (a) The articles or bylaws may provide for regular or special meetings of the
             5168      policyholders or voting members, and, if meetings are not provided for, then mail elections shall
             5169      be provided for in lieu of elections at meetings.
             5170          (b) Notice of the time and place of regular meetings or elections shall be given to each
             5171      policyholder or voting member in a reasonable manner as the commissioner approves or requires.
             5172      Changes may be made by written notice mailed, properly addressed, and stamped, to the
             5173      last-known address of all policyholders or voting members.


             5174          (5) The articles may provide that representatives or delegates selected by the policyholders
             5175      or voting members shall be from specific geographical districts or defined classes of policyholders
             5176      or voting members, as determined on a reasonable basis. After the representative assembly has
             5177      been selected by the policyholder or voting members, the assembly or the respective classes of
             5178      policyholders or voting members may choose replacements for members unable to complete their
             5179      terms, if the articles provide for their replacement. The vote of a person holding a valid proxy is
             5180      treated as the vote of the policyholders or voting members who gave the proxy.
             5181          Section 197. Section 31A-5-407 is amended to read:
             5182           31A-5-407. Board of directors.
             5183          (1) Subject to this section, Sections 16-10a-801 through 16-10a-803 , 16-10a-805 , and
             5184      16-10a-811 apply to the board of directors of a stock corporation and Sections [ 16-6-34 ] 16-6a-802
             5185      and [ 16-6-35 ] 16-6a-805 apply to the governing board and trustees of mutuals.
             5186          (2) A majority of the directors shall be residents of this state unless the commissioner is
             5187      satisfied that the corporation's financial condition, management, and other circumstances give
             5188      assurance that the interests of insureds and the public will not be endangered by the majority being
             5189      nonresidents.
             5190          (3) Employees and agents of a corporation that receive more than 10% of their income
             5191      from the corporation, and persons related to any of them within the second degree by blood or
             5192      marriage, if directors, are considered "inside directors." Inside directors may not constitute a
             5193      majority of the corporation's board.
             5194          (4) Subsections (2) and (3) and the required number of directors for committees under
             5195      Subsection 31A-5-412 (1) do not apply to an insurance subsidiary authorized under Subsection
             5196      31A-5-218 (1), nor to a stock insurance corporation, more than 50% of whose outstanding shares
             5197      entitled to vote are owned or controlled by a single person or all of whose voting shareholders are
             5198      either members of or are individually represented on the board.
             5199          (5) If the directors of a corporation are divided into classes by the articles or the bylaws,
             5200      no class may contain fewer than one-third of the total number of directors. Subject to this
             5201      requirement, Section 16-10a-804 applies to the classification of directors of stock corporations.
             5202      When classes of trustees or directors are provided in a mutual corporation, the terms of office of
             5203      the several classes need not be uniform.
             5204          (6) The board shall manage the business and affairs of the corporation and may not


             5205      delegate its power or responsibility, except as authorized by Section 31A-5-412 .
             5206          (7) Section 16-10a-824 applies to the determination of a quorum of directors of a stock
             5207      corporation and Section [ 16-6-37 ] 16-6a-816 applies to the determination of a quorum of trustees
             5208      for a mutual, except as specifically provided otherwise in this title.
             5209          (8) (a) Sections 16-10a-820 and 16-10a-821 apply to the meetings and action without a
             5210      meeting of the board of directors of stock corporations [and Section 16-6-39 applies].
             5211          (b) Sections 16-6a-812 through 16-6a-819 apply to the meetings and notice of mutuals.
             5212          (9) Sections 16-10a-1601 through 16-10a-1604 apply to stock corporations and Section
             5213      [ 16-6-41 ] 16-6a-1602 applies to mutuals regarding the examination of books and records of these
             5214      entities.
             5215          Section 198. Section 31A-5-409 is amended to read:
             5216           31A-5-409. Selection and removal of directors and officers of mutuals.
             5217          (1) The articles of a mutual may provide that any number of the directors are public
             5218      directors chosen under a plan proposed by the corporation and approved by the commissioner. The
             5219      plan shall assure true public representation on the board. The persons nominated as directors shall
             5220      have insurance business or general experience that qualifies them to serve responsibly and
             5221      impartially.
             5222          (2) Directors not chosen under Subsection (1) are elected by the policyholders or voting
             5223      members. If directors are divided into classes, one class shall be elected at least every four years,
             5224      for a term not exceeding six years.
             5225          (3) A director may be removed from office for cause by an affirmative vote of a majority
             5226      of the full board at a meeting of the board called for that purpose.
             5227          (4) Subject to Subsections (1), (2), and (3), Section [ 16-6-36 ] 16-6a-810 applies to
             5228      vacancies on the governing board.
             5229          Section 199. Section 31A-5-410 is amended to read:
             5230           31A-5-410. Supervision of management changes.
             5231          (1) (a) The name of a person selected as a director or principal officer of a corporation,
             5232      together with pertinent biographical and other data the commissioner requires by rule, shall be
             5233      reported to the commissioner immediately after the selection.
             5234          (b) For five years after the initial issuance of a certificate of authority to a corporation, the
             5235      commissioner may, within 30 days after receipt of a report under Subsection (1)(a), disapprove any


             5236      person selected who fails to satisfy the commissioner that he is trustworthy and has the competence
             5237      and experience necessary to discharge his responsibilities.
             5238          (2) Whenever a director or principal officer of a corporation is removed under Section
             5239      16-10a-808 or 16-10a-832 , [the third paragraph of Section 16-6-40 , or Subsection] Subsections
             5240      16-6a-820 (4) and 31A-5-409 (3), the removal shall be reported to the commissioner immediately,
             5241      together with a statement of the reasons for the removal.
             5242          (3) If the commissioner finds, after a hearing, that a director or officer is incompetent or
             5243      untrustworthy, or has wilfully violated this code, a rule adopted under Subsection 31A-2-201 (3),
             5244      or an order issued under Subsection 31A-2-201 (4), and that the incompetence, untrustworthiness,
             5245      or the violation endangers the interests of insureds or the public, he may order the removal of the
             5246      director or officer.
             5247          Section 200. Section 31A-5-415 is amended to read:
             5248           31A-5-415. Officers', directors', and employees' liability and indemnification.
             5249          (1) Section 16-10a-841 applies to the liabilities of directors of a stock corporation.
             5250      [Section 16-6-43 ] Subsection 16-6a-825 (3) applies to loans to trustees and officers of a mutual.
             5251      A director who votes for or assents to a violation of Subsection 16-6a-825 (3) or Section
             5252      16-10a-842 [or Section 16-6-43 ] is jointly and severally liable to the corporation for any loss on
             5253      the distribution.
             5254          (2) Part 9, Indemnification, of Title 16, Chapter 10a, Utah Revised Business Corporation
             5255      Act, applies to stock and mutual corporations, but no indemnification may be paid until 30 or more
             5256      days after sending a notice to the commissioner of the full details of the proposed indemnification.
             5257      The commissioner may bring an action in Third Judicial District Court for Salt Lake County to
             5258      have such indemnification enjoined. The court may enjoin the indemnification to the extent it
             5259      would render the insurer in a hazardous condition, or exacerbate an existing financially hazardous
             5260      condition.
             5261          Section 201. Section 31A-5-503 is amended to read:
             5262           31A-5-503. Merger and consolidation of mutuals.
             5263          Any two or more mutuals may merge or consolidate, under the procedures set forth under
             5264      Title 16, Chapter [6] 6a, Utah Revised Nonprofit Corporation Act. All mergers of mutuals are
             5265      subject to [the provisions of] Chapter 16.
             5266          Section 202. Section 31A-5-504 is amended to read:


