<effdate>10/1/2026</effdate><catchline>Business Entities</catchline><chapter number="16-1a"><catchline>Provisions Applicable To All Business Entities</catchline><part number="16-1a-1"><catchline>General Provisions</catchline><section number="16-1a-101"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Definitions.</catchline>As used in this chapter:<subsection number="16-1a-101(1)"><subsection number="16-1a-101(1)(a)">"Acquired entity" means an entity acquired by another entity in an interest exchange.</subsection><subsection number="16-1a-101(1)(b)">"Acquired entity" includes all of one or more classes or series of interests belonging to the entity that the other entity acquires.</subsection></subsection><subsection number="16-1a-101(2)">"Acquiring entity" means the entity that acquires all of one or more classes or series of interests of the acquired entity in an interest exchange.</subsection><subsection number="16-1a-101(3)"><subsection number="16-1a-101(3)(a)">"Address" means a location where the United States Postal Service may deliver mail.</subsection><subsection number="16-1a-101(3)(b)">"Address" includes:<subsection number="16-1a-101(3)(b)(i)">a post office box number;</subsection><subsection number="16-1a-101(3)(b)(ii)">a rural free delivery route number; and</subsection><subsection number="16-1a-101(3)(b)(iii)">a street name and number.</subsection></subsection></subsection><subsection number="16-1a-101(4)">"Appointment of agent" means a statement appointing an agent for service of process filed by a domestic filing entity, a registered foreign entity, or a D.B.A. registered under Title 42, Chapter 2, Conducting Business as a D.B.A.</subsection><subsection number="16-1a-101(5)">"Approve" means an entity's governors and interest holders taking steps required under the entity's organic rules, organic law, and other law to:<subsection number="16-1a-101(5)(a)">propose a transaction subject to this title;</subsection><subsection number="16-1a-101(5)(b)">adopt and approve the terms and conditions of the transaction; and</subsection><subsection number="16-1a-101(5)(c)">conduct required proceedings or otherwise obtain a required vote or consent of the governors or interest holders.</subsection></subsection><subsection number="16-1a-101(6)"><subsection number="16-1a-101(6)(a)">"Articles of incorporation" means a document that a person files to establish a domestic corporation.</subsection><subsection number="16-1a-101(6)(b)">"Articles of incorporation" includes:<subsection number="16-1a-101(6)(b)(i)">amended articles of incorporation;</subsection><subsection number="16-1a-101(6)(b)(ii)">restated articles of incorporation;</subsection><subsection number="16-1a-101(6)(b)(iii)">articles of merger; and</subsection><subsection number="16-1a-101(6)(b)(iv)">a substantially similar document to the documents described in Subsections <xref tempid="978">(6)(b)(i)</xref> through (iii).</subsection></subsection></subsection><subsection number="16-1a-101(7)">"Assumed corporate name" means the same as that term is defined in Section <xref depth="3" refnumber="16-10a-102">16-10a-102</xref>.</subsection><subsection number="16-1a-101(8)">"Beneficiary" means a person holding a certificate representing a beneficial interest in a trust estate and assets.</subsection><subsection number="16-1a-101(9)">"Benefit company" means a limited liability company that elects to become subject to Chapter 21, Benefit Limited Liability Company Act, and the business corporation's status as a benefit company has not terminated.</subsection><subsection number="16-1a-101(10)">"Benefit corporation" means a business corporation that elects to become subject to Chapter 10b, Benefit Corporation Act, and the status of the business corporation as a benefit corporation has not terminated.</subsection><subsection number="16-1a-101(11)"><subsection number="16-1a-101(11)(a)">"Board of directors" means the body authorized to manage the affairs of a domestic corporation or a foreign corporation.</subsection><subsection number="16-1a-101(11)(b)">"Board of directors" does not include an individual who is delegated power under Subsection <xref tempid="850">16-6a-801(2)</xref> or <xref tempid="423">16-10a-801(2)</xref>.</subsection></subsection><subsection number="16-1a-101(12)">"Business corporation" means a corporation formed under:<subsection number="16-1a-101(12)(a)">Chapter 10a, Utah Revised Business Corporation Act;</subsection><subsection number="16-1a-101(12)(b)">Chapter 10b, Benefit Corporation Act; or</subsection><subsection number="16-1a-101(12)(c)">Chapter 11, Professional Corporation Act.</subsection></subsection><subsection number="16-1a-101(13)">"Business trust" means an entity:<subsection number="16-1a-101(13)(a)">engaged in a trade or business; and</subsection><subsection number="16-1a-101(13)(b)">created by a declaration of trust that transfers property to trustees, that the trustees will hold and manage for the benefit of one or more beneficiary.</subsection></subsection><subsection number="16-1a-101(14)"><subsection number="16-1a-101(14)(a)">"Bylaws" means:<subsection number="16-1a-101(14)(a)(i)">one or more code of rules, other than the articles of incorporation, adopted under this title, for the regulation or management of the affairs of a domestic corporation or foreign corporation;</subsection><subsection number="16-1a-101(14)(a)(ii)">the procedural rules and regulations that govern:<subsection number="16-1a-101(14)(a)(ii)(A)">a decentralized autonomous organization organized under Chapter 22, Decentralized Autonomous Organization Act; and</subsection><subsection number="16-1a-101(14)(a)(ii)(B)">the interaction of the decentralized autonomous organization's members and participants; or</subsection></subsection><subsection number="16-1a-101(14)(a)(iii)">the articles of organization of a limited cooperative association required by Section <xref depth="3" refnumber="16-16-302">16-16-302</xref>.</subsection></subsection><subsection number="16-1a-101(14)(b)">"Bylaws" includes amended bylaws and restated bylaws.</subsection></subsection><subsection number="16-1a-101(15)"><subsection number="16-1a-101(15)(a)">"Certificate of limited partnership" means a document a person files to establish a domestic limited partnership.</subsection><subsection number="16-1a-101(15)(b)">"Certificate of limited partnership" includes the certificate of limited partnership as amended or restated.</subsection></subsection><subsection number="16-1a-101(16)"><subsection number="16-1a-101(16)(a)">"Certificate of organization" means a document a person files to establish a domestic limited liability company.</subsection><subsection number="16-1a-101(16)(b)">"Certificate of organization" includes a certificate of organization as amended or restated.</subsection></subsection><subsection number="16-1a-101(17)">"Class" means a group of memberships with a right that, with respect to voting, dissolution, redemption, transfer, or other similar characteristics, is determined to be the same right by using a formula applied uniformly to a group of memberships.</subsection><subsection number="16-1a-101(18)">"Commercial registered agent" means an individual or a domestic entity or foreign entity described in Section <xref depth="3" refnumber="16-1a-405">16-1a-405</xref>.</subsection><subsection number="16-1a-101(19)">"Contribution" means a property or a benefit described in Section <xref depth="3" refnumber="16-18-501">16-18-501</xref>, <xref refnumber="16-19-501" depth="">16-19-501</xref>, or <xref refnumber="16-20-402" depth="">16-20-402</xref> or Chapter 16, Part 10, Contributions, Allocations, and Distributions, that a person provides to a limited liability company, limited partnership, partnership, or limited cooperative association.</subsection><subsection number="16-1a-101(20)">"Control" means the direct or indirect possession of the power to direct or cause the direction of the management and policies of an entity, whether through the ownership of voting shares, by contract, or other means.</subsection><subsection number="16-1a-101(21)">"Conversion" means a transaction described in Part 9, Conversion.</subsection><subsection number="16-1a-101(22)">"Converted entity" means a converting entity as the converting entity continues in existence after a conversion.</subsection><subsection number="16-1a-101(23)">"Converting entity" means:<subsection number="16-1a-101(23)(a)">a domestic entity that approves a plan of conversion in accordance with Section <xref depth="3" refnumber="16-1a-904">16-1a-904</xref>; or</subsection><subsection number="16-1a-101(23)(b)">a foreign entity that approves a conversion in accordance with the law of the foreign entity's jurisdiction of formation.</subsection></subsection><subsection number="16-1a-101(24)">"Cooperative" means a limited cooperative association or an entity organized under a cooperative law of a jurisdiction.</subsection><subsection number="16-1a-101(25)">"Cooperative nonprofit corporation" means a nonprofit corporation organized or existing under Section <xref depth="3" refnumber="16-6a-207">16-6a-207</xref>.</subsection><subsection number="16-1a-101(26)">"Corporate name" means:<subsection number="16-1a-101(26)(a)">the name of a domestic corporation or a domestic nonprofit corporation as stated in the domestic corporation's or domestic nonprofit corporation's articles of incorporation; or</subsection><subsection number="16-1a-101(26)(b)">the name of a foreign corporation or a foreign nonprofit corporation as stated in the foreign corporation's or foreign nonprofit corporation's articles of incorporation.</subsection></subsection><subsection number="16-1a-101(27)">"Corporation" means a nonprofit corporation or a business corporation.</subsection><subsection number="16-1a-101(28)">"D.B.A." means a name that complies with the requirements of Title <xref depth="1" refnumber="42-2">42, Chapter 2</xref>, Conducting Business as a D.B.A.</subsection><subsection number="16-1a-101(29)">"Decentralized autonomous organization" means the same as that term is defined in Section <xref depth="3" refnumber="16-22-101">16-22-101</xref>.</subsection><subsection number="16-1a-101(30)">"Delegate" means a person elected or appointed to vote in a representative assembly:<subsection number="16-1a-101(30)(a)">for the election of a director; or</subsection><subsection number="16-1a-101(30)(b)">on a matter other than the election of a director.</subsection></subsection><subsection number="16-1a-101(31)">"Designation of agent" means a statement designating a registered agent delivered to the division for filing in accordance with Section <xref depth="3" refnumber="16-1a-411">16-1a-411</xref> by a nonregistered foreign entity or a nonfiling domestic entity.</subsection><subsection number="16-1a-101(32)">"Director" means a member of the board of directors.</subsection><subsection number="16-1a-101(33)"><subsection number="16-1a-101(33)(a)">"Distribution" means:<subsection number="16-1a-101(33)(a)(i)">for an entity formed under Chapter 6a, Utah Revised Nonprofit Corporation Act, the payment of a dividend or a part of the income or profit of a nonprofit corporation to the nonprofit corporation's members, directors, or officers;</subsection><subsection number="16-1a-101(33)(a)(ii)">for an entity formed under Chapter 16, Uniform Limited Cooperative Association Act, except as provided in Subsection <xref tempid="820">16-16-1007(5)</xref>, a transfer of money or other property from a limited cooperative association to a member because of the member's financial rights or to a transferee of a member's financial rights; or</subsection><subsection number="16-1a-101(33)(a)(iii)">for an entity formed under Chapter 18, Utah Uniform Partnership Act, through Chapter 22, Decentralized Autonomous Organization Act, a transfer of money or other property from a limited liability company, limited partnership, or partnership to a person because of a transferable interest or in the person's capacity as a member.</subsection></subsection><subsection number="16-1a-101(33)(b)">"Distribution" includes:<subsection number="16-1a-101(33)(b)(i)">a redemption or other purchase by a limited liability company, limited partnership, or partnership of a transferable interest; and</subsection><subsection number="16-1a-101(33)(b)(ii)">a transfer to a member or partner in return for the member's or partner's relinquishing any right:<subsection number="16-1a-101(33)(b)(ii)(A)">to participate as a member or partner in the management or conduct of the entity's activities and affairs; or</subsection><subsection number="16-1a-101(33)(b)(ii)(B)">to have access to a record or other information concerning the entity's activities and affairs.</subsection></subsection></subsection><subsection number="16-1a-101(33)(c)">"Distribution" does not include:<subsection number="16-1a-101(33)(c)(i)">a fair-value payment for a good sold or a service received;</subsection><subsection number="16-1a-101(33)(c)(ii)">reasonable compensation for present or past service; or</subsection><subsection number="16-1a-101(33)(c)(iii)">a payment made in the ordinary course of business under a bona fide retirement plan or other bona fide benefits program.</subsection></subsection></subsection><subsection number="16-1a-101(34)">"Distributional interest" means a person's right under an unincorporated entity's organic law and organic rules to receive distributions from the unincorporated entity.</subsection><subsection number="16-1a-101(35)">"Division" means the Division of Corporations and Commercial Code established by Section <xref depth="3" refnumber="13-1a-102">13-1a-102</xref>.</subsection><subsection number="16-1a-101(36)">"Domestic" means, with respect to an entity, that the laws of this state govern the entity's internal affairs.</subsection><subsection number="16-1a-101(37)">"Domestic entity" means an entity whose internal affairs are governed by the laws of this state.</subsection><subsection number="16-1a-101(38)">"Domesticated entity" means a domesticating entity as the domesticating entity continues in existence after a domestication.</subsection><subsection number="16-1a-101(39)">"Domesticating entity" means:<subsection number="16-1a-101(39)(a)">a domestic entity that approves a plan of domestication in accordance with Section <xref depth="3" refnumber="16-1a-1004">16-1a-1004</xref>; or</subsection><subsection number="16-1a-101(39)(b)">a foreign entity that approves a domestication in accordance with the law of the foreign entity's jurisdiction of formation.</subsection></subsection><subsection number="16-1a-101(40)">"Domestication" means a transaction authorized under Part 10, Domestication.</subsection><subsection number="16-1a-101(41)"><subsection number="16-1a-101(41)(a)">"Entity" means:<subsection number="16-1a-101(41)(a)(i)">a business corporation;</subsection><subsection number="16-1a-101(41)(a)(ii)">a nonprofit corporation;</subsection><subsection number="16-1a-101(41)(a)(iii)">a partnership;</subsection><subsection number="16-1a-101(41)(a)(iv)">a decentralized autonomous organization;</subsection><subsection number="16-1a-101(41)(a)(v)">a limited liability partnership;</subsection><subsection number="16-1a-101(41)(a)(vi)">a limited partnership;</subsection><subsection number="16-1a-101(41)(a)(vii)">a limited liability limited partnership;</subsection><subsection number="16-1a-101(41)(a)(viii)">a limited liability company;</subsection><subsection number="16-1a-101(41)(a)(ix)">a limited cooperative association;</subsection><subsection number="16-1a-101(41)(a)(x)">an unincorporated nonprofit association;</subsection><subsection number="16-1a-101(41)(a)(xi)">a statutory trust, business trust, or common-law business trust; or</subsection><subsection number="16-1a-101(41)(a)(xii)">another person that has:<subsection number="16-1a-101(41)(a)(xii)(A)">a legal existence separate from an interest holder of that person; or</subsection><subsection number="16-1a-101(41)(a)(xii)(B)">the power to acquire an interest in real property in the person's own name.</subsection></subsection></subsection><subsection number="16-1a-101(41)(b)">"Entity" does not include:<subsection number="16-1a-101(41)(b)(i)">an individual;</subsection><subsection number="16-1a-101(41)(b)(ii)">a trust with a predominantly donative purpose;</subsection><subsection number="16-1a-101(41)(b)(iii)">a charitable trust;</subsection><subsection number="16-1a-101(41)(b)(iv)">an association or relationship that is not a partnership solely by reason of Subsection <xref depth="4" refnumber="16-18-202(3)">16-18-202(3)</xref> or a similar provision of the law of another jurisdiction;</subsection><subsection number="16-1a-101(41)(b)(v)">a decedent's estate; or</subsection><subsection number="16-1a-101(41)(b)(vi)">a government or a governmental subdivision, agency, or instrumentality.</subsection></subsection></subsection><subsection number="16-1a-101(42)">"Filing entity" means an entity that is created by the filing of a public organic document.</subsection><subsection number="16-1a-101(43)"><subsection number="16-1a-101(43)(a)">"Financial right" means the right to participate in an allocation and distribution as provided in Chapter 16, Part 10, Contributions, Allocations, and Distributions.</subsection><subsection number="16-1a-101(43)(b)">"Financial right" does not include a right or obligation in a marketing contract as provided in Chapter 16, Part 7, Marketing Contracts.</subsection></subsection><subsection number="16-1a-101(44)">"Foreign entity" means an entity whose internal affairs are governed by the laws of another state, tribe, or country.</subsection><subsection number="16-1a-101(45)">"Foreign registration statement" means a document filed to allow a foreign entity the ability to transact business in this state.</subsection><subsection number="16-1a-101(46)">"General partner" means the same as that term is defined in Section <xref depth="3" refnumber="16-19-101">16-19-101</xref>.</subsection><subsection number="16-1a-101(47)">"Governance interest" means, for a person other than a governor, an agent, an assignee, or a proxy, the right under the organic law or organic rules of an entity to:<subsection number="16-1a-101(47)(a)">receive or demand access to information concerning:<subsection number="16-1a-101(47)(a)(i)">the entity; or</subsection><subsection number="16-1a-101(47)(a)(ii)">the books and records of the entity; or</subsection></subsection><subsection number="16-1a-101(47)(b)">receive notice of or vote on one or more issues involving the internal affair of the entity.</subsection></subsection><subsection number="16-1a-101(48)">"Governance right" means the right to participate in the governance of a limited cooperative association.</subsection><subsection number="16-1a-101(49)">"Governor" means:<subsection number="16-1a-101(49)(a)">a director of a business corporation;</subsection><subsection number="16-1a-101(49)(b)">a director or trustee of a nonprofit corporation;</subsection><subsection number="16-1a-101(49)(c)">a general partner of a partnership;</subsection><subsection number="16-1a-101(49)(d)">a general partner of a limited partnership;</subsection><subsection number="16-1a-101(49)(e)">a manager of a manager-managed limited liability company;</subsection><subsection number="16-1a-101(49)(f)">a member of a member-managed limited liability company;</subsection><subsection number="16-1a-101(49)(g)">a director of a limited cooperative association;</subsection><subsection number="16-1a-101(49)(h)">a manager of an unincorporated nonprofit association;</subsection><subsection number="16-1a-101(49)(i)">a trustee of a statutory trust, business trust, or common-law business trust; or</subsection><subsection number="16-1a-101(49)(j)">any other person:<subsection number="16-1a-101(49)(j)(i)">under whose authority a person may exercise the powers of an entity; or</subsection><subsection number="16-1a-101(49)(j)(ii)">under whose direction a person manages the activities and affairs of the entity in accordance with the organic law and organic rules of the entity.</subsection></subsection></subsection><subsection number="16-1a-101(50)">"Interest" means a:<subsection number="16-1a-101(50)(a)">share in a business corporation;</subsection><subsection number="16-1a-101(50)(b)">membership in a nonprofit corporation;</subsection><subsection number="16-1a-101(50)(c)">partnership interest in a partnership;</subsection><subsection number="16-1a-101(50)(d)">partnership interest in a limited partnership;</subsection><subsection number="16-1a-101(50)(e)">membership interest in a limited liability company;</subsection><subsection number="16-1a-101(50)(f)">membership interest in a limited cooperative association;</subsection><subsection number="16-1a-101(50)(g)">member's interest in a limited cooperative association;</subsection><subsection number="16-1a-101(50)(h)">membership in an unincorporated nonprofit association;</subsection><subsection number="16-1a-101(50)(i)">beneficial interest in a statutory trust, business trust, or common-law business trust; or</subsection><subsection number="16-1a-101(50)(j)">governance interest or distributional interest in any other type of unincorporated entity.</subsection></subsection><subsection number="16-1a-101(51)">"Interest exchange" means a transaction authorized in Part 8, Interest Exchange.</subsection><subsection number="16-1a-101(52)">"Interest holder" means:<subsection number="16-1a-101(52)(a)">a shareholder of a business corporation;</subsection><subsection number="16-1a-101(52)(b)">a member of a nonprofit corporation;</subsection><subsection number="16-1a-101(52)(c)">a general partner of a partnership;</subsection><subsection number="16-1a-101(52)(d)">a general partner of a limited partnership;</subsection><subsection number="16-1a-101(52)(e)">a limited partner of a limited partnership;</subsection><subsection number="16-1a-101(52)(f)">a member of a limited liability company;</subsection><subsection number="16-1a-101(52)(g)">a member of a limited cooperative association;</subsection><subsection number="16-1a-101(52)(h)">a member of an unincorporated nonprofit association;</subsection><subsection number="16-1a-101(52)(i)">a beneficiary or beneficial owner of a statutory trust, business trust, or common-law business trust; or</subsection><subsection number="16-1a-101(52)(j)">any other direct holder of an interest.</subsection></subsection><subsection number="16-1a-101(53)">"Interest holder liability" means:<subsection number="16-1a-101(53)(a)">personal liability for the liability of an entity that is imposed on a person:<subsection number="16-1a-101(53)(a)(i)">as a direct result of the person's status as an interest holder; or</subsection><subsection number="16-1a-101(53)(a)(ii)">by the organic rules of the entity that make one or more specified interest holders or categories of interest holders liable because of the interest holders' capacity as interest holders for all or specified liabilities of the entity; or</subsection></subsection><subsection number="16-1a-101(53)(b)">an obligation of an interest holder under the organic rules of the entity to contribute to the entity.</subsection></subsection><subsection number="16-1a-101(54)">"Investor member" means a member that:<subsection number="16-1a-101(54)(a)"><subsection number="16-1a-101(54)(a)(i)">makes a contribution to a limited cooperative association; and</subsection><subsection number="16-1a-101(54)(a)(ii)">is not required by the organic rules to conduct patronage with the association in the member's capacity as an investor member in order to receive the member's interest; or</subsection></subsection><subsection number="16-1a-101(54)(b)">is not permitted by the organic rules to conduct patronage with the association in the member's capacity as an investor member in order to receive the member's interest.</subsection></subsection><subsection number="16-1a-101(55)">"Jurisdiction of formation" means:<subsection number="16-1a-101(55)(a)">the jurisdiction under whose law an entity is formed; or</subsection><subsection number="16-1a-101(55)(b)">for a limited liability partnership or foreign limited liability partnership, the jurisdiction in which the partnership's statement of qualification is filed.</subsection></subsection><subsection number="16-1a-101(56)">"Limited cooperative association" means an association organized under Chapter 16, Uniform Limited Cooperative Association Act.</subsection><subsection number="16-1a-101(57)">"Limited liability company" means the same as that term is defined in Section <xref depth="3" refnumber="16-20-101">16-20-101</xref>.</subsection><subsection number="16-1a-101(58)">"Limited liability partnership" means the same as that term is defined in Section <xref depth="3" refnumber="16-18-101">16-18-101</xref>.</subsection><subsection number="16-1a-101(59)">"Limited partner" means the same as that term is defined in Section <xref depth="3" refnumber="16-19-101">16-19-101</xref>.</subsection><subsection number="16-1a-101(60)">"Limited partnership" means the same as that term is defined in Section <xref depth="3" refnumber="16-19-101">16-19-101</xref>.</subsection><subsection number="16-1a-101(61)">"Manager" means the same as that term is defined in Section <xref depth="3" refnumber="16-20-101">16-20-101</xref>.</subsection><subsection number="16-1a-101(62)">"Manager-managed limited liability company" means the same as that term is defined in Section <xref depth="3" refnumber="16-20-101">16-20-101</xref>.</subsection><subsection number="16-1a-101(63)"><subsection number="16-1a-101(63)(a)">"Member" means:<subsection number="16-1a-101(63)(a)(i)">a person identified or appointed as a member:<subsection number="16-1a-101(63)(a)(i)(A)">in an entity's articles of incorporation;</subsection><subsection number="16-1a-101(63)(a)(i)(B)">in an entity's bylaws;</subsection><subsection number="16-1a-101(63)(a)(i)(C)">by a resolution of a board of directors; or</subsection><subsection number="16-1a-101(63)(a)(i)(D)">by a resolution of the members of a nonprofit corporation;</subsection></subsection><subsection number="16-1a-101(63)(a)(ii)">for an entity formed under Chapter 16, Uniform Limited Cooperative Association Act, a person that is admitted as a patron member or investor member, or as both a patron member and investor member;</subsection><subsection number="16-1a-101(63)(a)(iii)">for an entity formed under Chapter 20, Utah Revised Uniform Limited Liability Company Act, a person that owns part of the limited liability company but does not directly own the limited liability company's property; or</subsection><subsection number="16-1a-101(63)(a)(iv)">for an entity formed under Chapter 22, Decentralized Autonomous Organization Act, a person with governance rights in a decentralized autonomous organization.</subsection></subsection><subsection number="16-1a-101(63)(b)">"Member" includes a voting member.</subsection><subsection number="16-1a-101(63)(c)">"Member" does not include:<subsection number="16-1a-101(63)(c)(i)">an individual who involuntarily receives governance rights, unless that individual chooses to participate in governance by undertaking a governance behavior for a decentralized autonomous organization; or</subsection><subsection number="16-1a-101(63)(c)(ii)">a person that dissociates as a member.</subsection></subsection></subsection><subsection number="16-1a-101(64)">"Member-managed limited liability company" means a limited liability company that is not a manager-managed limited liability company.</subsection><subsection number="16-1a-101(65)">"Member's interest" means the same as that term is defined in Section <xref depth="3" refnumber="16-16-102">16-16-102</xref>.</subsection><subsection number="16-1a-101(66)">"Merger" means a transaction authorized under Part 7, Merger.</subsection><subsection number="16-1a-101(67)">"Merging entity" means an entity that is a party to a merger and exists immediately before the merger becomes effective.</subsection><subsection number="16-1a-101(68)">"Money" means:<subsection number="16-1a-101(68)(a)">legal tender;</subsection><subsection number="16-1a-101(68)(b)">a negotiable instrument; or</subsection><subsection number="16-1a-101(68)(c)">another cash equivalent readily convertible into legal tender.</subsection></subsection><subsection number="16-1a-101(69)">"Noncommercial registered agent" means a person that is:<subsection number="16-1a-101(69)(a)">not listed as a commercial registered agent under Section <xref depth="3" refnumber="16-1a-405">16-1a-405</xref>; and</subsection><subsection number="16-1a-101(69)(b)"><subsection number="16-1a-101(69)(b)(i)">an individual, a domestic entity, or a foreign entity that serves in this state as the agent for service of process on an entity; or</subsection><subsection number="16-1a-101(69)(b)(ii)">the individual who holds the office or other position in an entity who an entity designates as the agent for service of process in accordance with Section <xref depth="3" refnumber="16-1a-404">16-1a-404</xref>.</subsection></subsection></subsection><subsection number="16-1a-101(70)">"Nonfiling domestic entity" means a domestic entity that is not a filing entity.</subsection><subsection number="16-1a-101(71)">"Nonregistered foreign entity" means a foreign entity that is not a registered foreign entity.</subsection><subsection number="16-1a-101(72)">"Nonresident LLP statement" means:<subsection number="16-1a-101(72)(a)">a statement of qualification of a domestic limited liability partnership that does not have an office in this state; or</subsection><subsection number="16-1a-101(72)(b)">a statement of foreign qualification of a foreign limited liability partnership that does not have an office in this state.</subsection></subsection><subsection number="16-1a-101(73)">"Operating agreement" means the same as that term is defined in Section <xref depth="3" refnumber="16-20-101">16-20-101</xref>.</subsection><subsection number="16-1a-101(74)">"Organic law" means the law of an entity's jurisdiction of formation that governs the internal affairs of the entity.</subsection><subsection number="16-1a-101(75)">"Organic rules" means the public organic record and private organic rules of an entity.</subsection><subsection number="16-1a-101(76)">"Partner" means a general partner or limited partner.</subsection><subsection number="16-1a-101(77)">"Partnership" means the same as that term is defined in Section <xref depth="3" refnumber="16-18-101">16-18-101</xref>.</subsection><subsection number="16-1a-101(78)">"Partnership agreement" means the same as that term is defined in Section <xref depth="3" refnumber="16-19-101">16-19-101</xref>.</subsection><subsection number="16-1a-101(79)">"Patron member" means the same as that term is defined in Section <xref depth="3" refnumber="16-16-102">16-16-102</xref>.</subsection><subsection number="16-1a-101(80)">"Patronage" means the same as that term is defined in Section <xref depth="3" refnumber="16-16-102">16-16-102</xref>.</subsection><subsection number="16-1a-101(81)">"Plan of conversion" means a plan approved in accordance with Section <xref depth="3" refnumber="16-1a-904">16-1a-904</xref>.</subsection><subsection number="16-1a-101(82)">"Plan of domestication" means a plan approved in accordance with Section <xref depth="3" refnumber="16-1a-1004">16-1a-1004</xref>.</subsection><subsection number="16-1a-101(83)">"Plan of interest exchange" means a plan approved in accordance with Section <xref depth="3" refnumber="16-1a-804">16-1a-804</xref>.</subsection><subsection number="16-1a-101(84)">"Plan of merger" means a plan approved in accordance with Section <xref depth="3" refnumber="16-1a-704">16-1a-704</xref>.</subsection><subsection number="16-1a-101(85)"><subsection number="16-1a-101(85)(a)">"Private organic rules" means the rules whether in a record or not, that govern the internal affairs of an entity, that are binding on all the entity's interest holders.</subsection><subsection number="16-1a-101(85)(b)">"Private organic rules" includes the:<subsection number="16-1a-101(85)(b)(i)">bylaws of a business corporation;</subsection><subsection number="16-1a-101(85)(b)(ii)">bylaws of a nonprofit corporation;</subsection><subsection number="16-1a-101(85)(b)(iii)">bylaws of a decentralized autonomous organization;</subsection><subsection number="16-1a-101(85)(b)(iv)">partnership agreement of a partnership;</subsection><subsection number="16-1a-101(85)(b)(v)">partnership agreement of a limited partnership;</subsection><subsection number="16-1a-101(85)(b)(vi)">operating agreement of a limited liability company;</subsection><subsection number="16-1a-101(85)(b)(vii)">bylaws of a limited cooperative association;</subsection><subsection number="16-1a-101(85)(b)(viii)">governing principles of an unincorporated nonprofit association; and</subsection><subsection number="16-1a-101(85)(b)(ix)">trust instrument of a statutory trust or similar rules of a business trust of common-law business trust.</subsection></subsection></subsection><subsection number="16-1a-101(86)">"Professional corporation" means the same as that term is defined in Section <xref depth="3" refnumber="16-11-2">16-11-2</xref>.</subsection><subsection number="16-1a-101(87)">"Protected agreement" means:<subsection number="16-1a-101(87)(a)">a record showing indebtedness and any related agreement in effect on January 1, 2014;</subsection><subsection number="16-1a-101(87)(b)">an agreement that is binding on an entity on January 1, 2014;</subsection><subsection number="16-1a-101(87)(c)">the organic rules of an entity in effect on January 1, 2014; or</subsection><subsection number="16-1a-101(87)(d)">an agreement that is binding on any of the governors or interest holders of an entity on January 1, 2014.</subsection></subsection><subsection number="16-1a-101(88)"><subsection number="16-1a-101(88)(a)">"Public organic record" means the record of the filing that the division makes to form an entity and any amendment to or restatement of that record.</subsection><subsection number="16-1a-101(88)(b)">"Public organic record" includes the:<subsection number="16-1a-101(88)(b)(i)">articles of incorporation of a business corporation;</subsection><subsection number="16-1a-101(88)(b)(ii)">articles of incorporation of a nonprofit corporation;</subsection><subsection number="16-1a-101(88)(b)(iii)">certificate of limited partnership of a limited liability limited partnership;</subsection><subsection number="16-1a-101(88)(b)(iv)">certificate of organization of a limited liability company;</subsection><subsection number="16-1a-101(88)(b)(v)">certificate of organization for a decentralized autonomous organization;</subsection><subsection number="16-1a-101(88)(b)(vi)">articles of organization of a limited cooperative association; and</subsection><subsection number="16-1a-101(88)(b)(vii)">certificate of trust of a statutory trust or similar record of a business trust.</subsection></subsection></subsection><subsection number="16-1a-101(89)">"Record" means information inscribed on a tangible medium or stored in an electronic or other medium that is retrievable in a perceivable form.</subsection><subsection number="16-1a-101(90)">"Registered agent" means a person that an entity authorizes to receive service of a process, notice, or demand required or permitted by law to be served on the entity.</subsection><subsection number="16-1a-101(91)">"Registered agent filing" means:<subsection number="16-1a-101(91)(a)">the public organic record of a domestic filing entity;</subsection><subsection number="16-1a-101(91)(b)">a statement of qualification of a domestic limited liability partnership;</subsection><subsection number="16-1a-101(91)(c)">a foreign registration statement filed in accordance with Section <xref depth="3" refnumber="16-1a-504">16-1a-504</xref>; or</subsection><subsection number="16-1a-101(91)(d)">a designation of agent.</subsection></subsection><subsection number="16-1a-101(92)">"Registered foreign entity" means a foreign entity that is registered to do business in this state in accordance with a record filed with the division.</subsection><subsection number="16-1a-101(93)">"Registered office" means the office within this state designated by a domestic entity that is a corporation or a foreign entity that is a corporation as the domestic entity's or foreign entity's registered office in the most recent document on file with the division such as the domestic entity's or foreign entity's:<subsection number="16-1a-101(93)(a)">articles of incorporation;</subsection><subsection number="16-1a-101(93)(b)">application for a certificate of authority; or</subsection><subsection number="16-1a-101(93)(c)">notice of change of the registered office.</subsection></subsection><subsection number="16-1a-101(94)">"Represented entity" means:<subsection number="16-1a-101(94)(a)">a domestic filing entity;</subsection><subsection number="16-1a-101(94)(b)">a registered foreign entity;</subsection><subsection number="16-1a-101(94)(c)">a domestic or foreign unincorporated nonprofit association for which a designation of agent is in effect;</subsection><subsection number="16-1a-101(94)(d)">a domestic nonfiling entity for which a designation of agent is in effect; or</subsection><subsection number="16-1a-101(94)(e)">a nonregistered foreign entity for which a designation of agent is in effect.</subsection></subsection><subsection number="16-1a-101(95)">"Series" means a series created in accordance with Chapter 20, Part 11, Series Limited Liability Companies.</subsection><subsection number="16-1a-101(96)">"Share" means:<subsection number="16-1a-101(96)(a)">for an entity organized under Chapter 6a, Utah Revised Nonprofit Corporation Act, a unit of interest in a nonprofit corporation; or</subsection><subsection number="16-1a-101(96)(b)">for an entity organized under Chapter 10a, Utah Revised Business Corporation Act, the unit into which the proprietary interest in a corporation is divided.</subsection></subsection><subsection number="16-1a-101(97)">"Shareholder" means the same as that term is defined in Section <xref depth="3" refnumber="16-10a-102">16-10a-102</xref>.</subsection><subsection number="16-1a-101(98)">"Statement of conversion" means a statement described in Section <xref depth="3" refnumber="16-1a-906">16-1a-906</xref>.</subsection><subsection number="16-1a-101(99)">"Statement of domestication" means a statement described in Section <xref depth="3" refnumber="16-1a-1006">16-1a-1006</xref>.</subsection><subsection number="16-1a-101(100)">"Statement of interest exchange" means a statement described in Section <xref depth="3" refnumber="16-1a-806">16-1a-806</xref>.</subsection><subsection number="16-1a-101(101)">"Statement of merger" means a statement described in Section <xref depth="3" refnumber="16-1a-706">16-1a-706</xref>.</subsection><subsection number="16-1a-101(102)">"Statement of qualification" means a document that a person files with the division to establish a domestic limited liability partnership or domestic general partnership.</subsection><subsection number="16-1a-101(103)">"Surviving entity" means an entity that continues in existence after a merger or that is created by a merger.</subsection><subsection number="16-1a-101(104)">"Transfer" means:<subsection number="16-1a-101(104)(a)">an assignment;</subsection><subsection number="16-1a-101(104)(b)">a conveyance;</subsection><subsection number="16-1a-101(104)(c)">a deed;</subsection><subsection number="16-1a-101(104)(d)">a sale;</subsection><subsection number="16-1a-101(104)(e)">a lease;</subsection><subsection number="16-1a-101(104)(f)">a mortgage;</subsection><subsection number="16-1a-101(104)(g)">a security interest;</subsection><subsection number="16-1a-101(104)(h)">an encumbrance;</subsection><subsection number="16-1a-101(104)(i)">a gift; or</subsection><subsection number="16-1a-101(104)(j)">a transfer by operation of law.</subsection></subsection><subsection number="16-1a-101(105)">"Transferable interest" means the right under an entity's organic law to receive a distribution from an entity.</subsection><subsection number="16-1a-101(106)">"Type of entity" means a generic form of entity:<subsection number="16-1a-101(106)(a)">recognized at common law; or</subsection><subsection number="16-1a-101(106)(b)">formed under an organic law.</subsection></subsection><subsection number="16-1a-101(107)">"Voting member" means the same as that term is defined in Section <xref depth="3" refnumber="16-6a-102">16-6a-102</xref>.</subsection></section><section number="16-1a-102"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Certificate of existence or registration.</catchline><subsection number="16-1a-102(1)">Upon request of a person, the division shall issue a certificate of existence for a domestic filing entity or a certificate of registration for a registered foreign entity.</subsection><subsection number="16-1a-102(2)">The division shall ensure that a certificate described in Subsection <xref depth="4" refnumber="16-1a-102(1)">(1)</xref> states:<subsection number="16-1a-102(2)(a)">the domestic filing entity's name or the registered foreign entity's name used in the state;</subsection><subsection number="16-1a-102(2)(b)">for a domestic filing entity:<subsection number="16-1a-102(2)(b)(i)">that the division has filed the domestic filing entity's public organic record or statement of qualification and the public organic record or statement of qualification has taken effect;</subsection><subsection number="16-1a-102(2)(b)(ii)">the date the public organic record or statement of qualification took effect;</subsection><subsection number="16-1a-102(2)(b)(iii)">the period of the entity's duration if the records of the division reflect that the entity's period of duration is less than perpetual; and</subsection><subsection number="16-1a-102(2)(b)(iv)">that the records of the division do not reflect that the entity has been dissolved;</subsection></subsection><subsection number="16-1a-102(2)(c)">for a registered foreign entity, that the registered foreign entity is registered to do business in this state;</subsection><subsection number="16-1a-102(2)(d)">that the domestic filing entity or the registered foreign entity pays all fees, taxes, interest, and penalties collected by the division that the domestic filing entity or registered foreign entity owes to the state if:<subsection number="16-1a-102(2)(d)(i)">the division's records reflect the domestic filing entity's or the registered foreign entity's payment of the fee, tax, interest, or penalty; and</subsection><subsection number="16-1a-102(2)(d)(ii)">nonpayment of the fees, taxes, interest, and penalties affects the good standing or registration of the domestic filing entity or the registered foreign entity;</subsection></subsection><subsection number="16-1a-102(2)(e)">that domestic filing entity or the registered foreign entity has delivered to the division for filing the most recent annual report required by the division;</subsection><subsection number="16-1a-102(2)(f)">that a proceeding is not pending under Part 6, Administrative Dissolution; and</subsection><subsection number="16-1a-102(2)(g)">other reasonable facts contained in the division's records relating to the domestic filing entity or the registered foreign entity that the person requesting the certificate requests.</subsection></subsection><subsection number="16-1a-102(3)">Subject to a qualification stated in the certificate of existence or registration, a person may rely on the facts stated in the certificate of existence or registration issued by the division under Subsection <xref depth="4" refnumber="16-1a-102(1)">(1)</xref> as conclusive evidence of the facts stated in the certificate of existence or registration.</subsection></section></part><part number="16-1a-2"><catchline>Filing Requirements</catchline><section number="16-1a-201"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Definitions.</catchline>Reserved.</section><section number="16-1a-202"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Entity filing requirements.</catchline><subsection number="16-1a-202(1)">In order for the division to file an entity filing in accordance with this chapter, the person delivering the entity filing to the division shall ensure that:<subsection number="16-1a-202(1)(a)">the division receives the entity filing;</subsection><subsection number="16-1a-202(1)(b)">the entity filing complies with this chapter;</subsection><subsection number="16-1a-202(1)(c)">the entity filing contains, at a minimum, the information required by this chapter;</subsection><subsection number="16-1a-202(1)(d)">subject to Subsection <xref tempid="632">(2)</xref>, the person delivers the entity filing to the division in written form unless the division allows the electronic delivery of an entity filing;</subsection><subsection number="16-1a-202(1)(e)">the words in the entity filing are in English;</subsection><subsection number="16-1a-202(1)(f)">the numbers in the entity filing are Arabic or Roman numerals;</subsection><subsection number="16-1a-202(1)(g)">if the name of the entity is not in English, the name of the entity appears in English letters or Arabic or Roman numerals;</subsection><subsection number="16-1a-202(1)(h)">if applicable, a certificate of existence or registration required of a foreign entity that is not in English with a reasonably authenticated English translation accompanies the entity filing;</subsection><subsection number="16-1a-202(1)(i)">an individual authorized or required under this chapter to sign the entity filing, or an individual acting on the authorized or required individual's behalf, signs the entity filing; and</subsection><subsection number="16-1a-202(1)(j)">the entity filing states the name and capacity, if any, of each individual who signs the entity filing.</subsection></subsection><subsection number="16-1a-202(2)">A person physically delivering an entity filing in written form shall ensure the entity filing is typewritten, computer generated, or machine printed.</subsection><subsection number="16-1a-202(3)">If other applicable law prohibits the division from disclosing information contained in an entity filing, the division shall:<subsection number="16-1a-202(3)(a)">file the entity filing if the entity filing otherwise complies with this chapter; and</subsection><subsection number="16-1a-202(3)(b)">redact the information prohibited by law from disclosure.</subsection></subsection><subsection number="16-1a-202(4)">When a person delivers an entity filing to the division for filing, the person shall pay a fee required under this chapter and any other fee, tax, interest, or penalty required by statute in a manner the division and applicable statute permit.</subsection></section><section number="16-1a-203"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Forms.</catchline><subsection number="16-1a-203(1)">The division may provide forms for an entity filing required or permitted under this chapter.</subsection><subsection number="16-1a-203(2)">A person making an entity filing is not required to use a form the division provides as described in Subsection <xref tempid="984">(1)</xref>.</subsection></section><section number="16-1a-204"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Effective date and time of an entity filing.</catchline>Except as otherwise provided in this chapter, an entity filing is effective:<subsection number="16-1a-204(1)">on the day and at the time the division files the entity filing;</subsection><subsection number="16-1a-204(2)">on the day and at the time specified in the entity filing as the entity filing's effective time, if the date and time specified in the entity filing is later than the time described in Subsection <xref tempid="223">(1)</xref>, which may not be more than 90 days after the day on which the division files the entity filing; and</subsection><subsection number="16-1a-204(3)">if the entity filing specifies a delayed effective date but does not specify a time, at 12:01 a.m. on the day specified in the entity filing, which may not be more than 90 days after the day on which the division files the entity filing.</subsection></section><section number="16-1a-205"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Withdrawal of an entity filing before effectiveness.</catchline><subsection number="16-1a-205(1)">Except as otherwise provided in this chapter, a person may withdraw an entity filing delivered to the division before the entity filing takes effect by delivering to the division for filing a statement of withdrawal.</subsection><subsection number="16-1a-205(2)">A person creating and delivering to the division a statement of withdrawal shall ensure that:<subsection number="16-1a-205(2)(a)">subject to Subsection <xref tempid="117">(2)(c)</xref>, each person that signed the entity filing being withdrawn signs the statement of withdrawal;</subsection><subsection number="16-1a-205(2)(b)">the statement of withdrawal identifies the entity filing to be withdrawn; and</subsection><subsection number="16-1a-205(2)(c)">if the statement of withdrawal is signed by fewer than the total number of persons that signed the entity filing being withdrawn, <badspell spid="3376" suggestions="ch"/>the entity filing is withdrawn in accordance with the agreement of each person that signed the entity filing.</subsection></subsection><subsection number="16-1a-205(3)">Once the division files the statement of withdrawal, the action or transaction evidenced by the original entity filing does not take effect.</subsection></section><section number="16-1a-206"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Correcting an entity filing.</catchline><subsection number="16-1a-206(1)">A person may correct an entity filing if:<subsection number="16-1a-206(1)(a)">the entity filing, at the time of filing, was inaccurate;</subsection><subsection number="16-1a-206(1)(b)">the entity filing was defectively signed; or</subsection><subsection number="16-1a-206(1)(c)">the electronic transmission of the entity filing to the division was defective.</subsection></subsection><subsection number="16-1a-206(2)">To correct an entity filing, a person, on behalf of which a person delivered an entity filing to the division for filing, shall deliver a statement of correction to the division for filing.</subsection><subsection number="16-1a-206(3)">A statement of correction:<subsection number="16-1a-206(3)(a)">may not state a delayed effective date;</subsection><subsection number="16-1a-206(3)(b)">shall be signed by the person correcting the entity filing;</subsection><subsection number="16-1a-206(3)(c)">shall identify the entity filing to be corrected;</subsection><subsection number="16-1a-206(3)(d)">shall specify the inaccuracy or defect the statement of correction will correct; and</subsection><subsection number="16-1a-206(3)(e)">shall correct the inaccuracy or defect.</subsection></subsection><subsection number="16-1a-206(4)">Except as provided in Subsection <xref tempid="825">(5)</xref>, a statement of correction is effective on the effective date of the entity filing that the statement of correction corrects.</subsection><subsection number="16-1a-206(5)">If a person relies on the uncorrected entity filing and is adversely affected by the correction, the statement of correction is effective, as the statement of correction relates to the person, on the day on which the statement of correction is filed.</subsection></section><section number="16-1a-207"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Duty of division to file -- Review of refusal to file.</catchline><subsection number="16-1a-207(1)">The division shall file an entity filing delivered to the division for filing in accordance with this chapter.</subsection><subsection number="16-1a-207(2)">The duty of the division described in Subsection <xref tempid="465">(1)</xref> is ministerial.</subsection><subsection number="16-1a-207(3)">When the division files an entity filing, the division shall record the entity filing as filed on the date and time the division files the entity filing.</subsection><subsection number="16-1a-207(4)">After filing an entity filing, the division shall deliver to the person making the entity filing a copy of the entity filing with an acknowledgment of the date and time of the filing.</subsection><subsection number="16-1a-207(5)">If the division refuses to file an entity filing:<subsection number="16-1a-207(5)(a)">no later than 15 business days after the day on which the person making the entity filing delivers the entity filing to the division, the division shall:<subsection number="16-1a-207(5)(a)(i)">return the entity filing to the person or notify the person of the refusal; and</subsection><subsection number="16-1a-207(5)(a)(ii)">provide a brief explanation of the division's reason for refusing to file the entity filing; and</subsection></subsection><subsection number="16-1a-207(5)(b)">the person making the entity filing may within a time period the division specifies that may not exceed 30 days from the day on which the division provides notice under Subsection <xref depth="4" refnumber="16-1a-207(5)(a)">(5)(a)</xref> amend the entity filing for the division to reexamine the entity filing.</subsection></subsection><subsection number="16-1a-207(6)">If the division refuses to file an entity filing after a reexamination completed in accordance with Subsection <xref depth="4" refnumber="16-1a-207(5)(b)">(5)(b)</xref>, the person making the entity filing may appeal the division's final refusal in accordance with Title 63G, Chapter 4, Administrative Procedures Act.</subsection><subsection number="16-1a-207(7)">The filing or refusal to file an entity filing does not:<subsection number="16-1a-207(7)(a)">affect the validity or invalidity of the entity filing in whole or in part; or</subsection><subsection number="16-1a-207(7)(b)">create a presumption that the information contained in the entity filing is correct or incorrect.</subsection></subsection><subsection number="16-1a-207(8)">A certification from the division accompanying a copy of a filed record is conclusive evidence that the copy is an accurate representation of the original record on file with the division.</subsection></section><section number="16-1a-208"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Signing of an entity filing.</catchline><subsection number="16-1a-208(1)">An individual, by signing an entity filing, affirms under penalty of perjury that the facts stated in the filing are true in all material respects.</subsection><subsection number="16-1a-208(2)">An agent may sign a record filed under this chapter.</subsection><subsection number="16-1a-208(3)">If this chapter requires a particular individual to sign an entity filing and the individual is deceased or incompetent, a legal representative of the individual may sign the entity filing.</subsection><subsection number="16-1a-208(4)">An individual that signs a record as an agent or legal representative shall affirm that the individual is authorized to sign the record.</subsection></section><section number="16-1a-209"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Signing and filing a record in accordance with a judicial order.</catchline><subsection number="16-1a-209(1)">If a person required under this chapter to sign or deliver a record to the division for filing does not sign or deliver the record to the division for filing, a person adversely affected by the person's failure to sign or deliver the record may petition a court to require that:<subsection number="16-1a-209(1)(a)">the person sign the record;</subsection><subsection number="16-1a-209(1)(b)">the person deliver the record to the division for filing; or</subsection><subsection number="16-1a-209(1)(c)">the division file the record unsigned.</subsection></subsection><subsection number="16-1a-209(2)">If a person that petitions a court under Subsection <xref tempid="876">(1)</xref> is not the person to which the record pertains, the person that petitions the court shall make the person to which the record pertains a party to the action.</subsection><subsection number="16-1a-209(3)">A record filed in accordance with Subsection <xref tempid="289">(1)(c)</xref> is effective without being signed.</subsection></section><section number="16-1a-210"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Liability for inaccurate information in a filed record.</catchline>If a record delivered to the division for filing in accordance with this chapter and filed with the division contains inaccurate information, a person that suffers a loss by relying on the information may recover damages for the loss from the person that:<subsection number="16-1a-210(1)">signed the record or caused another person to sign the record on the person's behalf; and</subsection><subsection number="16-1a-210(2)">knew at the time the person signed the record that the information was inaccurate.</subsection></section><section number="16-1a-211"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Delivery by division.</catchline>Except as otherwise provided in this chapter, the division may deliver a record to a person:<subsection number="16-1a-211(1)">in person to the person that submitted the record for filing;</subsection><subsection number="16-1a-211(2)">to the address of the person's registered agent;</subsection><subsection number="16-1a-211(3)">to the person's principal office address; or</subsection><subsection number="16-1a-211(4)">to another address the person provides to the division for delivery.</subsection></section><section number="16-1a-212"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Annual report for division.</catchline><subsection number="16-1a-212(1)">As used in this section, "anniversary month" means the calendar month in which:<subsection number="16-1a-212(1)(a)">a domestic filing entity's formation becomes effective with the division; or</subsection><subsection number="16-1a-212(1)(b)">a registered foreign entity's application for authority to conduct affairs in this state takes effect.</subsection></subsection><subsection number="16-1a-212(2)">Each domestic filing entity and registered foreign entity shall file an annual report with the division that includes:<subsection number="16-1a-212(2)(a)">the corporate name of the domestic filing entity or registered foreign entity;</subsection><subsection number="16-1a-212(2)(b)">if a registered foreign entity, any assumed corporate name of the registered foreign entity;</subsection><subsection number="16-1a-212(2)(c)">the jurisdiction under which law the domestic filing entity or registered foreign entity is organized or incorporated;</subsection><subsection number="16-1a-212(2)(d)">the information required by Subsection <xref refnumber="60-1">16-1a-404(1)</xref>;</subsection><subsection number="16-1a-212(2)(e)">the street address of the domestic filing entity's or the registered foreign entity's principal office; and</subsection><subsection number="16-1a-212(2)(f)">the name and address of each director and principal officer of the domestic filing entity or the registered foreign entity.</subsection></subsection><subsection number="16-1a-212(3)">The division shall:<subsection number="16-1a-212(3)(a)">determine the form and process by which a domestic filing entity or registered foreign entity is required to file an annual report; and</subsection><subsection number="16-1a-212(3)(b)">deliver a copy of the form described in Subsection <xref depth="4" refnumber="16-1a-212(3)(a)">(3)(a)</xref> to each domestic filing entity and registered foreign entity.</subsection></subsection><subsection number="16-1a-212(4)">The domestic filing entity or registered foreign entity shall ensure that information in the annual report is current as of the date the domestic filing entity or registered foreign entity executes the report.</subsection><subsection number="16-1a-212(5)"><subsection number="16-1a-212(5)(a)">Unless the division specifies a different time period by rule made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, a domestic filing entity or registered foreign entity:<subsection number="16-1a-212(5)(a)(i)">shall deliver an annual report to the division each calendar year on the last day of the anniversary month; and</subsection><subsection number="16-1a-212(5)(a)(ii)">may deliver the annual report up to 60 days before the last day of the anniversary month.</subsection></subsection><subsection number="16-1a-212(5)(b)">A domestic filing entity or registered foreign entity does not violate the requirement to submit an annual report if the domestic filing entity or registered foreign entity provides evidence of the submission.</subsection></subsection><subsection number="16-1a-212(6)">If an annual report contains the information required by this section, the division shall file the annual report.</subsection><subsection number="16-1a-212(7)">The fact that an individual's name is signed on an annual report form is prima facie evidence for division purposes that the individual is authorized to certify the report on behalf of the domestic filing entity or registered foreign entity.</subsection><subsection number="16-1a-212(8)">The division may design the annual report form the division prescribes to provide a simplified certification by the domestic filing entity or registered foreign entity if the domestic filing entity or registered foreign entity has not made changes to the required information from the last preceding report filed.</subsection><subsection number="16-1a-212(9)">If an annual report contains the name or address of a registered agent that differs from the information contained in the records of the division immediately before the annual report becomes effective, the differing information in the annual report is considered a statement of change under Section <xref depth="3" refnumber="16-1a-407">16-1a-407</xref>.</subsection></section></part><part number="16-1a-3"><catchline>Names</catchline><section number="16-1a-301"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Definitions.</catchline>Reserved.</section><section number="16-1a-302"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Permitted names.</catchline><subsection number="16-1a-302(1)">Except as provided in Subsection <xref depth="4" refnumber="16-1a-302(3)">(3)</xref> or <xref depth="4" refnumber="16-1a-302(4)">(4)</xref>, the name of a domestic filing entity, the name under which a foreign entity may register to do business in this state, and a D.B.A. registered under Title 42, Chapter 2, Conducting Business as a D.B.A., shall be distinguishable on the records of the division from a:<subsection number="16-1a-302(1)(a)">name of an existing domestic filing entity that at the time is not dissolved;</subsection><subsection number="16-1a-302(1)(b)">name under which a foreign entity is registered to do business in this state under Section <xref depth="3" refnumber="16-1a-503">16-1a-503</xref>;</subsection><subsection number="16-1a-302(1)(c)">D.B.A. registered under Title 42, Chapter 2, Conducting Business as a D.B.A.;</subsection><subsection number="16-1a-302(1)(d)">name reserved under Section <xref depth="3" refnumber="16-1a-304">16-1a-304</xref>; or</subsection><subsection number="16-1a-302(1)(e)">name registered under Section <xref depth="3" refnumber="16-1a-305">16-1a-305</xref>.</subsection></subsection><subsection number="16-1a-302(2)">Except as otherwise provided in Subsection <xref depth="4" refnumber="16-1a-302(4)">(4)</xref>, a name is distinguishable from other names registered with the division if the name contains one or more different words, letters, or numerals from other names in the division's records.</subsection><subsection number="16-1a-302(3)">The following differences do not qualify as distinguishing between two names:<subsection number="16-1a-302(3)(a)">the term:<subsection number="16-1a-302(3)(a)(i)">"Assoc.";</subsection><subsection number="16-1a-302(3)(a)(ii)">"association";</subsection><subsection number="16-1a-302(3)(a)(iii)">"Assn.";</subsection><subsection number="16-1a-302(3)(a)(iv)">"B.L.C.";</subsection><subsection number="16-1a-302(3)(a)(v)">"B.L.L.C";</subsection><subsection number="16-1a-302(3)(a)(vi)">"benefit limited company";</subsection><subsection number="16-1a-302(3)(a)(vii)">"benefit limited liability company";</subsection><subsection number="16-1a-302(3)(a)(viii)">"BLC";</subsection><subsection number="16-1a-302(3)(a)(ix)">"BLLC";</subsection><subsection number="16-1a-302(3)(a)(x)">"Co.";</subsection><subsection number="16-1a-302(3)(a)(xi)">"company";</subsection><subsection number="16-1a-302(3)(a)(xii)">"co-op";</subsection><subsection number="16-1a-302(3)(a)(xiii)">"coop";</subsection><subsection number="16-1a-302(3)(a)(xiv)">"cooperative";</subsection><subsection number="16-1a-302(3)(a)(xv)">"corp.";</subsection><subsection number="16-1a-302(3)(a)(xvi)">"corporation";</subsection><subsection number="16-1a-302(3)(a)(xvii)">"D.A.O.";</subsection><subsection number="16-1a-302(3)(a)(xviii)">"DAO";</subsection><subsection number="16-1a-302(3)(a)(xix)">"decentralized autonomous organization";</subsection><subsection number="16-1a-302(3)(a)(xx)">"Inc.";</subsection><subsection number="16-1a-302(3)(a)(xxi)">"incorporated";</subsection><subsection number="16-1a-302(3)(a)(xxii)">"L3C";</subsection><subsection number="16-1a-302(3)(a)(xxiii)">"LC";</subsection><subsection number="16-1a-302(3)(a)(xxiv)">"L.C.";</subsection><subsection number="16-1a-302(3)(a)(xxv)">"L.C.A.";</subsection><subsection number="16-1a-302(3)(a)(xxvi)">"L.D.";</subsection><subsection number="16-1a-302(3)(a)(xxvii)">"L.DAO";</subsection><subsection number="16-1a-302(3)(a)(xxviii)">"L.L.C.";</subsection><subsection number="16-1a-302(3)(a)(xxix)">"L.L.D.";</subsection><subsection number="16-1a-302(3)(a)(xxx)">"L.L.DAO";</subsection><subsection number="16-1a-302(3)(a)(xxxi)">"L.L.P";</subsection><subsection number="16-1a-302(3)(a)(xxxii)">"L.P.";</subsection><subsection number="16-1a-302(3)(a)(xxxiii)">"LCA";</subsection><subsection number="16-1a-302(3)(a)(xxxiv)">"limited";</subsection><subsection number="16-1a-302(3)(a)(xxxv)">"Limited Co";</subsection><subsection number="16-1a-302(3)(a)(xxxvi)">"limited company";</subsection><subsection number="16-1a-302(3)(a)(xxxvii)">"limited cooperative association";</subsection><subsection number="16-1a-302(3)(a)(xxxviii)">"limited decentralized autonomous organization";</subsection><subsection number="16-1a-302(3)(a)(xxxix)">"limited liability company";</subsection><subsection number="16-1a-302(3)(a)(xl)">"limited liability decentralized autonomous organization";</subsection><subsection number="16-1a-302(3)(a)(xli)">"limited liability partnership";</subsection><subsection number="16-1a-302(3)(a)(xlii)">"limited partnership";</subsection><subsection number="16-1a-302(3)(a)(xliii)">"LD";</subsection><subsection number="16-1a-302(3)(a)(xliv)">"LLC";</subsection><subsection number="16-1a-302(3)(a)(xlv)">"LLD";</subsection><subsection number="16-1a-302(3)(a)(xlvi)">"LLDAO";</subsection><subsection number="16-1a-302(3)(a)(xlvii)">"LLP";</subsection><subsection number="16-1a-302(3)(a)(xlviii)">"LP";</subsection><subsection number="16-1a-302(3)(a)(xlix)">"Ltd.";</subsection><subsection number="16-1a-302(3)(a)(l)">"Ltd Co";</subsection><subsection number="16-1a-302(3)(a)(li)">"Ltd Company";</subsection><subsection number="16-1a-302(3)(a)(lii)">"Ltd DAO";</subsection><subsection number="16-1a-302(3)(a)(liii)">"Ltd Liability Co";</subsection><subsection number="16-1a-302(3)(a)(liv)">"Ltd Liability Company";</subsection><subsection number="16-1a-302(3)(a)(lv)">"Ltd Liability DAO";</subsection><subsection number="16-1a-302(3)(a)(lvi)">"P.A.";</subsection><subsection number="16-1a-302(3)(a)(lvii)">"P.C.";</subsection><subsection number="16-1a-302(3)(a)(lviii)">"P.L.C.";</subsection><subsection number="16-1a-302(3)(a)(lix)">"P.L.L.C";</subsection><subsection number="16-1a-302(3)(a)(lx)">"PA";</subsection><subsection number="16-1a-302(3)(a)(lxi)">"PC";</subsection><subsection number="16-1a-302(3)(a)(lxii)">"PLC";</subsection><subsection number="16-1a-302(3)(a)(lxiii)">"PLLC";</subsection><subsection number="16-1a-302(3)(a)(lxiv)">"professional association";</subsection><subsection number="16-1a-302(3)(a)(lxv)">"professional corporation";</subsection><subsection number="16-1a-302(3)(a)(lxvi)">"professional limited liability company";</subsection><subsection number="16-1a-302(3)(a)(lxvii)">"R.L.L.P.";</subsection><subsection number="16-1a-302(3)(a)(lxviii)">"registered limited liability partnership"; or</subsection><subsection number="16-1a-302(3)(a)(lxix)">"RLLP";</subsection></subsection><subsection number="16-1a-302(3)(b)">an abbreviation of a word listed in Subsection <xref depth="4" refnumber="16-1a-302(3)(a)">(3)(a)</xref>;</subsection><subsection number="16-1a-302(3)(c)">the presence or absence of the words or symbols of the words:<subsection number="16-1a-302(3)(c)(i)">"the";</subsection><subsection number="16-1a-302(3)(c)(ii)">"and";</subsection><subsection number="16-1a-302(3)(c)(iii)">"a"; or</subsection><subsection number="16-1a-302(3)(c)(iv)">"plus";</subsection></subsection><subsection number="16-1a-302(3)(d)">a difference in punctuation, spacing, or special characters;</subsection><subsection number="16-1a-302(3)(e)">a difference in capitalization; and</subsection><subsection number="16-1a-302(3)(f)">for an entity's name described in Subsection <xref depth="4" refnumber="16-1a-302(1)">(1)</xref> that formed in this state on or after May 4, 1998:<subsection number="16-1a-302(3)(f)(i)">an abbreviation of a word or phrase; or</subsection><subsection number="16-1a-302(3)(f)(ii)">a difference in the singular or plural form of a word.</subsection></subsection></subsection><subsection number="16-1a-302(4)"><subsection number="16-1a-302(4)(a)">An entity may consent in a record to a person's use of a name that is not distinguishable on the records of the division from the entity's name if the name includes a term described in Subsection <xref depth="4" refnumber="16-1a-302(3)(a)">(3)(a)</xref>.</subsection><subsection number="16-1a-302(4)(b)">If an entity consents to a person's use of a name in accordance with Subsection <xref depth="4" refnumber="16-1a-302(4)(a)">(4)(a)</xref>, the entity is not required to change the entity's name.</subsection></subsection><subsection number="16-1a-302(5)">An entity's name shall comply with Section <xref depth="3" refnumber="7-1-701">7-1-701</xref>.</subsection><subsection number="16-1a-302(6)">An entity's name may not contain the words:<subsection number="16-1a-302(6)(a)">without the consent of the United States Olympic Committee:<subsection number="16-1a-302(6)(a)(i)">"Olympic";</subsection><subsection number="16-1a-302(6)(a)(ii)">"Olympiad"; or</subsection><subsection number="16-1a-302(6)(a)(iii)">"Citius Altius Fortius";</subsection></subsection><subsection number="16-1a-302(6)(b)">for an entity's name described in Subsection <xref tempid="294">(1)</xref> that an entity changes or forms on or after May 4, 2022, the number sequence "911"; or</subsection><subsection number="16-1a-302(6)(c)">without the consent of the Department of Financial Institutions, the words described in Section <xref depth="3" refnumber="7-1-701">7-1-701</xref>.</subsection></subsection><subsection number="16-1a-302(7)">An entity may use a name that is not distinguishable from a name described in Subsection <xref tempid="136">(1)</xref> if the entity delivers to the division for filing a certified copy of a final judgment of a court with jurisdiction establishing the right of the entity to use the name in this state.</subsection><subsection number="16-1a-302(8)">The division may not approve for filing a name that implies that an entity is an agency of this state or any of the state's political subdivisions, if the entity is not actually an agency of this state or any of the state's political subdivisions.</subsection></section><section number="16-1a-303"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Name requirements for certain types of entities.</catchline><subsection number="16-1a-303(1)">The corporate name of a nonprofit organization:<subsection number="16-1a-303(1)(a)">may, but is not required to contain:<subsection number="16-1a-303(1)(a)(i)">the word:<subsection number="16-1a-303(1)(a)(i)(A)">"corporation";</subsection><subsection number="16-1a-303(1)(a)(i)(B)">"incorporated";</subsection><subsection number="16-1a-303(1)(a)(i)(C)">"company"; or</subsection><subsection number="16-1a-303(1)(a)(i)(D)">a word of similar import; or</subsection></subsection><subsection number="16-1a-303(1)(a)(ii)">the abbreviation:<subsection number="16-1a-303(1)(a)(ii)(A)">"Corp.";</subsection><subsection number="16-1a-303(1)(a)(ii)(B)">"Inc.";</subsection><subsection number="16-1a-303(1)(a)(ii)(C)">"Co."; or</subsection><subsection number="16-1a-303(1)(a)(ii)(D)">an abbreviation of similar import; and</subsection></subsection></subsection><subsection number="16-1a-303(1)(b)">may not contain:<subsection number="16-1a-303(1)(b)(i)">a word or phrase that indicates or implies that the nonprofit corporation is organized for a purpose other than a purpose permitted by:<subsection number="16-1a-303(1)(b)(i)(A)">Section <xref depth="3" refnumber="16-6a-301">16-6a-301</xref>; and</subsection><subsection number="16-1a-303(1)(b)(i)(B)">the nonprofit corporation's articles of incorporation; or</subsection></subsection><subsection number="16-1a-303(1)(b)(ii)">the term:<subsection number="16-1a-303(1)(b)(ii)(A)">"limited liability company";</subsection><subsection number="16-1a-303(1)(b)(ii)(B)">"limited company";</subsection><subsection number="16-1a-303(1)(b)(ii)(C)">"limited liability partnership"; or</subsection><subsection number="16-1a-303(1)(b)(ii)(D)">"limited partnership"; or</subsection></subsection><subsection number="16-1a-303(1)(b)(iii)">a word or abbreviation of similar import to a term listed in Subsection <xref depth="4" refnumber="16-1a-303(1)(b)(ii)">(1)(b)(ii)</xref>.</subsection></subsection></subsection><subsection number="16-1a-303(2)"><subsection number="16-1a-303(2)(a)">The name of a corporation shall contain:<subsection number="16-1a-303(2)(a)(i)">the word:<subsection number="16-1a-303(2)(a)(i)(A)">"corporation";</subsection><subsection number="16-1a-303(2)(a)(i)(B)">"incorporated";</subsection><subsection number="16-1a-303(2)(a)(i)(C)">"company"; or</subsection><subsection number="16-1a-303(2)(a)(i)(D)">a word of similar import;</subsection></subsection><subsection number="16-1a-303(2)(a)(ii)">the abbreviation:<subsection number="16-1a-303(2)(a)(ii)(A)">"Corp.";</subsection><subsection number="16-1a-303(2)(a)(ii)(B)">"Inc.";</subsection><subsection number="16-1a-303(2)(a)(ii)(C)">"Co."; or</subsection><subsection number="16-1a-303(2)(a)(ii)(D)">an abbreviation of similar import; and</subsection></subsection><subsection number="16-1a-303(2)(a)(iii)">for a business corporation, may not contain language stating or implying that a business corporation is organized for a purpose other than a purpose permitted by:<subsection number="16-1a-303(2)(a)(iii)(A)">Section <xref depth="3" refnumber="16-10a-301">16-10a-301</xref>; and</subsection><subsection number="16-1a-303(2)(a)(iii)(B)">the business corporation's articles of incorporation.</subsection></subsection></subsection><subsection number="16-1a-303(2)(b)">The name of a corporation or a foreign corporation may not contain:<subsection number="16-1a-303(2)(b)(i)">the term:<subsection number="16-1a-303(2)(b)(i)(A)">"decentralized autonomous organization";</subsection><subsection number="16-1a-303(2)(b)(i)(B)">"limited liability company";</subsection><subsection number="16-1a-303(2)(b)(i)(C)">"limited company";</subsection><subsection number="16-1a-303(2)(b)(i)(D)">"limited liability partnership";</subsection><subsection number="16-1a-303(2)(b)(i)(E)">"limited partnership"; or</subsection><subsection number="16-1a-303(2)(b)(i)(F)">"limited liability limited partnership"; or</subsection></subsection><subsection number="16-1a-303(2)(b)(ii)">any word or abbreviation of similar import to a term listed in Subsection <xref depth="4" refnumber="16-1a-303(2)(b)(i)">(2)(b)(i)</xref>.</subsection></subsection><subsection number="16-1a-303(2)(c)">The name of an entity, other than a corporation formed in accordance with this title or a foreign entity authorized to transact business in this state may not contain:<subsection number="16-1a-303(2)(c)(i)">the term:<subsection number="16-1a-303(2)(c)(i)(A)">"Corp.";</subsection><subsection number="16-1a-303(2)(c)(i)(B)">"corporation";</subsection><subsection number="16-1a-303(2)(c)(i)(C)">"Inc."; or</subsection><subsection number="16-1a-303(2)(c)(i)(D)">"incorporated"; or</subsection></subsection><subsection number="16-1a-303(2)(c)(ii)">a word or abbreviation of similar import to a term listed in Subsection <xref depth="4" refnumber="16-1a-303(2)(c)(i)">(2)(c)(i)</xref>.</subsection></subsection></subsection><subsection number="16-1a-303(3)"><subsection number="16-1a-303(3)(a)">The name of a limited partnership may contain the name of a partner.</subsection><subsection number="16-1a-303(3)(b)">The name of a limited partnership that is not a limited liability limited partnership:<subsection number="16-1a-303(3)(b)(i)">shall contain:<subsection number="16-1a-303(3)(b)(i)(A)">the phrase "limited partnership"; or</subsection><subsection number="16-1a-303(3)(b)(i)(B)">the abbreviation "L.P." or "LP"; and</subsection></subsection><subsection number="16-1a-303(3)(b)(ii)">may not contain:<subsection number="16-1a-303(3)(b)(ii)(A)">the phrase "limited liability limited partnership" or "registered limited liability limited partnership"; or</subsection><subsection number="16-1a-303(3)(b)(ii)(B)">the abbreviation "L.L.L.P.," "LLLP," "R.L.L.L.P.," or "RLLLP."</subsection></subsection></subsection><subsection number="16-1a-303(3)(c)">The name of a limited partnership that is a limited liability limited partnership:<subsection number="16-1a-303(3)(c)(i)">shall contain:<subsection number="16-1a-303(3)(c)(i)(A)">the phrase "limited liability limited partnership"; or</subsection><subsection number="16-1a-303(3)(c)(i)(B)">the abbreviation "L.L.L.P.," "LLLP," "R.L.L.L.P.," or "RLLLP"; and</subsection></subsection><subsection number="16-1a-303(3)(c)(ii)">may not contain the abbreviation "L.P." or "LP."</subsection></subsection><subsection number="16-1a-303(3)(d)">The name of a limited partnership or a limited liability limited partnership or the name of a foreign limited partnership or a foreign limited liability limited partnership that registers to do business in this state may not contain:<subsection number="16-1a-303(3)(d)(i)">the term:<subsection number="16-1a-303(3)(d)(i)(A)">"association";</subsection><subsection number="16-1a-303(3)(d)(i)(B)">"corporation";</subsection><subsection number="16-1a-303(3)(d)(i)(C)">"decentralized autonomous organization";</subsection><subsection number="16-1a-303(3)(d)(i)(D)">"incorporated";</subsection><subsection number="16-1a-303(3)(d)(i)(E)">"limited liability company"; or</subsection><subsection number="16-1a-303(3)(d)(i)(F)">"limited company"; or</subsection></subsection><subsection number="16-1a-303(3)(d)(ii)">a word or abbreviation that is of similar import to a term listed in Subsection <xref depth="4" refnumber="16-1a-303(3)(d)(i)">(3)(d)(i)</xref>.</subsection></subsection><subsection number="16-1a-303(3)(e)">The name of an entity other than a limited partnership or a limited liability limited partnership or the name of a foreign limited partnership or a foreign limited liability partnership that registers to do business in this state may not contain:<subsection number="16-1a-303(3)(e)(i)">the term:<subsection number="16-1a-303(3)(e)(i)(A)">"limited partnership";</subsection><subsection number="16-1a-303(3)(e)(i)(B)">"LP";</subsection><subsection number="16-1a-303(3)(e)(i)(C)">"L.P.";</subsection><subsection number="16-1a-303(3)(e)(i)(D)">"limited liability partnership";</subsection><subsection number="16-1a-303(3)(e)(i)(E)">"LLLP"; or</subsection><subsection number="16-1a-303(3)(e)(i)(F)">"L.L.L.P."; or</subsection></subsection><subsection number="16-1a-303(3)(e)(ii)">a word or abbreviation that is of similar import to a term listed in Subsection <xref depth="4" refnumber="16-1a-303(3)(e)(i)">(3)(e)(i)</xref>.</subsection></subsection></subsection><subsection number="16-1a-303(4)"><subsection number="16-1a-303(4)(a)">The name of a limited liability partnership shall contain:<subsection number="16-1a-303(4)(a)(i)">the phrase "limited liability partnership" or "registered limited liability partnership"; or</subsection><subsection number="16-1a-303(4)(a)(ii)">the abbreviation "L.L.P.," "R.L.L.P.," "LLP," or "RLLP."</subsection></subsection><subsection number="16-1a-303(4)(b)">The name of a limited liability partnership or a foreign limited liability partnership may not contain:<subsection number="16-1a-303(4)(b)(i)">the term:<subsection number="16-1a-303(4)(b)(i)(A)">"association";</subsection><subsection number="16-1a-303(4)(b)(i)(B)">"corporation";</subsection><subsection number="16-1a-303(4)(b)(i)(C)">"decentralized autonomous organization";</subsection><subsection number="16-1a-303(4)(b)(i)(D)">"incorporated";</subsection><subsection number="16-1a-303(4)(b)(i)(E)">"limited liability company";</subsection><subsection number="16-1a-303(4)(b)(i)(F)">"limited company";</subsection><subsection number="16-1a-303(4)(b)(i)(G)">"limited partnership"; or</subsection><subsection number="16-1a-303(4)(b)(i)(H)">"Ltd."; or</subsection></subsection><subsection number="16-1a-303(4)(b)(ii)">a word or abbreviation that is of similar import to a term listed in Subsection <xref depth="4" refnumber="16-1a-303(4)(b)(i)">(4)(b)(i)</xref>.</subsection></subsection><subsection number="16-1a-303(4)(c)">The name of an entity other than a limited liability partnership or the name of a foreign limited liability partnership that registers to do business in this state may not contain:<subsection number="16-1a-303(4)(c)(i)">the term:<subsection number="16-1a-303(4)(c)(i)(A)">"limited liability partnership";</subsection><subsection number="16-1a-303(4)(c)(i)(B)">"LLP"; or</subsection><subsection number="16-1a-303(4)(c)(i)(C)">"L.L.P."; or</subsection></subsection><subsection number="16-1a-303(4)(c)(ii)">a word or abbreviation that is of similar import to Subsection <xref depth="4" refnumber="16-1a-303(4)(c)(i)">(4)(c)(i)</xref>.</subsection></subsection></subsection><subsection number="16-1a-303(5)"><subsection number="16-1a-303(5)(a)">The name of a limited liability company shall contain:<subsection number="16-1a-303(5)(a)(i)">the phrase "limited liability company" or "limited company"; or</subsection><subsection number="16-1a-303(5)(a)(ii)">the abbreviation "L.L.C.," "LLC," "L.C.," or "LC."</subsection></subsection><subsection number="16-1a-303(5)(b)">A limited liability company's name may abbreviate the term:<subsection number="16-1a-303(5)(b)(i)">"limited" as "Ltd."; and</subsection><subsection number="16-1a-303(5)(b)(ii)">"company" as "Co."</subsection></subsection><subsection number="16-1a-303(5)(c)">The name of a limited liability company or a foreign limited liability company may not contain:<subsection number="16-1a-303(5)(c)(i)">the term:<subsection number="16-1a-303(5)(c)(i)(A)">"association";</subsection><subsection number="16-1a-303(5)(c)(i)(B)">"corporation";</subsection><subsection number="16-1a-303(5)(c)(i)(C)">"decentralized autonomous organization";</subsection><subsection number="16-1a-303(5)(c)(i)(D)">"incorporated";</subsection><subsection number="16-1a-303(5)(c)(i)(E)">"partnership";</subsection><subsection number="16-1a-303(5)(c)(i)(F)">"limited partnership"; or</subsection><subsection number="16-1a-303(5)(c)(i)(G)">"L.P."; or</subsection></subsection><subsection number="16-1a-303(5)(c)(ii)">a word or abbreviation that is of similar import to a term listed in Subsection <xref depth="4" refnumber="16-1a-303(5)(c)(i)">(5)(c)(i)</xref>.</subsection></subsection><subsection number="16-1a-303(5)(d)">The name of an entity other than a limited liability company or the name of a foreign limited liability company authorized to do business in this state may not contain:<subsection number="16-1a-303(5)(d)(i)">the term:<subsection number="16-1a-303(5)(d)(i)(A)">"limited liability company";</subsection><subsection number="16-1a-303(5)(d)(i)(B)">"limited company";</subsection><subsection number="16-1a-303(5)(d)(i)(C)">"L.L.C.";</subsection><subsection number="16-1a-303(5)(d)(i)(D)">"L.C.";</subsection><subsection number="16-1a-303(5)(d)(i)(E)">"LLC"; or</subsection><subsection number="16-1a-303(5)(d)(i)(F)">"LC"; or</subsection></subsection><subsection number="16-1a-303(5)(d)(ii)">a word or abbreviation that is of similar import to a term listed in Subsection <xref depth="4" refnumber="16-1a-303(5)(d)(i)">(5)(d)(i)</xref>.</subsection></subsection></subsection><subsection number="16-1a-303(6)"><subsection number="16-1a-303(6)(a)">The name of a limited cooperative association shall contain:<subsection number="16-1a-303(6)(a)(i)">the phrase "limited cooperative association" or "limited cooperative"; or</subsection><subsection number="16-1a-303(6)(a)(ii)">the abbreviation "L.C.A." or "LCA."</subsection></subsection><subsection number="16-1a-303(6)(b)">A limited cooperative association's name may abbreviate the term:<subsection number="16-1a-303(6)(b)(i)">"association" as:<subsection number="16-1a-303(6)(b)(i)(A)">"Assn";</subsection><subsection number="16-1a-303(6)(b)(i)(B)">"Assn.";</subsection><subsection number="16-1a-303(6)(b)(i)(C)">"Assoc"; or</subsection><subsection number="16-1a-303(6)(b)(i)(D)">"Assoc.";</subsection></subsection><subsection number="16-1a-303(6)(b)(ii)">"cooperative" as:<subsection number="16-1a-303(6)(b)(ii)(A)">"Co-op.";</subsection><subsection number="16-1a-303(6)(b)(ii)(B)">"Coop."; or</subsection><subsection number="16-1a-303(6)(b)(ii)(C)">"Co-op"; and</subsection></subsection><subsection number="16-1a-303(6)(b)(iii)">"limited" as "Ltd."</subsection></subsection><subsection number="16-1a-303(6)(c)">The name of entity other than a limited cooperative association may not contain:<subsection number="16-1a-303(6)(c)(i)">the term:<subsection number="16-1a-303(6)(c)(i)(A)">"limited cooperative association";</subsection><subsection number="16-1a-303(6)(c)(i)(B)">"L.C.A."; or</subsection><subsection number="16-1a-303(6)(c)(i)(C)">"LCA"; or</subsection></subsection><subsection number="16-1a-303(6)(c)(ii)">a word or abbreviation that is of similar import to a term listed in Subsection <xref depth="4" refnumber="16-1a-303(6)(c)(i)">(6)(c)(i)</xref>.</subsection></subsection></subsection><subsection number="16-1a-303(7)"><subsection number="16-1a-303(7)(a)">The name of a professional corporation as set forth in the professional corporation's articles of incorporation:<subsection number="16-1a-303(7)(a)(i)">shall contain the terms:<subsection number="16-1a-303(7)(a)(i)(A)">"professional corporation"; or</subsection><subsection number="16-1a-303(7)(a)(i)(B)">"P.C.";</subsection></subsection><subsection number="16-1a-303(7)(a)(ii)">may not contain the words:<subsection number="16-1a-303(7)(a)(ii)(A)">"incorporated"; or</subsection><subsection number="16-1a-303(7)(a)(ii)(B)">"Inc."; and</subsection></subsection><subsection number="16-1a-303(7)(a)(iii)">may not contain language stating or implying that the professional corporation is organized for a purpose other than that permitted by Section <xref depth="3" refnumber="16-11-6">16-11-6</xref> and the professional corporation's articles of incorporation.</subsection></subsection><subsection number="16-1a-303(7)(b)">A person, other than a professional corporation formed or registered in accordance with this title, may not use in the person's name in this state the term:<subsection number="16-1a-303(7)(b)(i)">"professional corporation"; or</subsection><subsection number="16-1a-303(7)(b)(ii)">"P.C."</subsection></subsection></subsection><subsection number="16-1a-303(8)"><subsection number="16-1a-303(8)(a)">The name of a benefit limited liability company may contain:<subsection number="16-1a-303(8)(a)(i)">the term:<subsection number="16-1a-303(8)(a)(i)(A)">"benefit limited liability company"; or</subsection><subsection number="16-1a-303(8)(a)(i)(B)">"benefit limited company"; or</subsection></subsection><subsection number="16-1a-303(8)(a)(ii)">the abbreviation:<subsection number="16-1a-303(8)(a)(ii)(A)">"B.L.L.C.";</subsection><subsection number="16-1a-303(8)(a)(ii)(B)">"BLLC";</subsection><subsection number="16-1a-303(8)(a)(ii)(C)">"B.L.C."; or</subsection><subsection number="16-1a-303(8)(a)(ii)(D)">"BLC."</subsection></subsection></subsection><subsection number="16-1a-303(8)(b)">When contained in the name of a benefit limited liability company, the term:<subsection number="16-1a-303(8)(b)(i)">"limited" may be abbreviated as "Ltd."; and</subsection><subsection number="16-1a-303(8)(b)(ii)">"company" may be abbreviated as "Co."</subsection></subsection></subsection><subsection number="16-1a-303(9)"><subsection number="16-1a-303(9)(a)">The name of a limited liability decentralized autonomous organization shall contain:<subsection number="16-1a-303(9)(a)(i)">the term:<subsection number="16-1a-303(9)(a)(i)(A)">"limited liability decentralized autonomous organization"; or</subsection><subsection number="16-1a-303(9)(a)(i)(B)">"limited decentralized autonomous organization"; or</subsection></subsection><subsection number="16-1a-303(9)(a)(ii)">the abbreviation:<subsection number="16-1a-303(9)(a)(ii)(A)">"L.L.D.";</subsection><subsection number="16-1a-303(9)(a)(ii)(B)">"LLD";</subsection><subsection number="16-1a-303(9)(a)(ii)(C)">"L.D."; or</subsection><subsection number="16-1a-303(9)(a)(ii)(D)">"LD."</subsection></subsection></subsection><subsection number="16-1a-303(9)(b)">In the name of a decentralized autonomous organization:<subsection number="16-1a-303(9)(b)(i)">"limited" may be abbreviated as "Ltd."; and</subsection><subsection number="16-1a-303(9)(b)(ii)">"decentralized autonomous organization" may be abbreviated as "DAO."</subsection></subsection><subsection number="16-1a-303(9)(c)">The name of a decentralized autonomous organization may not contain:<subsection number="16-1a-303(9)(c)(i)">the term:<subsection number="16-1a-303(9)(c)(i)(A)">"association";</subsection><subsection number="16-1a-303(9)(c)(i)(B)">"corporation";</subsection><subsection number="16-1a-303(9)(c)(i)(C)">"incorporated";</subsection><subsection number="16-1a-303(9)(c)(i)(D)">"partnership";</subsection><subsection number="16-1a-303(9)(c)(i)(E)">"limited liability company";</subsection><subsection number="16-1a-303(9)(c)(i)(F)">"limited partnership"; or</subsection><subsection number="16-1a-303(9)(c)(i)(G)">"L.P."; or</subsection></subsection><subsection number="16-1a-303(9)(c)(ii)">a word or abbreviation that is of similar import to the terms listed in Subsection <xref depth="4" refnumber="16-1a-303(9)(c)(i)">(9)(c)(i)</xref>.</subsection></subsection><subsection number="16-1a-303(9)(d)">A person, other than a decentralized autonomous organization formed or registered in accordance with this title, may not use in the person's name in this state:<subsection number="16-1a-303(9)(d)(i)">the term:<subsection number="16-1a-303(9)(d)(i)(A)">"limited liability decentralized autonomous organization"; or</subsection><subsection number="16-1a-303(9)(d)(i)(B)">"limited decentralized autonomous organization"; or</subsection></subsection><subsection number="16-1a-303(9)(d)(ii)">the abbreviation:<subsection number="16-1a-303(9)(d)(ii)(A)">"L.L.DAO";</subsection><subsection number="16-1a-303(9)(d)(ii)(B)">"L.L.D.";</subsection><subsection number="16-1a-303(9)(d)(ii)(C)">"L.DAO"; or</subsection><subsection number="16-1a-303(9)(d)(ii)(D)">"L.D."</subsection></subsection></subsection></subsection><subsection number="16-1a-303(10)"><subsection number="16-1a-303(10)(a)">The words, "business trust" shall be the last words of the name of every business trust registered under Chapter 15, Utah Business Trust Registration Act.</subsection><subsection number="16-1a-303(10)(b)">A person that participates in the omission of the words "business trust" in the commercial use of the name of the business trust, or knowingly acquiesces in the omission is liable for any indebtedness, damage, or liability resulting from the omission.</subsection></subsection></section><section number="16-1a-304"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Reservation of name.</catchline><subsection number="16-1a-304(1)">A person may reserve the exclusive use of an entity name by delivering an application to the division for filing that states:<subsection number="16-1a-304(1)(a)">the name and address of the applicant; and</subsection><subsection number="16-1a-304(1)(b)">the name to reserve.