S.B. 110 Enrolled

1

FOREIGN BUSINESS ENTITIES AND
2 TRIBAL LAW
3 2008 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Kevin T. VanTassell
6 House Sponsor: DeMar Bud Bowman
7
8 LONG TITLE
9 General Description:
10 This bill modifies provisions related to corporations, partnerships, and other business
11 entities to address tribal entities created by tribal law.
12 Highlighted Provisions:
13 This bill:
14 . defines "tribe" and related terms for purposes of certain business entity provisions;
15 . modifies provisions related to nonprofit and for profit corporations, partnerships,
16 and limited liability companies to provide for a tribal entity created by tribal law to
17 be treated as a foreign business entity authorized to transact business in the state;
18 and
19 . makes technical and conforming amendments.
20 Monies Appropriated in this Bill:
21 None
22 Other Special Clauses:
23 None
24 Utah Code Sections Affected:
25 AMENDS:
26 16-4-102, as enacted by Laws of Utah 2007, Chapter 367
27 16-6a-102, as last amended by Laws of Utah 2007, Chapter 315
28 16-6a-1503, as enacted by Laws of Utah 2000, Chapter 300
29 16-10a-102, as last amended by Laws of Utah 2007, Chapter 21

30 16-10a-1503, as last amended by Laws of Utah 2005, Chapter 71
31 48-1-1, as last amended by Laws of Utah 1994, Chapter 61
32 48-1-44, as last amended by Laws of Utah 1996, Chapter 41
33 48-2a-101, as last amended by Laws of Utah 2001, Chapter 260
34 48-2a-902, as last amended by Laws of Utah 1991, Chapters 5 and 189
35 48-2c-102, as last amended by Laws of Utah 2006, Chapter 21
36 48-2c-1604, as last amended by Laws of Utah 2005, Chapter 71
37
38 Be it enacted by the Legislature of the state of Utah:
39 Section 1. Section 16-4-102 is amended to read:
40 16-4-102. Definitions.
41 As used in this chapter:
42 (1) "Corporation" means a nonprofit corporation or a profit corporation.
43 (2) "Nonprofit corporation" means a nonprofit corporation as defined in Section
44 16-6a-102 .
45 (3) "Profit corporation" means a corporation as defined in Section 16-10a-102 .
46 (4) ["Shares"] "Share" means [shares] a share as defined in:
47 (a) Section 16-6a-102 for a nonprofit corporation; and
48 (b) Section 16-10a-102 for a profit corporation.
49 (5) "Water company" means a corporation in which a shareholder has the right, based
50 on the shareholders shares, to receive a proportionate share of water delivered by the
51 corporation.
52 Section 2. Section 16-6a-102 is amended to read:
53 16-6a-102. Definitions.
54 As used in this chapter:
55 (1) (a) "Address" means a location where mail can be delivered by the United States
56 Postal Service.
57 (b) "Address" includes:

58 (i) a post office box number;
59 (ii) a rural free delivery route number; and
60 (iii) a street name and number.
61 (2) "Affiliate" means a person that directly or indirectly through one or more
62 intermediaries controls, or is controlled by, or is under common control with, the person
63 specified.
64 (3) "Articles of incorporation" include:
65 (a) amended articles of incorporation;
66 (b) restated articles of incorporation;
67 (c) articles of merger; and
68 (d) a document of a similar import to the documents described in Subsections (3)(a)
69 through (c).
70 (4) "Assumed corporate name" means [the] a name assumed for use in this state:
71 (a) by a:
72 (i) foreign corporation pursuant to Section 16-10a-1506 ; or
73 (ii) a foreign nonprofit corporation pursuant to Section 16-6a-1506 ; and
74 (b) because the corporate name of the foreign corporation described in Subsection
75 (4)(a) is not available for use in this state.
76 (5) (a) Except as provided in Subsection (5)(b), "board of directors" means the body
77 authorized to manage the affairs of [the] a domestic or foreign nonprofit corporation.
78 (b) Notwithstanding Subsection (5)(a), a person may not be considered a member of the
79 board of directors because of [powers] a power delegated to that person pursuant to Subsection
80 16-6a-801 (2).
81 (6) (a) "Bylaws" means the one or more codes of rules, other than the articles of
82 incorporation, adopted pursuant to this chapter for the regulation or management of the affairs
83 of [the] a domestic or foreign nonprofit corporation irrespective of the [name or] one or more
84 names by which the codes of rules are designated.
85 (b) "Bylaws" includes:

86 (i) amended bylaws; and
87 (ii) restated bylaws.
88 (7) (a) "Cash" or "money" means:
89 (i) legal tender;
90 (ii) a negotiable instrument; or
91 (iii) other cash equivalent readily convertible into legal tender.
92 (b) "Cash" and "money" are used interchangeably in this chapter.
93 (8) (a) "Class" [refers to] means a group of memberships that [have] has the same
94 [rights] right with respect to voting, dissolution, redemption, transfer, or other characteristics.
95 (b) For purposes of Subsection (8)(a), [rights are] a right is considered the same if [they
96 are] it is determined by a formula applied uniformly to a group of memberships.
97 (9) (a) "Conspicuous" means so written that a reasonable person against whom the
98 writing is to operate should have noticed the writing.
99 (b) "Conspicuous" includes printing or typing in:
100 (i) italics;
101 (ii) boldface;
102 (iii) contrasting color;
103 (iv) capitals; or
104 (v) underlining.
105 (10) "Control" or a "controlling interest" means the direct or indirect possession of the
106 power to direct or cause the direction of the management and policies of an entity by:
107 (a) the ownership of voting shares;
108 (b) contract; or
109 (c) a means other than those specified in Subsection (10)(a) or (b).
110 (11) Subject to Section 16-6a-207 , "cooperative nonprofit corporation" or
111 "cooperative" means a nonprofit corporation organized or existing under this chapter.
112 (12) "Corporate name" means:
113 (a) the name of a domestic corporation as stated in the domestic corporation's articles

114 of incorporation;
115 (b) the name of a domestic nonprofit corporation as stated in the domestic nonprofit
116 corporation's articles of incorporation;
117 (c) the name of a foreign corporation as stated in the foreign corporation's:
118 (i) articles of incorporation; or
119 (ii) document of similar import to articles of incorporation; or
120 (d) the name of a foreign nonprofit corporation as stated in the foreign nonprofit
121 corporation's:
122 (i) articles of incorporation; or
123 (ii) document of similar import to articles of incorporation.
124 (13) "Corporation" or "domestic corporation" means a corporation for profit[, which]
125 that:
126 (a) is not a foreign corporation[,]; and
127 (b) is incorporated under or subject to Chapter 10a, Utah Revised Business Corporation
128 Act.
129 (14) "Delegate" means [any] a person elected or appointed to vote in a representative
130 assembly:
131 (a) for the election of a director; or
132 (b) on matters other than the election of a director.
133 (15) "Deliver" includes delivery by mail [and any other] or another means of
134 transmission authorized by Section 16-6a-103 , except that delivery to the division means actual
135 receipt by the division.
136 (16) "Director" means a member of the board of directors.
137 (17) (a) "Distribution" means the payment of a dividend or any part of the income or
138 profit of a nonprofit corporation to the nonprofit corporation's:
139 (i) members;
140 (ii) directors; or
141 (iii) officers.

142 (b) "Distribution" does not include a fair-value [payments] payment for:
143 (i) [goods] a good sold; or
144 (ii) [services] a service received.
145 (18) "Division" means the Division of Corporations and Commercial Code.
146 (19) "Effective date," when referring to a document filed by the division, means the
147 time and date determined in accordance with Section 16-6a-108 .
148 (20) "Effective date of notice" means the date notice is effective as provided in Section
149 16-6a-103 .
150 (21) (a) "Employee" includes an officer of a nonprofit corporation.
151 (b) (i) Except as provided in Subsection (21)(b)(ii), "employee" does not include a
152 director of a nonprofit corporation.
153 (ii) Notwithstanding Subsection (21)(b)(i), a director may accept one or more duties
154 that make that director an employee of a nonprofit corporation.
155 (22) "Executive director" means the executive director of the Department of
156 Commerce.
157 (23) "Entity" includes:
158 (a) a domestic or foreign corporation;
159 (b) a domestic or foreign nonprofit corporation;
160 (c) a limited liability company;
161 (d) a profit or nonprofit unincorporated association;
162 (e) a business trust;
163 (f) an estate;
164 (g) a partnership;
165 (h) a trust;
166 (i) two or more persons having a joint or common economic interest;
167 (j) a state;
168 (k) the United States; or
169 (l) a foreign government.