             5267           31A-5-504. Voluntary dissolution of domestic insurance corporations.
             5268          (1) Under this section, a domestic stock insurance corporation may dissolve under the
             5269      provisions of Sections 16-10a-1401 through 16-10a-1405 . Under this section, a domestic mutual
             5270      insurance corporation may dissolve under [the provisions of Sections 16-6-62 through 16-6-67 ,
             5271      except that Subsections 16-6-63 (4), 16-6-64 (2), 16-6-65 (2), and 16-6-66 (3) do not apply] Section
             5272      16-6a-1405 .
             5273          (2) At least 60 days prior to the submission to shareholders or policyholders of any
             5274      proposed voluntary dissolution of an insurance corporation, the plan of dissolution shall be filed
             5275      with the commissioner. The commissioner may require the submission of any additional
             5276      information that will establish the financial condition of the corporation or other facts relevant to
             5277      the proposed dissolution. If the shareholders or policyholders adopt the resolution to dissolve, the
             5278      commissioner shall, within 30 days after the adoption of the resolution, begin an examination of
             5279      the corporation. He shall approve the dissolution unless he finds, after a hearing, that the
             5280      corporation is insolvent or may become insolvent in the process of dissolution. Upon approval,
             5281      the corporation may transfer all its obligations under insurance policies to other insurers approved
             5282      by the commissioner and then may dissolve under Subsection (1). If the commissioner
             5283      disapproves, the commissioner shall petition the court for a liquidation under Section 31A-27-307 .
             5284          (3) During the liquidation under Subsection (1), the corporation may apply to the
             5285      commissioner to have the liquidation continued under his supervision. After receiving this
             5286      application, the commissioner shall apply to the court for a liquidation under Section 31A-27-307 .
             5287          (4) If the corporation revokes the voluntary dissolution proceedings under Section
             5288      16-6a-1404 or 16-10a-1404 [or 16-6-65 ], it shall file a copy of the revocation of voluntary
             5289      dissolution proceedings with the commissioner.
             5290          (5) In distributing the assets in the dissolution of a nonlife mutual, Subsection
             5291      31A-27-337 (4) applies.
             5292          (6) No remedy available to or against the corporation, its directors, officers, or
             5293      shareholders is taken away or impaired if an action or other proceeding is brought within two years
             5294      after dissolution for any right or claim existing, or any liability incurred, prior to the voluntary
             5295      dissolution under this section. This action or proceeding may be prosecuted or defended by the
             5296      corporation in its corporate name. The shareholders, directors, and officers may take appropriate
             5297      corporate or other action to protect the remedy, right, or claim. A corporation which is dissolved


             5298      by the expiration of its period of duration may amend its articles of incorporation during the two
             5299      years to provide for perpetual existence.
             5300          (7) During the voluntary dissolution of a domestic insurance corporation under this
             5301      section, its corporate existence continues to allow the winding up of the corporation's affairs
             5302      regarding any property and assets not distributed or otherwise disposed of prior to dissolution. To
             5303      effect that purpose, the corporation may sell or otherwise dispose of the property and assets, sue
             5304      and be sued, contract, and exercise all other necessary powers.
             5305          Section 203. Section 31A-5-508 is amended to read:
             5306           31A-5-508. Transfer of business or assets.
             5307          (1) In the sale, lease, exchange, or mortgage of assets with or without shareholder action,
             5308      and concerning the rights of dissenting shareholders in those transactions, Sections 16-10a-1201 ,
             5309      16-10a-1202 , 16-10a-1320 through 16-10a-1328 , 16-10a-1330 , and 16-10a-1331 apply to stock
             5310      corporations. In the sale, lease, exchange, or mortgage of assets, Section [ 16-6-61 ] 16-6a-1201
             5311      applies to mutuals.
             5312          (2) Chapter 16 applies to:
             5313          (a) the sale of a domestic insurer's assets or book of business, other than in the ordinary
             5314      course of business; or
             5315          (b) the insurer entering into contracts of reinsurance which have substantially the same
             5316      effect as a merger.
             5317          Section 204. Section 31A-7-103 is amended to read:
             5318           31A-7-103. Applicability of other provisions.
             5319          (1) Except for exemptions specifically granted under this title, nonprofit health service
             5320      insurance corporations organized or operating under this chapter are subject to all of the provisions
             5321      of this title.
             5322          (2) Nonprofit health service corporations are exempt from the provisions of Chapter 5
             5323      except where sections or parts are specifically referenced and made applicable in this chapter, in
             5324      which case the referenced provisions under Chapter 5 that apply to mutual corporations apply to
             5325      nonprofit health service insurance corporations.
             5326          (3) Title 16, Chapter [6] 6a, Utah Revised Nonprofit Corporation Act, and Title 16,
             5327      Chapter 10a, Utah Revised Business Corporation Act, do not apply to nonprofit health service
             5328      insurance corporations except as specifically made applicable by:


             5329          (a) this chapter;
             5330          (b) a provision adopted by reference under this chapter; or
             5331          (c) a rule adopted by the commissioner to deal with corporate law issues of nonprofit
             5332      health service insurance corporations which are not settled under this chapter.
             5333          (4) Any insurer authorized under this chapter that is not in compliance with the applicable
             5334      capital and surplus requirements, yet has assets in excess of its liabilities, has until July 1, 1988,
             5335      to comply with the applicable capital and surplus requirements. One-half of any shortage in capital
             5336      and surplus on July 1, 1986, shall be remedied by July 1, 1987.
             5337          Section 205. Section 31A-7-201 is amended to read:
             5338           31A-7-201. Organization, incorporation, and licensing.
             5339          Part II of Chapter 5 governs the organization, incorporation, and licensing of nonprofit
             5340      health service corporations with the following exceptions:
             5341          (1) Section [ 16-6-45 ] 16-6a-201 applies in place of Section 31A-5-202 .
             5342          (2) Sections [ 16-6-24 ] 16-6a-401 and 31A-1-109 apply in place of Subsection 31A-5-203
             5343      (2) (a).
             5344          (3) The last sentence of Subsection 31A-5-203 (2) (e) does not apply.
             5345          (4) Sections 31A-5-214 and 31A-5-215 do not apply to nonprofit health service insurance
             5346      corporations.
             5347          Section 206. Section 31A-7-202 is amended to read:
             5348           31A-7-202. Members.
             5349          [Section 16-6-26 ] Sections 16-6a-601 and 16-6a-602 applies to members of corporations
             5350      organized or operating under this chapter. Sections [16-6-27 through 16-6-30 ] 16-6a-701 ,
             5351      16-6a-702 , 16-6a-704 , 16-6a-711 , and 16-6a-712 apply to corporations organized or operating
             5352      under this chapter which have members.
             5353          Section 207. Section 31A-7-303 is amended to read:
             5354           31A-7-303. Board of directors.
             5355          (1) Subject to other provisions under this section, Sections [ 16-6-34 ] 16-6a-801 through
             5356      [ 16-6-37 and Section 16-6-39 ] 16-6a-805 , and Sections 16-6a-810 , 16-6a-812 , 16-6a-814 ,
             5357      16-6a-815 , 16-6a-816 apply to the board of directors of insurers organized or operating under this
             5358      chapter.
             5359          (2) The property and lawful business of every corporation subject to this chapter shall be


             5360      held and managed by a governing board of trustees or directors with the powers and authority as
             5361      is necessary or incidental to the complete execution of the purposes of each corporation as limited
             5362      by its articles of incorporation and bylaws. [No] A board may not consist of less than five
             5363      members. A majority of the directors shall be residents of Utah.
             5364          (3) Any person employed by or receiving more than 10% of his income from a corporation
             5365      licensed under this chapter, and any person related to that person within the second degree by
             5366      blood or marriage, is an "insider." Insiders may not constitute a majority of the board of a
             5367      corporation organized and operating under this chapter.
             5368          (4) The board shall manage the business and affairs of the corporation and may not
             5369      delegate its power or responsibility to do so, except to the extent authorized by Section 31A-7-307 .
             5370          (5) Section [ 16-6-39 ] 16-6a-814 applies to the place and notice of directors' meetings.
             5371          (6) Any director may be removed from office for cause by an affirmative vote of a majority
             5372      of the full board at a meeting of the board called for that purpose.
             5373          Section 208. Section 31A-7-304 is amended to read:
             5374           31A-7-304. Waiver and consent.
             5375          Sections [ 16-6-32 ] 16-6a-813 and [ 16-6-33 ] 16-6a-815 apply to waiver and consent in
             5376      corporations organized or operating under this chapter.
             5377          Section 209. Section 31A-7-313 is amended to read:
             5378           31A-7-313. Books and records.
             5379          Section [ 16-6-41 ] 16-6a-1602 applies to the books and records of corporations organized
             5380      and operating under this chapter.
             5381          Section 210. Section 31A-8-103 is amended to read:
             5382           31A-8-103. Applicability to other provisions of law.
             5383          (1) Except for exemptions specifically granted under this title, organizations are subject
             5384      to regulation under all of the provisions of this title. Notwithstanding any provision of this title,
             5385      organizations licensed under this chapter are wholly exempt from the provisions of Chapters 7, 9,
             5386      10, 11, 12, 13, 19, and 28. In addition, organizations are not subject to:
             5387          (a) Chapter 3, except for Part I;
             5388          (b) Section 31A-4-107 ;
             5389          (c) Chapter 5, except for provisions specifically made applicable by this chapter;
             5390          (d) Chapter 14, except for provisions specifically made applicable by this chapter;