</subsection></subsection><subsection number="16-1a-304(2)">If the division determines that the entity name stated in the application described in Subsection <xref tempid="328">(1)</xref> is available, the division shall reserve the name for the applicant's exclusive use for 120 calendar days after the day on which the division reserves the name.</subsection><subsection number="16-1a-304(3)">A person that reserves a name in accordance with this section may transfer the reserved name to another person by delivering to the division a signed notice in a record of the transfer that states the name and address of the transferee.</subsection></section><section number="16-1a-305"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Registration of name.</catchline><subsection number="16-1a-305(1)">A foreign filing entity not registered to do business in this state may register the foreign filing entity's name, or an alternate name adopted in accordance with Section <xref depth="3" refnumber="16-1a-507">16-1a-507</xref>, if the name complies with Section <xref depth="3" refnumber="16-1a-302">16-1a-302</xref>.</subsection><subsection number="16-1a-305(2)">To register a name or an alternate name adopted in accordance with Section <xref depth="3" refnumber="16-1a-507">16-1a-507</xref>, a foreign filing entity shall deliver to the division for filing an application that states:<subsection number="16-1a-305(2)(a)">the foreign filing entity's requested name;</subsection><subsection number="16-1a-305(2)(b)">the jurisdiction and date of the foreign filing entity's formation; and</subsection><subsection number="16-1a-305(2)(c)">any alternate name adopted in accordance with Section <xref depth="3" refnumber="16-1a-507">16-1a-507</xref>.</subsection></subsection><subsection number="16-1a-305(3)">If the division finds that the name requested in Subsection <xref tempid="228">(2)</xref> is available, the division shall register the name for the applicant's exclusive use.</subsection><subsection number="16-1a-305(4)">The registration of a name under this section is effective for one year after the day on which the division registers the name as described in Subsection <xref tempid="717">(3)</xref>.</subsection><subsection number="16-1a-305(5)"><subsection number="16-1a-305(5)(a)">A foreign filing entity whose name registration is effective may renew the registration for a successive one-year period by delivering, not earlier than three months before the day on which the registration expires, to the division for filing a renewal application that complies with this section.</subsection><subsection number="16-1a-305(5)(b)">A renewal application renews the name's registration for one calendar year after the day on which the division files the renewal application described in this Subsection <xref tempid="652">(5)</xref>.</subsection></subsection><subsection number="16-1a-305(6)">A foreign filing entity whose name registration is effective may register as a foreign filing entity under the registered name or consent in a signed record to the use of the registered name by another entity.</subsection></section></part><part number="16-1a-4"><catchline>Registered Agent Of An Entity</catchline><section number="16-1a-401"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Definitions.</catchline>Reserved.</section><section number="16-1a-402"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Entities required to designate and maintain a registered agent.</catchline>The following entities shall designate and maintain a registered agent in this state:<subsection number="16-1a-402(1)">a domestic filing entity;</subsection><subsection number="16-1a-402(2)">a registered foreign entity; and</subsection><subsection number="16-1a-402(3)">a D.B.A.</subsection></section><section number="16-1a-403"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Address in filing.</catchline>If a provision in this chapter, other than Section <xref depth="3" refnumber="16-1a-410">16-1a-410</xref>, requires that a record state an address, the record shall state:<subsection number="16-1a-403(1)">a street address in this state; and</subsection><subsection number="16-1a-403(2)">a mailing address in this state, if different from the address described in Subsection <xref tempid="127">(1)</xref>.</subsection></section><section number="16-1a-404"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Designation of a registered agent.</catchline><subsection number="16-1a-404(1)">A represented entity shall sign a registered agent filing and include in the registered agent filing:<subsection number="16-1a-404(1)(a)">the name of the represented entity's commercial registered agent; or</subsection><subsection number="16-1a-404(1)(b)">if the represented entity does not have a commercial registered agent:<subsection number="16-1a-404(1)(b)(i)">the name and address of the represented entity's noncommercial registered agent; or</subsection><subsection number="16-1a-404(1)(b)(ii)"><subsection number="16-1a-404(1)(b)(ii)(A)">the title of an office or other position within the represented entity where an individual holding that office or position may accept service of process, notice, or demand may accept service on behalf of the represented entity; and</subsection><subsection number="16-1a-404(1)(b)(ii)(B)">the mailing address of the title or other position described in Subsection <xref depth="4" refnumber="16-1a-404(1)(b)(ii)(a)">(1)(b)(ii)(A)</xref>.</subsection></subsection></subsection></subsection><subsection number="16-1a-404(2)">A represented entity, by designating a registered agent in accordance with Subsection <xref tempid="207">(1)(a)</xref> or (1)(b), affirms that the designated registered agent consents to serve as a registered agent.</subsection><subsection number="16-1a-404(3)"><subsection number="16-1a-404(3)(a)">As soon as practicable, the division shall make available in a record a daily list of filings that contain the name of each registered agent.</subsection><subsection number="16-1a-404(3)(b)">The division shall ensure that the list described in Subsection <xref tempid="839">(3)(a)</xref>:<subsection number="16-1a-404(3)(b)(i)">is available for at least 14 calendar days after the day on which the division makes the list available;</subsection><subsection number="16-1a-404(3)(b)(ii)">lists, in alphabetical order, the names of the registered agents; and</subsection><subsection number="16-1a-404(3)(b)(iii)">states the type of filing and name of the represented entity making the filing.</subsection></subsection></subsection></section><section number="16-1a-405"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Listing of a commercial registered agent.</catchline><subsection number="16-1a-405(1)">A person may become listed as a commercial registered agent by delivering to the division for filing a commercial registered agent listing statement that states:<subsection number="16-1a-405(1)(a)"><subsection number="16-1a-405(1)(a)(i)">the name of the individual applying to become a commercial registered agent; or</subsection><subsection number="16-1a-405(1)(a)(ii)"><subsection number="16-1a-405(1)(a)(ii)(A)">the name of the entity applying to become a commercial registered agent;</subsection><subsection number="16-1a-405(1)(a)(ii)(B)">the type of entity applying to become a commercial registered agent; and</subsection><subsection number="16-1a-405(1)(a)(ii)(C)">the jurisdiction in which the entity formed;</subsection></subsection></subsection><subsection number="16-1a-405(1)(b)">that the person serves as a commercial registered agent in this state; and</subsection><subsection number="16-1a-405(1)(c)">the person's physical address for the person's place of business where the person may receive service of process, notices, or demands sent to an entity represented by the person.</subsection></subsection><subsection number="16-1a-405(2)">A commercial registered agent listing statement may include information regarding the agent accepting service of process, notices, and demands in a form other than a written record.</subsection><subsection number="16-1a-405(3)">If the name of the person delivering the record to the division for filing a commercial registered agent listing statement is not distinguishable on the records of the division from the name of another commercial registered agent listed under this section, the person delivering the record shall:<subsection number="16-1a-405(3)(a)">adopt a fictitious name that is distinguishable from the name of another commercial registered agent under this section; and</subsection><subsection number="16-1a-405(3)(b)">use the fictitious name in the person's statement and when the person does business in this state as a commercial registered agent.</subsection></subsection><subsection number="16-1a-405(4)"><subsection number="16-1a-405(4)(a)">The division shall note the filing of a commercial registered agent listing statement in the records maintained by the division for each entity represented by the commercial registered agent at the time of the filing.</subsection><subsection number="16-1a-405(4)(b)">A commercial registered agent listing statement described in Subsection <xref tempid="346">(4)(a)</xref> amends the registered agent filing for each entity represented by a commercial registered agent by:<subsection number="16-1a-405(4)(b)(i)">designating the person becoming listed as a commercial registered agent as the commercial registered agent of each entity; and</subsection><subsection number="16-1a-405(4)(b)(ii)">deleting the name and address of the former commercial registered agent from the registered agent filing of each entity.</subsection></subsection></subsection></section><section number="16-1a-406"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Termination of listing of a commercial registered agent.</catchline><subsection number="16-1a-406(1)">A commercial registered agent may terminate the commercial registered agent's listing as a commercial registered agent by delivering to the division for filing a commercial registered agent termination statement signed by the commercial registered agent that states:<subsection number="16-1a-406(1)(a)">the name of the commercial registered agent described in Section <xref depth="3" refnumber="16-1a-405">16-1a-405</xref>; and</subsection><subsection number="16-1a-406(1)(b)">that the agent no longer conducts the business of serving as a commercial registered agent in this state.</subsection></subsection><subsection number="16-1a-406(2)">A commercial registered agent termination statement takes effect at 12:01 a.m. 31 days after the day on which the division files the commercial registered agent termination statement.</subsection><subsection number="16-1a-406(3)">The commercial registered agent shall promptly furnish to each entity the commercial registered agent represents a notice of the filing of the commercial registered agent termination statement.</subsection><subsection number="16-1a-406(4)">When a commercial registered agent termination statement takes effect, the commercial registered agent ceases to be the commercial registered agent for each entity the commercial registered agent formerly represented.</subsection><subsection number="16-1a-406(5)">Notwithstanding Subsection <xref tempid="941">(4)</xref>, a person may deliver service of process to a commercial registered agent after the commercial registered agent termination takes effect, until an entity formerly represented by the commercial registered agent designates a new commercial registered agent.</subsection><subsection number="16-1a-406(6)">A commercial registered agent terminating the commercial registered agent's listing under this section does not affect a contractual right that:<subsection number="16-1a-406(6)(a)">a represented entity has against the commercial registered agent; or</subsection><subsection number="16-1a-406(6)(b)">a commercial registered agent has against a represented entity.</subsection></subsection></section><section number="16-1a-407"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Change of registered agent by a represented entity.</catchline><subsection number="16-1a-407(1)">A represented entity may change the information the division has on file under Section <xref depth="3" refnumber="16-1a-404">16-1a-404</xref> by delivering to the division for filing a statement of change signed by the represented entity that states:<subsection number="16-1a-407(1)(a)">the name of the new registered agent; and</subsection><subsection number="16-1a-407(1)(b)">the information that the filing of the statement of change will amend.</subsection></subsection><subsection number="16-1a-407(2)">The interest holders or governors of a domestic entity are not required to approve the filing of:<subsection number="16-1a-407(2)(a)">a statement of change under this section; or</subsection><subsection number="16-1a-407(2)(b)">a similar filing changing the registered agent or registered office, if applicable, of the entity in another jurisdiction.</subsection></subsection><subsection number="16-1a-407(3)">A statement of change filed under this section that designates a new registered agent is an affirmation of fact by the registered entity that the new registered agent consents to serve as the registered entity's new registered agent.</subsection><subsection number="16-1a-407(4)">In addition to the process described in Subsection <xref tempid="347">(1)</xref>, a represented entity may change the information the division has on file under Section <xref depth="3" refnumber="16-1a-404">16-1a-404</xref> by amending the represented entity's most recent registered agent filing in a manner provided by law.</subsection></section><section number="16-1a-408"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Change of name or address by a noncommercial registered agent.</catchline><subsection number="16-1a-408(1)">If a noncommercial registered agent changes the noncommercial registered agent's name or address with respect to a represented entity, the noncommercial registered agent shall deliver to the division for filing, with respect to each entity the noncommercial registered agent represents, a statement of change signed by the agent that states:<subsection number="16-1a-408(1)(a)">the name of the represented entity;</subsection><subsection number="16-1a-408(1)(b)">the name and address of the noncommercial registered agent in effect with respect to the entity;</subsection><subsection number="16-1a-408(1)(c)">if the noncommercial registered agent changes the noncommercial registered agent's name, the new name; and</subsection><subsection number="16-1a-408(1)(d)">if the noncommercial registered agent changes the noncommercial registered agent's address, the new address.</subsection></subsection><subsection number="16-1a-408(2)">A noncommercial registered agent shall promptly furnish to the represented entity:<subsection number="16-1a-408(2)(a)">a notice of the delivery to the division for filing a statement of change; and</subsection><subsection number="16-1a-408(2)(b)">each change made in the statement of change.</subsection></subsection></section><section number="16-1a-409"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Change of name, address, type of entity, or jurisdiction of formation by a commercial registered agent.</catchline><subsection number="16-1a-409(1)">If a commercial registered agent changes the commercial registered agent's name, address as listed under Section <xref depth="3" refnumber="16-1a-405">16-1a-405</xref>, type of entity, or jurisdiction of formation, the commercial registered agent shall deliver to the division for filing a statement of change signed by the commercial registered agent that states:<subsection number="16-1a-409(1)(a)">the name of the commercial registered agent the commercial registered agent provided to the division in accordance with Section <xref depth="3" refnumber="16-1a-405">16-1a-405</xref>;</subsection><subsection number="16-1a-409(1)(b)">if the commercial registered agent changes the commercial registered agent's name, the new name;</subsection><subsection number="16-1a-409(1)(c)">if the commercial registered agent changes the commercial registered agent's address, the new address; and</subsection><subsection number="16-1a-409(1)(d)">if the commercial registered agent is an entity:<subsection number="16-1a-409(1)(d)(i)">if the commercial registered agent changes the commercial registered entity's type of entity, the new type of entity; and</subsection><subsection number="16-1a-409(1)(d)(ii)">if the commercial registered agent changes the commercial registered entity's jurisdiction of formation, the new jurisdiction of formation.</subsection></subsection></subsection><subsection number="16-1a-409(2)">The filing of a statement of change described in Subsection <xref tempid="246">(1)</xref> by the division changes the information regarding the commercial registered agent with respect to each entity the commercial registered agent represents.</subsection><subsection number="16-1a-409(3)">A commercial registered agent shall promptly furnish to each entity that the commercial registered agent represents a notice of the statement of change that describes the changes made in the statement of change.</subsection><subsection number="16-1a-409(4)"><subsection number="16-1a-409(4)(a)">If a commercial registered agent changes the commercial registered agent's address without delivering for filing a statement of change as required by this section, the division may cancel the listing of the agent under Section <xref depth="3" refnumber="16-1a-405">16-1a-405</xref>.</subsection><subsection number="16-1a-409(4)(b)">If the division cancels the listing of an agent as described in this Subsection <xref tempid="457">(4)</xref>, the division's cancellation has the same effect as a termination of a listing of a commercial registered agent under Section <xref depth="3" refnumber="16-1a-406">16-1a-406</xref>.</subsection><subsection number="16-1a-409(4)(c)">After canceling the listing of an commercial registered agent, the division shall serve notice in a record on:<subsection number="16-1a-409(4)(c)(i)"><subsection number="16-1a-409(4)(c)(i)(A)">each entity that the commercial registered agent represents, stating that the commercial registered agent is no longer the registered agent for the entity; and</subsection><subsection number="16-1a-409(4)(c)(i)(B)">until the entity designates a new commercial registered agent, a person may make service of process on the entity; and</subsection></subsection><subsection number="16-1a-409(4)(c)(ii)">the commercial registered agent, stating that the division has canceled the listing of the commercial registered agent in accordance with this section.</subsection></subsection></subsection></section><section number="16-1a-410"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Resignation of a registered agent.</catchline><subsection number="16-1a-410(1)">A registered agent may resign as the registered agent for a represented entity by delivering to the division for filing a statement of resignation signed by the registered agent that states:<subsection number="16-1a-410(1)(a)">the name of the represented entity;</subsection><subsection number="16-1a-410(1)(b)">the name of the registered agent;</subsection><subsection number="16-1a-410(1)(c)">that the registered agent resigned from serving as the registered agent for the represented entity; and</subsection><subsection number="16-1a-410(1)(d)">the address of the represented entity to which the agent will send the notice required by Subsection <xref tempid="951">(3)</xref>.</subsection></subsection><subsection number="16-1a-410(2)">A statement of resignation takes effect on the earlier of:<subsection number="16-1a-410(2)(a)">12:01 a.m. on the 31st day after the day on which the division files the statement of resignation; or</subsection><subsection number="16-1a-410(2)(b)">the represented entity for which the statement of resignation applies designates a new registered agent.</subsection></subsection><subsection number="16-1a-410(3)">A registered agent shall promptly furnish to the represented entity notice in a record of the date on which the division files the statement of resignation.</subsection><subsection number="16-1a-410(4)">When a statement of resignation takes effect, the person that resigned ceases to have responsibility under this chapter for any matter presented to the person for the represented entity.</subsection><subsection number="16-1a-410(5)">Notwithstanding Subsection <xref tempid="881">(4)</xref>, a statement of resignation does not affect any contractual rights:<subsection number="16-1a-410(5)(a)">a represented entity has against the registered agent; or</subsection><subsection number="16-1a-410(5)(b)">the registered agent has against the represented entity.</subsection></subsection><subsection number="16-1a-410(6)">A registered agent may resign in accordance with this section regardless of whether the represented entity is current with the division.</subsection></section><section number="16-1a-411"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Designation of a registered agent by a nonregistered foreign entity or a nonfiling domestic entity.</catchline><subsection number="16-1a-411(1)">A nonregistered foreign entity or a nonfiling domestic entity may deliver to the division for filing a statement that designates a registered agent signed by the nonregistered foreign entity or the nonfiling domestic entity that states:<subsection number="16-1a-411(1)(a)">the name, type of entity, and jurisdiction of formation of the nonregistered foreign entity or the nonfiling domestic entity<badspell spid="3691" suggestions="nonflying,confiding,confining,nonfading,nonliving"/>; and</subsection><subsection number="16-1a-411(1)(b)">the information required by Subsection <xref refnumber="60-1">16-1a-404(1)</xref>.</subsection></subsection><subsection number="16-1a-411(2)">A statement described in Subsection <xref tempid="182">(1)</xref> is effective for five years after the day on which the division files the statement, unless the nonregistered foreign entity or the nonfiling domestic entity<badspell spid="2108" suggestions="nonflying,confiding,confining,nonfading,nonliving"/> cancels the statement earlier.</subsection><subsection number="16-1a-411(3)"><subsection number="16-1a-411(3)(a)">A person authorized to manage the affairs of the nonregistered foreign entity or the domestic nonfiling entity shall sign the statement described in Subsection <xref tempid="688">(1)</xref>.</subsection><subsection number="16-1a-411(3)(b)">By signing the statement in Subsection <xref tempid="799">(1)</xref>, the person signing affirms that:<subsection number="16-1a-411(3)(b)(i)">the person is authorized to manage the affairs of the nonregistered foreign entity or the nonfiling domestic entity<badspell spid="7477" suggestions="nonflying,confiding,confining,nonfading,nonliving"/>; and</subsection><subsection number="16-1a-411(3)(b)(ii)">the registered agent consents to serve as the registered agent for the nonregistered foreign entity or the nonfiling domestic entity<badspell spid="4670" suggestions="nonflying,confiding,confining,nonfading,nonliving"/>.</subsection></subsection></subsection><subsection number="16-1a-411(4)">The designation of a registered agent in accordance with Subsection <xref tempid="633">(1)</xref> does not register a nonregistered foreign entity to do business in this state.</subsection><subsection number="16-1a-411(5)">The division may not reject a statement described in Subsection <xref tempid="326">(1)</xref> for filing because the name of the nonregistered foreign entity or the nonfiling domestic entity<badspell spid="2281" suggestions="nonflying,confiding,confining,nonfading,nonliving"/> is not distinguishable on the division's records from the name of another entity that appears on the division's records.</subsection><subsection number="16-1a-411(6)">The division filing a statement described in Subsection <xref tempid="397">(1)</xref> does not make the name of the nonregistered foreign entity or the nonfiling domestic entity<badspell spid="7674" suggestions="nonflying,confiding,confining,nonfading,nonliving"/> signing the statement available for use by another entity.</subsection><subsection number="16-1a-411(7)">A nonregistered foreign entity or a nonfiling domestic entity<badspell spid="2636" suggestions="nonflying,confiding,confining,nonfading,nonliving"/> that delivers to the division for filing a statement described in Subsection <xref tempid="554">(1)</xref> may cancel the statement by delivering to the division for filing a statement of cancellation that states:<subsection number="16-1a-411(7)(a)">the name of the nonregistered foreign entity or the nonfiling domestic entity<badspell spid="9852" suggestions="nonflying,confiding,confining,nonfading,nonliving"/>; and</subsection><subsection number="16-1a-411(7)(b)">that the nonregistered foreign entity or the nonfiling domestic entity<badspell spid="9485" suggestions="nonflying,confiding,confining,nonfading,nonliving"/> cancels the nonregistered foreign entity's or the nonfiling domestic entity<badspell spid="2641" suggestions="nonflying,confiding,confining,nonfading,nonliving"/>'s designation as a registered agent in this state.</subsection></subsection><subsection number="16-1a-411(8)">A statement described in Subsection <xref tempid="520">(1)</xref> for a nonregistered foreign entity terminates on the day on which the nonregistered foreign entity becomes a registered foreign entity.</subsection></section><section number="16-1a-412"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Service of process, notice, or demand on entity.</catchline><subsection number="16-1a-412(1)">A person may serve a represented entity with any process, notice, or demand required or permitted by law by serving the represented entity's registered agent.</subsection><subsection number="16-1a-412(2)"><subsection number="16-1a-412(2)(a)">If a represented entity ceases to have a registered agent, or if a person cannot with reasonable diligence serve the represented entity's registered agent, the person may serve the registered entity by:<subsection number="16-1a-412(2)(a)(i)">registered or certified mail, return receipt requested; or</subsection><subsection number="16-1a-412(2)(a)(ii)">a similar commercial delivery service, addressed to the registered entity at the registered entity's principal office.</subsection></subsection><subsection number="16-1a-412(2)(b)">A domestic filing entity or a registered foreign entity shall list the domestic filing entity's or the registered foreign entity's address in the domestic filing entity's or the registered foreign entity's most recent annual report that the division files.</subsection><subsection number="16-1a-412(2)(c)">Service is considered effective under this Subsection <xref tempid="175">(2)</xref> on the earlier of:<subsection number="16-1a-412(2)(c)(i)">the day on which the represented entity receives the mail or delivery by the commercial delivery service;</subsection><subsection number="16-1a-412(2)(c)(ii)">the day shown on the return receipt, if the represented entity signs a return receipt; or</subsection><subsection number="16-1a-412(2)(c)(iii)">five days after the day on which the person serving the represented entity provides the process, notice, or demand the person intends to serve on the represented entity to the United States Postal Service or commercial delivery service, if the person provides to the United States Postal Service or commercial delivery service:<subsection number="16-1a-412(2)(c)(iii)(A)">the correct address for the represented entity; and</subsection><subsection number="16-1a-412(2)(c)(iii)(B)">sufficient postage and payment.</subsection></subsection></subsection></subsection><subsection number="16-1a-412(3)">If a person cannot serve a process, notice, or demand to a represented entity in accordance with Subsection <xref tempid="821">(1)</xref> or (2), the person may make service by delivering the process, notice, or demand to the individual in charge of any regular place of business or activity of the represented entity if the individual whom the person serves is not also a party to the action.</subsection><subsection number="16-1a-412(4)"><subsection number="16-1a-412(4)(a)">Except as provided in Subsection <xref tempid="1030">(4)(b)</xref>, a person shall serve a represented entity process, notice, or demand in a written record.</subsection><subsection number="16-1a-412(4)(b)">A person may service process, notice, or demand on a commercial registered agent in a form other than a written record, subject to the requirements the commercial registered agent sets in accordance with Section <xref depth="3" refnumber="16-1a-405">16-1a-405</xref>.</subsection></subsection></section><section number="16-1a-413"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Duties of a registered agent.</catchline>A registered agent that complies with this part shall:<subsection number="16-1a-413(1)">forward to the represented entity at the address the represented entity most recently provides to the registered agent any process, notice, or demand that pertains to the represented entity that the registered agent receives or a person serves on the agent;</subsection><subsection number="16-1a-413(2)">provide each notice required by this part to the represented entity at the address the represented entity most recently provides to the registered agent;</subsection><subsection number="16-1a-413(3)">if the registered agent is a noncommercial registered agent, keep current the information required by Subsection <xref refnumber="60-1">16-1a-404(1)</xref> in the most recent registered agent filing for the registered entity; and</subsection><subsection number="16-1a-413(4)">if the registered agent is a commercial registered agent, keep current the information listed in Subsection <xref refnumber="62-1">16-1a-405(1)</xref>.</subsection></section><section number="16-1a-414"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Jurisdiction and venue.</catchline><subsection number="16-1a-414(1)">A represented entity designating or maintaining a registered agent in this state does not create a basis for personal jurisdiction over the represented entity in this state.</subsection><subsection number="16-1a-414(2)">The address of a represented entity's registered agent does not determine venue in an action or proceeding involving the represented entity.</subsection></section></part><part number="16-1a-5"><catchline>Foreign Entities</catchline><section number="16-1a-501"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Definitions.</catchline>Reserved.</section><section number="16-1a-502"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Governing law.</catchline><subsection number="16-1a-502(1)">The law of the jurisdiction of formation of an entity governs:<subsection number="16-1a-502(1)(a)">the internal affairs of the entity;</subsection><subsection number="16-1a-502(1)(b)">the liability of a person as an interest holder or governor for a debt, obligation, or other liability of the entity; and</subsection><subsection number="16-1a-502(1)(c)">the liability of a series of a limited liability company or other unincorporated entity.</subsection></subsection><subsection number="16-1a-502(2)">A difference between the law of an entity's jurisdiction of formation and the law of this state does not preclude a foreign entity from registering to do business in this state.</subsection><subsection number="16-1a-502(3)">A foreign entity registering to do business in this state does not authorize the foreign entity to engage in an activity or affair or exercise a power in which a domestic entity of the same type may not engage in this state.</subsection><subsection number="16-1a-502(4)">Subsections <xref depth="4" refnumber="16-1a-502(1)">(1)</xref> and <xref depth="4" refnumber="16-1a-502(2)">(2)</xref> apply regardless of whether a foreign entity fails to register to do business in this state in accordance with Section <xref depth="3" refnumber="16-1a-503">16-1a-503</xref>.</subsection></section><section number="16-1a-503"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Registration to do business in this state.</catchline><subsection number="16-1a-503(1)">A filing foreign entity may not do business in this state until the filing foreign entity registers with the division in accordance with this chapter.</subsection><subsection number="16-1a-503(2)">A filing foreign entity doing business in this state may not maintain an action or proceeding in this state unless the filing foreign entity registers to do business in this state.</subsection><subsection number="16-1a-503(3)">The failure of a filing foreign entity to register to do business in this state does not:<subsection number="16-1a-503(3)(a)">impair the validity of a contract or act of the filing foreign entity; or</subsection><subsection number="16-1a-503(3)(b)">preclude the filing foreign entity from defending an action or proceeding in this state.</subsection></subsection><subsection number="16-1a-503(4)">A foreign unincorporated entity, a series of a foreign unincorporated entity, a filing foreign entity, or a foreign limited liability partnership does not waive the limitation on the liability of a series of a foreign unincorporated entity, an interest holder of a filing foreign entity, a governor of a filing foreign entity, or a partner of a foreign limited liability partnership because the foreign unincorporated entity, the series of a foreign unincorporated entity, the filing foreign entity, or the foreign limited liability partnership does business in this state without registering to do business in this state.</subsection></section><section number="16-1a-504"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Foreign registration statement.</catchline><subsection number="16-1a-504(1)">To do business in this state, a filing foreign entity shall deliver a foreign registration statement to the division for filing.</subsection><subsection number="16-1a-504(2)">A filing foreign entity shall sign the foreign registration statement described in Subsection <xref tempid="668">(1)</xref> and include in the statement:<subsection number="16-1a-504(2)(a)">the name of the filing foreign entity;</subsection><subsection number="16-1a-504(2)(b)">if the name of the filing foreign entity does not comply with Section <xref depth="3" refnumber="16-1a-302">16-1a-302</xref>, an alternate name the filing foreign entity adopts in accordance with Section <xref depth="3" refnumber="16-1a-507">16-1a-507</xref>;</subsection><subsection number="16-1a-504(2)(c)">the filing foreign entity's type of entity;</subsection><subsection number="16-1a-504(2)(d)">if the filing foreign entity is a foreign limited partnership, whether the foreign limited partnership is a foreign limited liability limited partnership;</subsection><subsection number="16-1a-504(2)(e)">the filing foreign entity's or jurisdiction of formation;</subsection><subsection number="16-1a-504(2)(f)">the filing foreign entity's street and mailing address for the filing foreign entity's principal office;</subsection><subsection number="16-1a-504(2)(g)">if the law of the filing foreign entity's or jurisdiction of formation requires the filing foreign entity to maintain an office in the jurisdiction of formation, the street and mailing address of the office in the jurisdiction of formation; and</subsection><subsection number="16-1a-504(2)(h)">the information required by Section <xref depth="3" refnumber="16-1a-305">16-1a-305</xref>.</subsection></subsection><subsection number="16-1a-504(3)"><subsection number="16-1a-504(3)(a)">A filing foreign entity shall include with the foreign registration statement described in Subsection <xref depth="4" refnumber="16-1a-504(1)">(1)</xref> a certificate of existence, or a document of similar import, that the lieutenant governor or other official that has custody of corporate records in the filing foreign entity's jurisdiction of formation authorizes.</subsection><subsection number="16-1a-504(3)(b)">A certificate of existence described in this Subsection <xref depth="4" refnumber="16-1a-504(3)">(3)</xref> shall be dated within 90 days before the day on which the foreign filing entity delivers the foreign registration statement to the division for filing.</subsection></subsection></section><section number="16-1a-505"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Amending a foreign registration statement.</catchline><subsection number="16-1a-505(1)">Subject to Subsection <xref depth="4" refnumber="16-1a-505(2)">(2)</xref>, a registered foreign entity shall sign and deliver to the division for filing an amendment to the registered foreign entity's foreign registration statement if one of the following changes:<subsection number="16-1a-505(1)(a)">the registered foreign entity's name;</subsection><subsection number="16-1a-505(1)(b)">the registered foreign entity's jurisdiction of formation;</subsection><subsection number="16-1a-505(1)(c)">an address required by Section <xref depth="3" refnumber="16-1a-403">16-1a-403</xref>; or</subsection><subsection number="16-1a-505(1)(d)">the information required by Section <xref depth="3" refnumber="16-1a-305">16-1a-305</xref>.</subsection></subsection><subsection number="16-1a-505(2)"><subsection number="16-1a-505(2)(a)">If information described in Subsection <xref depth="4" refnumber="16-1a-505(1)(a)">(1)(a)</xref> or <xref depth="4" refnumber="16-1a-505(b)">(b)</xref> changes, a foreign filing entity shall deliver with the amendment described in Subsection <xref depth="4" refnumber="16-1a-505(1)">(1)</xref> a certificate of existence, or a document of similar import that the lieutenant governor or other official that has custody of corporate records in the filing foreign entity's jurisdiction of formation authorizes.</subsection><subsection number="16-1a-505(2)(b)">A certificate of existence described in this Subsection <xref depth="4" refnumber="16-1a-505(2)">(2)</xref> shall be dated within 90 days before the day on which the foreign filing entity delivers the amendment to the division for filing.</subsection></subsection></section><section number="16-1a-506"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Activities that do not constitute doing business.</catchline><subsection number="16-1a-506(1)">The following activities of a filing foreign entity do not constitute doing business in this state:<subsection number="16-1a-506(1)(a)">maintaining, defending, mediating, arbitrating, or settling an action or proceeding;</subsection><subsection number="16-1a-506(1)(b)">carrying on an activity concerning the filing foreign entity's internal affairs, including holding meetings of the filing foreign entity's interest holders or governors;</subsection><subsection number="16-1a-506(1)(c)">maintaining an account in a financial institution;</subsection><subsection number="16-1a-506(1)(d)">maintaining an office or an agency for the transfer, exchange, and registration of the filing foreign entity's or the foreign limited liability partnership's securities;</subsection><subsection number="16-1a-506(1)(e)">maintaining a trustee or a depository for the filing foreign entity's securities;</subsection><subsection number="16-1a-506(1)(f)">selling through an independent contractor;</subsection><subsection number="16-1a-506(1)(g)">soliciting or obtaining an order by any means if the order requires acceptance outside this state before the order becomes a contract;</subsection><subsection number="16-1a-506(1)(h)">creating or acquiring indebtedness, a mortgage, or a security interest in property;</subsection><subsection number="16-1a-506(1)(i)">securing or collecting a debt;</subsection><subsection number="16-1a-506(1)(j)">enforcing a mortgage or a security interest in a property;</subsection><subsection number="16-1a-506(1)(k)">holding, protecting, or maintaining property the filing foreign entity acquires by enforcing a mortgage or a security interest;</subsection><subsection number="16-1a-506(1)(l)">conducting an isolated transaction that is outside the scope of the filing foreign entity's ordinary course of business;</subsection><subsection number="16-1a-506(1)(m)">owning real property; and</subsection><subsection number="16-1a-506(1)(n)">doing business that constitutes interstate commerce.</subsection></subsection><subsection number="16-1a-506(2)">A person does not do business in this state by being an interest holder or a governor of a foreign entity that does business in this state.</subsection><subsection number="16-1a-506(3)">This section does not apply when determining whether the contacts or activities subject a filing foreign entity to service of process, taxation, or regulation under a law of this state outside of this chapter.</subsection></section><section number="16-1a-507"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Noncomplying name of a foreign entity.</catchline><subsection number="16-1a-507(1)"><subsection number="16-1a-507(1)(a)">A filing foreign entity whose name does not comply with Section <xref depth="3" refnumber="16-1a-302">16-1a-302</xref> may not register to do business in this state until the filing foreign entity adopts, for the purpose of doing business in this state, an alternate name that complies with Section <xref depth="3" refnumber="16-1a-302">16-1a-302</xref>.</subsection><subsection number="16-1a-507(1)(b)">A filing foreign entity that registers under an alternate name under this Subsection <xref tempid="167">(1)</xref> is not required to comply with Title 42, Chapter 2, Conducting Business as a D.B.A.</subsection></subsection><subsection number="16-1a-507(2)">After registering to do business in this state with an alternate name, a filing foreign entity described in Subsection <xref tempid="596">(1)</xref> shall do business in this state under:<subsection number="16-1a-507(2)(a)">the alternate name;</subsection><subsection number="16-1a-507(2)(b)">the filing foreign entity's name, with the addition of the filing foreign entity's jurisdiction of formation; or</subsection><subsection number="16-1a-507(2)(c)">a name Title 42, Chapter 2, Conducting Business as a D.B.A., authorizes the filing foreign entity or to use.</subsection></subsection><subsection number="16-1a-507(3)">If a filing foreign entity changes the filing foreign entity's name to a name that does not comply with Section <xref depth="3" refnumber="16-1a-302">16-1a-302</xref>, the filing foreign entity may not do business in this state until the filing foreign entity complies with Subsection <xref tempid="486">(1)</xref>.</subsection></section><section number="16-1a-508"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Withdrawal of registration of registered foreign entity.</catchline><subsection number="16-1a-508(1)">A registered foreign entity may withdraw the registered foreign entity's registration by delivering a statement of withdrawal to the division for filing.</subsection><subsection number="16-1a-508(2)">A registered foreign entity shall sign the statement of withdrawal described in Subsection <xref tempid="606">(1)</xref> and state on the statement of withdrawal:<subsection number="16-1a-508(2)(a)">the registered foreign entity's name;</subsection><subsection number="16-1a-508(2)(b)">the registered foreign entity's jurisdiction of formation;</subsection><subsection number="16-1a-508(2)(c)"><subsection number="16-1a-508(2)(c)(i)">that the registered foreign entity does not currently do business in this state; and</subsection><subsection number="16-1a-508(2)(c)(ii)">that the registered foreign entity withdraws the registered foreign entity's registration to do business in this state;</subsection></subsection><subsection number="16-1a-508(2)(d)">an address to which a person may make service of process to the registered foreign entity as described in Subsection <xref tempid="413">(3)</xref>; and</subsection><subsection number="16-1a-508(2)(e)">if the registered foreign entity is a foreign corporation or foreign nonprofit corporation, the federal employer identification number of the registered foreign entity.</subsection></subsection><subsection number="16-1a-508(3)">After a registered foreign entity withdraws the registered foreign entity's registration in accordance with this section, a person may make service of process in an action or proceeding based on a cause of action arising during the time the entity was registered to do business in this state in accordance with Section <xref depth="3" refnumber="16-1a-412">16-1a-412</xref>.</subsection><subsection number="16-1a-508(4)">A registered foreign entity withdraws the registered foreign entity's registration:<subsection number="16-1a-508(4)(a)">on the effective date of a conversion, if the registered foreign entity converts to a filing domestic entity;</subsection><subsection number="16-1a-508(4)(b)">on the effective date of a merger, if the registered foreign entity is not the surviving entity after the merger occurs; or</subsection><subsection number="16-1a-508(4)(c)">on the effective date of a domestication, if the registered foreign entity becomes a registered domestic entity through domestication.</subsection></subsection><subsection number="16-1a-508(5)"><subsection number="16-1a-508(5)(a)">After receiving a foreign corporation's or a foreign nonprofit corporation's statement of withdrawal, the division shall:<subsection number="16-1a-508(5)(a)(i)">provide the State Tax Commission with the foreign corporation's or the foreign nonprofit corporation's federal employer identification number; and</subsection><subsection number="16-1a-508(5)(a)(ii)">request that the State Tax Commission certify that the foreign corporation or foreign nonprofit corporation is in good standing.</subsection></subsection><subsection number="16-1a-508(5)(b)">The State Tax Commission shall certify that a foreign corporation or a foreign nonprofit corporation is in good standing if the foreign corporation or foreign nonprofit corporation pays each tax, fee, and penalty the foreign corporation or foreign nonprofit corporation owes to the State Tax Commission.</subsection><subsection number="16-1a-508(5)(c)">If a foreign corporation or a foreign nonprofit corporation is not in good standing as described in Subsection <xref depth="4" refnumber="16-1a-508(5)(b)">(5)(b)</xref>, the State Tax Commission shall:<subsection number="16-1a-508(5)(c)(i)">notify the division that the foreign corporation or the foreign nonprofit corporation is not in good standing; and</subsection><subsection number="16-1a-508(5)(c)(ii)"><subsection number="16-1a-508(5)(c)(ii)(A)">notify the foreign corporation or the foreign nonprofit corporation that the foreign corporation or the foreign nonprofit corporation is not in good standing; and</subsection><subsection number="16-1a-508(5)(c)(ii)(B)">provide the foreign corporation or the foreign nonprofit corporation a detailed explanation as to why the foreign corporation or foreign nonprofit corporation is not in good standing.</subsection></subsection></subsection></subsection></section><section number="16-1a-509"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Transfer of registration.</catchline><subsection number="16-1a-509(1)">If a registered foreign entity merges with a nonregistered foreign entity or converts to a foreign entity that is required to register with the division to do business in this state, the foreign entity shall deliver to the division for filing an application for a transfer of registration.</subsection><subsection number="16-1a-509(2)">A surviving or converted entity described in Subsection <xref tempid="421">(1)</xref> shall sign an application for a transfer of registration and state on the application for a transfer of registration:<subsection number="16-1a-509(2)(a)">the registered foreign entity's name before the merger or conversion;</subsection><subsection number="16-1a-509(2)(b)">the type of entity the surviving or converted entity was before the merger or conversion;</subsection><subsection number="16-1a-509(2)(c)">the name of the surviving or converted entity, and if the name does not comply with Section <xref depth="3" refnumber="16-1a-302">16-1a-302</xref>, an alternate name adopted in accordance with Section <xref depth="3" refnumber="16-1a-507">16-1a-507</xref>;</subsection><subsection number="16-1a-509(2)(d)">the surviving or converted entity's type of entity;</subsection><subsection number="16-1a-509(2)(e)">the surviving or converted entity's jurisdiction of formation; and</subsection><subsection number="16-1a-509(2)(f)">the following information relating to the surviving or converted entity, if different from the information for the registered foreign entity before the merger or conversion:<subsection number="16-1a-509(2)(f)(i)">the street and mailing addresses of the surviving or converted entity;</subsection><subsection number="16-1a-509(2)(f)(ii)">if the law of the surviving or converted entity's jurisdiction of formation requires that the surviving or converted entity maintain an office in the jurisdiction of formation, the street and mailing address of that office; and</subsection><subsection number="16-1a-509(2)(f)(iii)">the information required in accordance with Section <xref depth="3" refnumber="16-1a-305">16-1a-305</xref>.</subsection></subsection></subsection></section><section number="16-1a-510"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Termination of registration.</catchline><subsection number="16-1a-510(1)">The division may terminate a registered foreign entity's registration in the manner described in Subsection <xref tempid="136">(2)</xref> or (3) if the registered foreign entity fails to:<subsection number="16-1a-510(1)(a)">pay a fee, tax, interest, or penalty that the division requires, within 60 days after the day on which the division requires payment;</subsection><subsection number="16-1a-510(1)(b)">deliver to the division for filing an annual report that the division requires, within 60 days after the division requires that the division file the annual report;</subsection><subsection number="16-1a-510(1)(c)">designate a registered agent as required in Section <xref depth="3" refnumber="16-1a-402">16-1a-402</xref>; or</subsection><subsection number="16-1a-510(1)(d)">deliver to the division for filing a statement of change as described in Section <xref depth="3" refnumber="16-1a-407">16-1a-407</xref> within 30 days after the day on which a change occurs in the registered foreign entity's registered agent's name or address.</subsection></subsection><subsection number="16-1a-510(2)">The division may terminate the registration of a registered foreign entity by:<subsection number="16-1a-510(2)(a)">filing a notice of termination or noting the termination in the division's records; and</subsection><subsection number="16-1a-510(2)(b)">delivering a copy of the notice or a copy of the information in the notation in the division's records to:<subsection number="16-1a-510(2)(b)(i)">the registered foreign entity's registered agent; or</subsection><subsection number="16-1a-510(2)(b)(ii)">if the registered foreign entity does not have a registered agent, to the registered foreign entity's principal office.</subsection></subsection></subsection><subsection number="16-1a-510(3)">The division shall include in a notice of termination or a notation in the division's records described in Subsection <xref tempid="1053">(2)</xref>:<subsection number="16-1a-510(3)(a)">the effective date of the termination, which the division shall set at least 60 days after the day on which the division delivers the copy of the notice or copy of the information in the notation in the division's records; and</subsection><subsection number="16-1a-510(3)(b)">the grounds under which the division terminates the registered foreign entity's registration under Subsection <xref tempid="207">(1)</xref>.</subsection></subsection><subsection number="16-1a-510(4)">The registration of a registered foreign entity to do business in this state ends on the effective date of the notice of termination or notation in the division's records described in Subsection <xref depth="4" refnumber="16-1a-510(2)">(2)</xref>, unless before the effective date, the entity cures each ground for termination the division states in the notice of termination or notation in the division's records.</subsection><subsection number="16-1a-510(5)">If a registered foreign entity cures each ground for termination in accordance with Subsection <xref tempid="580">(4)</xref>, the division shall file a record stating that the registered foreign entity has cured each ground for termination.</subsection></section></part><part number="16-1a-6"><catchline>Administrative Dissolution</catchline><section number="16-1a-601"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Definitions.</catchline>Reserved.</section><section number="16-1a-602"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Grounds for administrative dissolution of a domestic filing entity.</catchline>The division may bring an action to dissolve a domestic filing entity administratively if the domestic filing entity fails to:<subsection number="16-1a-602(1)">pay a fee, tax, interest, or penalty that the division requires, within six months after the day on which the division requires payment;</subsection><subsection number="16-1a-602(2)">deliver to the division for filing an annual report not later than 60 days after the day on which the the annual report is due; or</subsection><subsection number="16-1a-602(3)">maintain a registered agent in this state for 60 consecutive calendar days.</subsection></section><section number="16-1a-603"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Procedure and effect of administrative dissolution of a domestic filing entity.</catchline><subsection number="16-1a-603(1)">If the division determines that one or more conditions for administrative dissolution described in Section <xref depth="3" refnumber="16-1a-602">16-1a-602</xref> exist, the division shall serve the domestic filing entity with a notice of the division's determination.</subsection><subsection number="16-1a-603(2)">A domestic filing entity may for up to 60 days after the day on which the division serves the notice described in Subsection <xref tempid="1046">(1)</xref>:<subsection number="16-1a-603(2)(a)">cure each condition the division lists in the notice; or</subsection><subsection number="16-1a-603(2)(b)">demonstrate to the satisfaction of the division that each condition the division lists in the notice does not exist.</subsection></subsection><subsection number="16-1a-603(3)">If a domestic filing entity fails to comply with Subsection <xref tempid="321">(2)(a)</xref> or (b) within the time limit described in Subsection <xref tempid="836">(2)</xref>, the division shall administratively dissolve the domestic filing entity by signing a statement of administrative dissolution that states:<subsection number="16-1a-603(3)(a)">each condition that prompted the dissolution; and</subsection><subsection number="16-1a-603(3)(b)">the effective date of the dissolution.</subsection></subsection><subsection number="16-1a-603(4)">A domestic filing entity that the division administratively dissolves continues the domestic filing entity's existence as the same type of entity but may not conduct any activity except an activity that is necessary to:<subsection number="16-1a-603(4)(a)"><subsection number="16-1a-603(4)(a)(i)">wind up the domestic filing entity's activities and affairs; and</subsection><subsection number="16-1a-603(4)(a)(ii)">liquidate the domestic filing entity's assets in the manner provided in the domestic filing entity's domestic law; or</subsection></subsection><subsection number="16-1a-603(4)(b)">apply for reinstatement in accordance with Section <xref depth="3" refnumber="16-1a-604">16-1a-604</xref>.</subsection></subsection><subsection number="16-1a-603(5)">The administrative dissolution of a domestic filing entity does not terminate the authority of the domestic filing entity's registered agent.</subsection></section><section number="16-1a-604"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Reinstatement of a domestic filing entity.</catchline><subsection number="16-1a-604(1)">A domestic filing entity that is administratively dissolved under Section 16-1a-603 may apply to the division for reinstatement under the domestic filing entity's same name at any time after the effective date of dissolution if the domestic filing entity's name is available and the domestic filing entity delivers to the division for filing an application for reinstatement that states:<subsection number="16-1a-604(1)(a)">the name of the domestic filing entity at the time of the domestic filing entity's administrative dissolution and, if needed, a different name that satisfies Section <xref depth="3" refnumber="16-1a-302">16-1a-302</xref>;</subsection><subsection number="16-1a-604(1)(b)">the address of the principal office of the domestic filing entity and the name and address of the domestic filing entity's registered agent;</subsection><subsection number="16-1a-604(1)(c)">the effective date of the domestic filing entity's administrative dissolution;</subsection><subsection number="16-1a-604(1)(d)">that the domestic filing entity has paid all fees or penalties imposed under this chapter or other applicable state law;</subsection><subsection number="16-1a-604(1)(e)">that the domestic filing entity:<subsection number="16-1a-604(1)(e)(i)">has paid any tax, fee, or penalty the domestic filing entity owes to the State Tax Commission; or</subsection><subsection number="16-1a-604(1)(e)(ii)">is current on a payment plan with the State Tax Commission for any tax, fee, or penalty the domestic filing entity owes to the State Tax Commission;</subsection></subsection><subsection number="16-1a-604(1)(f)">that the grounds for dissolution do not exist or have been cured;</subsection><subsection number="16-1a-604(1)(g)">the federal employer identification number of the domestic filing entity if the domestic filing entity is organized under:<subsection number="16-1a-604(1)(g)(i)">Chapter 6a, Utah Revised Nonprofit Corporation Act;</subsection><subsection number="16-1a-604(1)(g)(ii)">Chapter 10a, Utah Revised Business Corporation Act;</subsection><subsection number="16-1a-604(1)(g)(iii)">Chapter 10b, Benefit Corporation Act; or</subsection><subsection number="16-1a-604(1)(g)(iv)">Chapter 11, Professional Corporation Act; and</subsection></subsection><subsection number="16-1a-604(1)(h)">any additional information the division determines to be necessary or appropriate.</subsection></subsection><subsection number="16-1a-604(2)">A domestic filing entity administratively dissolved under Section <xref depth="3" refnumber="16-1a-603">16-1a-603</xref> on or after May 1, 2019, but before May 1, 2024, may apply for reinstatement under the domestic filing entity's same name if the domestic filing entity's name is available and the domestic filing entity delivers to the division for filing an application for reinstatement that satisfies the requirements of Subsection <xref depth="4" refnumber="16-1a-604(1)">(1)</xref>.</subsection><subsection number="16-1a-604(3)">A domestic filing entity retains the domestic filing entity's name and D.B.A., as described in Section <xref depth="3" refnumber="42-2-105">42-2-105</xref>, for five years after the day on which the dissolution is effective.</subsection><subsection number="16-1a-604(4)"><subsection number="16-1a-604(4)(a)">After receiving a domestic filing entity's application for reinstatement, if the domestic filing entity is organized under Chapter 6a, Utah Revised Nonprofit Corporation Act, Chapter 10a, Utah Revised Business Corporation Act, Chapter 10b, Benefit Corporation Act, or Chapter 11, Professional Corporation Act, the division shall:<subsection number="16-1a-604(4)(a)(i)">provide to the State Tax Commission the domestic filing entity's federal employer identification number; and</subsection><subsection number="16-1a-604(4)(a)(ii)">request that the State Tax Commission certify that the domestic filing entity is in good standing.</subsection></subsection><subsection number="16-1a-604(4)(b)">The State Tax Commission shall certify that a domestic filing entity is in good standing if the domestic filing entity:<subsection number="16-1a-604(4)(b)(i)">has paid each tax, fee, and penalty the domestic filing entity owes to the State Tax Commission; or</subsection><subsection number="16-1a-604(4)(b)(ii)">is current on a payment plan with the State Tax Commission for each tax, fee, or penalty the domestic filing entity owes to the State Tax Commission.</subsection></subsection><subsection number="16-1a-604(4)(c)">If a domestic filing entity is not in good standing as described in Subsection <xref depth="4" refnumber="16-1a-604(4)(b)">(4)(b)</xref>, the State Tax Commission shall:<subsection number="16-1a-604(4)(c)(i)">notify the division, stating that the domestic filing entity is not in good standing;</subsection><subsection number="16-1a-604(4)(c)(ii)">notify the domestic filing entity that the domestic filing entity is not in good standing; and</subsection><subsection number="16-1a-604(4)(c)(iii)">provide to the domestic filing entity a detailed explanation of why the domestic filing entity is not in good standing.</subsection></subsection></subsection><subsection number="16-1a-604(5)">With respect to a domestic filing entity applying for reinstatement in accordance with Subsection <xref depth="4" refnumber="16-1a-604(1)">(1)</xref>, if the following conditions are met, the division shall take the actions described in Subsection <xref depth="4" refnumber="16-1a-604(6)">(6)</xref>:<subsection number="16-1a-604(5)(a)">the division determines that an application under Subsection <xref depth="4" refnumber="16-1a-604(1)">(1)</xref> contains the information required by Subsection <xref depth="4" refnumber="16-1a-604(1)">(1)</xref> and that the information contained in the application is correct;</subsection><subsection number="16-1a-604(5)(b)">the division determines that the domestic filing entity has made each payment that the domestic filing entity is required to make to the division by Subsection <xref depth="4" refnumber="16-1a-604(1)(d)">(1)(d)</xref>;</subsection><subsection number="16-1a-604(5)(c)">the domestic filing entity is organized under Chapter 6a, Utah Revised Nonprofit Corporation Act, Chapter 10a, Utah Revised Business Corporation Act, Chapter 10b, Benefit Corporation Act, or Chapter 11, Professional Corporation Act; and</subsection><subsection number="16-1a-604(5)(d)">the State Tax Commission certifies that the domestic filing entity is in good standing as described in Subsection <xref depth="4" refnumber="16-1a-604(4)(b)">(4)(b)</xref>.</subsection></subsection><subsection number="16-1a-604(6)">If the conditions of Subsection <xref depth="4" refnumber="16-1a-604(5)">(5)</xref> are met, the division shall:<subsection number="16-1a-604(6)(a)">cancel the administrative dissolution of the domestic filing entity;</subsection><subsection number="16-1a-604(6)(b)">prepare a statement of reinstatement that states:<subsection number="16-1a-604(6)(b)(i)">how each condition of Subsection <xref depth="4" refnumber="16-1a-604(5)">(5)</xref> is met; and</subsection><subsection number="16-1a-604(6)(b)(ii)">the effective date of reinstatement;</subsection></subsection><subsection number="16-1a-604(6)(c)">file the statement of reinstatement; and</subsection><subsection number="16-1a-604(6)(d)">serve a copy of the statement of reinstatement on the domestic filing entity.</subsection></subsection><subsection number="16-1a-604(7)">When reinstatement under this section is effective, the following rules apply:<subsection number="16-1a-604(7)(a)">the reinstatement relates back to and takes effect as of the effective date of the administrative dissolution;</subsection><subsection number="16-1a-604(7)(b)">the domestic filing entity may resume the domestic filing entity's activities and affairs as if the administrative dissolution had not occurred; and</subsection><subsection number="16-1a-604(7)(c)">the rights of a person arising out of an act or omission in reliance on the dissolution before the person knew or had notice of the reinstatement are not affected.</subsection></subsection></section><section number="16-1a-605"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Judicial review of a denial of reinstatement.</catchline><subsection number="16-1a-605(1)">If the division denies a domestic filing entity's application for reinstatement that complies with the provisions of this part, the division shall serve the domestic filing entity with a notice in a record that explains the reasons for this denial.</subsection><subsection number="16-1a-605(2)">A domestic filing entity may seek judicial review of the division's denial of the domestic filing entity's reinstatement from a court with jurisdiction for up to 30 days after the day on which the division serves the domestic filing entity notice of the denial of reinstatement.</subsection></section></part><part number="16-1a-7"><catchline>Merger</catchline><section number="16-1a-701"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Definitions.</catchline>Reserved.</section><section number="16-1a-702"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Merger authorized.</catchline><subsection number="16-1a-702(1)">By complying with this part:<subsection number="16-1a-702(1)(a)">one or more domestic entities may merge with one or more domestic entities or foreign entities into a domestic or foreign entity or a foreign surviving entity; and</subsection><subsection number="16-1a-702(1)(b)">two or more foreign entities may merge into a domestic entity.</subsection></subsection><subsection number="16-1a-702(2)">Subject to the provisions of this part, a foreign entity may be a part to a merger or may be the surviving entity in a merger if the merger is authorized by the law of the foreign entity's jurisdiction of formation.</subsection></section><section number="16-1a-703"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Plan of merger.</catchline><subsection number="16-1a-703(1)">A domestic entity may become a party to a merger by approving a plan of merger.</subsection><subsection number="16-1a-703(2)">A plan of merger shall contain:<subsection number="16-1a-703(2)(a)">each merging entity's:<subsection number="16-1a-703(2)(a)(i)">name;</subsection><subsection number="16-1a-703(2)(a)(ii)">jurisdiction of formation; and</subsection><subsection number="16-1a-703(2)(a)(iii)">type of entity;</subsection></subsection><subsection number="16-1a-703(2)(b)">if the merger creates a surviving entity:<subsection number="16-1a-703(2)(b)(i)">a statement stating that the merger creates a surviving entity; and</subsection><subsection number="16-1a-703(2)(b)(ii)">the surviving entity's:<subsection number="16-1a-703(2)(b)(ii)(A)">name;</subsection><subsection number="16-1a-703(2)(b)(ii)(B)">jurisdiction of formation; and</subsection><subsection number="16-1a-703(2)(b)(ii)(C)">type of entity;</subsection></subsection></subsection><subsection number="16-1a-703(2)(c)">if the surviving entity exists before the merger, any proposed amendment to the surviving entity's:<subsection number="16-1a-703(2)(c)(i)">public organic record; and</subsection><subsection number="16-1a-703(2)(c)(ii)">private organic rules that are, or that the surviving entity proposes to be, in a record;</subsection></subsection><subsection number="16-1a-703(2)(d)">the manner by which the interest of each party to the merger will convert to an interest, a security, an obligation, money, property, or a right to acquire an interest or security in the surviving entity;</subsection><subsection number="16-1a-703(2)(e)">all other terms and conditions of the merger; and</subsection><subsection number="16-1a-703(2)(f)">any other provision required by the law of a merging entity's jurisdiction of formation or the organic rules of a merging entity.</subsection></subsection></section><section number="16-1a-704"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Approval of merger.</catchline><subsection number="16-1a-704(1)">A plan of merger is not effective unless:<subsection number="16-1a-704(1)(a)">a domestic merging entity approves the plan of merger:<subsection number="16-1a-704(1)(a)(i)">in accordance with the requirements, if any, of the domestic merging entity's organic law and organic rules for approval of:<subsection number="16-1a-704(1)(a)(i)(A)">for an entity that is not a limited cooperative association, the merger; or</subsection><subsection number="16-1a-704(1)(a)(i)(B)">for an entity that is a limited cooperative association, a transaction under this part; or</subsection></subsection><subsection number="16-1a-704(1)(a)(ii)">by each interest holder of the domestic merging entity that is entitled to vote or consent to the plan of merger voting in favor of the plan of merger if:<subsection number="16-1a-704(1)(a)(ii)(A)">for an entity that is not a business corporation or a limited cooperative association, neither the business corporation's nor the limited cooperative association's organic rules provide for the approval of a merger; or</subsection><subsection number="16-1a-704(1)(a)(ii)(B)">for an entity that is a limited cooperative association, neither the limited cooperative association's organic law nor organic rules provide for the approval of a transaction under this part; and</subsection></subsection></subsection><subsection number="16-1a-704(1)(b)"><subsection number="16-1a-704(1)(b)(i)">for a business corporation or a nonprofit corporation, each interest holder of a domestic merging entity that will have interest holder liability for a debt, an obligation, or other liability after the merger becomes effective approves the merger; or</subsection><subsection number="16-1a-704(1)(b)(ii)">for an entity that is not a business corporation or a nonprofit corporation:<subsection number="16-1a-704(1)(b)(ii)(A)">a provision of the entity's organic rules provide for the approval of a merger in which one or more of the entity's interest holders will become subject to interest holder liability; and</subsection><subsection number="16-1a-704(1)(b)(ii)(B)">each interest holder consents to or votes in favor of the provision described in Subsection <xref depth="4" refnumber="16-1a-704(1)(b)(ii)(a)">(1)(b)(ii)(A)</xref> or became an interest holder after the adoption of the provision.</subsection></subsection></subsection></subsection><subsection number="16-1a-704(2)">A merger described in this part that involves a foreign merging entity is not effective unless the foreign entity approves the merger in accordance with the law of the foreign entity's jurisdiction of formation.</subsection></section><section number="16-1a-705"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Amendment or abandonment of a plan of merger.</catchline><subsection number="16-1a-705(1)">Except as otherwise provided in the plan of merger, a plan of merger may be amended only by the consent of each party to the plan of merger.</subsection><subsection number="16-1a-705(2)">A domestic merging entity may approve an amendment to a plan of merger:<subsection number="16-1a-705(2)(a)">in the same manner as the plan of merger was approved, if the plan does not provide for the manner by which the domestic merging entity may amend the plan of merger; or</subsection><subsection number="16-1a-705(2)(b)">subject to Subsection <xref tempid="626">(3)</xref>, by the governors or interest holders approving the amendment in the manner provided in the plan of merger.</subsection></subsection><subsection number="16-1a-705(3)">A governor or interest holder that was entitled to vote on or consent to the approval of a merger is entitled to vote on or consent to an amendment that will change:<subsection number="16-1a-705(3)(a)">the amount or kind of interests, securities, obligations, money, other property, rights to acquire interests or securities, or a combination that the interest holders of a party to the plan of merger will receive;</subsection><subsection number="16-1a-705(3)(b)">the public organic record, if any, or the private organic rules of the surviving entity that will be in effect immediately after the merger becomes effective, except for a change that does not require the approval of the interest holders of the surviving entity under the surviving entity's organic law or organic rules; or</subsection><subsection number="16-1a-705(3)(c)">any other term or condition of the plan of merger, if the change would adversely affect the governor or interest holder in a material respect.</subsection></subsection><subsection number="16-1a-705(4)"><subsection number="16-1a-705(4)(a)">After the parties to a plan of merger approve the plan and before a statement of merger is effective, the parties to a merger may abandon a plan of merger in a manner provided in the plan of merger.</subsection><subsection number="16-1a-705(4)(b)">Unless prohibited by the plan of merger, a domestic filing entity may abandon the plan of merger in the same manner as the domestic filing entity approves the plan of merger.</subsection></subsection><subsection number="16-1a-705(5)"><subsection number="16-1a-705(5)(a)">If the parties to a merger abandon the plan of merger after delivering a statement of merger to the division for filing, the parties shall deliver to the division for filing a statement of abandonment, signed by each party to the plan of abandonment.</subsection><subsection number="16-1a-705(5)(b)">The parties shall file a statement of abandonment before the day on which the statement of merger takes effect.</subsection><subsection number="16-1a-705(5)(c)">A statement of abandonment under this Subsection <xref tempid="904">(5)</xref> takes effect on the day on which the parties file the statement of abandonment with the division.</subsection><subsection number="16-1a-705(5)(d)">After the parties file a statement of abandonment, the plan of merger is abandoned and does not take effect.</subsection><subsection number="16-1a-705(5)(e)">A statement of abandonment shall contain:<subsection number="16-1a-705(5)(e)(i)">the name of each party to the plan of merger;</subsection><subsection number="16-1a-705(5)(e)(ii)">the day on which the parties file the statement of merger with the division; and</subsection><subsection number="16-1a-705(5)(e)(iii)">a statement that the parties abandon the merger in accordance with this section.</subsection></subsection></subsection></section><section number="16-1a-706"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Statement of merger -- Effective date of merger.</catchline><subsection number="16-1a-706(1)">Each merging entity shall sign a statement of merger and deliver the statement of merger to the division for filing.</subsection><subsection number="16-1a-706(2)">A statement of merger shall contain:<subsection number="16-1a-706(2)(a)">the name, jurisdiction of formation, and type of entity of each merging entity that is not the surviving entity;</subsection><subsection number="16-1a-706(2)(b)">the name, jurisdiction of formation, and type of entity of the surviving entity;</subsection><subsection number="16-1a-706(2)(c)">if the statement of merger is not effective on the day on which each merging entity files the statement of merger, the date and time on which the statement of merger will become effective, which shall be no later than 90 days after the day on which each merging entity files the statement of merger;</subsection><subsection number="16-1a-706(2)(d)">a statement that any domestic merging entity that is a party to the merger approves the merger in accordance with this part;</subsection><subsection number="16-1a-706(2)(e)">a statement that any foreign merging entity that is a party to the merger approves the merger in accordance with the law of the foreign merging entity's jurisdiction of formation;</subsection><subsection number="16-1a-706(2)(f)">if the surviving entity exists before the merger and is a domestic filing entity, any amendment to the surviving filing entity's public organic record the parties to the merger approve as part of the plan of merger;</subsection><subsection number="16-1a-706(2)(g)">if the surviving entity is created by the merger and is a domestic filing entity, the domestic filing entity's public organic record;</subsection><subsection number="16-1a-706(2)(h)">if the surviving entity is created by the merger and is a domestic limited liability partnership, the surviving entity's statement of qualification; and</subsection><subsection number="16-1a-706(2)(i)">if the surviving entity is a foreign entity that is not a registered foreign entity, a mailing address to which the division may send any process served on the division.</subsection></subsection><subsection number="16-1a-706(3)">In addition to the requirements described in Subsection <xref tempid="124">(2)</xref>, a statement of merger may contain any other provision not prohibited by law.</subsection><subsection number="16-1a-706(4)"><subsection number="16-1a-706(4)(a)">Except as provided in Subsection <xref tempid="104">(4)(b)</xref>, if the surviving entity is a domestic entity, the surviving entity's public record, if any exists, shall satisfy the requirements of the law of this state.</subsection><subsection number="16-1a-706(4)(b)">A surviving entity that is a domestic entity:<subsection number="16-1a-706(4)(b)(i)">is not required to sign the surviving entity's public organic record; and</subsection><subsection number="16-1a-706(4)(b)(ii)">may omit any provision that the surviving entity is not required to include in a restatement of the public organic record.</subsection></subsection></subsection><subsection number="16-1a-706(5)"><subsection number="16-1a-706(5)(a)">A party to a merger may deliver a plan of merger that each merging entity signs and that meets all the requirements described in Subsection <xref tempid="471">(2)</xref> to the division for filing instead of a statement of merger.</subsection><subsection number="16-1a-706(5)(b)">A party delivering a plan of merger in accordance with Subsection <xref tempid="343">(5)(a)</xref> has the same effect as filing a statement of merger.</subsection><subsection number="16-1a-706(5)(c)">If a party files a plan of merger in accordance with Subsection <xref tempid="493">(5)(a)</xref>, for purposes of complying with this part, the plan of merger shall serve as the statement of merger.</subsection></subsection><subsection number="16-1a-706(6)">A statement of merger is effective on:<subsection number="16-1a-706(6)(a)">the day and time on which a person files the statement of merger with the division; or</subsection><subsection number="16-1a-706(6)(b)">a date and time specified in the statement of merger that is later than the day and time on which the person files the statement of merger.</subsection></subsection><subsection number="16-1a-706(7)">If the surviving entity is a domestic entity, a merger becomes effective on the day and time on which the statement of merger is effective.</subsection><subsection number="16-1a-706(8)">If the surviving entity is a foreign entity, a merger takes effect on the later of:<subsection number="16-1a-706(8)(a)">the day and time provided in the organic law of the surviving entity; or</subsection><subsection number="16-1a-706(8)(b)">the day and time on which the statement is effective.</subsection></subsection></section><section number="16-1a-707"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Effect of merger.</catchline><subsection number="16-1a-707(1)">On or after the day and time on which a merger under this part takes effect:<subsection number="16-1a-707(1)(a)">the surviving entity continues the surviving entity's existence or comes into existence;</subsection><subsection number="16-1a-707(1)(b)">a merging entity that is not the surviving entity ceases to exist;</subsection><subsection number="16-1a-707(1)(c)">all property belonging to each merging entity vests in the surviving entity without transfer, reversion, or impairment;</subsection><subsection number="16-1a-707(1)(d)">each debt, obligation, or other liability of each merging entity becomes a debt, obligation, or other liability of the surviving entity;</subsection><subsection number="16-1a-707(1)(e)">except as otherwise provided by law or the plan of merger, each right, privilege, immunity, power, and purpose of each merging entity vests in the surviving entity;</subsection><subsection number="16-1a-707(1)(f)">if the surviving entity exists before the merger:<subsection number="16-1a-707(1)(f)(i)">all the surviving entity's property remains vested with the surviving entity without transfer, reversion, or impairment;</subsection><subsection number="16-1a-707(1)(f)(ii)">the surviving entity remains subject to each debt, obligation, or other liability of the surviving entity's; and</subsection><subsection number="16-1a-707(1)(f)(iii)">each right, privilege, immunity, power, and purpose of the surviving entity remain vested in the surviving entity;</subsection></subsection><subsection number="16-1a-707(1)(g)">if the surviving entity is created by the merger, the surviving entity's private organic rules are effective and:<subsection number="16-1a-707(1)(g)(i)">if the surviving entity is a filing entity, the surviving entity's public organic record is effective; or</subsection><subsection number="16-1a-707(1)(g)(ii)">if the surviving entity is a limited liability partnership, the surviving entity's statement of qualification is effective; and</subsection></subsection><subsection number="16-1a-707(1)(h)"><subsection number="16-1a-707(1)(h)(i)">each interest in each merging entity that is subject to conversion under the merger is converted; and</subsection><subsection number="16-1a-707(1)(h)(ii)">an interest holder of an interest described in Subsection <xref depth="4" refnumber="16-1a-707(1)(h)(i)">(1)(h)(i)</xref> is entitled only to the rights provided to the interest holder in:<subsection number="16-1a-707(1)(h)(ii)(A)">the plan of merger;</subsection><subsection number="16-1a-707(1)(h)(ii)(B)">the appraisal rights described in Section <xref depth="3" refnumber="16-1a-708">16-1a-708</xref>; and</subsection><subsection number="16-1a-707(1)(h)(ii)(C)">the merging entity's organic law.</subsection></subsection></subsection></subsection><subsection number="16-1a-707(2)">Except as otherwise provided in the organic law or organic rules of a merging entity, a merger under this part does not give rise to a right that an interest holder, governor, or third party would have upon the dissolution, liquidation, or winding up of a merging entity.</subsection><subsection number="16-1a-707(3)">On or after the day and time on which a merger takes effect, if a person did not have interest holder liability to any of the merging entities and after the merger takes effect becomes subject to interest holder liability as a result of the merger, the person has interest holder liability:<subsection number="16-1a-707(3)(a)">only to the extent provided by the organic law of the surviving entity; and</subsection><subsection number="16-1a-707(3)(b)">only for a debt, obligation, or other liability the surviving entity incurs after the merger takes effect.</subsection></subsection><subsection number="16-1a-707(4)"><subsection number="16-1a-707(4)(a)">A merger does not discharge any interest holder liability under the organic law of the domestic merging entity to the extent the person incurs interest holder liability before the merger takes effect.</subsection><subsection number="16-1a-707(4)(b)">A person does not have interest holder liability under the organic law of the domestic merging entity for a debt, obligation, or other liability that the surviving entity incurs after the merger takes effect.</subsection><subsection number="16-1a-707(4)(c)">The organic law of a domestic merging entity continues to apply to the release, collection, or discharge of any interest holder liability described in Subsection <xref depth="4" refnumber="16-1a-707(4)(a)">(4)(a)</xref>.</subsection><subsection number="16-1a-707(4)(d)">A person has whatever rights of contribution from any other person that exist in law other than this part or the organic rules of the domestic merging entity relating to any interest holder liability described in Subsection <xref depth="4" refnumber="16-1a-707(4)(a)">(4)(a)</xref>.</subsection></subsection><subsection number="16-1a-707(5)">On or after the day and time on which a merger takes effect, a person may serve a foreign entity that is the surviving entity with process for the collection and enforcement of any debt, obligation, or other liability of a domestic merging entity in accordance with applicable law.</subsection><subsection number="16-1a-707(6)">On or after the day and time on which a merger takes effect, the registration to do business in this state of a foreign merging entity that is not the surviving entity is canceled.</subsection></section><section number="16-1a-708"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Appraisal rights.</catchline><subsection number="16-1a-708(1)">As used in this section, "new entity" means a:<subsection number="16-1a-708(1)(a)">merging entity;</subsection><subsection number="16-1a-708(1)(b)">converting entity; or</subsection><subsection number="16-1a-708(1)(c)">domesticating entity.</subsection></subsection><subsection number="16-1a-708(2)">An interest holder of a new entity is entitled to an appraisal right in connection with the merger, conversion, or domestication if the interest holder would have been entitled to an appraisal right under the new entity's organic law unless:<subsection number="16-1a-708(2)(a)">the organic law permits the organic rules to limit or eliminate the availability of an appraisal right; and</subsection><subsection number="16-1a-708(2)(b)">the organic rules limit or eliminate the availability of an appraisal right.</subsection></subsection><subsection number="16-1a-708(3)">An interest holder in a new entity is entitled to a contractual appraisal right in connection with the merger, conversion, or domestication to the extent provided in:<subsection number="16-1a-708(3)(a)">the new entity's organic rules;</subsection><subsection number="16-1a-708(3)(b)">the plan; or</subsection><subsection number="16-1a-708(3)(c)">for a business corporation, an action of the business corporation's governors.</subsection></subsection></section><section number="16-1a-709"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Required notice or approval -- Effect of merger on property and gifts.</catchline><subsection number="16-1a-709(1)">A domestic entity or a foreign entity that is required under this part to give notice to, or obtain the approval of, a government agency or a government officer of this state in order to be a party to a merger shall also give the notice or obtain the required approval when the domestic entity or foreign entity becomes a party to an interest exchange, a conversion, or a domestication.</subsection><subsection number="16-1a-709(2)">A domestic entity or a foreign entity that holds property for a charitable purpose under the law of this state at the time a transaction governed by this part occurs shall retain possession of the property to the extent permitted under law.</subsection><subsection number="16-1a-709(3)">A bequest, devise, gift, or promise contained in a will or other instrument of donation or conveyance that a person makes to an acquired entity that takes effect remains payable after the merger to the acquiring entity.</subsection><subsection number="16-1a-709(4)">An acquired entity's trust obligation transfers to the acquiring entity after a merger.</subsection></section></part><part number="16-1a-8"><catchline>Interest Exchange</catchline><section number="16-1a-801"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Definitions.</catchline>Reserved.</section><section number="16-1a-802"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Interest exchange authorized.</catchline><subsection number="16-1a-802(1)">Except as otherwise provided in this section, by complying with this part:<subsection number="16-1a-802(1)(a)">a domestic entity may acquire all of one or more classes or series of interests of another domestic entity or a foreign entity in exchange for interests, securities, obligations, money, other property, or rights to acquire interests or securities;</subsection><subsection number="16-1a-802(1)(b)">a domestic entity or foreign entity may acquire all of one or more classes or series of interests of a domestic entity in exchange for all of one or more classes or series of interests of a domestic entity; or</subsection><subsection number="16-1a-802(1)(c)">a foreign entity may be an acquiring or acquired entity in an interest exchange under this part if the law of the foreign entity's jurisdiction of formation authorizes the interest exchange.</subsection></subsection><subsection number="16-1a-802(2)">If a protected agreement contains a provision that applies to a merger of a domestic entity but does not refer to an interest exchange, the provision applies to an interest exchange in which the domestic entity is the acquired entity as if the interest exchange were a merger until the day on which a person amends the provision.</subsection><subsection number="16-1a-802(3)">This section does not apply to a transaction described in Chapter 6a, Utah Revised Nonprofit Corporation Act.</subsection></section><section number="16-1a-803"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Plan of interest exchange.</catchline><subsection number="16-1a-803(1)">A domestic entity may be the acquired entity in an interest exchange under this part by approving a plan of interest exchange.</subsection><subsection number="16-1a-803(2)">A domestic entity shall create a plan of interest exchange in a record and include in the plan of exchange:<subsection number="16-1a-803(2)(a)">the name and type of entity of the acquired entity;</subsection><subsection number="16-1a-803(2)(b)">the name, jurisdiction, and type of entity of the acquiring entity;</subsection><subsection number="16-1a-803(2)(c)">the process of converting the interests in the acquired entity into interests, securities, obligations, money, other property, or rights to acquire interests or securities;</subsection><subsection number="16-1a-803(2)(d)">any proposed amendment to:<subsection number="16-1a-803(2)(d)(i)">the public organic record, if any, of the acquired entity;</subsection><subsection number="16-1a-803(2)(d)(ii)">the private organic rules of the acquired entity that are, or are proposed to be, in a record;</subsection><subsection number="16-1a-803(2)(d)(iii)">other terms and conditions of the interest exchange; and</subsection><subsection number="16-1a-803(2)(d)(iv)">any other provision required by the law of this state or the organic rules of the acquired entity.</subsection></subsection></subsection><subsection number="16-1a-803(3)">In addition to the requirements described in Subsection <xref depth="4" refnumber="16-1a-803(2)">(2)</xref>, a plan of interest exchange may contain any other provision not prohibited by law.</subsection></section><section number="16-1a-804"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Approval of interest exchange.