170 (24) "Foreign corporation" means a corporation for profit incorporated under a law
171 other than the laws of this state.
172 (25) "Foreign nonprofit corporation" means an entity:
173 (a) incorporated under a law other than the laws of this state; and
174 (b) that would be a nonprofit corporation if formed under the laws of this state.
175 (26) "Governmental subdivision" means:
176 (a) a county;
177 (b) a city;
178 (c) a town; or
179 (d) [any other] another type of governmental subdivision authorized by the laws of this
180 state.
181 (27) "Individual" means:
182 (a) a natural person;
183 (b) the estate of an incompetent individual; or
184 (c) the estate of a deceased individual.
185 (28) "Internal Revenue Code" means the federal "Internal Revenue Code of 1986," as
186 amended from time to time, or to corresponding provisions of subsequent internal revenue laws
187 of the United States of America.
188 (29) (a) "Mail," "mailed," or "mailing" means deposit, deposited, or depositing in the
189 United States mail, properly addressed, first-class postage prepaid.
190 (b) "Mail," "mailed," or "mailing" includes registered or certified mail for which the
191 proper fee [has been] is paid.
192 (30) (a) "Member" means one or more persons identified or otherwise appointed as a
193 member of a domestic or foreign nonprofit corporation as provided:
194 (i) in the articles of incorporation;
195 (ii) in the bylaws;
196 (iii) by a resolution of the board of directors; or
197 (iv) by a resolution of the members of the nonprofit corporation.

198 (b) "Member" includes "voting member."
199 (31) "Membership" refers to the rights and obligations of a member or members.
200 (32) "Mutual benefit corporation" means a nonprofit corporation:
201 (a) that issues shares of stock to its members evidencing a right to receive distribution
202 of water or otherwise representing property rights; or
203 (b) all of whose assets are contributed or acquired by or for the members of the
204 nonprofit corporation or their predecessors in interest to serve the mutual purposes of the
205 members.
206 (33) "Nonprofit corporation" or "domestic nonprofit corporation" means an entity[,
207 which] that:
208 (a) is not a foreign nonprofit corporation[,]; and
209 (b) is incorporated under or subject to [the provisions of] this chapter.
210 (34) "Notice" is as provided in Section 16-6a-103 .
211 (35) "Party related to a director" means:
212 (a) the spouse of the director;
213 (b) a child of the director;
214 (c) a grandchild of the director;
215 (d) a sibling of the director;
216 (e) a parent of the director;
217 (f) the spouse of an individual described in Subsections (35)(b) through (e);
218 (g) an individual having the same home as the director;
219 (h) a trust or estate of which the director or [any other] another individual specified in
220 this Subsection (35) is a substantial beneficiary; or
221 (i) any of the following of which the director is a fiduciary:
222 (i) a trust;
223 (ii) an estate;
224 (iii) an incompetent;
225 (iv) a conservatee; or

226 (v) a minor.
227 (36) "Person" means an:
228 (a) individual; or
229 (b) entity.
230 (37) "Principal office" means:
231 (a) the office, in or out of this state, designated by a domestic or foreign nonprofit
232 corporation as its principal office in the most recent document on file with the division
233 providing that information, including:
234 (i) an annual report;
235 (ii) an application for a certificate of authority; or
236 (iii) a notice of change of principal office; or
237 (b) if no principal office can be determined, a domestic or foreign nonprofit
238 corporation's registered office.
239 (38) "Proceeding" includes:
240 (a) a civil suit;
241 (b) arbitration;
242 (c) mediation;
243 (d) a criminal action;
244 (e) an administrative action; or
245 (f) an investigatory action.
246 (39) "Receive," when used in reference to receipt of a writing or other document by a
247 domestic or foreign nonprofit corporation, means the writing or other document is actually
248 received:
249 (a) by the domestic or foreign nonprofit corporation at:
250 (i) its registered office in this state; or
251 (ii) its principal office;
252 (b) by the secretary of the domestic or foreign nonprofit corporation, wherever the
253 secretary is found; or