             5391          (e) Chapters 17 and 18, except as made applicable by the commissioner by rule consistent
             5392      with this chapter; and
             5393          (f) Chapter 22, except for Parts VI, VII, and XII.
             5394          (2) The commissioner may by rule waive other specific provisions of this title that he
             5395      considers inapplicable to health maintenance organizations or limited health plans, upon a finding
             5396      that such a waiver will not endanger the interests of enrollees, investors, or the public.
             5397          (3) Title 16, Chapter [6] 6a, Utah Revised Nonprofit Corporation [and Co-operative
             5398      Association] Act, and Title 16, Chapter 10a, Utah Revised Business Corporation Act, do not apply
             5399      to organizations except as specifically made applicable by:
             5400          (a) this chapter;
             5401          (b) a provision referenced under this chapter; or
             5402          (c) a rule adopted by the commissioner to deal with corporate law issues of health
             5403      maintenance organizations that are not settled under this chapter.
             5404          (4) Whenever in this chapter a section, subsection, or paragraph of Chapter 5 or 14 is made
             5405      applicable to organizations, the application is of those provisions that apply to mutual corporations
             5406      if the organization is nonprofit and of those that apply to stock corporations if the organization is
             5407      for profit. Whenever a provision under Chapter 5 or 14 is made applicable to organizations under
             5408      this chapter, "mutual" means nonprofit organization.
             5409          (5) Solicitation of enrollees by an organization is not a violation of any provision of law
             5410      relating to solicitation or advertising by health professionals if that solicitation is made in
             5411      accordance with the provisions of this chapter and Chapter 23.
             5412          (6) Nothing in this title prohibits any health maintenance organization from meeting the
             5413      requirements of any federal law that enables the health maintenance organization to receive federal
             5414      funds or to obtain or maintain federal qualification status.
             5415          (7) Except as provided in Section 31A-8-501 , organizations are exempt from statutes in
             5416      this title or department rules that restrict or limit their freedom of choice in contracting with or
             5417      selecting health care providers, including Section 31A-22-618 .
             5418          (8) Organizations are exempt from the assessment or payment of premium taxes imposed
             5419      by Sections 59-9-101 through 59-9-104 .
             5420          Section 211. Section 31A-8-204 is amended to read:
             5421           31A-8-204. Articles and bylaws.


             5422          (1) The articles of a nonprofit organization shall conform to Subsections [ 16-6-46 ]
             5423      16-6a-202 (1)(a) through [(d) and (1)(g) through (i)] (f). The articles of other organizations shall
             5424      conform to Section 16-10a-202 . In addition:
             5425          (a) the powers of the corporation shall be limited to those permitted under Section
             5426      31A-8-105 ;
             5427          (b) the articles shall state whether the organization is a health maintenance organization
             5428      or a limited health plan;
             5429          (c) the articles shall state the services to be provided or for which indemnity is to be paid,
             5430      which services provided and indemnity guaranteed shall be consistent with the organization's
             5431      designation under Subsection (1)(b);
             5432          (d) the articles shall state that as to health care services for which individual providers are
             5433      required to be licensed, the services provided by the organization shall be provided by persons
             5434      properly licensed to perform the services;
             5435          (e) the articles shall state whether providers of services are subject to assessment or
             5436      withholding to pay operating costs or financial deficits;
             5437          (f) the articles shall state, for organizations having members, how persons become
             5438      members and that only members vote; and
             5439          (g) the articles of an organization not having members shall state how the directors of the
             5440      organization shall be selected and removed.
             5441          (2) The articles or bylaws shall designate three or more officers as the principal officers
             5442      of the corporation. The principal offices shall be held by at least three separate natural persons.
             5443          (3) Section 31A-5-219 applies to amendments to articles of organizations.
             5444          (4) Organizations shall adopt and maintain bylaws. Section [ 16-6-44 ] 16-6a-206 applies
             5445      to organizations, except for the statement that bylaws need not be adopted.
             5446          Section 212. Section 31A-8-406 is amended to read:
             5447           31A-8-406. Distribution by nonprofit organizations.
             5448          A nonprofit organization may pay compensation in a reasonable amount to its members,
             5449      trustees, or officers for services rendered, may make reasonable incentive payments to its
             5450      providers, may confer benefits upon its members in conformity with its purposes, may pay interest
             5451      on certificates of indebtedness issued by it evidencing capital contributions, and upon dissolution
             5452      or final liquidation may make distributions to its members as permitted by [the] Title 16, Chapter


             5453      6a, Utah Revised Nonprofit Corporation [and Co-operative Association] Act, [Section 16-6-18 ,
             5454      et seq.,] and no such payment, benefit, or distribution shall be considered to be a dividend or
             5455      distribution of income. Notwithstanding Section 31A-8-105 , and in addition to the powers granted
             5456      in that section, a nonprofit organization has all powers conferred upon it by Section [ 16-6-22 ]
             5457      16-6a-302 .
             5458          Section 213. Section 31A-9-101 is amended to read:
             5459           31A-9-101. Definitions.
             5460          (1) As used in this chapter:
             5461          (a) "Fraternal" or "fraternal benefit society" means a corporation organized or operating
             5462      under this chapter that:
             5463          (i) has no capital stock;
             5464          (ii) exists solely for:
             5465          (A) the benefit of its members and their beneficiaries; and
             5466          (B) any lawful social, intellectual, educational, charitable, benevolent, moral, fraternal,
             5467      patriotic, or religious purpose for the benefit of its members or the public, carried on through
             5468      voluntary activity of its members in their local lodges or through institutional programs of the
             5469      fraternal or its local lodges;
             5470          (iii) has a lodge system;
             5471          (iv) has a representative form of government; and
             5472          (v) provides insurance benefits authorized under this chapter.
             5473          (b) "Laws of a fraternal" include its articles of incorporation and bylaws, however
             5474      designated.
             5475          (c) "Lodge system" means one in which:
             5476          (i) there is a supreme governing body;
             5477          (ii) subordinate to the supreme governing body are local lodges, however designated, into
             5478      which natural persons are admitted as members in accordance with the laws of the fraternal;
             5479          (iii) the local lodges are required by the laws of the fraternal to hold regular meetings at
             5480      least monthly; and
             5481          (iv) the local lodges regularly engage in programs involving member participation to
             5482      implement the purposes of Subsection (1)(a)(ii).
             5483          (d) "Representative form of government" means the fraternal complies with Section


             5484      31A-9-403 .
             5485          (2) In any provisions of law made applicable to fraternals by this chapter, the technical
             5486      terms used in those provisions are applicable to fraternals despite the use of other parallel terms
             5487      by fraternals.
             5488          (3) The definitions provided in Subsections [ 16-6-19 (1), (2), (8), (10), and (12)]
             5489      16-6a-102 (4), (6), and (30), and Section 31A-1-301 apply to fraternals.
             5490          Section 214. Section 31A-9-105 is amended to read:
             5491           31A-9-105. General corporate powers and procedures.
             5492          (1) Section 16-10a-302 applies to the general powers of fraternals.
             5493          (2) [Subsections 16-6-23 (1) and (2)] Section 16-6a-304 apply to ultra vires issues in
             5494      fraternals.
             5495          (3) Subsection 31A-5-104 (3) applies to the omission of a seal in a fraternal.
             5496          (4) Sections [ 16-6-32 ] 16-6a-705 and [ 16-6-33 ] 16-6a-707 apply to waiver of notice and
             5497      consent to action without a meeting in a fraternal.
             5498          (5) Subsection 31A-5-104 (5) applies to the power to hold assets as a trustee in a fraternal.
             5499          Section 215. Section 31A-9-204 is amended to read:
             5500           31A-9-204. Articles of incorporation and bylaws.
             5501          (1) The articles of incorporation shall set forth:
             5502          (a) the name of the corporation, which shall include the word "fraternal" or words of
             5503      equivalent meaning;
             5504          (b) the location of the principal office of the fraternal, which shall be in this state;
             5505          (c) the purposes of the corporation, which shall include one or more of the purposes
             5506      specified in Subsection 31A-9-101 (1) (a) (ii) (B), but shall otherwise be restricted to those
             5507      permitted under Section 31A-4-107 ;
             5508          (d) the classes of members, and the qualifications and rights of the members of each class;
             5509          (e) a description of the fraternal's representative form of government, conforming to
             5510      Section 31A-9-403 ;
             5511          (f) the manner in which local lodges or branches may be formed and the powers they shall
             5512      have, or a statement that the formation and powers of local lodges or branches is provided for in
             5513      the bylaws;
             5514          (g) a provision for fraternal bonds, if any are to be authorized, which shall conform to