</catchline><subsection number="16-1a-804(1)">A plan of interest exchange is only effective if:<subsection number="16-1a-804(1)(a)">an acquired domestic entity approves the plan of exchange:<subsection number="16-1a-804(1)(a)(i)">in accordance with the requirements, if any, in the acquired domestic entity's organic law and organic rules for approval of an interest exchange;</subsection><subsection number="16-1a-804(1)(a)(ii)">if the domestic acquired entity's organic law or organic rules do not provide for approval of an interest exchange, in accordance with the requirements, if any, of the domestic acquired entity's organic law and organic rules for the approval of:<subsection number="16-1a-804(1)(a)(ii)(A)">for an entity that is not a business corporation or a limited cooperative association, a merger as if the interest exchange were a merger;</subsection><subsection number="16-1a-804(1)(a)(ii)(B)">for a business corporation, a merger requiring approval by a vote of the interest holders of the business corporation as if the interest exchange were that type of merger; or</subsection><subsection number="16-1a-804(1)(a)(ii)(C)">for a limited cooperative association, a transaction under this part; or</subsection></subsection><subsection number="16-1a-804(1)(a)(iii)">by a majority vote of each interest holder of the acquired domestic entity that is entitled to vote on or consent to any matter if:<subsection number="16-1a-804(1)(a)(iii)(A)">for an entity that is not a business corporation or limited cooperative association, the entity's organic law or organic rules do not provide for the approval of an interest exchange or a merger; or</subsection><subsection number="16-1a-804(1)(a)(iii)(B)">for a limited cooperative association, the entity's organic law or organic rules do not provide for the approval of an interest exchange or a transaction under this part;</subsection></subsection></subsection><subsection number="16-1a-804(1)(b)">the acquired domestic entity approves the plan of exchange in a record, by each interest holder of an acquired domestic entity that will have interest holder liability for any debt, obligation, or other liability that the acquired domestic entity incurs after the interest exchange takes effect; and</subsection><subsection number="16-1a-804(1)(c)">if the acquired domestic entity is not a business corporation or nonprofit corporation, the requirements of Subsection <xref tempid="949">(1)(b)</xref> do not apply if:<subsection number="16-1a-804(1)(c)(i)">the organic rules of the acquired domestic entity contain in a record a provision that provides for the approval of an interest exchange or a merger in which some or all of the acquired domestic entity's interest holders become subject to interest holder liability by the vote or consent of fewer than all of the interest holders; and</subsection><subsection number="16-1a-804(1)(c)(ii)">the interest holders consent in a record to or vote for the provision described in Subsection <xref tempid="1051">(1)(c)(i)</xref> of the organic rules or became an interest holder after the adoption of that provision.</subsection></subsection></subsection><subsection number="16-1a-804(2)">An interest exchange involving a foreign acquired entity is not effective unless the foreign entity approves the interest exchange in accordance with the law of the foreign entity's jurisdiction of formation.</subsection><subsection number="16-1a-804(3)">Except as otherwise provided in the acquiring entity's organic law or organic rules, the acquiring entity's interest holders are not required to approve an interest exchange.</subsection></section><section number="16-1a-805"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Amendment or abandonment of plan of interest exchange.</catchline><subsection number="16-1a-805(1)">A plan of interest exchange may be amended only with the consent of each party to the plan of interest exchange, except as otherwise provided in the plan of interest exchange.</subsection><subsection number="16-1a-805(2)">A domestic acquired entity may approve an amendment to a plan of interest exchange:<subsection number="16-1a-805(2)(a)">in the same manner as the plan of interest exchange was approved, if the plan of interest exchange does not provide for the manner by which a person may amend the plan of interest exchange; or</subsection><subsection number="16-1a-805(2)(b)">except as provided in Subsection <xref tempid="368">(3)</xref>, by the domestic acquired entity's governors or interest holders in the manner provided in the plan of interest exchange.</subsection></subsection><subsection number="16-1a-805(3)">An interest holder that was entitled to vote on or consent to the approval of an interest exchange is entitled to vote on or consent to an amendment to the plan of interest exchange that will change:<subsection number="16-1a-805(3)(a)">the amount or kind of interests, securities, obligations, money, other property, or rights to acquire interests or securities that the interest holders of the acquired entity will receive under the plan of interest exchange;</subsection><subsection number="16-1a-805(3)(b)">the public organic record, if any, or private organic rules of the acquired entity that will be in effect immediately after the interest exchange takes effect, except for a change that does not require approval of the interest holders of the acquired entity under the acquired entity's organic law or organic rules; or</subsection><subsection number="16-1a-805(3)(c)">any other term or condition of the plan of interest exchange if the change would adversely affect the interest holder in a material respect.</subsection></subsection><subsection number="16-1a-805(4)"><subsection number="16-1a-805(4)(a)">After a plan of interest exchange is approved and before a statement of interest exchange takes effect, the plan of interest exchange may be abandoned as provided in the plan of interest exchange.</subsection><subsection number="16-1a-805(4)(b)">Unless prohibited by the plan of interest exchange a domestic acquired entity may abandon the plan of interest exchange in the same manner as the plan of interest exchange was approved.</subsection></subsection><subsection number="16-1a-805(5)"><subsection number="16-1a-805(5)(a)">If a plan of interest exchange is abandoned after a statement of interest exchange is delivered to the division for filing and before the statement of interest exchange takes effect, the acquired entity shall:<subsection number="16-1a-805(5)(a)(i)">sign a statement of abandonment; and</subsection><subsection number="16-1a-805(5)(a)(ii)">deliver the statement of abandonment to the division for filing before the statement of interest exchange takes effect.</subsection></subsection><subsection number="16-1a-805(5)(b)">A statement of abandonment takes effect on the day and time on which the acquired entity delivers the statement of abandonment to the division for filing.</subsection><subsection number="16-1a-805(5)(c)">After a statement of abandonment takes effect, the interest exchange is abandoned and does not become effective.</subsection></subsection><subsection number="16-1a-805(6)">A statement of abandonment shall contain:<subsection number="16-1a-805(6)(a)">the name of the acquired entity;</subsection><subsection number="16-1a-805(6)(b)">the day on which the acquired entity delivers the statement of interest exchange to the division for filing; and</subsection><subsection number="16-1a-805(6)(c)">a statement that the interest exchange has been abandoned in accordance with this section.</subsection></subsection></section><section number="16-1a-806"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Statement of interest exchange -- Effective date of interest exchange.</catchline><subsection number="16-1a-806(1)">A domestic acquired entity shall sign a statement of interest exchange and deliver the statement of interest exchange to the division for filing.</subsection><subsection number="16-1a-806(2)">A statement of interest exchange shall contain:<subsection number="16-1a-806(2)(a)">the acquired entity's name and type of entity;</subsection><subsection number="16-1a-806(2)(b)">the acquiring entity's name, jurisdiction of formation and type of entity;</subsection><subsection number="16-1a-806(2)(c)">if the statement of interest exchange is not to be effective upon filing, the later day and time on which the statement of interest exchange will become effective, which may not be more than 90 days after the day on which the division files the statement of interest exchange;</subsection><subsection number="16-1a-806(2)(d)">a statement that the acquired entity approved the plan of interest exchange in accordance with Section <xref depth="3" refnumber="16-1a-804">16-1a-804</xref>; and</subsection><subsection number="16-1a-806(2)(e)">any amendment to the acquired entity's public record, if any, that was approved as part of the interest exchange.</subsection></subsection><subsection number="16-1a-806(3)">In addition to the requirements of Subsection <xref tempid="922">(2)</xref>, a statement of interest exchange may contain any other provision not prohibited by law.</subsection><subsection number="16-1a-806(4)"><subsection number="16-1a-806(4)(a)">A domestic acquired entity may deliver a plan of interest exchange that the domestic acquired entity signs and that meets all the requirements of Subsection <xref tempid="350">(2)</xref> to the division for filing instead of a statement of interest exchange.</subsection><subsection number="16-1a-806(4)(b)">A domestic acquired entity delivering a plan of interest exchange to the division in accordance with Subsection <xref tempid="1030">(4)(a)</xref> has the same effect as delivering a statement of interest exchange to the division.</subsection><subsection number="16-1a-806(4)(c)">If a domestic acquired entity delivers a plan of interest exchange as described in this Subsection <xref tempid="877">(4)</xref>, all references to a statement of interest exchange in this part refer to the plan of interest exchange for that plan of interest exchange.</subsection></subsection><subsection number="16-1a-806(5)">A statement of interest exchange takes effect on the day and time:<subsection number="16-1a-806(5)(a)">on which the domestic acquired entity delivers the statement of interest exchange to the division for filing; or</subsection><subsection number="16-1a-806(5)(b)">specified in the statement of interest exchange that is later than the day and time on which the domestic acquired entity delivers the statement of interest exchange to the division for filing.</subsection></subsection><subsection number="16-1a-806(6)">An interest exchange in which the acquired entity is a domestic entity takes effect when the statement of interest exchange takes effect.</subsection></section><section number="16-1a-807"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Effect of interest exchange.</catchline><subsection number="16-1a-807(1)">When an interest exchange in which the acquired entity is a domestic entity takes effect:<subsection number="16-1a-807(1)(a)">each interest in the domestic acquired entity that is subject to the interest exchange is converted, and each interest holder of an interest is entitled only to:<subsection number="16-1a-807(1)(a)(i)">the rights provided to the interest holder:<subsection number="16-1a-807(1)(a)(i)(A)">under the plan of interest exchange; or</subsection><subsection number="16-1a-807(1)(a)(i)(B)">in the acquired entity's organic law; and</subsection></subsection><subsection number="16-1a-807(1)(a)(ii)">any appraisal rights provided in Section <xref depth="3" refnumber="16-1a-708">16-1a-708</xref>;</subsection></subsection><subsection number="16-1a-807(1)(b)">the acquiring entity becomes the interest holder of each interest in the acquired entity stated in the plan of interest exchange that the acquiring entity will acquire;</subsection><subsection number="16-1a-807(1)(c)">the public organic record, if any, of the acquired entity is amended to the extent provided in the statement of interest exchange; and</subsection><subsection number="16-1a-807(1)(d)">the private organic rules of the acquired entity that are to be in a record, if any, are amended to the extent provided in the plan of interest exchange.</subsection></subsection><subsection number="16-1a-807(2)">Except as otherwise provided in the organic law or organic rules of the acquired entity, an interest exchange does not give rise to any right that an interest holder, governor, or third party would have upon a dissolution, liquidation, or winding up of the acquired entity.</subsection><subsection number="16-1a-807(3)">When an interest exchange takes effect:<subsection number="16-1a-807(3)(a)">a person that did not have interest holder liability with respect to the acquired entity and becomes subject to interest holder liability with respect to a domestic entity as a result of the interest exchange has interest holder liability only:<subsection number="16-1a-807(3)(a)(i)">to the extent provided by the organic law of the domestic entity; and</subsection><subsection number="16-1a-807(3)(a)(ii)">for a debt, obligation, or other liability that the domestic entity incurs after the interest exchange takes effect; and</subsection></subsection><subsection number="16-1a-807(3)(b)">the following conditions apply to the interest holder liability of a person that no longer holds an interest in a domestic acquired entity if the person had interest holder liability in the domestic acquired entity:<subsection number="16-1a-807(3)(b)(i)">the interest exchange does not discharge any interest holder liability under the organic law of the domestic acquired entity to the extent the person incurred the interest holder liability before the interest exchange became effective;</subsection><subsection number="16-1a-807(3)(b)(ii)">the person does not have interest holder liability under the organic law of the domestic acquired entity for a debt, obligation, or other liability that the domestic acquired entity incurs after the interest exchange takes effect;</subsection><subsection number="16-1a-807(3)(b)(iii)">the person does not have interest holder liability under the organic law of the domestic entity for any debt, obligation, or other liability preserved under Subsection <xref tempid="731">(3)(b)(i)</xref> as though the interest exchange had not occurred; and</subsection><subsection number="16-1a-807(3)(b)(iv)">the person has whatever rights of contribution from any other person in accordance with other law or the organic law or organic rules of the domestic acquired entity with respect to any interest holder liability preserved under Subsection <xref depth="4" refnumber="16-1a-807(3)(b)(i)">(3)(b)(i)</xref> as if the interest exchange had not occurred.</subsection></subsection></subsection></section></part><part number="16-1a-9"><catchline>Conversion</catchline><section number="16-1a-901"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Definitions.</catchline>Reserved.</section><section number="16-1a-902"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Conversion authorized.</catchline><subsection number="16-1a-902(1)">By complying with this part, a domestic entity may become:<subsection number="16-1a-902(1)(a)">a domestic entity that is a different type of entity; or</subsection><subsection number="16-1a-902(1)(b)">a foreign entity that is a different type of entity, if the conversion is authorized by the law of the foreign entity's jurisdiction of formation.</subsection></subsection><subsection number="16-1a-902(2)">By complying with the provisions of this part that are applicable to foreign entities, a foreign entity may become a domestic entity that is a different type of entity if the conversion is authorized by the law of the foreign entity's jurisdiction of formation.</subsection><subsection number="16-1a-902(3)">If a protected agreement contains a provision that applies to a merger of a domestic entity but does not refer to a conversion, the provision applies to a conversion of the entity as if the conversion were a merger until the provision is amended after May 7, 2026.</subsection></section><section number="16-1a-903"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Plan of conversion.</catchline><subsection number="16-1a-903(1)">A domestic entity may convert to a different type of entity by approving a plan of conversion.</subsection><subsection number="16-1a-903(2)">A domestic entity shall ensure that the plan of conversion is in a record and contains:<subsection number="16-1a-903(2)(a)">the converting entity's name, jurisdiction of formation, and type of entity;</subsection><subsection number="16-1a-903(2)(b)">the converted entity's name, jurisdiction of formation, and type of entity;</subsection><subsection number="16-1a-903(2)(c)">the manner of converting the interest in the converting entity into interest, securities, obligations, money, other property, or rights to acquire interests or securities;</subsection><subsection number="16-1a-903(2)(d)">the proposed public organic record of the converted entity if the converted entity will be a filing entity;</subsection><subsection number="16-1a-903(2)(e)">the full text of the private organic rules of the converted entity that are proposed to be in a record;</subsection><subsection number="16-1a-903(2)(f)">the other terms and conditions of the conversion; and</subsection><subsection number="16-1a-903(2)(g)">any other provision required by the law of this state or the organic rules of the converting entity.</subsection></subsection><subsection number="16-1a-903(3)">In addition to the requirements of Subsection <xref tempid="516">(2)</xref>, a plan of conversion may contain any provision not prohibited by law.</subsection></section><section number="16-1a-904"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Approval of conversion.</catchline><subsection number="16-1a-904(1)">A plan of conversion does not take effect unless:<subsection number="16-1a-904(1)(a)">a domestic converting entity approves the plan of conversion:<subsection number="16-1a-904(1)(a)(i)">in accordance with the requirements, if any, in the domestic converting entity's organic rules for approval of a conversion;</subsection><subsection number="16-1a-904(1)(a)(ii)">if the domestic converting entity's organic rules do not provide for the approval of a conversion, in accordance with the requirements, if any, in the converting entity's organic law and organic rules for the approval of:<subsection number="16-1a-904(1)(a)(ii)(A)">for an entity that is not a business corporation or a limited cooperative association, a merger, as if the conversion were a merger;</subsection><subsection number="16-1a-904(1)(a)(ii)(B)">for a business corporation, a merger requiring approval by a vote of the interest holders of the business corporation, as if the conversion were that type of merger; and</subsection><subsection number="16-1a-904(1)(a)(ii)(C)">for a limited cooperative association, a transaction authorized under this part; or</subsection></subsection><subsection number="16-1a-904(1)(a)(iii)">by each interest holder of the entity that is entitled to vote on or consent to any matter if:<subsection number="16-1a-904(1)(a)(iii)(A)">for an entity that is not a business corporation or a limited cooperative association, the entity's organic law and organic rules do not provide for the approval of a conversion or a merger; or</subsection><subsection number="16-1a-904(1)(a)(iii)(B)">for a limited cooperative association, the limited cooperative association's organic law and organic rules do not provide for the approval of a conversion or a transaction under this part;</subsection></subsection></subsection><subsection number="16-1a-904(1)(b)">each interest holder of a domestic converting entity that will have interest holder liability for a debt, obligation, or other liability that the domestic converting entity incurs after the conversion approves the plan of conversion in a record; and</subsection><subsection number="16-1a-904(1)(c)">for an entity that is not a business corporation or a nonprofit corporation, the entity complies with the provisions of Subsection <xref tempid="360">(1)(b)</xref>, unless:<subsection number="16-1a-904(1)(c)(i)">the organic rules of the entity contain a provision that provides in a record for the approval of an interest exchange or a merger in which some or all of the entity's interest holders become subject to interest holder liability by the vote or consent of fewer than all the interest holders; and</subsection><subsection number="16-1a-904(1)(c)(ii)">the interest holders consent in a record to or vote for the provision described in Subsection <xref tempid="176">(1)(c)(i)</xref> or became an interest holder after the adoption of the provision.</subsection></subsection></subsection><subsection number="16-1a-904(2)">A conversion of a foreign converting entity does not take effect until the foreign entity approves the conversion in accordance with the law of the foreign entity's jurisdiction of formation.</subsection></section><section number="16-1a-905"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Amendment or abandonment of plan of conversion.</catchline><subsection number="16-1a-905(1)">A domestic converting entity may amend the domestic converting entity's plan of conversion:<subsection number="16-1a-905(1)(a)">in the same manner as the domestic converting entity approved the plan of conversion, if the plan does not provide for the manner by which the domestic converting entity may amend the plan of conversion;</subsection><subsection number="16-1a-905(1)(b)">by the domestic converting entity's governors or interest holders in the manner provided in the plan of conversion, but an interest holder that was entitled to vote on or consent to approval of the conversion may vote on or consent to any amendment to the plan that will change:<subsection number="16-1a-905(1)(b)(i)">the amount or kind of interests, securities, obligations, money, other property, or rights to acquire interest or securities that the interest holders of the converting entity will receive under the plan of conversion;</subsection><subsection number="16-1a-905(1)(b)(ii)">the public organic record, if any, or private organic rules of the converted entity that will be in effect immediately after the conversion takes effect, except for changes that do not require approval of the converted entity's interest holders under the converted entity's organic law or organic rules; or</subsection><subsection number="16-1a-905(1)(b)(iii)">any other term or condition of the plan, if the change would adversely affect the interest holder in a material respect.</subsection></subsection></subsection><subsection number="16-1a-905(2)"><subsection number="16-1a-905(2)(a)">After a domestic converting entity approves a plan of conversion and before a statement of conversion is effective, the domestic converting entity may abandon the plan of conversion as provided in the plan of conversion.</subsection><subsection number="16-1a-905(2)(b)">Unless prohibited by the plan of conversion, a domestic converting entity may abandon the plan in the same manner as the domestic converting entity approved the plan of conversion.</subsection></subsection><subsection number="16-1a-905(3)">If a domestic converting entity abandons a plan of conversion after a statement of conversion has been delivered to the division for filing and before the statement is effective, the domestic converting entity shall:<subsection number="16-1a-905(3)(a)">sign a statement of abandonment; and</subsection><subsection number="16-1a-905(3)(b)">deliver the signed statement of abandonment to the division for filing before the statement of conversion takes effect.</subsection></subsection><subsection number="16-1a-905(4)">A statement of abandonment takes effect on the day and time on which the division files the statement of abandonment and the conversion is abandoned and does not take effect.</subsection><subsection number="16-1a-905(5)">A statement of abandonment shall contain:<subsection number="16-1a-905(5)(a)">the name of the converting entity;</subsection><subsection number="16-1a-905(5)(b)">the day on which the converting entity files the statement of conversion with the division; and</subsection><subsection number="16-1a-905(5)(c)">a statement that the domestic converting entity abandoned the conversion in accordance with this section.</subsection></subsection></section><section number="16-1a-906"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Statement of conversion -- Effective date of conversion.</catchline><subsection number="16-1a-906(1)">A converting entity shall sign a statement of conversion and deliver the statement of conversion to the division for filing.</subsection><subsection number="16-1a-906(2)">A statement of conversion shall contain:<subsection number="16-1a-906(2)(a)">the converting entity's name, jurisdiction of formation, and type of entity;</subsection><subsection number="16-1a-906(2)(b)">the converted entity's name, jurisdiction of formation, and type of entity;</subsection><subsection number="16-1a-906(2)(c)">if the statement of conversion is not to be effective upon filing, the later day and time on which the statement of conversion will take effect, which may not be more than 90 days after the day on which the division files the statement of conversion;</subsection><subsection number="16-1a-906(2)(d)"><subsection number="16-1a-906(2)(d)(i)">if the converting entity is a domestic entity, a statement that the converting entity approved the plan of conversion in accordance with Section <xref depth="3" refnumber="16-1a-904">16-1a-904</xref>; or</subsection><subsection number="16-1a-906(2)(d)(ii)">if the converting entity is a foreign entity, a statement that the converting entity approved the plan of conversion in accordance with the law of the converting entity's jurisdiction of formation;</subsection></subsection><subsection number="16-1a-906(2)(e)">if the converting entity is a domestic entity, the converting entity's public organic record;</subsection><subsection number="16-1a-906(2)(f)">if the converted entity is a domestic limited liability partnership, the converted entity's statement of qualification; and</subsection><subsection number="16-1a-906(2)(g)">if the converted entity is a foreign entity that is not a registered foreign entity, a mailing address to which the division may send any process served on the division.</subsection></subsection><subsection number="16-1a-906(3)">In addition to the requirements of Subsection <xref depth="4" refnumber="16-1a-906(2)">(2)</xref>, a statement of conversion may contain any other provision not prohibited by law.</subsection><subsection number="16-1a-906(4)">If the converted entity is a domestic entity, the converted entity's public organic record, if any, shall satisfy the requirements of the laws of this state, except that the public organic record:<subsection number="16-1a-906(4)(a)">is not required to be signed; and</subsection><subsection number="16-1a-906(4)(b)">is not required to be included in a restatement of the public organic record.</subsection></subsection><subsection number="16-1a-906(5)"><subsection number="16-1a-906(5)(a)">A domestic converting entity may deliver a plan of conversion that a domestic converting entity signs and that meets all of the requirements of Subsection <xref tempid="567">(2)</xref> to the division for filing instead of a statement of conversion.</subsection><subsection number="16-1a-906(5)(b)">A domestic converting entity delivering a plan of conversion in accordance with Subsection <xref tempid="895">(5)(a)</xref> has the same effect as delivering a statement of conversion to the division.</subsection><subsection number="16-1a-906(5)(c)">If a domestic converting entity delivers a plan of conversion as described in this Subsection <xref tempid="935">(5)</xref>, all references to a statement of conversion refer to the plan of conversion filed in accordance with this part.</subsection></subsection><subsection number="16-1a-906(6)">A statement of conversion takes effect on the day and time:<subsection number="16-1a-906(6)(a)">on which the domestic converting entity delivers the statement of conversion to the division for filing; or</subsection><subsection number="16-1a-906(6)(b)">specified in the statement of conversion that is later than the day and time on which the domestic converting entity delivers the statement of conversion to the division for filing.</subsection></subsection><subsection number="16-1a-906(7)"><subsection number="16-1a-906(7)(a)">If a converted entity is a domestic entity, a conversion takes effect on the day and time on which the statement of conversion takes effect.</subsection><subsection number="16-1a-906(7)(b)">If a converted entity is a foreign entity, the conversion takes effect on the later of:<subsection number="16-1a-906(7)(b)(i)">the day and time provided by the organic law of the converted entity; or</subsection><subsection number="16-1a-906(7)(b)(ii)">the day and time on which the statement of conversion takes effect.</subsection></subsection></subsection></section><section number="16-1a-907"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Effect of conversion.</catchline><subsection number="16-1a-907(1)">When a conversion takes effect:<subsection number="16-1a-907(1)(a)">the converted entity is:<subsection number="16-1a-907(1)(a)(i)">organized under and subject to the organic law of the converted entity; and</subsection><subsection number="16-1a-907(1)(a)(ii)">the same entity without interruption as the converting entity;</subsection></subsection><subsection number="16-1a-907(1)(b)">all property of the converting entity continues to be vested in the converted entity without transfer, reversion, or impairment;</subsection><subsection number="16-1a-907(1)(c)">each debt, obligation, and other liability of the converting entity continues as a debt, obligation, and other liability of the converted entity;</subsection><subsection number="16-1a-907(1)(d)">except as otherwise provided by law or the plan of conversion, each right, privilege, immunity, power, and purpose of the converting entity remain in the converted entity;</subsection><subsection number="16-1a-907(1)(e)">the name of the converted entity may be substituted for the name of the converting entity in a pending action or proceeding;</subsection><subsection number="16-1a-907(1)(f)">if a converted entity is a filing entity, the converted entity's public organic record takes effect;</subsection><subsection number="16-1a-907(1)(g)">if the converted entity is a limited liability partnership, the converted entity's statement of qualification is effective;</subsection><subsection number="16-1a-907(1)(h)">the private organic rules of the converted entity that are to be in a record, if any, approved as part of the plan of conversion take effect;</subsection><subsection number="16-1a-907(1)(i)">each interest in the converting entity is converted, and each interest holder of the converting entity is entitled only to:<subsection number="16-1a-907(1)(i)(i)">the rights provided to the interest holder under the plan of conversion;</subsection><subsection number="16-1a-907(1)(i)(ii)">appraisal rights described in Section <xref depth="3" refnumber="16-1a-708">16-1a-708</xref>; and</subsection><subsection number="16-1a-907(1)(i)(iii)">the converting entity's organic law;</subsection></subsection><subsection number="16-1a-907(1)(j)">a person that did not have interest holder liability with respect to the converting entity and becomes subject to interest holder liability with respect to a domestic entity as a result of the conversion has interest holder liability:<subsection number="16-1a-907(1)(j)(i)">only to the extent provided by the organic law of the entity; and</subsection><subsection number="16-1a-907(1)(j)(ii)">only for a debt, obligation, or other liability that the converting entity incurs after the conversion takes effect;</subsection></subsection><subsection number="16-1a-907(1)(k)">the following conditions apply to the interest holder liability of a person that no longer holds an interest in a domestic converting entity if the person had interest holder liability in the domestic converting entity:<subsection number="16-1a-907(1)(k)(i)">the conversion does not discharge any interest holder liability under the organic law of the domestic converting entity to the extent the person incurred the interest holder liability before the conversion takes effect;</subsection><subsection number="16-1a-907(1)(k)(ii)">the person does not have interest holder liability under the organic law of the domestic converting entity for a debt, obligation, or other liability that the converted entity incurs after the conversion takes effect;</subsection><subsection number="16-1a-907(1)(k)(iii)">the organic law of the domestic converting entity continues to apply to the release, collection, or discharge of any interest holder liability preserved under Subsection <xref depth="4" refnumber="16-1a-907(1)(k)(i)">(1)(k)(i)</xref> as if the conversion does not occur; and</subsection><subsection number="16-1a-907(1)(k)(iv)">the person has whatever rights of contribution from any other person as provided by other law or the organic rules of the domestic converting entity with respect to any interest holder liability preserved under Subsection <xref depth="4" refnumber="16-1a-907(1)(k)(i)">(1)(k)(i)</xref> as if the conversion does not occur; and</subsection></subsection><subsection number="16-1a-907(1)(l)">a person may serve a foreign entity that is the converted entity with process in this state for the collection and enforcement of any of the foreign entity's debts, obligations, and other liabilities in accordance with applicable law.</subsection></subsection><subsection number="16-1a-907(2)">Except as otherwise provided in the organic law or organic rules of a converting entity, a conversion does not give rise to a right that an interest holder, a governor, or a third party would have upon the dissolution, liquidation, or winding up of the converting entity.</subsection><subsection number="16-1a-907(3)">If a converting entity is a registered foreign entity, the converting entity's registration to do business is canceled when the conversion takes effect.</subsection><subsection number="16-1a-907(4)">A conversion does not require an entity to wind up the entity's affairs and does not constitute or cause the dissolution of the entity.</subsection></section></part><part number="16-1a-10"><catchline>Domestication</catchline><section number="16-1a-1001"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Definitions.</catchline>Reserved.</section><section number="16-1a-1002"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Domestication authorized.</catchline><subsection number="16-1a-1002(1)">Except as otherwise provided in this section, by complying with this part:<subsection number="16-1a-1002(1)(a)">a domestic entity may become a domestic entity of the same type of entity in a foreign jurisdiction if the domestication is authorized by the law of the foreign jurisdiction; and</subsection><subsection number="16-1a-1002(1)(b)">a foreign entity may become a domestic entity of the same type of entity in this state if the domestication is authorized by the law of the foreign entity's jurisdiction of formation.</subsection></subsection><subsection number="16-1a-1002(2)">If a protected agreement contains a provision that applies to a merger of a domestic entity but does not refer to domestication, the provision applies to a domestication of the entity as if the domestication were a merger until the provision is amended after May 7, 2026.</subsection></section><section number="16-1a-1003"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Plan of domestication.</catchline><subsection number="16-1a-1003(1)">A domestic entity may become a foreign entity in a domestication by approving a plan of domestication.</subsection><subsection number="16-1a-1003(2)">The domestic entity shall ensure that a plan of domestication is in a record and that the plan of domestication contains:<subsection number="16-1a-1003(2)(a)">the domesticating entity's name, jurisdiction of formation, and type of entity;</subsection><subsection number="16-1a-1003(2)(b)">the domesticated entity's name, jurisdiction of formation, and type of entity;</subsection><subsection number="16-1a-1003(2)(c)">the manner of converting the interests in the domesticating entity into interests, securities, obligations, money, other property, or rights to acquire interests and securities;</subsection><subsection number="16-1a-1003(2)(d)">the proposed public organic record of the domesticated entity if the domesticated entity is a filing entity;</subsection><subsection number="16-1a-1003(2)(e)">the full text of the private organic rules of the domesticated entity that are proposed to be in a record;</subsection><subsection number="16-1a-1003(2)(f)">the other terms and conditions of the domestication; and</subsection><subsection number="16-1a-1003(2)(g)">any other provision required by the law of this state or the organic rules of the domesticating entity.</subsection></subsection><subsection number="16-1a-1003(3)">In addition to the requirements described in Subsection <xref tempid="553">(2)</xref>, a plan of domestication may contain any other provision not prohibited by law.</subsection></section><section number="16-1a-1004"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Approval of domestication.</catchline><subsection number="16-1a-1004(1)">A plan of domestication does not take effect unless:<subsection number="16-1a-1004(1)(a)">a domestic domesticating entity approves the plan of domestication:<subsection number="16-1a-1004(1)(a)(i)">in accordance with the requirements, if any, of the domestic domesticating entity's organic rules for the approval of a domestication;</subsection><subsection number="16-1a-1004(1)(a)(ii)">if the domestic domesticating entity's rules do not provide for approval of a domestication, in accordance with the requirements, if any, of the domestic domesticating entity's organic law and organic rules for the approval of:<subsection number="16-1a-1004(1)(a)(ii)(A)">for an entity that is not a business corporation or limited cooperative association, a merger, as if the domestication were a merger;</subsection><subsection number="16-1a-1004(1)(a)(ii)(B)">for a business corporation, a merger requiring approval for a vote of the interest holders of the business corporation, as if the domestication was that type of merger; or</subsection><subsection number="16-1a-1004(1)(a)(ii)(C)">for a limited cooperative association, a transaction under this part; or</subsection></subsection><subsection number="16-1a-1004(1)(a)(iii)">by each interest holder of the entity entitled to vote on or consent to any matter if:<subsection number="16-1a-1004(1)(a)(iii)(A)">for an entity that is not a business corporation or a limited cooperative association, the business corporation's or limited cooperative association's organic law or organic rules do not provide for the approval of a domestication or merger; or</subsection><subsection number="16-1a-1004(1)(a)(iii)(B)">for a limited cooperative association, the limited cooperative association's organic law or organic rules do not provide for the approval of a domestication or a transaction under this part;</subsection></subsection></subsection><subsection number="16-1a-1004(1)(b)">each interest holder that will have interest holder liability for a debt, obligation, or other liability that a domesticated entity incurs after the domestication takes effect approves the domestication in a record; and</subsection><subsection number="16-1a-1004(1)(c)">for an entity that is not a business corporation or a nonprofit corporation, the entity shall comply with the provisions of Subsection <xref depth="4" refnumber="16-1a-1004(1)(b)">(1)(b)</xref>, unless:<subsection number="16-1a-1004(1)(c)(i)">the organic rules of the entity contain a provision in a record for the approval of a domestication or merger in which some or all of the entity's interest holders become subject to interest holder liability by the vote or consent of fewer than all the interest holders; and</subsection><subsection number="16-1a-1004(1)(c)(ii)">the interest holder consented in a record to or voted for the provision described in Subsection <xref tempid="801">(1)(c)(i)</xref> or became an interest holder after the adoption of the provision.</subsection></subsection></subsection><subsection number="16-1a-1004(2)">A domestication of a foreign domesticating entity does not take effect unless the foreign domesticating entity approves the domestication in accordance with the law of the foreign entity's jurisdiction of formation.</subsection></section><section number="16-1a-1005"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Amendment or abandonment of plan of domestication.</catchline><subsection number="16-1a-1005(1)">A domestic domesticating entity may amend a plan of domestication for the domestic domesticating entity:<subsection number="16-1a-1005(1)(a)">in the same manner as the domestic domesticating entity approved the plan of domestication; or</subsection><subsection number="16-1a-1005(1)(b)">through the domestic domesticating entity's governors or interest holders in the manner provided in the plan of domestication, if an interest holder that was entitled to vote on or consent to approval of the domestication is entitled to vote on any amendment to the plan of domestication that will change:<subsection number="16-1a-1005(1)(b)(i)">the amount or kind of interests, securities, obligations, money, other property, or rights to acquire interest or securities that an interest holder of the domesticating entity will receive under the plan of domestication;</subsection><subsection number="16-1a-1005(1)(b)(ii)">the public organic record, if any, or private organic rules of the domesticated entity that will take effect immediately after the domestication takes effect, except for any change that does not require the approval of the interest holders of the domesticated entity under the domesticated entity's organic law or organic rules; or</subsection><subsection number="16-1a-1005(1)(b)(iii)">any other term or condition of the plan, if the change would adversely affect the interest holder in any material respect.</subsection></subsection></subsection><subsection number="16-1a-1005(2)"><subsection number="16-1a-1005(2)(a)">After a domestic domesticating entity approves a plan of domestication and before a statement of domestication takes effect, the domestic domesticating entity may abandon the plan of domestication as provided in the plan of domestication.</subsection><subsection number="16-1a-1005(2)(b)">Unless prohibited by the plan of domestication, a domestic domesticating entity may abandon the plan of domestication in the same manner as the domestic domesticating entity approved the plan of domestication.</subsection></subsection><subsection number="16-1a-1005(3)">If a domestic domesticating entity abandons a plan of domestication after delivering a statement of domestication to the division for filing and before the statement of abandonment is effective, the domestic domesticating entity shall:<subsection number="16-1a-1005(3)(a)">sign a statement of abandonment; and</subsection><subsection number="16-1a-1005(3)(b)">deliver the signed statement of abandonment to the division for filing before the statement of domestication takes effect.</subsection></subsection><subsection number="16-1a-1005(4)">A statement of abandonment takes effect on the day and time on which the division files the statement of abandonment and the domestication is abandoned and does not take effect.</subsection><subsection number="16-1a-1005(5)">A statement of abandonment shall contain:<subsection number="16-1a-1005(5)(a)">the name of the domesticating entity;</subsection><subsection number="16-1a-1005(5)(b)">the day on which the domesticating entity files the statement of domestication with the division; and</subsection><subsection number="16-1a-1005(5)(c)">a statement that the domestic domesticating entity abandoned the domestication in accordance with this section.</subsection></subsection></section><section number="16-1a-1006"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Statement of domestication -- Effective date of domestication.</catchline><subsection number="16-1a-1006(1)">A domesticating entity shall sign a statement of domestication and deliver the statement of domestication to the division for filing.</subsection><subsection number="16-1a-1006(2)">A statement of domestication shall contain:<subsection number="16-1a-1006(2)(a)">the domesticating entity's name, jurisdiction of formation, and type of entity;</subsection><subsection number="16-1a-1006(2)(b)">the domesticated entity's name, jurisdiction of formation, and type of entity;</subsection><subsection number="16-1a-1006(2)(c)">if the statement of domestication is not to be effective upon filing, the later day and time on which the statement of domestication will take effect, which may not be more than 90 days after the day on which the division files the statement of domestication;</subsection><subsection number="16-1a-1006(2)(d)"><subsection number="16-1a-1006(2)(d)(i)">if the domesticated entity is a domestic entity, a statement that the domesticating entity approved the plan of domestication in accordance with Section <xref depth="3" refnumber="16-1a-1004">16-1a-1004</xref>; or</subsection><subsection number="16-1a-1006(2)(d)(ii)">if the domesticating entity is a foreign entity, a statement that the domesticating entity approved the plan of domestication in accordance with the law of the domesticating entity's jurisdiction of formation;</subsection></subsection><subsection number="16-1a-1006(2)(e)">if the domesticated entity is a domestic filing entity, the domesticated entity's public organic record;</subsection><subsection number="16-1a-1006(2)(f)">if the domesticated entity is a domestic limited liability partnership, the domesticated entity's statement of qualification; and</subsection><subsection number="16-1a-1006(2)(g)">if the domesticated entity is a foreign entity that is not a registered foreign entity, a mailing address to which the division may send any process served on the division.</subsection></subsection><subsection number="16-1a-1006(3)">In addition to the requirements of Subsection <xref depth="4" refnumber="16-1a-1006(2)">(2)</xref>, a statement of domestication may contain any other provision not prohibited by law.</subsection><subsection number="16-1a-1006(4)">If the domesticated entity is a domestic entity, the domesticated entity's public organic record, if any, shall satisfy the requirements of the laws of this state, except that the public organic record:<subsection number="16-1a-1006(4)(a)">is not required to be signed; and</subsection><subsection number="16-1a-1006(4)(b)">may omit any provision that is not required to be included in a restatement of the public organic record.</subsection></subsection><subsection number="16-1a-1006(5)"><subsection number="16-1a-1006(5)(a)">A domestic domesticating entity may deliver a plan of domestication that a domestic domesticating entity signs and that meets all of the requirements of Subsection <xref depth="4" refnumber="16-1a-1006(2)">(2)</xref> to the division for filing instead of a statement of domestication.</subsection><subsection number="16-1a-1006(5)(b)">A domestic domesticating entity delivering a plan of domestication in accordance with Subsection <xref depth="4" refnumber="16-1a-1006(5)(a)">(5)(a)</xref> has the same effect as delivering a statement of domestication to the division.</subsection><subsection number="16-1a-1006(5)(c)">If a domestic domesticating entity delivers a plan of domestication as described in this Subsection <xref depth="4" refnumber="16-1a-1006(5)">(5)</xref>, all references to a statement of domestication refer to the plan of domestication filed in accordance with this part.</subsection></subsection><subsection number="16-1a-1006(6)">A statement of domestication takes effect on the day and time:<subsection number="16-1a-1006(6)(a)">on which the domestic domesticating entity delivers the statement of domestication to the division for filing; or</subsection><subsection number="16-1a-1006(6)(b)">specified in the statement of domestication that is later than the day and time on which the domestic domesticating entity delivers the statement of domestication to the division for filing.</subsection></subsection><subsection number="16-1a-1006(7)"><subsection number="16-1a-1006(7)(a)">If a domesticated entity is a domestic entity, a domestication takes effect on the day and time on which the statement of domestication takes effect.</subsection><subsection number="16-1a-1006(7)(b)">If a domesticated entity is a foreign entity, the domestication takes effect on the later of:<subsection number="16-1a-1006(7)(b)(i)">the day and time provided by the organic law of the domesticated entity; or</subsection><subsection number="16-1a-1006(7)(b)(ii)">the day and time on which the statement of domestication takes effect.</subsection></subsection></subsection></section><section number="16-1a-1007"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Effect of domestication.</catchline><subsection number="16-1a-1007(1)">When a domestication takes effect:<subsection number="16-1a-1007(1)(a)">the domesticated entity is:<subsection number="16-1a-1007(1)(a)(i)">organized under and subject to the organic law of the domesticated entity; and</subsection><subsection number="16-1a-1007(1)(a)(ii)">the same entity without interruption as the domesticating entity;</subsection></subsection><subsection number="16-1a-1007(1)(b)">all of the domesticating entity's property continues to be vested in the domesticated entity without transfer, reversion, or impairment;</subsection><subsection number="16-1a-1007(1)(c)">each debt, obligation, and other liability of the domesticating entity continues as a debt, obligation, and other liability of the domesticated entity;</subsection><subsection number="16-1a-1007(1)(d)">except as otherwise provided by law or the plan of domestication, each right, privilege, immunity, power, and purpose of the domesticating entity remain in the domesticated entity;</subsection><subsection number="16-1a-1007(1)(e)">the name of the domesticated entity may be substituted for the name of the domesticating entity in a pending action or proceeding;</subsection><subsection number="16-1a-1007(1)(f)">if the domesticated entity is a filing entity the domesticated entity's public organic record takes effect;</subsection><subsection number="16-1a-1007(1)(g)">if the domesticated entity is a limited liability partnership, the domesticated entity's statement of qualification takes effect simultaneously with the domestication;</subsection><subsection number="16-1a-1007(1)(h)">the private organic rules of the domesticated entity that are to be in a record, if any, approved as part of the plan of domestication take effect; and</subsection><subsection number="16-1a-1007(1)(i)"><subsection number="16-1a-1007(1)(i)(i)">each interest in the domesticating entity is converted to the extent and as approved in connection with the domestication; and</subsection><subsection number="16-1a-1007(1)(i)(ii)">each interest holder of the domesticating entity is entitled only to:<subsection number="16-1a-1007(1)(i)(ii)(A)">the rights provided to the interest holder under the plan of domestication;</subsection><subsection number="16-1a-1007(1)(i)(ii)(B)">any appraisal rights the interest holder has under Section <xref depth="3" refnumber="16-1a-708">16-1a-708</xref>; and</subsection><subsection number="16-1a-1007(1)(i)(ii)(C)">the rights provided to the interest holder under the domesticating entity's organic law;</subsection></subsection></subsection><subsection number="16-1a-1007(1)(j)">a person that did not have interest holder liability with respect to the domesticating entity and becomes subject to interest holder liability with respect to a domestic entity as a result of the domestication has interest holder liability:<subsection number="16-1a-1007(1)(j)(i)">only to the extent provided by the organic law of the entity; and</subsection><subsection number="16-1a-1007(1)(j)(ii)">only for a debt, obligation, or other liability that the domesticating entity incurs after the domestication takes effect; and</subsection></subsection><subsection number="16-1a-1007(1)(k)">the following conditions apply to the interest holder liability of a person that no longer holds an interest in a domestic domesticating entity if the person had interest holder liability in the domestic domesticating entity:<subsection number="16-1a-1007(1)(k)(i)">the domestication does not discharge any interest holder liability under the organic law of the domestic domesticating entity to the extent the person incurred the interest holder liability before the domestication takes effect;</subsection><subsection number="16-1a-1007(1)(k)(ii)">the person does not have interest holder liability under the organic law of the domestic domesticating entity for a debt, obligation, or other liability that the domesticated entity incurs after the domesticating takes effect;</subsection><subsection number="16-1a-1007(1)(k)(iii)">the organic law of the domestic domesticating entity continues to apply to the release, collection, or discharge of any interest holder liability preserved under Subsection <xref depth="4" refnumber="16-1a-1007(1)(k)(i)">(1)(k)(i)</xref> as if the domestication does not occur; and</subsection><subsection number="16-1a-1007(1)(k)(iv)">the person has whatever rights of contribution from any other person as provided by other law or the organic rules of the domestic domesticating entity with respect to any interest holder liability preserved under Subsection <xref depth="4" refnumber="16-1a-1007(1)(k)(i)">(1)(k)(i)</xref> as if the domestication does not occur.</subsection></subsection></subsection><subsection number="16-1a-1007(2)">Except as otherwise provided in the organic law or organic rules of the domesticating entity, the domestication does not give rise to any right that an interest holder, governor, or third party would have upon the dissolution, liquidation, or winding up of the domesticating entity.</subsection><subsection number="16-1a-1007(3)">When a domestication takes effect, a person may serve a foreign entity that is the domesticated entity with process in this state for the collection and enforcement of any debt, obligation, or other liability of the foreign entity in accordance with applicable law.</subsection><subsection number="16-1a-1007(4)">If a domesticating entity is a registered foreign entity, the registration to do business in this state of the domesticating entity is canceled when the domestication takes effect.</subsection><subsection number="16-1a-1007(5)">A domestication does not require the domesticating entity to wind up the domesticating entity's affairs and does not constitute or cause the dissolution of the domesticating entity.</subsection></section></part></chapter><chapter number="16-4"><catchline>Share Assessment Act</catchline><part number="16-4-1"><catchline>General Provisions</catchline><section number="16-4-101"><histories><history>Enacted by Chapter <modchap sess="2007GS">367</modchap>, 2007 General Session</history><modyear>2007</modyear></histories><catchline>Title.</catchline><tab/>This chapter is known as the "Share Assessment Act." </section><section number="16-4-102"><histories><history>Amended by Chapter <modchap sess="2008GS">249</modchap>, 2008 General Session</history><modyear>2008</modyear><history>Amended by Chapter <modchap sess="2008GS">250</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Definitions.</catchline><tab/>As used in this chapter:<subsection number="16-4-102(1)"> "Corporation" means a nonprofit corporation or a profit corporation.</subsection><subsection number="16-4-102(2)"> "Nonprofit corporation" means a nonprofit corporation as defined in Section <xref depth="3" refnumber="16-6a-102" start="0">16-6a-102</xref>.</subsection><subsection number="16-4-102(3)"> "Profit corporation" means a corporation as defined in Section <xref depth="3" refnumber="16-10a-102" start="0">16-10a-102</xref>.</subsection><subsection number="16-4-102(4)"> "Share" means a share as defined in: <subsection number="16-4-102(4)(a)"> Section <xref depth="3" refnumber="16-6a-102" start="0">16-6a-102</xref> for a nonprofit corporation; and</subsection><subsection number="16-4-102(4)(b)"> Section <xref depth="3" refnumber="16-10a-102" start="0">16-10a-102</xref> for a profit corporation.</subsection></subsection><subsection number="16-4-102(5)"> "Water company" means a corporation in which a shareholder has the right, based on the shareholder's shares, to receive a proportionate share of water delivered by the corporation.</subsection></section></part><part number="16-4-2"><catchline>Assessments</catchline><section number="16-4-201"><histories><history>Enacted by Chapter <modchap sess="2007GS">367</modchap>, 2007 General Session</history><modyear>2007</modyear></histories><catchline>Assessments.</catchline><subsection number="16-4-201(1)"> The shares of a nonprofit corporation are subject to assessment for any corporate purpose, except to the extent proscribed by the articles of incorporation.</subsection><subsection number="16-4-201(2)"> The shares of a profit corporation are subject to assessment if: <subsection number="16-4-201(2)(a)"> those shares were subject to assessment before May 1, 2007; and</subsection><subsection number="16-4-201(2)(b)"> the assessment is not proscribed by the corporation's articles of incorporation.</subsection></subsection></section><section number="16-4-202"><histories><history>Enacted by Chapter <modchap sess="2007GS">367</modchap>, 2007 General Session</history><modyear>2007</modyear></histories><catchline>Procedure for assessment in absence of provisions in articles or bylaws.</catchline><subsection number="16-4-202(1)"> An assessment shall be levied in the manner this chapter provides, unless other commercially reasonable procedures are provided in the articles of incorporation or bylaws.</subsection><subsection number="16-4-202(2)"> Each assessment shall comply with the requirements of Section <xref depth="3" refnumber="16-4-203" start="0">16-4-203</xref>.</subsection></section><section number="16-4-203"><histories><history>Enacted by Chapter <modchap sess="2007GS">367</modchap>, 2007 General Session</history><modyear>2007</modyear></histories><catchline>Equitable assessment.</catchline><subsection number="16-4-203(1)"><subsection number="16-4-203(1)(a)"> Subject to Subsection <xref depth="4" refnumber="16-4-203(2)" start="0">(2)</xref>, all shares subject to assessment shall be assessed equitably.</subsection><subsection number="16-4-203(1)(b)"> Different classes of shares, and shares with different rights or benefits, may be subject to differing assessments.</subsection></subsection><subsection number="16-4-203(2)"> Shares may also be assessed on any basis required by: <subsection number="16-4-203(2)(a)"> any existing or future contract between:<subsection number="16-4-203(2)(a)(i)"> the United States and a water company;</subsection><subsection number="16-4-203(2)(a)(ii)"> the United States and the shareholders of a water company; or</subsection><subsection number="16-4-203(2)(a)(iii)"> a water company and one or more shareholders of the water company; or</subsection></subsection><subsection number="16-4-203(2)(b)"> any contract of subscription for shares in a water company contracting with the United States.</subsection></subsection><subsection number="16-4-203(3)"> For purposes of Subsection <xref depth="4" refnumber="16-4-203(2)" start="0">(2)</xref>, "contract" does not include the articles of incorporation or the bylaws.</subsection></section><section number="16-4-204"><histories><history>Enacted by Chapter <modchap sess="2007GS">367</modchap>, 2007 General Session</history><modyear>2007</modyear></histories><catchline>Order levying assessment -- Contents.</catchline><subsection number="16-4-204(1)"> An assessment may be levied by order of the board of directors.</subsection><subsection number="16-4-204(2)"> An order levying an assessment shall: <subsection number="16-4-204(2)(a)"> specify the amount of the levy on each share;</subsection><subsection number="16-4-204(2)(b)"> specify when, to whom, and where the assessment is payable; and</subsection><subsection number="16-4-204(2)(c)"> identify the day on which an unpaid assessment becomes delinquent.</subsection></subsection><subsection number="16-4-204(3)"> The date on which an unpaid assessment is considered delinquent shall be at least 30 days after notice of assessment is given as provided in Section <xref depth="3" refnumber="16-4-206" start="0">16-4-206</xref>.</subsection><subsection number="16-4-204(4)"> If assessments are not levied on an equal basis for all shares, the order shall state the equitable basis for the differing assessments.</subsection></section><section number="16-4-205"><histories><history>Enacted by Chapter <modchap sess="2007GS">367</modchap>, 2007 General Session</history><modyear>2007</modyear></histories><catchline>Notice of assessment -- Form and contents.</catchline><tab/>When the board of directors levies an assessment, the secretary shall prepare a notice of assessment, including:<subsection number="16-4-205(1)"> the name of the corporation;</subsection><subsection number="16-4-205(2)"> the location of the corporation's principal place of business;</subsection><subsection number="16-4-205(3)"> the date of the meeting at which the board of directors adopted the order levying the assessment;</subsection><subsection number="16-4-205(4)"> a description of the class or classes of shares assessed, and the amount of assessment per share;</subsection><subsection number="16-4-205(5)"> the time, place, and manner of payment;</subsection><subsection number="16-4-205(6)"> the day on which payment is considered delinquent;</subsection><subsection number="16-4-205(7)"> if assessments are not levied on an equal basis, a statement that the equitable basis for the assessments is set forth in the order; and</subsection><subsection number="16-4-205(8)"> a general statement that the board of directors may elect various remedies to enforce payment, including the auctioning of shares.</subsection></section><section number="16-4-206"><histories><history>Amended by Chapter <modchap sess="2009GS">388</modchap>, 2009 General Session</history><modyear>2009</modyear></histories><catchline>Service and publication of notice of assessment.</catchline><subsection number="16-4-206(1)"> The notice of assessment required by Section <xref depth="3" refnumber="16-4-205" start="0">16-4-205</xref> shall be: <subsection number="16-4-206(1)(a)"> personally served on each shareholder; or</subsection><subsection number="16-4-206(1)(b)"> sent by first-class mail to each shareholder at the address shown on the corporation's records.</subsection></subsection><subsection number="16-4-206(2)"> A shareholder is responsible for providing the shareholder's current mailing address to the corporation for purposes of Subsection <xref depth="4" refnumber="16-4-206(1)" start="0">(1)</xref>.</subsection><subsection number="16-4-206(3)"><subsection number="16-4-206(3)(a)"> Except as provided in Subsection <xref depth="4" refnumber="16-4-206(3)(b)" start="0">(3)(b)</xref>, a notice of assessment shall be published:<subsection number="16-4-206(3)(a)(i)"> once a week for two weeks in a newspaper of general circulation in the location of the corporation's principal place of business; and</subsection><subsection number="16-4-206(3)(a)(ii)"> in accordance with Section <xref depth="3" refnumber="45-1-101" start="0">45-1-101</xref> for two weeks.</subsection></subsection><subsection number="16-4-206(3)(b)"> A water company may elect not to publish notice under Subsection <xref depth="4" refnumber="16-4-206(3)(a)" start="0">(3)(a)</xref>.</subsection></subsection></section></part><part number="16-4-3"><catchline>Enforcement</catchline><section number="16-4-301"><histories><history>Enacted by Chapter <modchap sess="2007GS">367</modchap>, 2007 General Session</history><modyear>2007</modyear></histories><catchline>Enforcement of assessment.</catchline><subsection number="16-4-301(1)"> Payment of a delinquent assessment may be enforced by a corporation in one or more of the following ways: <subsection number="16-4-301(1)(a)"> imposition of a late charge, penalty, or interest;</subsection><subsection number="16-4-301(1)(b)"> suspension of one or more benefits of share ownership, including the right to vote, to transfer shares, or to delivery of water in the case of a water company;</subsection><subsection number="16-4-301(1)(c)"> sale at public auction of the shares on which payment is delinquent; and</subsection><subsection number="16-4-301(1)(d)"> any other enforcement method specified in the corporation's articles of incorporation.</subsection></subsection><subsection number="16-4-301(2)"> In an enforcement action, the corporation may recover the delinquent assessment, any late charge, penalty, or interest, and all costs of collection, including attorney fees.</subsection><subsection number="16-4-301(3)"><subsection number="16-4-301(3)(a)"> The board of directors shall follow enforcement procedures:<subsection number="16-4-301(3)(a)(i)"> as set forth in the articles of incorporation or bylaws; or</subsection><subsection number="16-4-301(3)(a)(ii)"> as determined by the board of directors in a manner consistent with the board of directors' fiduciary duty to shareholders.</subsection></subsection><subsection number="16-4-301(3)(b)"> If the board of directors determines to sell shares at public auction, the board shall follow the procedures required by Sections <xref depth="3" refnumber="16-4-302" start="0">16-4-302</xref> through <xref depth="3" refnumber="16-4-312" start="0">16-4-312</xref>.</subsection></subsection></section><section number="16-4-302"><histories><history>Enacted by Chapter <modchap sess="2007GS">367</modchap>, 2007 General Session</history><modyear>2007</modyear></histories><catchline>Notice of sale -- Form.</catchline><tab/>Upon a determination by the board of directors to sell shares on which payment of an assessment is delinquent and the adoption of an order to sell the shares, the secretary shall prepare a notice of sale, including:<subsection number="16-4-302(1)"> the name of the corporation;</subsection><subsection number="16-4-302(2)"> the location of the corporation's principal place of business;</subsection><subsection number="16-4-302(3)"> the date on which the assessment order was adopted;</subsection><subsection number="16-4-302(4)"> a description of the shares on which an assessment is delinquent, including the name of any owner, certificate numbers if share certificates exist, and the number of shares represented by any certificate;</subsection><subsection number="16-4-302(5)"> a description of the amount due and payable with respect to each share on which an assessment is delinquent, including the assessment, any late charge, penalty, or interest, and the estimated costs and expenses of collection;</subsection><subsection number="16-4-302(6)"> a statement of the date, time, and place of the sale of shares to pay the amount payable if the amount is not paid before the identified date; and</subsection><subsection number="16-4-302(7)"> a statement that if shares are purchased at the auction by the corporation, or a director or officer of the corporation for the benefit of the officer or director, the shares may be redeemed by the shareholder for a period of 30 days after the day on which the shares are sold.</subsection></section><section number="16-4-303"><histories><history>Amended by Chapter <modchap sess="2009GS">388</modchap>, 2009 General Session</history><modyear>2009</modyear></histories><catchline>Service and publication of notice of sale.</catchline><subsection number="16-4-303(1)"> The notice of sale required by Section <xref depth="3" refnumber="16-4-302" start="0">16-4-302</xref> shall be: <subsection number="16-4-303(1)(a)"> personally served on each shareholder whose share is subject to sale; or</subsection><subsection number="16-4-303(1)(b)"> sent by certified mail, return-receipt requested, to each shareholder whose share is subject to sale at the address shown on the corporation's records.</subsection></subsection><subsection number="16-4-303(2)"> A shareholder is responsible for providing the shareholder's current mailing address to the corporation for purposes of Subsection <xref depth="4" refnumber="16-4-303(1)" start="0">(1)</xref>.</subsection><subsection number="16-4-303(3)"> The notice required by Subsection <xref depth="4" refnumber="16-4-303(1)" start="0">(1)</xref> shall be served or mailed at least 15 days, but not more than 30 days before the day on which the sale is to occur.</subsection><subsection number="16-4-303(4)"> A notice of sale shall be published: <subsection number="16-4-303(4)(a)"> once a week for two weeks in a newspaper of general circulation in the location of the corporation's principal place of business beginning at least 15 days but no more than 45 days before the day on which the sale is to occur; and</subsection><subsection number="16-4-303(4)(b)"> in accordance with Section <xref depth="3" refnumber="45-1-101" start="0">45-1-101</xref> for 45 days before the day on which the sale is to occur.</subsection></subsection></section><section number="16-4-304"><histories><history>Enacted by Chapter <modchap sess="2007GS">367</modchap>, 2007 General Session</history><modyear>2007</modyear></histories><catchline>Power of sale.</catchline><tab/>The service or mailing and publication of the notice of sale required under Section <xref depth="3" refnumber="16-4-303" start="0">16-4-303</xref> gives a corporation power to sell and convey all the shares described in the notice of sale upon which any delinquent assessment or other amount remains unpaid at the time appointed for the sale. </section><section number="16-4-305"><histories><history>Enacted by Chapter <modchap sess="2007GS">367</modchap>, 2007 General Session</history><modyear>2007</modyear></histories><catchline>Number of shares to be sold.</catchline><subsection number="16-4-305(1)"> On the day, at the time and place appointed for a sale under this part, the secretary or other officer shall sell at public auction to the highest bidder for cash the number of shares necessary to pay all amounts due on an overdue assessment.</subsection><subsection number="16-4-305(2)"> Shares shall be sold in the smallest fraction as authorized in the articles of incorporation or the bylaws.</subsection><subsection number="16-4-305(3)"> The public auction shall be conducted by open bid, sealed bid, or by other means provided in the articles of incorporation or bylaws that reasonably protects the delinquent shareholder's interest.</subsection><subsection number="16-4-305(4)"> Proceeds of a sale in excess of the assessment and other amounts due shall be promptly paid to the shareholder whose shares were sold.</subsection></section><section number="16-4-306"><histories><history>Enacted by Chapter <modchap sess="2007GS">367</modchap>, 2007 General Session</history><modyear>2007</modyear></histories><catchline>Determining the highest bidder -- Transfer to highest bidder.</catchline><subsection number="16-4-306(1)"><subsection number="16-4-306(1)(a)"> The person offering at a sale to pay the highest amount for the smallest number or fraction of shares, which may not be less than the delinquent assessment and all other amounts payable, is the highest bidder.</subsection><subsection number="16-4-306(1)(b)"> Whether the bid is for the smallest number or fraction of shares is determined by the articles of incorporation.</subsection></subsection><subsection number="16-4-306(2)"> The shares purchased shall be transferred to the highest bidder on the share books of the corporation upon payment of the bid amount.</subsection></section><section number="16-4-307"><histories><history>Enacted by Chapter <modchap sess="2007GS">367</modchap>, 2007 General Session</history><modyear>2007</modyear></histories><catchline>Purchase by corporation, officer, or director -- Redemption.</catchline><subsection number="16-4-307(1)"><subsection number="16-4-307(1)(a)"> If at the sale of shares, no bidder offers the amount of the delinquent assessment and all other amounts payable, the shares may be bid on and purchased by the corporation through the secretary, president, or any director for the amount of the delinquent assessment and all other amounts payable.</subsection><subsection number="16-4-307(1)(b)"> If a corporation purchases shares under Subsection <xref depth="4" refnumber="16-4-307(1)" start="0">(1)</xref>, the delinquent assessment and all other amounts payable shall be credited as paid in full on the books of the corporation.</subsection></subsection><subsection number="16-4-307(2)"> If purchased under Subsection <xref depth="4" refnumber="16-4-307(1)" start="0">(1)</xref>, entry of the transfer of the shares to the corporation shall be made on the corporation's books.</subsection><subsection number="16-4-307(3)"> Any shares acquired by a corporation under this section, or purchased by an officer or director for the officer's or director's own benefit, are subject to redemption by the shareholder for a period of 30 days following the day on which the shares are sold at auction.</subsection><subsection number="16-4-307(4)"><subsection number="16-4-307(4)(a)"> Shares subject to redemption under Subsection <xref depth="4" refnumber="16-4-307(3)" start="0">(3)</xref> may be redeemed at a price equal to the amount of the delinquent assessment and all other amounts payable on the day of the sale, plus interest through the day on which the shares are redeemed.</subsection><subsection number="16-4-307(4)(b)"> The amount of interest under Subsection <xref depth="4" refnumber="16-4-307(4)(a)" start="0">(4)(a)</xref> is the amount determined under Section <xref depth="3" refnumber="15-1-4" start="0">15-1-4</xref>.</subsection></subsection></section><section number="16-4-308"><histories><history>Enacted by Chapter <modchap sess="2007GS">367</modchap>, 2007 General Session</history><modyear>2007</modyear></histories><catchline>Status of shares purchased by corporation, officer, or director.</catchline><subsection number="16-4-308(1)"><subsection number="16-4-308(1)(a)"> Title to any shares purchased by a corporation under Section <xref depth="3" refnumber="16-4-307" start="0">16-4-307</xref> vests in the corporation upon expiration of the 30-day redemption period if the right of redemption is not exercised.</subsection><subsection number="16-4-308(1)(b)"> Shares purchased by a corporation under Section <xref depth="3" refnumber="16-4-307" start="0">16-4-307</xref> are treated as treasury shares and shall be held and disposed of in a manner expressly provided for in <xref depth="1" refnumber="16-10a" start="0">Title 16, Chapter 10a, Utah Revised Business Corporation Act</xref>.</subsection><subsection number="16-4-308(1)(c)"> Any shares held by a corporation under this section are not assessable.</subsection><subsection number="16-4-308(1)(d)"> No dividends or distributions may be made on shares held by the corporation.</subsection></subsection><subsection number="16-4-308(2)"><subsection number="16-4-308(2)(a)"> Title to any shares purchased by an officer or director of the corporation for the officer's or director's own benefit vest in the officer or director upon expiration of the 30-day redemption period if the right of redemption is not exercised.</subsection><subsection number="16-4-308(2)(b)"> Shares purchased by an officer or director for the officer's or director's own benefit are subject to all assessments levied by the corporation after the assessment that was the basis for the sale at which the officer or director purchased the shares.</subsection></subsection></section><section number="16-4-309"><histories><history>Enacted by Chapter <modchap sess="2007GS">367</modchap>, 2007 General Session</history><modyear>2007</modyear></histories><catchline>Extension of time specified in notices.</catchline><subsection number="16-4-309(1)"> The dates fixed in any notice of assessment or notice of sale may be extended for up to six months by order of the board of directors entered on the corporation's records.</subsection><subsection number="16-4-309(2)"> No order extending the time for the performance of any act specified in any notice under this chapter is effective unless notice of the extension is published and served in the same manner as the original notice.</subsection></section><section number="16-4-310"><histories><history>Enacted by Chapter <modchap sess="2007GS">367</modchap>, 2007 General Session</history><modyear>2007</modyear></histories><catchline>Error or omission in proceedings -- Effect.</catchline><subsection number="16-4-310(1)"> No assessment is invalidated by: <subsection number="16-4-310(1)(a)"> a failure to serve, mail, or publish the notice of sale;</subsection><subsection number="16-4-310(1)(b)"> the omission of any information required to be contained in the notice; or</subsection><subsection number="16-4-310(1)(c)"> the nonperformance of any act otherwise required to be performed in connection with the sale of shares to enforce payment of an assessment.</subsection></subsection><subsection number="16-4-310(2)"> No sale is valid unless proper notice is given and any material acts of nonperformance are corrected.</subsection></section><section number="16-4-311"><histories><history>Enacted by Chapter <modchap sess="2007GS">367</modchap>, 2007 General Session</history><modyear>2007</modyear></histories><catchline>Action to recover shares sold -- Tender -- Limitation of action.</catchline><subsection number="16-4-311(1)"> No action may be brought to recover shares sold for a delinquent assessment based on irregularity or defect in the notice of sale or the sale unless the person bringing the action first pays or tenders payment to the corporation or to the person holding the shares sold: <subsection number="16-4-311(1)(a)"> the amount for which the shares were sold;</subsection><subsection number="16-4-311(1)(b)"> the amount of all subsequent assessments levied on the shares; and</subsection><subsection number="16-4-311(1)(c)"> interest on the amounts identified in Subsections <xref depth="4" refnumber="16-4-311(1)(a)" start="0">(1)(a)</xref> and <xref depth="4" refnumber="16-4-311(1)(b)" start="0">(b)</xref> from the time the amounts were paid by the person purchasing the shares.</subsection></subsection><subsection number="16-4-311(2)"> No action may be brought to recover shares sold under this part more than six months after the sale of the shares at auction.</subsection></section><section number="16-4-312"><histories><history>Amended by Chapter <modchap sess="2009GS">388</modchap>, 2009 General Session</history><modyear>2009</modyear></histories><catchline>Affidavit and posting of notice -- Evidence.</catchline><subsection number="16-4-312(1)"> An affidavit made by the secretary of a corporation of the mailing of a notice required by this chapter is prima facie evidence of the existence and mailing of the notice.</subsection><subsection number="16-4-312(2)"> The publication of a notice under this chapter may be proved by the affidavit of: <subsection number="16-4-312(2)(a)"> the printer foreman or principal clerk of the newspaper in which the notice was published; and</subsection><subsection number="16-4-312(2)(b)"> in accordance with Section <xref depth="3" refnumber="45-1-101" start="0">45-1-101</xref>, the website publisher or website publisher's designee charged with publishing the notice as required in Section <xref depth="3" refnumber="45-1-101" start="0">45-1-101</xref>.</subsection></subsection><subsection number="16-4-312(3)"> The affidavit of the secretary of the corporation or the auctioneer responsible for selling shares is prima facie evidence of: <subsection number="16-4-312(3)(a)"> the time and place of sale;</subsection><subsection number="16-4-312(3)(b)"> the quantity and particular description of the shares sold;</subsection><subsection number="16-4-312(3)(c)"> to whom and for what price the shares were sold; and</subsection><subsection number="16-4-312(3)(d)"> the fact of the purchase money being paid.</subsection></subsection><subsection number="16-4-312(4)"> The affidavits referenced in this section shall be filed in the corporation's office.</subsection><subsection number="16-4-312(5)"> A copy of an affidavit referenced in this section is prima facie evidence of the facts contained in the affidavit if the affidavit is certified by the secretary.</subsection></section></part></chapter><chapter number="16-6a"><catchline>Utah Revised Nonprofit Corporation Act</catchline><part number="16-6a-1"><catchline>General Provisions</catchline><section number="16-6a-101"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Title.</catchline><tab/>This chapter is known as the "Utah Revised Nonprofit Corporation Act." </section><section number="16-6a-102"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Definitions.</catchline><tab/>As used in this chapter:<subsection number="16-6a-102(1)"><subsection number="16-6a-102(1)(a)">"Address" means a location where mail can be delivered by the United States Postal Service.</subsection><subsection number="16-6a-102(1)(b)">"Address" includes:<subsection number="16-6a-102(1)(b)(i)">a post office box number;</subsection><subsection number="16-6a-102(1)(b)(ii)">a rural free delivery route number; and</subsection><subsection number="16-6a-102(1)(b)(iii)">a street name and number.</subsection></subsection></subsection><subsection number="16-6a-102(2)">"Affiliate" means a person that directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, the person specified.</subsection><subsection number="16-6a-102(3)">"Articles of incorporation" include:<subsection number="16-6a-102(3)(a)">amended articles of incorporation;</subsection><subsection number="16-6a-102(3)(b)">restated articles of incorporation;</subsection><subsection number="16-6a-102(3)(c)">articles of merger; and</subsection><subsection number="16-6a-102(3)(d)">a document of a similar import to the documents described in Subsections <xref depth="4" refnumber="16-6a-102(3)(a)">(3)(a)</xref> through <xref depth="4" refnumber="16-6a-102(c)">(c)</xref>.</subsection></subsection><subsection number="16-6a-102(4)">"Assumed corporate name" means a name assumed for use in this state:<subsection number="16-6a-102(4)(a)">by a:<subsection number="16-6a-102(4)(a)(i)">foreign corporation in accordance with Section <xref depth="3" refnumber="16-1a-507">16-1a-507</xref>; or</subsection><subsection number="16-6a-102(4)(a)(ii)">foreign nonprofit corporation in accordance with Section <xref depth="3" refnumber="16-1a-507">16-1a-507</xref>; and</subsection></subsection><subsection number="16-6a-102(4)(b)">because the corporate name of the foreign corporation described in Subsection <xref depth="4" refnumber="16-6a-102(4)(a)">(4)(a)</xref> is not available for use in this state.</subsection></subsection><subsection number="16-6a-102(5)"><subsection number="16-6a-102(5)(a)">Except as provided in Subsection <xref depth="4" refnumber="16-6a-102(5)(b)">(5)(b)</xref>, "board of directors" means the body authorized to manage the affairs of a domestic or foreign nonprofit corporation.</subsection><subsection number="16-6a-102(5)(b)">Notwithstanding Subsection <xref depth="4" refnumber="16-6a-102(5)(a)">(5)(a)</xref>, a person may not be considered a member of the board of directors because of a power delegated to that person under Subsection <xref depth="4" refnumber="16-6a-801(2)">16-6a-801(2)</xref>.</subsection></subsection><subsection number="16-6a-102(6)"><subsection number="16-6a-102(6)(a)">"Bylaws" means the one or more codes of rules, other than the articles of incorporation, adopted under this chapter for the regulation or management of the affairs of a domestic or foreign nonprofit corporation irrespective of the one or more names by which the codes of rules are designated.</subsection><subsection number="16-6a-102(6)(b)">"Bylaws" includes:<subsection number="16-6a-102(6)(b)(i)">amended bylaws; and</subsection><subsection number="16-6a-102(6)(b)(ii)">restated bylaws.</subsection></subsection></subsection><subsection number="16-6a-102(7)"><subsection number="16-6a-102(7)(a)">"Cash" or "money" means:<subsection number="16-6a-102(7)(a)(i)">legal tender;</subsection><subsection number="16-6a-102(7)(a)(ii)">a negotiable instrument; or</subsection><subsection number="16-6a-102(7)(a)(iii)">other cash equivalent readily convertible into legal tender.</subsection></subsection><subsection number="16-6a-102(7)(b)">"Cash" and "money" are used interchangeably in this chapter.</subsection></subsection><subsection number="16-6a-102(8)">"Charitable organization" means the same as that term is defined in Section <xref depth="3" refnumber="13-22-101">13-22-101</xref>.</subsection><subsection number="16-6a-102(9)"><subsection number="16-6a-102(9)(a)">"Class" means a group of memberships that has the same right with respect to voting, dissolution, redemption, transfer, or other characteristics.</subsection><subsection number="16-6a-102(9)(b)">For purposes of Subsection <xref depth="4" refnumber="16-6a-102(9)(a)">(9)(a)</xref>, a right is considered the same if it is determined by a formula applied uniformly to a group of memberships.</subsection></subsection><subsection number="16-6a-102(10)"><subsection number="16-6a-102(10)(a)">"Conspicuous" means so written that a reasonable person against whom the writing is to operate should have noticed the writing.</subsection><subsection number="16-6a-102(10)(b)">"Conspicuous" includes printing or typing in:<subsection number="16-6a-102(10)(b)(i)">italics;</subsection><subsection number="16-6a-102(10)(b)(ii)">boldface;</subsection><subsection number="16-6a-102(10)(b)(iii)">contrasting color;</subsection><subsection number="16-6a-102(10)(b)(iv)">capitals; or</subsection><subsection number="16-6a-102(10)(b)(v)">underlining.</subsection></subsection></subsection><subsection number="16-6a-102(11)">"Control" or a "controlling interest" means the direct or indirect possession of the power to direct or cause the direction of the management and policies of an entity by:<subsection number="16-6a-102(11)(a)">the ownership of voting shares;</subsection><subsection number="16-6a-102(11)(b)">contract; or</subsection><subsection number="16-6a-102(11)(c)">a means other than those specified in Subsection <xref depth="4" refnumber="16-6a-102(11)(a)">(11)(a)</xref> or <xref depth="4" refnumber="16-6a-102(b)">(b)</xref>.</subsection></subsection><subsection number="16-6a-102(12)">Subject to Section <xref depth="3" refnumber="16-6a-207">16-6a-207</xref>, "cooperative nonprofit corporation" or "cooperative" means a nonprofit corporation organized or existing under this chapter.</subsection><subsection number="16-6a-102(13)">"Corporate name" means:<subsection number="16-6a-102(13)(a)">the name of a domestic corporation as stated in the domestic corporation's articles of incorporation;</subsection><subsection number="16-6a-102(13)(b)">the name of a domestic nonprofit corporation as stated in the domestic nonprofit corporation's articles of incorporation;</subsection><subsection number="16-6a-102(13)(c)">the name of a foreign corporation as stated in the foreign corporation's:<subsection number="16-6a-102(13)(c)(i)">articles of incorporation; or</subsection><subsection number="16-6a-102(13)(c)(ii)">document of similar import to articles of incorporation; or</subsection></subsection><subsection number="16-6a-102(13)(d)">the name of a foreign nonprofit corporation as stated in the foreign nonprofit corporation's:<subsection number="16-6a-102(13)(d)(i)">articles of incorporation; or</subsection><subsection number="16-6a-102(13)(d)(ii)">document of similar import to articles of incorporation.</subsection></subsection></subsection><subsection number="16-6a-102(14)"><subsection number="16-6a-102(14)(a)">"Corporate records" means the records described in Section <xref depth="3" refnumber="16-6a-1601">16-6a-1601</xref>.</subsection><subsection number="16-6a-102(14)(b)">"Corporate records" does not include correspondence, communications, notes, or other similar information, regardless of format or method of storage, that are not an official decision, published document, or record of the corporation.</subsection></subsection><subsection number="16-6a-102(15)">"Corporation" or "domestic corporation" means a corporation for profit that:<subsection number="16-6a-102(15)(a)">is not a foreign corporation; and</subsection><subsection number="16-6a-102(15)(b)">is incorporated under or subject to Chapter 10a, Utah Revised Business Corporation Act.</subsection></subsection><subsection number="16-6a-102(16)">"Delegate" means a person elected or appointed to vote in a representative assembly:<subsection number="16-6a-102(16)(a)">for the election of a director; or</subsection><subsection number="16-6a-102(16)(b)">on matters other than the election of a director.</subsection></subsection><subsection number="16-6a-102(17)">"Deliver" includes delivery by mail or another means of transmission authorized by Section <xref depth="3" refnumber="16-6a-103">16-6a-103</xref>, except that delivery to the division means actual receipt by the division.</subsection><subsection number="16-6a-102(18)">"Director" means a member of the board of directors.</subsection><subsection number="16-6a-102(19)"><subsection number="16-6a-102(19)(a)">"Distribution" means the payment of a dividend or any part of the income or profit of a nonprofit corporation to the nonprofit corporation's:<subsection number="16-6a-102(19)(a)(i)">members;</subsection><subsection number="16-6a-102(19)(a)(ii)">directors; or</subsection><subsection number="16-6a-102(19)(a)(iii)">officers.</subsection></subsection><subsection number="16-6a-102(19)(b)">"Distribution" does not include a fair-value payment for:<subsection number="16-6a-102(19)(b)(i)">a good sold; or</subsection><subsection number="16-6a-102(19)(b)(ii)">a service received.</subsection></subsection></subsection><subsection number="16-6a-102(20)">"Division" means the Division of Corporations and Commercial Code.</subsection><subsection number="16-6a-102(21)">"Effective date," when referring to a document filed by the division, means the time and date determined in accordance with Section <xref depth="3" refnumber="16-1a-204">16-1a-204</xref>.</subsection><subsection number="16-6a-102(22)">"Effective date of notice" means the date notice is effective as provided in Section <xref depth="3" refnumber="16-6a-103">16-6a-103</xref>.</subsection><subsection number="16-6a-102(23)">"Electronic transmission" or "electronically transmitted" means a process of communication not directly involving the physical transfer of paper that is suitable for the receipt, retention, retrieval, and reproduction of information by the recipient, whether by email, texting, facsimile, or otherwise.</subsection><subsection number="16-6a-102(24)"><subsection number="16-6a-102(24)(a)">"Employee" includes an officer of a nonprofit corporation.</subsection><subsection number="16-6a-102(24)(b)"><subsection number="16-6a-102(24)(b)(i)">Except as provided in Subsection <xref depth="4" refnumber="16-6a-102(24)(b)(ii)">(24)(b)(ii)</xref>, "employee" does not include a director of a nonprofit corporation.</subsection><subsection number="16-6a-102(24)(b)(ii)">Notwithstanding Subsection <xref depth="4" refnumber="16-6a-102(24)(b)(i)">(24)(b)(i)</xref>, a director may accept one or more duties that make that director an employee of a nonprofit corporation.</subsection></subsection></subsection><subsection number="16-6a-102(25)">"Entity" includes:<subsection number="16-6a-102(25)(a)">a domestic or foreign corporation;</subsection><subsection number="16-6a-102(25)(b)">a domestic or foreign nonprofit corporation;</subsection><subsection number="16-6a-102(25)(c)">a limited liability company;</subsection><subsection number="16-6a-102(25)(d)">a profit or nonprofit unincorporated association;</subsection><subsection number="16-6a-102(25)(e)">a business trust;</subsection><subsection number="16-6a-102(25)(f)">an estate;</subsection><subsection number="16-6a-102(25)(g)">a partnership;</subsection><subsection number="16-6a-102(25)(h)">a trust;</subsection><subsection number="16-6a-102(25)(i)">two or more persons having a joint or common economic interest;</subsection><subsection number="16-6a-102(25)(j)">a state;</subsection><subsection number="16-6a-102(25)(k)">the United States; or</subsection><subsection number="16-6a-102(25)(l)">a foreign government.</subsection></subsection><subsection number="16-6a-102(26)">"Executive director" means the executive director of the Department of Commerce.</subsection><subsection number="16-6a-102(27)">"Foreign corporation" means a corporation for profit incorporated under a law other than the laws of this state.</subsection><subsection number="16-6a-102(28)">"Foreign nonprofit corporation" means an entity:<subsection number="16-6a-102(28)(a)">incorporated under a law other than the laws of this state; and</subsection><subsection number="16-6a-102(28)(b)">that would be a nonprofit corporation if formed under the laws of this state.