254 (c) by [any other] another person authorized by the bylaws or the board of directors to
255 receive the writing or other document, wherever that person is found.
256 (40) (a) "Record date" means the date established under Part 6, Members, or Part 7,
257 Member Meetings and Voting, on which a nonprofit corporation determines the identity of the
258 nonprofit corporation's members.
259 (b) The determination described in Subsection (40)(a) shall be made as of the close of
260 business on the record date unless another time for doing so is specified when the record date is
261 fixed.
262 (41) "Registered agent" means the registered agent of:
263 (a) a domestic nonprofit corporation required to be maintained pursuant to Subsection
264 16-6a-501 (1)(b); or
265 (b) a foreign nonprofit corporation required to be maintained pursuant to Subsection
266 16-6a-1508 (1)(b).
267 (42) "Registered office" means the office within this state designated by a domestic or
268 foreign nonprofit corporation as its registered office in the most recent document on file with
269 the division providing that information, including:
270 (a) articles of incorporation;
271 (b) an application for a certificate of authority; or
272 (c) a notice of change of registered office.
273 (43) "Secretary" means the corporate officer to whom the bylaws or the board of
274 directors [has delegated] delegates responsibility under Subsection 16-6a-818 (3) for:
275 (a) the preparation and maintenance of:
276 (i) minutes of the meetings of:
277 (A) the board of directors; or
278 (B) the members; and
279 (ii) the other records and information required to be kept by the nonprofit corporation
280 pursuant to Section 16-6a-1601 ; and
281 (b) authenticating records of the nonprofit corporation.

282 (44) "Shareholder" means [the] a person in whose name a share is registered in the
283 records of a nonprofit corporation.
284 (45) "Share" means a unit of interest in a nonprofit corporation.
285 (46) "State," when referring to a part of the United States, includes:
286 (a) a state;
287 (b) a commonwealth;
288 (c) the District of Columbia;
289 (d) an agency or governmental and political subdivision of a state, commonwealth, or
290 District of Columbia;
291 (e) territory or insular possession of the United States; or
292 (f) an agency or governmental and political subdivision of a territory or insular
293 possession of the United States.
294 (47) "Street address" means:
295 (a) (i) street name and number;
296 (ii) city or town; and
297 (iii) United States post office zip code designation; or
298 (b) if, by reason of rural location or otherwise, a street name, number, city, or town
299 does not exist, an appropriate description other than that described in Subsection (47)(a) fixing
300 as nearly as possible the actual physical location, but only if the information includes:
301 (i) the rural free delivery route;
302 (ii) the county; and
303 (iii) the United States post office zip code designation.
304 (48) "Tribe" means a tribe, band, nation, pueblo, or other organized group or
305 community of Indians, including an Alaska Native village, that is legally recognized as eligible
306 for and is consistent with a special program, service, or entitlement provided by the United
307 States to Indians because of their status as Indians.
308 (49) "Tribal nonprofit corporation" means a nonprofit corporation:
309 (a) incorporated under the law of a tribe; and