             5515      Section 31A-9-303 ; and
             5516          (h) a provision for amendment of the articles, which shall conform to Section 31A-9-213 .
             5517          (2) The articles of incorporation are not required to recite the corporate powers enumerated
             5518      in this chapter, as these powers are authorized by law.
             5519          (3) Section [ 16-6-40 ] 16-6a-818 applies to the officers of fraternals. The articles or bylaws
             5520      shall specifically designate three or more offices, which shall be held by the principal officers of
             5521      the fraternal. The principal offices shall be held by at least three separate natural persons.
             5522          (4) The bylaws shall comply with the provisions of this chapter. A copy of the bylaws and
             5523      any amendments to them shall be filed with the commissioner promptly after their adoption.
             5524      Notice of amendments to the bylaws shall be given promptly to members. Subject to this chapter,
             5525      Section [ 16-6-44 ] 16-6a-206 applies to the bylaws and resolutions of fraternals.
             5526          Section 216. Section 31A-9-212 is amended to read:
             5527           31A-9-212. Separate accounts and subsidiaries.
             5528          (1) Except as provided in Subsections (2) and (3), Sections 31A-5-217 and 31A-5-218
             5529      apply to separate accounts and subsidiaries of fraternals. If a fraternal issues contracts on a variable
             5530      basis, Subsections 31A-22-902 (2) and (6) and 31A-9-209 (2) do not apply, except that Subsection
             5531      31A-9-209 (2) applies to any benefits contained in the variable contracts which are fixed or
             5532      guaranteed dollar amounts.
             5533          (2) If a fraternal engages in any insurance business other than life, disability, annuities,
             5534      property, or liability insurance, it shall do so through a subsidiary under Section 31A-5-218 .
             5535          (3) (a) A local lodge may incorporate under Title 16, Chapter [6] 6a, Utah Revised
             5536      Nonprofit Corporation Act, or the corresponding law of the state where it is located, to carry out
             5537      the noninsurance activities of the local lodge.
             5538          (b) Corporations may be formed under Title 16, Chapter [6] 6a, Utah Revised Nonprofit
             5539      Corporation Act, to implement Subsection 31A-9-602 (2).
             5540          Section 217. Section 31A-9-405 is amended to read:
             5541           31A-9-405. Board of directors.
             5542          (1) [Section 16-6-34 applies] Sections 16-6a-801 and 16-6a-802 apply to fraternals, except
             5543      that the supreme governing body may act as the board of directors if it meets at least quarterly.
             5544      Subsections 31A-5-407 (2) through (9) apply to fraternals, except that the word "mutual" shall be
             5545      read "fraternal" and the references to other sections of Chapter 5 shall be to the corresponding


             5546      sections of Chapter 9.
             5547          (2) The terms of directors and officers may not exceed four years.
             5548          Section 218. Section 31A-9-406 is amended to read:
             5549           31A-9-406. Removal of directors and filling of vacancies.
             5550          (1) A director may be removed from office for cause by an affirmative vote of a majority
             5551      of the full board of directors at a meeting of the board called for that purpose or may be removed
             5552      under [Paragraph 3 of Section 16-6-40 ] Subsection 16-6a-820 (4).
             5553          (2) Any vacancy occurring in the board, including a vacancy created by an increase in the
             5554      number of directors, may be filled by the affirmative vote of a majority of the directors then in
             5555      office, although less than a quorum.
             5556          (3) If the laws of the fraternal provide that at least two-thirds of the directors are elected
             5557      by the members, elected director vacancies may be filled by the board for the remainder of the
             5558      terms for which there are vacancies.
             5559          (4) If the vacancy is to be filled other than by a regular election, the election by the board
             5560      is effective only until a reasonable time has elapsed for choosing the director in that other manner.
             5561          (5) If less than two-thirds of the directors are elected by the members, elected director
             5562      vacancies may be filled by the directors only until the next succeeding regular election. At that
             5563      time, the elected director vacancy may be filled for the remainder of the term for which there is a
             5564      vacancy. A director elected under this section to fill the unexpired term of an elected director is
             5565      an elected director within the meaning of Subsection 31A-9-403 (1)(a).
             5566          (6) If the board ceases to exist, the commissioner shall arrange the necessary procedures
             5567      for holding elections to create a new board.
             5568          Section 219. Section 31A-9-502 is amended to read:
             5569           31A-9-502. Voluntary dissolution of solvent domestic fraternals.
             5570          (1) Subject to this section, a domestic fraternal may voluntarily dissolve under Sections
             5571      [ 16-6-62 ] 16-6a-1401 through [ 16-6-67 , except that Subsections 16-6-63 (4), 16-6-64 (2), 16-6-65
             5572      (2) and 16-6-66 (3) do not apply] 16-6a-1405 .
             5573          (2) The proposal for voluntary dissolution shall be filed with the commissioner at least 60
             5574      days prior to the submission of that proposal to the supreme governing body or the members. The
             5575      commissioner may require the submission of additional information necessary to establish the
             5576      financial condition of the fraternal or other facts relevant to the proposed dissolution. If the


             5577      supreme governing body or the members adopt the resolution to dissolve, by a majority of those
             5578      voting or a larger number as required by the laws of the fraternal, the commissioner shall, within
             5579      30 days after the adoption of the resolution, begin to examine the fraternal. The commissioner shall
             5580      approve the dissolution unless he finds, after the examination and a hearing, that it is insolvent or
             5581      may become insolvent in the process of dissolution. Upon approval, the fraternal may provide for
             5582      a transfer to other fraternals approved by the commissioner of all its obligations under insurance
             5583      policies and then may dissolve under Subsection (1). If the commissioner disapproves, he shall
             5584      petition the court for liquidation under Section 31A-27-307 .
             5585          (3) During the liquidation under Sections [ 16-6-63 ] 16-6a-1401 through [ 16-6-66 ]
             5586      16-6a-1408 , the fraternal may apply to the commissioner to have the liquidation continued under
             5587      the commissioner's supervision. Upon receiving this request, the commissioner shall apply to the
             5588      court for liquidation under Section 31A-27-307 .
             5589          (4) If the fraternal revokes the voluntary dissolution proceedings under Section [ 16-6-65 ]
             5590      16-6a-404 , a copy of the revocation of voluntary dissolution proceedings shall be filed with the
             5591      commissioner.
             5592          (5) Subsections 31A-5-504 (6) and (7) apply to the survival of remedies and continuance
             5593      of corporate existence of a voluntarily dissolved fraternal.
             5594          Section 220. Section 31A-11-105 is amended to read:
             5595           31A-11-105. Application of Title 16 -- Incorporation of domestic motor clubs.
             5596          Domestic corporations acting or applying to act as a motor club under this chapter are
             5597      subject to Title 16, Chapter 10a, Utah Revised Business Corporation Act, if for profit, or Title 16,
             5598      Chapter [6] 6a, Utah Revised Nonprofit Corporation Act, if not for profit. The Division of
             5599      Corporations and Commercial Code in the Department of Commerce issues certificates of
             5600      incorporation for domestic corporations acting as motor clubs under this chapter, unless they are
             5601      Chapter 5 corporations. This section does not negate the requirement of a motor club obtaining
             5602      a certificate of authority from the commissioner. Section [ 16-6-21 ] 16-6a-301 does not apply to
             5603      bar a not-for-profit motor club from organizing under Title 16, Chapter [6] 6a, Utah Revised
             5604      Nonprofit Corporation Act.
             5605          Section 221. Section 31A-14-205 is amended to read:
             5606           31A-14-205. Requirements from other applicable chapters.
             5607          (1) A foreign insurer may not be authorized to do business in this state, unless it strictly


             5608      complies with the following requirements:
             5609          (a) Foreign insurers shall comply with the solvency standard set forth in Chapter 17, Part
             5610      6, Risk-Based Capital, including maintenance of minimum capital or permanent surplus under
             5611      Section 31A-5-211 .
             5612          (b) A foreign insurer proposing to market securities in this state shall comply with Sections
             5613      31A-5-301 , 31A-5-302 , and 31A-5-305 , unless this marketing is subject to United States Securities
             5614      and Exchange Commission regulation.
             5615          (c) Section 16-10a-1506 applies to the corporate name and the change of name of foreign
             5616      stock insurers. Section [ 16-6-82 ] 16-6a-1507 applies to the change of name of foreign mutual
             5617      insurers.
             5618          (d) Subsection 31A-5-203 (2)(c) applies to other business of foreign mutual insurers.
             5619          (e) Subsection 31A-5-404 (2), as modified by Subsection 31A-5-404 (4), applies to
             5620      communications to shareholders, policyholders, or voting members of mutuals by foreign insurers.
             5621          (f) Section 31A-5-413 applies to interlocking directorates of foreign insurers.
             5622          (g) Subsection 31A-5-203 (2)(d) applies to assessment liability in foreign insurers issuing
             5623      assessable policies in any state.
             5624          (2) The commissioner may issue orders imposing and eliminating restrictions to foreign
             5625      insurers under Section 31A-5-103 .
             5626          (3) After a hearing, the commissioner may by order apply any of the provisions of Sections
             5627      31A-5-307 , 31A-5-414 , 31A-5-418 to a foreign corporation after finding that it is necessary for
             5628      the protection of the interests of its insureds, creditors, or the public in this state. This subsection
             5629      may be applied to a foreign insurer without a hearing if done under a reciprocal agreement with
             5630      the domiciliary regulatory authority.
             5631          (4) If any provision made applicable to a foreign insurer under this section conflicts with
             5632      the law of the insurer's domicile so that it is impossible for the corporation to comply with both
             5633      laws, the law of the domicile governs.
             5634          (5) This section does not excuse or exempt any foreign insurer from complying with the
             5635      provisions of this title which are otherwise applicable to a foreign insurer.
             5636          (6) This section does not apply to foreign fraternal insurers.
             5637          (7) If a licensed foreign insurer is in rehabilitation or liquidation proceedings or is found
             5638      to be insolvent in its state of domicile, the commissioner may, without hearing, suspend the