</subsection></subsection><subsection number="16-6a-102(29)">"Governmental entity" means:<subsection number="16-6a-102(29)(a)"><subsection number="16-6a-102(29)(a)(i)">the executive branch of the state;</subsection><subsection number="16-6a-102(29)(a)(ii)">the judicial branch of the state;</subsection><subsection number="16-6a-102(29)(a)(iii)">the legislative branch of the state;</subsection><subsection number="16-6a-102(29)(a)(iv)">an independent entity, as defined in Section <xref depth="3" refnumber="63E-1-102">63E-1-102</xref>;</subsection><subsection number="16-6a-102(29)(a)(v)">a political subdivision of the state;</subsection><subsection number="16-6a-102(29)(a)(vi)">an institution of higher education, as defined in Section <xref depth="3" refnumber="53H-1-101">53H-1-101</xref>;</subsection><subsection number="16-6a-102(29)(a)(vii)">an entity within the state system of public education; or</subsection><subsection number="16-6a-102(29)(a)(viii)">the National Guard; or</subsection></subsection><subsection number="16-6a-102(29)(b)">any of the following that is established or controlled by a governmental entity listed in Subsection <xref depth="4" refnumber="16-6a-102(29)(a)">(29)(a)</xref> to carry out the public's business:<subsection number="16-6a-102(29)(b)(i)">an office;</subsection><subsection number="16-6a-102(29)(b)(ii)">a division;</subsection><subsection number="16-6a-102(29)(b)(iii)">an agency;</subsection><subsection number="16-6a-102(29)(b)(iv)">a board;</subsection><subsection number="16-6a-102(29)(b)(v)">a bureau;</subsection><subsection number="16-6a-102(29)(b)(vi)">a committee;</subsection><subsection number="16-6a-102(29)(b)(vii)">a department;</subsection><subsection number="16-6a-102(29)(b)(viii)">an advisory board;</subsection><subsection number="16-6a-102(29)(b)(ix)">an administrative unit; or</subsection><subsection number="16-6a-102(29)(b)(x)">a commission.</subsection></subsection></subsection><subsection number="16-6a-102(30)">"Governmental subdivision" means:<subsection number="16-6a-102(30)(a)">a county;</subsection><subsection number="16-6a-102(30)(b)">a city;</subsection><subsection number="16-6a-102(30)(c)">a town; or</subsection><subsection number="16-6a-102(30)(d)">another type of governmental subdivision authorized by the laws of this state.</subsection></subsection><subsection number="16-6a-102(31)">"Individual" means:<subsection number="16-6a-102(31)(a)">a natural person;</subsection><subsection number="16-6a-102(31)(b)">the estate of an incompetent individual; or</subsection><subsection number="16-6a-102(31)(c)">the estate of a deceased individual.</subsection></subsection><subsection number="16-6a-102(32)">"Internal Revenue Code" means the federal "Internal Revenue Code of 1986," as amended from time to time, or to corresponding provisions of subsequent internal revenue laws of the United States of America.</subsection><subsection number="16-6a-102(33)"><subsection number="16-6a-102(33)(a)">"Mail," "mailed," or "mailing" means deposit, deposited, or depositing in the United States mail, properly addressed, first-class postage prepaid.</subsection><subsection number="16-6a-102(33)(b)">"Mail," "mailed," or "mailing" includes registered or certified mail for which the proper fee is paid.</subsection></subsection><subsection number="16-6a-102(34)"><subsection number="16-6a-102(34)(a)">"Member" means one or more persons identified or otherwise appointed as a member of a domestic or foreign nonprofit corporation as provided:<subsection number="16-6a-102(34)(a)(i)">in the articles of incorporation;</subsection><subsection number="16-6a-102(34)(a)(ii)">in the bylaws;</subsection><subsection number="16-6a-102(34)(a)(iii)">by a resolution of the board of directors; or</subsection><subsection number="16-6a-102(34)(a)(iv)">by a resolution of the members of the nonprofit corporation.</subsection></subsection><subsection number="16-6a-102(34)(b)">"Member" includes:<subsection number="16-6a-102(34)(b)(i)">"voting member"; and</subsection><subsection number="16-6a-102(34)(b)(ii)">a shareholder in a water company.</subsection></subsection></subsection><subsection number="16-6a-102(35)">"Membership" refers to the rights and obligations of a member or members.</subsection><subsection number="16-6a-102(36)">"Mutual benefit corporation" means a nonprofit corporation:<subsection number="16-6a-102(36)(a)">that issues shares of stock to its members evidencing a right to receive distribution of water or otherwise representing property rights; or</subsection><subsection number="16-6a-102(36)(b)">all of whose assets are contributed or acquired by or for the members of the nonprofit corporation or the members' predecessors in interest to serve the mutual purposes of the members.</subsection></subsection><subsection number="16-6a-102(37)">"Nonprofit corporation" or "domestic nonprofit corporation" means an entity that:<subsection number="16-6a-102(37)(a)">is not a foreign nonprofit corporation; and</subsection><subsection number="16-6a-102(37)(b)">is incorporated under or subject to this chapter.</subsection></subsection><subsection number="16-6a-102(38)">"Notice" means the same as that term is defined in Section <xref depth="3" refnumber="16-6a-103">16-6a-103</xref>.</subsection><subsection number="16-6a-102(39)">"Party related to a director" means:<subsection number="16-6a-102(39)(a)">the spouse of the director;</subsection><subsection number="16-6a-102(39)(b)">a child of the director;</subsection><subsection number="16-6a-102(39)(c)">a grandchild of the director;</subsection><subsection number="16-6a-102(39)(d)">a sibling of the director;</subsection><subsection number="16-6a-102(39)(e)">a parent of the director;</subsection><subsection number="16-6a-102(39)(f)">the spouse of an individual described in Subsections <xref depth="4" refnumber="16-6a-102(39)(b)">(39)(b)</xref> through <xref depth="4" refnumber="16-6a-102(e)">(e)</xref>;</subsection><subsection number="16-6a-102(39)(g)">an individual having the same home as the director;</subsection><subsection number="16-6a-102(39)(h)">a trust or estate of which the director or another individual specified in this Subsection <xref depth="4" refnumber="16-6a-102(39)">(39)</xref> is a substantial beneficiary; or</subsection><subsection number="16-6a-102(39)(i)">any of the following of which the director is a fiduciary:<subsection number="16-6a-102(39)(i)(i)">a trust;</subsection><subsection number="16-6a-102(39)(i)(ii)">an estate;</subsection><subsection number="16-6a-102(39)(i)(iii)">an incompetent;</subsection><subsection number="16-6a-102(39)(i)(iv)">a conservatee; or</subsection><subsection number="16-6a-102(39)(i)(v)">a minor.</subsection></subsection></subsection><subsection number="16-6a-102(40)">"Person" means an:<subsection number="16-6a-102(40)(a)">individual; or</subsection><subsection number="16-6a-102(40)(b)">entity.</subsection></subsection><subsection number="16-6a-102(41)">"Principal office" means:<subsection number="16-6a-102(41)(a)">the office, in or out of this state, designated by a domestic or foreign nonprofit corporation as its principal office in the most recent document on file with the division providing that information, including:<subsection number="16-6a-102(41)(a)(i)">an annual report;</subsection><subsection number="16-6a-102(41)(a)(ii)">an application for a certificate of authority; or</subsection><subsection number="16-6a-102(41)(a)(iii)">a notice of change of principal office; or</subsection></subsection><subsection number="16-6a-102(41)(b)">if no principal office can be determined, a domestic or foreign nonprofit corporation's registered office.</subsection></subsection><subsection number="16-6a-102(42)">"Proceeding" includes:<subsection number="16-6a-102(42)(a)">a civil suit;</subsection><subsection number="16-6a-102(42)(b)">arbitration;</subsection><subsection number="16-6a-102(42)(c)">mediation;</subsection><subsection number="16-6a-102(42)(d)">a criminal action;</subsection><subsection number="16-6a-102(42)(e)">an administrative action; or</subsection><subsection number="16-6a-102(42)(f)">an investigatory action.</subsection></subsection><subsection number="16-6a-102(43)">"Receive," when used in reference to receipt of a writing or other document by a domestic or foreign nonprofit corporation, means the writing or other document is actually received:<subsection number="16-6a-102(43)(a)">by the domestic or foreign nonprofit corporation at:<subsection number="16-6a-102(43)(a)(i)">its registered office in this state; or</subsection><subsection number="16-6a-102(43)(a)(ii)">its principal office;</subsection></subsection><subsection number="16-6a-102(43)(b)">by the secretary of the domestic or foreign nonprofit corporation, wherever the secretary is found; or</subsection><subsection number="16-6a-102(43)(c)">by another person authorized by the bylaws or the board of directors to receive the writing or other document, wherever that person is found.</subsection></subsection><subsection number="16-6a-102(44)"><subsection number="16-6a-102(44)(a)">"Record date" means the date established under Part <xref depth="2" refnumber="16-6a-6">6, Members</xref>, or Part <xref depth="2" refnumber="16-6a-7">7, Member Meetings and Voting</xref>, on which a nonprofit corporation determines the identity of the nonprofit corporation's members.</subsection><subsection number="16-6a-102(44)(b)">The determination described in Subsection <xref depth="4" refnumber="16-6a-102(44)(a)">(44)(a)</xref> shall be made as of the close of business on the record date unless another time for doing so is specified when the record date is fixed.</subsection></subsection><subsection number="16-6a-102(45)">"Registered agent" means the registered agent of:<subsection number="16-6a-102(45)(a)">a domestic nonprofit corporation; or</subsection><subsection number="16-6a-102(45)(b)">a foreign nonprofit corporation.</subsection></subsection><subsection number="16-6a-102(46)">"Registered office" means the office within this state designated by a domestic or foreign nonprofit corporation as its registered office in the most recent document on file with the division providing that information, including:<subsection number="16-6a-102(46)(a)">articles of incorporation;</subsection><subsection number="16-6a-102(46)(b)">an application for a certificate of authority; or</subsection><subsection number="16-6a-102(46)(c)">a notice of change of registered office.</subsection></subsection><subsection number="16-6a-102(47)">"Secretary" means the corporate officer to whom the bylaws or the board of directors delegates responsibility under Subsection <xref depth="4" refnumber="16-6a-818(3)">16-6a-818(3)</xref> for:<subsection number="16-6a-102(47)(a)">the preparation and maintenance of:<subsection number="16-6a-102(47)(a)(i)">minutes of the meetings of:<subsection number="16-6a-102(47)(a)(i)(A)">the board of directors; or</subsection><subsection number="16-6a-102(47)(a)(i)(B)">the members; and</subsection></subsection><subsection number="16-6a-102(47)(a)(ii)">the other records and information required to be kept by the nonprofit corporation as described in Section <xref depth="3" refnumber="16-6a-1601">16-6a-1601</xref>; and</subsection></subsection><subsection number="16-6a-102(47)(b)">authenticating records of the nonprofit corporation.</subsection></subsection><subsection number="16-6a-102(48)">"Share" means a unit of interest in a nonprofit corporation.</subsection><subsection number="16-6a-102(49)">"Shareholder" means a person in whose name a share is registered in the records of a nonprofit corporation.</subsection><subsection number="16-6a-102(50)">"State," when referring to a part of the United States, includes:<subsection number="16-6a-102(50)(a)">a state;</subsection><subsection number="16-6a-102(50)(b)">a commonwealth;</subsection><subsection number="16-6a-102(50)(c)">the District of Columbia;</subsection><subsection number="16-6a-102(50)(d)">an agency or governmental and political subdivision of a state, commonwealth, or District of Columbia;</subsection><subsection number="16-6a-102(50)(e)">territory or insular possession of the United States; or</subsection><subsection number="16-6a-102(50)(f)">an agency or governmental and political subdivision of a territory or insular possession of the United States.</subsection></subsection><subsection number="16-6a-102(51)">"Street address" means:<subsection number="16-6a-102(51)(a)"><subsection number="16-6a-102(51)(a)(i)">street name and number;</subsection><subsection number="16-6a-102(51)(a)(ii)">city or town; and</subsection><subsection number="16-6a-102(51)(a)(iii)">United States post office zip code designation; or</subsection></subsection><subsection number="16-6a-102(51)(b)">if, by reason of rural location or otherwise, a street name, number, city, or town does not exist, an appropriate description other than that described in Subsection <xref depth="4" refnumber="16-6a-102(51)(a)">(51)(a)</xref> fixing as nearly as possible the actual physical location, but only if the information includes:<subsection number="16-6a-102(51)(b)(i)">the rural free delivery route;</subsection><subsection number="16-6a-102(51)(b)(ii)">the county; and</subsection><subsection number="16-6a-102(51)(b)(iii)">the United States post office zip code designation.</subsection></subsection></subsection><subsection number="16-6a-102(52)">"Tribal nonprofit corporation" means a nonprofit corporation:<subsection number="16-6a-102(52)(a)">incorporated under the law of a tribe; and</subsection><subsection number="16-6a-102(52)(b)">that is at least 51% owned or controlled by the tribe.</subsection></subsection><subsection number="16-6a-102(53)">"Tribe" means a tribe, band, nation, pueblo, or other organized group or community of Indians, including an Alaska Native village, that is legally recognized as eligible for and is consistent with a special program, service, or entitlement provided by the United States to Indians because of the tribe's status as Indians.</subsection><subsection number="16-6a-102(54)">"United States" includes a district, authority, office, bureau, commission, department, and another agency of the United States of America.</subsection><subsection number="16-6a-102(55)">"Vote" includes authorization by:<subsection number="16-6a-102(55)(a)">written ballot; and</subsection><subsection number="16-6a-102(55)(b)">written consent.</subsection></subsection><subsection number="16-6a-102(56)"><subsection number="16-6a-102(56)(a)">"Voting group" means all the members of one or more classes of members or directors that, under this chapter, the articles of incorporation, or the bylaws, are entitled to vote and be counted together collectively on a matter.</subsection><subsection number="16-6a-102(56)(b)">All members or directors entitled by this chapter, the articles of incorporation, or the bylaws to vote generally on a matter are for that purpose a single voting group.</subsection></subsection><subsection number="16-6a-102(57)"><subsection number="16-6a-102(57)(a)">"Voting member" means a person entitled to vote for all matters required or permitted under this chapter to be submitted to a vote of the members, except as otherwise provided in the articles of incorporation or bylaws.</subsection><subsection number="16-6a-102(57)(b)">A person is not a voting member solely because of:<subsection number="16-6a-102(57)(b)(i)">a right the person has as a delegate;</subsection><subsection number="16-6a-102(57)(b)(ii)">a right the person has to designate a director; or</subsection><subsection number="16-6a-102(57)(b)(iii)">a right the person has as a director.</subsection></subsection><subsection number="16-6a-102(57)(c)">Except as the bylaws may otherwise provide, "voting member" includes a "shareholder" if the nonprofit corporation has shareholders.</subsection></subsection><subsection number="16-6a-102(58)">"Water company" means:<subsection number="16-6a-102(58)(a)">the same as that term is defined in Subsection <xref depth="4" refnumber="16-4-102(5)">16-4-102(5)</xref>; or</subsection><subsection number="16-6a-102(58)(b)">a mutual benefit corporation, when the stock in the mutual benefit corporation represents a right to receive a distribution of water for beneficial use.</subsection></subsection></section><section number="16-6a-103"><histories><history>Amended by Chapter <modchap sess="2015GS">240</modchap>, 2015 General Session</history><modyear>2015</modyear></histories><catchline>Notice.</catchline><subsection number="16-6a-103(1)"> Notice given under this chapter shall be in writing unless oral notice is reasonable under the circumstances.</subsection><subsection number="16-6a-103(2)"><subsection number="16-6a-103(2)(a)"> Notice may be communicated:<subsection number="16-6a-103(2)(a)(i)"> in person;</subsection><subsection number="16-6a-103(2)(a)(ii)"> by telephone;</subsection><subsection number="16-6a-103(2)(a)(iii)"> by electronic transmission; or</subsection><subsection number="16-6a-103(2)(a)(iv)"> by mail or private carrier.</subsection></subsection><subsection number="16-6a-103(2)(b)"> If the forms of personal notice described in Subsection <xref depth="4" refnumber="16-6a-103(2)(a)" start="0">(2)(a)</xref> are impracticable, notice may be communicated by:<subsection number="16-6a-103(2)(b)(i)"><subsection number="16-6a-103(2)(b)(i)(A)"> a newspaper of general circulation in the county or similar governmental subdivision in which the corporation's principal or registered office is located; and</subsection><subsection number="16-6a-103(2)(b)(i)(B)"> as required in Section <xref depth="3" refnumber="45-1-101" start="0">45-1-101</xref>; or</subsection></subsection><subsection number="16-6a-103(2)(b)(ii)"> radio, television, or other form of public broadcast communication in the county or similar governmental subdivision in which the corporation's principal or registered office is located.</subsection></subsection></subsection><subsection number="16-6a-103(3)"> Written notice to a domestic or foreign nonprofit corporation authorized to conduct affairs in this state may be addressed to: <subsection number="16-6a-103(3)(a)"> its registered agent at its registered office; or</subsection><subsection number="16-6a-103(3)(b)"> the corporation's secretary at its principal office.</subsection></subsection><subsection number="16-6a-103(4)"><subsection number="16-6a-103(4)(a)"> Written notice by a domestic or foreign nonprofit corporation to its members, is effective as to each member when mailed, if:<subsection number="16-6a-103(4)(a)(i)"> in a comprehensible form; and</subsection><subsection number="16-6a-103(4)(a)(ii)"> addressed to the member's address shown in the domestic or foreign nonprofit corporation's current record of members.</subsection></subsection><subsection number="16-6a-103(4)(b)"> If three successive notices given to a member pursuant to Subsection <xref depth="4" refnumber="16-6a-103(5)" start="0">(5)</xref> have been returned as undeliverable, further notices to that member are not necessary until another address of the member is made known to the nonprofit corporation.</subsection></subsection><subsection number="16-6a-103(5)"> Except as provided in Subsection <xref depth="4" refnumber="16-6a-103(4)" start="0">(4)</xref>, written notice, if in a comprehensible form, is effective at the earliest of the following: <subsection number="16-6a-103(5)(a)"> when received;</subsection><subsection number="16-6a-103(5)(b)"> five days after it is mailed; or</subsection><subsection number="16-6a-103(5)(c)"> on the date shown on the return receipt if:<subsection number="16-6a-103(5)(c)(i)"> sent by registered or certified mail;</subsection><subsection number="16-6a-103(5)(c)(ii)"> sent return receipt requested; and</subsection><subsection number="16-6a-103(5)(c)(iii)"> the receipt is signed by or on behalf of the addressee.</subsection></subsection></subsection><subsection number="16-6a-103(6)"> Oral notice is effective when communicated if communicated in a comprehensible manner.</subsection><subsection number="16-6a-103(7)"> Notice by publication is effective on the date of first publication.</subsection><subsection number="16-6a-103(8)"> A written notice or report delivered as part of a newsletter, magazine, or other publication regularly sent to members shall constitute a written notice or report if: <subsection number="16-6a-103(8)(a)"> addressed or delivered to the member's address shown in the nonprofit corporation's current list of members; or</subsection><subsection number="16-6a-103(8)(b)"> if two or more members are residents of the same household and have the same address in the nonprofit corporation's current list of members, addressed or delivered to one of the members at the address appearing on the current list of members.</subsection></subsection><subsection number="16-6a-103(9)"><subsection number="16-6a-103(9)(a)"> If this chapter prescribes notice requirements for particular circumstances, the notice requirements for the particular circumstances govern.</subsection><subsection number="16-6a-103(9)(b)"> If articles of incorporation or bylaws prescribe notice requirements not inconsistent with this section or other provisions of this chapter, the notice requirements of the articles of incorporation or bylaws govern.</subsection></subsection></section><section number="16-6a-104"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Powers of the division.</catchline><tab/>The division has the power reasonably necessary to perform the duties required of the division under this chapter. </section><section number="16-6a-107"><histories><history>Amended by Chapter <modchap sess="2009GS">183</modchap>, 2009 General Session</history><modyear>2009</modyear></histories><catchline>Fees.</catchline><subsection number="16-6a-107(1)"> Unless otherwise provided by statute, the division shall charge and collect a fee for services established by the division in accordance with Section <xref depth="3" refnumber="63J-1-504" start="0">63J-1-504</xref> including fees: <subsection number="16-6a-107(1)(a)"> for furnishing a certified copy of any document, instrument, or paper relating to a domestic or foreign nonprofit corporation; and</subsection><subsection number="16-6a-107(1)(b)"> for the certificate and affixing the seal to a certified copy described in Subsection <xref depth="4" refnumber="16-6a-107(1)(a)" start="0">(1)(a)</xref>.</subsection></subsection><subsection number="16-6a-107(2)"><subsection number="16-6a-107(2)(a)"> The division shall provide expedited, 24-hour processing of any item under this section upon request.</subsection><subsection number="16-6a-107(2)(b)"> The division shall charge and collect additional fees established by the division in accordance with Section <xref depth="3" refnumber="63J-1-504" start="0">63J-1-504</xref> for expedited service provided under Subsection <xref depth="4" refnumber="16-6a-107(2)(a)" start="0">(2)(a)</xref>.</subsection></subsection><subsection number="16-6a-107(3)"><subsection number="16-6a-107(3)(a)"> The division shall charge and collect a fee determined by the division in accordance with Section <xref depth="3" refnumber="63J-1-504" start="0">63J-1-504</xref> at the time of any service of process on the director of the division as resident agent of a domestic or foreign nonprofit corporation.</subsection><subsection number="16-6a-107(3)(b)"> The fee paid under Subsection <xref depth="4" refnumber="16-6a-107(3)(a)" start="0">(3)(a)</xref> may be recovered as taxable costs by the party to the suit or action causing the service to be made if the party prevails in the suit or action.</subsection></subsection></section><section number="16-6a-111"><histories><history>Amended by Chapter <modchap sess="2008GS">382</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Appeal from division's refusal to file document.</catchline><tab/>If the division refuses to file a document delivered to it for filing, in accordance with <xref depth="1" refnumber="63G-4" start="0">Title 63G, Chapter 4, Administrative Procedures Act</xref>, the following may appeal the refusal to the executive director:<subsection number="16-6a-111(1)"> the domestic or foreign nonprofit corporation for which the filing was requested; or</subsection><subsection number="16-6a-111(2)"> the representative of the domestic or foreign nonprofit corporation for which filing was requested.</subsection></section><section number="16-6a-112"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Evidentiary effect of copy of filed document.</catchline><tab/>One or more of the following is conclusive evidence that the original document has been filed with the division:<subsection number="16-6a-112(1)"> a certificate attached to a copy of a document filed by the division; or</subsection><subsection number="16-6a-112(2)"> an endorsement, seal, or stamp placed on the copy by the division.</subsection></section><section number="16-6a-113"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Certificates issued by the division.</catchline><subsection number="16-6a-113(1)">Any person may apply to the division for:<subsection number="16-6a-113(1)(a)">a certificate of existence for a domestic nonprofit corporation;</subsection><subsection number="16-6a-113(1)(b)">a certificate of authorization for a foreign nonprofit corporation; or</subsection><subsection number="16-6a-113(1)(c)">a certificate that sets forth any facts of record in the division.</subsection></subsection><subsection number="16-6a-113(2)">A certificate of existence or certificate of authorization sets forth:<subsection number="16-6a-113(2)(a)"><subsection number="16-6a-113(2)(a)(i)">the domestic nonprofit corporation's corporate name; or</subsection><subsection number="16-6a-113(2)(a)(ii)">the foreign nonprofit corporation's corporate name registered in this state;</subsection></subsection><subsection number="16-6a-113(2)(b)">that:<subsection number="16-6a-113(2)(b)(i)"><subsection number="16-6a-113(2)(b)(i)(A)">the domestic nonprofit corporation is incorporated under the law of this state; and</subsection><subsection number="16-6a-113(2)(b)(i)(B)">the date of its incorporation; or</subsection></subsection><subsection number="16-6a-113(2)(b)(ii)">the foreign nonprofit corporation is authorized to conduct affairs in this state;</subsection></subsection><subsection number="16-6a-113(2)(c)">that all fees, taxes, and penalties owed to this state have been paid, if:<subsection number="16-6a-113(2)(c)(i)">payment is reflected in the records of the division; and</subsection><subsection number="16-6a-113(2)(c)(ii)">nonpayment affects the existence or authorization of the domestic or foreign nonprofit corporation;</subsection></subsection><subsection number="16-6a-113(2)(d)">that the domestic or foreign nonprofit corporation's most recent annual report required by Section <xref depth="3" refnumber="16-1a-212">16-1a-212</xref> has been filed by the division;</subsection><subsection number="16-6a-113(2)(e)">that articles of dissolution have not been filed by the division; and</subsection><subsection number="16-6a-113(2)(f)">other facts of record in the division that may be requested by the applicant.</subsection></subsection><subsection number="16-6a-113(3)">Subject to any qualification stated in the certificate, a certificate issued by the division may be relied upon as conclusive evidence of the facts set forth in the certificate.</subsection></section><section number="16-6a-114"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Penalty for signing false documents.</catchline><subsection number="16-6a-114(1)"> It is unlawful for a person to sign a document: <subsection number="16-6a-114(1)(a)"> knowing it to be false in any material respect; and</subsection><subsection number="16-6a-114(1)(b)"> with intent that the document be delivered to the division for filing.</subsection></subsection><subsection number="16-6a-114(2)"> An offense under this section is a class A misdemeanor punishable by a fine not to exceed the fine specified in Section <xref depth="3" refnumber="76-3-301" start="0">76-3-301</xref>.</subsection></section><section number="16-6a-115"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Liability to third parties.</catchline><tab/>The directors, officers, employees, and members of a nonprofit corporation are not personally liable in their capacity as directors, officers, employees, and members for the acts, debts, liabilities, or obligations of a nonprofit corporation. </section><section number="16-6a-116"><histories><history>Amended by Chapter <modchap sess="2015GS">240</modchap>, 2015 General Session</history><modyear>2015</modyear></histories><catchline>Private foundations.</catchline><tab/>Except when otherwise determined by a court of competent jurisdiction, a nonprofit corporation that is a private foundation as defined in Section 509(a), Internal Revenue Code:<subsection number="16-6a-116(1)"> shall make distributions for each taxable year at the time and in the manner as not to subject the nonprofit corporation to tax under Section 4942, Internal Revenue Code;</subsection><subsection number="16-6a-116(2)"> may not engage in any act of self-dealing as defined in Section 4941(d), Internal Revenue Code;</subsection><subsection number="16-6a-116(3)"> may not retain any excess business holdings as defined in Section 4943(c), Internal Revenue Code;</subsection><subsection number="16-6a-116(4)"> may not make any investments that would subject the nonprofit corporation to taxation under Section 4944, Internal Revenue Code; and</subsection><subsection number="16-6a-116(5)"> may not make any taxable expenditures as defined in Section 4945(d), Internal Revenue Code.</subsection></section><section number="16-6a-117"><histories><history>Amended by Chapter <modchap sess="2023GS">401</modchap>, 2023 General Session</history><modyear>2023</modyear></histories><catchline>Judicial relief.</catchline><subsection number="16-6a-117(1)"><subsection number="16-6a-117(1)(a)"> A director, officer, delegate, or member may petition a court to take an action provided in Subsection <xref depth="4" refnumber="16-6a-117(1)(b)" start="0">(1)(b)</xref> if for any reason it is impractical or impossible for a nonprofit corporation in the manner prescribed by this chapter or the nonprofit corporation's articles of incorporation or bylaws to:<subsection number="16-6a-117(1)(a)(i)"> call or conduct a meeting of the nonprofit corporation's members, delegates, or directors; or</subsection><subsection number="16-6a-117(1)(a)(ii)"> otherwise obtain the consent of the nonprofit corporation's members, delegates, or directors.</subsection></subsection><subsection number="16-6a-117(1)(b)"> If a petition is filed under Subsection <xref depth="4" refnumber="16-6a-117(1)(a)" start="0">(1)(a)</xref>, the court, in the manner the court finds fair and equitable under the circumstances, may order that:<subsection number="16-6a-117(1)(b)(i)"> a meeting be called; or</subsection><subsection number="16-6a-117(1)(b)(ii)"> a written consent or other form of obtaining the vote of members, delegates, or directors be authorized.</subsection></subsection></subsection><subsection number="16-6a-117(2)"><subsection number="16-6a-117(2)(a)"> A court shall, in an order issued pursuant to this section, provide for a method of notice reasonably designed to give actual notice to all persons who would be entitled to notice of a meeting held pursuant to this chapter, the articles of incorporation, or bylaws.</subsection><subsection number="16-6a-117(2)(b)"> The method of notice described in Subsection <xref depth="4" refnumber="16-6a-117(1)" start="0">(1)</xref> complies with this section whether or not the method of notice:<subsection number="16-6a-117(2)(b)(i)"> results in actual notice to all persons described in Subsection <xref depth="4" refnumber="16-6a-117(2)(a)" start="0">(2)(a)</xref>; or</subsection><subsection number="16-6a-117(2)(b)(ii)"> conforms to the notice requirements that would otherwise apply.</subsection></subsection><subsection number="16-6a-117(2)(c)"> In a proceeding under this section, the court may determine who are the members or directors of a nonprofit corporation.</subsection></subsection><subsection number="16-6a-117(3)"> An order issued pursuant to this section may dispense with any requirement relating to the holding of or voting at meetings or obtaining votes that would otherwise be imposed by this chapter or the nonprofit corporation's articles of incorporation, or bylaws, including any requirement as to: <subsection number="16-6a-117(3)(a)"> quorums; or</subsection><subsection number="16-6a-117(3)(b)"> the number or percentage of votes needed for approval.</subsection></subsection><subsection number="16-6a-117(4)"><subsection number="16-6a-117(4)(a)"> Whenever practical, any order issued pursuant to this section shall limit the subject matter of a meeting or other form of consent authorized to items the resolution of which will or may enable the nonprofit corporation to continue managing the nonprofit corporation's affairs without further resort to this section, including amendments to the articles of incorporation or bylaws.</subsection><subsection number="16-6a-117(4)(b)"> Notwithstanding Subsection <xref depth="4" refnumber="16-6a-117(4)(a)" start="0">(4)(a)</xref>, an order under this section may authorize the obtaining of whatever votes and approvals are necessary for the dissolution, merger, or sale of assets of a nonprofit corporation.</subsection></subsection><subsection number="16-6a-117(5)"> A meeting or other method of obtaining the vote of members, delegates, or directors conducted pursuant to and that complies with an order issued under this section: <subsection number="16-6a-117(5)(a)"> is for all purposes a valid meeting or vote, as the case may be; and</subsection><subsection number="16-6a-117(5)(b)"> shall have the same force and effect as if it complied with every requirement imposed by this chapter or the nonprofit corporation's articles of incorporation or bylaws.</subsection></subsection><subsection number="16-6a-117(6)"> In addition to a meeting held under this section, a court-ordered meeting may be held pursuant to Section <xref depth="3" refnumber="16-6a-703" start="0">16-6a-703</xref>.</subsection></section><section number="16-6a-118"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Electronic documents.</catchline><subsection number="16-6a-118(1)">Notwithstanding the other requirements of this chapter except subject to Section <xref depth="3" refnumber="16-1a-203">16-1a-203</xref>, the division may by rule permit a writing required or permitted to be filed with the division under this chapter:<subsection number="16-6a-118(1)(a)">to be delivered, mailed, or filed:<subsection number="16-6a-118(1)(a)(i)">in an electronic medium; or</subsection><subsection number="16-6a-118(1)(a)(ii)">by electronic transmission; or</subsection></subsection><subsection number="16-6a-118(1)(b)">to be signed by photographic, electronic, or other means prescribed by rule, except that a writing signed in an electronic medium shall be signed by electronic signature in accordance with <xref depth="1" refnumber="46-4" start="0">Title 46, Chapter 4, Uniform Electronic Transactions Act</xref>.</subsection></subsection><subsection number="16-6a-118(2)">The division may by rule provide for any writing required or permitted to be prepared, delivered, or mailed by the division under this chapter to be prepared, delivered, or mailed:<subsection number="16-6a-118(2)(a)">in an electronic medium; or</subsection><subsection number="16-6a-118(2)(b)">by electronic transmission.</subsection></subsection></section><section number="16-6a-119"><histories><history>Enacted by Chapter <modchap sess="2009GS">37</modchap>, 2009 General Session</history><modyear>2009</modyear></histories><catchline>Execution against a mutual benefit corporation.</catchline><subsection number="16-6a-119(1)"> As used in this section: <subsection number="16-6a-119(1)(a)"> "Judicial lien" means one or more of the following:<subsection number="16-6a-119(1)(a)(i)"> a judgment lien; or</subsection><subsection number="16-6a-119(1)(a)(ii)"> other lien obtained by a judicial or equitable process or proceeding.</subsection></subsection><subsection number="16-6a-119(1)(b)"> "Water right" means:<subsection number="16-6a-119(1)(b)(i)"> a right to use water evidenced by a means identified in Section <xref depth="3" refnumber="73-1-10" start="0">73-1-10</xref>; or</subsection><subsection number="16-6a-119(1)(b)(ii)"> a right to use water under an approved application: <subsection number="16-6a-119(1)(b)(ii)(A)"> to appropriate;</subsection><subsection number="16-6a-119(1)(b)(ii)(B)"> for a change of use; or</subsection><subsection number="16-6a-119(1)(b)(ii)(C)"> for the exchange of water.</subsection></subsection></subsection><subsection number="16-6a-119(1)(c)"> "Water rights and related assets" means a water right or title to:<subsection number="16-6a-119(1)(c)(i)"> a water conveyance facility; or</subsection><subsection number="16-6a-119(1)(c)(ii)"> other asset of a mutual benefit corporation necessary to divert or distribute water to its members.</subsection></subsection></subsection><subsection number="16-6a-119(2)"> Except as provided in Subsection <xref depth="4" refnumber="16-6a-119(3)" start="0">(3)</xref>, a court may not do the following with regard to a judicial lien recorded on or after May 12, 2009 against the water rights and related assets of a mutual benefit corporation earlier than 180 days after the day on which the judicial lien is recorded or takes effect: <subsection number="16-6a-119(2)(a)"> execute the judicial lien;</subsection><subsection number="16-6a-119(2)(b)"> impose a levy as a result of the judicial lien; or</subsection><subsection number="16-6a-119(2)(c)"> force the sale, transfer, or change in ownership of the water rights and related assets pursuant to the judicial lien.</subsection></subsection><subsection number="16-6a-119(3)"> This section does not apply to a judicial lien related to a cause of action brought against a mutual benefit corporation by a shareholder under Section <xref depth="3" refnumber="73-3-3.5" start="0">73-3-3.5</xref>.</subsection></section><section number="16-6a-120"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Provisions Applicable to All Business Entities applicable.</catchline>Chapter 1a, Provisions Applicable to All Business Entities, applies to the provisions of this chapter.</section></part><part number="16-6a-2"><catchline>Incorporation</catchline><section number="16-6a-201"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Incorporators.</catchline><subsection number="16-6a-201(1)"> One or more persons may act as incorporators of a nonprofit corporation by delivering to the division for filing articles of incorporation meeting the requirements of Section <xref depth="3" refnumber="16-6a-202" start="0">16-6a-202</xref>.</subsection><subsection number="16-6a-201(2)"> An incorporator who is a natural person shall be 18 years of age or older.</subsection></section><section number="16-6a-202"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Articles of incorporation.</catchline><subsection number="16-6a-202(1)">The articles of incorporation shall set forth:<subsection number="16-6a-202(1)(a)">one or more purposes for which the nonprofit corporation is organized;</subsection><subsection number="16-6a-202(1)(b)">a corporate name for the nonprofit corporation that satisfies the requirements of Section <xref depth="3" refnumber="16-1a-302">16-1a-302</xref>;</subsection><subsection number="16-6a-202(1)(c)">the information required by Section <xref depth="3" refnumber="16-1a-404">16-1a-404</xref>;</subsection><subsection number="16-6a-202(1)(d)">the name and address of each incorporator;</subsection><subsection number="16-6a-202(1)(e)">whether or not the nonprofit corporation will have voting members;</subsection><subsection number="16-6a-202(1)(f)">if the nonprofit corporation is to issue shares of stock evidencing membership in the nonprofit corporation or interests in water or other property rights:<subsection number="16-6a-202(1)(f)(i)">the aggregate number of shares that the nonprofit corporation has authority to issue; and</subsection><subsection number="16-6a-202(1)(f)(ii)">if the shares are to be divided into classes:<subsection number="16-6a-202(1)(f)(ii)(A)">the number of shares of each class;</subsection><subsection number="16-6a-202(1)(f)(ii)(B)">the designation of each class; and</subsection><subsection number="16-6a-202(1)(f)(ii)(C)">a statement of the preferences, limitations, and relative rights of the shares of each class; and</subsection></subsection></subsection><subsection number="16-6a-202(1)(g)">provisions not inconsistent with law regarding the distribution of assets on dissolution.</subsection></subsection><subsection number="16-6a-202(2)">The articles of incorporation may but need not set forth:<subsection number="16-6a-202(2)(a)">the names and addresses of the individuals who are to serve as the initial directors;</subsection><subsection number="16-6a-202(2)(b)">provisions not inconsistent with law regarding:<subsection number="16-6a-202(2)(b)(i)">managing the business and regulating the affairs of the nonprofit corporation;</subsection><subsection number="16-6a-202(2)(b)(ii)">defining, limiting, and regulating the powers of:<subsection number="16-6a-202(2)(b)(ii)(A)">the nonprofit corporation;</subsection><subsection number="16-6a-202(2)(b)(ii)(B)">the board of directors of the nonprofit corporation; and</subsection><subsection number="16-6a-202(2)(b)(ii)(C)">the members of the nonprofit corporation or any class of members;</subsection></subsection><subsection number="16-6a-202(2)(b)(iii)">whether cumulative voting will be permitted; and</subsection><subsection number="16-6a-202(2)(b)(iv)">the characteristics, qualifications, rights, limitations, and obligations attaching to each or any class of members; and</subsection></subsection><subsection number="16-6a-202(2)(c)">any provision that under this chapter is permitted to be in the articles of incorporation or required or permitted to be set forth in the bylaws, including elective provisions that in accordance with this chapter shall be included in the articles of incorporation to be effective.</subsection></subsection><subsection number="16-6a-202(3)"><subsection number="16-6a-202(3)(a)">It is sufficient under Subsection <xref depth="4" refnumber="16-6a-202(1)(a)" start="0">(1)(a)</xref> to state, either alone or with other purposes, that the purpose of the nonprofit corporation is to engage in any lawful act for which a nonprofit corporation may be organized under this chapter.</subsection><subsection number="16-6a-202(3)(b)">If the articles of incorporation include the statement described in Subsection <xref depth="4" refnumber="16-6a-202(3)(a)" start="0">(3)(a)</xref>, all lawful acts and activities shall be within the purposes of the nonprofit corporation, except for express limitations, if any.</subsection></subsection><subsection number="16-6a-202(4)">The articles of incorporation need not set forth any corporate power enumerated in this chapter.</subsection><subsection number="16-6a-202(5)">The articles of incorporation shall:<subsection number="16-6a-202(5)(a)">be signed by each incorporator; and</subsection><subsection number="16-6a-202(5)(b)">meet the filing requirements of Section <xref depth="3" refnumber="16-1a-202">16-1a-202</xref>.</subsection></subsection><subsection number="16-6a-202(6)"><subsection number="16-6a-202(6)(a)">If this chapter conditions any matter upon the presence of a provision in the bylaws, the condition is satisfied if the provision is present either in:<subsection number="16-6a-202(6)(a)(i)">the articles of incorporation; or</subsection><subsection number="16-6a-202(6)(a)(ii)">the bylaws.</subsection></subsection><subsection number="16-6a-202(6)(b)">If this chapter conditions any matter upon the absence of a provision in the bylaws, the condition is satisfied only if the provision is absent from both:<subsection number="16-6a-202(6)(b)(i)">the articles of incorporation; and</subsection><subsection number="16-6a-202(6)(b)(ii)">the bylaws.</subsection></subsection></subsection></section><section number="16-6a-203"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Incorporation -- Required filings.</catchline><subsection number="16-6a-203(1)">A nonprofit corporation is incorporated, and its corporate existence begins:<subsection number="16-6a-203(1)(a)">when the articles of incorporation are filed by the division; or</subsection><subsection number="16-6a-203(1)(b)">if a delayed effective date is specified as described in Section <xref depth="3" refnumber="16-1a-204">16-1a-204</xref>, on the delayed effective date, unless a certificate of withdrawal is filed prior to the delayed effective date.</subsection></subsection><subsection number="16-6a-203(2)">Notwithstanding Section <xref depth="3" refnumber="16-1a-207">16-1a-207</xref>, the filing of the articles of incorporation by the division is conclusive proof that all conditions precedent to incorporation have been satisfied, except in a proceeding by the state to:<subsection number="16-6a-203(2)(a)">cancel or revoke the incorporation; or</subsection><subsection number="16-6a-203(2)(b)">involuntarily dissolve the nonprofit corporation.</subsection></subsection><subsection number="16-6a-203(3)">Beginning January 1, 2025, a nonprofit corporation that is a charitable organization, unless exempted by Section <xref depth="3" refnumber="13-22-110">13-22-110</xref>, shall file with the division the information described by Section <xref depth="3" refnumber="13-22-110">13-22-110</xref> in the form described in Section <xref depth="3" refnumber="13-22-110">13-22-110</xref>.</subsection></section><section number="16-6a-204"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Liability for preincorporation transactions.</catchline><tab/>All persons purporting to act as or on behalf of a nonprofit corporation, knowing there is no incorporation under this chapter, are jointly and severally liable for all liabilities created while so acting. </section><section number="16-6a-205"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Organization of the nonprofit corporation.</catchline><subsection number="16-6a-205(1)"> After incorporation: <subsection number="16-6a-205(1)(a)"> if initial directors are named in the articles of incorporation, the initial directors may hold an organizational meeting, at the call of a majority of the initial directors, to complete the organization of the nonprofit corporation by:<subsection number="16-6a-205(1)(a)(i)"> appointing officers;</subsection><subsection number="16-6a-205(1)(a)(ii)"> adopting bylaws, if desired; and</subsection><subsection number="16-6a-205(1)(a)(iii)"> carrying on any other business brought before the meeting; or</subsection></subsection><subsection number="16-6a-205(1)(b)"> if initial directors are not named in the articles of incorporation, until directors are elected, the incorporators may hold an organizational meeting at the call of a majority of the incorporators to do whatever is necessary and proper to complete the organization of the nonprofit corporation, including:<subsection number="16-6a-205(1)(b)(i)"> the election of directors and officers;</subsection><subsection number="16-6a-205(1)(b)(ii)"> the appointment of members; and</subsection><subsection number="16-6a-205(1)(b)(iii)"> the adoption and amendment of bylaws.</subsection></subsection></subsection><subsection number="16-6a-205(2)"> Action required or permitted by this chapter to be taken by incorporators at an organizational meeting may be taken without a meeting if the action taken is evidenced by one or more written consents that: <subsection number="16-6a-205(2)(a)"> describe the action taken; and</subsection><subsection number="16-6a-205(2)(b)"> are signed by each incorporator.</subsection></subsection><subsection number="16-6a-205(3)"> An organizational meeting may be held in or out of this state.</subsection></section><section number="16-6a-206"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Bylaws.</catchline><subsection number="16-6a-206(1)"><subsection number="16-6a-206(1)(a)"> The board of directors of a nonprofit corporation may adopt initial bylaws for the nonprofit corporation.</subsection><subsection number="16-6a-206(1)(b)"> If no directors of the nonprofit corporation have been elected, the incorporators may adopt initial bylaws for the nonprofit corporation.</subsection><subsection number="16-6a-206(1)(c)"> If neither the incorporators nor the board of directors have adopted initial bylaws, the members, if any, may adopt initial bylaws.</subsection></subsection><subsection number="16-6a-206(2)"> The bylaws of a nonprofit corporation may contain any provision for managing the business and regulating the affairs of the nonprofit corporation that is not inconsistent with law or the articles of incorporation, including management and regulation of the nonprofit corporation in the event of an emergency.</subsection></section><section number="16-6a-207"><histories><history>Amended by Chapter <modchap sess="2017GS">168</modchap>, 2017 General Session</history><modyear>2017</modyear></histories><catchline>Incorporation of cooperative association.</catchline><subsection number="16-6a-207(1)"><subsection number="16-6a-207(1)(a)"> If a cooperative association meets the requirements of Subsection <xref depth="4" refnumber="16-6a-207(1)(b)" start="0">(1)(b)</xref>, it may:<subsection number="16-6a-207(1)(a)(i)"> be incorporated under this chapter; and</subsection><subsection number="16-6a-207(1)(a)(ii)"> use the word "cooperative" as part of its corporate or business name.</subsection></subsection><subsection number="16-6a-207(1)(b)"> A cooperative association described in Subsection <xref depth="4" refnumber="16-6a-207(1)(a)" start="0">(1)(a)</xref>:<subsection number="16-6a-207(1)(b)(i)"> may not be an association subject to the insurance or credit union laws of this state; and</subsection><subsection number="16-6a-207(1)(b)(ii)"> shall state in its articles of incorporation that: <subsection number="16-6a-207(1)(b)(ii)(A)"> a member may not have more than one vote regardless of the number or amount of stock or membership capital owned by the member unless voting is based in whole or in part on the volume of patronage of the member with the cooperative association; and</subsection><subsection number="16-6a-207(1)(b)(ii)(B)"> savings in excess of dividends and additions to reserves and surplus shall be distributed or allocated to members or patrons on the basis of patronage.</subsection></subsection></subsection></subsection><subsection number="16-6a-207(2)"><subsection number="16-6a-207(2)(a)"> Any cooperative association incorporated in accordance with Subsection <xref depth="4" refnumber="16-6a-207(1)" start="0">(1)</xref>:<subsection number="16-6a-207(2)(a)(i)"> has all the rights and is subject to the limitations provided in Section <xref depth="3" refnumber="3-1-11" start="0">3-1-11</xref>; and</subsection><subsection number="16-6a-207(2)(a)(ii)"> may pay dividends on its stock, if it has stock, subject to the limitations of Section <xref depth="3" refnumber="3-1-11" start="0">3-1-11</xref>.</subsection></subsection><subsection number="16-6a-207(2)(b)"> The articles of incorporation or the bylaws of a cooperative association incorporated in accordance with Subsection <xref depth="4" refnumber="16-6a-207(1)" start="0">(1)</xref> may provide for:<subsection number="16-6a-207(2)(b)(i)"> the establishment and alteration of voting districts;</subsection><subsection number="16-6a-207(2)(b)(ii)"> the election of delegates to represent: <subsection number="16-6a-207(2)(b)(ii)(A)"> the districts described in Subsection <xref depth="4" refnumber="16-6a-207(2)(b)(i)" start="0">(2)(b)(i)</xref>; and</subsection><subsection number="16-6a-207(2)(b)(ii)(B)"> the members of the districts described in Subsection <xref depth="4" refnumber="16-6a-207(2)(b)(i)" start="0">(2)(b)(i)</xref>;</subsection></subsection><subsection number="16-6a-207(2)(b)(iii)"> the establishment and alteration of director districts; and</subsection><subsection number="16-6a-207(2)(b)(iv)"> the election of directors to represent the districts described in Subsection <xref depth="4" refnumber="16-6a-207(2)(b)(ii)" start="0">(2)(b)(ii)</xref> by: <subsection number="16-6a-207(2)(b)(iv)(A)"> the members of the districts; or</subsection><subsection number="16-6a-207(2)(b)(iv)(B)"> delegates elected by the members.</subsection></subsection></subsection></subsection><subsection number="16-6a-207(3)"><subsection number="16-6a-207(3)(a)"> A corporation organized under <xref depth="0" refnumber="3" start="0">Title 3, Uniform Agricultural Cooperative Association Act</xref>, or <xref depth="1" refnumber="16-16" start="0">Title 16, Chapter 16, Uniform Limited Cooperative Association Act</xref>, may convert itself into a cooperative association subject to this chapter by adopting appropriate amendments to its articles of incorporation by which:<subsection number="16-6a-207(3)(a)(i)"> it elects to become subject to this chapter; and</subsection><subsection number="16-6a-207(3)(a)(ii)"> makes changes in its articles of incorporation that are: <subsection number="16-6a-207(3)(a)(ii)(A)"> required by this chapter; and</subsection><subsection number="16-6a-207(3)(a)(ii)(B)"> any other changes permitted by this chapter.</subsection></subsection></subsection><subsection number="16-6a-207(3)(b)"> The amendments described in Subsection <xref depth="4" refnumber="16-6a-207(3)(a)" start="0">(3)(a)</xref> shall be adopted and filed in the manner provided by the law then applicable to the cooperative nonprofit corporation.</subsection></subsection><subsection number="16-6a-207(4)"> Except as otherwise provided in this section, a cooperative nonprofit corporation is subject to this chapter.</subsection><subsection number="16-6a-207(5)"> A corporation that is a cooperative under this chapter may convert to a limited cooperative association under <xref depth="1" refnumber="16-16" start="0">Title 16, Chapter 16, Uniform Limited Cooperative Association Act</xref>, by complying with that chapter.</subsection></section></part><part number="16-6a-3"><catchline>Purposes And Powers</catchline><section number="16-6a-301"><histories><history>Amended by Chapter <modchap sess="2017GS">168</modchap>, 2017 General Session</history><modyear>2017</modyear></histories><catchline>Purposes.</catchline><subsection number="16-6a-301(1)"> Every nonprofit corporation incorporated under this chapter that in its articles of incorporation has a statement meeting the requirements of Subsection <xref depth="4" refnumber="16-6a-202(3)(a)" start="0">16-6a-202(3)(a)</xref> may engage in any lawful activity except for express limitations set forth in the articles of incorporation.</subsection><subsection number="16-6a-301(2)"><subsection number="16-6a-301(2)(a)"> A nonprofit corporation engaging in an activity that is subject to regulation under another statute of this state may incorporate under this chapter only if permitted by, and subject to all limitations of, the other statute.</subsection><subsection number="16-6a-301(2)(b)"> Without limiting Subsection <xref depth="4" refnumber="16-6a-301(2)(a)" start="0">(2)(a)</xref>, an organization may not be organized under this chapter if the organization is subject to the:<subsection number="16-6a-301(2)(b)(i)"> insurance laws of this state; or</subsection><subsection number="16-6a-301(2)(b)(ii)"> laws governing depository institutions as defined in Section <xref depth="3" refnumber="7-1-103" start="0">7-1-103</xref>.</subsection></subsection></subsection></section><section number="16-6a-302"><histories><history>Amended by Chapter <modchap sess="2001GS">127</modchap>, 2001 General Session</history><modyear>2001</modyear></histories><catchline>General powers.</catchline><tab/>Unless its articles of incorporation provide otherwise, and except as restricted by the Utah Constitution, every nonprofit corporation has:<subsection number="16-6a-302(1)"> perpetual duration and succession in its corporate name; and</subsection><subsection number="16-6a-302(2)"> the same powers as an individual to do all things necessary or convenient to carry out its permitted activities and affairs, including without limitation the power to: <subsection number="16-6a-302(2)(a)"> sue and be sued, complain and defend in its corporate name;</subsection><subsection number="16-6a-302(2)(b)"><subsection number="16-6a-302(2)(b)(i)"> have a corporate seal, that may be altered at will; and</subsection><subsection number="16-6a-302(2)(b)(ii)"> use the corporate seal, or a facsimile of the corporate seal, by impressing or affixing it or in any other manner reproducing it;</subsection></subsection><subsection number="16-6a-302(2)(c)"> make and amend bylaws, not inconsistent with its articles of incorporation or with the laws of this state, for managing and regulating the affairs of the nonprofit corporation;</subsection><subsection number="16-6a-302(2)(d)"> purchase, receive, lease, or otherwise acquire, and own, hold, improve, use, and otherwise deal with, real or personal property, or any legal or equitable interest in property, wherever located;</subsection><subsection number="16-6a-302(2)(e)"> sell, convey, mortgage, pledge, lease, exchange, and otherwise dispose of all or any part of its property and assets;</subsection><subsection number="16-6a-302(2)(f)"> purchase, receive, subscribe for, or otherwise acquire, own, hold, vote, use, sell, mortgage, lend, pledge, or otherwise dispose of, and deal in and with shares or other interests in, or obligations of, any other entity;</subsection><subsection number="16-6a-302(2)(g)"> make contracts and guarantees, incur liabilities, borrow money, issue its notes, bonds, and other obligations and secure any of its obligations by mortgage or pledge of any of its property, assets, franchises, or income;</subsection><subsection number="16-6a-302(2)(h)"> lend money, invest and reinvest its funds, and receive and hold real and personal property as security for repayment, except that a nonprofit corporation may not lend money to or guarantee the obligation of a director or officer of the nonprofit corporation;</subsection><subsection number="16-6a-302(2)(i)"> be an agent, associate, fiduciary, manager, member, partner, promoter, or trustee of, or to hold any similar position with, any entity;</subsection><subsection number="16-6a-302(2)(j)"> conduct its business, locate offices, and exercise the powers granted by this chapter within or without this state;</subsection><subsection number="16-6a-302(2)(k)"><subsection number="16-6a-302(2)(k)(i)"> elect directors and appoint officers, employees, and agents of the nonprofit corporation;</subsection><subsection number="16-6a-302(2)(k)(ii)"> define the duties of the directors, officers, employees, and agents; and</subsection><subsection number="16-6a-302(2)(k)(iii)"> fix the compensation of the directors, officers, employees, and agents;</subsection></subsection><subsection number="16-6a-302(2)(l)"> pay compensation in a reasonable amount to its directors, officers, or members for services rendered, including:<subsection number="16-6a-302(2)(l)(i)"> payment of advances for expenses reasonably expected to be incurred; and</subsection><subsection number="16-6a-302(2)(l)(ii)"> expenses relating to relocation of directors, officers, or employees;</subsection></subsection><subsection number="16-6a-302(2)(m)"> pay pensions and establish pension plans, pension trusts, profit sharing plans, share bonus plans, share option plans, and benefit or incentive plans for any or all of its current or former directors, officers, employees, and agents;</subsection><subsection number="16-6a-302(2)(n)"> make contributions to or for any person for:<subsection number="16-6a-302(2)(n)(i)"> the public welfare;</subsection><subsection number="16-6a-302(2)(n)(ii)"> charitable, religious, scientific, or educational purposes; or</subsection><subsection number="16-6a-302(2)(n)(iii)"> for other purposes that further the corporate interest;</subsection></subsection><subsection number="16-6a-302(2)(o)"> pursue any lawful activity that will aid governmental policy;</subsection><subsection number="16-6a-302(2)(p)"> make payments or do any other act, not inconsistent with law, that furthers the business and affairs of the nonprofit corporation;</subsection><subsection number="16-6a-302(2)(q)"> establish rules governing the conduct of the business and affairs of the nonprofit corporation in the event of an emergency;</subsection><subsection number="16-6a-302(2)(r)"> impose dues, assessments, admission fees, and transfer fees upon its members;</subsection><subsection number="16-6a-302(2)(s)"><subsection number="16-6a-302(2)(s)(i)"> establish conditions for admission of members;</subsection><subsection number="16-6a-302(2)(s)(ii)"> admit members; and</subsection><subsection number="16-6a-302(2)(s)(iii)"> issue or transfer membership;</subsection></subsection><subsection number="16-6a-302(2)(t)"> carry on a business;</subsection><subsection number="16-6a-302(2)(u)"> indemnify current or former directors, officers, employees, fiduciaries, or agents as provided in this chapter;</subsection><subsection number="16-6a-302(2)(v)"> limit the liability of its directors as provided in Subsection <xref depth="4" refnumber="16-6a-823(1)" start="0">16-6a-823(1)</xref>;</subsection><subsection number="16-6a-302(2)(w)"> cease its corporate activities and dissolve; and</subsection><subsection number="16-6a-302(2)(x)"> issue certificates or stock evidencing:<subsection number="16-6a-302(2)(x)(i)"> membership in the nonprofit corporation; or</subsection><subsection number="16-6a-302(2)(x)(ii)"> interests in water or other property rights.</subsection></subsection></subsection></section><section number="16-6a-303"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Emergency powers.</catchline><subsection number="16-6a-303(1)"> In anticipation of or during an emergency defined in Subsection <xref depth="4" refnumber="16-6a-303(4)" start="0">(4)</xref>, the board of directors may: <subsection number="16-6a-303(1)(a)"> modify lines of succession to accommodate the incapacity of any director, officer, employee, or agent;</subsection><subsection number="16-6a-303(1)(b)"> adopt bylaws to be effective only in an emergency; and</subsection><subsection number="16-6a-303(1)(c)"><subsection number="16-6a-303(1)(c)(i)"> relocate the principal office;</subsection><subsection number="16-6a-303(1)(c)(ii)"> designate an alternative principal office or regional office; or</subsection><subsection number="16-6a-303(1)(c)(iii)"> authorize officers to relocate or designate an alternative principal office or regional office.</subsection></subsection></subsection><subsection number="16-6a-303(2)"> During an emergency as defined in Subsection <xref depth="4" refnumber="16-6a-303(4)" start="0">(4)</xref>, unless emergency bylaws provide otherwise: <subsection number="16-6a-303(2)(a)"> notice of a meeting of the board of directors:<subsection number="16-6a-303(2)(a)(i)"> need be given only to those directors whom it is practicable to reach; and</subsection><subsection number="16-6a-303(2)(a)(ii)"> may be given in any practicable manner, including by publication or radio; and</subsection></subsection><subsection number="16-6a-303(2)(b)"> the officers of the nonprofit corporation present at a meeting of the board of directors may be considered to be directors for the meeting, in order of rank and within the same rank in order of seniority, as necessary to achieve a quorum.</subsection></subsection><subsection number="16-6a-303(3)"> Corporate action taken in good faith during an emergency under this section to further the ordinary business affairs of the nonprofit corporation: <subsection number="16-6a-303(3)(a)"> binds the nonprofit corporation; and</subsection><subsection number="16-6a-303(3)(b)"> may not be the basis for the imposition of liability on any director, officer, employee, or agent of the nonprofit corporation on the ground that the action was not an authorized corporate action.</subsection></subsection><subsection number="16-6a-303(4)"> An emergency exists for purposes of this section if a quorum of the directors cannot readily be obtained because of a catastrophic event.</subsection></section><section number="16-6a-304"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Ultra vires.</catchline><subsection number="16-6a-304(1)"> Except as provided in Subsection <xref depth="4" refnumber="16-6a-304(2)" start="0">(2)</xref>, the validity of corporate action may not be challenged on the ground that the nonprofit corporation lacks or lacked power to act.</subsection><subsection number="16-6a-304(2)"> A nonprofit corporation's power to act may be challenged: <subsection number="16-6a-304(2)(a)"> in a proceeding against the nonprofit corporation to enjoin the act brought by:<subsection number="16-6a-304(2)(a)(i)"> a director; or</subsection><subsection number="16-6a-304(2)(a)(ii)"> one or more voting members in a derivative proceeding;</subsection></subsection><subsection number="16-6a-304(2)(b)"> in a proceeding by or in the right of the nonprofit corporation, whether directly, derivatively, or through a receiver, trustee, or other legal representative, against an incumbent or former director, officer, employee, or agent of the nonprofit corporation; or</subsection><subsection number="16-6a-304(2)(c)"> in a proceeding by the attorney general under Section <xref depth="3" refnumber="16-6a-1414" start="0">16-6a-1414</xref>.</subsection></subsection><subsection number="16-6a-304(3)"> In a proceeding under Subsection <xref depth="4" refnumber="16-6a-304(2)(a)" start="0">(2)(a)</xref> to enjoin an unauthorized corporate act, the court may: <subsection number="16-6a-304(3)(a)"> enjoin or set aside the act, if:<subsection number="16-6a-304(3)(a)(i)"> it would be equitable to do so; and</subsection><subsection number="16-6a-304(3)(a)(ii)"> all affected persons are parties to the proceeding; and</subsection></subsection><subsection number="16-6a-304(3)(b)"> award damages for loss, including anticipated profits, suffered by the nonprofit corporation or another party because of an injunction issued under this section.</subsection></subsection></section></part><part number="16-6a-4"><catchline>Name</catchline><section number="16-6a-403"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Corporate name -- Limited rights.</catchline><tab/>The authorization granted by the division to file articles of incorporation under a corporate name or to reserve a name does not:<subsection number="16-6a-403(1)"> abrogate or limit the law governing unfair competition or unfair trade practices;</subsection><subsection number="16-6a-403(2)"> derogate from the common law the principles of equity or the statutes of this state or of the United States with respect to the right to acquire and protect names and trademarks; or</subsection><subsection number="16-6a-403(3)"> create an exclusive right in geographic or generic terms contained within a name.</subsection></section></part><part number="16-6a-6"><catchline>Members</catchline><section number="16-6a-601"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>No requirement of members.</catchline><tab/>A nonprofit corporation is not required to have members. </section><section number="16-6a-602"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Number and classes.</catchline><subsection number="16-6a-602(1)"> A nonprofit corporation may have: <subsection number="16-6a-602(1)(a)"> one or more classes of voting or nonvoting members; and</subsection><subsection number="16-6a-602(1)(b)"> one or more members in each class described in Subsection <xref depth="4" refnumber="16-6a-602(1)(a)" start="0">(1)(a)</xref>.</subsection></subsection><subsection number="16-6a-602(2)"> The bylaws may designate: <subsection number="16-6a-602(2)(a)"> the class or classes of members; and</subsection><subsection number="16-6a-602(2)(b)"> the qualifications and rights of the members of each class of members including the matters or items for which voting members may vote.</subsection></subsection></section><section number="16-6a-603"><histories><history>Amended by Chapter <modchap sess="2002GS">197</modchap>, 2002 General Session</history><modyear>2002</modyear></histories><catchline>Admission.</catchline><subsection number="16-6a-603(1)"> The bylaws may establish: <subsection number="16-6a-603(1)(a)"> criteria or procedures for admission of members; and</subsection><subsection number="16-6a-603(1)(b)"> the procedure for replacing:<subsection number="16-6a-603(1)(b)(i)"> a member; or</subsection><subsection number="16-6a-603(1)(b)(ii)"> a membership interest.</subsection></subsection></subsection><subsection number="16-6a-603(2)"> A person may not be admitted as a member without the person's consent.</subsection></section><section number="16-6a-604"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Consideration.</catchline><tab/>Unless otherwise provided by the bylaws, a nonprofit corporation may admit members:<subsection number="16-6a-604(1)"> for no consideration; or</subsection><subsection number="16-6a-604(2)"> for such consideration as is determined by the board of directors.</subsection></section><section number="16-6a-605"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Differences in rights and obligations of members.</catchline><tab/>Unless otherwise provided by this chapter or the bylaws:<subsection number="16-6a-605(1)"> all voting members shall have the same rights and obligations with respect to voting and all other matters that this chapter specifically reserves to voting members; and</subsection><subsection number="16-6a-605(2)"> with respect to matters not reserved under Subsection <xref depth="4" refnumber="16-6a-605(1)" start="0">(1)</xref>, all members, including voting members, shall have the same rights and obligations.</subsection></section><section number="16-6a-606"><histories><history>Amended by Chapter <modchap sess="2017GS">358</modchap>, 2017 General Session</history><modyear>2017</modyear></histories><catchline>Transfers.</catchline><subsection number="16-6a-606(1)"> Except as provided in Subsection <xref depth="4" refnumber="16-6a-606(3)" start="0">(3)</xref>, and unless otherwise provided in the articles of incorporation or the bylaws, a member of a nonprofit corporation may not transfer: <subsection number="16-6a-606(1)(a)"> a membership; or</subsection><subsection number="16-6a-606(1)(b)"> any right arising from a membership.</subsection></subsection><subsection number="16-6a-606(2)"> Except as provided in Subsection <xref depth="4" refnumber="16-6a-606(3)" start="0">(3)</xref>, where transfer rights have been provided in the articles of incorporation or the bylaws of a nonprofit corporation, a restriction on transfer rights may not be binding with respect to a member holding a membership issued before the adoption of the restriction, unless the restriction is approved by the affected member.</subsection><subsection number="16-6a-606(3)"><subsection number="16-6a-606(3)(a)"> For a water company, unless otherwise provided by the articles of incorporation or bylaws, ownership of shares is transferrable.</subsection><subsection number="16-6a-606(3)(b)"> Any restriction on the transfer of ownership under Subsection <xref depth="4" refnumber="16-6a-606(3)(a)" start="0">(3)(a)</xref>:<subsection number="16-6a-606(3)(b)(i)"> shall be reasonable;</subsection><subsection number="16-6a-606(3)(b)(ii)"> shall be adopted in good faith and for a legitimate purpose;</subsection><subsection number="16-6a-606(3)(b)(iii)"> shall be adopted in the best interest of the water company and its shareholders; and</subsection><subsection number="16-6a-606(3)(b)(iv)"> may not discriminate against any individual shareholder or class of shareholders, but in a company where there are classes or divisions of stock, restrictions may differ between the classes or divisions.</subsection></subsection><subsection number="16-6a-606(3)(c)"> Nothing in this section is intended to alter any right or remedy a shareholder may have under Sections <xref depth="3" refnumber="16-6a-612" start="0">16-6a-612</xref>, <xref depth="3" refnumber="16-6a-808" start="0">16-6a-808</xref>, <xref depth="3" refnumber="16-6a-809" start="0">16-6a-809</xref>, <xref depth="3" refnumber="16-6a-822" start="0">16-6a-822</xref>, <xref depth="3" refnumber="16-6a-824" start="0">16-6a-824</xref>, and <xref depth="3" refnumber="16-6a-825" start="0">16-6a-825</xref>, or any other applicable law.</subsection></subsection></section><section number="16-6a-607"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Creditor's action against member.</catchline><tab/>A proceeding may not be brought by a creditor to reach the liability, if any, of a member to the nonprofit corporation unless:<subsection number="16-6a-607(1)"><subsection number="16-6a-607(1)(a)"> final judgment has been rendered in favor of the creditor against the nonprofit corporation; and</subsection><subsection number="16-6a-607(1)(b)"> execution has been returned unsatisfied in whole or in part; or</subsection></subsection><subsection number="16-6a-607(2)"> a proceeding described in Subsection <xref depth="4" refnumber="16-6a-607(1)" start="0">(1)</xref> would be useless.</subsection></section><section number="16-6a-608"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Resignation.</catchline><subsection number="16-6a-608(1)"> Unless otherwise provided by the bylaws, a member may resign at any time.</subsection><subsection number="16-6a-608(2)"> The resignation of a member does not relieve the member from any obligation or commitment the member may have to the nonprofit corporation incurred or made prior to resignation.</subsection></section><section number="16-6a-609"><histories><history>Amended by Chapter <modchap sess="2011GS">311</modchap>, 2011 General Session</history><modyear>2011</modyear></histories><catchline>Termination, expulsion, or suspension.</catchline><subsection number="16-6a-609(1)"> Unless otherwise provided by the bylaws, except pursuant to a procedure that is fair and reasonable: <subsection number="16-6a-609(1)(a)"> a member of a nonprofit corporation may not be expelled or suspended; and</subsection><subsection number="16-6a-609(1)(b)"> membership in a nonprofit corporation may not be terminated or suspended.</subsection></subsection><subsection number="16-6a-609(2)"> For purposes of this section, a procedure is fair and reasonable when either: <subsection number="16-6a-609(2)(a)"> the bylaws or a written policy of the board of directors set forth a procedure that provides:<subsection number="16-6a-609(2)(a)(i)"> not less than 15 days prior written notice of: <subsection number="16-6a-609(2)(a)(i)(A)"> the expulsion, suspension, or termination; and</subsection><subsection number="16-6a-609(2)(a)(i)(B)"> the reasons for the expulsion, suspension, or termination; and</subsection></subsection><subsection number="16-6a-609(2)(a)(ii)"> an opportunity for the member to be heard: <subsection number="16-6a-609(2)(a)(ii)(A)"> orally or in writing;</subsection><subsection number="16-6a-609(2)(a)(ii)(B)"> not less than five days before the effective date of the expulsion, suspension, or termination; and</subsection><subsection number="16-6a-609(2)(a)(ii)(C)"> by one or more persons authorized to decide that the proposed expulsion, termination, or suspension not take place; or</subsection></subsection></subsection><subsection number="16-6a-609(2)(b)"> it is fair and reasonable taking into consideration all of the relevant facts and circumstances.</subsection></subsection><subsection number="16-6a-609(3)"> For purposes of this section, any written notice given by mail shall be given by first-class or certified mail sent to the last address of the member shown on the nonprofit corporation's records.</subsection><subsection number="16-6a-609(4)"> Unless otherwise provided by the bylaws, any proceeding challenging an expulsion, suspension, or termination, including a proceeding in which defective notice is alleged, shall be commenced within one year after the effective date of the expulsion, suspension, or termination.</subsection><subsection number="16-6a-609(5)"> Unless otherwise provided by the bylaws, a member who has been expelled or suspended may be liable to the nonprofit corporation for dues, assessments, or fees as a result of an obligation incurred or commitment made prior to the effective date of the expulsion or suspension.</subsection><subsection number="16-6a-609(6)"> A mutual benefit corporation that complies with Section <xref depth="3" refnumber="70A-8-409.1" start="0">70A-8-409.1</xref> is considered to have followed a fair and reasonable procedure for purposes of this section without the existence of a written policy or bylaw otherwise required by this section.</subsection></section><section number="16-6a-610"><histories><history>Amended by Chapter <modchap sess="2017GS">358</modchap>, 2017 General Session</history><modyear>2017</modyear></histories><catchline>Purchase of memberships.</catchline><subsection number="16-6a-610(1)"> Unless otherwise provided in the articles of incorporation or the bylaws, a nonprofit corporation may not purchase the membership of a member: <subsection number="16-6a-610(1)(a)"> who resigns; or</subsection><subsection number="16-6a-610(1)(b)"> whose membership is terminated.</subsection></subsection><subsection number="16-6a-610(2)"><subsection number="16-6a-610(2)(a)"> If so authorized, a nonprofit corporation may purchase the membership of a member who resigns or whose membership is terminated for the amount and pursuant to the conditions set forth in or authorized by:<subsection number="16-6a-610(2)(a)(i)"> its articles of incorporation or its bylaws; or</subsection><subsection number="16-6a-610(2)(a)(ii)"> agreement with the affected member.</subsection></subsection><subsection number="16-6a-610(2)(b)"> A payment permitted under Subsection <xref depth="4" refnumber="16-6a-610(2)(a)" start="0">(2)(a)</xref> may not violate:<subsection number="16-6a-610(2)(b)(i)"> Section <xref depth="3" refnumber="16-6a-1301" start="0">16-6a-1301</xref>; or</subsection><subsection number="16-6a-610(2)(b)(ii)"> any other provision of this chapter.</subsection></subsection></subsection><subsection number="16-6a-610(3)"> A mutual benefit corporation may purchase a member's membership if, after the purchase is completed: <subsection number="16-6a-610(3)(a)"> the mutual benefit corporation would be able to pay its debts as they become due in the usual course of its activities; and</subsection><subsection number="16-6a-610(3)(b)"> the mutual benefit corporation's total assets would at least equal the sum of its total liabilities.</subsection></subsection><subsection number="16-6a-610(4)"> A water company may purchase the shares of a shareholder who is delinquent in payment of shareholder assessments, in accordance with <xref depth="1" refnumber="16-4" start="1">Chapter 4, Share Assessment Act</xref>. </subsection></section><section number="16-6a-611"><histories><history>Amended by Chapter <modchap sess="2017GS">358</modchap>, 2017 General Session</history><modyear>2017</modyear></histories><catchline>Property rights.</catchline><subsection number="16-6a-611(1)"> A member has no right relating to management, control, purpose, or duration of the nonprofit corporation, except as provided by: <subsection number="16-6a-611(1)(a)"> the articles of incorporation or the bylaws of a mutual benefit corporation; or</subsection><subsection number="16-6a-611(1)(b)"> other applicable law.</subsection></subsection><subsection number="16-6a-611(2)"> Unless otherwise provided by agreement, articles of incorporation, or the bylaws of a water company, and subject to the general liabilities and obligations of the water company, a shareholder in a water company has: <subsection number="16-6a-611(2)(a)"> an equitable, beneficial interest in the use of the water supply of the water company, proportionate to the shareholder's shares in the water company, which is an interest in real property; and</subsection><subsection number="16-6a-611(2)(b)"> the right to have the shareholder's proportionate share of the water delivered through a diversion structure, ditch, canal, storage and distribution facility, or other appurtenance of the water company, in accordance with:<subsection number="16-6a-611(2)(b)(i)"> the distribution method of the water company; or</subsection><subsection number="16-6a-611(2)(b)(ii)"> an approved change application under Section <xref depth="3" refnumber="73-3-3.5" start="0">73-3-3.5</xref>.</subsection></subsection></subsection></section><section number="16-6a-612"><histories><history>Amended by Chapter <modchap sess="2006GS">228</modchap>, 2006 General Session</history><modyear>2006</modyear></histories><catchline>Derivative suits.</catchline><subsection number="16-6a-612(1)"> Without affecting the right of a member or director to bring a proceeding against a nonprofit corporation or its directors or officers, a proceeding may be brought in the right of a nonprofit corporation to procure a judgment in its favor by a complainant who is: <subsection number="16-6a-612(1)(a)"> a voting member; or</subsection><subsection number="16-6a-612(1)(b)"> a director in a nonprofit corporation that does not have voting members.</subsection></subsection><subsection number="16-6a-612(2)"> A complainant may not commence or maintain a derivative proceeding unless the complainant: <subsection number="16-6a-612(2)(a)"> is a voting member, or a director in a nonprofit corporation that does not have voting members, at the time the proceeding is brought; and</subsection><subsection number="16-6a-612(2)(b)"> fairly and adequately represents the nonprofit corporation's interests in enforcing the nonprofit corporation's right.</subsection></subsection><subsection number="16-6a-612(3)"><subsection number="16-6a-612(3)(a)"> A complainant may not commence a derivative proceeding until:<subsection number="16-6a-612(3)(a)(i)"> a written demand is made upon the nonprofit corporation to take suitable action; and</subsection><subsection number="16-6a-612(3)(a)(ii)"> 90 days have expired from the date the demand described in Subsection <xref depth="4" refnumber="16-6a-612(3)(a)(i)" start="0">(3)(a)(i)</xref> is made, unless: <subsection number="16-6a-612(3)(a)(ii)(A)"> the complainant is notified before the 90-day period expires that the demand is rejected by the nonprofit corporation; or</subsection><subsection number="16-6a-612(3)(a)(ii)(B)"> irreparable injury to the nonprofit corporation would result by waiting for the 90-day period's expiration.</subsection></subsection></subsection><subsection number="16-6a-612(3)(b)"> A complaint in a derivative proceeding shall be:<subsection number="16-6a-612(3)(b)(i)"> verified; and</subsection><subsection number="16-6a-612(3)(b)(ii)"> allege with particularity the demand made to obtain action by the board of directors.</subsection></subsection><subsection number="16-6a-612(3)(c)"> A derivative proceeding shall comply with the procedures of Utah Rules of Civil Procedure, Rule 23.1.</subsection><subsection number="16-6a-612(3)(d)"> The court shall stay any derivative proceeding until the inquiry is completed and for an additional period as the court considers appropriate if:<subsection number="16-6a-612(3)(d)(i)"> the nonprofit corporation commences an inquiry into the allegations made in the demand or complaint; and</subsection><subsection number="16-6a-612(3)(d)(ii)"> a person or group described in Subsection <xref depth="4" refnumber="16-6a-612(4)" start="0">(4)</xref> is conducting an active review of the allegations in good faith.</subsection></subsection><subsection number="16-6a-612(3)(e)"> If a nonprofit corporation proposes to dismiss a derivative proceeding pursuant to Subsection <xref depth="4" refnumber="16-6a-612(4)(a)" start="0">(4)(a)</xref>, discovery by a complainant in the derivative proceeding:<subsection number="16-6a-612(3)(e)(i)"> is limited to facts relating to: <subsection number="16-6a-612(3)(e)(i)(A)"> whether the person or group conducting the inquiry is independent and disinterested;</subsection><subsection number="16-6a-612(3)(e)(i)(B)"> the good faith of the inquiry; and</subsection><subsection number="16-6a-612(3)(e)(i)(C)"> the reasonableness of the procedures followed by the person or group conducting the inquiry; and</subsection></subsection><subsection number="16-6a-612(3)(e)(ii)"> may not extend to any facts or substantive issues with respect to the act, omission, or other matter that is the subject matter of the derivative proceeding.</subsection></subsection></subsection><subsection number="16-6a-612(4)"><subsection number="16-6a-612(4)(a)"> A derivative proceeding shall be dismissed by the court on motion by the corporation if a person or group specified in Subsection <xref depth="4" refnumber="16-6a-612(4)(b)" start="0">(4)(b)</xref> or <xref depth="4" refnumber="16-6a-612(4)(f)" start="0">(4)(f)</xref> determines in good faith, after conducting a reasonable inquiry upon which the person's or group's conclusions are based, that the maintenance of the derivative proceeding is not in the best interest of the nonprofit corporation.</subsection><subsection number="16-6a-612(4)(b)"> Unless a panel is appointed pursuant to Subsection <xref depth="4" refnumber="16-6a-612(4)(f)" start="0">(4)(f)</xref>, the determination in Subsection <xref depth="4" refnumber="16-6a-612(4)(a)" start="0">(4)(a)</xref> shall be made by:<subsection number="16-6a-612(4)(b)(i)"> a majority vote of independent directors present at a meeting of the board of directors, if the independent directors constitute a quorum; or</subsection><subsection number="16-6a-612(4)(b)(ii)"> a majority vote of a committee consisting of two or more independent directors appointed by a majority vote of independent directors present at a meeting of the board of directors, whether or not the independent directors appointing the committee constituted a quorum.</subsection></subsection><subsection number="16-6a-612(4)(c)"> None of the following by itself causes a director to be considered not independent for purposes of this section:<subsection number="16-6a-612(4)(c)(i)"> the nomination or election of the director by persons: <subsection number="16-6a-612(4)(c)(i)(A)"> who are defendants in the derivative proceeding; or</subsection><subsection number="16-6a-612(4)(c)(i)(B)"> against whom action is demanded;</subsection></subsection><subsection number="16-6a-612(4)(c)(ii)"> the naming of the director as: <subsection number="16-6a-612(4)(c)(ii)(A)"> a defendant in the derivative proceeding; or</subsection><subsection number="16-6a-612(4)(c)(ii)(B)"> a person against whom action is demanded; or</subsection></subsection><subsection number="16-6a-612(4)(c)(iii)"> the approval by the director of the act being challenged in the derivative proceeding or demand if the act resulted in no personal benefit to the director.</subsection></subsection><subsection number="16-6a-612(4)(d)"> If a derivative proceeding is commenced after a determination is made rejecting a demand by a complainant, the complaint shall allege with particularity facts establishing either:<subsection number="16-6a-612(4)(d)(i)"> that a majority of the board of directors did not consist of independent directors at the time the determination was made; or</subsection><subsection number="16-6a-612(4)(d)(ii)"> that the requirements of Subsection <xref depth="4" refnumber="16-6a-612(4)(a)" start="0">(4)(a)</xref> are not met.</subsection></subsection><subsection number="16-6a-612(4)(e)"><subsection number="16-6a-612(4)(e)(i)"> If a majority of the board of directors does not consist of independent directors at the time the determination is made to reject a demand by a shareholder, the corporation has the burden of proving that the requirements of Subsection <xref depth="4" refnumber="16-6a-612(4)(a)" start="0">(4)(a)</xref> are met.</subsection><subsection number="16-6a-612(4)(e)(ii)"> If a majority of the board of directors consists of independent directors at the time the determination is made to reject a demand by a complainant, the plaintiff has the burden of proving that the requirements of Subsection <xref depth="4" refnumber="16-6a-612(4)(a)" start="0">(4)(a)</xref> are not met.</subsection></subsection><subsection number="16-6a-612(4)(f)"><subsection number="16-6a-612(4)(f)(i)"> The court may appoint a panel of one or more independent persons upon motion by the corporation to make a determination whether the maintenance of the derivative proceeding is in the best interest of the corporation.</subsection><subsection number="16-6a-612(4)(f)(ii)"> If the court appoints a panel under Subsection <xref depth="4" refnumber="16-6a-612(4)(f)(i)" start="0">(4)(f)(i)</xref>, the plaintiff has the burden of proving that the requirements of Subsection <xref depth="4" refnumber="16-6a-612(4)(a)" start="0">(4)(a)</xref> are not met.</subsection></subsection><subsection number="16-6a-612(4)(g)"> A person may appeal an interlocutory order of a court that grants or denies a motion to dismiss brought pursuant to Subsection <xref depth="4" refnumber="16-6a-612(4)(a)" start="0">(4)(a)</xref>.</subsection></subsection><subsection number="16-6a-612(5)"> On termination of a derivative proceeding the court may order: <subsection number="16-6a-612(5)(a)"> the nonprofit corporation to pay the plaintiff's reasonable expenses, including attorney fees, incurred in the proceeding, if it finds that the proceeding results in a substantial benefit to the nonprofit corporation;</subsection><subsection number="16-6a-612(5)(b)"> the plaintiff to pay a defendant's reasonable expenses, including attorney fees, incurred in defending the proceeding, if it finds that the proceeding was commenced or maintained:<subsection number="16-6a-612(5)(b)(i)"> without reasonable cause; or</subsection><subsection number="16-6a-612(5)(b)(ii)"> for an improper purpose; or</subsection></subsection><subsection number="16-6a-612(5)(c)"> a party to pay an opposing party's reasonable expenses, including attorney fees, incurred because of the filing of a pleading, motion, or other paper, if the court finds that the pleading, motion, or other paper was:<subsection number="16-6a-612(5)(c)(i)"><subsection number="16-6a-612(5)(c)(i)(A)"> not well grounded in fact, after reasonable inquiry; or</subsection><subsection number="16-6a-612(5)(c)(i)(B)"> not warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law; and</subsection></subsection><subsection number="16-6a-612(5)(c)(ii)"> interposed for an improper purpose, such as to: <subsection number="16-6a-612(5)(c)(ii)(A)"> harass;</subsection><subsection number="16-6a-612(5)(c)(ii)(B)"> cause unnecessary delay; or</subsection><subsection number="16-6a-612(5)(c)(ii)(C)"> cause needless increase in the cost of litigation.</subsection></subsection></subsection></subsection></section><section number="16-6a-613"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Delegates.</catchline><subsection number="16-6a-613(1)"> A nonprofit corporation may provide in its bylaws for delegates having some or all of the authority of members.</subsection><subsection number="16-6a-613(2)"> The bylaws may set forth provisions relating to: <subsection number="16-6a-613(2)(a)"> the characteristics, qualifications, rights, limitations, and obligations of delegates, including their selection and removal;</subsection><subsection number="16-6a-613(2)(b)"> calling, noticing, holding, and conducting meetings of delegates; and</subsection><subsection number="16-6a-613(2)(c)"> carrying on corporate activities during and between meetings of delegates.</subsection></subsection></section></part><part number="16-6a-7"><catchline>Member Meetings and Voting</catchline><section number="16-6a-701"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Annual and regular meetings.</catchline><subsection number="16-6a-701(1)"> Unless the bylaws eliminate the requirement for holding an annual meeting, a nonprofit corporation that has voting members shall hold a meeting of the voting members annually: <subsection number="16-6a-701(1)(a)"> at a time and date stated in or fixed in accordance with the bylaws; or</subsection><subsection number="16-6a-701(1)(b)"> if a time and date is not stated in or fixed in accordance with the bylaws, at a time and date stated in or fixed in accordance with a resolution of the board of directors.