310 (b) that is at least 51% owned or controlled by the tribe.
311 [(48)] (50) "United States" includes [any] a district, authority, office, bureau,
312 commission, department, and [any other] another agency of the United States of America.
313 [(49)] (51) "Vote" includes authorization by:
314 (a) written ballot; and
315 (b) written consent.
316 [(50)] (52) (a) "Voting group" means all the members of one or more classes of
317 members or directors that, under this chapter, the articles of incorporation, or the bylaws, are
318 entitled to vote and be counted together collectively on a matter.
319 (b) All members or directors entitled by this chapter, the articles of incorporation, or the
320 bylaws to vote generally on a matter are for that purpose a single voting group.
321 [(51)] (53) (a) "Voting member" means a person entitled to vote for all matters required
322 or permitted under this chapter to be submitted to a vote of the members, except as otherwise
323 provided in the articles of incorporation or bylaws.
324 (b) A person is not a voting member solely because of:
325 (i) a right the person has as a delegate;
326 (ii) a right the person has to designate a director; or
327 (iii) a right the person has as a director.
328 (c) Except as the bylaws may otherwise provide, "voting member" includes a
329 "shareholder" if the nonprofit corporation has shareholders.
330 Section 3. Section 16-6a-1503 is amended to read:
331 16-6a-1503. Application for authority to conduct affairs.
332 (1) A foreign nonprofit corporation may apply for authority to conduct affairs in this
333 state by delivering to the division for filing an application for authority to conduct affairs setting
334 forth:
335 (a) its corporate name and its assumed corporate name, if any;
336 (b) the name of the state or country under whose law it is incorporated;
337 (c) its date of incorporation;

338 (d) its period of duration;
339 (e) the street address of its principal office;
340 (f) the address of its registered office;
341 (g) the name of its registered agent at the office listed in Subsection (1)(f);
342 (h) the names and usual business addresses of its current directors and officers;
343 (i) the date it commenced or expects to commence conducting affairs in this state; and
344 (j) [such] the additional information [as] the division determines is necessary or
345 appropriate to determine whether the application for authority to conduct affairs should be filed.
346 (2) With the completed application required by Subsection (1) the foreign nonprofit
347 corporation shall deliver to the division for a certificate of existence, or a document of similar
348 import that is:
349 (a) authenticated by the division or other official having custody of corporate records in
350 the state or country under whose law it is incorporated; and
351 (b) dated within 90 days before the [filing of] day on which the application for authority
352 to conduct affairs is filed.
353 (3) The foreign nonprofit corporation shall include in the application for authority to
354 conduct affairs, or in an accompanying document, written consent to appointment by its
355 designated registered agent.
356 (4) (a) The division may permit a tribal nonprofit corporation to apply for authority to
357 conduct affairs in this state in the same manner as a nonprofit corporation incorporated in
358 another state.
359 (b) If a tribal nonprofit corporation elects to apply for authority to conduct affairs in
360 this state, for purposes of this chapter, the tribal nonprofit corporation shall be treated in the
361 same manner as a foreign nonprofit corporation incorporated under the laws of another state.
362 Section 4. Section 16-10a-102 is amended to read:
363 16-10a-102. Definitions.
364 As used in this chapter:
365 (1) (a) "Address" means a location where mail can be delivered by the United States

366 Postal Service.
367 (b) "Address" includes:
368 (i) a post office box number;
369 (ii) a rural free delivery route number; and
370 (iii) a street name and number.
371 (2) "Affiliate" means a person that directly or indirectly through one or more
372 intermediaries controls, or is controlled by, or is under common control with, the person
373 specified.
374 (3) "Assumed corporate name" means [the] a name assumed for use in this state by a
375 foreign corporation pursuant to Section 16-10a-1506 because its corporate name is not
376 available for use in this state.
377 (4) "Articles of incorporation" include:
378 (a) amended and restated articles of incorporation;
379 (b) articles of merger; and
380 (c) [documents] a document of a similar import to those described in Subsections (4)(a)
381 and (b).
382 (5) "Authorized shares" means the shares of all classes a domestic or foreign
383 corporation is authorized to issue.
384 (6) "Bylaws" includes amended bylaws and restated bylaws.
385 (7) "Cash" and "money" are used interchangeably in this chapter and mean:
386 (a) legal tender [and];
387 (b) a negotiable [instruments] instrument; and [other]
388 (c) a cash [equivalents] equivalent readily convertible into legal tender.
389 (8) "Conspicuous" means so written that a reasonable person against whom the writing
390 is to operate should have noticed it, including[: (a)] printing or typing in:
391 (a) italics;
392 &