             5639      insurer's certificate of authority to do business in this state.
             5640          Section 222. Section 31A-22-1305 is amended to read:
             5641           31A-22-1305. Persons authorized to issue annuities.
             5642          No person may issue an annuity to another person unless the issuer is:
             5643          (1) an insurer authorized to issue annuities under Chapter 5, 9, or 14;
             5644          (2) a domestic corporation created under Title 16, Chapter [6] 6a, Utah Revised Nonprofit
             5645      Corporation Act, or other applicable law, or a foreign corporation conducted without profit, which
             5646      is engaged solely in bona fide charitable, religious, missionary, educational, medical, or
             5647      philanthropic activities; or
             5648          (3) a natural person who issues an annuity to his spouse, children, grandchildren,
             5649      great-grandchildren, parents, grandparents, uncles, aunts, brothers, sisters, nieces, or nephews,
             5650      whether those relationships are by birth, marriage, or legal adoption.
             5651          Section 223. Section 31A-27-335 is amended to read:
             5652           31A-27-335. Priority of distribution.
             5653          (1) (a) Every claim in each class of claims from the insurer's estate shall be paid in full or
             5654      adequate funds retained for the payment before the members of the next class receive any payment.
             5655          (b) Once the funds are retained by the liquidator and approved by the court, the insurer's
             5656      estate shall have no further liability to members of that class except to the extent of the retained
             5657      funds and any other undistributed funds.
             5658          (c) Subclasses may not be established within any class.
             5659          (d) A claim by a shareholder, policyholder, or other creditor may not be permitted to
             5660      circumvent the priority classes through the use of equitable remedies.
             5661          (2) The classes and order of distribution are as described in Subsections (2)(a) through (i).
             5662          (a) Class one is the costs and expenses of administration expressly approved by the
             5663      liquidator, including:
             5664          (i) the actual and necessary costs of preserving or recovering the assets of the insurer;
             5665          (ii) compensation for all authorized services rendered in the supervision, rehabilitation,
             5666      or liquidation;
             5667          (iii) any necessary filing fees;
             5668          (iv) the fees and mileage payable to witnesses; and
             5669          (v) reasonable attorney's fees and other professional services rendered in the supervision,


             5670      rehabilitation, or liquidation.
             5671          (b) (i) Class two is the administrative expenses of guaranty associations.
             5672          (ii) For purposes of this section, "administrative expenses of a guaranty association" means
             5673      the reasonable expenses incurred by a guaranty association:
             5674          (A) when the expenses are not payments or expenses that are required to be incurred as
             5675      direct policy benefits in fulfillment of the terms of the insurance contract or policy; and
             5676          (B) that are of the type and nature that, but for the activities of the guaranty association,
             5677      otherwise would have been incurred by the liquidator, including:
             5678          (I) evaluations of policy coverage;
             5679          (II) activities involved in the adjustment and settlement of claims under policies, including
             5680      those of in-house or outside adjusters; and
             5681          (III) the reasonable expenses incurred in connection with the arrangements for ongoing
             5682      coverage through transfer to other insurers, policy exchanges, or maintaining policies in force.
             5683          (iii) The liquidator may in the liquidator's sole discretion approve as an administrative
             5684      expense of a guaranty association any other reasonable expenses of the guaranty association if the
             5685      liquidator finds:
             5686          (A) the expenses are not expenses required to be paid or incurred as direct policy benefits
             5687      by the terms of the policy; and
             5688          (B) the expenses were incurred in furtherance of activities that provided material economic
             5689      benefit to the estate as a whole, irrespective of whether the activities resulted in additional benefits
             5690      to covered claimants.
             5691          (iv) The court shall approve the expenses approved by the liquidator under Subsection
             5692      (2)(b)(iii) unless the court finds the liquidator abused the liquidator's discretion in approving the
             5693      expenses.
             5694          (c) (i) Class three is all claims under policies for losses incurred including:
             5695          (A) claims of the federal, state, or local government;
             5696          (B) third party claims;
             5697          (C) claims for unearned premiums; and
             5698          (D) claims of a guaranty association, other than those included in class two, including
             5699      claims for payment of covered claims or covered obligations of the insurer.
             5700          (ii) All claims under life and health insurance and annuity policies shall be treated as loss


             5701      claims.
             5702          (iii) That portion of any loss for which indemnification is provided by other benefits or
             5703      advantages recovered or recoverable by the claimant are not included in this class, other than
             5704      benefits or advantages recovered or recoverable in discharge of familial obligations of support, by
             5705      way of succession at death, as proceeds of life insurance, or as gratuities. A payment made by an
             5706      employer to the employer's employee may not be treated as a gratuity.
             5707          (iv) Notwithstanding Subsections (2)(c)(i), (ii), and (iii), the following claims shall be
             5708      excluded from class three priority:
             5709          (A) obligations of the insolvent insurer arising out of reinsurance contracts;
             5710          (B) obligations incurred after:
             5711          (I) the expiration date of the insurance policy;
             5712          (II) the policy has been replaced by the insured;
             5713          (III) the policy has been canceled at the insured's request; or
             5714          (IV) the policy has been canceled as provided in the chapter;
             5715          (C) obligations to insurers, insurance pools, or underwriting associations and their claims
             5716      for contribution, indemnity, or subrogation, equitable or otherwise;
             5717          (D) any claim that is in excess of any applicable limits provided in the insurance policy
             5718      issued by the insolvent insurer;
             5719          (E) any amount accrued as punitive or exemplary damages unless expressly covered under
             5720      the terms of the policy; and
             5721          (F) tort claims of any kind against the insurer, and claims against the insurer for bad faith
             5722      or wrongful settlement practices.
             5723          (v) Notwithstanding Subsection (2)(c)(iv)(B), unearned premium claims on policies, other
             5724      than reinsurance agreements, may not be excluded.
             5725          (d) Class four is claims of the federal government other than those claims included under
             5726      class three.
             5727          (e) (i) Class five is debts due employees for services, benefits, contractual or otherwise
             5728      due, arising out of reasonable compensation to employees for services performed:
             5729          (A) to the extent that they:
             5730          (I) do not exceed two months of monetary compensation; and
             5731          (II) represent payment for services performed within six months before the filing of the


             5732      petition for liquidation; or
             5733          (B) if rehabilitation preceded liquidation, within one year before the filing of the petition
             5734      for rehabilitation.
             5735          (ii) Principal officers and directors are not entitled to the benefit of class five priority
             5736      except as otherwise approved by the liquidator and the court.
             5737          (iii) Class five priority shall be in lieu of any other similar priority that may be authorized
             5738      by law as to wages or compensation of employees.
             5739          (f) (i) Class six is claims of:
             5740          (A) any person, including claims of state or local governments, except those specifically
             5741      classified elsewhere in this section; or
             5742          (B) attorneys for fees and expenses owed them by a person for services rendered in
             5743      opposing a formal delinquency proceeding.
             5744          (ii) To prove the claim for attorneys' fees and expenses, the claimant shall show that:
             5745          (A) the insurer that is the subject of the delinquency proceeding incurred the fees and
             5746      expenses based on its best knowledge, information, and belief, formed after reasonable inquiry
             5747      indicating opposition was:
             5748          (I) in the best interests of the person;
             5749          (II) well grounded in fact; and
             5750          (III) warranted by existing law or a good faith argument for the extension, modification,
             5751      or reversal of existing law; and
             5752          (B) opposition was not pursued for any improper purpose, such as to:
             5753          (I) harass;
             5754          (II) cause unnecessary delay; or
             5755          (III) cause needless increase in the cost of litigation.
             5756          (g) (i) Class seven is claims of any state or local government for a penalty or forfeiture,
             5757      but only to the extent of the pecuniary loss sustained from the act, transaction, or proceeding out
             5758      of which the penalty or forfeiture arose, including the reasonable and actual costs incurred from
             5759      the act, transaction, or proceeding.
             5760          (ii) The remainder of the claims shall be postponed to class eight claims.
             5761          (h) Class eight is:
             5762          (i) surplus or contribution notes or similar obligations;