</subsection></subsection><subsection number="16-6a-701(2)"> A nonprofit corporation with members may hold regular membership meetings at: <subsection number="16-6a-701(2)(a)"> a time and date stated in or fixed in accordance with the bylaws; or</subsection><subsection number="16-6a-701(2)(b)"> if a time and date is not stated in or fixed in accordance with the bylaws, at a time and date stated in or fixed in accordance with a resolution of the board of directors.</subsection></subsection><subsection number="16-6a-701(3)"><subsection number="16-6a-701(3)(a)"> Annual and regular membership meetings may be held in or out of this state:<subsection number="16-6a-701(3)(a)(i)"> at the place stated in or fixed in accordance with the bylaws; or</subsection><subsection number="16-6a-701(3)(a)(ii)"> if no place is stated in or fixed in accordance with the bylaws, at a place stated in or fixed in accordance with a resolution of the board of directors.</subsection></subsection><subsection number="16-6a-701(3)(b)"> If no place is stated or fixed in accordance with Subsection <xref depth="4" refnumber="16-6a-701(3)(a)" start="0">(3)(a)</xref>, annual and regular meetings shall be held at the nonprofit corporation's principal office.</subsection></subsection><subsection number="16-6a-701(4)"> The failure to hold an annual or regular meeting at the time and date determined pursuant to Subsection <xref depth="4" refnumber="16-6a-701(1)" start="0">(1)</xref> does not: <subsection number="16-6a-701(4)(a)"> affect the validity of any corporate action; or</subsection><subsection number="16-6a-701(4)(b)"> work a forfeiture or dissolution of the nonprofit corporation.</subsection></subsection></section><section number="16-6a-702"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Special meetings.</catchline><subsection number="16-6a-702(1)"> A nonprofit corporation shall hold a special meeting of its members: <subsection number="16-6a-702(1)(a)"> on call of:<subsection number="16-6a-702(1)(a)(i)"> its board of directors; or</subsection><subsection number="16-6a-702(1)(a)(ii)"> the person or persons authorized by the bylaws or resolution of the board of directors to call a special meeting; or</subsection></subsection><subsection number="16-6a-702(1)(b)"> unless otherwise provided by the bylaws, if the nonprofit corporation receives one or more written demands for the meeting, that:<subsection number="16-6a-702(1)(b)(i)"> state the purpose or purposes for which the meeting is to be held; and</subsection><subsection number="16-6a-702(1)(b)(ii)"> are signed and dated by members holding at least 10% of all the votes entitled pursuant to the bylaws to be cast on any issue proposed to be considered at the meeting.</subsection></subsection></subsection><subsection number="16-6a-702(2)"> If not otherwise fixed under Section <xref depth="3" refnumber="16-6a-703" start="0">16-6a-703</xref> or <xref depth="3" refnumber="16-6a-706" start="0">16-6a-706</xref>, the record date for determining the members entitled to demand a special meeting pursuant to Subsection <xref depth="4" refnumber="16-6a-702(1)(b)" start="0">(1)(b)</xref> is the later of the date of: <subsection number="16-6a-702(2)(a)"> the earliest of any of the demands pursuant to which the meeting is called; or</subsection><subsection number="16-6a-702(2)(b)"> the date that is 60 days before the date the first of the demands is received by the nonprofit corporation.</subsection></subsection><subsection number="16-6a-702(3)"> If a notice for a special meeting demanded pursuant to Subsection <xref depth="4" refnumber="16-6a-702(1)(b)" start="0">(1)(b)</xref> is not given pursuant to Section <xref depth="3" refnumber="16-6a-704" start="0">16-6a-704</xref> within 30 days after the date the written demand is delivered to a corporate officer, regardless of the requirements of Subsection <xref depth="4" refnumber="16-6a-702(4)" start="0">(4)</xref>, a person signing the demand may: <subsection number="16-6a-702(3)(a)"> set the time and place of the meeting; and</subsection><subsection number="16-6a-702(3)(b)"> give notice pursuant to Section <xref depth="3" refnumber="16-6a-704" start="0">16-6a-704</xref>.</subsection></subsection><subsection number="16-6a-702(4)"><subsection number="16-6a-702(4)(a)"> A special meeting of the members may be held in or out of this state:<subsection number="16-6a-702(4)(a)(i)"> at the place stated in or fixed in accordance with the bylaws; or</subsection><subsection number="16-6a-702(4)(a)(ii)"> if a place is not stated in or fixed in accordance with the bylaws, at a place stated in or fixed in accordance with a resolution of the board of directors.</subsection></subsection><subsection number="16-6a-702(4)(b)"> If no place is stated or fixed in accordance with Subsection <xref depth="4" refnumber="16-6a-702(3)(a)" start="0">(3)(a)</xref> or <xref depth="4" refnumber="16-6a-702(4)(a)" start="0">(4)(a)</xref>, a special meeting of the members shall be held at the nonprofit corporation's principal office.</subsection></subsection><subsection number="16-6a-702(5)"> Unless otherwise provided by the bylaws, only business within the purposes described in the notice of the meeting required by Subsection <xref depth="4" refnumber="16-6a-704(3)" start="0">16-6a-704(3)</xref> may be conducted at a special meeting of the members.</subsection></section><section number="16-6a-703"><histories><history>Amended by Chapter <modchap sess="2023GS">401</modchap>, 2023 General Session</history><modyear>2023</modyear></histories><catchline>Court-ordered meeting.</catchline><subsection number="16-6a-703(1)"><subsection number="16-6a-703(1)(a)"> A voting member entitled to participate in an annual meeting may petition a court with jurisdiction under <xref depth="0" refnumber="78A" start="0">Title 78A, Judiciary and Judicial Administration</xref>, if an annual meeting was required to be held and was not held within 15 months after:<subsection number="16-6a-703(1)(a)(i)"> the corporation's last annual meeting; or</subsection><subsection number="16-6a-703(1)(a)(ii)"> if there has been no annual meeting, the date of incorporation.</subsection></subsection><subsection number="16-6a-703(1)(b)"> A person who participated in a call of or demand for a special meeting effective under Subsection <xref depth="4" refnumber="16-6a-702(1)" start="0">16-6a-702(1)</xref> may petition a court with jurisdiction under <xref depth="0" refnumber="78A" start="0">Title 78A, Judiciary and Judicial Administration</xref>, if: <subsection number="16-6a-703(1)(b)(i)"> notice of the special meeting was not given within 30 days after<eol/><tab/>the date of the call or<eol/><tab/>the date the last of the demands necessary to require the calling of the meeting was received by the nonprofit corporation pursuant to Subsection <xref depth="4" refnumber="16-6a-702(1)(b)" start="0">16-6a-702(1)(b)</xref>; or</subsection><subsection number="16-6a-703(1)(b)(ii)"> the special meeting was not held in accordance with the notice.</subsection></subsection></subsection><subsection number="16-6a-703(2)"> If a petition is filed under this section, the court may summarily order the holding of a meeting of the members.</subsection><subsection number="16-6a-703(3)"> A court that orders a meeting under Subsection <xref depth="4" refnumber="16-6a-703(2)" start="0">(2)</xref> may: <subsection number="16-6a-703(3)(a)"> fix the time and place of the meeting;</subsection><subsection number="16-6a-703(3)(b)"> determine the members entitled to participate in the meeting;</subsection><subsection number="16-6a-703(3)(c)"> specify a record date for determining members entitled to notice of and to vote at the meeting;</subsection><subsection number="16-6a-703(3)(d)"> prescribe the form and content of the notice of the meeting;</subsection><subsection number="16-6a-703(3)(e)"><subsection number="16-6a-703(3)(e)(i)"> fix the quorum required for specific matters to be considered at the meeting; or</subsection><subsection number="16-6a-703(3)(e)(ii)"> direct that the votes represented at the meeting constitute a quorum for action on the specific matters to be considered at the meeting; and</subsection></subsection><subsection number="16-6a-703(3)(f)"> enter other orders necessary or appropriate to accomplish the holding of the meeting.</subsection></subsection></section><section number="16-6a-704"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Notice of meeting.</catchline><subsection number="16-6a-704(1)">A nonprofit corporation shall give to each member entitled to vote at the meeting notice consistent with its bylaws of meetings of members in a fair and reasonable manner.</subsection><subsection number="16-6a-704(2)">Any notice that conforms to the requirements of Subsection <xref depth="4" refnumber="16-6a-704(3)" start="0">(3)</xref> is fair and reasonable, but other means of giving notice may also be fair and reasonable when all the circumstances are considered.</subsection><subsection number="16-6a-704(3)">Notice is fair and reasonable if:<subsection number="16-6a-704(3)(a)">the nonprofit corporation notifies its members of the place, date, and time of each annual, regular, and special meeting of members:<subsection number="16-6a-704(3)(a)(i)">no fewer than 10 days before the meeting;</subsection><subsection number="16-6a-704(3)(a)(ii)">if notice is mailed by other than first-class or registered mail, no fewer than 30 days, nor more than 60 days before the meeting date; and</subsection><subsection number="16-6a-704(3)(a)(iii)">if notice is given:<subsection number="16-6a-704(3)(a)(iii)(A)">by newspaper as provided in Subsection <xref depth="4" refnumber="16-6a-103(2)(b)(i)(A)" start="0">16-6a-103(2)(b)(i)(A)</xref>, by publication three separate times with:<subsection number="16-6a-704(3)(a)(iii)(A)(I)">the first of the publications no more than 60 days before the meeting date; and</subsection><subsection number="16-6a-704(3)(a)(iii)(A)(II)">the last of the publications no fewer than 10 days before the meeting date; and</subsection></subsection><subsection number="16-6a-704(3)(a)(iii)(B)"><subsection number="16-6a-704(3)(a)(iii)(B)(I)">by publication in accordance with Section <xref depth="3" refnumber="45-1-101" start="0">45-1-101</xref>; and</subsection><subsection number="16-6a-704(3)(a)(iii)(B)(II)">as provided in Subsection <xref depth="4" refnumber="16-6a-103(2)(b)(i)(B)" start="0">16-6a-103(2)(b)(i)(B)</xref>, for 60 days before the meeting date;</subsection></subsection></subsection></subsection><subsection number="16-6a-704(3)(b)">the notice of an annual or regular meeting includes a description of any matter or matters that:<subsection number="16-6a-704(3)(b)(i)">must be approved by the members; or</subsection><subsection number="16-6a-704(3)(b)(ii)">for which the members' approval is sought under Sections <xref depth="3" refnumber="16-1a-703">16-1a-703</xref>, <xref depth="3" refnumber="16-6a-825" start="0">16-6a-825</xref>, <xref depth="3" refnumber="16-6a-910" start="0">16-6a-910</xref>, <xref depth="3" refnumber="16-6a-1003" start="0">16-6a-1003</xref>, <xref depth="3" refnumber="16-6a-1010" start="0">16-6a-1010</xref>, <xref depth="3" refnumber="16-6a-1202" start="0">16-6a-1202</xref>, and <xref depth="3" refnumber="16-6a-1402" start="0">16-6a-1402</xref>; and</subsection></subsection><subsection number="16-6a-704(3)(c)">unless otherwise provided by this chapter or the bylaws, the notice of a special meeting includes a description of the purpose or purposes for which the meeting is called.</subsection></subsection><subsection number="16-6a-704(4)"><subsection number="16-6a-704(4)(a)">Unless otherwise provided by the bylaws, if an annual, regular, or special meeting of members is adjourned to a different date, time, or place, notice need not be given of the new date, time, or place, if the new date, time, or place is announced at the meeting before adjournment.</subsection><subsection number="16-6a-704(4)(b)">Notwithstanding Subsection <xref depth="4" refnumber="16-6a-704(4)(a)" start="0">(4)(a)</xref>, if a new record date for the adjourned meeting is or shall be fixed under Section <xref depth="3" refnumber="16-6a-706" start="0">16-6a-706</xref>, notice of the adjourned meeting shall be given under this section to the members of record as of the new record date.</subsection></subsection><subsection number="16-6a-704(5)">When giving notice of an annual, regular, or special meeting of members, a nonprofit corporation shall give notice of a matter a member intends to raise at the meeting if:<subsection number="16-6a-704(5)(a)">requested in writing to do so by a person entitled to call a special meeting; and</subsection><subsection number="16-6a-704(5)(b)">the request is received by the secretary or president of the nonprofit corporation at least 10 days before the nonprofit corporation gives notice of the meeting.</subsection></subsection></section><section number="16-6a-705"><histories><history>Amended by Chapter <modchap sess="2015GS">240</modchap>, 2015 General Session</history><modyear>2015</modyear></histories><catchline>Waiver of notice.</catchline><subsection number="16-6a-705(1)"><subsection number="16-6a-705(1)(a)"> A member may waive any notice required by this chapter or by the bylaws, whether before or after the date or time stated in the notice as the date or time when any action will occur or has occurred.</subsection><subsection number="16-6a-705(1)(b)"> A waiver described in Subsection <xref depth="4" refnumber="16-6a-705(1)" start="0">(1)</xref> shall be:<subsection number="16-6a-705(1)(b)(i)"> in writing;</subsection><subsection number="16-6a-705(1)(b)(ii)"> signed by the member entitled to the notice; and</subsection><subsection number="16-6a-705(1)(b)(iii)"> delivered to the nonprofit corporation for: <subsection number="16-6a-705(1)(b)(iii)(A)"> inclusion in the minutes; or</subsection><subsection number="16-6a-705(1)(b)(iii)(B)"> filing with the corporate records.</subsection></subsection></subsection><subsection number="16-6a-705(1)(c)"> A waiver satisfies the requirements of Subsection <xref depth="4" refnumber="16-6a-705(1)(b)" start="0">(1)(b)</xref> if communicated by electronic transmission.</subsection><subsection number="16-6a-705(1)(d)"> The delivery and filing required under Subsection <xref depth="4" refnumber="16-6a-705(1)(b)" start="0">(1)(b)</xref> may not be conditions of the effectiveness of the waiver.</subsection></subsection><subsection number="16-6a-705(2)"> A member's attendance at a meeting: <subsection number="16-6a-705(2)(a)"> waives objection to lack of notice or defective notice of the meeting, unless the member at the beginning of the meeting objects to holding the meeting or transacting business at the meeting because of lack of notice or defective notice; and</subsection><subsection number="16-6a-705(2)(b)"> waives objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the member objects to considering the matter when it is presented.</subsection></subsection></section><section number="16-6a-706"><histories><history>Amended by Chapter <modchap sess="2002GS">197</modchap>, 2002 General Session</history><modyear>2002</modyear></histories><catchline>Record date -- Determining members entitled to notice and vote.</catchline><subsection number="16-6a-706(1)"><subsection number="16-6a-706(1)(a)"> The bylaws may fix or provide the manner of fixing a date as the record date for determining the members entitled to notice of a members' meeting.</subsection><subsection number="16-6a-706(1)(b)"> If the bylaws do not fix or provide for fixing a record date described in Subsection <xref depth="4" refnumber="16-6a-706(1)(a)" start="0">(1)(a)</xref>, the board of directors may fix a future date as the record date.</subsection><subsection number="16-6a-706(1)(c)"> If a record date is not fixed in accordance with Subsection <xref depth="4" refnumber="16-6a-706(1)(a)" start="0">(1)(a)</xref> or <xref depth="4" refnumber="16-6a-706(1)(b)" start="0">(b)</xref>, members entitled to notice of the meeting are the members of the nonprofit corporation:<subsection number="16-6a-706(1)(c)(i)"> at the close of business on the business day preceding the day on which notice is given; or</subsection><subsection number="16-6a-706(1)(c)(ii)"> if notice is waived, at the close of business on the business day preceding the day on which the meeting is held.</subsection></subsection></subsection><subsection number="16-6a-706(2)"><subsection number="16-6a-706(2)(a)"> The bylaws may fix or provide the manner of fixing a date as the record date for determining the members entitled to vote at a members' meeting.</subsection><subsection number="16-6a-706(2)(b)"> If the bylaws do not fix or provide for fixing a record date described in Subsection <xref depth="4" refnumber="16-6a-706(2)(a)" start="0">(2)(a)</xref>, the board may fix a future date as the record date.</subsection><subsection number="16-6a-706(2)(c)"> If a record date is not fixed in accordance with Subsection <xref depth="4" refnumber="16-6a-706(2)(a)" start="0">(2)(a)</xref> or <xref depth="4" refnumber="16-6a-706(2)(b)" start="0">(b)</xref>, members entitled to vote at the meeting are the members of the nonprofit corporation:<subsection number="16-6a-706(2)(c)(i)"> on the date of the meeting; and</subsection><subsection number="16-6a-706(2)(c)(ii)"> who are otherwise eligible to vote.</subsection></subsection></subsection><subsection number="16-6a-706(3)"><subsection number="16-6a-706(3)(a)"> The bylaws may fix or provide the manner for determining a date as the record date for the purpose of determining the members entitled to exercise any rights in respect of any other lawful action.</subsection><subsection number="16-6a-706(3)(b)"> If the bylaws do not fix or provide for fixing a record date described in Subsection <xref depth="4" refnumber="16-6a-706(3)(a)" start="0">(3)(a)</xref>, the board of directors may fix a future date as the record date.</subsection><subsection number="16-6a-706(3)(c)"> If a record date is not fixed in accordance with Subsection <xref depth="4" refnumber="16-6a-706(3)(a)" start="0">(3)(a)</xref> or <xref depth="4" refnumber="16-6a-706(3)(b)" start="0">(b)</xref>, members entitled to exercise the right are members of the nonprofit corporation at the later of:<subsection number="16-6a-706(3)(c)(i)"> the close of business on the day on which the board adopts the resolution relating to the exercise of the right; or</subsection><subsection number="16-6a-706(3)(c)(ii)"> the close of business on the 60th day before the date of the exercise of the right.</subsection></subsection></subsection><subsection number="16-6a-706(4)"> A record date fixed under this section may not be more than 70 days before the meeting or action requiring a determination of members occurs.</subsection><subsection number="16-6a-706(5)"><subsection number="16-6a-706(5)(a)"> A determination of members entitled to notice of or to vote at a meeting of members is effective for any adjournment of the meeting unless the board of directors fixes a new date for determining the right to notice or the right to vote.</subsection><subsection number="16-6a-706(5)(b)"> The board of directors shall fix a new date for determining the right to notice or the right to vote if the meeting is adjourned to a date more than 120 days after the record date for determining members entitled to notice of the original meeting.</subsection></subsection><subsection number="16-6a-706(6)"> If a court orders a meeting adjourned to a date more than 120 days after the date fixed for the original meeting, the court may: <subsection number="16-6a-706(6)(a)"> provide that the original record date for notice or voting continues in effect; or</subsection><subsection number="16-6a-706(6)(b)"> fix a new record date for notice or voting.</subsection></subsection></section><section number="16-6a-707"><histories><history>Amended by Chapter <modchap sess="2015GS">240</modchap>, 2015 General Session</history><modyear>2015</modyear></histories><catchline>Action without meeting.</catchline><subsection number="16-6a-707(1)"> Unless otherwise provided in the articles of incorporation and Subsection <xref depth="4" refnumber="16-6a-707(5)" start="0">(5)</xref>, and subject to the limitations of Subsection <xref depth="4" refnumber="16-6a-1704(3)" start="0">16-6a-1704(3)</xref>, any action that may be taken at any annual or special meeting of members may be taken without a meeting and without prior notice, if one or more consents in writing, setting forth the action taken, are signed by the members having not less than the minimum voting power that would be necessary to authorize or take the action at a meeting at which all members entitled to vote on the action were present and voted.</subsection><subsection number="16-6a-707(2)"><subsection number="16-6a-707(2)(a)"> Unless the written consents of all members entitled to vote have been obtained, notice of any member approval without a meeting shall be given at least 10 days before the consummation of the transaction, action, or event authorized by the member action to:<subsection number="16-6a-707(2)(a)(i)"> those members entitled to vote who have not consented in writing; and</subsection><subsection number="16-6a-707(2)(a)(ii)"> those members: <subsection number="16-6a-707(2)(a)(ii)(A)"> not entitled to vote; and</subsection><subsection number="16-6a-707(2)(a)(ii)(B)"> to whom this chapter requires that notice of the proposed action be given.</subsection></subsection></subsection><subsection number="16-6a-707(2)(b)"> The notice required pursuant to Subsection <xref depth="4" refnumber="16-6a-707(2)(a)" start="0">(2)(a)</xref> shall contain or be accompanied by the same material that under this chapter would have been required to be sent in a notice of meeting at which the proposed action would have been submitted to the members for action.</subsection></subsection><subsection number="16-6a-707(3)"> Any member giving a written consent, or the member's proxyholder or a personal representative of the member or their respective proxyholder, may revoke the consent by a signed writing: <subsection number="16-6a-707(3)(a)"> describing the action;</subsection><subsection number="16-6a-707(3)(b)"> stating that the member's prior consent is revoked; and</subsection><subsection number="16-6a-707(3)(c)"> that is received by the nonprofit corporation prior to the effectiveness of the action.</subsection></subsection><subsection number="16-6a-707(4)"><subsection number="16-6a-707(4)(a)"> A member action taken pursuant to this section is not effective unless all written consents on which the nonprofit corporation relies for the taking of an action pursuant to Subsection <xref depth="4" refnumber="16-6a-707(1)" start="0">(1)</xref> are:<subsection number="16-6a-707(4)(a)(i)"> received by the nonprofit corporation within a 60-day period; and</subsection><subsection number="16-6a-707(4)(a)(ii)"> not revoked pursuant to Subsection <xref depth="4" refnumber="16-6a-707(3)" start="0">(3)</xref>.</subsection></subsection><subsection number="16-6a-707(4)(b)"> Action taken by the members pursuant to this section is effective:<subsection number="16-6a-707(4)(b)(i)"> as of the date the last written consent necessary to effect the action is received by the nonprofit corporation; or</subsection><subsection number="16-6a-707(4)(b)(ii)"> if all of the written consents necessary to effect the action specify a later date as the effective date of the action, the later date specified in the consents.</subsection></subsection><subsection number="16-6a-707(4)(c)"> If the nonprofit corporation has received written consents in accordance with Subsection <xref depth="4" refnumber="16-6a-707(1)" start="0">(1)</xref> signed by all members entitled to vote with respect to the action, the effective date of the member action may be any date that is specified in all the written consents as the effective date of the member action.</subsection><subsection number="16-6a-707(4)(d)"><subsection number="16-6a-707(4)(d)(i)"> Unless otherwise provided by the bylaws, a member may deliver a written consent under this section by an electronic transmission that provides the nonprofit corporation with a complete copy of the written consent.</subsection><subsection number="16-6a-707(4)(d)(ii)"> An electronic transmission consenting to an action under this section is considered to be written, signed, and dated for purposes of this section if the electronic transmission is delivered with information from which the corporation can determine: <subsection number="16-6a-707(4)(d)(ii)(A)"> that the electronic transmission is transmitted by the member; and</subsection><subsection number="16-6a-707(4)(d)(ii)(B)"> the date on which the electronic transmission is transmitted.</subsection></subsection><subsection number="16-6a-707(4)(d)(iii)"> The date on which an electronic transmission is transmitted is considered the date on which a consent is signed.</subsection></subsection></subsection><subsection number="16-6a-707(5)"> Notwithstanding Subsection <xref depth="4" refnumber="16-6a-707(1)" start="0">(1)</xref>, directors may not be elected by written consent except by unanimous written consent of all members entitled to vote for the election of directors.</subsection><subsection number="16-6a-707(6)"> If not otherwise determined under Section <xref depth="3" refnumber="16-6a-703" start="0">16-6a-703</xref> or <xref depth="3" refnumber="16-6a-706" start="0">16-6a-706</xref>, the record date for determining the members entitled to take action without a meeting or entitled to be given notice under Subsection <xref depth="4" refnumber="16-6a-707(2)" start="0">(2)</xref> of action taken without a meeting is the date the first member delivers to the nonprofit corporation a writing upon which the action is taken pursuant to Subsection <xref depth="4" refnumber="16-6a-707(1)" start="0">(1)</xref>.</subsection><subsection number="16-6a-707(7)"> Action taken under this section has the same effect as action taken at a meeting of members and may be so described in any document.</subsection></section><section number="16-6a-708"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Meetings by telecommunication.</catchline><subsection number="16-6a-708(1)"> Unless otherwise provided in the bylaws, any or all of the members may participate in an annual, regular, or special meeting of the members by, or the meeting may be conducted through the use of, any means of communication by which all persons participating in the meeting may hear each other during the meeting.</subsection><subsection number="16-6a-708(2)"> A member participating in a meeting by a means permitted under Subsection <xref depth="4" refnumber="16-6a-708(1)" start="0">(1)</xref> is considered to be present in person at the meeting.</subsection></section><section number="16-6a-709"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Action by written ballot.</catchline><subsection number="16-6a-709(1)"> Unless otherwise provided by the bylaws, any action that may be taken at any annual, regular, or special meeting of members may be taken without a meeting if the nonprofit corporation delivers a written ballot to every member entitled to vote on the matter.</subsection><subsection number="16-6a-709(2)"> A written ballot described in Subsection <xref depth="4" refnumber="16-6a-709(1)" start="0">(1)</xref> shall: <subsection number="16-6a-709(2)(a)"> set forth each proposed action; and</subsection><subsection number="16-6a-709(2)(b)"> provide an opportunity to vote for or against each proposed action.</subsection></subsection><subsection number="16-6a-709(3)"><subsection number="16-6a-709(3)(a)"> Approval by written ballot pursuant to this section shall be valid only when:<subsection number="16-6a-709(3)(a)(i)"> the time, as determined under Subsection <xref depth="4" refnumber="16-6a-709(8)" start="0">(8)</xref>, by which all ballots must be received by the nonprofit corporation has passed so that a quorum can be determined; and</subsection><subsection number="16-6a-709(3)(a)(ii)"> the number of approvals equals or exceeds the number of votes that would be required to approve the matter at a meeting at which the total number of votes cast was the same as the number of votes cast by ballot.</subsection></subsection><subsection number="16-6a-709(3)(b)"> Unless otherwise provided in this chapter or in accordance with Section <xref depth="3" refnumber="16-6a-716" start="0">16-6a-716</xref>, for purposes of taking action by written ballot the number of votes cast by written ballot pursuant to this section constitute a quorum for action on the matter.</subsection></subsection><subsection number="16-6a-709(4)"> All solicitations for votes by written ballot shall: <subsection number="16-6a-709(4)(a)"> indicate the number of responses needed to meet the quorum requirements;</subsection><subsection number="16-6a-709(4)(b)"> state the percentage of approvals necessary to approve each matter other than election of directors;</subsection><subsection number="16-6a-709(4)(c)"> specify the time by which a ballot must be received by the nonprofit corporation in order to be counted; and</subsection><subsection number="16-6a-709(4)(d)"> be accompanied by written information sufficient to permit each person casting the ballot to reach an informed decision on the matter.</subsection></subsection><subsection number="16-6a-709(5)"> Unless otherwise provided by the bylaws, a written ballot may not be revoked.</subsection><subsection number="16-6a-709(6)"> Action taken under this section has the same effect as action taken at a meeting of members and may be described as such in any document.</subsection><subsection number="16-6a-709(7)"> Unless otherwise provided by the bylaws, a written ballot delivered to every member entitled to vote on the matter or matters therein, as described in this section, may also be used in connection with any annual, regular, or special meeting of members, thereby allowing members the choice of either voting in person or by written ballot delivered by a member to the nonprofit corporation in lieu of attendance at such meeting. Any written ballot shall comply with the requirements of Subsection <xref depth="4" refnumber="16-6a-709(2)" start="0">(2)</xref> and shall be counted equally with the votes of members in attendance at any meeting for every purpose, including satisfaction of a quorum requirement.</subsection><subsection number="16-6a-709(8)"><subsection number="16-6a-709(8)(a)"> Members shall be provided a fair and reasonable amount of time before the day on which the nonprofit corporation must receive ballots.</subsection><subsection number="16-6a-709(8)(b)"> An amount of time is considered to be fair and reasonable if:<subsection number="16-6a-709(8)(b)(i)"> members are given at least 15 days from the day on which the notice is mailed, if the notice is mailed by first-class or registered mail;</subsection><subsection number="16-6a-709(8)(b)(ii)"> members are given at least 30 days from the day on which the notice is mailed, if the notice is mailed by other than first-class or registered mail; or</subsection><subsection number="16-6a-709(8)(b)(iii)"> considering all the circumstances, the amount of time is otherwise reasonable.</subsection></subsection></subsection></section><section number="16-6a-710"><histories><history>Amended by Chapter <modchap sess="2023GS">401</modchap>, 2023 General Session</history><modyear>2023</modyear></histories><catchline>Members' list for meeting and action by written ballot.</catchline><subsection number="16-6a-710(1)"><subsection number="16-6a-710(1)(a)"> Unless otherwise provided by the bylaws, after fixing a record date for a notice of a meeting or for determining the members entitled to take action by written ballot, a nonprofit corporation shall prepare a list of the names of all the nonprofit corporation's members who are:<subsection number="16-6a-710(1)(a)(i)"><subsection number="16-6a-710(1)(a)(i)(A)"> entitled to notice of the meeting; and</subsection><subsection number="16-6a-710(1)(a)(i)(B)"> to vote at the meeting; or</subsection></subsection><subsection number="16-6a-710(1)(a)(ii)"> to take the action by written ballot.</subsection></subsection><subsection number="16-6a-710(1)(b)"> The list required by Subsection <xref depth="4" refnumber="16-6a-710(1)" start="0">(1)</xref> shall:<subsection number="16-6a-710(1)(b)(i)"> be arranged by voting group;</subsection><subsection number="16-6a-710(1)(b)(ii)"> be alphabetical within each voting group;</subsection><subsection number="16-6a-710(1)(b)(iii)"> show the address of each member entitled to notice of, and to vote at, the meeting or to take such action by written ballot; and</subsection><subsection number="16-6a-710(1)(b)(iv)"> show the number of votes each member is entitled to vote at the meeting or by written ballot.</subsection></subsection></subsection><subsection number="16-6a-710(2)"><subsection number="16-6a-710(2)(a)"> If prepared in connection with a meeting of the members, the members' list required by Subsection <xref depth="4" refnumber="16-6a-710(1)" start="0">(1)</xref> shall be available for inspection by any member entitled to vote at the meeting:<subsection number="16-6a-710(2)(a)(i)"><subsection number="16-6a-710(2)(a)(i)(A)"> beginning the earlier of:<subsection number="16-6a-710(2)(a)(i)(A)(I)"> 10 days before the meeting for which the list was prepared; or</subsection><subsection number="16-6a-710(2)(a)(i)(A)(II)"> two business days after notice of the meeting is given; and</subsection></subsection><subsection number="16-6a-710(2)(a)(i)(B)"> continuing through the meeting, and any adjournment of the meeting; and</subsection></subsection><subsection number="16-6a-710(2)(a)(ii)"><subsection number="16-6a-710(2)(a)(ii)(A)"> at the nonprofit corporation's principal office; or</subsection><subsection number="16-6a-710(2)(a)(ii)(B)"> at a place identified in the notice of the meeting in the city where the meeting will be held.</subsection></subsection></subsection><subsection number="16-6a-710(2)(b)"><subsection number="16-6a-710(2)(b)(i)"> The nonprofit corporation shall make the members' list required by Subsection <xref depth="4" refnumber="16-6a-710(1)" start="0">(1)</xref> available at the meeting.</subsection><subsection number="16-6a-710(2)(b)(ii)"> Any member entitled to vote at the meeting or an agent or attorney of a member entitled to vote at the meeting is entitled to inspect the members' list at any time during the meeting or any adjournment.</subsection></subsection><subsection number="16-6a-710(2)(c)"> A member entitled to vote at the meeting, or an agent or attorney of a member entitled to vote at the meeting, is entitled on written demand to inspect and, subject to Subsection <xref depth="4" refnumber="16-6a-1602(3)" start="0">16-6a-1602(3)</xref> and Subsections <xref depth="4" refnumber="16-6a-1603(2)" start="0">16-6a-1603(2)</xref> and <xref depth="4" refnumber="16-6a-1603(3)" start="0">(3)</xref>, to copy a members' list required by Subsection <xref depth="4" refnumber="16-6a-710(1)" start="0">(1)</xref>:<subsection number="16-6a-710(2)(c)(i)"> during: <subsection number="16-6a-710(2)(c)(i)(A)"> regular business hours; and</subsection><subsection number="16-6a-710(2)(c)(i)(B)"> the period it is available for inspection; and</subsection></subsection><subsection number="16-6a-710(2)(c)(ii)"> at the member's expense.</subsection></subsection></subsection><subsection number="16-6a-710(3)"><subsection number="16-6a-710(3)(a)"> A member of a nonprofit corporation may petition a court with jurisdiction under <xref depth="0" refnumber="78A" start="0">Title 78A, Judiciary and Judicial Administration</xref>, if the nonprofit corporation refuses to allow a member entitled to vote at the meeting or by the written ballot, or an agent or attorney of a member entitled to vote at the meeting or by the written ballot, to inspect or copy the members' list during the period the nonprofit corporation is required to be available for inspection under Subsection <xref depth="4" refnumber="16-6a-710(2)" start="0">(2)</xref>.</subsection><subsection number="16-6a-710(3)(b)"> If a petition is filed under Subsection <xref depth="4" refnumber="16-6a-710(3)(a)" start="0">(3)(a)</xref>, the court may:<subsection number="16-6a-710(3)(b)(i)"> summarily order the inspection or copying of the members' list at the nonprofit corporation's expense; and</subsection><subsection number="16-6a-710(3)(b)(ii)"> until the inspection or copying is complete: <subsection number="16-6a-710(3)(b)(ii)(A)"> postpone or adjourn the meeting for which the members' list was prepared; or</subsection><subsection number="16-6a-710(3)(b)(ii)(B)"> postpone the time when the nonprofit corporation must receive written ballots in connection with which the members' list was prepared.</subsection></subsection></subsection></subsection><subsection number="16-6a-710(4)"> If a court orders inspection or copying of a members' list pursuant to Subsection <xref depth="4" refnumber="16-6a-710(3)" start="0">(3)</xref>, unless the nonprofit corporation proves that it refused inspection or copying of the list in good faith because it had a reasonable basis for doubt about the right of the member or the agent or attorney of the member to inspect or copy the members' list: <subsection number="16-6a-710(4)(a)"> the court shall order the nonprofit corporation to pay the member's costs, including reasonable counsel fees, incurred in obtaining the order;</subsection><subsection number="16-6a-710(4)(b)"> the court may order the nonprofit corporation to pay the member for any damages the member incurred; and</subsection><subsection number="16-6a-710(4)(c)"> the court may grant the member any other remedy afforded the member by law.</subsection></subsection><subsection number="16-6a-710(5)"> If a court orders inspection or copying of a members' list pursuant to Subsection <xref depth="4" refnumber="16-6a-710(3)" start="0">(3)</xref>, the court may impose reasonable restrictions on the use or distribution of the list by the member.</subsection><subsection number="16-6a-710(6)"> Failure to prepare or make available the members' list does not affect the validity of action taken at the meeting or by means of the written ballot.</subsection></section><section number="16-6a-711"><histories><history>Amended by Chapter <modchap sess="2015GS">240</modchap>, 2015 General Session</history><modyear>2015</modyear></histories><catchline>Voting entitlement generally.</catchline><subsection number="16-6a-711(1)"> Unless otherwise provided by the bylaws: <subsection number="16-6a-711(1)(a)"> only voting members may vote with respect to any matter required or permitted under this chapter to be submitted to a vote of the members;</subsection><subsection number="16-6a-711(1)(b)"> all references in this chapter to votes of or voting by the members permit voting only by the voting members; and</subsection><subsection number="16-6a-711(1)(c)"> voting members may vote with respect to all matters required or permitted under this chapter to be submitted to a vote of the members.</subsection></subsection><subsection number="16-6a-711(2)"> Unless otherwise provided by the bylaws, each member entitled to vote may cast: <subsection number="16-6a-711(2)(a)"> one vote on each matter submitted to a vote of members for nonprofit corporations other than those in Subsection <xref depth="4" refnumber="16-6a-711(2)(b)" start="0">(2)(b)</xref>; and</subsection><subsection number="16-6a-711(2)(b)"> one vote for each share held by the member on each matter submitted for a vote of members if the nonprofit corporation issues shares to its members.</subsection></subsection><subsection number="16-6a-711(3)"> Unless otherwise provided by the bylaws, if a membership stands of record in the names of two or more persons, the membership's acts with respect to voting have the following effect: <subsection number="16-6a-711(3)(a)"> If only one votes, the act binds all of the persons whose membership is jointly held.</subsection><subsection number="16-6a-711(3)(b)"> If more than one votes, the vote is divided on a pro-rata basis.</subsection></subsection></section><section number="16-6a-712"><histories><history>Amended by Chapter <modchap sess="2015GS">240</modchap>, 2015 General Session</history><modyear>2015</modyear></histories><catchline>Proxies.</catchline><subsection number="16-6a-712(1)"> Unless otherwise provided by the bylaws, a member entitled to vote may vote or otherwise act in person or by proxy.</subsection><subsection number="16-6a-712(2)"> Without limiting the manner in which a member may appoint a proxy to vote or otherwise act for the member, Subsections <xref depth="4" refnumber="16-6a-712(2)(a)" start="0">(2)(a)</xref> and <xref depth="4" refnumber="16-6a-712(2)(b)" start="0">(b)</xref> constitute valid means of appointing a proxy. <subsection number="16-6a-712(2)(a)"> A member may appoint a proxy by signing an appointment form, either personally or by the member's attorney-in-fact.</subsection><subsection number="16-6a-712(2)(b)"><subsection number="16-6a-712(2)(b)(i)"> Subject to Subsection <xref depth="4" refnumber="16-6a-712(2)(b)(ii)" start="0">(2)(b)(ii)</xref> a member may appoint a proxy by transmitting or authorizing the transmission of a telegram, teletype, facsimile, or other electronic transmission providing a written statement of the appointment to: <subsection number="16-6a-712(2)(b)(i)(A)"> the proxy;</subsection><subsection number="16-6a-712(2)(b)(i)(B)"> a proxy solicitor;</subsection><subsection number="16-6a-712(2)(b)(i)(C)"> a proxy support service organization;</subsection><subsection number="16-6a-712(2)(b)(i)(D)"> another person duly authorized by the proxy to receive appointments as agent for the proxy; or</subsection><subsection number="16-6a-712(2)(b)(i)(E)"> the nonprofit corporation.</subsection></subsection><subsection number="16-6a-712(2)(b)(ii)"> An appointment transmitted under Subsection <xref depth="4" refnumber="16-6a-712(2)(b)(i)" start="0">(2)(b)(i)</xref> shall set forth or be transmitted with written evidence from which it can be determined that the member transmitted or authorized the transmission of the appointment.</subsection></subsection></subsection><subsection number="16-6a-712(3)"><subsection number="16-6a-712(3)(a)"> An appointment of a proxy is effective against the nonprofit corporation when received by the nonprofit corporation, including receipt by the nonprofit corporation of an appointment transmitted pursuant to Subsection <xref depth="4" refnumber="16-6a-712(2)(b)" start="0">(2)(b)</xref>.</subsection><subsection number="16-6a-712(3)(b)"> An appointment is valid for 11 months unless a different period is expressly provided in the appointment form.</subsection></subsection><subsection number="16-6a-712(4)"> Any complete copy, including an electronic transmission, of an appointment of a proxy may be substituted for or used in lieu of the original appointment for any purpose for which the original appointment could be used.</subsection><subsection number="16-6a-712(5)"> An appointment of a proxy is revocable by the member.</subsection><subsection number="16-6a-712(6)"> An appointment of a proxy is revoked by the person appointing the proxy: <subsection number="16-6a-712(6)(a)"> attending any meeting and voting in person; or</subsection><subsection number="16-6a-712(6)(b)"> signing and delivering to the secretary or other officer or agent authorized to tabulate proxy votes:<subsection number="16-6a-712(6)(b)(i)"> a writing stating that the appointment of the proxy is revoked; or</subsection><subsection number="16-6a-712(6)(b)(ii)"> a subsequent appointment form.</subsection></subsection></subsection><subsection number="16-6a-712(7)"> The death or incapacity of the member appointing a proxy does not affect the right of the nonprofit corporation to accept the proxy's authority unless notice of the death or incapacity is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises the proxy's authority under the appointment.</subsection><subsection number="16-6a-712(8)"> Subject to Section <xref depth="3" refnumber="16-6a-713" start="0">16-6a-713</xref> and to any express limitation on the proxy's authority appearing on the appointment form, a nonprofit corporation is entitled to accept the proxy's vote or other action as that of the member making the appointment.</subsection></section><section number="16-6a-713"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Nonprofit corporation's acceptance of votes.</catchline><subsection number="16-6a-713(1)"> If the name signed on any of the following corresponds to the name of a member, the nonprofit corporation, if acting in good faith, may accept and give the following effect as the act of the member: <subsection number="16-6a-713(1)(a)"> a vote;</subsection><subsection number="16-6a-713(1)(b)"> a consent;</subsection><subsection number="16-6a-713(1)(c)"> a written ballot;</subsection><subsection number="16-6a-713(1)(d)"> a waiver;</subsection><subsection number="16-6a-713(1)(e)"> a proxy appointment; or</subsection><subsection number="16-6a-713(1)(f)"> a proxy appointment revocation.</subsection></subsection><subsection number="16-6a-713(2)"> If the name signed on any writing listed in Subsection <xref depth="4" refnumber="16-6a-713(1)" start="0">(1)</xref> does not correspond to the name of a member, the nonprofit corporation, if acting in good faith, may accept the writing and give it effect as the act of the member if: <subsection number="16-6a-713(2)(a)"><subsection number="16-6a-713(2)(a)(i)"> the member is an entity; and</subsection><subsection number="16-6a-713(2)(a)(ii)"> the name signed purports to be that of an officer or agent of the entity;</subsection></subsection><subsection number="16-6a-713(2)(b)"><subsection number="16-6a-713(2)(b)(i)"> the name signed purports to be that of an administrator, executor, guardian, or conservator representing the member; and</subsection><subsection number="16-6a-713(2)(b)(ii)"> evidence of fiduciary status acceptable to the nonprofit corporation with respect to the writing listed in Subsection <xref depth="4" refnumber="16-6a-713(1)" start="0">(1)</xref> that: <subsection number="16-6a-713(2)(b)(ii)(A)"> has been requested by the nonprofit corporation; and</subsection><subsection number="16-6a-713(2)(b)(ii)(B)"> is presented to the nonprofit corporation;</subsection></subsection></subsection><subsection number="16-6a-713(2)(c)"><subsection number="16-6a-713(2)(c)(i)"> the name signed purports to be that of a receiver or trustee in bankruptcy of the member; and</subsection><subsection number="16-6a-713(2)(c)(ii)"> evidence of this status acceptable to the nonprofit corporation with respect to the writing listed in Subsection <xref depth="4" refnumber="16-6a-713(1)" start="0">(1)</xref> that: <subsection number="16-6a-713(2)(c)(ii)(A)"> has been requested by the nonprofit corporation; and</subsection><subsection number="16-6a-713(2)(c)(ii)(B)"> is presented to the nonprofit corporation;</subsection></subsection></subsection><subsection number="16-6a-713(2)(d)"><subsection number="16-6a-713(2)(d)(i)"> the name signed purports to be that of a pledgee, beneficial owner, or attorney-in-fact of the member; and</subsection><subsection number="16-6a-713(2)(d)(ii)"> evidence acceptable to the nonprofit corporation of the signatory's authority to sign for the member has been presented with respect to the writing listed in Subsection <xref depth="4" refnumber="16-6a-713(1)" start="0">(1)</xref> that: <subsection number="16-6a-713(2)(d)(ii)(A)"> has been requested by the nonprofit corporation; and</subsection><subsection number="16-6a-713(2)(d)(ii)(B)"> is presented to the nonprofit corporation;</subsection></subsection></subsection><subsection number="16-6a-713(2)(e)"><subsection number="16-6a-713(2)(e)(i)"> two or more persons are the member as cotenants or fiduciaries;</subsection><subsection number="16-6a-713(2)(e)(ii)"> the name signed purports to be the name of at least one of the cotenants or fiduciaries; and</subsection><subsection number="16-6a-713(2)(e)(iii)"> the person signing appears to be acting on behalf of all the cotenants or fiduciaries; or</subsection></subsection><subsection number="16-6a-713(2)(f)"> the acceptance of the writing listed in Subsection <xref depth="4" refnumber="16-6a-713(1)" start="0">(1)</xref> is otherwise proper under rules established by the nonprofit corporation that are not inconsistent with this Subsection <xref depth="4" refnumber="16-6a-713(2)" start="0">(2)</xref>.</subsection></subsection><subsection number="16-6a-713(3)"> The nonprofit corporation is entitled to reject a writing listed in Subsection <xref depth="4" refnumber="16-6a-713(1)" start="0">(1)</xref> if the secretary or other officer or agent authorized to tabulate votes, acting in good faith, has reasonable basis for doubt about: <subsection number="16-6a-713(3)(a)"> the validity of the signature on it; or</subsection><subsection number="16-6a-713(3)(b)"> the signatory's authority to sign for the member.</subsection></subsection><subsection number="16-6a-713(4)"> The nonprofit corporation and its officer or agent who accepts or rejects a writing listed in Subsection <xref depth="4" refnumber="16-6a-713(1)" start="0">(1)</xref> in good faith and in accordance with the standards of this section are not liable in damages for the consequences of the acceptance or rejection.</subsection><subsection number="16-6a-713(5)"> Corporate action based on the acceptance or rejection of a writing listed in Subsection <xref depth="4" refnumber="16-6a-713(1)" start="0">(1)</xref> under this section is valid unless a court of competent jurisdiction determines otherwise.</subsection></section><section number="16-6a-714"><histories><history>Amended by Chapter <modchap sess="2001S1">13</modchap>, 2001 Special Session 1</history><modyear>2001</modyear><history>Amended by Chapter <modchap sess="200101">13</modchap>, 2001 Special Session 1</history><modyear>2001</modyear></histories><catchline>Quorum and voting requirements for voting groups.</catchline><subsection number="16-6a-714(1)"><subsection number="16-6a-714(1)(a)"> Members entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those members exists with respect to that matter.</subsection><subsection number="16-6a-714(1)(b)"> Unless otherwise provided in this chapter or in accordance with Section <xref depth="3" refnumber="16-6a-716" start="0">16-6a-716</xref>, at a meeting of the voting group, the members of the voting group that are represented for any purpose at the meeting constitute a quorum of that voting group for action on a matter.</subsection></subsection><subsection number="16-6a-714(2)"> Once a member is represented for any purpose at a meeting, including the purpose of determining that a quorum exists, the member is considered present for quorum purposes: <subsection number="16-6a-714(2)(a)"> for the remainder of the meeting; and</subsection><subsection number="16-6a-714(2)(b)"> for any adjournment of that meeting, unless:<subsection number="16-6a-714(2)(b)(i)"> otherwise provided in the bylaws; or</subsection><subsection number="16-6a-714(2)(b)(ii)"> a new record date is or shall be set for that adjourned meeting.</subsection></subsection></subsection><subsection number="16-6a-714(3)"> Action on a matter other than the election of directors by a voting group is approved if: <subsection number="16-6a-714(3)(a)"> a quorum exists;</subsection><subsection number="16-6a-714(3)(b)"> the votes cast within the voting group favoring the action exceed the votes cast within the voting group opposing the action; and</subsection><subsection number="16-6a-714(3)(c)"> a greater number of affirmative votes is not required by this chapter or the bylaws.</subsection></subsection><subsection number="16-6a-714(4)"> The election of directors is governed by Section <xref depth="3" refnumber="16-6a-717" start="0">16-6a-717</xref>.</subsection></section><section number="16-6a-715"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Action by single and multiple voting groups.</catchline><subsection number="16-6a-715(1)"> If this chapter or the bylaws provide for voting by a single voting group on a matter, action on that matter is taken when voted upon by that voting group as provided in Section <xref depth="3" refnumber="16-6a-714" start="0">16-6a-714</xref>.</subsection><subsection number="16-6a-715(2)"><subsection number="16-6a-715(2)(a)"> If this chapter or the bylaws provide for voting by two or more voting groups on a matter, action on that matter is taken only when voted upon by each of those voting groups counted separately as provided in Section <xref depth="3" refnumber="16-6a-714" start="0">16-6a-714</xref>.</subsection><subsection number="16-6a-715(2)(b)"> One voting group may vote on a matter even though no action is taken by another voting group entitled to vote on the matter.</subsection></subsection></section><section number="16-6a-716"><histories><history>Amended by Chapter <modchap sess="2023GS">191</modchap>, 2023 General Session</history><modyear>2023</modyear></histories><catchline>Greater quorum or voting requirements.</catchline><subsection number="16-6a-716(1)"> The articles of incorporation or bylaws may provide for a greater: <subsection number="16-6a-716(1)(a)"> quorum requirement for members or voting groups than is provided for by this chapter; or</subsection><subsection number="16-6a-716(1)(b)"> voting requirement for members or voting groups than is provided by this chapter.</subsection></subsection><subsection number="16-6a-716(2)"> Except as provided in Subsection <xref depth="4" refnumber="16-6a-716(3)" start="0">(3)</xref>, an amendment to the articles of incorporation or the bylaws that adds, changes, or deletes a greater quorum or voting requirement shall meet the same quorum requirement and be adopted by the same vote and voting groups required to take action under the greater of the quorum and voting requirements: <subsection number="16-6a-716(2)(a)"> then in effect; or</subsection><subsection number="16-6a-716(2)(b)"> proposed to be adopted.</subsection></subsection><subsection number="16-6a-716(3)"> Notwithstanding Subsection <xref depth="4" refnumber="16-6a-716(2)" start="0">(2)</xref>, a nonprofit organization that is affiliated with a religious organization may make an amendment to the nonprofit organization's articles of incorporation or bylaws in accordance with the direction of the religious organization's religious authorities.</subsection></section><section number="16-6a-717"><histories><history>Amended by Chapter <modchap sess="2001GS">127</modchap>, 2001 General Session</history><modyear>2001</modyear></histories><catchline>Voting for directors -- Cumulative voting.</catchline><subsection number="16-6a-717(1)"> If the bylaws provide for cumulative voting for directors by the voting members, voting members may cumulatively vote, by: <subsection number="16-6a-717(1)(a)"> multiplying the number of votes the voting members are entitled to cast by the number of directors for whom they are entitled to vote; and</subsection><subsection number="16-6a-717(1)(b)"><subsection number="16-6a-717(1)(b)(i)"> casting the product for a single candidate; or</subsection><subsection number="16-6a-717(1)(b)(ii)"> distributing the product among two or more candidates.</subsection></subsection></subsection><subsection number="16-6a-717(2)"> Cumulative voting is not authorized at a particular meeting unless: <subsection number="16-6a-717(2)(a)"> the meeting notice or statement accompanying the notice states that cumulative voting will take place; or</subsection><subsection number="16-6a-717(2)(b)"><subsection number="16-6a-717(2)(b)(i)"> a voting member gives notice during the meeting and before the vote is taken of the voting member's intent to cumulate votes; and</subsection><subsection number="16-6a-717(2)(b)(ii)"> if one voting member gives this notice, all other voting members participating in the election are entitled to cumulate their votes without giving further notice.</subsection></subsection></subsection><subsection number="16-6a-717(3)"><subsection number="16-6a-717(3)(a)"> Unless otherwise provided in the bylaws, in an election of multiple directors, that number of candidates equaling the number of directors to be elected, having the highest number of votes cast in favor of their election, are elected to the board of directors.</subsection><subsection number="16-6a-717(3)(b)"> Unless otherwise provided in the bylaws, when only one director is being voted upon, the candidate having the highest number of votes cast in his or her favor is elected to the board of directors.</subsection></subsection></section><section number="16-6a-718"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Voting agreements.</catchline><subsection number="16-6a-718(1)"> Two or more members may provide for the manner in which they will vote by signing an agreement for that purpose.</subsection><subsection number="16-6a-718(2)"> A voting agreement created under this section is specifically enforceable.</subsection></section></part><part number="16-6a-8"><catchline>Directors and Officers</catchline><section number="16-6a-801"><histories><history>Amended by Chapter <modchap sess="2015GS">240</modchap>, 2015 General Session</history><modyear>2015</modyear></histories><catchline>Requirement for board of directors.</catchline><subsection number="16-6a-801(1)"> A nonprofit corporation shall have a board of directors.</subsection><subsection number="16-6a-801(2)"><subsection number="16-6a-801(2)(a)"> Except as may otherwise be provided in this chapter, including Subsection <xref depth="4" refnumber="16-6a-801(2)(b)" start="0">(2)(b)</xref>, all corporate powers shall be exercised by or under the authority of, and the business and affairs of the nonprofit corporation managed under the direction of, the board of directors.</subsection><subsection number="16-6a-801(2)(b)"><subsection number="16-6a-801(2)(b)(i)"> The articles of incorporation may authorize one or more persons to exercise some or all of the powers that would otherwise be exercised by the board of directors.</subsection><subsection number="16-6a-801(2)(b)(ii)"> To the extent the articles of incorporation authorize a person other than the board of directors to have the authority and perform a duty of the board of directors, the directors shall be relieved to that extent from such authority and duty.</subsection></subsection></subsection><subsection number="16-6a-801(3)"> The board of directors may be divided into classes, each with such respective rights and duties as the articles of incorporation or bylaws may provide.</subsection><subsection number="16-6a-801(4)"> The board of directors and the directors may be known by any other name designated in the bylaws.</subsection></section><section number="16-6a-802"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Qualifications of directors.</catchline><subsection number="16-6a-802(1)"> A director shall be: <subsection number="16-6a-802(1)(a)"> a natural person; and</subsection><subsection number="16-6a-802(1)(b)"> 18 years of age or older.</subsection></subsection><subsection number="16-6a-802(2)"> The bylaws may prescribe other qualifications for directors in addition to the requirements under Subsection <xref depth="4" refnumber="16-6a-802(1)" start="0">(1)</xref>.</subsection><subsection number="16-6a-802(3)"> A director need not be a resident of this state or a member of the nonprofit corporation unless required by the bylaws.</subsection></section><section number="16-6a-803"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Number of directors.</catchline><subsection number="16-6a-803(1)"> A board of directors shall consist of three or more directors, with the number specified in, or fixed in accordance with, the bylaws.</subsection><subsection number="16-6a-803(2)"><subsection number="16-6a-803(2)(a)"> The bylaws may establish, or permit the voting members or the board of directors to establish, a range for the size of the board of directors by fixing a minimum and maximum number of directors.</subsection><subsection number="16-6a-803(2)(b)"> If a range for the size of the board of directors is established in accordance with Subsection <xref depth="4" refnumber="16-6a-803(2)(a)" start="0">(2)(a)</xref>, the number of directors may be fixed or changed from time to time within the range by:<subsection number="16-6a-803(2)(b)(i)"> the voting members; or</subsection><subsection number="16-6a-803(2)(b)(ii)"> the board of directors.</subsection></subsection></subsection></section><section number="16-6a-804"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Election, appointment, and designation of directors.</catchline><subsection number="16-6a-804(1)"><subsection number="16-6a-804(1)(a)"> All directors except the initial directors shall be elected, appointed, or designated as provided in the bylaws.</subsection><subsection number="16-6a-804(1)(b)"> If no method of election, appointment, or designation is set forth in the bylaws, the directors other than the initial directors shall be elected as follows:<subsection number="16-6a-804(1)(b)(i)"> if the nonprofit corporation has voting members, all directors except the initial directors shall be elected by the voting members at each annual meeting of the voting members; and</subsection><subsection number="16-6a-804(1)(b)(ii)"> if the nonprofit corporation does not have voting members, all directors except the initial directors shall be elected by the board of directors.</subsection></subsection></subsection><subsection number="16-6a-804(2)"><subsection number="16-6a-804(2)(a)"> The bylaws may authorize the election of all or a specified number or portion of directors, except the initial directors, by:<subsection number="16-6a-804(2)(a)(i)"> the members of one or more voting groups of voting members; or</subsection><subsection number="16-6a-804(2)(a)(ii)"> the directors of one or more authorized classes of directors.</subsection></subsection><subsection number="16-6a-804(2)(b)"> A class of voting members or directors entitled to elect one or more directors is a separate voting group for purposes of the election of directors.</subsection></subsection><subsection number="16-6a-804(3)"> The bylaws may authorize the appointment of one or more directors by one or more persons, or by the holder of the office or position, as the bylaws shall specify.</subsection><subsection number="16-6a-804(4)"> The bylaws may provide for election of directors by voting members or delegates: <subsection number="16-6a-804(4)(a)"> on the basis of chapter or other organizational unit;</subsection><subsection number="16-6a-804(4)(b)"> by region or other geographic unit;</subsection><subsection number="16-6a-804(4)(c)"> by preferential voting; or</subsection><subsection number="16-6a-804(4)(d)"> by any other reasonable method.</subsection></subsection><subsection number="16-6a-804(5)"> For purposes of this chapter, designation occurs when the bylaws: <subsection number="16-6a-804(5)(a)"> name an individual as a director; or</subsection><subsection number="16-6a-804(5)(b)"> designate the holder of some office or position as a director.</subsection></subsection></section><section number="16-6a-805"><histories><history>Amended by Chapter <modchap sess="2001GS">127</modchap>, 2001 General Session</history><modyear>2001</modyear></histories><catchline>Terms of directors generally.</catchline><subsection number="16-6a-805(1)"><subsection number="16-6a-805(1)(a)"> The bylaws may specify the terms of directors.</subsection><subsection number="16-6a-805(1)(b)"> In the absence of any term specified in the bylaws, the term of each director shall be one year.</subsection><subsection number="16-6a-805(1)(c)"> Unless otherwise provided in the bylaws, directors may be elected for successive terms.</subsection></subsection><subsection number="16-6a-805(2)"> Unless otherwise provided in the bylaws, the terms of the initial directors of a nonprofit corporation expire at the first meeting at which directors are elected or appointed.</subsection><subsection number="16-6a-805(3)"> A decrease in the number of directors or in the term of office does not shorten an incumbent director's term.</subsection><subsection number="16-6a-805(4)"> Unless otherwise provided in the bylaws, the term of a director filling a vacancy expires at the end of the unexpired term that the director is filling, except that if a director is elected to fill a vacancy created by reason of an increase in the number of directors, the term of the director shall expire on the later of: <subsection number="16-6a-805(4)(a)"> the next meeting at which directors are elected; or</subsection><subsection number="16-6a-805(4)(b)"> the term, if any, designated for the director at the time of the creation of the position being filled.</subsection></subsection><subsection number="16-6a-805(5)"> Unless otherwise provided in the bylaws, despite the expiration of a director's term, a director continues to serve until: <subsection number="16-6a-805(5)(a)"> the director's successor is elected, appointed, or designated and qualifies; or</subsection><subsection number="16-6a-805(5)(b)"> there is a decrease in the number of directors.</subsection></subsection><subsection number="16-6a-805(6)"> A director whose term has expired may deliver to the division for filing a statement to that effect pursuant to Section <xref depth="3" refnumber="16-6a-1608" start="0">16-6a-1608</xref>.</subsection></section><section number="16-6a-806"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Staggered terms for directors.</catchline><subsection number="16-6a-806(1)"> The bylaws may provide for staggering the terms of directors by dividing the total number of directors into any number of groups.</subsection><subsection number="16-6a-806(2)"> The terms of office of the several groups permitted under Subsection <xref depth="4" refnumber="16-6a-806(1)" start="0">(1)</xref> need not be uniform.</subsection></section><section number="16-6a-807"><histories><history>Amended by Chapter <modchap sess="2015GS">240</modchap>, 2015 General Session</history><modyear>2015</modyear></histories><catchline>Resignation of directors.</catchline><subsection number="16-6a-807(1)"> A director may resign at any time by giving written notice of resignation to the board's chair, the nonprofit corporation's secretary, or as otherwise provided in the bylaws.</subsection><subsection number="16-6a-807(2)"> A resignation of a director is effective when the notice is received by the nonprofit corporation unless the notice specifies a later effective date.</subsection><subsection number="16-6a-807(3)"> A director who resigns may deliver to the division for filing a statement that the director resigns pursuant to Section <xref depth="3" refnumber="16-6a-1608" start="0">16-6a-1608</xref>.</subsection><subsection number="16-6a-807(4)"> The failure to attend or meet obligations shall be effective as a resignation at the time of the board of director's vote to confirm the failure if: <subsection number="16-6a-807(4)(a)"> at the beginning of a director's term on the board, the bylaws provide that a director may be considered to have resigned for failing to:<subsection number="16-6a-807(4)(a)(i)"> attend a specified number of board meetings; or</subsection><subsection number="16-6a-807(4)(a)(ii)"> meet other specified obligations of directors; and</subsection></subsection><subsection number="16-6a-807(4)(b)"> the failure to attend or meet obligations is confirmed by an affirmative vote of the board of directors.</subsection></subsection></section><section number="16-6a-808"><histories><history>Amended by Chapter <modchap sess="2015GS">240</modchap>, 2015 General Session</history><modyear>2015</modyear></histories><catchline>Removal of directors.</catchline><subsection number="16-6a-808(1)"> Directors elected by voting members or directors may be removed as provided in Subsections <xref depth="4" refnumber="16-6a-808(1)(a)" start="0">(1)(a)</xref> through <xref depth="4" refnumber="16-6a-808(1)(f)" start="0">(f)</xref>. <subsection number="16-6a-808(1)(a)"> The voting members may remove one or more directors elected by them with or without cause unless the bylaws provide that directors may be removed only for cause.</subsection><subsection number="16-6a-808(1)(b)"> If a director is elected by a voting group, only that voting group may participate in the vote to remove that director.</subsection><subsection number="16-6a-808(1)(c)"> Unless otherwise provided in the bylaws, a director may be removed:<subsection number="16-6a-808(1)(c)(i)"> when the director is elected by the voting members, only if a majority of the voting members votes to remove the director; or</subsection><subsection number="16-6a-808(1)(c)(ii)"> when the director is elected by a voting group, only if a majority of the voting group votes to remove the director.</subsection></subsection><subsection number="16-6a-808(1)(d)"> A director elected by voting members may be removed by the voting members only:<subsection number="16-6a-808(1)(d)(i)"> at a meeting called for the purpose of removing that director; and</subsection><subsection number="16-6a-808(1)(d)(ii)"> if the meeting notice states that the purpose, or one of the purposes, of the meeting is removal of the director.</subsection></subsection><subsection number="16-6a-808(1)(e)"> An entire board of directors may be removed under Subsections <xref depth="4" refnumber="16-6a-808(1)(a)" start="0">(1)(a)</xref> through <xref depth="4" refnumber="16-6a-808(1)(d)" start="0">(d)</xref>.</subsection><subsection number="16-6a-808(1)(f)"><subsection number="16-6a-808(1)(f)(i)"> Except as provided in Subsection <xref depth="4" refnumber="16-6a-808(1)(f)(ii)" start="0">(1)(f)(ii)</xref>, a director elected by the board of directors may be removed with or without cause by the vote of a majority of the directors then in office or such greater number as is set forth in the bylaws.</subsection><subsection number="16-6a-808(1)(f)(ii)"> A director elected by the board of directors to fill the vacancy of a director elected by the voting members may be removed without cause by the voting members but not the board of directors.</subsection></subsection><subsection number="16-6a-808(1)(g)"> A director who is removed pursuant to this section may deliver to the division for filing a statement to that effect pursuant to Section <xref depth="3" refnumber="16-6a-1608" start="0">16-6a-1608</xref>.</subsection></subsection><subsection number="16-6a-808(2)"> Unless otherwise provided in the bylaws: <subsection number="16-6a-808(2)(a)"> an appointed director may be removed without cause by the person appointing the director;</subsection><subsection number="16-6a-808(2)(b)"> the person described in Subsection <xref depth="4" refnumber="16-6a-808(2)(a)" start="0">(2)(a)</xref> shall remove the director by giving written notice of the removal to:<subsection number="16-6a-808(2)(b)(i)"> the director; and</subsection><subsection number="16-6a-808(2)(b)(ii)"> the nonprofit corporation; and</subsection></subsection><subsection number="16-6a-808(2)(c)"> unless the written notice described in Subsection <xref depth="4" refnumber="16-6a-808(2)(b)" start="0">(2)(b)</xref> specifies a future effective date, a removal is effective when the notice is received by both:<subsection number="16-6a-808(2)(c)(i)"> the director to be removed; and</subsection><subsection number="16-6a-808(2)(c)(ii)"> the nonprofit corporation.</subsection></subsection></subsection><subsection number="16-6a-808(3)"> A designated director, as provided in Subsection <xref depth="4" refnumber="16-6a-804(5)" start="0">16-6a-804(5)</xref>, may be removed by an amendment to the bylaws deleting or changing the designation.</subsection><subsection number="16-6a-808(4)"> Removal of a director under this section is not affected by Subsection <xref depth="4" refnumber="16-6a-805(5)" start="0">16-6a-805(5)</xref>.</subsection></section><section number="16-6a-809"><histories><history>Amended by Chapter <modchap sess="2023GS">401</modchap>, 2023 General Session</history><modyear>2023</modyear></histories><catchline>Removal of directors by judicial proceeding.</catchline><subsection number="16-6a-809(1)"><subsection number="16-6a-809(1)(a)"> A court may remove a director, in an action brought by the nonprofit corporation or by voting members holding at least 10% of the votes entitled to be cast in the election of the director's successor, if the court finds that:<subsection number="16-6a-809(1)(a)(i)"> the director engaged in: <subsection number="16-6a-809(1)(a)(i)(A)"> fraudulent or dishonest conduct; or</subsection><subsection number="16-6a-809(1)(a)(i)(B)"> gross abuse of authority or discretion with respect to the nonprofit corporation; or</subsection></subsection><subsection number="16-6a-809(1)(a)(ii)"><subsection number="16-6a-809(1)(a)(ii)(A)"> a final judgment has been entered finding that the director has violated a duty set forth in Section <xref depth="3" refnumber="16-6a-822" start="0">16-6a-822</xref>; and</subsection><subsection number="16-6a-809(1)(a)(ii)(B)"> removal is in the best interests of the nonprofit corporation.</subsection></subsection></subsection></subsection><subsection number="16-6a-809(2)"> The court that removes a director may bar the director for a period prescribed by the court from: <subsection number="16-6a-809(2)(a)"> reelection;</subsection><subsection number="16-6a-809(2)(b)"> reappointment; or</subsection><subsection number="16-6a-809(2)(c)"> designation.</subsection></subsection><subsection number="16-6a-809(3)"> If voting members commence a proceeding under Subsection <xref depth="4" refnumber="16-6a-809(1)" start="0">(1)</xref>, the voting members shall make the nonprofit corporation a party defendant.</subsection><subsection number="16-6a-809(4)"> A director who is removed pursuant to this section may deliver to the division for filing a statement to that effect pursuant to Section <xref depth="3" refnumber="16-6a-1608" start="0">16-6a-1608</xref>.</subsection></section><section number="16-6a-810"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Vacancy on board.</catchline><subsection number="16-6a-810(1)"> Unless otherwise provided in the bylaws, if a vacancy occurs on a board of directors, including a vacancy resulting from an increase in the number of directors: <subsection number="16-6a-810(1)(a)"> the voting members, if any, may fill the vacancy;</subsection><subsection number="16-6a-810(1)(b)"> the board of directors may fill the vacancy; or</subsection><subsection number="16-6a-810(1)(c)"> if the directors remaining in office constitute fewer than a quorum of the board of directors, the remaining directors may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office.</subsection></subsection><subsection number="16-6a-810(2)"> Notwithstanding Subsection <xref depth="4" refnumber="16-6a-810(1)" start="0">(1)</xref>, unless otherwise provided in the bylaws, if the vacant office was held by a director elected by a voting group of voting members: <subsection number="16-6a-810(2)(a)"> if one or more of the remaining directors were elected by the same voting group of voting members:<subsection number="16-6a-810(2)(a)(i)"> only the directors elected by the same voting group of voting members are entitled to vote to fill the vacancy if it is filled by directors; and</subsection><subsection number="16-6a-810(2)(a)(ii)"> the directors elected by the same voting group of voting members may fill the vacancy by the affirmative vote of a majority of the directors remaining in office; and</subsection></subsection><subsection number="16-6a-810(2)(b)"> only that voting group is entitled to vote to fill the vacancy if it is filled by the voting members.</subsection></subsection><subsection number="16-6a-810(3)"> Notwithstanding Subsection <xref depth="4" refnumber="16-6a-810(1)" start="0">(1)</xref> and unless otherwise provided in the bylaws, only the directors elected by the same voting group of directors are entitled to vote to fill the vacancy if: <subsection number="16-6a-810(3)(a)"> the vacant office was held by a director elected by a voting group of directors; and</subsection><subsection number="16-6a-810(3)(b)"> any persons in that voting group remain as directors.</subsection></subsection><subsection number="16-6a-810(4)"> Unless otherwise provided in the bylaws, if a vacant office was held by an appointed director, only the person who appointed the director may fill the vacancy.</subsection><subsection number="16-6a-810(5)"><subsection number="16-6a-810(5)(a)"> If a vacant office was held by a designated director, as provided in Subsection <xref depth="4" refnumber="16-6a-804(5)" start="0">16-6a-804(5)</xref>, the vacancy shall be filled as provided in the bylaws.</subsection><subsection number="16-6a-810(5)(b)"> In the absence of an applicable bylaw provision, the vacancy may not be filled by the board.</subsection></subsection><subsection number="16-6a-810(6)"> A vacancy that will occur at a specific later date by reason of a resignation effective at a later date under Subsection <xref depth="4" refnumber="16-6a-807(2)" start="0">16-6a-807(2)</xref> or otherwise, may be filled before the vacancy occurs, but the new director may not take office until the vacancy occurs.</subsection></section><section number="16-6a-811"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Compensation of directors.</catchline><tab/>Unless otherwise provided in the bylaws, the board of directors may authorize and fix the compensation of directors. </section><section number="16-6a-812"><histories><history>Amended by Chapter <modchap sess="2006GS">228</modchap>, 2006 General Session</history><modyear>2006</modyear></histories><catchline>Meetings.</catchline><subsection number="16-6a-812(1)"> Unless the bylaws eliminate the requirement for holding an annual meeting, a nonprofit corporation that does not have voting members shall hold a meeting of the directors annually: <subsection number="16-6a-812(1)(a)"> at a time and date stated in or fixed in accordance with the bylaws; or</subsection><subsection number="16-6a-812(1)(b)"> if a time and date is not stated in or fixed in accordance with the bylaws, at a time and date stated in or fixed in accordance with a resolution of the board of directors.</subsection></subsection><subsection number="16-6a-812(2)"> The board of directors may hold regular or special meetings in or out of this state.</subsection><subsection number="16-6a-812(3)"><subsection number="16-6a-812(3)(a)"> Unless otherwise provided in the bylaws, the board of directors may permit any director to participate in a meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may hear each other during the meeting.</subsection><subsection number="16-6a-812(3)(b)"> A director participating in a meeting by a means permitted under Subsection <xref depth="4" refnumber="16-6a-812(2)" start="0">(2)</xref> is considered to be present in person at the meeting.</subsection></subsection><subsection number="16-6a-812(4)"> The failure to hold an annual or regular meeting at the time and date determined pursuant to Subsection <xref depth="4" refnumber="16-6a-812(1)" start="0">(1)</xref> or <xref depth="4" refnumber="16-6a-812(2)" start="0">(2)</xref> does not: <subsection number="16-6a-812(4)(a)"> affect the validity of any corporate action; or</subsection><subsection number="16-6a-812(4)(b)"> result in forfeiture or dissolution of the nonprofit corporation.</subsection></subsection></section><section number="16-6a-813"><histories><history>Amended by Chapter <modchap sess="2016GS">69</modchap>, 2016 General Session</history><modyear>2016</modyear></histories><catchline>Action without meeting.</catchline><subsection number="16-6a-813(1)"><subsection number="16-6a-813(1)(a)"> Unless otherwise provided in the bylaws, any action required or permitted by this chapter to be taken at a board of directors' meeting may be taken without a meeting if all members of the board consent to the action in writing.</subsection><subsection number="16-6a-813(1)(b)"> Action is taken under Subsection <xref depth="4" refnumber="16-6a-813(1)(a)" start="0">(1)(a)</xref> at the time the last director signs a writing describing the action taken, unless, before that time, any director revokes a consent by a writing signed by the director and received by the secretary or any other person authorized by the bylaws or the board of directors to receive the revocation.</subsection><subsection number="16-6a-813(1)(c)"> Action under Subsection <xref depth="4" refnumber="16-6a-813(1)(a)" start="0">(1)(a)</xref> is effective at the time it is taken under Subsection <xref depth="4" refnumber="16-6a-813(1)(a)" start="0">(1)(a)</xref> unless the board of directors establishes a different effective date.</subsection></subsection><subsection number="16-6a-813(2)"><subsection number="16-6a-813(2)(a)"> Unless otherwise provided in the bylaws, any action required or permitted by this chapter to be taken at a board of directors' meeting may be taken without a meeting if notice is transmitted in writing to each member of the board and each member of the board by the time stated in the notice:<subsection number="16-6a-813(2)(a)(i)"><subsection number="16-6a-813(2)(a)(i)(A)"> signs a writing for such action; or</subsection><subsection number="16-6a-813(2)(a)(i)(B)"> signs a writing against such action, abstains in writing from voting, or fails to respond or vote; and</subsection></subsection><subsection number="16-6a-813(2)(a)(ii)"> fails to demand in writing that action not be taken without a meeting.</subsection></subsection><subsection number="16-6a-813(2)(b)"> The notice required by Subsection <xref depth="4" refnumber="16-6a-813(2)(a)" start="0">(2)(a)</xref> shall state:<subsection number="16-6a-813(2)(b)(i)"> the action to be taken;</subsection><subsection number="16-6a-813(2)(b)(ii)"> the time by which a director must respond to the notice;</subsection><subsection number="16-6a-813(2)(b)(iii)"> that failure to respond by the time stated in the notice will have the same effect as: <subsection number="16-6a-813(2)(b)(iii)(A)"> abstaining in writing by the time stated in the notice; and</subsection><subsection number="16-6a-813(2)(b)(iii)(B)"> failing to demand in writing by the time stated in the notice that action not be taken without a meeting; and</subsection></subsection><subsection number="16-6a-813(2)(b)(iv)"> any other matters the nonprofit corporation determines to include.</subsection></subsection><subsection number="16-6a-813(2)(c)"> Action is taken under this Subsection <xref depth="4" refnumber="16-6a-813(2)" start="0">(2)</xref> only if at the end of the time stated in the notice transmitted pursuant to Subsection <xref depth="4" refnumber="16-6a-813(2)(a)" start="0">(2)(a)</xref>:<subsection number="16-6a-813(2)(c)(i)"> the affirmative votes in writing for the action received by the nonprofit corporation and not revoked pursuant to Subsection <xref depth="4" refnumber="16-6a-813(2)(e)" start="0">(2)(e)</xref> equal or exceed the minimum number of votes that would be necessary to take such action at a meeting at which all of the directors then in office were present and voted; and</subsection><subsection number="16-6a-813(2)(c)(ii)"> the nonprofit corporation has not received a written demand by a director that the action not be taken without a meeting other than a demand that has been revoked pursuant to Subsection <xref depth="4" refnumber="16-6a-813(2)(e)" start="0">(2)(e)</xref>.</subsection></subsection><subsection number="16-6a-813(2)(d)"> A director's right to demand that action not be taken without a meeting shall be considered to have been waived unless the nonprofit corporation receives such demand from the director in writing by the time stated in the notice transmitted pursuant to Subsection <xref depth="4" refnumber="16-6a-813(2)(a)" start="0">(2)(a)</xref> and the demand has not been revoked pursuant to Subsection <xref depth="4" refnumber="16-6a-813(2)(e)" start="0">(2)(e)</xref>.</subsection><subsection number="16-6a-813(2)(e)"> A director who in writing has voted, abstained, or demanded action not be taken without a meeting pursuant to this Subsection <xref depth="4" refnumber="16-6a-813(2)" start="0">(2)</xref> may revoke the vote, abstention, or demand in writing received by the nonprofit corporation by the time stated in the notice transmitted pursuant to Subsection <xref depth="4" refnumber="16-6a-813(2)(a)" start="0">(2)(a)</xref>.</subsection><subsection number="16-6a-813(2)(f)"> Unless the notice transmitted pursuant to Subsection <xref depth="4" refnumber="16-6a-813(2)(a)" start="0">(2)(a)</xref> states a different effective date, action taken pursuant to this Subsection <xref depth="4" refnumber="16-6a-813(2)" start="0">(2)</xref> is effective at the end of the time stated in the notice transmitted pursuant to Subsection <xref depth="4" refnumber="16-6a-813(2)(a)" start="0">(2)(a)</xref>.</subsection></subsection><subsection number="16-6a-813(3)"><subsection number="16-6a-813(3)(a)"> Unless otherwise provided by the bylaws, a communication under this section may be delivered by an electronic transmission.</subsection><subsection number="16-6a-813(3)(b)"> An electronic transmission communicating a vote, abstention, demand, or revocation under Subsection <xref depth="4" refnumber="16-6a-813(2)" start="0">(2)</xref> is considered to be written, signed, and dated for purposes of this section if the electronic transmission is delivered with information from which the nonprofit corporation can determine:<subsection number="16-6a-813(3)(b)(i)"> that the electronic transmission is transmitted by the director; and</subsection><subsection number="16-6a-813(3)(b)(ii)"> the date on which the electronic transmission is transmitted.</subsection></subsection><subsection number="16-6a-813(3)(c)"> The date on which an electronic transmission is transmitted is considered the date on which the vote, abstention, demand, or revocation is signed.</subsection><subsection number="16-6a-813(3)(d)"> For purposes of this section, communications to the nonprofit corporation are not effective until received.</subsection></subsection><subsection number="16-6a-813(4)"> Action taken pursuant to this section: <subsection number="16-6a-813(4)(a)"> has the same effect as action taken at a meeting of directors; and</subsection><subsection number="16-6a-813(4)(b)"> may be described as an action taken at a meeting of directors in any document.</subsection></subsection></section><section number="16-6a-814"><histories><history>Amended by Chapter <modchap sess="2015GS">240</modchap>, 2015 General Session</history><modyear>2015</modyear></histories><catchline>Notice of meeting.</catchline><subsection number="16-6a-814(1)"><subsection number="16-6a-814(1)(a)"> A nonprofit corporation shall give to each director entitled to vote at an annual meeting notice of the annual meeting consistent with the nonprofit corporation's bylaws in a fair and reasonable manner.</subsection><subsection number="16-6a-814(1)(b)"> Any notice that conforms to the requirements of Subsection <xref depth="4" refnumber="16-6a-814(1)(c)" start="0">(1)(c)</xref> is fair and reasonable, but other means of giving notice may also be fair and reasonable when all the circumstances are considered.</subsection><subsection number="16-6a-814(1)(c)"> Notice under Subsection <xref depth="4" refnumber="16-6a-814(1)(a)" start="0">(1)(a)</xref> is fair and reasonable if the nonprofit corporation notifies each director of the place, date, and time of the annual meeting:<subsection number="16-6a-814(1)(c)(i)"> no fewer than 10 days before the meeting, unless otherwise provided by the bylaws;</subsection><subsection number="16-6a-814(1)(c)(ii)"> if notice is mailed by other than first-class or registered mail, no fewer than 30 days, nor more than 60 days before the meeting date; and</subsection><subsection number="16-6a-814(1)(c)(iii)"> if notice is given: <subsection number="16-6a-814(1)(c)(iii)(A)"> by newspaper as provided in Subsection <xref depth="4" refnumber="16-6a-103(2)(b)(i)(A)" start="0">16-6a-103(2)(b)(i)(A)</xref>, by publication three separate times with:<subsection number="16-6a-814(1)(c)(iii)(A)(I)"> the first of the publications no more than 60 days before the meeting date; and</subsection><subsection number="16-6a-814(1)(c)(iii)(A)(II)"> the last of the publications no fewer than 10 days before the meeting date; and</subsection></subsection><subsection number="16-6a-814(1)(c)(iii)(B)"><subsection number="16-6a-814(1)(c)(iii)(B)(I)"> as provided in Subsection <xref depth="4" refnumber="16-6a-103(2)(b)(i)(B)" start="0">16-6a-103(2)(b)(i)(B)</xref>; and</subsection><subsection number="16-6a-814(1)(c)(iii)(B)(II)"> for 60 days before the meeting date.</subsection></subsection></subsection></subsection></subsection><subsection number="16-6a-814(2)"> Unless otherwise provided in this chapter or in the bylaws, regular meetings of the board of directors may be held without notice of the date, time, place, or purpose of the meeting.</subsection><subsection number="16-6a-814(3)"><subsection number="16-6a-814(3)(a)"> Unless the bylaws provide for a longer or shorter period, special meetings of the board of directors shall be preceded by at least two days notice of the date, time, and place of the meeting.</subsection><subsection number="16-6a-814(3)(b)"> The notice required by Subsection <xref depth="4" refnumber="16-6a-814(3)(a)" start="0">(3)(a)</xref> need not describe the purpose of the special meeting unless otherwise required by this chapter or the bylaws.</subsection></subsection></section><section number="16-6a-815"><histories><history>Amended by Chapter <modchap sess="2015GS">240</modchap>, 2015 General Session</history><modyear>2015</modyear></histories><catchline>Waiver of notice.</catchline><subsection number="16-6a-815(1)"><subsection number="16-6a-815(1)(a)"> A director may waive any notice of a meeting before or after the time and date of the meeting stated in the notice.</subsection><subsection number="16-6a-815(1)(b)"> Except as provided by Subsection <xref depth="4" refnumber="16-6a-815(2)" start="0">(2)</xref>, the waiver shall be:<subsection number="16-6a-815(1)(b)(i)"> in writing;</subsection><subsection number="16-6a-815(1)(b)(ii)"> signed by the director entitled to the notice; and</subsection><subsection number="16-6a-815(1)(b)(iii)"> delivered to the nonprofit corporation for filing with the corporate records.</subsection></subsection><subsection number="16-6a-815(1)(c)"> A waiver satisfies the requirements of Subsection <xref depth="4" refnumber="16-6a-815(1)(b)" start="0">(1)(b)</xref> if communicated by electronic transmission.</subsection><subsection number="16-6a-815(1)(d)"> The delivery and filing required by Subsection <xref depth="4" refnumber="16-6a-815(1)(b)" start="0">(1)(b)</xref> may not be conditions of the effectiveness of the waiver.</subsection></subsection><subsection number="16-6a-815(2)"> A director's attendance at or participation in a meeting waives any required notice to that director of the meeting unless: <subsection number="16-6a-815(2)(a)"><subsection number="16-6a-815(2)(a)(i)"> at the beginning of the meeting or promptly upon the director's later arrival, the director objects to holding the meeting or transacting business at the meeting because of lack of notice or defective notice; and</subsection><subsection number="16-6a-815(2)(a)(ii)"> after objecting, the director does not vote for or assent to action taken at the meeting; or</subsection></subsection><subsection number="16-6a-815(2)(b)"> if special notice was required of a particular purpose pursuant to Subsection <xref depth="4" refnumber="16-6a-814(3)" start="0">16-6a-814(3)</xref>:<subsection number="16-6a-815(2)(b)(i)"> the director objects to transacting business with respect to the purpose for which the special notice was required; and</subsection><subsection number="16-6a-815(2)(b)(ii)"> after objecting, the director does not vote for or assent to action taken at the meeting with respect to the purpose.</subsection></subsection></subsection></section><section number="16-6a-816"><histories><history>Amended by Chapter <modchap sess="2009GS">386</modchap>, 2009 General Session</history><modyear>2009</modyear></histories><catchline>Quorum and voting.