             5763          (ii) premium refunds on assessable policies;
             5764          (iii) interest on claims of classes one through seven; and
             5765          (iv) any other claims specifically subordinated to this class.
             5766          (i) Class nine is claims of shareholders or other owners, including policyholders of a
             5767      mutual insurance corporation within the limits of Subsection 31A-27-337 (4)(b) except as they may
             5768      be qualified in class three or four.
             5769          (3) (a) If the liquidator determines that the assets of the estate will be sufficient to pay all
             5770      class one claims in full, class two claims shall be paid currently, only after the liquidator secures
             5771      from each of the guaranty associations receiving disbursements under this section an agreement
             5772      to return to the liquidator the disbursements, together with investment income actually earned on
             5773      the disbursements, as may be required to pay class one claims.
             5774          (b) A guaranty association entering into an agreement under Subsection (3)(a) may not be
             5775      required to post a bond.
             5776          (4) As to a nonprofit corporation organized and operating under Chapter 7 with assets not
             5777      fully liquidated under Subsections (1) and (2), the remaining assets shall be distributed under
             5778      Subsections [ 16-6-70 (2), (3), (4), and (5)] 16-6a-1405 (1)(b) and (c) and Subsection 16-6a-1405 (2).
             5779          (5) (a) If any claimant of this state, another state, or foreign country is entitled to or
             5780      receives a distribution upon the claimant's claim out of a statutory deposit or the proceeds of any
             5781      bond or other asset located in another state or foreign country, unless the deposit or proceeds shall
             5782      have been delivered to the domiciliary liquidator, the claimant is not entitled to any further
             5783      distribution from the liquidator until and unless all other claimants of the same class, irrespective
             5784      of residence or place of the acts or contracts upon which their claims are based, shall have received
             5785      an equal distribution upon their claims.
             5786          (b) After the equalization under Subsection (5)(a), the claimants of the same class are
             5787      entitled to share in the further distributions by the liquidator, along with and like all other creditors
             5788      of the same class, wherever the claimants reside.
             5789          (6) Upon the declaration of a distribution, the liquidator shall apply the amount of the
             5790      distribution against any indebtedness owed to the insurer by the person entitled to the distribution.
             5791      There shall be no claim allowed for and deductible charged by a guaranty association or entity
             5792      performing a similar function.
             5793          (7) This section applies retrospectively to any proceeding under this chapter initiated after


             5794      January 1, 1992.
             5795          Section 224. Section 31A-34-105 is amended to read:
             5796           31A-34-105. Association requirements.
             5797          (1) A nonprofit corporation organized under Title 16, Chapter [6] 6a, Utah Revised
             5798      Nonprofit Corporation Act, may only hold itself out as a voluntary health insurance purchasing
             5799      association if it:
             5800          (a) is organized by participating employers;
             5801          (b) is governed and controlled by participating employers;
             5802          (c) does not bear risk; and
             5803          (d) has filed with the commissioner:
             5804          (i) its articles of incorporation and bylaws; and
             5805          (ii) a completed form provided by the department.
             5806          (2) A voluntary health insurance purchasing association is not an alliance under this
             5807      chapter, is not exempt from state or federal antitrust laws, and is therefore not subject to the
             5808      regulation of this chapter, except as provided in this section.
             5809          Section 225. Section 31A-34-108 is amended to read:
             5810           31A-34-108. Powers of and restrictions on alliances.
             5811          (1) An alliance may only exercise the powers necessary to:
             5812          (a) make health insurance available to its members and enrollees from multiple unaffiliated
             5813      insurers through the use of coordinated actuarial models, coordinated underwriting, or coordinated
             5814      marketing methodologies; and
             5815          (b) subject to Subsection (3)(d), make available to its members other related insurance
             5816      products and services, including dental, vision, and life insurance.
             5817          (2) In addition to the powers granted to a nonprofit corporation in Title 16, Chapter [6] 6a,
             5818      Utah Revised Nonprofit Corporation Act, or to the powers of a trust under common law, the
             5819      powers of an alliance include:
             5820          (a) setting reasonable fees and conditions for membership, which may vary by group size,
             5821      to reflect reasonable and necessary costs incurred in administering the alliance;
             5822          (b) providing or contracting for premium collection services consistent with the
             5823      requirements of Title 31A, Chapter 25; or
             5824          (c) contracting with qualified independent third parties for any service necessary to carry


             5825      out the powers and duties authorized or required by this chapter.
             5826          (3) Notwithstanding Subsection (1), an alliance may not:
             5827          (a) purchase health care services;
             5828          (b) assume risk for the cost or provision of health services;
             5829          (c) contract with health care providers for the provision of health care services to enrollees;
             5830      or
             5831          (d) condition alliance membership on the purchase or subscription of a product or service
             5832      other than health insurance.
             5833          Section 226. Section 41-22-2 is amended to read:
             5834           41-22-2. Definitions.
             5835          As used in this chapter:
             5836          (1) "Advisory council" means the Off-highway Vehicle Advisory Council appointed by
             5837      the Board of Parks and Recreation.
             5838          (2) "All-terrain type I vehicle" means any motor vehicle 50 inches or less in width, having
             5839      an unladen dry weight of 800 pounds or less, traveling on three or more low pressure tires, having
             5840      a seat designed to be straddled by the operator, and designed for or capable of travel over
             5841      unimproved terrain.
             5842          (3) "All-terrain type II vehicle" means any other motor vehicle, not defined in Subsection
             5843      (2), (9), or (19), designed for or capable of travel over unimproved terrain. This term does not
             5844      include golf carts, any vehicle designed to carry a disabled person, any vehicle not specifically
             5845      designed for recreational use, or farm tractors as defined under Section 41-1a-102 .
             5846          (4) "Board" means the Board of Parks and Recreation.
             5847          (5) "Dealer" means a person engaged in the business of selling off-highway vehicles at
             5848      wholesale or retail.
             5849          (6) "Division" means the Division of Parks and Recreation.
             5850          (7) "Low pressure tire" means any pneumatic tire six inches or more in width designed for
             5851      use on wheels with rim diameter of 12 inches or less and utilizing an operating pressure of ten
             5852      pounds per square inch or less as recommended by the vehicle manufacturer.
             5853          (8) "Manufacturer" means a person engaged in the business of manufacturing off-highway
             5854      vehicles.
             5855          (9) "Motorcycle" means every motor vehicle having a saddle for the use of the operator


             5856      and designed to travel on not more than two tires.
             5857          (10) "Motor vehicle" means every vehicle which is self-propelled.
             5858          (11) "Off-highway vehicle" means any snowmobile, all-terrain type I vehicle, all-terrain
             5859      type II vehicle, or motorcycle.
             5860          (12) "Off-highway implement of husbandry" means every all-terrain type I vehicle,
             5861      motorcycle, or snowmobile which is used by the owner or his agent for agricultural operations.
             5862          (13) "Operate" means to control the movement of or otherwise use an off-highway vehicle.
             5863          (14) "Operator" means the person who is in actual physical control of an off-highway
             5864      vehicle.
             5865          (15) "Organized user group" means an off-highway vehicle organization incorporated as
             5866      a nonprofit corporation in the state under Title 16, Chapter [6] 6a, Utah Revised Nonprofit
             5867      Corporation [and Co-operative Association] Act, for the purpose of promoting the interests of
             5868      off-highway vehicle recreation.
             5869          (16) "Owner" means a person, other than a person with a security interest, having a
             5870      property interest or title to an off-highway vehicle and entitled to the use and possession of that
             5871      vehicle.
             5872          (17) "Public land" means land owned or administered by any federal or state agency or any
             5873      political subdivision of the state.
             5874          (18) "Register" means the act of assigning a registration number to an off-highway vehicle.
             5875          (19) "Roadway" is used as defined in Section 41-6-1 .
             5876          (20) "Snowmobile" means any motor vehicle designed for travel on snow or ice and
             5877      steered and supported in whole or in part by skis, belts, cleats, runners, or low pressure tires.
             5878          (21) "Street or highway" means the entire width between boundary lines of every way or
             5879      place of whatever nature, when any part of it is open to the use of the public for vehicular travel.
             5880          Section 227. Section 48-2b-106 is amended to read:
             5881           48-2b-106. Name -- Exclusive right.
             5882          (1) The name of each limited liability company as set forth in the articles of organization:
             5883          (a) shall contain the terms:
             5884          (i) "limited company";
             5885          (ii) "limited liability company";
             5886          (iii) "L.C."; or


             5887          (iv) "L.L.C.";
             5888          (b) may not contain:
             5889          (i) the terms:
             5890          (A) "association";
             5891          (B) "corporation";
             5892          (C) "incorporated";
             5893          (D) "limited partnership";
             5894          (E) "limited";
             5895          (F) "L.P."; or
             5896          (G) "Ltd."; or
             5897          (ii) words or any abbreviation with a similar meaning to those described in Subsection
             5898      (1)(b)(i) in any other language;
             5899          (c) without the written consent of the United States Olympic Committee, may not contain
             5900      the words:
             5901          (i) "Olympic";
             5902          (ii) "Olympiad"; or
             5903          (iii) "Citius Altius Fortius"; and
             5904          (d) without the written consent of the State Board of Regents in accordance with Section
             5905      53B-5-114 , may not contain the words:
             5906          (i) "university";
             5907          (ii) "college"; or
             5908          (iii) "institute."
             5909          (2) (a) A person or entity, other than a limited liability company formed or registered under
             5910      this chapter, may not use in its name in this state any of the terms:
             5911          (i) "limited liability company";
             5912          (ii) "limited company";
             5913          (iii) "L.L.C.";
             5914          (iv) "L.C.";
             5915          (v) "LLC"; or
             5916          (vi) "LC".
             5917          (b) Notwithstanding Subsection (2)(a):