</catchline><subsection number="16-6a-816(1)"> Unless a greater or lesser number is required by the bylaws, a quorum of a board of directors consists of a majority of the number of directors in office immediately before the meeting begins.</subsection><subsection number="16-6a-816(2)"> The bylaws may authorize a quorum of a board of directors to consist of: <subsection number="16-6a-816(2)(a)"> no fewer than:<subsection number="16-6a-816(2)(a)(i)"> one-third of the number of directors fixed if the nonprofit corporation has a fixed board size; and</subsection><subsection number="16-6a-816(2)(a)(ii)"> no fewer than two directors in all circumstances;</subsection></subsection><subsection number="16-6a-816(2)(b)"> if a range for the size of the board is established pursuant to Subsection <xref depth="4" refnumber="16-6a-803(2)" start="0">16-6a-803(2)</xref>, no fewer than one-third of the number of directors:<subsection number="16-6a-816(2)(b)(i)"> fixed in accordance with Subsection <xref depth="4" refnumber="16-6a-803(2)" start="0">16-6a-803(2)</xref>; or</subsection><subsection number="16-6a-816(2)(b)(ii)"> in office immediately before the meeting begins, if no number is fixed in accordance with Subsection <xref depth="4" refnumber="16-6a-803(2)" start="0">16-6a-803(2)</xref>.</subsection></subsection></subsection><subsection number="16-6a-816(3)"> If a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act of the board of directors unless the vote of a greater number of directors is required by this chapter or the bylaws.</subsection><subsection number="16-6a-816(4)"><subsection number="16-6a-816(4)(a)"> If provided in the bylaws, for purposes of determining a quorum with respect to a particular proposal, and for purposes of casting a vote for or against a particular proposal, a director may be considered to be present at a meeting and to vote if the director has granted a signed written proxy:<subsection number="16-6a-816(4)(a)(i)"> to another director who is present at the meeting; and</subsection><subsection number="16-6a-816(4)(a)(ii)"> authorizing the other director to cast the vote that is directed to be cast by the written proxy with respect to the particular proposal that is described with reasonable specificity in the proxy.</subsection></subsection><subsection number="16-6a-816(4)(b)"> Except as provided in this Subsection <xref depth="4" refnumber="16-6a-816(4)" start="0">(4)</xref> and as permitted by Section <xref depth="3" refnumber="16-6a-813" start="0">16-6a-813</xref>, directors may not vote or otherwise act by proxy.</subsection><subsection number="16-6a-816(4)(c)"> Notwithstanding Subsection <xref depth="4" refnumber="16-6a-816(4)(a)" start="0">(4)(a)</xref>, a director may grant a proxy to a person who is not a director if:<subsection number="16-6a-816(4)(c)(i)"> permitted by the bylaws; and</subsection><subsection number="16-6a-816(4)(c)(ii)"> the proxy meets all other requirements of Subsection <xref depth="4" refnumber="16-6a-816(4)(a)" start="0">(4)(a)</xref>.</subsection></subsection></subsection><subsection number="16-6a-816(5)"> A director who is present at a meeting of the board of directors when corporate action is taken is considered to have assented to all action taken at the meeting unless: <subsection number="16-6a-816(5)(a)"><subsection number="16-6a-816(5)(a)(i)"> the director objects at the beginning of the meeting, or promptly upon the director's arrival, to holding the meeting or transacting business at the meeting; and</subsection><subsection number="16-6a-816(5)(a)(ii)"> after objecting, the director does not vote for or assent to any action taken at the meeting;</subsection></subsection><subsection number="16-6a-816(5)(b)"> the director contemporaneously requests that the director's dissent or abstention as to any specific action taken be entered in the minutes of the meeting; or</subsection><subsection number="16-6a-816(5)(c)"> the director causes written notice of the director's dissent or abstention as to any specific action to be received by:<subsection number="16-6a-816(5)(c)(i)"> the presiding officer of the meeting before adjournment of the meeting; or</subsection><subsection number="16-6a-816(5)(c)(ii)"> the nonprofit corporation promptly after adjournment of the meeting.</subsection></subsection></subsection><subsection number="16-6a-816(6)"> The right of dissent or abstention pursuant to Subsection <xref depth="4" refnumber="16-6a-816(5)" start="0">(5)</xref> as to a specific action is not available to a director who votes in favor of the action taken.</subsection></section><section number="16-6a-817"><histories><history>Amended by Chapter <modchap sess="2015GS">240</modchap>, 2015 General Session</history><modyear>2015</modyear></histories><catchline>Committees of the board.</catchline><subsection number="16-6a-817(1)"> Unless otherwise provided in the bylaws, the board of directors may: <subsection number="16-6a-817(1)(a)"> create one or more committees of the board; and</subsection><subsection number="16-6a-817(1)(b)"> appoint two or more directors to serve on the committees created under Subsection <xref depth="4" refnumber="16-6a-817(1)(a)" start="0">(1)(a)</xref>.</subsection></subsection><subsection number="16-6a-817(2)"> Unless otherwise provided in the bylaws, the creation of a committee of the board and appointment of directors to it shall be approved by the greater of: <subsection number="16-6a-817(2)(a)"> a majority of all the directors in office when the action is taken; or</subsection><subsection number="16-6a-817(2)(b)"> the number of directors required by the bylaws to take action under Section <xref depth="3" refnumber="16-6a-816" start="0">16-6a-816</xref>.</subsection></subsection><subsection number="16-6a-817(3)"> Unless otherwise provided in the bylaws, a committee of the board and the members of the committee are subject to Sections <xref depth="3" refnumber="16-6a-812" start="0">16-6a-812</xref> through <xref depth="3" refnumber="16-6a-816" start="0">16-6a-816</xref>, which govern: <subsection number="16-6a-817(3)(a)"> meetings;</subsection><subsection number="16-6a-817(3)(b)"> action without meeting;</subsection><subsection number="16-6a-817(3)(c)"> notice;</subsection><subsection number="16-6a-817(3)(d)"> waiver of notice; and</subsection><subsection number="16-6a-817(3)(e)"> quorum and voting requirements.</subsection></subsection><subsection number="16-6a-817(4)"> To the extent stated in the bylaws or by the board of directors, each committee of the board shall have the authority of the board of directors as described in Section <xref depth="3" refnumber="16-6a-801" start="0">16-6a-801</xref>, except that a committee of the board may not: <subsection number="16-6a-817(4)(a)"> authorize distributions;</subsection><subsection number="16-6a-817(4)(b)"> approve or propose to members any action required by this chapter to be approved by members;</subsection><subsection number="16-6a-817(4)(c)"> elect, appoint, or remove a director;</subsection><subsection number="16-6a-817(4)(d)"> amend articles of incorporation;</subsection><subsection number="16-6a-817(4)(e)"> adopt, amend, or repeal bylaws;</subsection><subsection number="16-6a-817(4)(f)"> approve a plan of conversion or a plan of merger not requiring member approval; or</subsection><subsection number="16-6a-817(4)(g)"> approve a sale, lease, exchange, or other disposition of all, or substantially all, of its property, with or without goodwill, otherwise than in the usual and regular course of business.</subsection></subsection><subsection number="16-6a-817(5)"> The creation of, delegation of authority to, or action by a committee does not alone constitute compliance by a director with the standards of conduct described in Section <xref depth="3" refnumber="16-6a-822" start="0">16-6a-822</xref>.</subsection><subsection number="16-6a-817(6)"><subsection number="16-6a-817(6)(a)"> Subject to Subsection <xref depth="4" refnumber="16-6a-817(6)(b)" start="0">(6)(b)</xref>, nothing in this part shall prohibit or restrict a nonprofit corporation from establishing in its bylaws or by action of the board of directors or otherwise one or more committees, advisory boards, auxiliaries, or other bodies of any kind:<subsection number="16-6a-817(6)(a)(i)"> having the members and rules of procedure as the bylaws or board of directors may provide;</subsection><subsection number="16-6a-817(6)(a)(ii)"> established to provide the advice, service, and assistance to the nonprofit corporation as may be specified in the bylaws or by the board of directors; and</subsection><subsection number="16-6a-817(6)(a)(iii)"> established to carry out the duties and responsibilities for the nonprofit corporation, as may be specified in the bylaws or by the board of directors.</subsection></subsection><subsection number="16-6a-817(6)(b)"> Notwithstanding Subsection <xref depth="4" refnumber="16-6a-817(6)(a)" start="0">(6)(a)</xref>, if any committee or other body established under Subsection <xref depth="4" refnumber="16-6a-817(6)(a)" start="0">(6)(a)</xref> has one or more members who are entitled to vote on committee matters and who are not then also directors, the committee or other body may not exercise any power or authority reserved to the board of directors, in this chapter or in the bylaws.</subsection></subsection></section><section number="16-6a-818"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Officers.</catchline><subsection number="16-6a-818(1)"><subsection number="16-6a-818(1)(a)"> A nonprofit corporation shall have the officers designated:<subsection number="16-6a-818(1)(a)(i)"> in its bylaws; or</subsection><subsection number="16-6a-818(1)(a)(ii)"> by the board of directors in a manner not inconsistent with the bylaws.</subsection></subsection><subsection number="16-6a-818(1)(b)"> An officer shall be:<subsection number="16-6a-818(1)(b)(i)"> a natural person; and</subsection><subsection number="16-6a-818(1)(b)(ii)"> 18 years of age or older.</subsection></subsection><subsection number="16-6a-818(1)(c)"> An officer need not be a director or a member of the nonprofit corporation, unless the bylaws so prescribe.</subsection></subsection><subsection number="16-6a-818(2)"><subsection number="16-6a-818(2)(a)"> An officer may be appointed by the board of directors or in such other manner as the board of directors or bylaws may provide.</subsection><subsection number="16-6a-818(2)(b)"> An appointed officer may appoint one or more officers or assistant officers if authorized by:<subsection number="16-6a-818(2)(b)(i)"> the bylaws; or</subsection><subsection number="16-6a-818(2)(b)(ii)"> the board of directors.</subsection></subsection></subsection><subsection number="16-6a-818(3)"> The bylaws or the board of directors shall delegate to the secretary or to one or more other persons responsibility for: <subsection number="16-6a-818(3)(a)"> the preparation and maintenance of:<subsection number="16-6a-818(3)(a)(i)"> minutes of the directors' and members' meetings; and</subsection><subsection number="16-6a-818(3)(a)(ii)"> other records and information required to be kept by the nonprofit corporation under Section <xref depth="3" refnumber="16-6a-1601" start="0">16-6a-1601</xref>; and</subsection></subsection><subsection number="16-6a-818(3)(b)"> authenticating records of the nonprofit corporation.</subsection></subsection><subsection number="16-6a-818(4)"> The same individual may simultaneously hold more than one office in a nonprofit corporation.</subsection></section><section number="16-6a-819"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Duties of officers.</catchline><tab/>Each officer shall have the authority and shall perform the duties set forth with respect to the office:<subsection number="16-6a-819(1)"> in the bylaws; or</subsection><subsection number="16-6a-819(2)"> to the extent not inconsistent with the bylaws, prescribed with respect to the office by: <subsection number="16-6a-819(2)(a)"> the board of directors; or</subsection><subsection number="16-6a-819(2)(b)"> an officer authorized by the board of directors.</subsection></subsection></section><section number="16-6a-820"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Resignation and removal of officers.</catchline><subsection number="16-6a-820(1)"> An officer may resign at any time by giving written notice of resignation to the nonprofit corporation.</subsection><subsection number="16-6a-820(2)"> A resignation of an officer is effective when the notice is received by the nonprofit corporation unless the notice specifies a later effective date.</subsection><subsection number="16-6a-820(3)"> If a resignation is made effective at a later date, the board of directors may: <subsection number="16-6a-820(3)(a)"><subsection number="16-6a-820(3)(a)(i)"> permit the officer to remain in office until the effective date; and</subsection><subsection number="16-6a-820(3)(a)(ii)"> fill the pending vacancy before the effective date if the successor does not take office until the effective date; or</subsection></subsection><subsection number="16-6a-820(3)(b)"><subsection number="16-6a-820(3)(b)(i)"> remove the officer at any time before the effective date; and</subsection><subsection number="16-6a-820(3)(b)(ii)"> fill the vacancy created by the removal.</subsection></subsection></subsection><subsection number="16-6a-820(4)"><subsection number="16-6a-820(4)(a)"> Unless otherwise provided in the bylaws, the board of directors may remove any officer at any time with or without cause.</subsection><subsection number="16-6a-820(4)(b)"> The bylaws or the board of directors may make provisions for the removal of officers by:<subsection number="16-6a-820(4)(b)(i)"> other officers; or</subsection><subsection number="16-6a-820(4)(b)(ii)"> the voting members.</subsection></subsection></subsection><subsection number="16-6a-820(5)"> An officer who resigns, is removed, or whose appointment has expired may deliver to the division for filing a statement to that effect pursuant to Section <xref depth="3" refnumber="16-6a-1608" start="0">16-6a-1608</xref>.</subsection></section><section number="16-6a-821"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Contract rights with respect to officers.</catchline><subsection number="16-6a-821(1)"> The appointment of an officer does not itself create contract rights.</subsection><subsection number="16-6a-821(2)"><subsection number="16-6a-821(2)(a)"> An officer's removal does not affect the officer's contract rights, if any, with the nonprofit corporation.</subsection><subsection number="16-6a-821(2)(b)"> An officer's resignation does not affect the nonprofit corporation's contract rights, if any, with the officer.</subsection></subsection></section><section number="16-6a-822"><histories><history>Amended by Chapter <modchap sess="2007GS">306</modchap>, 2007 General Session</history><modyear>2007</modyear></histories><catchline>General standards of conduct for directors and officers.</catchline><subsection number="16-6a-822(1)"><subsection number="16-6a-822(1)(a)"> A director shall discharge the director's duties as a director, including the director's duties as a member of a committee of the board, in accordance with Subsection <xref depth="4" refnumber="16-6a-822(2)" start="0">(2)</xref>.</subsection><subsection number="16-6a-822(1)(b)"> An officer with discretionary authority shall discharge the officer's duties under that authority in accordance with Subsection <xref depth="4" refnumber="16-6a-822(2)" start="0">(2)</xref>.</subsection></subsection><subsection number="16-6a-822(2)"> A director or an officer described in Subsection <xref depth="4" refnumber="16-6a-822(1)" start="0">(1)</xref> shall discharge the director or officer's duties: <subsection number="16-6a-822(2)(a)"> in good faith;</subsection><subsection number="16-6a-822(2)(b)"> with the care an ordinarily prudent person in a like position would exercise under similar circumstances; and</subsection><subsection number="16-6a-822(2)(c)"> in a manner the director or officer reasonably believes to be in the best interests of the nonprofit corporation.</subsection></subsection><subsection number="16-6a-822(3)"> In discharging duties, a director or officer is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by: <subsection number="16-6a-822(3)(a)"> one or more officers or employees of the nonprofit corporation whom the director or officer reasonably believes to be reliable and competent in the matters presented;</subsection><subsection number="16-6a-822(3)(b)"> legal counsel, a public accountant, or another person as to matters the director or officer reasonably believes are within the person's professional or expert competence;</subsection><subsection number="16-6a-822(3)(c)"> religious authorities or ministers, priests, rabbis, or other persons:<subsection number="16-6a-822(3)(c)(i)"> whose position or duties in the nonprofit corporation, or in a religious organization with which the nonprofit corporation is affiliated, the director or officer believes justify reliance and confidence; and</subsection><subsection number="16-6a-822(3)(c)(ii)"> who the director or officer believes to be reliable and competent in the matters presented; or</subsection></subsection><subsection number="16-6a-822(3)(d)"> in the case of a director, a committee of the board of directors of which the director is not a member if the director reasonably believes the committee merits confidence.</subsection></subsection><subsection number="16-6a-822(4)"> A director or officer is not acting in good faith if the director or officer has knowledge concerning the matter in question that makes reliance otherwise permitted by Subsection <xref depth="4" refnumber="16-6a-822(3)" start="0">(3)</xref> unwarranted.</subsection><subsection number="16-6a-822(5)"> A director, regardless of title, may not be considered to be a trustee with respect to any property held or administered by the nonprofit corporation including property that may be subject to restrictions imposed by the donor or transferor of the property.</subsection><subsection number="16-6a-822(6)"> A director or officer is not liable to the nonprofit corporation, its members, or any conservator or receiver, or any assignee or successor-in-interest of the nonprofit corporation or member, for any action taken, or any failure to take any action, as an officer or director, as the case may be, unless: <subsection number="16-6a-822(6)(a)"> the director or officer has breached or failed to perform the duties of the office as set forth in this section; and</subsection><subsection number="16-6a-822(6)(b)"> the breach or failure to perform constitutes:<subsection number="16-6a-822(6)(b)(i)"> willful misconduct; or</subsection><subsection number="16-6a-822(6)(b)(ii)"> intentional infliction of harm on: <subsection number="16-6a-822(6)(b)(ii)(A)"> the nonprofit corporation; or</subsection><subsection number="16-6a-822(6)(b)(ii)(B)"> the members of the nonprofit corporation; or</subsection></subsection><subsection number="16-6a-822(6)(b)(iii)"> gross negligence.</subsection></subsection></subsection></section><section number="16-6a-823"><histories><history>Amended by Chapter <modchap sess="2009GS">386</modchap>, 2009 General Session</history><modyear>2009</modyear></histories><catchline>Limitation of liability of directors.</catchline><subsection number="16-6a-823(1)"><subsection number="16-6a-823(1)(a)"> Except as provided in Subsection <xref depth="4" refnumber="16-6a-823(1)(b)" start="0">(1)(b)</xref>, a nonprofit corporation may eliminate or limit the liability of a director to the nonprofit corporation or to its members for monetary damages for any action taken or any failure to take any action as a director, if:<subsection number="16-6a-823(1)(a)(i)"> so provided in: <subsection number="16-6a-823(1)(a)(i)(A)"> the articles of incorporation;</subsection><subsection number="16-6a-823(1)(a)(i)(B)"> the bylaws; or</subsection><subsection number="16-6a-823(1)(a)(i)(C)"> a resolution; and</subsection></subsection><subsection number="16-6a-823(1)(a)(ii)"> to the extent permitted in Subsection <xref depth="4" refnumber="16-6a-823(3)" start="0">(3)</xref>.</subsection></subsection><subsection number="16-6a-823(1)(b)"> Subsection <xref depth="4" refnumber="16-6a-823(1)(a)" start="0">(1)(a)</xref> does not permit a nonprofit corporation from eliminating or limiting the liability of a director for:<subsection number="16-6a-823(1)(b)(i)"> the amount of a financial benefit received by a director to which the director is not entitled;</subsection><subsection number="16-6a-823(1)(b)(ii)"> an intentional infliction of harm on: <subsection number="16-6a-823(1)(b)(ii)(A)"> the nonprofit corporation; or</subsection><subsection number="16-6a-823(1)(b)(ii)(B)"> the members of a nonprofit corporation;</subsection></subsection><subsection number="16-6a-823(1)(b)(iii)"> an intentional violation of criminal law; or</subsection><subsection number="16-6a-823(1)(b)(iv)"> a violation of Section <xref depth="3" refnumber="16-6a-824" start="0">16-6a-824</xref>.</subsection></subsection></subsection><subsection number="16-6a-823(2)"> A provision authorized under this section may not eliminate or limit the liability of a director for any act or omission occurring prior to the date when the provision becomes effective.</subsection><subsection number="16-6a-823(3)"> Any provision authorized under this section to be included in the articles of incorporation may be adopted in the bylaws or by resolution, but only if the provision is approved by the same percentage of members of each voting group as would be required to approve an amendment to the articles of incorporation including the provision.</subsection><subsection number="16-6a-823(4)"> Any foreign nonprofit corporation authorized to transact business in this state, except as otherwise provided by law, may adopt any provision authorized under this section.</subsection></section><section number="16-6a-824"><histories><history>Amended by Chapter <modchap sess="2002GS">197</modchap>, 2002 General Session</history><modyear>2002</modyear></histories><catchline>Liability of directors for unlawful distributions.</catchline><subsection number="16-6a-824(1)"><subsection number="16-6a-824(1)(a)"> A director who votes for or assents to a distribution made in violation of Section <xref depth="3" refnumber="16-6a-1301" start="0">16-6a-1301</xref> or the articles of incorporation is personally liable to the nonprofit corporation for the amount of the distribution that exceeds what could have been distributed without violating Section <xref depth="3" refnumber="16-6a-1301" start="0">16-6a-1301</xref> or the articles of incorporation, if it is established that the director's duties were not performed in compliance with Section <xref depth="3" refnumber="16-6a-822" start="0">16-6a-822</xref>.</subsection><subsection number="16-6a-824(1)(b)"> In any proceeding commenced under this section, a director has all of the defenses ordinarily available to a director.</subsection></subsection><subsection number="16-6a-824(2)"> A director held liable under Subsection <xref depth="4" refnumber="16-6a-824(1)" start="0">(1)</xref> for an unlawful distribution is entitled to contribution: <subsection number="16-6a-824(2)(a)"> from every other director who could be held liable under Subsection <xref depth="4" refnumber="16-6a-824(1)" start="0">(1)</xref> for the unlawful distribution; and</subsection><subsection number="16-6a-824(2)(b)"> from each member who accepted the distribution knowing the distribution was made in violation of Section <xref depth="3" refnumber="16-6a-1301" start="0">16-6a-1301</xref> or the articles of incorporation.</subsection></subsection><subsection number="16-6a-824(3)"> The amount of the contribution from each member under Subsection <xref depth="4" refnumber="16-6a-824(2)(b)" start="0">(2)(b)</xref> is the amount of the distribution to the member multiplied by the percentage of the amount of distribution to all members that exceeded what could have been distributed to members without violating Section <xref depth="3" refnumber="16-6a-1301" start="0">16-6a-1301</xref> or the articles of incorporation.</subsection></section><section number="16-6a-825"><histories><history>Amended by Chapter <modchap sess="2015GS">240</modchap>, 2015 General Session</history><modyear>2015</modyear></histories><catchline>Conflicting interest transaction.</catchline><subsection number="16-6a-825(1)"> As used in this section, "conflicting interest transaction" means a contract, transaction, or other financial relationship between a nonprofit corporation and: <subsection number="16-6a-825(1)(a)"> a director of the nonprofit corporation;</subsection><subsection number="16-6a-825(1)(b)"> a party related to a director; or</subsection><subsection number="16-6a-825(1)(c)"> an entity in which a director of the nonprofit corporation:<subsection number="16-6a-825(1)(c)(i)"> is a director or officer; or</subsection><subsection number="16-6a-825(1)(c)(ii)"> has a financial interest.</subsection></subsection></subsection><subsection number="16-6a-825(2)"> Except as otherwise provided in this section, upon the finding of a conflicting interest transaction, in an action properly brought before it, a court may: <subsection number="16-6a-825(2)(a)"> rule that the conflicting interest transaction is void or voidable;</subsection><subsection number="16-6a-825(2)(b)"> enjoin or set aside the conflict of interest transaction; or</subsection><subsection number="16-6a-825(2)(c)"> determine that the conflicting interest transaction gives rise to an award of damages or other sanctions.</subsection></subsection><subsection number="16-6a-825(3)"><subsection number="16-6a-825(3)(a)"> A loan may not be made directly or indirectly by a nonprofit corporation to:<subsection number="16-6a-825(3)(a)(i)"> a director or officer of the nonprofit corporation;</subsection><subsection number="16-6a-825(3)(a)(ii)"> a natural person related to a director or officer; or</subsection><subsection number="16-6a-825(3)(a)(iii)"> an entity in which a director, officer, or natural person related to a director or officer has any ownership, management right, or financial interest.</subsection></subsection><subsection number="16-6a-825(3)(b)"> A director or officer who assents to or participates in the making of a loan in violation of Subsection <xref depth="4" refnumber="16-6a-825(3)(a)" start="0">(3)(a)</xref> shall be liable to the nonprofit corporation for the amount of the loan until the repayment of the loan.</subsection></subsection><subsection number="16-6a-825(4)"><subsection number="16-6a-825(4)(a)"> If the conditions of Subsection <xref depth="4" refnumber="16-6a-825(4)(b)" start="0">(4)(b)</xref> are met, a conflicting interest transaction may not be void or voidable or be enjoined, set aside, or give rise to an award of damages or other sanctions in a proceeding by a member or by or in the right of the nonprofit corporation, solely because:<subsection number="16-6a-825(4)(a)(i)"> the conflicting interest transaction involves: <subsection number="16-6a-825(4)(a)(i)(A)"> a director of the nonprofit corporation;</subsection><subsection number="16-6a-825(4)(a)(i)(B)"> a party related to a director; or</subsection><subsection number="16-6a-825(4)(a)(i)(C)"> an entity in which a director of the nonprofit corporation is a director or officer or has a financial interest;</subsection></subsection><subsection number="16-6a-825(4)(a)(ii)"> the director is present at or participates in the meeting of the nonprofit corporation's board of directors or of the committee of the board of directors that authorizes, approves, or ratifies the conflicting interest transaction; or</subsection><subsection number="16-6a-825(4)(a)(iii)"> the director's vote is counted for the purpose described in Subsection <xref depth="4" refnumber="16-6a-825(4)(a)(ii)" start="0">(4)(a)(ii)</xref>.</subsection></subsection><subsection number="16-6a-825(4)(b)"> Subsection <xref depth="4" refnumber="16-6a-825(4)(a)" start="0">(4)(a)</xref> applies if:<subsection number="16-6a-825(4)(b)(i)"><subsection number="16-6a-825(4)(b)(i)(A)"> the material facts as to the director's relationship or interest and as to the conflicting interest transaction are disclosed or are known to the board of directors or the committee; and</subsection><subsection number="16-6a-825(4)(b)(i)(B)"> the board of directors or committee in good faith authorizes, approves, or ratifies the conflicting interest transaction by the affirmative vote of a majority of the disinterested directors, even though the disinterested directors are less than a quorum;</subsection></subsection><subsection number="16-6a-825(4)(b)(ii)"><subsection number="16-6a-825(4)(b)(ii)(A)"> the material facts as to the director's relationship or interest and as to the conflicting interest transaction are disclosed or are known to the members entitled to vote on the conflicting interest transaction; and</subsection><subsection number="16-6a-825(4)(b)(ii)(B)"> the conflicting interest transaction is specifically authorized, approved, or ratified in good faith by a vote of the members entitled to vote thereon;</subsection></subsection><subsection number="16-6a-825(4)(b)(iii)"> the conflicting interest transaction is consistent with a provision in the articles of incorporation or bylaws which: <subsection number="16-6a-825(4)(b)(iii)(A)"> commits the nonprofit corporation to support one or more other nonprofit corporations, charitable trusts, or charitable entities; or</subsection><subsection number="16-6a-825(4)(b)(iii)(B)"> authorizes one or more directors to exercise discretion in making gifts or contributions to one or more other nonprofit corporations, charitable trusts, or charitable entities; or</subsection></subsection><subsection number="16-6a-825(4)(b)(iv)"> the conflicting interest transaction is fair as to the nonprofit corporation.</subsection></subsection></subsection><subsection number="16-6a-825(5)"> Common or interested directors may be counted in determining the presence of a quorum at a meeting of the board of directors or of a committee that authorizes, approves, or ratifies the conflicting interest transaction.</subsection><subsection number="16-6a-825(6)"> For purposes of this section, "a natural person related to a director or officer" means any natural person whose familial, financial, professional, or employment relationship with the director or officer would, under the circumstances, reasonably be expected to exert an influence on the director's or officer's judgment when voting on a transaction.</subsection></section><section number="16-6a-826"><histories><history>Amended by Chapter <modchap sess="2001GS">127</modchap>, 2001 General Session</history><modyear>2001</modyear></histories><catchline>Common members, directors, or officers.</catchline><subsection number="16-6a-826(1)"> Two or more nonprofit corporations may have members, directors, or officers that are common to each nonprofit corporation.</subsection><subsection number="16-6a-826(2)"> The fact of common members, directors, or officers in two or more nonprofit corporations may not, by itself, create an inference that the nonprofit corporations individually or collectively: <subsection number="16-6a-826(2)(a)"> are agents or alter egos of one another; or</subsection><subsection number="16-6a-826(2)(b)"> have been formed or availed of, for an improper purpose.</subsection></subsection><subsection number="16-6a-826(3)"> The doctrine of "piercing the corporate veil" may not be applied to one or more nonprofit corporations solely because of the fact of common members, directors, or officers.</subsection></section></part><part number="16-6a-9"><catchline>Indemnification</catchline><section number="16-6a-901"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Indemnification definitions.</catchline><tab/>As used in this part:<subsection number="16-6a-901(1)"><subsection number="16-6a-901(1)(a)"> "Director" means an individual who:<subsection number="16-6a-901(1)(a)(i)"> is or was a director of a nonprofit corporation; or</subsection><subsection number="16-6a-901(1)(a)(ii)"> while a director of a nonprofit corporation at the nonprofit corporation's request, is or was serving as a director, officer, partner, member, manager, trustee, employee, fiduciary, or agent of: <subsection number="16-6a-901(1)(a)(ii)(A)"> another domestic or foreign corporation;</subsection><subsection number="16-6a-901(1)(a)(ii)(B)"> another nonprofit corporation;</subsection><subsection number="16-6a-901(1)(a)(ii)(C)"> another person; or</subsection><subsection number="16-6a-901(1)(a)(ii)(D)"> an employee benefit plan.</subsection></subsection></subsection><subsection number="16-6a-901(1)(b)"> A director is considered to be serving an employee benefit plan at the nonprofit corporation's request if the director's duties to the nonprofit corporation also impose duties on, or otherwise involve services by, the director to the employee benefit plan or to participants in or beneficiaries of the employee benefit plan.</subsection><subsection number="16-6a-901(1)(c)"> "Director" includes, unless the context requires otherwise, the estate or personal representative of a director.</subsection></subsection><subsection number="16-6a-901(2)"> "Expenses" includes attorneys' fees.</subsection><subsection number="16-6a-901(3)"> "Liability" means the obligation incurred with respect to a proceeding to pay a judgment, settlement, penalty, or fine, including: <subsection number="16-6a-901(3)(a)"> an excise tax assessed with respect to an employee benefit plan; or</subsection><subsection number="16-6a-901(3)(b)"> reasonable expenses.</subsection></subsection><subsection number="16-6a-901(4)"> "Nonprofit corporation" includes any domestic or foreign entity that is a predecessor of a nonprofit corporation by reason of a merger or other transaction in which the predecessor's existence ceased upon consummation of the transaction.</subsection><subsection number="16-6a-901(5)"><subsection number="16-6a-901(5)(a)"> "Officer," "employee," "fiduciary," and "agent" include any person who, while serving the indicated relationship to the nonprofit corporation, at the nonprofit corporation's request, is or was serving as a director, officer, partner, trustee, employee, fiduciary, or agent of:<subsection number="16-6a-901(5)(a)(i)"> another domestic or foreign corporation;</subsection><subsection number="16-6a-901(5)(a)(ii)"> another person; or</subsection><subsection number="16-6a-901(5)(a)(iii)"> an employee benefit plan.</subsection></subsection><subsection number="16-6a-901(5)(b)"> An officer, employee, fiduciary, or agent is considered to be serving an employee benefit plan at the nonprofit corporation's request if that person's duties to the nonprofit corporation also impose duties on, or otherwise involve services by, that person to the plan or participants in, or beneficiaries of the plan.</subsection><subsection number="16-6a-901(5)(c)"> Unless the context requires otherwise, "officer," "employee," "fiduciary," and "agent" include the estates or personal representatives of the officer, employee, fiduciary, or agent.</subsection></subsection><subsection number="16-6a-901(6)"><subsection number="16-6a-901(6)(a)"> "Official capacity" means:<subsection number="16-6a-901(6)(a)(i)"> when used with respect to a director, the office of director in a corporation; and</subsection><subsection number="16-6a-901(6)(a)(ii)"> when used with respect to a person other than a director, as contemplated in Section <xref depth="3" refnumber="16-6a-907" start="0">16-6a-907</xref>, the office in a corporation held by the officer or the employment, fiduciary, or agency relationship undertaken by the person on behalf of the corporation.</subsection></subsection><subsection number="16-6a-901(6)(b)"> "Official capacity" does not include service for any:<subsection number="16-6a-901(6)(b)(i)"> other foreign or domestic corporation;</subsection><subsection number="16-6a-901(6)(b)(ii)"> other person; or</subsection><subsection number="16-6a-901(6)(b)(iii)"> employee benefit plan.</subsection></subsection></subsection><subsection number="16-6a-901(7)"> "Party" includes an individual who was, is, or is threatened to be made a named defendant or respondent in a proceeding.</subsection><subsection number="16-6a-901(8)"> "Proceeding" means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative and whether formal or informal.</subsection></section><section number="16-6a-902"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Authority to indemnify directors.</catchline><subsection number="16-6a-902(1)"> Except as provided in Subsection <xref depth="4" refnumber="16-6a-902(4)" start="0">(4)</xref>, a nonprofit corporation may indemnify an individual made a party to a proceeding because the individual is or was a director, against liability incurred in the proceeding if: <subsection number="16-6a-902(1)(a)"> the individual's conduct was in good faith;</subsection><subsection number="16-6a-902(1)(b)"> the individual reasonably believed that the individual's conduct was in, or not opposed to, the corporation's best interests; and</subsection><subsection number="16-6a-902(1)(c)"> in the case of any criminal proceeding, the individual had no reasonable cause to believe the individual's conduct was unlawful.</subsection></subsection><subsection number="16-6a-902(2)"> A director's conduct with respect to any employee benefit plan for a purpose the director reasonably believed to be in or not opposed to the interests of the participants in and beneficiaries of the plan is conduct that satisfies the requirement of Subsection <xref depth="4" refnumber="16-6a-902(1)(b)" start="0">(1)(b)</xref>.</subsection><subsection number="16-6a-902(3)"> The termination of a proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent is not, of itself, determinative that the director did not meet the standard of conduct described in this section.</subsection><subsection number="16-6a-902(4)"> A nonprofit corporation may not indemnify a director under this section: <subsection number="16-6a-902(4)(a)"> in connection with a proceeding by or in the right of the nonprofit corporation in which the director was adjudged liable to the nonprofit corporation; or</subsection><subsection number="16-6a-902(4)(b)"> in connection with any other proceeding charging that the director derived an improper personal benefit, whether or not involving action in the director's official capacity, in which proceeding the director was adjudged liable on the basis that the director derived an improper personal benefit.</subsection></subsection><subsection number="16-6a-902(5)"> Indemnification permitted under this section in connection with a proceeding by or in the right of the nonprofit corporation is limited to reasonable expenses incurred in connection with the proceeding.</subsection></section><section number="16-6a-903"><histories><history>Amended by Chapter <modchap sess="2006GS">228</modchap>, 2006 General Session</history><modyear>2006</modyear></histories><catchline>Mandatory indemnification of directors.</catchline><subsection number="16-6a-903(1)"> Unless limited by its bylaws, a nonprofit corporation shall indemnify a director described in Subsection <xref depth="4" refnumber="16-6a-903(2)" start="0">(2)</xref> against reasonable expenses incurred by the director in connection with the proceeding or claim with respect to which the director has been successful.</subsection><subsection number="16-6a-903(2)"> Subsection <xref depth="4" refnumber="16-6a-903(1)" start="0">(1)</xref> applies to a director who was successful, on the merits or otherwise, in the defense of: <subsection number="16-6a-903(2)(a)"> any proceeding to which the director was a party because the director is or was a director of the nonprofit corporation; or</subsection><subsection number="16-6a-903(2)(b)"> any claim, issue, or matter in the proceeding, to which the director was a party because the director is or was a director of the nonprofit corporation.</subsection></subsection></section><section number="16-6a-904"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Advance of expenses for directors.</catchline><subsection number="16-6a-904(1)"> A nonprofit corporation may pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if: <subsection number="16-6a-904(1)(a)"> the director furnishes the nonprofit corporation a written affirmation of the director's good faith belief that the director has met the applicable standard of conduct described in Section <xref depth="3" refnumber="16-6a-902" start="0">16-6a-902</xref>;</subsection><subsection number="16-6a-904(1)(b)"> the director furnishes the nonprofit corporation a written undertaking, executed personally or on the director's behalf, to repay the advance, if it is ultimately determined that the director did not meet the standard of conduct; and</subsection><subsection number="16-6a-904(1)(c)"> a determination is made that the facts then known to those making the determination would not preclude indemnification under this part.</subsection></subsection><subsection number="16-6a-904(2)"> The undertaking required by Subsection <xref depth="4" refnumber="16-6a-904(1)(b)" start="0">(1)(b)</xref>: <subsection number="16-6a-904(2)(a)"> shall be an unlimited general obligation of the director;</subsection><subsection number="16-6a-904(2)(b)"> need not be secured; and</subsection><subsection number="16-6a-904(2)(c)"> may be accepted without reference to financial ability to make repayment.</subsection></subsection><subsection number="16-6a-904(3)"> Determinations and authorizations of payments under this section shall be made in the manner specified in Section <xref depth="3" refnumber="16-6a-906" start="0">16-6a-906</xref>.</subsection></section><section number="16-6a-905"><histories><history>Amended by Chapter <modchap sess="2015GS">240</modchap>, 2015 General Session</history><modyear>2015</modyear></histories><catchline>Court-ordered indemnification of directors.</catchline><subsection number="16-6a-905(1)"> Unless a nonprofit corporation's articles of incorporation provide otherwise, a director of the nonprofit corporation who is or was a party to a proceeding may apply for indemnification to: <subsection number="16-6a-905(1)(a)"> the court conducting the proceeding; or</subsection><subsection number="16-6a-905(1)(b)"> another court of competent jurisdiction.</subsection></subsection><subsection number="16-6a-905(2)"> On receipt of an application described in Subsection <xref depth="4" refnumber="16-6a-905(1)" start="0">(1)</xref>, the court, after giving any notice the court considers necessary, may order indemnification in the following manner: <subsection number="16-6a-905(2)(a)"> if the court determines that the director is entitled to mandatory indemnification under Section <xref depth="3" refnumber="16-6a-903" start="0">16-6a-903</xref>, the court shall:<subsection number="16-6a-905(2)(a)(i)"> order indemnification; and</subsection><subsection number="16-6a-905(2)(a)(ii)"> order the nonprofit corporation to pay the director's reasonable expenses incurred to obtain court-ordered indemnification; and</subsection></subsection><subsection number="16-6a-905(2)(b)"> if the court determines that the director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not the director met the applicable standard of conduct set forth in Section <xref depth="3" refnumber="16-6a-902" start="0">16-6a-902</xref> or was adjudged liable as described in Subsection <xref depth="4" refnumber="16-6a-902(4)" start="0">16-6a-902(4)</xref>, the court may order indemnification as the court determines to be proper, except that the indemnification with respect to any proceeding in which liability has been adjudged in the circumstances described in Subsection <xref depth="4" refnumber="16-6a-902(4)" start="0">16-6a-902(4)</xref> is limited to reasonable expenses incurred.</subsection></subsection></section><section number="16-6a-906"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Determination and authorization of indemnification of directors.</catchline><subsection number="16-6a-906(1)"><subsection number="16-6a-906(1)(a)"> A nonprofit corporation may not indemnify a director under Section <xref depth="3" refnumber="16-6a-902" start="0">16-6a-902</xref> unless authorized in the specific case after a determination has been made that indemnification of the director is permissible in the circumstances because the director has met the standard of conduct set forth in Section <xref depth="3" refnumber="16-6a-902" start="0">16-6a-902</xref>.</subsection><subsection number="16-6a-906(1)(b)"> A nonprofit corporation may not advance expenses to a director under Section <xref depth="3" refnumber="16-6a-904" start="0">16-6a-904</xref> unless:<subsection number="16-6a-906(1)(b)(i)"> authorized in the specific case after the written affirmation and undertaking required by Subsections <xref depth="4" refnumber="16-6a-904(1)(a)" start="0">16-6a-904(1)(a)</xref> and <xref depth="4" refnumber="16-6a-904(1)(b)" start="0">(1)(b)</xref> are received; and</subsection><subsection number="16-6a-906(1)(b)(ii)"> the determination required by Subsection <xref depth="4" refnumber="16-6a-904(1)(c)" start="0">16-6a-904(1)(c)</xref> has been made.</subsection></subsection></subsection><subsection number="16-6a-906(2)"><subsection number="16-6a-906(2)(a)"> The determinations required by Subsection <xref depth="4" refnumber="16-6a-906(1)" start="0">(1)</xref> shall be made:<subsection number="16-6a-906(2)(a)(i)"> by the board of directors by a majority vote of those present at a meeting at which a quorum is present if only those directors not parties to the proceeding are counted in satisfying the quorum;</subsection><subsection number="16-6a-906(2)(a)(ii)"> if a quorum cannot be obtained under Subsection <xref depth="4" refnumber="16-6a-906(2)(a)(i)" start="0">(2)(a)(i)</xref>, by a majority vote of a committee of the board of directors: <subsection number="16-6a-906(2)(a)(ii)(A)"> designated by the board of directors; and</subsection><subsection number="16-6a-906(2)(a)(ii)(B)"> consisting of two or more directors not parties to the proceeding; or</subsection></subsection><subsection number="16-6a-906(2)(a)(iii)"> by persons listed in Subsection <xref depth="4" refnumber="16-6a-906(3)" start="0">(3)</xref>.</subsection></subsection><subsection number="16-6a-906(2)(b)"> The directors who are parties to the proceeding may participate in the designation of directors for the committee described in Subsection <xref depth="4" refnumber="16-6a-906(2)(a)(ii)" start="0">(2)(a)(ii)</xref>.</subsection></subsection><subsection number="16-6a-906(3)"><subsection number="16-6a-906(3)(a)"> The determination required to be made by Subsection <xref depth="4" refnumber="16-6a-906(1)" start="0">(1)</xref> shall be made by a person described in Subsection <xref depth="4" refnumber="16-6a-906(3)(b)" start="0">(3)(b)</xref> if:<subsection number="16-6a-906(3)(a)(i)"><subsection number="16-6a-906(3)(a)(i)(A)"> a quorum cannot be obtained in accordance with Subsection <xref depth="4" refnumber="16-6a-906(2)(a)(i)" start="0">(2)(a)(i)</xref>; and</subsection><subsection number="16-6a-906(3)(a)(i)(B)"> a committee cannot be established under Subsection <xref depth="4" refnumber="16-6a-906(2)(a)(ii)" start="0">(2)(a)(ii)</xref>; or</subsection></subsection><subsection number="16-6a-906(3)(a)(ii)"> even if a quorum is obtained or a committee is designated, a majority of the directors constituting the quorum or committee directs.</subsection></subsection><subsection number="16-6a-906(3)(b)"> If a condition described in Subsection <xref depth="4" refnumber="16-6a-906(3)(a)" start="0">(3)(a)</xref> is met, the determination required to be made by Subsection <xref depth="4" refnumber="16-6a-906(1)" start="0">(1)</xref> shall be made:<subsection number="16-6a-906(3)(b)(i)"> by independent legal counsel selected by: <subsection number="16-6a-906(3)(b)(i)(A)"> a vote of the board of directors or the committee in the manner specified in Subsection <xref depth="4" refnumber="16-6a-906(2)(a)(i)" start="0">(2)(a)(i)</xref> or <xref depth="4" refnumber="16-6a-906(2)(a)(ii)" start="0">(ii)</xref>; or</subsection><subsection number="16-6a-906(3)(b)(i)(B)"> if a quorum of the full board cannot be obtained and a committee cannot be established, by independent legal counsel selected by a majority vote of the full board of directors; or</subsection></subsection><subsection number="16-6a-906(3)(b)(ii)"> by the voting members, but a voting member may not vote on the determination if the voting member is: <subsection number="16-6a-906(3)(b)(ii)(A)"> a director; and</subsection><subsection number="16-6a-906(3)(b)(ii)(B)"> at the time seeking indemnification.</subsection></subsection></subsection></subsection><subsection number="16-6a-906(4)"><subsection number="16-6a-906(4)(a)"> Except as provided in Subsection <xref depth="4" refnumber="16-6a-906(4)(b)" start="0">(4)(b)</xref>, an authorization of indemnification and advance of expenses shall be made in the same manner as the determination that indemnification or advance of expenses is permissible.</subsection><subsection number="16-6a-906(4)(b)"> Notwithstanding Subsection <xref depth="4" refnumber="16-6a-906(4)(a)" start="0">(4)(a)</xref>, if the determination that indemnification or advance of expenses is permissible is made by independent legal counsel, authorization of indemnification and advance of expenses shall be made by the body that selected the independent legal counsel.</subsection></subsection></section><section number="16-6a-907"><histories><history>Amended by Chapter <modchap sess="2002GS">197</modchap>, 2002 General Session</history><modyear>2002</modyear></histories><catchline>Indemnification of officers, employees, fiduciaries, and agents.</catchline><tab/>Unless a nonprofit corporation's articles of incorporation provide otherwise:<subsection number="16-6a-907(1)"> to the same extent as a director, an officer of the nonprofit corporation is entitled to: <subsection number="16-6a-907(1)(a)"> mandatory indemnification under Section <xref depth="3" refnumber="16-6a-903" start="0">16-6a-903</xref>; and</subsection><subsection number="16-6a-907(1)(b)"> apply for court-ordered indemnification under Section <xref depth="3" refnumber="16-6a-905" start="0">16-6a-905</xref>;</subsection></subsection><subsection number="16-6a-907(2)"> a nonprofit corporation may indemnify and advance expenses to an officer, employee, fiduciary, or agent of the nonprofit corporation to the same extent as to a director; and</subsection><subsection number="16-6a-907(3)"> a nonprofit corporation may indemnify and advance expenses to an officer, employee, fiduciary, or agent who is not a director to a greater extent if: <subsection number="16-6a-907(3)(a)"> not inconsistent with public policy; and</subsection><subsection number="16-6a-907(3)(b)"> provided for by:<subsection number="16-6a-907(3)(b)(i)"> its articles of incorporation or bylaws;</subsection><subsection number="16-6a-907(3)(b)(ii)"> general or specific action of its board of directors; or</subsection><subsection number="16-6a-907(3)(b)(iii)"> contract.</subsection></subsection></subsection></section><section number="16-6a-908"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Insurance.</catchline><subsection number="16-6a-908(1)"> A nonprofit corporation may purchase and maintain liability insurance: <subsection number="16-6a-908(1)(a)"> on behalf of a person who:<subsection number="16-6a-908(1)(a)(i)"> is or was a director, officer, employee, fiduciary, or agent of the nonprofit corporation; or</subsection><subsection number="16-6a-908(1)(a)(ii)"> while serving as a director, officer, employee, fiduciary, or agent of the nonprofit corporation at the request of the nonprofit corporation, is or was serving as a director, officer, partner, trustee, employee, fiduciary, or agent of: <subsection number="16-6a-908(1)(a)(ii)(A)"> another foreign or domestic nonprofit corporation;</subsection><subsection number="16-6a-908(1)(a)(ii)(B)"> other person; or</subsection><subsection number="16-6a-908(1)(a)(ii)(C)"> an employee benefit plan; and</subsection></subsection></subsection><subsection number="16-6a-908(1)(b)"> against liability asserted against or incurred by the person in that capacity or arising from the person's status as a director, officer, employee, fiduciary, or agent, whether or not the nonprofit corporation would have power to indemnify the person against the same liability under Section <xref depth="3" refnumber="16-6a-902" start="0">16-6a-902</xref>, <xref depth="3" refnumber="16-6a-903" start="0">16-6a-903</xref>, or <xref depth="3" refnumber="16-6a-907" start="0">16-6a-907</xref>.</subsection></subsection><subsection number="16-6a-908(2)"> Insurance may be procured from any insurance company designated by the board of directors, whether the insurance company is formed under the laws of this state or any other jurisdiction of the United States or elsewhere, including any insurance company in which the nonprofit corporation has an equity or any other interest through stock ownership or otherwise.</subsection></section><section number="16-6a-909"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Limitations on indemnification of directors.</catchline><subsection number="16-6a-909(1)"><subsection number="16-6a-909(1)(a)"> A provision treating a nonprofit corporation's indemnification of, or advance for expenses to, directors that is contained in the following is valid only if and to the extent the provision is not inconsistent with this part:<subsection number="16-6a-909(1)(a)(i)"> the articles of incorporation or bylaws of the nonprofit corporation;</subsection><subsection number="16-6a-909(1)(a)(ii)"> a resolution of the nonprofit corporation's members or board of directors;</subsection><subsection number="16-6a-909(1)(a)(iii)"> a contract, except an insurance policy; or</subsection><subsection number="16-6a-909(1)(a)(iv)"> other writing.</subsection></subsection><subsection number="16-6a-909(1)(b)"> If the articles of incorporation limit indemnification or advance of expenses, indemnification and advance of expenses are valid only to the extent not inconsistent with the articles of incorporation.</subsection></subsection><subsection number="16-6a-909(2)"> This part does not limit a nonprofit corporation's power to pay or reimburse expenses incurred by a director in connection with the director's appearance as a witness in a proceeding at a time when the director has not been made a named defendant or respondent to the proceeding.</subsection></section><section number="16-6a-910"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Notice to voting members of indemnification of director.</catchline><subsection number="16-6a-910(1)"> If a nonprofit corporation indemnifies or advances expenses to a director under this part in connection with a proceeding by or in the right of the nonprofit corporation, the nonprofit corporation shall give written notice of the indemnification or advance to the voting members with or before the notice of the next voting members' meeting.</subsection><subsection number="16-6a-910(2)"> If the next voting member action after the indemnification or advance is taken without a meeting at the instigation of the board of directors, the notice shall be given to the voting members at or before the time the first voting member signs a writing consenting to the action.</subsection></section></part><part number="16-6a-10"><catchline>Amendment of Articles of Incorporation and Bylaws</catchline><section number="16-6a-1001"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Authority to amend articles of incorporation.</catchline><subsection number="16-6a-1001(1)"> A nonprofit corporation may amend its articles of incorporation at any time to: <subsection number="16-6a-1001(1)(a)"> add or change a provision that is required or permitted in the articles of incorporation; or</subsection><subsection number="16-6a-1001(1)(b)"> delete a provision not required in the articles of incorporation.</subsection></subsection><subsection number="16-6a-1001(2)"> Whether a provision is required or permitted in the articles of incorporation is determined as of the effective date of the amendment.</subsection></section><section number="16-6a-1002"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Amendment of articles of incorporation by board of directors or incorporators.</catchline><subsection number="16-6a-1002(1)">Unless otherwise provided in the articles of incorporation, the board of directors may adopt, without member approval, one or more amendments to the articles of incorporation to:<subsection number="16-6a-1002(1)(a)">delete the names and addresses of the initial directors;</subsection><subsection number="16-6a-1002(1)(b)">change the information required by Section <xref depth="3" refnumber="16-1a-404">16-1a-404</xref>, but an amendment is not required to change the information;</subsection><subsection number="16-6a-1002(1)(c)">change the corporate name by:<subsection number="16-6a-1002(1)(c)(i)">substituting the word "corporation," "incorporated," "company," "limited," or an abbreviation of any such word for a similar word or abbreviation in the name; or</subsection><subsection number="16-6a-1002(1)(c)(ii)">adding, deleting, or changing a geographical attribution; or</subsection></subsection><subsection number="16-6a-1002(1)(d)">make any other change expressly permitted by this chapter to be made without member action.</subsection></subsection><subsection number="16-6a-1002(2)">The board of directors may adopt, without member action, one or more amendments to the articles of incorporation to change the corporate name, if necessary, in connection with the reinstatement of a nonprofit corporation pursuant to Section <xref depth="3" refnumber="16-1a-604">16-1a-604</xref>.</subsection><subsection number="16-6a-1002(3)"><subsection number="16-6a-1002(3)(a)">Subject to any approval required pursuant to Section <xref depth="3" refnumber="16-6a-1013" start="0">16-6a-1013</xref>, if a nonprofit corporation has no members, no members entitled to vote on amendments, or no members yet admitted to membership, one or more amendments to the nonprofit corporation's articles of incorporation may be adopted by:<subsection number="16-6a-1002(3)(a)(i)">its incorporators until directors have been chosen; or</subsection><subsection number="16-6a-1002(3)(a)(ii)">its directors after the directors have been chosen.</subsection></subsection><subsection number="16-6a-1002(3)(b)">A nonprofit corporation described in Subsection <xref depth="4" refnumber="16-6a-1002(3)(a)" start="0">(3)(a)</xref> shall provide notice of any meeting at which an amendment is to be voted upon.</subsection><subsection number="16-6a-1002(3)(c)">The notice required by Subsection <xref depth="4" refnumber="16-6a-1002(3)(b)" start="0">(3)(b)</xref> shall:<subsection number="16-6a-1002(3)(c)(i)">be in accordance with Section <xref depth="3" refnumber="16-6a-814" start="0">16-6a-814</xref>;</subsection><subsection number="16-6a-1002(3)(c)(ii)">state that the purpose, or one of the purposes, of the meeting is to consider a proposed amendment to the articles of incorporation; and</subsection><subsection number="16-6a-1002(3)(c)(iii)"><subsection number="16-6a-1002(3)(c)(iii)(A)">contain or be accompanied by a copy or summary of the amendment; or</subsection><subsection number="16-6a-1002(3)(c)(iii)(B)">state the general nature of the amendment.</subsection></subsection></subsection><subsection number="16-6a-1002(3)(d)">An amendment described in Subsection <xref depth="4" refnumber="16-6a-1002(3)(a)" start="0">(3)(a)</xref> shall be approved:<subsection number="16-6a-1002(3)(d)(i)">by a majority of the incorporators, until directors have been chosen; or</subsection><subsection number="16-6a-1002(3)(d)(ii)">after directors are chosen by a majority of the directors in office at the time the amendment is adopted or such greater number as is set forth in the bylaws.</subsection></subsection></subsection></section><section number="16-6a-1003"><histories><history>Amended by Chapter <modchap sess="2015GS">240</modchap>, 2015 General Session</history><modyear>2015</modyear></histories><catchline>Amendment of articles of incorporation by board of directors and members.</catchline><subsection number="16-6a-1003(1)"> The board of directors or the members representing at least 10% of all of the votes entitled to be cast on the amendment may propose an amendment to the articles of incorporation for submission to the members unless a different vote or voting class is required by: <subsection number="16-6a-1003(1)(a)"> this chapter;</subsection><subsection number="16-6a-1003(1)(b)"> the articles of incorporation;</subsection><subsection number="16-6a-1003(1)(c)"> the bylaws; or</subsection><subsection number="16-6a-1003(1)(d)"> the members or the board of directors acting pursuant to Subsection <xref depth="4" refnumber="16-6a-1003(5)" start="0">(5)</xref>.</subsection></subsection><subsection number="16-6a-1003(2)"> For an amendment to the articles of incorporation to be adopted pursuant to Subsection <xref depth="4" refnumber="16-6a-1003(1)" start="0">(1)</xref>: <subsection number="16-6a-1003(2)(a)"> the board of directors shall recommend the amendment to the members unless:<subsection number="16-6a-1003(2)(a)(i)"> the amendment is proposed by members; or</subsection><subsection number="16-6a-1003(2)(a)(ii)"> the board of directors: <subsection number="16-6a-1003(2)(a)(ii)(A)"> determines that because of conflict of interest or other special circumstances it should make no recommendation; and</subsection><subsection number="16-6a-1003(2)(a)(ii)(B)"> communicates the basis for its determination to the members with the amendment; and</subsection></subsection></subsection><subsection number="16-6a-1003(2)(b)"> the members entitled to vote on the amendment shall approve the amendment as provided in Subsection <xref depth="4" refnumber="16-6a-1003(5)" start="0">(5)</xref>.</subsection></subsection><subsection number="16-6a-1003(3)"> The proposing board of directors or the proposing members may condition the effectiveness of the amendment on any basis.</subsection><subsection number="16-6a-1003(4)"><subsection number="16-6a-1003(4)(a)"> The nonprofit corporation shall give notice, in accordance with Section <xref depth="3" refnumber="16-6a-704" start="0">16-6a-704</xref>, to each member entitled to vote on the amendment of the members' meeting at which the amendment will be voted upon.</subsection><subsection number="16-6a-1003(4)(b)"> The notice required by Subsection <xref depth="4" refnumber="16-6a-1003(4)(a)" start="0">(4)(a)</xref> shall:<subsection number="16-6a-1003(4)(b)(i)"> state that the purpose, or one of the purposes, of the meeting is to consider the amendment; and</subsection><subsection number="16-6a-1003(4)(b)(ii)"><subsection number="16-6a-1003(4)(b)(ii)(A)"> contain or be accompanied by a copy or a summary of the amendment; or</subsection><subsection number="16-6a-1003(4)(b)(ii)(B)"> shall state the general nature of the amendment.</subsection></subsection></subsection></subsection><subsection number="16-6a-1003(5)"> The amendment shall be approved by the votes required by Sections <xref depth="3" refnumber="16-6a-714" start="0">16-6a-714</xref> and <xref depth="3" refnumber="16-6a-715" start="0">16-6a-715</xref> by every voting group entitled to vote on the amendment unless a greater vote is required by: <subsection number="16-6a-1003(5)(a)"> this chapter;</subsection><subsection number="16-6a-1003(5)(b)"> the articles of incorporation;</subsection><subsection number="16-6a-1003(5)(c)"> bylaws adopted by the members; or</subsection><subsection number="16-6a-1003(5)(d)"> the proposing board of directors or the proposing members acting pursuant to Subsection <xref depth="4" refnumber="16-6a-1003(3)" start="0">(3)</xref>.</subsection></subsection><subsection number="16-6a-1003(6)"> If the board of directors or the members seek to have the amendment approved by the members by written consent or by written ballot, the material soliciting the approval shall contain or be accompanied by a copy or summary of the amendment.</subsection></section><section number="16-6a-1004"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Voting on amendments of articles of incorporation by voting groups.</catchline><subsection number="16-6a-1004(1)"> Unless otherwise provided by this chapter or the articles of incorporation, if membership voting is otherwise required by this chapter, the members of a class who are entitled to vote are entitled to vote as a separate voting group on an amendment to the articles of incorporation if the amendment would: <subsection number="16-6a-1004(1)(a)"> affect the rights, privileges, preferences, restrictions, or conditions of that class as to voting, dissolution, redemption, or transfer of memberships in a manner different than the amendment would affect another class;</subsection><subsection number="16-6a-1004(1)(b)"> change the rights, privileges, preferences, restrictions, or conditions of that class as to voting, dissolution, redemption, or transfer by changing the rights, privileges, preferences, restrictions, or conditions of another class;</subsection><subsection number="16-6a-1004(1)(c)"> increase or decrease the number of memberships authorized for that class;</subsection><subsection number="16-6a-1004(1)(d)"> increase the number of memberships authorized for another class;</subsection><subsection number="16-6a-1004(1)(e)"> effect an exchange, reclassification, or termination of the memberships of that class; or</subsection><subsection number="16-6a-1004(1)(f)"> authorize a new class of memberships.</subsection></subsection><subsection number="16-6a-1004(2)"> If a class is to be divided into two or more classes as a result of an amendment to the articles of incorporation, the amendment shall be approved by the members of each class that would be created by the amendment.</subsection></section><section number="16-6a-1005"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Articles of amendment to articles of incorporation.</catchline><tab/>A nonprofit corporation amending its articles of incorporation shall deliver to the division for filing articles of amendment setting forth:<subsection number="16-6a-1005(1)"> the name of the nonprofit corporation;</subsection><subsection number="16-6a-1005(2)"> the text of each amendment adopted;</subsection><subsection number="16-6a-1005(3)"> the date of each amendment's adoption;</subsection><subsection number="16-6a-1005(4)"> if the amendment was adopted by the board of directors or incorporators without member action, a statement to that effect and that: <subsection number="16-6a-1005(4)(a)"> the nonprofit corporation does not have members; or</subsection><subsection number="16-6a-1005(4)(b)"> member action was not required;</subsection></subsection><subsection number="16-6a-1005(5)"> if the amendment was adopted by the members, a statement that the number of votes cast for the amendment by the members or by each voting group entitled to vote separately on the amendment was sufficient for approval by the members or voting group respectively; and</subsection><subsection number="16-6a-1005(6)"> if approval of the amendment by some person or persons other than the members, the board of directors, or the incorporators is required pursuant to Section <xref depth="3" refnumber="16-6a-1013" start="0">16-6a-1013</xref>, a statement that the approval was obtained.</subsection></section><section number="16-6a-1006"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Restated articles of incorporation.</catchline><subsection number="16-6a-1006(1)"><subsection number="16-6a-1006(1)(a)">The board of directors may restate the articles of incorporation at any time with or without member action.</subsection><subsection number="16-6a-1006(1)(b)">The incorporators of a nonprofit corporation may restate the articles of incorporation at any time if the nonprofit corporation:<subsection number="16-6a-1006(1)(b)(i)">has no members; and</subsection><subsection number="16-6a-1006(1)(b)(ii)">no directors have been chosen.</subsection></subsection></subsection><subsection number="16-6a-1006(2)"><subsection number="16-6a-1006(2)(a)">The restatement may include one or more amendments to the articles of incorporation.</subsection><subsection number="16-6a-1006(2)(b)">Notwithstanding Subsection <xref depth="4" refnumber="16-6a-1006(1)" start="0">(1)</xref>, if the restatement includes an amendment requiring member approval, it shall be adopted as provided in Section <xref depth="3" refnumber="16-6a-1003" start="0">16-6a-1003</xref>.</subsection></subsection><subsection number="16-6a-1006(3)"><subsection number="16-6a-1006(3)(a)">If the board of directors submits a restatement for member action, the nonprofit corporation shall give notice, in accordance with Section <xref depth="3" refnumber="16-6a-704" start="0">16-6a-704</xref>, to each member entitled to vote on the restatement of the members' meeting at which the restatement will be voted upon.</subsection><subsection number="16-6a-1006(3)(b)">The notice required by Subsection <xref depth="4" refnumber="16-6a-1006(3)(a)" start="0">(3)(a)</xref> shall:<subsection number="16-6a-1006(3)(b)(i)">state that the purpose, or one of the purposes, of the meeting is to consider the restatement; and</subsection><subsection number="16-6a-1006(3)(b)(ii)">contain or be accompanied by a copy of the restatement that identifies any amendment or other change it would make in the articles of incorporation.</subsection></subsection></subsection><subsection number="16-6a-1006(4)">A nonprofit corporation restating its articles of incorporation shall deliver to the division for filing articles of restatement setting forth:<subsection number="16-6a-1006(4)(a)">the name of the nonprofit corporation;</subsection><subsection number="16-6a-1006(4)(b)">the text of the restated articles of incorporation;</subsection><subsection number="16-6a-1006(4)(c)">if the restatement contains an amendment to the articles of incorporation that was adopted by the members, the information required by Subsection <xref depth="4" refnumber="16-6a-1005(5)" start="0">16-6a-1005(5)</xref>;</subsection><subsection number="16-6a-1006(4)(d)">if the restatement was adopted by the board of directors or incorporators without member action, a statement to that effect and that member action was not required; and</subsection><subsection number="16-6a-1006(4)(e)">the restatement does not need to contain the name or address of the incorporator or incorporators that were included in the articles of incorporation when originally filed.</subsection></subsection><subsection number="16-6a-1006(5)">Upon filing by the division or at any later effective date determined pursuant to Section <xref depth="3" refnumber="16-1a-204">16-1a-204</xref>, restated articles of incorporation supersede the original articles of incorporation and all prior amendments to the original articles of incorporation.</subsection></section><section number="16-6a-1007"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Amendment of articles of incorporation pursuant to reorganization.</catchline><subsection number="16-6a-1007(1)"> Articles of incorporation may be amended, without action by the board of directors or members, to carry out a plan of reorganization ordered or decreed by a court of competent jurisdiction under a statute of this state or of the United States if the articles of incorporation after amendment contain only provisions required or permitted by Section <xref depth="3" refnumber="16-6a-202" start="0">16-6a-202</xref>.</subsection><subsection number="16-6a-1007(2)"> For an amendment to the articles of incorporation to be made pursuant to Subsection <xref depth="4" refnumber="16-6a-1007(1)" start="0">(1)</xref>, one or more individuals designated by the court shall deliver to the division for filing articles of amendment setting forth: <subsection number="16-6a-1007(2)(a)"> the name of the nonprofit corporation;</subsection><subsection number="16-6a-1007(2)(b)"> the text of each amendment approved by the court;</subsection><subsection number="16-6a-1007(2)(c)"> the date of the court's order or decree approving the articles of amendment;</subsection><subsection number="16-6a-1007(2)(d)"> the title of the reorganization proceeding in which the order or decree was entered; and</subsection><subsection number="16-6a-1007(2)(e)"> a statement that the court had jurisdiction of the proceeding under a specified statute of this state or of the United States.</subsection></subsection><subsection number="16-6a-1007(3)"> This section does not apply after entry of a final decree in the reorganization proceeding even though the court retains jurisdiction of the proceeding for limited purposes unrelated to consummation of the reorganization plan.</subsection></section><section number="16-6a-1008"><histories><history>Amended by Chapter <modchap sess="2015GS">240</modchap>, 2015 General Session</history><modyear>2015</modyear></histories><catchline>Conversion to a business corporation.</catchline><subsection number="16-6a-1008(1)"><subsection number="16-6a-1008(1)(a)"> A domestic nonprofit corporation may convert to a corporation subject to <xref depth="1" refnumber="16-10a" start="1">Chapter 10a, Utah Revised Business Corporation Act</xref>, by filing an amendment of its articles of incorporation with the division pursuant to this section.</subsection><subsection number="16-6a-1008(1)(b)"> The day on which a nonprofit domestic corporation files an amendment under this section, the domestic nonprofit corporation becomes a corporation subject to <xref depth="1" refnumber="16-10a" start="1">Chapter 10a, Utah Revised Business Corporation Act</xref>, except that, notwithstanding Section <xref depth="3" refnumber="16-10a-203" start="0">16-10a-203</xref>, the existence of the nonprofit corporation is considered to commence on the day on which the converting corporation:<subsection number="16-6a-1008(1)(b)(i)"> commenced its existence under this chapter; or</subsection><subsection number="16-6a-1008(1)(b)(ii)"> otherwise was created, formed, incorporated, or came into being.</subsection></subsection></subsection><subsection number="16-6a-1008(2)"> The amendment of the articles of incorporation to convert to a corporation shall: <subsection number="16-6a-1008(2)(a)"> revise the statement of purpose;</subsection><subsection number="16-6a-1008(2)(b)"> delete:<subsection number="16-6a-1008(2)(b)(i)"> the authorization for members; and</subsection><subsection number="16-6a-1008(2)(b)(ii)"> any other provisions relating to memberships;</subsection></subsection><subsection number="16-6a-1008(2)(c)"> authorize shares:<subsection number="16-6a-1008(2)(c)(i)"> stating the number of shares; and</subsection><subsection number="16-6a-1008(2)(c)(ii)"> including the information required by Section <xref depth="3" refnumber="16-10a-601" start="0">16-10a-601</xref> with respect to each class of shares the corporation is to be authorized to issue;</subsection></subsection><subsection number="16-6a-1008(2)(d)"> make such other changes as may be necessary or desired; and</subsection><subsection number="16-6a-1008(2)(e)"> if the corporation has any members, provide for:<subsection number="16-6a-1008(2)(e)(i)"> the cancellation of the memberships; or</subsection><subsection number="16-6a-1008(2)(e)(ii)"> the conversion of the memberships to shares of the corporation.</subsection></subsection></subsection><subsection number="16-6a-1008(3)"> If the nonprofit corporation has any voting members, an amendment to convert to a corporation shall be approved by all of the voting members regardless of limitations or restrictions on the voting rights of the members.</subsection><subsection number="16-6a-1008(4)"> If an amendment to the articles of incorporation filed pursuant to this section is included in a merger agreement, this section applies, except that any provisions for cancellation or conversion of memberships: <subsection number="16-6a-1008(4)(a)"> shall be in the merger agreement; and</subsection><subsection number="16-6a-1008(4)(b)"> may not be in the amendment of the articles of incorporation.</subsection></subsection><subsection number="16-6a-1008(5)"> A conversion under this section may not result in a violation, directly or indirectly, of: <subsection number="16-6a-1008(5)(a)"> Section <xref depth="3" refnumber="16-6a-1301" start="0">16-6a-1301</xref>; or</subsection><subsection number="16-6a-1008(5)(b)"> any other provision of this chapter.</subsection></subsection><subsection number="16-6a-1008(6)"> The conversion of a nonprofit corporation into a corporation does not affect: <subsection number="16-6a-1008(6)(a)"> an obligation or liability of the converting nonprofit corporation incurred before its conversion to a corporation; or</subsection><subsection number="16-6a-1008(6)(b)"> the personal liability of any person incurred before the conversion.</subsection></subsection><subsection number="16-6a-1008(7)"><subsection number="16-6a-1008(7)(a)"><subsection number="16-6a-1008(7)(a)(i)"> When a conversion is effective under this section, for purposes of the laws of this state, the things listed in Subsection <xref depth="4" refnumber="16-6a-1008(7)(a)(ii)" start="0">(7)(a)(ii)</xref>: <subsection number="16-6a-1008(7)(a)(i)(A)"> vest in the corporation to which the nonprofit corporation converts;</subsection><subsection number="16-6a-1008(7)(a)(i)(B)"> are the property of the corporation; and</subsection><subsection number="16-6a-1008(7)(a)(i)(C)"> are not considered transferred by the converting nonprofit corporation to the corporation by operation of this Subsection <xref depth="4" refnumber="16-6a-1008(7)(a)" start="0">(7)(a)</xref>.</subsection></subsection><subsection number="16-6a-1008(7)(a)(ii)"> This Subsection <xref depth="4" refnumber="16-6a-1008(7)(a)" start="0">(7)(a)</xref> applies to the following of the converting nonprofit corporation: <subsection number="16-6a-1008(7)(a)(ii)(A)"> its rights, privileges, and powers;</subsection><subsection number="16-6a-1008(7)(a)(ii)(B)"> its interests in property, whether real, personal, or mixed;</subsection><subsection number="16-6a-1008(7)(a)(ii)(C)"> debts due to the converting nonprofit corporation;</subsection><subsection number="16-6a-1008(7)(a)(ii)(D)"> the debts, liabilities, and duties of the converting nonprofit corporation;</subsection><subsection number="16-6a-1008(7)(a)(ii)(E)"> the rights and obligations under contract of the converting nonprofit corporation; and</subsection><subsection number="16-6a-1008(7)(a)(ii)(F)"> other things and causes of action belonging to the converting nonprofit corporation.</subsection></subsection></subsection><subsection number="16-6a-1008(7)(b)"> The title to any real property vested by deed or otherwise in a nonprofit corporation converting to a corporation does not revert and is not in any way impaired by reason of this chapter or of the conversion.</subsection><subsection number="16-6a-1008(7)(c)"> A right of a creditor or a lien on property of a converting nonprofit corporation that is described in Subsection <xref depth="4" refnumber="16-6a-1008(6)(a)" start="0">(6)(a)</xref> or <xref depth="4" refnumber="16-6a-1008(6)(b)" start="0">(b)</xref> is preserved unimpaired.</subsection><subsection number="16-6a-1008(7)(d)"> A debt, liability, or duty of a converting nonprofit corporation:<subsection number="16-6a-1008(7)(d)(i)"> remains attached to the corporation to which the nonprofit corporation converts; and</subsection><subsection number="16-6a-1008(7)(d)(ii)"> may be enforced against the corporation to the same extent as if the debts, liabilities, and duties had been incurred or contracted by the corporation in its capacity as a corporation.</subsection></subsection><subsection number="16-6a-1008(7)(e)"> A converted nonprofit corporation upon conversion to a corporation pursuant to this section is considered the same entity as the corporation.</subsection><subsection number="16-6a-1008(7)(f)"> In connection with a conversion of a nonprofit corporation to a corporation under this section, the interests or rights in the nonprofit corporation which is to be converted may be exchanged or converted into one or more of the following:<subsection number="16-6a-1008(7)(f)(i)"> cash, property, interests, or rights in the corporation to which it is converted; or</subsection><subsection number="16-6a-1008(7)(f)(ii)"> cash, property or interests in, or rights in another entity.</subsection></subsection><subsection number="16-6a-1008(7)(g)"> Unless otherwise agreed:<subsection number="16-6a-1008(7)(g)(i)"> a converting nonprofit corporation is not required solely as a result of the conversion to: <subsection number="16-6a-1008(7)(g)(i)(A)"> wind up its affairs;</subsection><subsection number="16-6a-1008(7)(g)(i)(B)"> pay its liabilities; or</subsection><subsection number="16-6a-1008(7)(g)(i)(C)"> distribute its assets; and</subsection></subsection><subsection number="16-6a-1008(7)(g)(ii)"> a conversion is not considered to constitute a dissolution of the nonprofit corporation, but constitutes a continuation of the existence of the nonprofit corporation in the form of a corporation.</subsection></subsection></subsection></section><section number="16-6a-1008.7"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Conversion to or from a domestic limited liability company.</catchline><subsection number="16-6a-1008.7(1)"><subsection number="16-6a-1008.7(1)(a)">A domestic nonprofit corporation may convert to a domestic limited liability company subject to Chapter 20, Utah Revised Uniform Limited Liability Company Act, pursuant to Section <xref depth="3" refnumber="16-20-1205">16-20-1205</xref>, by complying with:<subsection number="16-6a-1008.7(1)(a)(i)">this Subsection <xref depth="4" refnumber="16-6a-1008.7(1)" start="0">(1)</xref>; and</subsection><subsection number="16-6a-1008.7(1)(a)(ii)">Section <xref depth="3" refnumber="16-1a-902">16-1a-902</xref>.</subsection></subsection><subsection number="16-6a-1008.7(1)(b)">If a domestic nonprofit corporation converts to a domestic limited liability company in accordance with this Subsection <xref depth="4" refnumber="16-6a-1008.7(1)" start="0">(1)</xref>, the articles of conversion or statement of conversion, as applicable, shall:<subsection number="16-6a-1008.7(1)(b)(i)">comply with Sections <xref depth="3" refnumber="16-1a-903">16-1a-903</xref> and <xref depth="3" refnumber="16-1a-906">16-1a-906</xref>; and</subsection><subsection number="16-6a-1008.7(1)(b)(ii)">if the corporation has any members, provide for:<subsection number="16-6a-1008.7(1)(b)(ii)(A)">the cancellation of any membership; or</subsection><subsection number="16-6a-1008.7(1)(b)(ii)(B)">the conversion of any membership in the domestic nonprofit corporation to a membership interest in the domestic limited liability company.</subsection></subsection></subsection><subsection number="16-6a-1008.7(1)(c)">Before articles of conversion or statement of conversion may be filed with the division, the conversion shall be approved:<subsection number="16-6a-1008.7(1)(c)(i)">in the manner provided for the articles of incorporation or bylaws of the domestic nonprofit corporation; or</subsection><subsection number="16-6a-1008.7(1)(c)(ii)">if the articles of incorporation or bylaws of the domestic nonprofit corporation do not provide the method for approval:<subsection number="16-6a-1008.7(1)(c)(ii)(A)">if the domestic nonprofit corporation has voting members, by all of the members of the domestic nonprofit corporation regardless of limitations or restrictions on the voting rights of the members; or</subsection><subsection number="16-6a-1008.7(1)(c)(ii)(B)">if the nonprofit domestic corporation does not have voting members, by a majority of:<subsection number="16-6a-1008.7(1)(c)(ii)(B)(I)">the directors in office at the time the conversion is approved by the board of directors; or</subsection><subsection number="16-6a-1008.7(1)(c)(ii)(B)(II)">if directors have not been appointed or elected, the incorporators.</subsection></subsection></subsection></subsection></subsection><subsection number="16-6a-1008.7(2)">A domestic limited liability company may convert to a domestic nonprofit corporation subject to this chapter by:<subsection number="16-6a-1008.7(2)(a)">filing articles of incorporation in accordance with this chapter; and</subsection><subsection number="16-6a-1008.7(2)(b)">complying with Section <xref depth="3" refnumber="16-1a-902">16-1a-902</xref>, pursuant to Section <xref depth="3" refnumber="16-20-1205">16-20-1205</xref>.</subsection></subsection><subsection number="16-6a-1008.7(3)">Any conversion under this section may not result in a violation, directly or indirectly, of:<subsection number="16-6a-1008.7(3)(a)">Section <xref depth="3" refnumber="16-6a-1301" start="0">16-6a-1301</xref>; or</subsection><subsection number="16-6a-1008.7(3)(b)">any other provision of this chapter.</subsection></subsection></section><section number="16-6a-1009"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Effect of amendment of articles of incorporation.</catchline><subsection number="16-6a-1009(1)"> An amendment to the articles of incorporation does not affect: <subsection number="16-6a-1009(1)(a)"> any existing right of persons other than members;</subsection><subsection number="16-6a-1009(1)(b)"> any cause of action existing against or in favor of the nonprofit corporation; or</subsection><subsection number="16-6a-1009(1)(c)"> any proceeding to which the nonprofit corporation is a party.</subsection></subsection><subsection number="16-6a-1009(2)"> An amendment changing a nonprofit corporation's corporate name does not abate a proceeding brought by or against a nonprofit corporation in its former corporate name.</subsection></section><section number="16-6a-1010"><histories><history>Amended by Chapter <modchap sess="2006GS">228</modchap>, 2006 General Session</history><modyear>2006</modyear></histories><catchline>Amendment of bylaws by board of directors or members.</catchline><subsection number="16-6a-1010(1)"> The board of directors may amend the bylaws at any time to add, change, or delete a provision, unless: <subsection number="16-6a-1010(1)(a)"> this chapter or the articles of incorporation or bylaws:<subsection number="16-6a-1010(1)(a)(i)"> reserve the power exclusively to the members in whole or part; or</subsection><subsection number="16-6a-1010(1)(a)(ii)"> otherwise prohibit the board of directors from amending the bylaws to add, change, or delete a provision; or</subsection></subsection><subsection number="16-6a-1010(1)(b)"> it would result in a change of the rights, privileges, preferences, restrictions, or conditions of a membership class as to voting, dissolution, redemption, or transfer by changing the rights, privileges, preferences, restrictions, or conditions of another class.</subsection></subsection><subsection number="16-6a-1010(2)"><subsection number="16-6a-1010(2)(a)"> Unless otherwise provided by the bylaws, the members may amend the bylaws even though the bylaws may also be amended by the board of directors.</subsection><subsection number="16-6a-1010(2)(b)"> Amendments to the bylaws by members shall be made in accordance with Sections <xref depth="3" refnumber="16-6a-1003" start="0">16-6a-1003</xref> and <xref depth="3" refnumber="16-6a-1004" start="0">16-6a-1004</xref> as if each reference in Sections <xref depth="3" refnumber="16-6a-1003" start="0">16-6a-1003</xref> and <xref depth="3" refnumber="16-6a-1004" start="0">16-6a-1004</xref> to the article of incorporation was a reference to the bylaws.</subsection></subsection></section><section number="16-6a-1011"><histories><history>Amended by Chapter <modchap sess="2014GS">189</modchap>, 2014 General Session</history><modyear>2014</modyear></histories><catchline>Bylaw changing quorum or voting requirement for members.</catchline><subsection number="16-6a-1011(1)"><subsection number="16-6a-1011(1)(a)"> If authorized by the articles of incorporation, the members may adopt, amend, or repeal bylaws that fix a greater quorum or voting requirement for members, or voting groups of members, than is required by this chapter.</subsection><subsection number="16-6a-1011(1)(b)"> An action by the members under Subsection <xref depth="4" refnumber="16-6a-1011(1)(a)" start="0">(1)(a)</xref> is subject to <xref depth="2" refnumber="16-6a-6" start="2">Part 6, Members</xref>, and <xref depth="2" refnumber="16-6a-7" start="2">Part 7, Member Meetings and Voting</xref>.</subsection></subsection><subsection number="16-6a-1011(2)"> Bylaws that fix a greater quorum requirement or a greater voting requirement for members pursuant to Section <xref depth="3" refnumber="16-6a-716" start="0">16-6a-716</xref> may not be amended by the board of directors.</subsection></section><section number="16-6a-1012"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Bylaw changing quorum or voting requirement for directors.</catchline><subsection number="16-6a-1012(1)"> Bylaws that fix a greater quorum or voting requirement for the board of directors may be amended: <subsection number="16-6a-1012(1)(a)"> if adopted by the members, only by the members; or</subsection><subsection number="16-6a-1012(1)(b)"> if adopted by the board of directors, by:<subsection number="16-6a-1012(1)(b)(i)"> the members; or</subsection><subsection number="16-6a-1012(1)(b)(ii)"> the board of directors.</subsection></subsection></subsection><subsection number="16-6a-1012(2)"> Bylaws adopted or amended by the members that fix a greater quorum or voting requirement for the board of directors may provide that the bylaws may be amended only by a specified vote of: <subsection number="16-6a-1012(2)(a)"> the members; or</subsection><subsection number="16-6a-1012(2)(b)"> the board of directors.</subsection></subsection><subsection number="16-6a-1012(3)"> Action by the board of directors under Subsection <xref depth="4" refnumber="16-6a-1012(1)(b)" start="0">(1)(b)</xref> to adopt or amend bylaws that change the quorum or voting requirement for the board of directors shall meet the greater of the quorum and voting requirement for taking the action: <subsection number="16-6a-1012(3)(a)"> then in effect; or</subsection><subsection number="16-6a-1012(3)(b)"> proposed to be adopted.</subsection></subsection></section><section number="16-6a-1013"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Approval by third persons.</catchline><subsection number="16-6a-1013(1)"> The articles of incorporation may require an amendment to the articles of incorporation or bylaws to be approved in writing by a specified person or persons other than the board of directors.</subsection><subsection number="16-6a-1013(2)"> A provision permitted under Subsection <xref depth="4" refnumber="16-6a-1013(1)" start="0">(1)</xref> may only be amended with the approval in writing of the person or persons specified in the provision.</subsection></section><section number="16-6a-1014"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Amendment terminating members or redeeming or canceling memberships.</catchline><subsection number="16-6a-1014(1)"> An amendment to the articles of incorporation or bylaws of a nonprofit corporation shall meet the requirements of this chapter and this section if the amendment would: <subsection number="16-6a-1014(1)(a)"> terminate all members or any class of members; or</subsection><subsection number="16-6a-1014(1)(b)"> redeem or cancel all memberships or any class of memberships.</subsection></subsection><subsection number="16-6a-1014(2)"> Before adopting a resolution proposing an amendment as described in Subsection <xref depth="4" refnumber="16-6a-1014(1)" start="0">(1)</xref>, the board of directors of a nonprofit corporation shall give notice of the general nature of the amendment to the members.</subsection></section></part><part number="16-6a-12"><catchline>Sale of Property</catchline><section number="16-6a-1201"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Sale of property.