             5918          (i) a foreign corporation whose actual name includes the word "limited" or "Ltd." may use
             5919      its actual name in this state if it also uses:
             5920          (A) "corporation";
             5921          (B) "incorporated"; or
             5922          (C) an abbreviation of the words listed in this Subsection (2)(b)(i); or
             5923          (ii) a limited liability partnership may use in its name the terms:
             5924          (A) "limited liability partnership";
             5925          (B) "L.L.P."; or
             5926          (C) "LLP".
             5927          (3) Except as authorized by Subsection (4), the name of a limited liability company must
             5928      be distinguishable as defined in Subsection (5) upon the records of the division from:
             5929          (a) the name of any limited partnership formed or authorized to transact business in this
             5930      state;
             5931          (b) the name of any limited liability company formed or authorized to transact business
             5932      in this state;
             5933          (c) the corporate name of any corporation incorporated or authorized to transact business
             5934      in the state;
             5935          (d) any limited partnership name reserved under this chapter;
             5936          (e) any limited liability company name reserved under this chapter;
             5937          (f) any corporate name reserved under:
             5938          [(ii)] (i) Title 16, Chapter [6] 6a, Utah Revised Nonprofit Corporation [and Cooperative
             5939      Association] Act, as amended;
             5940          [(i)] (ii) Title 16, Chapter 10a, Utah Revised Business Corporation Act, as amended; or
             5941          (g) any fictitious name adopted by a foreign corporation, limited partnership, or limited
             5942      liability company authorized to transact business in this state because its real name is unavailable;
             5943          (h) any corporate name of a not-for-profit corporation incorporated or authorized to
             5944      transact business in this state; and
             5945          (i) any assumed name, trademark, or service mark registered by the division.
             5946          (4) (a) A limited liability company may apply to the division for approval to file its articles
             5947      of organization under or to reserve a name that is not distinguishable upon the division's records
             5948      from one or more of the names described in Subsection (3).


             5949          (b) The division shall approve the name for which the company applies under Subsection
             5950      (4)(a) if:
             5951          (i) the other person whose name is not distinguishable from the name under which the
             5952      applicant desires to file:
             5953          (A) consents to the filing in writing; and
             5954          (B) submits an undertaking in a form satisfactory to the division to change its name to a
             5955      name that is distinguishable from the name of the applicant; or
             5956          (ii) the applicant delivers to the division a certified copy of the final judgment of a court
             5957      of competent jurisdiction establishing the applicant's right to use the name in this state.
             5958          (5) A name is distinguishable from other names, trademarks, and service marks registered
             5959      with the division if it contains one or more different letters or numerals from other names upon the
             5960      division's records.
             5961          (6) The following differences are not distinguishing:
             5962          (a) the terms:
             5963          (i) "corporation";
             5964          (ii) "incorporated";
             5965          (iii) "company";
             5966          (iv) "limited partnership";
             5967          (v) "limited";
             5968          (vi) "L.P.";
             5969          (vii) "Ltd.";
             5970          (viii) "limited liability company";
             5971          (ix) "limited company";
             5972          (x) "L.C."; or
             5973          (xi) "L.L.C.";
             5974          (b) an abbreviation of a word listed in Subsection (6)(a);
             5975          (c) the presence or absence of the words or symbols of the words "the," "and," "a," or
             5976      "plus";
             5977          (d) differences in punctuation and special characters;
             5978          (e) differences in capitalization;
             5979          (f) for a limited liability company that is formed in or registered as a foreign limited


             5980      liability company in this state on or after May 4, 1998, differences between singular and plural
             5981      forms of words; or
             5982          (g) differences in whether the letters or numbers immediately follow each other or are
             5983      separated by one or more spaces if:
             5984          (i) the sequence of letters or numbers is identical; and
             5985          (ii) the limited liability company is formed in or registered as a foreign limited liability
             5986      company in this state on or after May 3, 1999.
             5987          (7) The director of the division shall have the power and authority reasonably necessary
             5988      to interpret and efficiently administer this section and to perform the duties imposed on the
             5989      division by this section.
             5990          (8) A name that implies that a limited liability company is an agency of this state or any
             5991      of its political subdivisions, if it is not actually such a legally established agency or subdivision,
             5992      may not be approved for filing by the division.
             5993          (9) The exclusive right to a name may be reserved by:
             5994          (a) any person intending to:
             5995          (i) organize a limited liability company under this chapter; and
             5996          (ii) adopt that name;
             5997          (b) any limited liability company or any foreign limited liability company registered in this
             5998      state intending to adopt that name;
             5999          (c) any foreign limited liability company intending to:
             6000          (i) register in this state; and
             6001          (ii) adopt that name; and
             6002          (d) any person intending to:
             6003          (i) organize a foreign limited liability company;
             6004          (ii) have the company register in this state; and
             6005          (iii) adopt that name.
             6006          (10) (a) The reservation described in Subsection (9)(a) shall be made by filing with the
             6007      division an application executed under penalty of perjury by the applicant to reserve a specified
             6008      name.
             6009          (b) If the division finds that the name is available for use by a limited liability company
             6010      or a foreign limited liability company, it shall reserve the name exclusively for the applicant for


             6011      a period of 120 days. The name reservation may be renewed for any number of subsequent periods
             6012      of 120 days.
             6013          (c) The exclusive right to a reserved name may be transferred to any other person by filing
             6014      with the division a notice of the transfer executed under penalty of perjury by the applicant for
             6015      whom the name was reserved and specifying the name and address of the transferee.
             6016          (11) (a) The requirements of Subsection (1)(d) do not apply to a limited liability company
             6017      that is formed in or registered as a foreign limited liability company in this state on or before May
             6018      4, 1998, until December 31, 1998.
             6019          (b) On or after January 1, 1999, any limited liability company formed in or registered as
             6020      a foreign limited liability company in this state shall comply with the requirements of Subsection
             6021      (1)(d).
             6022          Section 228. Section 53B-5-114 is amended to read:
             6023           53B-5-114. Consent to use of educational terms in business names.
             6024          (1) For purposes of this section:
             6025          (a) "Business name" means a name filed with the Division of Corporations and
             6026      Commercial Code under:
             6027          (i) Section [ 16-6-24 ] 16-6a-401 ;
             6028          (ii) Section 16-10a-401 ;
             6029          (iii) Section 42-2-6.6 ;
             6030          (iv) Section 48-2a-102 ; or
             6031          (v) Section 48-2b-106 .
             6032          (b) "Educational term" means the term:
             6033          (i) "university";
             6034          (ii) "college"; or
             6035          (iii) "institution."
             6036          (2) If a statute listed in Subsection (1)(a) requires the written consent of the board to file
             6037      a business name with the Division of Corporations and Commercial Code that includes an
             6038      educational term, the board may consent to the use of an educational term in accordance with this
             6039      statute.
             6040          (3) The board shall consent to the use of an educational term in a business name if the
             6041      person seeking to file the name:


             6042          (a) is registered under this chapter;
             6043          (b) is exempt from the chapter under Section 53B-5-105 ; or
             6044          (c) (i) is not engaged in educational activities; and
             6045          (ii) does not represent that it is engaged in educational activities.
             6046          (4) The board may withhold consent to use of an educational term in a business name if
             6047      the person seeking to file the name:
             6048          (a) offers, sells, or awards a degree or any other type of educational credential; and
             6049          (b) fails to provide bona fide instruction through student-faculty interaction according to
             6050      the standards and criteria established by the board under Subsection 53B-5-104 (5).
             6051          Section 229. Section 59-8-103 is amended to read:
             6052           59-8-103. Definitions.
             6053          As used in this chapter:
             6054          (1) "Corporation" means:
             6055          (a) any domestic corporation organized under Title 16, Chapter [6, or] 6a, Utah Revised
             6056      Nonprofit Corporation Act;
             6057          (b) any foreign corporation engaged in business in this state under Sections [ 16-6-79 ]
             6058      16-6a-1501 through [ 16-6-96 ,] 16-6a-1518 ; or
             6059          (c) any legal or administrative entity created under Section 11-13-5.5 .
             6060          (2) "Engaging in business" means carrying on or causing to be carried on any activity
             6061      through which goods or services are made or rendered by the taxpayer, except as provided in
             6062      Section 59-7-102 .
             6063          (3) "Gross receipts" means the totality of the consideration that the taxpayer receives for
             6064      any good or service produced or rendered in the state without any deduction or expense paid or
             6065      accrued in respect to it.
             6066          (4) "Taxpayer" means any corporation, other than an eleemosynary, religious, or charitable
             6067      institution, any insurance company, credit union, or Subchapter S organization, any nonprofit
             6068      hospital, educational, welfare, or employee representation organization, or any mutual benefit
             6069      association engaged in business in the state that is not otherwise required to pay income or
             6070      franchise tax to the state under Title 59, Chapter 7.
             6071          Section 230. Section 63-11-3.1 is amended to read:
             6072           63-11-3.1. Definitions.


             6073          As used in Sections 63-11-3.1 through 63-11-3.3 :
             6074          (1) "Board" means the board of trustees of This is the Place Foundation.
             6075          (2) "Division" means the Division of Parks and Recreation.
             6076          (3) "Foundation" means This is the Place Foundation, a private nonprofit corporation
             6077      formed pursuant to Title 16, Chapter [6] 6a, Utah Revised Nonprofit Corporation [and
             6078      Co-operative Association] Act.
             6079          (4) "Monument" means This is the Place Monument at This is the Place State Park.
             6080          (5) "Park" means This is the Place State Park, property owned by the state of Utah located
             6081      at 2601 East Sunnyside Avenue, Salt Lake City.
             6082          Section 231. Repealer.
             6083          This act repeals:
             6084          Section 16-6-18, Short title.
             6085          Section 16-6-19, Definitions.
             6086          Section 16-6-20, Applicability.
             6087          Section 16-6-21, Purposes.
             6088          Section 16-6-22, General powers.
             6089          Section 16-6-23, Defense of ultra vires.
             6090          Section 16-6-24, Corporate name -- Contents.
             6091          Section 16-6-25, Corporate name -- Reservation.
             6092          Section 16-6-25.1, Registered office -- Appointment of registered agent Disclosure.
             6093          Section 16-6-25.2, Change of registered office or registered agent -- Resignation of
             6094      registered agent.
             6095          Section 16-6-25.3, Service of process on registered agent or director of division.
             6096          Section 16-6-26, Members -- Classes -- Provisions of articles of incorporation or
             6097      bylaws -- Liability.
             6098          Section 16-6-27, Meetings of members -- Annual and special meetings.
             6099          Section 16-6-28, Meetings of members -- Notice.
             6100          Section 16-6-29, Voting -- Quorum.
             6101          Section 16-6-30, Voting -- Rights of members.
             6102          Section 16-6-31, Voting -- Provisions of articles control.
             6103          Section 16-6-32, Waiver of notice.


             6104          Section 16-6-33, Consent to action without meeting.
             6105          Section 16-6-34, Governing board -- Qualifications for trustees.
             6106          Section 16-6-35, Trustees -- Number -- Election or appointment -- Terms.
             6107          Section 16-6-36, Vacancies in governing board.
             6108          Section 16-6-37, Voting rights -- Proxy -- Quorum of trustees.
             6109          Section 16-6-38, Committees.
             6110          Section 16-6-39, Meetings of governing board -- Notice and waiver of notice.
             6111          Section 16-6-40, Officers.
             6112          Section 16-6-41, Inspection of books and records -- Report to members.
             6113          Section 16-6-42, Issuance of certificates or stock -- Compensation to members,
             6114      trustees, or officers -- Effect of distributions on dissolution or liquidation.
             6115          Section 16-6-43, Loans to trustees or officers prohibited.
             6116          Section 16-6-44, Bylaws -- Resolutions.
             6117          Section 16-6-45, Incorporators.
             6118          Section 16-6-46, Articles of incorporation.
             6119          Section 16-6-47, Filing articles of incorporation.
             6120          Section 16-6-48, Effect of issuance of certificate of incorporation.
             6121          Section 16-6-49, Right to amend articles of incorporation -- Conversion to business
             6122      corporation.
             6123          Section 16-6-50, Procedure to amend articles of incorporation.
             6124          Section 16-6-51, Articles of amendment.
             6125          Section 16-6-52, Filing articles of amendment.
             6126          Section 16-6-53, Effect of certificate of amendment.
             6127          Section 16-6-53.5, Restated articles of incorporation -- Filing -- Issuance and effect of
             6128      issuance of certificate of restatement.
             6129          Section 16-6-54, Procedure for merger.
             6130          Section 16-6-55, Procedure for consolidation.
             6131          Section 16-6-56, Approval of merger or consolidation.
             6132          Section 16-6-57, Articles of merger or consolidation.
             6133          Section 16-6-58, Effective date of merger or consolidation.
             6134          Section 16-6-59, Effect of merger or consolidation.


             6135          Section 16-6-60, Merger or consolidation of foreign or domestic corporations.
             6136          Section 16-6-61, Sale, lease, exchange or mortgage of assets.
             6137          Section 16-6-62, Voluntary dissolution.
             6138          Section 16-6-63, Distribution of assets.
             6139          Section 16-6-64, Plan of distribution.
             6140          Section 16-6-65, Revocation of voluntary dissolution proceedings.
             6141          Section 16-6-66, Articles of dissolution.
             6142          Section 16-6-67, Filing articles of dissolution.
             6143          Section 16-6-68, Involuntary dissolution.
             6144          Section 16-6-69, Jurisdiction of court to liquidate assets and affairs of nonprofit
             6145      corporation.
             6146          Section 16-6-70, Procedure in liquidation of nonprofit corporation.
             6147          Section 16-6-71, Qualification of receivers.
             6148          Section 16-6-72, Filing of claims in liquidation proceedings.
             6149          Section 16-6-73, Discontinuance of liquidation proceedings.
             6150          Section 16-6-74, Decree dissolving corporation.
             6151          Section 16-6-75, Filing decree dissolving corporation.
             6152          Section 16-6-76, Deposits with state treasurer.
             6153          Section 16-6-77, Survival of remedy after dissolution.
             6154          Section 16-6-78, Continuance of corporate existence after dissolution.
             6155          Section 16-6-79, Admission of foreign corporation.
             6156          Section 16-6-80, Powers of foreign corporation.
             6157          Section 16-6-82, Change of name by foreign corporation.
             6158          Section 16-6-83, Application for certificate of authority by foreign corporation.
             6159          Section 16-6-84, Filing application for certificate of authority by foreign corporation.
             6160          Section 16-6-85, Effect of certificate of authority of foreign corporation.
             6161          Section 16-6-86, Registered office and registered agent of foreign corporation -
             6162      Appointment of registered agent.
             6163          Section 16-6-87, Change of registered office or registered agent of foreign corporation.
             6164          Section 16-6-88, Service of process on foreign corporation.
             6165          Section 16-6-89, Amendment of articles of incorporation of foreign corporation.


             6166          Section 16-6-90, Merger of foreign corporation authorized to conduct affairs in this
             6167      state.
             6168          Section 16-6-91, Amended certificate of authority of foreign corporation.
             6169          Section 16-6-92, Withdrawal of foreign corporation.
             6170          Section 16-6-93, Filing application for withdrawal by foreign corporation.
             6171          Section 16-6-94, Revocation of certificate of authority of foreign corporation.
             6172          Section 16-6-95, Issuance of certificate of revocation of foreign corporation.
             6173          Section 16-6-96, Conducting affairs without certificate of authority by foreign
             6174      corporation.
             6175          Section 16-6-97, Annual report of domestic and foreign nonprofit corporations --
             6176      Contents.
             6177          Section 16-6-98, Annual report of domestic and foreign nonprofit corporations --
             6178      Filing -- Certification.
             6179          Section 16-6-99, Delinquency -- Notice.
             6180          Section 16-6-99.1, Suspension -- Notice -- Failure to remove suspension.
             6181          Section 16-6-100, Fees.
             6182          Section 16-6-100.5, Expedited document processing for items under Section 16-6-100.
             6183          Section 16-6-101, Fees for certified copies and for accepting service of process as
             6184      resident agent.
             6185          Section 16-6-102, Powers of division.
             6186          Section 16-6-103, Procedure upon disapproval of document or revocation of certificate
             6187      of authority -- Venue for judicial review.
             6188          Section 16-6-104, Certificates and certified copies to be received in evidence.
             6189          Section 16-6-105, Use of particular forms not mandatory.
             6190          Section 16-6-106, Liability for unauthorized assumption of corporate powers.
             6191          Section 16-6-107, Personal liability of a trustee or officer limited -- Trustee or officer
             6192      signing false document as misdemeanor.
             6193          Section 16-6-108, Incorporation of co-operative association.
             6194          Section 16-6-109, Continuation of existing domestic and foreign nonprofit
             6195      corporations.
             6196          Section 16-6-110, Effect of repeal of prior law.


             6197          Section 16-6-112, Correction of technical errors in instruments.
             6198          Section 232. Effective date.
             6199          This act takes effect on July 1, 2000.




Legislative Review Note
    as of 2-7-00 8:04 PM


A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel


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