</catchline><subsection number="16-6a-1201(1)"> Unless the bylaws otherwise provide, a nonprofit corporation may, as authorized by the board of directors: <subsection number="16-6a-1201(1)(a)"> sell, lease, exchange, or otherwise dispose of all or substantially all of its property in the usual and regular course of business; or</subsection><subsection number="16-6a-1201(1)(b)"> mortgage, pledge, dedicate to the repayment of indebtedness, whether with or without recourse, or otherwise encumber all or substantially all of its property whether or not in the usual and regular course of business.</subsection></subsection><subsection number="16-6a-1201(2)"> Unless otherwise provided in the bylaws, approval of a transaction described in this section by the members is not required.</subsection></section><section number="16-6a-1202"><histories><history>Amended by Chapter <modchap sess="2014GS">189</modchap>, 2014 General Session</history><modyear>2014</modyear></histories><catchline>Sale of property other than in regular course of activities.</catchline><subsection number="16-6a-1202(1)"><subsection number="16-6a-1202(1)(a)"> A nonprofit corporation may sell, lease, exchange, or otherwise dispose of all, or substantially all, of its property, with or without its good will, other than in the usual and regular course of business on the terms and conditions and for the consideration determined by the board of directors, if:<subsection number="16-6a-1202(1)(a)(i)"> the board of directors proposes the transaction; and</subsection><subsection number="16-6a-1202(1)(a)(ii)"> the members entitled to vote on the transaction approve the transaction.</subsection></subsection><subsection number="16-6a-1202(1)(b)"> A sale, lease, exchange, or other disposition of all, or substantially all, of the property of a nonprofit corporation, with or without its good will, in connection with its dissolution, other than in the usual and regular course of business, and other than pursuant to a court order, shall be subject to this section.</subsection><subsection number="16-6a-1202(1)(c)"> A sale, lease, exchange, or other disposition of all, or substantially all, of the property of a nonprofit corporation, with or without its good will, pursuant to a court order is not subject to this section.</subsection></subsection><subsection number="16-6a-1202(2)"><subsection number="16-6a-1202(2)(a)"> A nonprofit corporation shall comply with Subsection <xref depth="4" refnumber="16-6a-1202(2)(b)" start="0">(2)(b)</xref> to vote or otherwise consent with respect to the sale, lease, exchange, or other disposition of all, or substantially all, of the property with or without the good will of another entity that the nonprofit corporation controls if:<subsection number="16-6a-1202(2)(a)(i)"> the nonprofit corporation is entitled to vote or otherwise consent; and</subsection><subsection number="16-6a-1202(2)(a)(ii)"> the property interests held by the nonprofit corporation in the other entity constitute all, or substantially all, of the property of the nonprofit corporation.</subsection></subsection><subsection number="16-6a-1202(2)(b)"> A nonprofit corporation may vote or otherwise consent to a transaction described in Subsection <xref depth="4" refnumber="16-6a-1202(2)(a)" start="0">(2)(a)</xref> only if:<subsection number="16-6a-1202(2)(b)(i)"> the board of the directors of the nonprofit corporation proposes the vote or consent; and</subsection><subsection number="16-6a-1202(2)(b)(ii)"> the members, if any are entitled to vote on the vote or consent, approve giving the vote or consent.</subsection></subsection></subsection><subsection number="16-6a-1202(3)"> For a transaction described in Subsection <xref depth="4" refnumber="16-6a-1202(1)" start="0">(1)</xref> or a consent described in Subsection <xref depth="4" refnumber="16-6a-1202(2)" start="0">(2)</xref> to be approved by the members: <subsection number="16-6a-1202(3)(a)"><subsection number="16-6a-1202(3)(a)(i)"> the board of directors shall recommend the transaction or the consent to the members; or</subsection><subsection number="16-6a-1202(3)(a)(ii)"> the board of directors shall: <subsection number="16-6a-1202(3)(a)(ii)(A)"> determine that because of a conflict of interest or other special circumstance it should make no recommendation; and</subsection><subsection number="16-6a-1202(3)(a)(ii)(B)"> communicate the basis for its determination to the members at a membership meeting with the submission of the transaction or consent; and</subsection></subsection></subsection><subsection number="16-6a-1202(3)(b)"> the members entitled to vote on the transaction or the consent shall approve the transaction or the consent as provided in Subsection <xref depth="4" refnumber="16-6a-1202(6)" start="0">(6)</xref>.</subsection></subsection><subsection number="16-6a-1202(4)"> The board of directors may condition the effectiveness of the transaction or the consent on any basis.</subsection><subsection number="16-6a-1202(5)"><subsection number="16-6a-1202(5)(a)"> The nonprofit corporation shall give notice, in accordance with Section <xref depth="3" refnumber="16-6a-704" start="0">16-6a-704</xref> to each member entitled to vote on the transaction described in Subsection <xref depth="4" refnumber="16-6a-1202(1)" start="0">(1)</xref> or the consent described in Subsection <xref depth="4" refnumber="16-6a-1202(2)" start="0">(2)</xref>, of the members' meeting at which the transaction or the consent will be voted upon.</subsection><subsection number="16-6a-1202(5)(b)"> The notice required by Subsection <xref depth="4" refnumber="16-6a-1202(1)" start="0">(1)</xref> shall:<subsection number="16-6a-1202(5)(b)(i)"> state that the purpose, or one of the purposes, of the meeting is to consider: <subsection number="16-6a-1202(5)(b)(i)(A)"> in the case of action pursuant to Subsection <xref depth="4" refnumber="16-6a-1202(1)" start="0">(1)</xref>, the sale, lease, exchange, or other disposition of all, or substantially all, of the property of the nonprofit corporation; or</subsection><subsection number="16-6a-1202(5)(b)(i)(B)"> in the case of action pursuant to Subsection <xref depth="4" refnumber="16-6a-1202(2)" start="0">(2)</xref>, the nonprofit corporation's consent to the sale, lease, exchange, or other disposition of all, or substantially all, of the property of another entity, the property interests of which:<subsection number="16-6a-1202(5)(b)(i)(B)(I)"> are held by the nonprofit corporation; and</subsection><subsection number="16-6a-1202(5)(b)(i)(B)(II)"> constitute all, or substantially all, of the property of the nonprofit corporation;</subsection></subsection></subsection><subsection number="16-6a-1202(5)(b)(ii)"> contain or be accompanied by a description of: <subsection number="16-6a-1202(5)(b)(ii)(A)"> the transaction, in the case of action pursuant to Subsection <xref depth="4" refnumber="16-6a-1202(1)" start="0">(1)</xref>; or</subsection><subsection number="16-6a-1202(5)(b)(ii)(B)"> the transaction underlying the consent, in the case of action pursuant to Subsection <xref depth="4" refnumber="16-6a-1202(2)" start="0">(2)</xref>; and</subsection></subsection><subsection number="16-6a-1202(5)(b)(iii)"> in the case of action pursuant to Subsection <xref depth="4" refnumber="16-6a-1202(2)" start="0">(2)</xref>, identify the entity whose property is the subject of the transaction.</subsection></subsection></subsection><subsection number="16-6a-1202(6)"> The transaction described in Subsection <xref depth="4" refnumber="16-6a-1202(1)" start="0">(1)</xref> or the consent described in Subsection <xref depth="4" refnumber="16-6a-1202(2)" start="0">(2)</xref> shall be approved by the votes required by Sections <xref depth="3" refnumber="16-6a-714" start="0">16-6a-714</xref> and <xref depth="3" refnumber="16-6a-715" start="0">16-6a-715</xref> by every voting group entitled to vote on the transaction or the consent unless a greater vote is required by: <subsection number="16-6a-1202(6)(a)"> this chapter;</subsection><subsection number="16-6a-1202(6)(b)"> the articles of incorporation;</subsection><subsection number="16-6a-1202(6)(c)"> bylaws adopted by the members; or</subsection><subsection number="16-6a-1202(6)(d)"> the board of directors acting pursuant to Subsection <xref depth="4" refnumber="16-6a-1202(4)" start="0">(4)</xref>.</subsection></subsection><subsection number="16-6a-1202(7)"> After a transaction described in Subsection <xref depth="4" refnumber="16-6a-1202(1)" start="0">(1)</xref> or a consent described in Subsection <xref depth="4" refnumber="16-6a-1202(2)" start="0">(2)</xref> is authorized, the transaction may be abandoned or the consent withheld or revoked, subject to any contractual rights or other limitations on such abandonment, withholding, or revocation, without further action by the members.</subsection><subsection number="16-6a-1202(8)"> A transaction that constitutes a distribution is governed by <xref depth="2" refnumber="16-6a-13" start="2">Part 13, Distributions</xref>, and not by this section.</subsection></section></part><part number="16-6a-13"><catchline>Distributions</catchline><section number="16-6a-1301"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Distributions prohibited.</catchline><tab/>Except as authorized by Section <xref depth="3" refnumber="16-6a-1302" start="0">16-6a-1302</xref>, a nonprofit corporation may not make a distribution. </section><section number="16-6a-1302"><histories><history>Amended by Chapter <modchap sess="2017GS">358</modchap>, 2017 General Session</history><modyear>2017</modyear></histories><catchline>Authorized distributions.</catchline><subsection number="16-6a-1302(1)"> A nonprofit corporation may: <subsection number="16-6a-1302(1)(a)"> make distributions or distribute the nonprofit corporation's assets to a:<subsection number="16-6a-1302(1)(a)(i)"> member that is a domestic or foreign nonprofit corporation;</subsection><subsection number="16-6a-1302(1)(a)(ii)"> member of a mutual benefit corporation, not inconsistent with its bylaws;</subsection><subsection number="16-6a-1302(1)(a)(iii)"> shareholder of a water company in a manner consistent with its articles of incorporation, bylaws, and the provisions of this chapter; or </subsection><subsection number="16-6a-1302(1)(a)(iv)"> governmental entity;</subsection></subsection><subsection number="16-6a-1302(1)(b)"> pay compensation in a reasonable amount to its members, directors, or officers for services rendered;</subsection><subsection number="16-6a-1302(1)(c)"> if a cooperative nonprofit corporation, make distributions consistent with its purposes; and</subsection><subsection number="16-6a-1302(1)(d)"> confer benefits upon its members in conformity with its purposes.</subsection></subsection><subsection number="16-6a-1302(2)"> A nonprofit corporation may make distributions upon dissolution as follows: <subsection number="16-6a-1302(2)(a)"> to a member that is a domestic or foreign nonprofit corporation;</subsection><subsection number="16-6a-1302(2)(b)"> to its members if it is a mutual benefit corporation;</subsection><subsection number="16-6a-1302(2)(c)"> to a shareholder of a water company in proportion to the shareholder's interest in the water company, consistent with the water company's articles of incorporation and bylaws; </subsection><subsection number="16-6a-1302(2)(d)"> to another nonprofit corporation, including a nonprofit corporation organized to receive the assets of and function in place of the dissolved nonprofit corporation; and</subsection><subsection number="16-6a-1302(2)(e)"> otherwise in conformity with <xref depth="2" refnumber="16-6a-14" start="2">Part 14, Dissolution</xref>.</subsection></subsection><subsection number="16-6a-1302(3)"> Authorized distributions by a dissolved nonprofit corporation may be made by authorized officers or directors, including those elected, hired, or otherwise selected after dissolution if the election, hiring, or other selection after dissolution is not inconsistent with the articles of incorporation and bylaws existing at the time of dissolution.</subsection></section></part><part number="16-6a-14"><catchline>Dissolution</catchline><section number="16-6a-1401"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Dissolution by incorporators or directors if no members.</catchline><subsection number="16-6a-1401(1)"> If a nonprofit corporation has no members, the following may authorize the dissolution of the nonprofit corporation: <subsection number="16-6a-1401(1)(a)"> a majority of its directors; or</subsection><subsection number="16-6a-1401(1)(b)"> if it has no directors, a majority of its incorporators.</subsection></subsection><subsection number="16-6a-1401(2)"> The directors or incorporators in approving dissolution shall adopt a plan of dissolution indicating to whom the assets owned or held by the nonprofit corporation will be distributed after all creditors have been paid.</subsection></section><section number="16-6a-1402"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Dissolution by directors and members.</catchline><subsection number="16-6a-1402(1)"> If a nonprofit corporation has members, dissolution of a nonprofit corporation may be authorized in the manner provided in Subsection <xref depth="4" refnumber="16-6a-1402(2)" start="0">(2)</xref>.</subsection><subsection number="16-6a-1402(2)"> For a proposal to dissolve the nonprofit corporation to be authorized: <subsection number="16-6a-1402(2)(a)"> the board of directors shall adopt the proposal to dissolve;</subsection><subsection number="16-6a-1402(2)(b)"> the board of directors shall:<subsection number="16-6a-1402(2)(b)(i)"> recommend the proposal to dissolve to the members; or</subsection><subsection number="16-6a-1402(2)(b)(ii)"><subsection number="16-6a-1402(2)(b)(ii)(A)"> determine that because of a conflict of interest or other special circumstance, it should make no recommendation; and</subsection><subsection number="16-6a-1402(2)(b)(ii)(B)"> communicate the basis for its determination to the members; and</subsection></subsection></subsection><subsection number="16-6a-1402(2)(c)"> the members entitled to vote on the proposal to dissolve shall approve the proposal to dissolve as provided in Subsection <xref depth="4" refnumber="16-6a-1402(5)" start="0">(5)</xref>.</subsection></subsection><subsection number="16-6a-1402(3)"> The board of directors may condition the effectiveness of the dissolution, and the members may condition their approval of the dissolution, on any basis.</subsection><subsection number="16-6a-1402(4)"><subsection number="16-6a-1402(4)(a)"> The nonprofit corporation shall give notice, in accordance with Section <xref depth="3" refnumber="16-6a-704" start="0">16-6a-704</xref>, to each member entitled to vote on the proposal of the members' meeting at which the proposal to dissolve will be voted on.</subsection><subsection number="16-6a-1402(4)(b)"> The notice required by Subsection <xref depth="4" refnumber="16-6a-1402(4)(a)" start="0">(4)(a)</xref> shall:<subsection number="16-6a-1402(4)(b)(i)"> state that the purpose, or one of the purposes, of the meeting is to consider the proposal to dissolve the nonprofit corporation; and</subsection><subsection number="16-6a-1402(4)(b)(ii)"> contain or be accompanied by a copy of the proposal or a summary of the proposal.</subsection></subsection></subsection><subsection number="16-6a-1402(5)"> The proposal to dissolve shall be approved by the votes required by Sections <xref depth="3" refnumber="16-6a-714" start="0">16-6a-714</xref> and <xref depth="3" refnumber="16-6a-715" start="0">16-6a-715</xref> by every voting group entitled to vote on the proposal to dissolve unless a greater vote is required by: <subsection number="16-6a-1402(5)(a)"> this chapter;</subsection><subsection number="16-6a-1402(5)(b)"> the articles of incorporation;</subsection><subsection number="16-6a-1402(5)(c)"> bylaws adopted by the members; or</subsection><subsection number="16-6a-1402(5)(d)"> the board of directors acting pursuant to Subsection <xref depth="4" refnumber="16-6a-1402(3)" start="0">(3)</xref>.</subsection></subsection><subsection number="16-6a-1402(6)"> The plan of dissolution shall indicate to whom the assets owned or held by the nonprofit corporation will be distributed after all creditors have been paid.</subsection></section><section number="16-6a-1403"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Articles of dissolution.</catchline><subsection number="16-6a-1403(1)"> At any time after dissolution is authorized, the nonprofit corporation may dissolve by delivering to the division for filing articles of dissolution setting forth: <subsection number="16-6a-1403(1)(a)"> the name of the nonprofit corporation;</subsection><subsection number="16-6a-1403(1)(b)"><subsection number="16-6a-1403(1)(b)(i)"><subsection number="16-6a-1403(1)(b)(i)(A)"> the address of the nonprofit corporation's principal office; or</subsection><subsection number="16-6a-1403(1)(b)(i)(B)"> if a principal office is not to be maintained, a statement that the nonprofit corporation will not maintain a principal office; and</subsection></subsection><subsection number="16-6a-1403(1)(b)(ii)"> if different from the address of the principal office or if no principal office is to be maintained, the address to which service of process may be mailed pursuant to Section <xref depth="3" refnumber="16-6a-1409" start="0">16-6a-1409</xref>;</subsection></subsection><subsection number="16-6a-1403(1)(c)"> the date dissolution was authorized;</subsection><subsection number="16-6a-1403(1)(d)"> if dissolution was authorized by the directors or the incorporators pursuant to Section <xref depth="3" refnumber="16-6a-1401" start="0">16-6a-1401</xref>, a statement to that effect;</subsection><subsection number="16-6a-1403(1)(e)"> if dissolution was approved by the members pursuant to Section <xref depth="3" refnumber="16-6a-1402" start="0">16-6a-1402</xref>, a statement that the number of votes cast for the proposal to dissolve by each voting group entitled to vote separately on the proposal was sufficient for approval by that voting group; and</subsection><subsection number="16-6a-1403(1)(f)"> any additional information as the division determines is necessary or appropriate.</subsection></subsection><subsection number="16-6a-1403(2)"> A nonprofit corporation is dissolved upon the effective date of its articles of dissolution.</subsection><subsection number="16-6a-1403(3)"> Articles of dissolution need not be filed by a nonprofit corporation that is dissolved pursuant to Section <xref depth="3" refnumber="16-6a-1418" start="0">16-6a-1418</xref>.</subsection></section><section number="16-6a-1404"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Revocation of dissolution.</catchline><subsection number="16-6a-1404(1)">A nonprofit corporation may revoke its dissolution within 120 days after the effective date of the dissolution.</subsection><subsection number="16-6a-1404(2)"><subsection number="16-6a-1404(2)(a)">Except as provided in Subsection <xref depth="4" refnumber="16-6a-1404(2)(b)" start="0">(2)(b)</xref>, revocation of dissolution shall be authorized in the same manner as the dissolution was authorized.</subsection><subsection number="16-6a-1404(2)(b)">The board of directors may revoke the dissolution without member action if:<subsection number="16-6a-1404(2)(b)(i)">the dissolution is authorized pursuant to Section <xref depth="3" refnumber="16-6a-1402" start="0">16-6a-1402</xref>; and</subsection><subsection number="16-6a-1404(2)(b)(ii)">the authorization permitted revocation by action of the board of directors alone.</subsection></subsection></subsection><subsection number="16-6a-1404(3)"><subsection number="16-6a-1404(3)(a)">After the revocation of dissolution is authorized, the nonprofit corporation may revoke the dissolution by delivering to the division for filing, within 120 days after the effective date of dissolution:<subsection number="16-6a-1404(3)(a)(i)">articles of revocation of dissolution; and</subsection><subsection number="16-6a-1404(3)(a)(ii)">a copy of its articles of dissolution.</subsection></subsection><subsection number="16-6a-1404(3)(b)">The articles of revocation of dissolution shall set forth:<subsection number="16-6a-1404(3)(b)(i)">the name of the nonprofit corporation;</subsection><subsection number="16-6a-1404(3)(b)(ii)">the effective date of the dissolution that was revoked;</subsection><subsection number="16-6a-1404(3)(b)(iii)">the date that the revocation of dissolution was authorized;</subsection><subsection number="16-6a-1404(3)(b)(iv)">if, pursuant to Subsection <xref depth="4" refnumber="16-6a-1404(2)" start="0">(2)</xref>, the directors or the incorporators revoked a dissolution authorized under Section <xref depth="3" refnumber="16-6a-1401" start="0">16-6a-1401</xref>, a statement that the revocation of dissolution was authorized by the directors or the incorporators, as the case may be;</subsection><subsection number="16-6a-1404(3)(b)(v)">if, pursuant to Subsection <xref depth="4" refnumber="16-6a-1404(2)" start="0">(2)</xref>, the directors revoked a dissolution approved by the members, a statement that the revocation was permitted by action of the directors pursuant to that approval; and</subsection><subsection number="16-6a-1404(3)(b)(vi)">if the revocation of dissolution was approved pursuant to Subsection <xref depth="4" refnumber="16-6a-1404(2)" start="0">(2)</xref> by the members, a statement that the number of votes cast for revocation of dissolution by each voting group entitled to vote separately on the proposal to dissolve was sufficient for approval by that voting group.</subsection></subsection></subsection><subsection number="16-6a-1404(4)"><subsection number="16-6a-1404(4)(a)">Revocation of dissolution is effective as provided in Section <xref depth="3" refnumber="16-1a-205">16-1a-205</xref>.</subsection><subsection number="16-6a-1404(4)(b)">A delayed effective date may not be specified pursuant to Section <xref depth="3" refnumber="16-1a-204">16-1a-204</xref>.</subsection></subsection><subsection number="16-6a-1404(5)">When the revocation of dissolution is effective:<subsection number="16-6a-1404(5)(a)">the revocation relates back to and takes effect as of the effective date of the dissolution; and</subsection><subsection number="16-6a-1404(5)(b)">the nonprofit corporation may carry on its activities and use its corporate name as if dissolution had never occurred.</subsection></subsection></section><section number="16-6a-1405"><histories><history>Amended by Chapter <modchap sess="2023GS">401</modchap>, 2023 General Session</history><modyear>2023</modyear></histories><catchline>Effect of dissolution.</catchline><subsection number="16-6a-1405(1)"> A dissolved nonprofit corporation continues its corporate existence but may not carry on any activities except as is appropriate to wind up and liquidate its affairs, including: <subsection number="16-6a-1405(1)(a)"> collecting its assets;</subsection><subsection number="16-6a-1405(1)(b)"> returning, transferring, or conveying assets held by the nonprofit corporation upon a condition requiring return, transfer, or conveyance, which condition occurs by reason of the dissolution, in accordance with the condition;</subsection><subsection number="16-6a-1405(1)(c)"> transferring, subject to any contractual or legal requirements, its assets as provided in or authorized by its articles of incorporation or bylaws;</subsection><subsection number="16-6a-1405(1)(d)"> discharging or making provision for discharging its liabilities; and</subsection><subsection number="16-6a-1405(1)(e)"> doing every other act necessary to wind up and liquidate its assets and affairs.</subsection></subsection><subsection number="16-6a-1405(2)"> Dissolution of a nonprofit corporation does not: <subsection number="16-6a-1405(2)(a)"> transfer title to the nonprofit corporation's property including title to water rights, water conveyance facilities, or other assets of a nonprofit corporation organized to divert or distribute water to its members;</subsection><subsection number="16-6a-1405(2)(b)"> subject its directors or officers to standards of conduct different from those prescribed in this chapter;</subsection><subsection number="16-6a-1405(2)(c)"> change quorum or voting requirements for its board of directors or members;</subsection><subsection number="16-6a-1405(2)(d)"> change provisions for selection, resignation, or removal of its directors or officers, or both;</subsection><subsection number="16-6a-1405(2)(e)"> change provisions for amending its bylaws or its articles of incorporation;</subsection><subsection number="16-6a-1405(2)(f)"> prevent commencement of a proceeding by or against the nonprofit corporation in its corporate name; or</subsection><subsection number="16-6a-1405(2)(g)"> abate or suspend a proceeding pending by or against the nonprofit corporation on the effective date of dissolution.</subsection></subsection><subsection number="16-6a-1405(3)"> Nothing in this section may be applied in a manner inconsistent with a court's power of judicial dissolution exercised in accordance with Section <xref depth="3" refnumber="16-6a-1414" start="0">16-6a-1414</xref>.</subsection></section><section number="16-6a-1406"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Disposition of known claims by notification.</catchline><subsection number="16-6a-1406(1)"> A dissolved nonprofit corporation may dispose of the known claims against it by following the procedures described in this section.</subsection><subsection number="16-6a-1406(2)"> A dissolved nonprofit corporation electing to dispose of known claims pursuant to this section may give written notice of the dissolution to known claimants at any time after the effective date of the dissolution. The written notice shall: <subsection number="16-6a-1406(2)(a)"> describe the information that shall be included in a claim;</subsection><subsection number="16-6a-1406(2)(b)"> provide an address to which written notice of any claim shall be given to the nonprofit corporation;</subsection><subsection number="16-6a-1406(2)(c)"> state the deadline by which the dissolved nonprofit corporation shall receive a claim, which may not be fewer than 120 days after the effective date of the notice; and</subsection><subsection number="16-6a-1406(2)(d)"> state that unless sooner barred by any other state statute limiting actions, a claim will be barred if not received by the deadline stated in Subsection <xref depth="4" refnumber="16-6a-1406(2)(c)" start="0">(2)(c)</xref>.</subsection></subsection><subsection number="16-6a-1406(3)"> Unless sooner barred by any other statute limiting actions, a claim against the dissolved nonprofit corporation is barred if: <subsection number="16-6a-1406(3)(a)"><subsection number="16-6a-1406(3)(a)(i)"> a claimant was given notice under Subsection <xref depth="4" refnumber="16-6a-1406(2)" start="0">(2)</xref>; and</subsection><subsection number="16-6a-1406(3)(a)(ii)"> the claim is not received by the dissolved nonprofit corporation by the deadline stated in the notice; or</subsection></subsection><subsection number="16-6a-1406(3)(b)"><subsection number="16-6a-1406(3)(b)(i)"> the dissolved nonprofit corporation delivers to the claimant written notice of rejection of the claim within 90 days after receipt of the claim; and</subsection><subsection number="16-6a-1406(3)(b)(ii)"> the claimant whose claim was rejected by the dissolved nonprofit corporation does not commence a proceeding to enforce the claim within 90 days after the effective date of the rejection notice.</subsection></subsection></subsection><subsection number="16-6a-1406(4)"> Claims that are not rejected by the dissolved nonprofit corporation in writing within 90 days after receipt of the claim by the dissolved nonprofit corporation shall be considered accepted.</subsection><subsection number="16-6a-1406(5)"> The failure of the dissolved nonprofit corporation to give notice to any known claimant pursuant to Subsection <xref depth="4" refnumber="16-6a-1406(2)" start="0">(2)</xref> does not affect the disposition under this section of any claim held by any other known claimant.</subsection><subsection number="16-6a-1406(6)"> For purposes of this section: <subsection number="16-6a-1406(6)(a)"> "claim" does not include:<subsection number="16-6a-1406(6)(a)(i)"> a contingent liability; or</subsection><subsection number="16-6a-1406(6)(a)(ii)"> a claim based on an event occurring after the effective date of dissolution; and</subsection></subsection><subsection number="16-6a-1406(6)(b)"> an action to enforce a claim includes:<subsection number="16-6a-1406(6)(b)(i)"> any civil action; and</subsection><subsection number="16-6a-1406(6)(b)(ii)"> any arbitration under any agreement for binding arbitration between the dissolved nonprofit corporation and the claimant.</subsection></subsection></subsection></section><section number="16-6a-1407"><histories><history>Amended by Chapter <modchap sess="2009GS">388</modchap>, 2009 General Session</history><modyear>2009</modyear></histories><catchline>Disposition of claims by publication.</catchline><subsection number="16-6a-1407(1)"> A dissolved nonprofit corporation may publish notice of its dissolution and request that persons with claims against the nonprofit corporation present them in accordance with the notice.</subsection><subsection number="16-6a-1407(2)"> The notice described in Subsection <xref depth="4" refnumber="16-6a-1407(1)" start="0">(1)</xref> shall: <subsection number="16-6a-1407(2)(a)"> be published:<subsection number="16-6a-1407(2)(a)(i)"> one time in a newspaper of general circulation in: <subsection number="16-6a-1407(2)(a)(i)(A)"> the county where:<subsection number="16-6a-1407(2)(a)(i)(A)(I)"> the dissolved nonprofit corporation's principal office is located; or</subsection><subsection number="16-6a-1407(2)(a)(i)(A)(II)"> if the dissolved nonprofit corporation has no principal office in this state, its registered office is or was last located; or</subsection></subsection><subsection number="16-6a-1407(2)(a)(i)(B)"> if neither Subsection <xref depth="4" refnumber="16-6a-1407(2)(a)(i)(A)" start="0">(2)(a)(i)(A)</xref> or <xref depth="4" refnumber="16-6a-1407(2)(a)(i)(B)" start="0">(B)</xref> apply, Salt Lake County; and</subsection></subsection><subsection number="16-6a-1407(2)(a)(ii)"> as required in Section <xref depth="3" refnumber="45-1-101" start="0">45-1-101</xref>;</subsection></subsection><subsection number="16-6a-1407(2)(b)"> describe the information that shall be included in a claim;</subsection><subsection number="16-6a-1407(2)(c)"> provide an address at which any claim shall be given to the nonprofit corporation; and</subsection><subsection number="16-6a-1407(2)(d)"> state that unless sooner barred by any other statute limiting actions, a claim will be barred if an action to enforce the claim is not commenced within three years after publication of the notice.</subsection></subsection><subsection number="16-6a-1407(3)"> If the dissolved nonprofit corporation publishes a newspaper or website notice in accordance with Subsection <xref depth="4" refnumber="16-6a-1407(2)" start="0">(2)</xref>, then unless sooner barred under Section <xref depth="3" refnumber="16-6a-1406" start="0">16-6a-1406</xref> or under any other statute limiting actions, the claim of any claimant against the dissolved nonprofit corporation is barred unless the claimant commences an action to enforce the claim against the dissolved nonprofit corporation within three years after the publication date of the notice.</subsection><subsection number="16-6a-1407(4)"> For purposes of this section: <subsection number="16-6a-1407(4)(a)"> "claim" means any claim, including claims of this state, whether:<subsection number="16-6a-1407(4)(a)(i)"> known;</subsection><subsection number="16-6a-1407(4)(a)(ii)"> due or to become due;</subsection><subsection number="16-6a-1407(4)(a)(iii)"> absolute or contingent;</subsection><subsection number="16-6a-1407(4)(a)(iv)"> liquidated or unliquidated;</subsection><subsection number="16-6a-1407(4)(a)(v)"> founded on contract, tort, or other legal basis; or</subsection><subsection number="16-6a-1407(4)(a)(vi)"> otherwise; and</subsection></subsection><subsection number="16-6a-1407(4)(b)"> an action to enforce a claim includes:<subsection number="16-6a-1407(4)(b)(i)"> any civil action; and</subsection><subsection number="16-6a-1407(4)(b)(ii)"> any arbitration under any agreement for binding arbitration between the dissolved nonprofit corporation and the claimant.</subsection></subsection></subsection></section><section number="16-6a-1408"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Enforcement of claims against dissolved nonprofit corporation.</catchline><subsection number="16-6a-1408(1)"> Subject to Subsection <xref depth="4" refnumber="16-6a-1408(2)" start="0">(2)</xref>, a claim may be enforced under Section <xref depth="3" refnumber="16-6a-1406" start="0">16-6a-1406</xref> or <xref depth="3" refnumber="16-6a-1407" start="0">16-6a-1407</xref>: <subsection number="16-6a-1408(1)(a)"> against the dissolved nonprofit corporation to the extent of its undistributed assets; and</subsection><subsection number="16-6a-1408(1)(b)"> if assets have been distributed in liquidation, against any person, other than a creditor of the nonprofit corporation, to whom the nonprofit corporation distributed its property.</subsection></subsection><subsection number="16-6a-1408(2)"> Notwithstanding Subsection <xref depth="4" refnumber="16-6a-1408(1)" start="0">(1)</xref>, a distributee's total liability for all claims under this section may not exceed the total value of assets distributed to the distributee, as the value is determined at the time of distribution.</subsection><subsection number="16-6a-1408(3)"><subsection number="16-6a-1408(3)(a)"> A distributee required to return any portion of the value of assets received by the distributee in liquidation shall be entitled to contribution from all other distributees.</subsection><subsection number="16-6a-1408(3)(b)"> Each contribution under Subsection <xref depth="4" refnumber="16-6a-1408(3)(a)" start="0">(3)(a)</xref>:<subsection number="16-6a-1408(3)(b)(i)"> shall be in accordance with the contributing distributee's rights and interests; and</subsection><subsection number="16-6a-1408(3)(b)(ii)"> may not exceed the value of the assets received by the contributing distributee in liquidation.</subsection></subsection></subsection></section><section number="16-6a-1409"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Service on dissolved nonprofit corporation.</catchline><subsection number="16-6a-1409(1)"> A dissolved nonprofit corporation shall: <subsection number="16-6a-1409(1)(a)"> maintain a registered agent to accept service of process on its behalf; or</subsection><subsection number="16-6a-1409(1)(b)"> be considered to have authorized service of process on it by registered or certified mail, return receipt requested, to:<subsection number="16-6a-1409(1)(b)(i)"> the address of its principal office, if any: <subsection number="16-6a-1409(1)(b)(i)(A)"> as set forth in its articles of dissolution; or</subsection><subsection number="16-6a-1409(1)(b)(i)(B)"> as last changed by notice delivered to the division for filing; or</subsection></subsection><subsection number="16-6a-1409(1)(b)(ii)"> the address for service of process that: <subsection number="16-6a-1409(1)(b)(ii)(A)"> is stated in its articles of dissolution; or</subsection><subsection number="16-6a-1409(1)(b)(ii)(B)"> as last changed by notice delivered to the division for filing.</subsection></subsection></subsection></subsection><subsection number="16-6a-1409(2)"> Service effected pursuant to Subsection <xref depth="4" refnumber="16-6a-1409(1)(b)" start="0">(1)(b)</xref> is perfected at the earliest of: <subsection number="16-6a-1409(2)(a)"> the date the dissolved nonprofit corporation receives the process, notice, or demand;</subsection><subsection number="16-6a-1409(2)(b)"> the date shown on the return receipt, if signed on behalf of the dissolved nonprofit corporation; or</subsection><subsection number="16-6a-1409(2)(c)"> five days after mailing.</subsection></subsection><subsection number="16-6a-1409(3)"> Subsection <xref depth="4" refnumber="16-6a-1409(1)" start="0">(1)</xref> does not prescribe the only means, or necessarily the required means, of serving a dissolved nonprofit corporation.</subsection></section><section number="16-6a-1414"><enddate type="SC">1/1/2027</enddate><histories><history>Amended by Chapter <modchap sess="2025GS">173</modchap>, 2025 General Session</history><modyear>2025</modyear></histories><catchline>Grounds and procedure for judicial dissolution.</catchline><subsection number="16-6a-1414(1)">The attorney general or the division director may bring an action in a court with jurisdiction under Title 78A, Judiciary and Judicial Administration, to dissolve a nonprofit corporation if it is established that:<subsection number="16-6a-1414(1)(a)">the nonprofit corporation obtained the nonprofit corporation's articles of incorporation through fraud; or</subsection><subsection number="16-6a-1414(1)(b)">the nonprofit corporation has continued to exceed or abuse the authority conferred upon the nonprofit corporation by law.</subsection></subsection><subsection number="16-6a-1414(2)">A member or director of a nonprofit corporation may bring an action in a court with jurisdiction under Title 78A, Judiciary and Judicial Administration, to dissolve the nonprofit corporation if it is established that:<subsection number="16-6a-1414(2)(a)"><subsection number="16-6a-1414(2)(a)(i)">the directors are deadlocked in the management of the corporate affairs;</subsection><subsection number="16-6a-1414(2)(a)(ii)">the members, if any, are unable to break the deadlock; and</subsection><subsection number="16-6a-1414(2)(a)(iii)">irreparable injury to the nonprofit corporation is threatened or being suffered;</subsection></subsection><subsection number="16-6a-1414(2)(b)">the directors or those in control of the nonprofit corporation have acted, are acting, or will act in a manner that is illegal, oppressive, or fraudulent;</subsection><subsection number="16-6a-1414(2)(c)">the members are deadlocked in voting power and have failed, for a period that includes at least two consecutive annual meeting dates, to elect successors to directors whose terms have expired or would have expired upon the election of their successors; or</subsection><subsection number="16-6a-1414(2)(d)">the corporate assets are being misapplied or wasted.</subsection></subsection><subsection number="16-6a-1414(3)">A creditor may bring an action in a court with jurisdiction under Title 78A, Judiciary and Judicial Administration, to dissolve a nonprofit corporation if it is established that:<subsection number="16-6a-1414(3)(a)"><subsection number="16-6a-1414(3)(a)(i)">the creditor's claim has been reduced to judgment;</subsection><subsection number="16-6a-1414(3)(a)(ii)">the execution on the judgment has been returned unsatisfied; and</subsection><subsection number="16-6a-1414(3)(a)(iii)">the nonprofit corporation is insolvent; or</subsection></subsection><subsection number="16-6a-1414(3)(b)"><subsection number="16-6a-1414(3)(b)(i)">the nonprofit corporation is insolvent; and</subsection><subsection number="16-6a-1414(3)(b)(ii)">the nonprofit corporation has admitted in writing that the creditor's claim is due and owing.</subsection></subsection></subsection><subsection number="16-6a-1414(4)"><subsection number="16-6a-1414(4)(a)">As used in this Subsection (4):<subsection number="16-6a-1414(4)(a)(i)"><subsection number="16-6a-1414(4)(a)(i)(A)">"Misconduct claim" means:<subsection number="16-6a-1414(4)(a)(i)(A)(I)">a claim for wrongful death, fraud, breach of public trust, or an intentional tort; or</subsection><subsection number="16-6a-1414(4)(a)(i)(A)(II)">a claim regarding criminal conduct by a director, member, or employee of the nonprofit corporation that is a felony offense or an offense described in Title 76, Chapter 5, Part 4, Sexual Offenses, Title 76, Chapter 5b, Sexual Exploitation Act, or Section <xref depth="3" refnumber="76-7-102">76-7-102</xref>.</subsection></subsection><subsection number="16-6a-1414(4)(a)(i)(B)">"Misconduct claim" does not include a claim regarding criminal conduct by a director, member, or employee of the nonprofit corporation that is an offense described in Section <xref depth="3" refnumber="76-5-417">76-5-417</xref> or <xref depth="3" refnumber="76-5-420">76-5-420</xref>.</subsection></subsection><subsection number="16-6a-1414(4)(a)(ii)">"Nonprofit corporation" does not include a bona fide church or religious organization.</subsection></subsection><subsection number="16-6a-1414(4)(b)">If a person brings a misconduct claim in an action against a nonprofit corporation, the person may also bring an action to dissolve the nonprofit corporation.</subsection><subsection number="16-6a-1414(4)(c)">If a person brings a dissolution action under Subsection (4)(b), the court may only dissolve the nonprofit corporation if the court finds the nonprofit corporation is liable for the misconduct claim.</subsection><subsection number="16-6a-1414(4)(d)">Upon a motion by the plaintiff in a dissolution action described in Subsection (4)(b), the court may:<subsection number="16-6a-1414(4)(d)(i)">issue an injunction preventing the nonprofit corporation from selling or disposing of any assets held by the nonprofit corporation; and</subsection><subsection number="16-6a-1414(4)(d)(ii)">require the nonprofit corporation to deposit funds, or post a bond, with the court for the amount of damages pleaded in the complaint.</subsection></subsection><subsection number="16-6a-1414(4)(e)">The court may void a transaction that is made by the nonprofit corporation within 12 months before the day on which the action was filed with the court if the court finds that the transaction is voidable under Section <xref depth="3" refnumber="25-6-202">25-6-202</xref>.</subsection></subsection><subsection number="16-6a-1414(5)">If an action is brought under this section, it is not necessary to make directors or members parties to the action to dissolve the nonprofit corporation unless relief is sought against the members individually.</subsection><subsection number="16-6a-1414(6)">In an action under this section, the court may:<subsection number="16-6a-1414(6)(a)">issue injunctions;</subsection><subsection number="16-6a-1414(6)(b)">appoint a receiver or a custodian pendente lite with all powers and duties the court directs; or</subsection><subsection number="16-6a-1414(6)(c)">take other action required to preserve the nonprofit corporation's assets wherever located and carry on the business of the nonprofit corporation until a full hearing can be held.</subsection></subsection><subsection number="16-6a-1414(7)">If a nonprofit corporation has been dissolved by voluntary or another action taken under this part:<subsection number="16-6a-1414(7)(a)">the nonprofit corporation may bring a proceeding to wind up and liquidate its business and affairs under judicial supervision in accordance with Section <xref depth="3" refnumber="16-6a-1405">16-6a-1405</xref>; and</subsection><subsection number="16-6a-1414(7)(b)">the attorney general, a director, a member, a creditor, or a plaintiff under Subsection (4) may bring a proceeding to wind up and liquidate the affairs of the nonprofit corporation under judicial supervision in accordance with Section <xref depth="3" refnumber="16-6a-1405">16-6a-1405</xref>, upon establishing the grounds set forth in Subsections (1) through (4).</subsection></subsection></section><section number="16-6a-1414"><effdate>1/1/2027</effdate><histories><history>Amended by Chapter <modchap sess="2026GS">445</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Grounds and procedure for judicial dissolution.</catchline><subsection number="16-6a-1414(1)">The attorney general or the division director may bring an action in a court with jurisdiction under Title 78A, Judiciary and Judicial Administration, to dissolve a nonprofit corporation if it is established that:<subsection number="16-6a-1414(1)(a)">the nonprofit corporation obtained the nonprofit corporation's articles of incorporation through fraud; or</subsection><subsection number="16-6a-1414(1)(b)">the nonprofit corporation has continued to exceed or abuse the authority conferred upon the nonprofit corporation by law.</subsection></subsection><subsection number="16-6a-1414(2)">A member or director of a nonprofit corporation may bring an action in a court with jurisdiction under Title 78A, Judiciary and Judicial Administration, to dissolve the nonprofit corporation if it is established that:<subsection number="16-6a-1414(2)(a)"><subsection number="16-6a-1414(2)(a)(i)">the directors are deadlocked in the management of the corporate affairs;</subsection><subsection number="16-6a-1414(2)(a)(ii)">the members, if any, are unable to break the deadlock; and</subsection><subsection number="16-6a-1414(2)(a)(iii)">irreparable injury to the nonprofit corporation is threatened or being suffered;</subsection></subsection><subsection number="16-6a-1414(2)(b)">the directors or those in control of the nonprofit corporation have acted, are acting, or will act in a manner that is illegal, oppressive, or fraudulent;</subsection><subsection number="16-6a-1414(2)(c)">the members are deadlocked in voting power and have failed, for a period that includes at least two consecutive annual meeting dates, to elect successors to directors whose terms have expired or would have expired upon the election of their successors; or</subsection><subsection number="16-6a-1414(2)(d)">the corporate assets are being misapplied or wasted.</subsection></subsection><subsection number="16-6a-1414(3)">A creditor may bring an action in a court with jurisdiction under Title 78A, Judiciary and Judicial Administration, to dissolve a nonprofit corporation if it is established that:<subsection number="16-6a-1414(3)(a)"><subsection number="16-6a-1414(3)(a)(i)">the creditor's claim has been reduced to judgment;</subsection><subsection number="16-6a-1414(3)(a)(ii)">the execution on the judgment has been returned unsatisfied; and</subsection><subsection number="16-6a-1414(3)(a)(iii)">the nonprofit corporation is insolvent; or</subsection></subsection><subsection number="16-6a-1414(3)(b)"><subsection number="16-6a-1414(3)(b)(i)">the nonprofit corporation is insolvent; and</subsection><subsection number="16-6a-1414(3)(b)(ii)">the nonprofit corporation has admitted in writing that the creditor's claim is due and owing.</subsection></subsection></subsection><subsection number="16-6a-1414(4)"><subsection number="16-6a-1414(4)(a)">As used in this Subsection <xref depth="4" refnumber="16-6a-1414(4)">(4)</xref>:<subsection number="16-6a-1414(4)(a)(i)">"Misconduct claim" means:<subsection number="16-6a-1414(4)(a)(i)(A)">a claim for wrongful death, fraud, breach of public trust, or an intentional tort; or</subsection><subsection number="16-6a-1414(4)(a)(i)(B)">a claim regarding criminal conduct by a director, member, or employee of the nonprofit corporation that is a felony offense or an offense described in Title 76, Chapter 5, Part 4, Sexual Offenses, Title 76, Chapter 5b, Sexual Exploitation Act, or Section <xref depth="3" refnumber="76-7-102">76-7-102</xref>.</subsection></subsection><subsection number="16-6a-1414(4)(a)(ii)">"Nonprofit corporation" does not include a bona fide church or religious organization.</subsection></subsection><subsection number="16-6a-1414(4)(b)">If a person brings a misconduct claim in an action against a nonprofit corporation, the person may also bring an action to dissolve the nonprofit corporation.</subsection><subsection number="16-6a-1414(4)(c)">If a person brings a dissolution action under Subsection <xref depth="4" refnumber="16-6a-1414(4)(b)">(4)(b)</xref>, the court may only dissolve the nonprofit corporation if the court finds the nonprofit corporation is liable for the misconduct claim.</subsection><subsection number="16-6a-1414(4)(d)">Upon a motion by the plaintiff in a dissolution action described in Subsection <xref depth="4" refnumber="16-6a-1414(4)(b)">(4)(b)</xref>, the court may:<subsection number="16-6a-1414(4)(d)(i)">issue an injunction preventing the nonprofit corporation from selling or disposing of any assets held by the nonprofit corporation; and</subsection><subsection number="16-6a-1414(4)(d)(ii)">require the nonprofit corporation to deposit funds, or post a bond, with the court for the amount of damages pleaded in the complaint.</subsection></subsection><subsection number="16-6a-1414(4)(e)">The court may void a transaction that is made by the nonprofit corporation within 12 months before the day on which the action was filed with the court if the court finds that the transaction is voidable under Section <xref depth="3" refnumber="25-6-202">25-6-202</xref>.</subsection></subsection><subsection number="16-6a-1414(5)">If an action is brought under this section, it is not necessary to make directors or members parties to the action to dissolve the nonprofit corporation unless relief is sought against the members individually.</subsection><subsection number="16-6a-1414(6)">In an action under this section, the court may:<subsection number="16-6a-1414(6)(a)">issue injunctions;</subsection><subsection number="16-6a-1414(6)(b)">appoint a receiver or a custodian pendente lite with all powers and duties the court directs; or</subsection><subsection number="16-6a-1414(6)(c)">take other action required to preserve the nonprofit corporation's assets wherever located and carry on the business of the nonprofit corporation until a full hearing can be held.</subsection></subsection><subsection number="16-6a-1414(7)">If a nonprofit corporation has been dissolved by voluntary or another action taken under this part:<subsection number="16-6a-1414(7)(a)">the nonprofit corporation may bring a proceeding to wind up and liquidate its business and affairs under judicial supervision in accordance with Section <xref depth="3" refnumber="16-6a-1405">16-6a-1405</xref>; and</subsection><subsection number="16-6a-1414(7)(b)">the attorney general, a director, a member, a creditor, or a plaintiff under Subsection <xref depth="4" refnumber="16-6a-1414(4)">(4)</xref> may bring a proceeding to wind up and liquidate the affairs of the nonprofit corporation under judicial supervision in accordance with Section <xref depth="3" refnumber="16-6a-1405">16-6a-1405</xref>, upon establishing the grounds set forth in Subsections <xref depth="4" refnumber="16-6a-1414(1)">(1)</xref> through <xref depth="4" refnumber="16-6a-1414(4)">(4)</xref>.</subsection></subsection></section><section number="16-6a-1416"><histories><history>Amended by Chapter <modchap sess="2024GS">331</modchap>, 2024 General Session</history><modyear>2024</modyear></histories><catchline>Receivership or custodianship.</catchline><subsection number="16-6a-1416(1)">As used in this section:<subsection number="16-6a-1416(1)(a)">"Decree of dissolution" includes an order of a court entered in a proceeding under Section <xref depth="3" refnumber="16-6a-1414">16-6a-1414</xref> that directs that the affairs of a nonprofit corporation be wound up and liquidated under judicial supervision.</subsection><subsection number="16-6a-1416(1)(b)">"Judicial proceeding to dissolve the nonprofit corporation" includes a proceeding brought under Section <xref depth="3" refnumber="16-6a-1414">16-6a-1414</xref>.</subsection></subsection><subsection number="16-6a-1416(2)"><subsection number="16-6a-1416(2)(a)">A court in a judicial proceeding brought to dissolve a nonprofit corporation may appoint:<subsection number="16-6a-1416(2)(a)(i)">one or more receivers to wind up and liquidate the affairs of the nonprofit corporation; or</subsection><subsection number="16-6a-1416(2)(a)(ii)">one or more custodians to manage the affairs of the nonprofit corporation.</subsection></subsection><subsection number="16-6a-1416(2)(b)">Before appointing a receiver or custodian, the court shall hold a hearing, after giving notice to:<subsection number="16-6a-1416(2)(b)(i)">all parties to the proceeding; and</subsection><subsection number="16-6a-1416(2)(b)(ii)">any interested persons designated by the court.</subsection></subsection><subsection number="16-6a-1416(2)(c)">The court appointing a receiver or custodian has exclusive jurisdiction over the nonprofit corporation and all of its property, wherever located.</subsection><subsection number="16-6a-1416(2)(d)">The court may appoint as a receiver or custodian:<subsection number="16-6a-1416(2)(d)(i)">an individual;</subsection><subsection number="16-6a-1416(2)(d)(ii)">a domestic or foreign corporation authorized to conduct affairs in this state; or</subsection><subsection number="16-6a-1416(2)(d)(iii)">a domestic or foreign nonprofit corporation authorized to conduct affairs in this state.</subsection></subsection><subsection number="16-6a-1416(2)(e)">The court may require the receiver or custodian to post bond, with or without sureties, in an amount specified by the court.</subsection></subsection><subsection number="16-6a-1416(3)">The court shall describe the powers and duties of the receiver or custodian in its appointing order that may be amended from time to time. Among other powers the receiver shall have the power to:<subsection number="16-6a-1416(3)(a)">dispose of all or any part of the property of the nonprofit corporation, wherever located:<subsection number="16-6a-1416(3)(a)(i)">at a public or private sale; and</subsection><subsection number="16-6a-1416(3)(a)(ii)">if authorized by the court; and</subsection></subsection><subsection number="16-6a-1416(3)(b)">sue and defend in the receiver's own name as receiver of the nonprofit corporation in all courts.</subsection></subsection><subsection number="16-6a-1416(4)">The custodian may exercise all of the powers of the nonprofit corporation, through or in place of its board of directors or officers, to the extent necessary to manage the affairs of the nonprofit corporation in the best interests of its members and creditors.</subsection><subsection number="16-6a-1416(5)">If doing so is in the best interests of the nonprofit corporation and its members and creditors, the court may:<subsection number="16-6a-1416(5)(a)">during a receivership, redesignate the receiver as a custodian; and</subsection><subsection number="16-6a-1416(5)(b)">during a custodianship, redesignate the custodian as a receiver.</subsection></subsection><subsection number="16-6a-1416(6)">The court from time to time during the receivership or custodianship may order compensation paid and expense disbursements or reimbursements made from the assets of the nonprofit corporation or proceeds from the sale of the assets to:<subsection number="16-6a-1416(6)(a)">the receiver;</subsection><subsection number="16-6a-1416(6)(b)">the custodian; or</subsection><subsection number="16-6a-1416(6)(c)">the receiver's or custodian's attorney.</subsection></subsection></section><section number="16-6a-1417"><histories><history>Amended by Chapter <modchap sess="2024GS">331</modchap>, 2024 General Session</history><modyear>2024</modyear></histories><catchline>Decree of dissolution.</catchline><subsection number="16-6a-1417(1)">As used in this section:<subsection number="16-6a-1417(1)(a)">"Decree of dissolution" includes an order of a court entered in a proceeding under Section <xref depth="3" refnumber="16-6a-1414">16-6a-1414</xref> that directs that the affairs of a nonprofit corporation be wound up and liquidated under judicial supervision.</subsection><subsection number="16-6a-1417(1)(b)">"Judicial proceeding to dissolve the nonprofit corporation" includes a proceeding brought under Section <xref depth="3" refnumber="16-6a-1414">16-6a-1414</xref>.</subsection></subsection><subsection number="16-6a-1417(2)">If after a hearing the court determines that one or more grounds for judicial dissolution described in Section <xref depth="3" refnumber="16-6a-1414">16-6a-1414</xref> exist:<subsection number="16-6a-1417(2)(a)">the court may enter a decree:<subsection number="16-6a-1417(2)(a)(i)">dissolving the nonprofit corporation; and</subsection><subsection number="16-6a-1417(2)(a)(ii)">specifying the effective date of the dissolution; and</subsection></subsection><subsection number="16-6a-1417(2)(b)">the clerk of the court shall deliver a certified copy of the decree to the division which shall file it accordingly.</subsection></subsection><subsection number="16-6a-1417(3)">After entering the decree of dissolution, the court shall direct:<subsection number="16-6a-1417(3)(a)">the winding up and liquidation of the nonprofit corporation's affairs in accordance with Section <xref depth="3" refnumber="16-6a-1405">16-6a-1405</xref>; and</subsection><subsection number="16-6a-1417(3)(b)">the giving of notice to:<subsection number="16-6a-1417(3)(b)(i)"><subsection number="16-6a-1417(3)(b)(i)(A)">the nonprofit corporation's registered agent; or</subsection><subsection number="16-6a-1417(3)(b)(i)(B)">the division if it has no registered agent; and</subsection></subsection><subsection number="16-6a-1417(3)(b)(ii)">to claimants in accordance with Sections <xref depth="3" refnumber="16-6a-1406">16-6a-1406</xref> and <xref depth="3" refnumber="16-6a-1407">16-6a-1407</xref>.</subsection></subsection></subsection><subsection number="16-6a-1417(4)">The court's order or decision may be appealed as in other civil proceedings.</subsection></section><section number="16-6a-1418"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Dissolution upon expiration of period of duration.</catchline><subsection number="16-6a-1418(1)"> A nonprofit corporation shall be dissolved upon and by reason of the expiration of its period of duration, if any, stated in its articles of incorporation.</subsection><subsection number="16-6a-1418(2)"> For purposes of this section: <subsection number="16-6a-1418(2)(a)"> a provision in the articles of incorporation is considered a provision for a period of duration if it is to the effect that the nonprofit corporation or its existence shall be terminated:<subsection number="16-6a-1418(2)(a)(i)"> at a specified date;</subsection><subsection number="16-6a-1418(2)(a)(ii)"> after a stated period of time;</subsection><subsection number="16-6a-1418(2)(a)(iii)"> upon a contingency; or</subsection><subsection number="16-6a-1418(2)(a)(iv)"> any event similar to those described in Subsections <xref depth="4" refnumber="16-6a-1418(2)(a)(i)" start="0">(2)(a)(i)</xref> through <xref depth="4" refnumber="16-6a-1418(2)(a)(iii)" start="0">(iii)</xref>; and</subsection></subsection><subsection number="16-6a-1418(2)(b)"> the following shall be considered to be the expiration of the nonprofit corporation's period of duration:<subsection number="16-6a-1418(2)(b)(i)"> the occurrence of the specified date;</subsection><subsection number="16-6a-1418(2)(b)(ii)"> the expiration of the stated period of time;</subsection><subsection number="16-6a-1418(2)(b)(iii)"> the occurrence of the contingency; or</subsection><subsection number="16-6a-1418(2)(b)(iv)"> the satisfaction of the provision described in Subsection <xref depth="4" refnumber="16-6a-1418(2)(a)(iv)" start="0">(2)(a)(iv)</xref>.</subsection></subsection></subsection></section><section number="16-6a-1419"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Deposit with state treasurer.</catchline><tab/>Assets of a dissolved nonprofit corporation that are to be transferred to a creditor, claimant, or member of the nonprofit corporation shall be reduced to cash and deposited with the state treasurer in accordance with <xref depth="1" refnumber="67-4a" start="0">Title 67, Chapter 4a, Revised Uniform Unclaimed Property Act</xref>, if the creditor, claimant, or member:<subsection number="16-6a-1419(1)"> cannot be found; or</subsection><subsection number="16-6a-1419(2)"> is not legally competent to receive the assets.</subsection></section></part><part number="16-6a-16"><catchline>Records, Information, and Reports</catchline><section number="16-6a-1601"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Corporate records.</catchline><subsection number="16-6a-1601(1)">A nonprofit corporation shall keep as permanent records:<subsection number="16-6a-1601(1)(a)">minutes of all meetings of its members and board of directors;</subsection><subsection number="16-6a-1601(1)(b)">a record of all actions taken by the members or board of directors without a meeting;</subsection><subsection number="16-6a-1601(1)(c)">a record of all actions taken by a committee of the board of directors in place of the board of directors on behalf of the nonprofit corporation; and</subsection><subsection number="16-6a-1601(1)(d)">a record of all waivers of notices of meetings of members and of the board of directors or any committee of the board of directors.</subsection></subsection><subsection number="16-6a-1601(2)">A nonprofit corporation shall maintain appropriate accounting records.</subsection><subsection number="16-6a-1601(3)">A nonprofit corporation or its agent shall maintain a record of its members in a form that permits preparation of a list of the name and address of all members:<subsection number="16-6a-1601(3)(a)">in alphabetical order, by class; and</subsection><subsection number="16-6a-1601(3)(b)">showing the number of votes each member is entitled to vote.</subsection></subsection><subsection number="16-6a-1601(4)">A nonprofit corporation shall maintain its records in written form or in another form capable of conversion into written form within a reasonable time.</subsection><subsection number="16-6a-1601(5)">A nonprofit corporation shall keep a copy of each of the following records at its principal office:<subsection number="16-6a-1601(5)(a)">its articles of incorporation;</subsection><subsection number="16-6a-1601(5)(b)">its bylaws;</subsection><subsection number="16-6a-1601(5)(c)">resolutions adopted by its board of directors relating to the characteristics, qualifications, rights, limitations, and obligations of members or any class or category of members;</subsection><subsection number="16-6a-1601(5)(d)">the minutes of all members' meetings for a period of three years;</subsection><subsection number="16-6a-1601(5)(e)">records of all action taken by members without a meeting, for a period of three years;</subsection><subsection number="16-6a-1601(5)(f)">all written communications to members generally as members for a period of three years;</subsection><subsection number="16-6a-1601(5)(g)">a list of the names and business or home addresses of its current directors and officers;</subsection><subsection number="16-6a-1601(5)(h)">a copy of its most recent annual report delivered to the division under Section <xref depth="3" refnumber="16-1a-212">16-1a-212</xref>; and</subsection><subsection number="16-6a-1601(5)(i)">all financial statements prepared for periods ending during the last three years that a member could have requested under Section <xref depth="3" refnumber="16-6a-1606" start="0">16-6a-1606</xref>.</subsection></subsection></section><section number="16-6a-1602"><histories><history>Amended by Chapter <modchap sess="2024GS">519</modchap>, 2024 General Session</history><modyear>2024</modyear></histories><catchline>Inspection of records by directors and members.</catchline><subsection number="16-6a-1602(1)">A director or member is entitled to inspect and copy any of the records of the nonprofit corporation described in Subsection <xref depth="4" refnumber="16-6a-1601(5)">16-6a-1601(5)</xref>:<subsection number="16-6a-1602(1)(a)">during regular business hours;</subsection><subsection number="16-6a-1602(1)(b)">at the nonprofit corporation's principal office; and</subsection><subsection number="16-6a-1602(1)(c)">if the director or member gives the nonprofit corporation written demand, at least five business days before the date on which the member wishes to inspect and copy the records.</subsection></subsection><subsection number="16-6a-1602(2)">In addition to the rights set forth in Subsection (1), a director or member is entitled to inspect and copy any of the other records of the nonprofit corporation described in Subsections <xref depth="4" refnumber="16-6a-1601(1)">16-6a-1601(1)</xref> through (3):<subsection number="16-6a-1602(2)(a)">during regular business hours;</subsection><subsection number="16-6a-1602(2)(b)">at a reasonable location specified by the nonprofit corporation; and</subsection><subsection number="16-6a-1602(2)(c)">at least five business days before the date on which the member wishes to inspect and copy the records, if the director or member:<subsection number="16-6a-1602(2)(c)(i)">meets the requirements of Subsection (3); and</subsection><subsection number="16-6a-1602(2)(c)(ii)">gives the nonprofit corporation written demand.</subsection></subsection></subsection><subsection number="16-6a-1602(3)">A director or member may inspect and copy the records described in Subsections (1) and (2) only if:<subsection number="16-6a-1602(3)(a)">the demand is made:<subsection number="16-6a-1602(3)(a)(i)">in good faith; and</subsection><subsection number="16-6a-1602(3)(a)(ii)">for a proper purpose;</subsection></subsection><subsection number="16-6a-1602(3)(b)">the director or member describes with reasonable particularity the purpose and the records the director or member desires to inspect; and</subsection><subsection number="16-6a-1602(3)(c)">the records are directly connected with the described purpose.</subsection></subsection><subsection number="16-6a-1602(4)">Notwithstanding Section <xref depth="3" refnumber="16-6a-102">16-6a-102</xref>, for purposes of this section:<subsection number="16-6a-1602(4)(a)">"member" includes:<subsection number="16-6a-1602(4)(a)(i)">a beneficial owner whose membership interest is held in a voting trust; and</subsection><subsection number="16-6a-1602(4)(a)(ii)">any other beneficial owner of a membership interest who establishes beneficial ownership; and</subsection></subsection><subsection number="16-6a-1602(4)(b)">"proper purpose" means a purpose reasonably related to the demanding member's or director's interest as a member or director.</subsection></subsection><subsection number="16-6a-1602(5)">The right of inspection granted by this section may not be abolished or limited by the articles of incorporation or bylaws.</subsection><subsection number="16-6a-1602(6)">This section does not affect:<subsection number="16-6a-1602(6)(a)">the right of a director or member to inspect records under Section <xref depth="3" refnumber="16-6a-710">16-6a-710</xref>;</subsection><subsection number="16-6a-1602(6)(b)">the right of a member to inspect records to the same extent as any other litigant if the member is in litigation with the nonprofit corporation; or</subsection><subsection number="16-6a-1602(6)(c)">the power of a court, independent of this chapter, to compel the production of corporate records for examination.</subsection></subsection><subsection number="16-6a-1602(7)">A director or member may not use any information obtained through the inspection or copying of records permitted by Subsection (2) for any purposes other than those set forth in a demand made under Subsection (3).</subsection></section><section number="16-6a-1603"><histories><history>Amended by Chapter <modchap sess="2010GS">218</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Scope of inspection right.</catchline><subsection number="16-6a-1603(1)"> A director's or member's agent or attorney has the same inspection and copying rights as the director or member.</subsection><subsection number="16-6a-1603(2)"> The right to copy records under Section <xref depth="3" refnumber="16-6a-1602" start="0">16-6a-1602</xref> includes, if reasonable, the right to receive copies made by photographic, xerographic, electronic, or other means.</subsection><subsection number="16-6a-1603(3)"> Except as provided in Section <xref depth="3" refnumber="16-6a-1606" start="0">16-6a-1606</xref>, the nonprofit corporation may impose a reasonable charge covering the costs of labor and material for copies of any documents provided to the director or member. The charge may not exceed the estimated cost of production and reproduction of the records.</subsection><subsection number="16-6a-1603(4)"> The nonprofit corporation may comply with a director's or member's demand to inspect the record of members under Subsection <xref depth="4" refnumber="16-6a-1601(3)" start="0">16-6a-1601(3)</xref> by furnishing to the director or member a list of directors or members that: <subsection number="16-6a-1603(4)(a)"> complies with Subsection <xref depth="4" refnumber="16-6a-1601(3)" start="0">16-6a-1601(3)</xref>; and</subsection><subsection number="16-6a-1603(4)(b)"> is compiled no earlier than the date of the director's or member's demand.</subsection></subsection></section><section number="16-6a-1604"><histories><history>Amended by Chapter <modchap sess="2023GS">401</modchap>, 2023 General Session</history><modyear>2023</modyear></histories><catchline>Court-ordered inspection of corporate records.</catchline><subsection number="16-6a-1604(1)"><subsection number="16-6a-1604(1)(a)"> A director or member may bring a petition in a court with jurisdiction under <xref depth="0" refnumber="78A" start="0">Title 78A, Judiciary and Judicial Administration</xref>, against a nonprofit corporation if:<subsection number="16-6a-1604(1)(a)(i)"> the nonprofit corporation refuses to allow a director or member, or the director's or member's agent or attorney, to inspect or copy any records that the director or member is entitled to inspect or copy under Subsection <xref depth="4" refnumber="16-6a-1602(1)" start="0">16-6a-1602(1)</xref>; and</subsection><subsection number="16-6a-1604(1)(a)(ii)"> the director or member complies with Subsection <xref depth="4" refnumber="16-6a-1602(1)" start="0">16-6a-1602(1)</xref>.</subsection></subsection><subsection number="16-6a-1604(1)(b)"> If a petition is filed under Subsection <xref depth="4" refnumber="16-6a-1604(1)(a)" start="0">(1)(a)</xref>, the court may summarily order the inspection or copying of the records demanded at the nonprofit corporation's expense on an expedited basis.</subsection></subsection><subsection number="16-6a-1604(2)"><subsection number="16-6a-1604(2)(a)"> A director or member may bring a petition in a court with jurisdiction under <xref depth="0" refnumber="78A" start="0">Title 78A, Judiciary and Judicial Administration</xref>, against a nonprofit corporation if:<subsection number="16-6a-1604(2)(a)(i)"> the nonprofit corporation refuses to allow a director or member, or the director's or member's agent or attorney, to inspect or copy any records that the director or member is entitled to inspect or copy pursuant to Subsections <xref depth="4" refnumber="16-6a-1602(2)" start="0">16-6a-1602(2)</xref> and <xref depth="4" refnumber="16-6a-1602(3)" start="0">(3)</xref> within a reasonable time following the director's or member's demand; and</subsection><subsection number="16-6a-1604(2)(a)(ii)"> the director or member complies with Subsections <xref depth="4" refnumber="16-6a-1602(2)" start="0">16-6a-1602(2)</xref> and <xref depth="4" refnumber="16-6a-1602(3)" start="0">(3)</xref>.</subsection></subsection><subsection number="16-6a-1604(2)(b)"> If a petition is brought under Subsection <xref depth="4" refnumber="16-6a-1604(2)(a)" start="0">(2)(a)</xref>, the court may summarily order the inspection or copying of the records demanded.</subsection></subsection><subsection number="16-6a-1604(3)"> If a court orders inspection or copying of the records demanded under Subsection <xref depth="4" refnumber="16-6a-1604(1)" start="0">(1)</xref> or <xref depth="4" refnumber="16-6a-1604(2)" start="0">(2)</xref>, unless the nonprofit corporation proves that the nonprofit corporation refused inspection or copying in good faith because the nonprofit corporation had a reasonable basis for doubt about the right of the director or member, or the director's or member's agent or attorney, to inspect or copy the records demanded: <subsection number="16-6a-1604(3)(a)"> the court shall also order the nonprofit corporation to pay the director's or member's costs, including reasonable counsel fees, incurred to obtain the order;</subsection><subsection number="16-6a-1604(3)(b)"> the court may order the nonprofit corporation to pay the director or member for any damages the member incurred;</subsection><subsection number="16-6a-1604(3)(c)"> if inspection or copying is ordered pursuant to Subsection <xref depth="4" refnumber="16-6a-1604(2)" start="0">(2)</xref>, the court may order the nonprofit corporation to pay the director's or member's inspection and copying expenses; and</subsection><subsection number="16-6a-1604(3)(d)"> the court may grant the director or member any other remedy provided by law.</subsection></subsection><subsection number="16-6a-1604(4)"> If a court orders inspection or copying of records demanded, the court may impose reasonable restrictions on the use or distribution of the records by the demanding director or member.</subsection></section><section number="16-6a-1605"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Limitations on use of membership list.</catchline><subsection number="16-6a-1605(1)"> Without consent of the board of directors, a membership list or any part of a membership list may not be obtained or used by any person for any purpose unrelated to a member's interest as a member.</subsection><subsection number="16-6a-1605(2)"> Without limiting the generality of Subsection <xref depth="4" refnumber="16-6a-1605(1)" start="0">(1)</xref>, without the consent of the board of directors, a membership list or any part of a membership list may not be: <subsection number="16-6a-1605(2)(a)"> used to solicit money or property unless the money or property will be used solely to solicit the votes of the members in an election to be held by the nonprofit corporation;</subsection><subsection number="16-6a-1605(2)(b)"> used for any commercial purpose; or</subsection><subsection number="16-6a-1605(2)(c)"> sold to or purchased by any person.</subsection></subsection></section><section number="16-6a-1606"><histories><history>Amended by Chapter <modchap sess="2002GS">197</modchap>, 2002 General Session</history><modyear>2002</modyear></histories><catchline>Financial statements.</catchline><tab/>By no later than 15 days after the day on which the nonprofit corporation receives a written request of any member, a nonprofit corporation shall mail to the member the following that show in reasonable detail the assets and liabilities and results of the operations of the nonprofit corporation:<subsection number="16-6a-1606(1)"> the nonprofit corporation's most recent annual financial statements, if any; and</subsection><subsection number="16-6a-1606(2)"> the nonprofit corporation's most recently published financial statements, if any.</subsection></section><section number="16-6a-1608"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Statement of person named as director or officer.</catchline><tab/>Any person named as a director or officer of a domestic or foreign nonprofit corporation in an annual report or other document on file with the division may, if that person does not hold the named position, deliver to the division for filing a statement setting forth:<subsection number="16-6a-1608(1)"> that person's name;</subsection><subsection number="16-6a-1608(2)"> the domestic or foreign nonprofit corporation's name;</subsection><subsection number="16-6a-1608(3)"> information sufficient to identify the report or other document in which the person is named as a director or officer; and</subsection><subsection number="16-6a-1608(4)"><subsection number="16-6a-1608(4)(a)"> the date on which the person ceased to be a director or officer of the domestic or foreign nonprofit corporation; or</subsection><subsection number="16-6a-1608(4)(b)"> a statement that the person did not hold the position for which the person was named in the corporate report or other document.</subsection></subsection></section><section number="16-6a-1609"><histories><history>Amended by Chapter <modchap sess="2023GS">401</modchap>, 2023 General Session</history><modyear>2023</modyear></histories><catchline>Interrogatories by division.</catchline><subsection number="16-6a-1609(1)"><subsection number="16-6a-1609(1)(a)"> The division may give interrogatories reasonably necessary to ascertain whether a nonprofit corporation has complied with the provisions of this chapter applicable to the nonprofit corporation to:<subsection number="16-6a-1609(1)(a)(i)"> any domestic or foreign nonprofit corporation subject to the provisions of this chapter; and</subsection><subsection number="16-6a-1609(1)(a)(ii)"> to any officer or director of a nonprofit corporation described in Subsection <xref depth="4" refnumber="16-6a-1609(1)(a)(i)" start="0">(1)(a)(i)</xref>.</subsection></subsection><subsection number="16-6a-1609(1)(b)"> The interrogatories described in this Subsection <xref depth="4" refnumber="16-6a-1609(1)" start="0">(1)</xref> shall be answered within:<subsection number="16-6a-1609(1)(b)(i)"> 30 days after the mailing of the interrogatories; or</subsection><subsection number="16-6a-1609(1)(b)(ii)"> additional time as fixed by the division.</subsection></subsection><subsection number="16-6a-1609(1)(c)"> The answers to the interrogatories shall be:<subsection number="16-6a-1609(1)(c)(i)"> full and complete; and</subsection><subsection number="16-6a-1609(1)(c)(ii)"> made in writing.</subsection></subsection><subsection number="16-6a-1609(1)(d)"><subsection number="16-6a-1609(1)(d)(i)"> If the interrogatories are directed to an individual, the interrogatories shall be answered by the individual.</subsection><subsection number="16-6a-1609(1)(d)(ii)"> If directed to a nonprofit corporation, the interrogatories shall be answered by: <subsection number="16-6a-1609(1)(d)(ii)(A)"> the chair of the board of directors of the nonprofit corporation;</subsection><subsection number="16-6a-1609(1)(d)(ii)(B)"> all of the nonprofit corporation's directors;</subsection><subsection number="16-6a-1609(1)(d)(ii)(C)"> one of the nonprofit corporation's officers; or</subsection><subsection number="16-6a-1609(1)(d)(ii)(D)"> any other person authorized to answer the interrogatories as the nonprofit corporation's agent.</subsection></subsection></subsection><subsection number="16-6a-1609(1)(e)"><subsection number="16-6a-1609(1)(e)(i)"> The division need not file any document to which the interrogatories relate until the interrogatories are answered as provided in this section.</subsection><subsection number="16-6a-1609(1)(e)(ii)"> Notwithstanding Subsection <xref depth="4" refnumber="16-6a-1609(1)(e)(i)" start="0">(1)(e)(i)</xref>, the division need not file a document to which the interrogatory relates if the answers to the interrogatory disclose that the document is not in conformity with the provisions of this chapter.</subsection></subsection><subsection number="16-6a-1609(1)(f)"> The division shall certify to the attorney general, for such action as the attorney general considers appropriate, all interrogatories and answers to interrogatories that disclose a violation of this chapter.</subsection></subsection><subsection number="16-6a-1609(2)"><subsection number="16-6a-1609(2)(a)"> Interrogatories given by the division under Subsection <xref depth="4" refnumber="16-6a-1609(1)" start="0">(1)</xref>, and the answers to interrogatories, may not be open to public inspection.</subsection><subsection number="16-6a-1609(2)(b)"> The division may not disclose any facts or information obtained from the interrogatories or answers to the interrogatories, except:<subsection number="16-6a-1609(2)(b)(i)"> as the official duties of the division may require the facts or information to be made public; or</subsection><subsection number="16-6a-1609(2)(b)(ii)"> in the event the interrogatories or the answers to the interrogatories are required for evidence in any criminal proceedings or in any other action by this state.</subsection></subsection></subsection><subsection number="16-6a-1609(3)"> Each domestic or foreign nonprofit corporation that knowingly fails or refuses to answer truthfully and fully, within the time prescribed by Subsection <xref depth="4" refnumber="16-6a-1609(1)" start="0">(1)</xref>, interrogatories given to the domestic or foreign nonprofit corporation by the division in accordance with Subsection <xref depth="4" refnumber="16-6a-1609(1)" start="0">(1)</xref> is guilty of a class C misdemeanor and, upon conviction, shall be punished by a fine of not more than $500.</subsection><subsection number="16-6a-1609(4)"> Each officer and director of a domestic or foreign nonprofit corporation who knowingly fails or refuses to answer truthfully and fully, within the time prescribed by Subsection <xref depth="4" refnumber="16-6a-1609(1)" start="0">(1)</xref>, interrogatories given to the officer or director by the division in accordance with Subsection <xref depth="4" refnumber="16-6a-1609(1)" start="0">(1)</xref> is guilty of a class B misdemeanor and, upon conviction, shall be punished by a fine of not more than $1,000.</subsection><subsection number="16-6a-1609(5)"> The attorney general may enforce this section by bringing an action in a court with jurisdiction under <xref depth="0" refnumber="78A" start="0">Title 78A, Judiciary and Judicial Administration</xref>.</subsection></section><section number="16-6a-1610"><histories><history>Enacted by Chapter <modchap sess="2002GS">197</modchap>, 2002 General Session</history><modyear>2002</modyear></histories><catchline>Scope of a member's right to inspect or receive copies.</catchline><tab/>Notwithstanding the other provisions of this part, unless otherwise provided in the bylaws, a right of a member to inspect or receive information from a nonprofit corporation that is created by this part applies only to a voting member of the nonprofit corporation. </section></part><part number="16-6a-17"><catchline>Transitional Provisions and Scope of Chapter</catchline><section number="16-6a-1701"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Application to existing domestic nonprofit corporations -- Reports of domestic and foreign nonprofit corporation.</catchline><subsection number="16-6a-1701(1)">Except as otherwise provided in Section <xref depth="3" refnumber="16-6a-1704" start="0">16-6a-1704</xref>, this chapter applies to domestic nonprofit corporations as follows:<subsection number="16-6a-1701(1)(a)">domestic nonprofit corporations in existence on April 30, 2001, that were incorporated under any general statute of this state providing for incorporation of nonprofit corporations, including all nonprofit corporations organized under any former provisions of <oldref depth="1" refnumber="16-6" start="0">Title 16, Chapter 6</oldref>;</subsection><subsection number="16-6a-1701(1)(b)">mutual irrigation, canal, ditch, reservoir, and water companies and water users' associations organized and existing under the laws of this state on April 30, 2001;</subsection><subsection number="16-6a-1701(1)(c)">corporations organized under the provisions of <xref depth="1" refnumber="16-7" start="0">Title 16, Chapter 7, Corporations Sole</xref>, for purposes of applying all provisions relating to merger or consolidation; and</subsection><subsection number="16-6a-1701(1)(d)">to actions taken by the directors, officers, and members of the entities described in Subsections <xref depth="4" refnumber="16-6a-1701(1)(a)" start="0">(1)(a)</xref>, <xref depth="4" refnumber="16-6a-1701(1)(b)" start="0">(b)</xref>, and <xref depth="4" refnumber="16-6a-1701(1)(c)" start="0">(c)</xref> after April 30, 2001.</subsection></subsection><subsection number="16-6a-1701(2)">Domestic nonprofit corporations to which this chapter applies, that are organized and existing under the laws of this state on April 30, 2001:<subsection number="16-6a-1701(2)(a)">shall continue in existence with all the rights and privileges applicable to nonprofit corporations organized under this chapter; and</subsection><subsection number="16-6a-1701(2)(b)">from April 30, 2001, shall have all the rights and privileges and shall be subject to all the remedies, restrictions, liabilities, and duties prescribed in this chapter except as otherwise specifically provided in this chapter.</subsection></subsection><subsection number="16-6a-1701(3)">Every existing domestic nonprofit corporation and foreign nonprofit corporation qualified to conduct affairs in this state on April 30, 2001, shall file an annual report with the division setting forth the information prescribed by Section <xref depth="3" refnumber="16-1a-212">16-1a-212</xref>. The annual report shall be filed at such time as would have been required had this chapter not taken effect and shall be filed annually thereafter as required in Section <xref depth="3" refnumber="16-1a-212">16-1a-212</xref>.</subsection></section><section number="16-6a-1702"><histories><history>Amended by Chapter <modchap sess="2014GS">189</modchap>, 2014 General Session</history><modyear>2014</modyear></histories><catchline>Application to foreign nonprofit corporations.</catchline><subsection number="16-6a-1702(1)"> A foreign nonprofit corporation authorized to conduct affairs in this state on April 30, 2001, is subject to this chapter, but is not required to obtain a new certificate of authority to conduct affairs under this chapter.</subsection><subsection number="16-6a-1702(2)"> A foreign nonprofit corporation that is qualified to do business in this state under the provisions of <oldref depth="1" refnumber="16-8" start="1">Chapter 8</oldref>, which provisions were repealed by <ext_ref type="Laws of Utah">Laws of Utah 1961, Chapter 28</ext_ref>, shall be authorized to transact business in this state subject to all of the limitations, restrictions, liabilities, and duties prescribed in this chapter.</subsection><subsection number="16-6a-1702(3)"> This chapter shall apply to all foreign nonprofit corporations sole qualified to do business in this state with respect to mergers and consolidations.</subsection></section><section number="16-6a-1703"><histories><history>Enacted by Chapter <modchap sess="2000GS">300</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Nonapplicability of chapter.</catchline><tab/>This chapter does not apply to:<subsection number="16-6a-1703(1)"> corporations sole, except with respect to mergers and consolidations; or</subsection><subsection number="16-6a-1703(2)"> domestic or foreign nonprofit corporations governed by <xref depth="1" refnumber="3-1" start="0">Title 3, Chapter 1, General Provisions Relating to Agricultural Cooperative Associations</xref>.</subsection></section><section number="16-6a-1704"><histories><history>Amended by Chapter <modchap sess="2001S1">13</modchap>, 2001 Special Session 1</history><modyear>2001</modyear><history>Amended by Chapter <modchap sess="200101">13</modchap>, 2001 Special Session 1</history><modyear>2001</modyear></histories><catchline>Saving provisions.</catchline><subsection number="16-6a-1704(1)"><subsection number="16-6a-1704(1)(a)"> Except as provided in Subsection <xref depth="4" refnumber="16-6a-1704(2)" start="0">(2)</xref>, the repeal of any statute by this act does not affect:<subsection number="16-6a-1704(1)(a)(i)"> the operation of the statute or any action taken under it before its repeal;</subsection><subsection number="16-6a-1704(1)(a)(ii)"> any ratification, right, remedy, privilege, obligation, or liability acquired, accrued, or incurred under the statute before its repeal;</subsection><subsection number="16-6a-1704(1)(a)(iii)"> any violation of the statute, or any penalty, forfeiture, or punishment incurred because of the violation of the statute before its repeal; or</subsection><subsection number="16-6a-1704(1)(a)(iv)"> any proceeding, reorganization, or dissolution commenced under the statute before its repeal.</subsection></subsection><subsection number="16-6a-1704(1)(b)"> A proceeding, reorganization, or dissolution described in Subsection <xref depth="4" refnumber="16-6a-1704(1)(a)(iv)" start="0">(1)(a)(iv)</xref> may be completed in accordance with the repealed statute as if the statute had not been repealed.</subsection></subsection><subsection number="16-6a-1704(2)"> If a penalty or punishment imposed for violation of a statute repealed by this act is reduced by this act, the penalty or punishment if not already imposed shall be imposed in accordance with this act.</subsection><subsection number="16-6a-1704(3)"> Section <xref depth="3" refnumber="16-6a-707" start="0">16-6a-707</xref> does not operate to permit a nonprofit corporation in existence prior to April 30, 2001, to take action by the written consent of fewer than all of the members entitled to vote with respect to the subject matter of the action, until the date a resolution providing otherwise is approved either: <subsection number="16-6a-1704(3)(a)"> by a consent in writing:<subsection number="16-6a-1704(3)(a)(i)"> setting forth the proposed resolution; and</subsection><subsection number="16-6a-1704(3)(a)(ii)"> signed by all of the members entitled to vote with respect to the subject matter of the resolution; or</subsection></subsection><subsection number="16-6a-1704(3)(b)"> at a duly convened meeting of members, by the vote of the same percentage of members of each voting group as would be required to include the resolution in an amendment to the nonprofit corporation's articles of incorporation.</subsection></subsection><subsection number="16-6a-1704(4)"> Indemnification for an act or omission of a director or officer of a nonprofit corporation if the act or omission occurs prior to April 30, 2001, is governed by <oldref depth="1" refnumber="16-6" start="0">Title 16, Chapter 6, Utah Nonprofit Corporation and Co-operative Association Act</oldref>, in effect as of April 29, 2001.</subsection><subsection number="16-6a-1704(5)"> A nonprofit corporation is not required to amend the nonprofit corporation's articles of incorporation to state whether its members are voting members if: <subsection number="16-6a-1704(5)(a)"> the nonprofit corporation was:<subsection number="16-6a-1704(5)(a)(i)"> formed prior to April 30, 2001;</subsection><subsection number="16-6a-1704(5)(a)(ii)"> formed under the laws of this state; and</subsection><subsection number="16-6a-1704(5)(a)(iii)"> existing on April 30, 2001; and</subsection></subsection><subsection number="16-6a-1704(5)(b)"> the articles of incorporation of the nonprofit corporation states on April 30, 2001, that the nonprofit corporation has members.</subsection></subsection></section><section number="16-6a-1705"><histories><history>Enacted by Chapter <modchap sess="2001GS">127</modchap>, 2001 General Session</history><modyear>2001</modyear></histories><catchline>Severability clause.</catchline><tab/>If any provision of this act, or the application of any provision to any person or circumstance, is held invalid, the remainder of this act is given effect without the invalid provision or application. </section></part></chapter><chapter number="16-7"><catchline>Corporations Sole</catchline><section number="16-7-1"><histories><history>No Change Since 1953</history><modyear>1953</modyear></histories><catchline>Formation -- Purposes.</catchline><tab/>Corporations sole may be formed for acquiring, holding or disposing of church or religious society property for the benefit of religion, for works of charity and for public worship, in the manner hereinafter provided. </section><section number="16-7-2"><histories><history>Amended by Chapter <modchap sess="2025GS">302</modchap>, 2025 General Session</history><modyear>2025</modyear></histories><catchline>Articles of incorporation -- Execution -- Filing.</catchline><tab/>Any person who is the archbishop, bishop, president, trustee in trust, president of stake, president of congregation, overseer, presiding elder, or clergyman of any church or religious society who has been duly chosen, elected, or appointed in conformity with the constitution, canons, rites, regulations, or discipline of such church or religious society, and in whom is vested the legal title to its property, may make and subscribe articles of incorporation, acknowledge the same before some officer authorized to take acknowledgments, and file the original articles with the Division of Corporations and Commercial Code; the person who makes and subscribes the articles of incorporation shall retain a copy of these articles in the person's possession.</section><section number="16-7-3"><histories><history>No Change Since 1953</history><modyear>1953</modyear></histories><catchline>Contents of articles of incorporation.</catchline><tab/>The articles of incorporation shall specify:<subsection number="16-7-3(1)"> The name of the corporation by which it shall be known.</subsection><subsection number="16-7-3(2)"> The object of the corporation.</subsection><subsection number="16-7-3(3)"> The estimated value of the property at the time of the making of articles of incorporation.</subsection><subsection number="16-7-3(4)"> The title of the person making such articles.</subsection></section><section number="16-7-4"><histories><history>Amended by Chapter <modchap sess="1984GS">66</modchap>, 1984 General Session</history><modyear>1984</modyear></histories><catchline>Certified copies of articles as evidence.</catchline><tab/>The articles of incorporation or a certified copy of those filed and recorded with the Division of Corporations and Commercial Code shall be evidence of the existence of such corporation. </section><section number="16-7-5"><histories><history>Amended by Chapter <modchap sess="2004GS">16</modchap>, 2004 General Session</history><modyear>2004</modyear></histories><catchline>Amendments of articles of incorporation.</catchline><subsection number="16-7-5(1)"> A corporation sole formed under this chapter may alter or amend its articles of incorporation.</subsection><subsection number="16-7-5(2)"> An amendment described in Subsection <xref depth="4" refnumber="16-7-5(1)" start="0">(1)</xref> shall: <subsection number="16-7-5(2)(a)"> be made by the corporation sole;</subsection><subsection number="16-7-5(2)(b)"> be executed by:<subsection number="16-7-5(2)(b)(i)"> the person who executed the original articles of incorporation; or</subsection><subsection number="16-7-5(2)(b)(ii)"> the successor in office to the person described in Subsection <xref depth="4" refnumber="16-7-5(2)(b)(i)" start="0">(2)(b)(i)</xref>;</subsection></subsection><subsection number="16-7-5(2)(c)"> specify the name, title, and street address of the person described in Subsection <xref depth="4" refnumber="16-7-5(2)(b)" start="0">(2)(b)</xref>; and</subsection><subsection number="16-7-5(2)(d)"> be filed in the same manner as is provided for the filing of the original articles.</subsection></subsection><subsection number="16-7-5(3)"> A corporation sole altering or amending its articles of incorporation after May 3, 2004, shall comply with Subsection <xref depth="4" refnumber="16-7-15(1)" start="0">16-7-15(1)</xref>.</subsection></section><section number="16-7-6"><histories><history>Amended by Chapter <modchap sess="2024GS">365</modchap>, 2024 General Session</history><modyear>2024</modyear></histories><catchline>Powers of corporations sole.</catchline><tab/>Upon making and filing articles of incorporation as herein provided the person subscribing the same and the person's successor in office, by the name or title specified in the articles, shall thereafter be deemed and is hereby created a body politic and a corporation sole, with perpetual succession, and shall have power:<subsection number="16-7-6(1)">To acquire and possess, by donation, gift, bequest, devise or purchase, and to hold and maintain, property, real, personal and mixed; and to grant, sell, convey, rent or otherwise dispose of the same as may be necessary to carry on or promote the objects of the corporation.</subsection><subsection number="16-7-6(2)">To borrow money and to give written obligations therefor, and to secure the payment thereof by mortgage or other lien upon real or personal property, when necessary to promote such objects.</subsection><subsection number="16-7-6(3)">To contract and be contracted with.</subsection><subsection number="16-7-6(4)">To sue and be sued.</subsection><subsection number="16-7-6(5)">To plead and be impleaded in all courts of justice.</subsection><subsection number="16-7-6(6)">To have and use a common seal by which all deeds and acts of such corporation may be authenticated.</subsection></section><section number="16-7-7"><histories><history>No Change Since 1953</history><modyear>1953</modyear></histories><catchline>Right to act without authorization from members -- Sale of property.</catchline><tab/>Any corporation sole created under this chapter, and any such archbishop, bishop, president, trustee in trust, president of stake, president of congregation, overseer, presiding elder or clergyman of the state of Utah, who holds the title to trust property for the use and benefit of any church or religious society and who is not so incorporated, unless the articles of incorporation or deed under which such corporation or individual trustee holds such property provides otherwise, shall have power without any authority or authorization from the members of such church or religious society to mortgage, exchange, sell and convey the same; and any such corporation sole, or individual trustee residing within this state may hold title to property, real or personal, which is situated in any other state or jurisdiction; which holding shall be subject to the same conditions, limitations, powers and rights and with the same trusts, duties and obligations in regard to the property that like property is held for such purposes in this state. </section><section number="16-7-8"><histories><history>Amended by Chapter <modchap sess="2004GS">16</modchap>, 2004 General Session</history><modyear>2004</modyear></histories><catchline>Execution of corporate instruments -- Authority of agents -- Revocation of authority.</catchline><subsection number="16-7-8(1)"> All deeds and other instruments of writing shall be: <subsection number="16-7-8(1)(a)"> made in the name of the corporation;</subsection><subsection number="16-7-8(1)(b)"> signed by:<subsection number="16-7-8(1)(b)(i)"> the person representing the corporation in the official capacity designated in the articles of incorporation; or</subsection><subsection number="16-7-8(1)(b)(ii)"> a duly authorized agent or agents designated and named in a certificate filed by the corporation with the Division of Corporations and Commercial Code.</subsection></subsection></subsection><subsection number="16-7-8(2)"> The authority of an agent or agents designated pursuant to Subsection <xref depth="4" refnumber="16-7-8(1)(b)(ii)" start="0">(1)(b)(ii)</xref> shall continue until revoked, notwithstanding the subsequent death, resignation, removal, incapacity, or incompetency of: <subsection number="16-7-8(2)(a)"> the person who executed the original articles of incorporation; or</subsection><subsection number="16-7-8(2)(b)"> the successor in office to the person described in Subsection <xref depth="4" refnumber="16-7-8(2)(a)" start="0">(2)(a)</xref>.</subsection></subsection><subsection number="16-7-8(3)"> A corporation sole designating an agent or agents to sign deeds and instruments of writing by certificate may revoke such authority by filing a notice of revocation of authority with the Division of Corporations and Commercial Code.</subsection></section><section number="16-7-9"><histories><history>Amended by Chapter <modchap sess="2004GS">16</modchap>, 2004 General Session</history><modyear>2004</modyear></histories><catchline>Succession in event of death, resignation, or removal of incumbent.</catchline><subsection number="16-7-9(1)"> In the event of the death or resignation of any such archbishop, bishop, president, trustee in trust, president of stake, president of congregation, overseer, presiding elder or clergyman, being at the time a corporation sole, or of his removal from office by the person or body having authority to remove him, his successor in office, as such corporation sole, shall be vested with the title to any and all property held by his predecessor as such corporation sole, with like power and authority over the same and subject to all the legal liabilities and obligations with reference thereto.</subsection><subsection number="16-7-9(2)"> A successor described in Subsection <xref depth="4" refnumber="16-7-9(1)" start="0">(1)</xref> shall file with the Division of Corporations and Commercial Code a certified copy or other adequate written proof of the successor's commission, certificate, or letter of election or appointment.</subsection></section><section number="16-7-10"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Death of bishop, trustee, not incorporated -- Succession to property.</catchline><tab/>In case of the death, resignation or removal of any such archbishop, bishop, president, trustee in trust, president of stake, president of congregation, overseer, presiding elder or clergyman who at the time of his death, resignation or removal was holding the title to trust property for the use or benefit of any church or religious society, and was not incorporated as a corporation sole, the title to any and all such property held by him, of every nature and kind, does not revert to the grantor nor vest in the heirs of such deceased person, but shall be deemed to be in abeyance after such death, resignation or removal until his successor is duly appointed to fill such vacancy, and upon the appointment of such successor the title to all the property held by his predecessor shall at once, without any other act or deed, vest in the person appointed to fill such vacancy. </section><section number="16-7-11"><histories><history>Amended by Chapter <modchap sess="2009GS">183</modchap>, 2009 General Session</history><modyear>2009</modyear></histories><catchline>Fees for filing documents and issuing certificates.</catchline><tab/>The division shall charge and collect a fee determined by it pursuant to Section <xref depth="3" refnumber="63J-1-504" start="0">63J-1-504</xref> for:<subsection number="16-7-11(1)"> filing articles of incorporation of a corporation sole and issuing a certificate of incorporation;</subsection><subsection number="16-7-11(2)"> filing articles of amendment and issuing a certificate of amendment;</subsection><subsection number="16-7-11(3)"> issuing each additional certificate of incorporation or amendment;</subsection><subsection number="16-7-11(4)"> filing a certificate of authorized agent and issuing the agent's certificate;</subsection><subsection number="16-7-11(5)"> filing a revocation of authority;</subsection><subsection number="16-7-11(6)"> furnishing a certified copy of any document, instrument, or paper relating to a corporation sole and affixing its seal;</subsection><subsection number="16-7-11(7)"> issuing a certificate of dissolution; and</subsection><subsection number="16-7-11(8)"> issuing a certificate of merger or consolidation.</subsection></section><section number="16-7-12"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Dissolution of corporation sole.</catchline><subsection number="16-7-12(1)">A corporation sole may be dissolved and its affairs wound up voluntarily by filing with the Division of Corporations and Commercial Code articles of dissolution, fully executed and signed under penalty of perjury, by the chief officer of the corporation. If any corporation sole ceases to have assets, has failed to function, or desires to terminate its existence, the articles of dissolution may be filed by any officer of the corporation authorized to administer the affairs and property of the corporation.</subsection><subsection number="16-7-12(2)">An original and a copy of the articles of dissolution shall be submitted to the Division of Corporations and Commercial Code. If it conforms to law, the division shall file it and issue a certificate of dissolution. After the issuance of this certificate, the corporation shall cease to carry on business, except for the purpose of adjusting and winding up its affairs.</subsection><subsection number="16-7-12(3)">The articles of dissolution shall set forth:<subsection number="16-7-12(3)(a)">the name of the corporation;</subsection><subsection number="16-7-12(3)(b)">the reason for its dissolution or winding up;</subsection><subsection number="16-7-12(3)(c)">that dissolution of the corporation has been duly authorized by the organization governed by the corporation sole;</subsection><subsection number="16-7-12(3)(d)">the names and addresses of the persons who are to supervise the winding up of the affairs of the corporation;</subsection><subsection number="16-7-12(3)(e)">that all debts, obligations, and liabilities of the corporation sole have been paid and discharged or that adequate provision has been made therefor;</subsection><subsection number="16-7-12(3)(f)">that all the remaining property and assets of the corporation sole have been transferred, conveyed, or distributed in accordance with the purposes of Section <xref depth="3" refnumber="16-7-1" start="0">16-7-1</xref>; and</subsection><subsection number="16-7-12(3)(g)">that there are no suits pending against the corporation sole in any court, or that adequate provision has been made for the satisfaction of any judgment, order, or decree which may be entered against it in any pending suit.</subsection></subsection><subsection number="16-7-12(4)">The Division of Corporations and Commercial Code may administratively dissolve a corporation sole that does not comply with Subsection <xref depth="4" refnumber="16-7-15(1)" start="0">16-7-15(1)</xref> in accordance with the relevant procedures for administrative dissolution of a nonprofit corporation under Sections <xref depth="3" refnumber="16-6a-1411">16-6a-1411</xref>, <xref depth="3" refnumber="16-6a-1412">16-6a-1412</xref>, and <xref depth="3" refnumber="16-6a-1413">16-6a-1413</xref>.</subsection></section><section number="16-7-14"><histories><history>Amended by Chapter <modchap sess="2004GS">16</modchap>, 2004 General Session</history><modyear>2004</modyear></histories><catchline>Restatement of articles of incorporation.</catchline><subsection number="16-7-14(1)"> A corporation sole organized under this chapter may restate its articles of incorporation in the same manner allowed nonprofit corporations under Section <xref depth="3" refnumber="16-6a-1006" start="0">16-6a-1006</xref>.</subsection><subsection number="16-7-14(2)"><subsection number="16-7-14(2)(a)"> The restated articles shall be adopted on behalf of the corporation by the appropriate incorporator or the successor to an incorporator as described in Section <xref depth="3" refnumber="16-7-2" start="0">16-7-2</xref>.</subsection><subsection number="16-7-14(2)(b)"> If there is no such incorporator or successor, the articles shall be signed by the officer or official authorized to administer the affairs and property of the corporation according to the practices and procedures of the church, denomination, or religious society.</subsection><subsection number="16-7-14(2)(c)"> The restated articles described in this section shall specify the name, title, and street address of the person executing the restated articles.</subsection></subsection><subsection number="16-7-14(3)"> This chapter does not require the restated articles described in this section to specify a value of the property of the corporation sole.</subsection><subsection number="16-7-14(4)"> A corporation sole restating its articles of incorporation after May 3, 2004, shall comply with Subsection <xref depth="4" refnumber="16-7-15(1)" start="0">16-7-15(1)</xref>.</subsection></section><section number="16-7-15"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Official representative -- Registered office -- Registered agent.</catchline><subsection number="16-7-15(1)"><subsection number="16-7-15(1)(a)">A corporation sole altering, amending, or restating its articles of incorporation on or after May 3, 2004, shall continuously maintain with the Division of Corporations and Commercial Code the name, title, and Utah street address of an official representative for the corporation sole.</subsection><subsection number="16-7-15(1)(b)">The official representative described in Subsection <xref depth="4" refnumber="16-7-15(1)(a)" start="0">(1)(a)</xref> shall, on behalf of the corporation sole, receive communication, notices, or demands from:<subsection number="16-7-15(1)(b)(i)">the Division of Corporations and Commercial Code; or</subsection><subsection number="16-7-15(1)(b)(ii)">any other state or federal authority, agency, or official.</subsection></subsection><subsection number="16-7-15(1)(c)">If a corporation sole appoints a registered agent pursuant to Subsection <xref depth="4" refnumber="16-7-15(2)" start="0">(2)</xref>, that registered agent is the official representative of the corporation sole for purposes of this Subsection <xref depth="4" refnumber="16-7-15(1)" start="0">(1)</xref>.</subsection></subsection><subsection number="16-7-15(2)"><subsection number="16-7-15(2)(a)">A corporation sole formed under this chapter may maintain a registered office and registered agent in Utah by complying with Chapter 1a, Part 4, Registered Agent of an Entity.</subsection><subsection number="16-7-15(2)(b)">A corporation sole maintaining registered agent may change the registered agent by complying with the requirements of Chapter 1a, Part 4, Registered Agent of an Entity.</subsection><subsection number="16-7-15(2)(c)">A registered agent of a corporation sole may resign by complying with the requirements imposed on a registered agent under Chapter 1a, Part 4, Registered Agent of an Entity.</subsection><subsection number="16-7-15(2)(d)">A registered agent described in this Subsection <xref depth="4" refnumber="16-7-15(2)" start="0">(2)</xref> is the agent of the corporation sole for service of:<subsection number="16-7-15(2)(d)(i)">process;</subsection><subsection number="16-7-15(2)(d)(ii)">notice;</subsection><subsection number="16-7-15(2)(d)(iii)">demand; or</subsection><subsection number="16-7-15(2)(d)(iv)">any type required or permitted by law to be served on the corporation sole.</subsection></subsection></subsection></section><section number="16-7-16"><histories><history>Enacted by Chapter <modchap sess="2004GS">16</modchap>, 2004 General Session</history><modyear>2004</modyear></histories><catchline>Prohibition on formation of corporation sole after May 3, 2004.</catchline><tab/>Notwithstanding any other provision of this chapter, a corporation sole may not be formed or incorporated under this chapter after May 3, 2004. </section><section number="16-7-17"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Provisions Applicable to All Business Entities applicable.</catchline>Chapter 1a, Provisions Applicable to All Business Entities, applies to the provisions of this chapter.</section></chapter><chapter number="16-10a"><catchline>Utah Revised Business Corporation Act</catchline><part number="16-10a-1"><catchline>General Provisions</catchline><section number="16-10a-101"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Short title.</catchline><tab/>This chapter is known as the Utah Revised Business Corporation Act. </section><section number="16-10a-102"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Definitions.</catchline><tab/>As used in this chapter:<subsection number="16-10a-102(1)"><subsection number="16-10a-102(1)(a)">"Address" means a location where mail can be delivered by the United States Postal Service.</subsection><subsection number="16-10a-102(1)(b)">"Address" includes:<subsection number="16-10a-102(1)(b)(i)">a post office box number;</subsection><subsection number="16-10a-102(1)(b)(ii)">a rural free delivery route number; and</subsection><subsection number="16-10a-102(1)(b)(iii)">a street name and number.</subsection></subsection></subsection><subsection number="16-10a-102(2)">"Affiliate" means a person that directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, the person specified.</subsection><subsection number="16-10a-102(3)">"Assumed corporate name" means a name assumed for use in this state by a foreign corporation pursuant to Section <xref depth="3" refnumber="16-1a-507">16-1a-507</xref> because its corporate name is not available for use in this state.</subsection><subsection number="16-10a-102(4)">"Articles of incorporation" include:<subsection number="16-10a-102(4)(a)">amended and restated articles of incorporation;</subsection><subsection number="16-10a-102(4)(b)">articles of merger; and</subsection><subsection number="16-10a-102(4)(c)">a document of a similar import to those described in Subsections <xref depth="4" refnumber="16-10a-102(4)(a)" start="0">(4)(a)</xref> and <xref depth="4" refnumber="16-10a-102(4)(b)" start="0">(b)</xref>.</subsection></subsection><subsection number="16-10a-102(5)">"Authorized shares" means the shares of all classes a domestic or foreign corporation is authorized to issue.</subsection><subsection number="16-10a-102(6)">"Bylaws" includes amended bylaws and restated bylaws.</subsection><subsection number="16-10a-102(7)">"Cash" and "money" are used interchangeably in this chapter and mean:<subsection number="16-10a-102(7)(a)">legal tender;</subsection><subsection number="16-10a-102(7)(b)">a negotiable instrument; and</subsection><subsection number="16-10a-102(7)(c)">a cash equivalent readily convertible into legal tender.</subsection></subsection><subsection number="16-10a-102(8)">"Conspicuous" means so written that a reasonable person against whom the writing is to operate should have noticed it, including printing or typing in:<subsection number="16-10a-102(8)(a)">italics;</subsection><subsection number="16-10a-102(8)(b)">boldface;</subsection><subsection number="16-10a-102(8)(c)">contrasting color;</subsection><subsection number="16-10a-102(8)(d)">capitals; or</subsection><subsection number="16-10a-102(8)(e)">underlining.</subsection></subsection><subsection number="16-10a-102(9)">"Control" or a "controlling interest" means the direct or indirect possession of the power to direct or cause the direction of the management and policies of an entity, whether through the ownership of voting shares, by contract, or otherwise.</subsection><subsection number="16-10a-102(10)">"Corporate name" means:<subsection number="16-10a-102(10)(a)">the name of a domestic corporation or a domestic nonprofit corporation as stated in its articles of incorporation; or</subsection><subsection number="16-10a-102(10)(b)">the name of a foreign corporation or a foreign nonprofit corporation as stated in its articles of incorporation or document of similar import.</subsection></subsection><subsection number="16-10a-102(11)">"Corporation" or "domestic corporation" means a corporation for profit that:<subsection number="16-10a-102(11)(a)">is not a foreign corporation; and</subsection><subsection number="16-10a-102(11)(b)">is incorporated under or subject to this chapter.</subsection></subsection><subsection number="16-10a-102(12)">"Deliver" includes delivery by mail or another means of transmission authorized by Section <xref depth="3" refnumber="16-10a-103" start="0">16-10a-103</xref>, except that delivery to the division means actual receipt by the division.</subsection><subsection number="16-10a-102(13)"><subsection number="16-10a-102(13)(a)">"Distribution" means the following by a corporation to or for the benefit of its shareholders in respect of any of the corporation's shares:<subsection number="16-10a-102(13)(a)(i)">a direct or indirect transfer of money or other property, other than a corporation's own shares; or</subsection><subsection number="16-10a-102(13)(a)(ii)">incurrence of indebtedness by the corporation.</subsection></subsection><subsection number="16-10a-102(13)(b)">A distribution may be in the form of:<subsection number="16-10a-102(13)(b)(i)">a declaration or payment of a dividend;</subsection><subsection number="16-10a-102(13)(b)(ii)">a purchase, redemption, or other acquisition of shares;</subsection><subsection number="16-10a-102(13)(b)(iii)">distribution of indebtedness; or</subsection><subsection number="16-10a-102(13)(b)(iv)">another form.</subsection></subsection></subsection><subsection number="16-10a-102(14)">"Division" means the Division of Corporations and Commercial Code.</subsection><subsection number="16-10a-102(15)">"Effective date," when referring to a document filed by the division, means the time and date determined in accordance with Section <xref depth="3" refnumber="16-1a-204">16-1a-204</xref>.</subsection><subsection number="16-10a-102(16)">"Effective date of notice" means the date notice is effective as provided in Section <xref depth="3" refnumber="16-10a-103" start="0">16-10a-103</xref>.</subsection><subsection number="16-10a-102(17)">"Electronic transmission" or "electronically transmitted" means a process of communication not directly involving the physical transfer of paper that is suitable for the receipt, retention, retrieval, and reproduction of information by the recipient, whether by e-mail, facsimile, or otherwise.</subsection><subsection number="16-10a-102(18)">"Employee" includes an officer but not a director, unless the director accepts a duty that makes that director also an employee.</subsection><subsection number="16-10a-102(19)">"Entity" includes:<subsection number="16-10a-102(19)(a)">a domestic and foreign corporation;</subsection><subsection number="16-10a-102(19)(b)">a nonprofit corporation;</subsection><subsection number="16-10a-102(19)(c)">a limited liability company;</subsection><subsection number="16-10a-102(19)(d)">a profit or nonprofit unincorporated association;</subsection><subsection number="16-10a-102(19)(e)">a business trust;</subsection><subsection number="16-10a-102(19)(f)">an estate;</subsection><subsection number="16-10a-102(19)(g)">a partnership;</subsection><subsection number="16-10a-102(19)(h)">a trust;</subsection><subsection number="16-10a-102(19)(i)">two or more persons having a joint or common economic interest;</subsection><subsection number="16-10a-102(19)(j)">a state;</subsection><subsection number="16-10a-102(19)(k)">the United States; and</subsection><subsection number="16-10a-102(19)(l)">a foreign government.</subsection></subsection><subsection number="16-10a-102(20)">"Foreign corporation" means a corporation for profit incorporated under a law other than the law of this state.</subsection><subsection number="16-10a-102(21)">"Governmental subdivision" means:<subsection number="16-10a-102(21)(a)">county;</subsection><subsection number="16-10a-102(21)(b)">municipality; or</subsection><subsection number="16-10a-102(21)(c)">another type of governmental subdivision authorized by the laws of this state.</subsection></subsection><subsection number="16-10a-102(22)">"Individual" means:<subsection number="16-10a-102(22)(a)">a natural person;</subsection><subsection number="16-10a-102(22)(b)">the estate of an incompetent individual; or</subsection><subsection number="16-10a-102(22)(c)">the estate of a deceased individual.</subsection></subsection><subsection number="16-10a-102(23)">"Mail," "mailed," or "mailing" means deposit, deposited, or depositing in the United States mail, properly addressed, first class postage prepaid, and includes registered or certified mail for which the proper fee is paid.</subsection><subsection number="16-10a-102(24)">"Notice" means the same as that term is defined in Section <xref depth="3" refnumber="16-10a-103" start="0">16-10a-103</xref>.</subsection><subsection number="16-10a-102(25)">"Principal office" means the office, in or out of this state, designated by a domestic or foreign corporation as its principal office in the most recent document on file with the division providing the information, including:<subsection number="16-10a-102(25)(a)">an annual report;</subsection><subsection number="16-10a-102(25)(b)">an application for a certificate of authority; or</subsection><subsection number="16-10a-102(25)(c)">a notice of change of principal office.</subsection></subsection><subsection number="16-10a-102(26)">"Proceeding" includes:<subsection number="16-10a-102(26)(a)">a civil suit;</subsection><subsection number="16-10a-102(26)(b)">arbitration or mediation; and</subsection><subsection number="16-10a-102(26)(c)">a criminal, administrative, or investigatory action.</subsection></subsection><subsection number="16-10a-102(27)">"Qualified shares" means, with respect to a director's conflicting interest transaction pursuant to Section <xref depth="3" refnumber="16-10a-853" start="0">16-10a-853</xref>, one or more shares entitled to vote on the transaction, except a share:<subsection number="16-10a-102(27)(a)">that, to the knowledge, before the vote, of the secretary, other officer, or agent of the corporation authorized to tabulate votes, is beneficially owned; or</subsection><subsection number="16-10a-102(27)(b)">the voting of which is controlled, by:<subsection number="16-10a-102(27)(b)(i)">a director who has a conflicting interest respecting the transaction;</subsection><subsection number="16-10a-102(27)(b)(ii)">a related person of that director; or</subsection><subsection number="16-10a-102(27)(b)(iii)">a person referred to in Subsections <xref depth="4" refnumber="16-10a-102(27)(b)(i)" start="0">(27)(b)(i)</xref> and <xref depth="4" refnumber="16-10a-102(27)(b)(ii)" start="0">(ii)</xref>.</subsection></subsection></subsection><subsection number="16-10a-102(28)">"Receive," when used in reference to receipt of a writing or other document by a domestic or foreign corporation, means the writing or other document is actually received by:<subsection number="16-10a-102(28)(a)">the corporation at its:<subsection number="16-10a-102(28)(a)(i)">registered office in this state; or</subsection><subsection number="16-10a-102(28)(a)(ii)">principal office;</subsection></subsection><subsection number="16-10a-102(28)(b)">the secretary of the corporation, wherever the secretary is found; or</subsection><subsection number="16-10a-102(28)(c)">another person authorized by the bylaws or the board of directors to receive the writing or other document, wherever that person is found.</subsection></subsection><subsection number="16-10a-102(29)"><subsection number="16-10a-102(29)(a)">"Record date" means the date established under <xref depth="2" refnumber="16-10a-6" start="2">Part 6, Shares and Distributions</xref>, or <xref depth="2" refnumber="16-10a-7" start="2">Part 7, Shareholders</xref>, on which a corporation determines the identity of its shareholders.</subsection><subsection number="16-10a-102(29)(b)">The determination under Subsection <xref depth="4" refnumber="16-10a-102(29)(a)" start="0">(29)(a)</xref> shall be made as of the close of business on the record date unless another time for doing so is specified when the record date is fixed.</subsection></subsection><subsection number="16-10a-102(30)">"Registered office" means the office within this state designated by a domestic or foreign corporation as its registered office in the most recent document on file with the division providing that information, including:<subsection number="16-10a-102(30)(a)">articles of incorporation;</subsection><subsection number="16-10a-102(30)(b)">an application for a certificate of authority; or</subsection><subsection number="16-10a-102(30)(c)">a notice of change of registered office.</subsection></subsection><subsection number="16-10a-102(31)">"Related person" of a director means:<subsection number="16-10a-102(31)(a)">the spouse of the director;</subsection><subsection number="16-10a-102(31)(b)">a child, grandchild, sibling, or parent of the director;</subsection><subsection number="16-10a-102(31)(c)">the spouse of a child, grandchild, sibling, or parent of the director;</subsection><subsection number="16-10a-102(31)(d)">an individual having the same home as the director;</subsection><subsection number="16-10a-102(31)(e)">a trust or estate of which the director or any other individual specified in this Subsection <xref depth="4" refnumber="16-10a-102(31)" start="0">(31)</xref> is a substantial beneficiary; or</subsection><subsection number="16-10a-102(31)(f)">a trust, estate, incompetent, conservatee, or minor of which the director is a fiduciary.</subsection></subsection><subsection number="16-10a-102(32)">"Secretary" means the corporate officer to whom the bylaws or the board of directors delegates responsibility under Subsection <xref depth="4" refnumber="16-10a-830(3)" start="0">16-10a-830(3)</xref> for:<subsection number="16-10a-102(32)(a)">the preparation and maintenance of:<subsection number="16-10a-102(32)(a)(i)">minutes of the meetings of the board of directors and of the shareholders; and</subsection><subsection number="16-10a-102(32)(a)(ii)">the other records and information required to be kept by the corporation by Section <xref depth="3" refnumber="16-10a-830" start="0">16-10a-830</xref>; and</subsection></subsection><subsection number="16-10a-102(32)(b)">authenticating records of the corporation.</subsection></subsection><subsection number="16-10a-102(33)">" Share" means the unit into which the proprietary interests in a corporation are divided.</subsection><subsection number="16-10a-102(34)"><subsection number="16-10a-102(34)(a)">"Shareholder" means:<subsection number="16-10a-102(34)(a)(i)">the person in whose name a share is registered in the records of a corporation; or</subsection><subsection number="16-10a-102(34)(a)(ii)">the beneficial owner of a share to the extent recognized pursuant to Section <xref depth="3" refnumber="16-10a-723" start="0">16-10a-723</xref>.</subsection></subsection><subsection number="16-10a-102(34)(b)">For purposes of this chapter:<subsection number="16-10a-102(34)(b)(i)">the following, identified as a shareholder in a corporation's current record of shareholders, constitute one shareholder:<subsection number="16-10a-102(34)(b)(i)(A)"><subsection number="16-10a-102(34)(b)(i)(A)(I)">three or fewer coowners; or</subsection><subsection number="16-10a-102(34)(b)(i)(A)(II)">in the case of more than three coowners, each coowner in excess of the first three is counted as a separate shareholder;</subsection></subsection><subsection number="16-10a-102(34)(b)(i)(B)">a corporation, limited liability company, partnership, trust, estate, or other entity; and</subsection><subsection number="16-10a-102(34)(b)(i)(C)">the trustees, guardians, custodians, or other fiduciaries of a single trust, estate, or account;</subsection></subsection><subsection number="16-10a-102(34)(b)(ii)">shareholdings registered in substantially similar names constitute one shareholder if it is reasonable to believe that the names represent the same person; and</subsection><subsection number="16-10a-102(34)(b)(iii)">if the record of a shareholder is not maintained in accordance with accepted practice, an additional person who would be identified as an owner on that record if it had been maintained in accordance with accepted practice shall be included as a holder of record.</subsection></subsection></subsection><subsection number="16-10a-102(35)">"Subscriber" means a person who subscribes for shares in a corporation, whether before or after incorporation.</subsection><subsection number="16-10a-102(36)">"Tribe" means a tribe, band, nation, pueblo, or other organized group or community of Indians, including an Alaska Native village, that is legally recognized as eligible for and is consistent with a special program, service, or entitlement provided by the United States to Indians because of their status as Indians.</subsection><subsection number="16-10a-102(37)">"Tribal corporation" means a corporation:<subsection number="16-10a-102(37)(a)">incorporated under the law of a tribe; and</subsection><subsection number="16-10a-102(37)(b)">that is at least 51% owned or controlled by the tribe.</subsection></subsection><subsection number="16-10a-102(38)"><subsection number="16-10a-102(38)(a)">"Voting group" means all shares of one or more classes or series that under the articles of incorporation or this chapter are entitled to vote and be counted together collectively on a matter at a meeting of shareholders.</subsection><subsection number="16-10a-102(38)(b)">All shares entitled by the articles of incorporation or this chapter to vote generally on the matter are for that purpose a single voting group.</subsection></subsection></section><section number="16-10a-103"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Notice.</catchline><subsection number="16-10a-103(1)"><subsection number="16-10a-103(1)(a)"> Notice given under this chapter shall be in writing unless oral notice is reasonable under the circumstances.</subsection><subsection number="16-10a-103(1)(b)"> Notice by electronic transmission is written notice.</subsection></subsection><subsection number="16-10a-103(2)"><subsection number="16-10a-103(2)(a)"> Subject to compliance with any requirement that notice be in writing, notice may be communicated in person, by telephone, by any form of electronic transmission, or by mail or private carrier.</subsection><subsection number="16-10a-103(2)(b)"> If the forms of personal notice listed in Subsection <xref depth="4" refnumber="16-10a-103(2)(a)" start="0">(2)(a)</xref> are impracticable, notice may be communicated:<subsection number="16-10a-103(2)(b)(i)"><subsection number="16-10a-103(2)(b)(i)(A)"> by a newspaper of general circulation in the county, or similar subdivision, in which the corporation's principal office is located; and</subsection><subsection number="16-10a-103(2)(b)(i)(B)"> by publication in accordance with Section <xref depth="3" refnumber="45-1-101" start="0">45-1-101</xref>;</subsection></subsection><subsection number="16-10a-103(2)(b)(ii)"> by radio, television, or other form of public broadcast communication in the county or subdivision; or</subsection><subsection number="16-10a-103(2)(b)(iii)"> if the corporation has no office in this state, in the manner allowed by Subsection <xref depth="4" refnumber="16-10a-103(2)(b)(i)" start="0">(2)(b)(i)</xref> or <xref depth="4" refnumber="16-10a-103(2)(b)(ii)" start="0">(ii)</xref> but in Salt Lake County.</subsection></subsection></subsection><subsection number="16-10a-103(3)"><subsection number="16-10a-103(3)(a)"> Written notice by a domestic or foreign corporation to its shareholders or directors, if in a comprehensible form, is effective as to each shareholder or director:<subsection number="16-10a-103(3)(a)(i)"> when mailed, if addressed to the shareholder's or director's address shown in the corporation's current record of the shareholder or director; or</subsection><subsection number="16-10a-103(3)(a)(ii)"> when electronically transmitted to the shareholder or director, in a manner and to an address provided by the shareholder or director in an unrevoked consent.</subsection></subsection><subsection number="16-10a-103(3)(b)"> Consent under Subsection <xref depth="4" refnumber="16-10a-103(3)(a)(ii)" start="0">(3)(a)(ii)</xref> is considered revoked if:<subsection number="16-10a-103(3)(b)(i)"> the corporation is unable to deliver by electronic transmission two consecutive notices transmitted by the corporation based on that consent; and</subsection><subsection number="16-10a-103(3)(b)(ii)"> the corporation's inability to deliver notice by electronic transmission under Subsection <xref depth="4" refnumber="16-10a-103(3)(b)(i)" start="0">(3)(b)(i)</xref> is known by the: <subsection number="16-10a-103(3)(b)(ii)(A)"> corporation's secretary;</subsection><subsection number="16-10a-103(3)(b)(ii)(B)"> an assistant secretary or transfer agent of the corporation; or</subsection><subsection number="16-10a-103(3)(b)(ii)(C)"> any other person responsible for providing notice.</subsection></subsection></subsection><subsection number="16-10a-103(3)(c)"> Notwithstanding Subsection <xref depth="4" refnumber="16-10a-103(3)(b)" start="0">(3)(b)</xref>, a corporation's failure to treat consent under Subsection <xref depth="4" refnumber="16-10a-103(3)(a)" start="0">(3)(a)</xref> as revoked does not invalidate any meeting or other act.</subsection><subsection number="16-10a-103(3)(d)"> Delivery of a notice to shareholders may be excused in accordance with Subsection <xref depth="4" refnumber="16-10a-705(5)" start="0">16-10a-705(5)</xref>.</subsection></subsection><subsection number="16-10a-103(4)"> Written notice to a domestic or foreign corporation authorized to transact business in this state may be addressed to the corporation's: <subsection number="16-10a-103(4)(a)"> registered agent; or</subsection><subsection number="16-10a-103(4)(b)"> secretary at its principal office.</subsection></subsection><subsection number="16-10a-103(5)"> Except as provided in Subsection <xref depth="4" refnumber="16-10a-103(3)" start="0">(3)</xref>, written notice, if in a comprehensible form, is effective at the earliest of the following: <subsection number="16-10a-103(5)(a)"> when received;</subsection><subsection number="16-10a-103(5)(b)"> five days after it is mailed; or</subsection><subsection number="16-10a-103(5)(c)"> on the date shown on the return receipt if sent by registered or certified mail, return receipt requested, and the receipt is signed by or on behalf of the addressee.</subsection></subsection><subsection number="16-10a-103(6)"> Oral notice is effective when communicated if communicated in a comprehensible manner.</subsection><subsection number="16-10a-103(7)"> Notice by publication is effective on the date of first publication.</subsection><subsection number="16-10a-103(8)"><subsection number="16-10a-103(8)(a)"> If this chapter prescribes notice requirements for particular circumstances, those requirements govern.</subsection><subsection number="16-10a-103(8)(b)"> If articles of incorporation or bylaws prescribe notice requirements, not inconsistent with this section or other provisions of this chapter, those requirements govern.</subsection></subsection></section><section number="16-10a-104"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Powers of the division.</catchline><tab/>The division has the power reasonably necessary to perform the duties required of the division under this chapter. </section><section number="16-10a-122"><histories><history>Amended by Chapter <modchap sess="2009GS">183</modchap>, 2009 General Session</history><modyear>2009</modyear></histories><catchline>Fees.</catchline><tab/>Unless otherwise provided by statute, the division shall charge and collect fees for services as provided in Section <xref depth="3" refnumber="63J-1-504" start="0">63J-1-504</xref>. </section><section number="16-10a-127"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Evidentiary effect of copy of filed document.</catchline><tab/>A certificate attached to a copy of a document filed by the division, or an endorsement, seal, or stamp placed on the copy, which certificate, endorsement, seal, or stamp bears the signature of the director of the division, or a facsimile of the director's signature, and the seal of the division, is conclusive evidence that the original document has been filed with the division. </section><section number="16-10a-128"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Certificates issued by the division.</catchline><subsection number="16-10a-128(1)">Anyone may apply to the division for a certificate of existence for a domestic corporation, a certificate of authorization for a foreign corporation, or a certificate that sets forth any facts of record in the office of the division.</subsection><subsection number="16-10a-128(2)">A certificate of existence or authorization sets forth:<subsection number="16-10a-128(2)(a)">the domestic corporation's corporate name or the foreign corporation's corporate name registered in this state;</subsection><subsection number="16-10a-128(2)(b)">that:<subsection number="16-10a-128(2)(b)(i)">the domestic corporation is duly incorporated under the law of this state and the date of its incorporation; or</subsection><subsection number="16-10a-128(2)(b)(ii)">the foreign corporation is authorized to transact business in this state;</subsection></subsection><subsection number="16-10a-128(2)(c)">that all fees, taxes, and penalties owed to this state have been paid, if:<subsection number="16-10a-128(2)(c)(i)">payment is reflected in the records of the division; and</subsection><subsection number="16-10a-128(2)(c)(ii)">nonpayment affects the existence or authorization of the domestic or foreign corporation;</subsection></subsection><subsection number="16-10a-128(2)(d)">that its most recent annual report required by Section <xref depth="3" refnumber="16-1a-212">16-1a-212</xref> has been filed by the division;</subsection><subsection number="16-10a-128(2)(e)">that articles of dissolution have not been filed; and</subsection><subsection number="16-10a-128(2)(f)">other facts of record in the office of the division that may be requested by the applicant.</subsection></subsection><subsection number="16-10a-128(3)">Subject to any qualification stated in the certificate, a certificate issued by the division may be relied upon as conclusive evidence of the facts set forth in the certificate.</subsection></section><section number="16-10a-129"><histories><history>Amended by Chapter <modchap sess="2025GS">302</modchap>, 2025 General Session</history><modyear>2025</modyear></histories><catchline>Penalty for signing false documents.</catchline><subsection number="16-10a-129(1)">A person commits an offense if the person signs a document knowing it to be false in any material respect, with intent that the document be delivered to the division for filing.</subsection><subsection number="16-10a-129(2)">An offense under this section is a class A misdemeanor punishable by a fine not to exceed $2,500.</subsection></section><section number="16-10a-130"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Provisions Applicable to All Business Entities applicable.</catchline>Chapter 1a, Provisions Applicable to All Business Entities, applies to the provisions of this chapter.</section></part><part number="16-10a-2"><catchline>Incorporation</catchline><section number="16-10a-201"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Incorporators.</catchline><tab/>One or more persons may act as incorporators of a corporation by delivering to the division for filing articles meeting the requirements of Section <xref depth="3" refnumber="16-10a-202" start="0">16-10a-202</xref>. An incorporator who is a natural person shall be at least 18 years old. </section><section number="16-10a-202"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Articles of incorporation.</catchline><subsection number="16-10a-202(1)">The articles of incorporation shall set forth:<subsection number="16-10a-202(1)(a)">the purpose or purposes for which the corporation is organized;</subsection><subsection number="16-10a-202(1)(b)">a corporate name for the corporation that satisfies the requirements of Section <xref depth="3" refnumber="16-1a-302">16-1a-302</xref>;</subsection><subsection number="16-10a-202(1)(c)">the number of shares the corporation is authorized to issue;</subsection><subsection number="16-10a-202(1)(d)">the information required by Section <xref depth="3" refnumber="16-10a-601" start="0">16-10a-601</xref> with respect to each class of shares the corporation is authorized to issue;</subsection><subsection number="16-10a-202(1)(e)">the information required by Section <xref depth="3" refnumber="16-1a-404">16-1a-404</xref>; and</subsection><subsection number="16-10a-202(1)(f)">the name and address of each incorporator.</subsection></subsection><subsection number="16-10a-202(2)">The articles of incorporation may set forth:<subsection number="16-10a-202(2)(a)">the names and addresses of the individuals who are to serve as the initial directors;</subsection><subsection number="16-10a-202(2)(b)">provisions not inconsistent with law regarding:<subsection number="16-10a-202(2)(b)(i)">managing the business and regulating the affairs of the corporation;</subsection><subsection number="16-10a-202(2)(b)(ii)">defining, limiting, and regulating the powers of the corporation, its board of directors, and its shareholders;</subsection><subsection number="16-10a-202(2)(b)(iii)">a par value for authorized shares or classes of shares; and</subsection><subsection number="16-10a-202(2)(b)(iv)">the imposition of personal liability on shareholders for the debts of the corporation to a specified extent and upon specified conditions; and</subsection></subsection><subsection number="16-10a-202(2)(c)">any provision that under this chapter is permitted to be in the articles of incorporation or required or permitted to be set forth in the bylaws including elective provisions which, to be effective, shall be included in the articles of incorporation, as provided in this chapter.</subsection></subsection><subsection number="16-10a-202(3)">It shall be sufficient under Subsection <xref depth="4" refnumber="16-10a-202(1)(a)" start="0">(1)(a)</xref> to state, either alone or with other purposes, that the purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under this chapter, and by such statement all lawful acts and activities shall be within the purposes of the corporation, except for express limitations, if any.</subsection><subsection number="16-10a-202(4)">The articles of incorporation need not set forth any of the corporate powers enumerated in this chapter.</subsection><subsection number="16-10a-202(5)">The articles of incorporation shall be signed by each incorporator and meet the filing requirements of Section <xref depth="3" refnumber="16-1a-202">16-1a-202</xref>.</subsection><subsection number="16-10a-202(6)"><subsection number="16-10a-202(6)(a)">If this chapter conditions any matter upon the presence of a provision in the bylaws, the condition is satisfied if the provision is present either in the articles of incorporation or the bylaws.</subsection><subsection number="16-10a-202(6)(b)">If this chapter conditions any matter upon the absence of a provision in the bylaws, the condition is satisfied only if the provision is absent from both the articles of incorporation and the bylaws.</subsection></subsection></section><section number="16-10a-203"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Incorporation.</catchline><subsection number="16-10a-203(1)">A corporation is incorporated, and its corporate existence begins, when the articles of incorporation are filed by the division, unless a delayed effective date is specified pursuant to Section <xref depth="3" refnumber="16-1a-204">16-1a-204</xref>, in which case the incorporation is effective, and the corporate existence begins, on the delayed effective date, unless a certificate of withdrawal is filed prior to the delayed effective date.</subsection><subsection number="16-10a-203(2)">The filing of the articles of incorporation by the division is conclusive proof that all conditions precedent to incorporation have been satisfied, except in a proceeding by the state to cancel or revoke the incorporation or involuntarily dissolve the corporation.</subsection></section><section number="16-10a-204"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Liability for preincorporation transactions.</catchline><tab/>All persons purporting to act as or on behalf of a corporation, knowing there was no incorporation under this chapter, are jointly and severally liable for all liabilities created while so acting. </section><section number="16-10a-205"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Organization of the corporation.</catchline><subsection number="16-10a-205(1)"> After incorporation: <subsection number="16-10a-205(1)(a)"> if initial directors are named in the articles of incorporation, the initial directors may hold an organizational meeting, at the call of a majority of the directors, to complete the organization of the corporation by appointing officers, adopting bylaws, and carrying on any other business brought before the meeting; or</subsection><subsection number="16-10a-205(1)(b)"> if initial directors are not named in the articles of incorporation, then until directors are elected, the incorporator or incorporators may hold an organizational meeting at the call of a majority of the incorporators to do whatever is necessary and proper to complete the organization of the corporation, including the election of directors and officers and the adoption and amendment of bylaws.</subsection></subsection><subsection number="16-10a-205(2)"> Action required or permitted by this chapter to be taken by incorporators at an organizational meeting may be taken without a meeting if the action taken is evidenced by one or more written consents describing the action taken and signed by each incorporator.</subsection><subsection number="16-10a-205(3)"> An organizational meeting may be held in or out of this state.</subsection></section><section number="16-10a-206"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Bylaws.</catchline><subsection number="16-10a-206(1)"><subsection number="16-10a-206(1)(a)"> The board of directors of a corporation may adopt initial bylaws for the corporation.</subsection><subsection number="16-10a-206(1)(b)"> If no directors have been elected the incorporators may adopt initial bylaws for the corporation.</subsection><subsection number="16-10a-206(1)(c)"> If neither the incorporators nor the board of directors have adopted initial bylaws, the shareholders may do so.</subsection></subsection><subsection number="16-10a-206(2)"> The bylaws of a corporation may contain any provision for managing the business and regulating the affairs of the corporation that is not inconsistent with law or the articles of incorporation, including management and regulation of the corporation in the event of an emergency.</subsection></section></part><part number="16-10a-3"><catchline>Purposes and Powers</catchline><section number="16-10a-301"><histories><history>Amended by Chapter <modchap sess="2015GS">237</modchap>, 2015 General Session</history><modyear>2015</modyear></histories><catchline>Purposes.</catchline><subsection number="16-10a-301(1)"> A corporation incorporated under this chapter and including in the corporation's articles of incorporation a statement that meets the requirements of Subsection <xref depth="4" refnumber="16-10a-202(3)" start="0">16-10a-202(3)</xref> may engage in any lawful business or activity except for express limitations set forth in the articles of incorporation.</subsection><subsection number="16-10a-301(2)"> A corporation engaging in a business or an activity that is subject to regulation under another statute of this state may incorporate under this chapter only if permitted by, and subject to all limitations of, the other statute.</subsection></section><section number="16-10a-302"><histories><history>Amended by Chapter <modchap sess="2015GS">237</modchap>, 2015 General Session</history><modyear>2015</modyear></histories><catchline>General powers.</catchline><tab/>Unless its articles of incorporation provide otherwise, and except as restricted by the Utah Constitution, every corporation has perpetual duration and succession in its corporate name and has the same powers as an individual to do all things necessary or convenient to carry out its permitted and lawful purposes, activities, and affairs, including without limitation the power:<subsection number="16-10a-302(1)"> to sue and be sued, complain and defend in the corporation's corporate name;</subsection><subsection number="16-10a-302(2)"> to have a corporate seal, which may be altered at will, and to use the corporate seal, or a facsimile of the corporate seal, by impressing or affixing the corporate seal or in any other manner reproducing the corporate seal;</subsection><subsection number="16-10a-302(3)"> to make and amend bylaws, not inconsistent with the corporation's articles of incorporation or with the laws of this state, for managing the business and regulating the affairs of the corporation;</subsection><subsection number="16-10a-302(4)"> to purchase, receive, lease, or otherwise acquire, and own, hold, improve, use, and otherwise deal with, real or personal property, or any legal or equitable interest in property, wherever located;</subsection><subsection number="16-10a-302(5)"> to sell, convey, mortgage, pledge, lease, exchange, and otherwise dispose of all or any part of the corporation's property and assets;</subsection><subsection number="16-10a-302(6)"> to purchase, receive, subscribe for, or otherwise acquire, own, hold, vote, use, sell, mortgage, lend, pledge, or otherwise dispose of, and deal in and with shares or other interests in, or obligations of, any other entity;</subsection><subsection number="16-10a-302(7)"> to make contracts and guarantees, incur liabilities, borrow money, issue the corporation's notes, bonds, and other obligations that may or may not be convertible into or include the option to purchase other securities of the corporation, and secure any of the corporation's obligations by mortgage or pledge of any of the corporation's property, assets, franchises, or income;</subsection><subsection number="16-10a-302(8)"> to lend money, invest and reinvest the corporation's funds, and receive and hold real and personal property as security for repayment;</subsection><subsection number="16-10a-302(9)"> to be a promoter, partner, member, associate, or manager of any partnership, joint venture, trust, or other entity;</subsection><subsection number="16-10a-302(10)"> to conduct the corporation's business and activities, locate offices, and exercise the powers granted by this chapter within or without this state;</subsection><subsection number="16-10a-302(11)"> to elect directors and appoint officers, employees, and agents of the corporation, define their duties, fix their compensation, and lend them money and credit;</subsection><subsection number="16-10a-302(12)"> to pay pensions and establish pension plans, pension trusts, profit sharing plans, share bonus plans, share option plans, and benefit or incentive plans for any or all of the corporation's current or former directors, officers, employees, and agents;</subsection><subsection number="16-10a-302(13)"> to operate, and to make donations, for the public welfare or for charitable, religious, scientific, or educational purposes;</subsection><subsection number="16-10a-302(14)"> to transact any lawful business that will aid governmental policy;</subsection><subsection number="16-10a-302(15)"> to make payments or donations, or do any other act, not inconsistent with law, that furthers the business and affairs of the corporation; and</subsection><subsection number="16-10a-302(16)"> to establish rules governing the conduct of the business and affairs of the corporation in the event of an emergency.</subsection></section><section number="16-10a-303"><histories><history>Amended by Chapter <modchap sess="2023GS">401</modchap>, 2023 General Session</history><modyear>2023</modyear></histories><catchline>Ultra vires.</catchline><subsection number="16-10a-303(1)"> Except as provided in Subsection <xref depth="4" refnumber="16-10a-303(2)" start="0">(2)</xref>, the validity of corporate action may not be challenged on the ground that the corporation lacks or lacked power to act.</subsection><subsection number="16-10a-303(2)"> A corporation's power to act may be challenged: <subsection number="16-10a-303(2)(a)"> in an action by a shareholder against the corporation to enjoin the act;</subsection><subsection number="16-10a-303(2)(b)"> in an action by the corporation, directly, derivatively, or through a receiver, trustee, or other legal representative, against an incumbent or former director, officer, employee, or agent of the corporation; or</subsection><subsection number="16-10a-303(2)(c)"> in an action by the attorney general under Section <xref depth="3" refnumber="16-10a-1430" start="0">16-10a-1430</xref>.</subsection></subsection><subsection number="16-10a-303(3)"> In a shareholder's action under Subsection <xref depth="4" refnumber="16-10a-303(2)(a)" start="0">(2)(a)</xref> to enjoin an unauthorized corporate act, the court may enjoin or set aside the act, if equitable and if all affected persons are parties to the proceeding, and may award damages for loss, other than anticipated profits, suffered by the corporation or another party because of enjoining the unauthorized act.</subsection></section></part><part number="16-10a-4"><catchline>Name</catchline><section number="16-10a-403"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Corporate name -- Limited rights.</catchline><tab/>The authorization granted by the division to file articles of incorporation under a corporate name or to reserve a name does not:<subsection number="16-10a-403(1)"> abrogate or limit the law governing unfair competition or unfair trade practices;</subsection><subsection number="16-10a-403(2)"> derogate from the common law the principles of equity or the statutes of this state or of the United States with respect to the right to acquire and protect names and trademarks; or</subsection><subsection number="16-10a-403(3)"> create an exclusive right in geographic or generic terms contained within a name.</subsection></section></part><part number="16-10a-6"><catchline>Shares and Distributions</catchline><section number="16-10a-601"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Authorized shares.</catchline><subsection number="16-10a-601(1)"> The articles of incorporation shall prescribe the classes of shares and the number of shares of each class that the corporation is authorized to issue. If more than one class of shares is authorized, the articles of incorporation shall prescribe a distinguishing designation for each class, and prior to the issuance of shares of a class the preferences, limitations, and relative rights of that class shall be described in the articles of incorporation. All shares of a class shall have preferences, limitations, and relative rights identical with those of other shares of the same class except to the extent otherwise permitted by this section and Section <xref depth="3" refnumber="16-10a-602" start="0">16-10a-602</xref>.</subsection><subsection number="16-10a-601(2)"> The articles of incorporation shall authorize: <subsection number="16-10a-601(2)(a)"> one or more classes of shares that together have unlimited voting rights; and</subsection><subsection number="16-10a-601(2)(b)"> one or more classes of shares, which may be the same class or classes as those with voting rights, that together are entitled to receive the net assets of the corporation upon dissolution.</subsection></subsection><subsection number="16-10a-601(3)"> The articles of incorporation may authorize one or more classes of shares and one or more series of shares within any class that: <subsection number="16-10a-601(3)(a)"> have special, conditional, or limited voting rights, or no right to vote, except to the extent prohibited by this chapter;</subsection><subsection number="16-10a-601(3)(b)"> are redeemable or convertible as specified in the articles of incorporation:<subsection number="16-10a-601(3)(b)(i)"> at the option of the corporation, the shareholder, or another person or upon the occurrence of a designated event;</subsection><subsection number="16-10a-601(3)(b)(ii)"> for money, indebtedness, securities, or other property; or</subsection><subsection number="16-10a-601(3)(b)(iii)"> in a designated amount or in an amount determined in accordance with a designated formula or by reference to extrinsic data or events;</subsection></subsection><subsection number="16-10a-601(3)(c)"> entitle the holders to distributions calculated in any manner, including dividends that may be cumulative, noncumulative, or partially cumulative; or</subsection><subsection number="16-10a-601(3)(d)"> have preference over any other class or series of shares with respect to distributions, including dividends and distributions upon the dissolution of the corporation.</subsection></subsection><subsection number="16-10a-601(4)"> The description of the designations, preferences, limitations, and relative rights of share classes or series of shares in Subsection <xref depth="4" refnumber="16-10a-601(3)" start="0">(3)</xref> is not exhaustive.</subsection></section><section number="16-10a-602"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Terms of class or series determined by board of directors.</catchline><subsection number="16-10a-602(1)"> If the articles of incorporation so provide, the board of directors, without shareholder action but subject to any limitations and restrictions stated in the articles of incorporation, may amend the corporation's articles of incorporation pursuant to the authority granted to the board of directors by Subsection <xref depth="4" refnumber="16-10a-1002(1)(e)" start="0">16-10a-1002(1)(e)</xref> to do any of the following: <subsection number="16-10a-602(1)(a)"> designate in whole or in part, the preferences, limitations, and relative rights, within the limits set forth in Section <xref depth="3" refnumber="16-10a-601" start="0">16-10a-601</xref>, of any class of shares before the issuance of any shares of that class;</subsection><subsection number="16-10a-602(1)(b)"> create one or more series within a class of shares, fix the number of shares of each such series, and designate, in whole or part, the preferences, limitations, and relative rights of the series, within the limits set forth in Section <xref depth="3" refnumber="16-10a-601" start="0">16-10a-601</xref>, all before the issuance of any shares of that series;</subsection><subsection number="16-10a-602(1)(c)"> alter or revoke the preferences, limitations, and relative rights granted to or imposed upon any wholly unissued class of shares or any wholly unissued series of any class of shares; or</subsection><subsection number="16-10a-602(1)(d)"> increase or decrease the number of shares constituting any series, the number of shares of which was originally fixed by the board of directors, either before or after the issuance of shares of the series, provided that the number may not be decreased below the number of shares of the series then outstanding, or increased above the total number of authorized shares of the applicable class of shares available for designation as a part of the series.</subsection></subsection><subsection number="16-10a-602(2)"> Each series of a class shall be given a distinguishing designation.</subsection><subsection number="16-10a-602(3)"> All shares of a series shall have preferences, limitations, and relative rights identical with those of other shares of the same series and, except to the extent otherwise provided in the description of the series, with those of other series of the same class.</subsection><subsection number="16-10a-602(4)"> Before issuing any shares of a class or series created under this section, or having preferences, limitations, or relative rights designated by the board of directors as provided in this section, and before any amendment to articles of incorporation contemplated by Subsection <xref depth="4" refnumber="16-10a-602(1)" start="0">(1)</xref> shall be effective, the corporation shall deliver to the division for filing, in accordance with the procedure set forth in Section <xref depth="3" refnumber="16-10a-1006" start="0">16-10a-1006</xref>, articles of amendment that set forth: <subsection number="16-10a-602(4)(a)"> the name of the corporation;</subsection><subsection number="16-10a-602(4)(b)"> the text of the amendment adopted by the board of directors pursuant to Subsection <xref depth="4" refnumber="16-10a-602(1)" start="0">(1)</xref>;</subsection><subsection number="16-10a-602(4)(c)"> the date the amendment was adopted by the board of directors;</subsection><subsection number="16-10a-602(4)(d)"> a statement that the amendment was duly adopted by the board of directors without shareholder action and that shareholder action was not required; and</subsection><subsection number="16-10a-602(4)(e)"> if the amendment alters or revokes the preferences, limitations, or relative rights granted to or imposed upon any wholly unissued class of shares or any wholly unissued series of any class of shares, a statement that none of the shares of any class or series of shares so affected has been issued.</subsection></subsection></section><section number="16-10a-603"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Issued and outstanding shares.</catchline><subsection number="16-10a-603(1)"> A corporation may issue the number of shares of each class or series authorized by the articles of incorporation. Shares that are issued are outstanding shares until they are reacquired, redeemed, converted, or cancelled.</subsection><subsection number="16-10a-603(2)"> The reacquisition, redemption, or conversion of outstanding shares is subject to the limitations of Subsection <xref depth="4" refnumber="16-10a-603(3)" start="0">(3)</xref> and to Section <xref depth="3" refnumber="16-10a-640" start="0">16-10a-640</xref>.</subsection><subsection number="16-10a-603(3)"> At all times that shares of the corporation are outstanding, one or more shares that together have unlimited voting rights and one or more shares that together are entitled to receive the net assets of the corporation upon dissolution shall be outstanding.</subsection></section><section number="16-10a-604"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Fractional shares.</catchline><subsection number="16-10a-604(1)"> A corporation may: <subsection number="16-10a-604(1)(a)"> issue fractions of a share or pay in money the value of fractions of a share;</subsection><subsection number="16-10a-604(1)(b)"> arrange for disposition of fractional shares by the shareholders; or</subsection><subsection number="16-10a-604(1)(c)"> issue scrip in registered or bearer form entitling the holder to receive a full share upon surrendering enough scrip to equal a full share.</subsection></subsection><subsection number="16-10a-604(2)"> Each certificate representing scrip shall be conspicuously labeled "scrip" and shall contain the information required to be included on a share certificate by Subsections <xref depth="4" refnumber="16-10a-625(2)" start="0">16-10a-625(2)</xref> and <xref depth="4" refnumber="16-10a-625(3)" start="0">(3)</xref> and Section <xref depth="3" refnumber="16-10a-627" start="0">16-10a-627</xref>.</subsection><subsection number="16-10a-604(3)"> The holder of a fractional share is entitled to exercise the rights of a shareholder, including the right to vote, to receive dividends, and to participate in the assets of the corporation upon liquidation. The holder of scrip is not entitled to any of these rights unless the scrip provides for them.</subsection><subsection number="16-10a-604(4)"> The board of directors may authorize the issuance of scrip subject to any condition considered desirable, including: <subsection number="16-10a-604(4)(a)"> that the scrip will become void if not exchanged for full shares before a specified date; and</subsection><subsection number="16-10a-604(4)(b)"> that the shares for which the scrip is exchangeable may be sold and the proceeds paid to the scripholders.</subsection></subsection></section><section number="16-10a-620"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Subscriptions for shares.</catchline><subsection number="16-10a-620(1)"> A subscription for shares entered into before incorporation is irrevocable for six months unless the subscription agreement provides a longer or shorter period or all the subscribers agree or the corporation consents to revocation of the subscription and provided the subscription is not considered revocable under the federal securities laws.</subsection><subsection number="16-10a-620(2)"> The acceptance by the corporation of a subscription entered into before incorporation and the authorization of the issuance of shares pursuant thereto are subject to Section <xref depth="3" refnumber="16-10a-621" start="0">16-10a-621</xref>.</subsection><subsection number="16-10a-620(3)"> The board of directors may determine the payment terms of subscriptions for shares that were entered into before incorporation, unless the subscription agreement specifies them. A call for payment by the board of directors shall be uniform so far as practicable as to all shares of the same class or series, unless the subscription agreement specifies otherwise.</subsection><subsection number="16-10a-620(4)"> Shares issued pursuant to subscriptions entered into before incorporation are fully paid and nonassessable when the corporation receives the consideration specified in the subscription agreement.</subsection><subsection number="16-10a-620(5)"> If a subscriber defaults in payment of money or property under a subscription agreement entered into before incorporation, the corporation may collect the amount owed as any other debt. Alternatively, unless the subscription agreement provides otherwise, the corporation may rescind the agreement and may sell the shares if the debt remains unpaid more than 20 days after the corporation sends written demand for payment to the subscriber.</subsection><subsection number="16-10a-620(6)"> A subscription agreement entered into after incorporation is a contract between the subscriber and the corporation subject to Section <xref depth="3" refnumber="16-10a-621" start="0">16-10a-621</xref>.</subsection></section><section number="16-10a-621"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Issuance of shares.</catchline><subsection number="16-10a-621(1)"> The powers granted in this section to the board of directors may be reserved to the shareholders by the articles of incorporation.</subsection><subsection number="16-10a-621(2)"> The board of directors may authorize the issuance of shares for consideration consisting of any tangible or intangible property or benefit to the corporation, including cash, promissory notes, services performed, contracts or arrangements for services to be performed, or other securities of the corporation. The terms and conditions of any tangible or intangible property or benefit to be provided in the future to the corporation, including contracts or arrangements for services to be performed, shall be set forth in writing. However, the failure to set forth the terms and conditions in writing does not affect the validity of the issuance of any shares issued for any consideration, or their status as fully paid and nonassessable shares.</subsection><subsection number="16-10a-621(3)"> Before the corporation issues shares, the board of directors shall determine that the consideration received or to be received for the shares to be issued is adequate. The board of directors' determination regarding the adequacy of consideration for the issuance of shares is conclusive for the purpose of determining whether the shares are validly issued, fully paid, and nonassessable.</subsection><subsection number="16-10a-621(4)"> When the corporation receives the consideration for which the board of directors authorized the issuance of shares, the shares issued therefor are fully paid and nonassessable.</subsection><subsection number="16-10a-621(5)"> The corporation may place in escrow shares issued in consideration for contracts or arrangements for future services or benefits or in consideration for a promissory note, or make other arrangements to restrict the transfer of the shares issued for any such consideration, and may credit distributions in respect of the shares against their purchase price, until the services are performed, the note is paid, or the benefits are received. If specified future services are not performed, the note is not paid, or the benefits are not received, the shares escrowed or restricted and the distributions credited may be cancelled in whole or part.</subsection><subsection number="16-10a-621(6)"> The board of directors may authorize a committee of the board of directors, or an officer of the corporation, to authorize or approve the issuance or sale, or contract for sale of shares, within limits specifically prescribed by the board of directors.</subsection></section><section number="16-10a-622"><histories><history>Amended by Chapter <modchap sess="2010GS">44</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Liability of shareholders.</catchline><subsection number="16-10a-622(1)"> A purchaser from a corporation of shares issued by the corporation is not liable to the corporation or its creditors with respect to the shares except to pay or provide the consideration for which the issuance of the shares was authorized under Section <xref depth="3" refnumber="16-10a-621" start="0">16-10a-621</xref> or specified in the subscription agreement under Section <xref depth="3" refnumber="16-10a-620" start="0">16-10a-620</xref>.</subsection><subsection number="16-10a-622(2)"> Unless otherwise provided in the articles of incorporation, a shareholder or subscriber for shares of a corporation is not personally liable for the acts or debts of the corporation solely by reason of the ownership of the corporation's shares.</subsection><subsection number="16-10a-622(3)"><subsection number="16-10a-622(3)(a)"> A shareholder of a corporation, when acting solely in the capacity of a shareholder, has no fiduciary duty or other similar duty to any other shareholder of the corporation, including not having a duty of care, loyalty, or utmost good faith.</subsection><subsection number="16-10a-622(3)(b)"> This Subsection <xref depth="4" refnumber="16-10a-622(3)" start="0">(3)</xref> applies to a corporation governed by this chapter, including a public corporation or a closely-held corporation.</subsection><subsection number="16-10a-622(3)(c)"> This Subsection <xref depth="4" refnumber="16-10a-622(3)" start="0">(3)</xref> does not affect any of the following:<subsection number="16-10a-622(3)(c)(i)"> liability of a shareholder who receives an improper dividend or distribution, as set forth in Section <xref depth="3" refnumber="16-10a-842" start="0">16-10a-842</xref>;</subsection><subsection number="16-10a-622(3)(c)(ii)"> liability for an act before incorporation, as set forth in Section <xref depth="3" refnumber="16-10a-204" start="0">16-10a-204</xref>;</subsection><subsection number="16-10a-622(3)(c)(iii)"> liability of a director or officer of a corporation for breach of a fiduciary duty or other similar duty to shareholders solely in the capacity as a director or officer, regardless of whether the director or officer is a shareholder of the corporation; or</subsection><subsection number="16-10a-622(3)(c)(iv)"> liability of a director or officer of a corporation for an act, breach, or failure for which liability is set forth in: <subsection number="16-10a-622(3)(c)(iv)(A)"> Section <xref depth="3" refnumber="16-10a-840" start="0">16-10a-840</xref>;</subsection><subsection number="16-10a-622(3)(c)(iv)(B)"> Section <xref depth="3" refnumber="16-10a-841" start="0">16-10a-841</xref>; or</subsection><subsection number="16-10a-622(3)(c)(iv)(C)"> Section <xref depth="3" refnumber="16-10a-842" start="0">16-10a-842</xref>.</subsection></subsection></subsection></subsection></section><section number="16-10a-623"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Share dividends.</catchline><subsection number="16-10a-623(1)"> Unless the articles of incorporation provide otherwise, shares may be issued pro rata and without consideration to the corporation's shareholders or, to the extent and in the manner provided for in the articles of incorporation, to the shareholders of one or more classes or series of shares. An issuance of shares under this subsection is a share dividend.</subsection><subsection number="16-10a-623(2)"> Shares of one class or series may not be issued as a share dividend in respect of shares of another class or series unless: <subsection number="16-10a-623(2)(a)"> the articles of incorporation so authorize;</subsection><subsection number="16-10a-623(2)(b)"> a majority of the votes entitled to be cast by the outstanding shares of the class or series to be issued approve the issue; or</subsection><subsection number="16-10a-623(2)(c)"> there are no outstanding shares of the class or series to be issued.</subsection></subsection><subsection number="16-10a-623(3)"> The bylaws or, in the absence of an applicable bylaw, the board of directors may fix a future date as the record date for determining shareholders entitled to a share dividend. If no future date is so fixed, the record date is the date the board of directors authorizes the share dividend.</subsection></section><section number="16-10a-624"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Share options and other rights.</catchline><subsection number="16-10a-624(1)"> Subject to any provisions in its articles of incorporation, a corporation may create and issue, whether or not in connection with the issue and sale of any shares or other securities of the corporation, rights or options for the purchase of shares or assets of the corporation. The board of directors shall determine the terms upon which the rights or options are issued, their form and content, and the consideration for which the shares are to be issued.</subsection><subsection number="16-10a-624(2)"> The terms and conditions of the options or rights may include restrictions or conditions that: <subsection number="16-10a-624(2)(a)"> preclude or limit the exercise, transfer, or receipt of the options or rights by any person owning or offering to acquire a specified number or percentage of the outstanding common shares or other securities of the corporation or any transferee of that person; or</subsection><subsection number="16-10a-624(2)(b)"> invalidate or void the options or rights.</subsection></subsection><subsection number="16-10a-624(3)"> This section applies to all options and rights notwithstanding the date of grant.</subsection></section><section number="16-10a-625"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Form and content of certificates.</catchline><subsection number="16-10a-625(1)"> Shares may but need not be represented by certificates. Unless this chapter or another applicable statute expressly provides otherwise, the rights and obligations of shareholders are not affected by whether or not their shares are represented by certificates.</subsection><subsection number="16-10a-625(2)"> Each share certificate shall state on its face: <subsection number="16-10a-625(2)(a)"> the name of the issuing corporation and that it is organized under the laws of this state;</subsection><subsection number="16-10a-625(2)(b)"> the name of the person to whom the certificate is issued; and</subsection><subsection number="16-10a-625(2)(c)"> the number and class of shares and the designation of the series, if any, the certificate represents.</subsection></subsection><subsection number="16-10a-625(3)"> If the issuing corporation is authorized to issue different classes of shares or different series within a class, the designations, preferences, limitations, and relative rights applicable to each class, the variations in preferences, limitations, and relative rights determined for each series, and the authority of the board of directors to determine variations for any existing or future class or series, shall be summarized on the front or back of each share certificate. Alternatively, each certificate may state conspicuously on its front or back that the corporation will furnish the shareholder this information on request in writing and without charge.</subsection><subsection number="16-10a-625(4)"> Each share certificate: <subsection number="16-10a-625(4)(a)"> shall be signed by two officers designated in the bylaws or by the board of directors;</subsection><subsection number="16-10a-625(4)(b)"> may bear the corporate seal or its facsimile; and</subsection><subsection number="16-10a-625(4)(c)"> may contain any other information as the corporation considers necessary or appropriate.</subsection></subsection><subsection number="16-10a-625(5)"> The signatures of the officers upon a certificate may be facsimiles if the certificate is countersigned by a transfer agent, or registered by a registrar, other than the corporation itself or an employee of the corporation.</subsection><subsection number="16-10a-625(6)"> In case any officer who has signed or whose facsimile signature has been placed upon a certificate ceases to be an officer before the certificate is issued, the certificate may be issued by the corporation with the same effect as if the person were an officer at the date of its issue.</subsection></section><section number="16-10a-626"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Shares without certificates.</catchline><subsection number="16-10a-626(1)"> Unless the articles of incorporation or bylaws provide otherwise, the board of directors of a corporation may authorize the issuance of some or all of the shares of any or all of its classes or series without certificates. The authorization does not affect shares already represented by certificates until they are surrendered to the corporation.</subsection><subsection number="16-10a-626(2)"> Within a reasonable time after the issuance or transfer of shares without certificates, the corporation shall send the shareholder a written statement of the information required on certificates by Subsections <xref depth="4" refnumber="16-10a-625(2)" start="0">16-10a-625(2)</xref> and <xref depth="4" refnumber="16-10a-625(3)" start="0">(3)</xref>, and, if applicable, Section <xref depth="3" refnumber="16-10a-627" start="0">16-10a-627</xref>.</subsection></section><section number="16-10a-627"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Restrictions on transfer or registration of shares or other securities.</catchline><subsection number="16-10a-627(1)"> The articles of incorporation, the bylaws, an agreement among shareholders, or an agreement between one or more shareholders and the corporation may impose restrictions on the transfer or registration of transfer of shares of the corporation. A restriction does not affect shares issued before the restriction was adopted unless the holders of the shares are parties to the restriction agreement or voted in favor of the restriction or otherwise consented to the restriction.</subsection><subsection number="16-10a-627(2)"> A restriction on the transfer or registration of transfer of shares is valid and enforceable against the holder or a transferee of the holder if the restriction is authorized by this section and its existence is noted conspicuously on the front or back of the certificate, or if the restriction is contained in the information statement required by Subsection <xref depth="4" refnumber="16-10a-626(2)" start="0">16-10a-626(2)</xref>. Unless so noted, a restriction is not enforceable against a person without knowledge of the restriction.</subsection><subsection number="16-10a-627(3)"> A restriction on the transfer or registration of transfer of shares is authorized: <subsection number="16-10a-627(3)(a)"> to maintain the corporation's status when it is dependent on the number or identity of its shareholders;</subsection><subsection number="16-10a-627(3)(b)"> to preserve entitlements, benefits, or exemptions under federal, state, or local laws; and</subsection><subsection number="16-10a-627(3)(c)"> for any other reasonable purpose.</subsection></subsection><subsection number="16-10a-627(4)"> A restriction on the transfer or registration of transfer of shares may: <subsection number="16-10a-627(4)(a)"> obligate the shareholder first to offer to the corporation or other persons, separately, consecutively, or simultaneously, an opportunity to acquire the restricted shares;</subsection><subsection number="16-10a-627(4)(b)"> obligate the corporation or other persons, separately, consecutively, or simultaneously, to acquire the restricted shares;</subsection><subsection number="16-10a-627(4)(c)"> require, as a condition to a transfer or registration, that any one or more persons, including the corporation or any of its shareholders, approve the transfer or registration, if the requirement is not manifestly unreasonable; or</subsection><subsection number="16-10a-627(4)(d)"> prohibit the transfer or the registration of a transfer of the restricted shares to designated persons or classes of persons, if the prohibition is not manifestly unreasonable.</subsection></subsection><subsection number="16-10a-627(5)"> The description of the restrictions on the transfer or registration of transfer of shares in Subsection <xref depth="4" refnumber="16-10a-627(4)" start="0">(4)</xref> is not exhaustive.</subsection><subsection number="16-10a-627(6)"> For purposes of this section, "shares" includes a security convertible into or carrying a right to subscribe for or acquire shares.</subsection></section><section number="16-10a-628"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Expense of issue.</catchline><tab/>A corporation may pay the expenses of selling or underwriting its shares, and of incorporating, organizing, or reorganizing the corporation from the consideration received for shares. </section><section number="16-10a-630"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Shareholders' preemptive rights.</catchline><subsection number="16-10a-630(1)"> Subject to the provisions of Subsection <xref depth="4" refnumber="16-10a-1704(3)" start="0">16-10a-1704(3)</xref>, the shareholders of a corporation do not have a preemptive right to acquire the corporation's unissued shares except to the extent the articles of incorporation so provide.</subsection><subsection number="16-10a-630(2)"> A statement included in the articles of incorporation that "the corporation elects to have preemptive rights," or words of similar import, means that the following principles apply except to the extent the articles of incorporation expressly provide otherwise: <subsection number="16-10a-630(2)(a)"> Upon the decision of the board of directors to issue shares, the shareholders of the corporation have a preemptive right, subject to any uniform terms and conditions prescribed by the board of directors, to provide a fair and reasonable opportunity to exercise the right, to acquire a number of the shares proposed to be issued in an amount proportional to their percentage ownership of the corporation's outstanding shares.</subsection><subsection number="16-10a-630(2)(b)"> A shareholder may waive a preemptive right. A waiver evidenced by a writing is irrevocable even though it is not supported by consideration.</subsection><subsection number="16-10a-630(2)(c)"> There is no preemptive right with respect to:<subsection number="16-10a-630(2)(c)(i)"> shares issued as compensation for services to directors, officers, agents, or employees of the corporation, its subsidiaries, or affiliates;</subsection><subsection number="16-10a-630(2)(c)(ii)"> shares issued to satisfy conversion or option rights created to provide compensation for services to directors, officers, agents, or employees of the corporation, its subsidiaries, or affiliates;</subsection><subsection number="16-10a-630(2)(c)(iii)"> shares issued within six months from the effective date of incorporation; or</subsection><subsection number="16-10a-630(2)(c)(iv)"> shares sold otherwise than for cash.</subsection></subsection><subsection number="16-10a-630(2)(d)"> Holders of shares of any class without general voting rights but with preferential rights to distributions have no preemptive rights with respect to shares of any other class.</subsection><subsection number="16-10a-630(2)(e)"> Holders of shares of any class with general voting rights but without preferential rights to distributions have no preemptive rights with respect to shares of any class without general voting rights but with preferential rights to distributions unless the shares without general voting rights but with preferential rights are convertible into or carry a right to subscribe for or acquire shares with general voting rights or without preferential rights.</subsection><subsection number="16-10a-630(2)(f)"> Shares subject to preemptive rights that are not acquired by shareholders may be issued to any person for a period of one year after being offered to shareholders pursuant to the preemptive rights, at a consideration set by the board of directors that is not lower than the consideration set for the exercise of preemptive rights. An offer at a lower consideration or after the expiration of the one year period is subject to the shareholders' preemptive rights.</subsection></subsection><subsection number="16-10a-630(3)"> For purposes of this section, "shares" includes a security convertible into or carrying a right to subscribe for or acquire shares.</subsection></section><section number="16-10a-631"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Corporation's acquisition of its own shares.</catchline><subsection number="16-10a-631(1)"> A corporation may acquire its own shares and shares so acquired constitute authorized but unissued shares.</subsection><subsection number="16-10a-631(2)"> If the articles of incorporation prohibit the reissuance of acquired shares: <subsection number="16-10a-631(2)(a)"> the number of authorized shares is reduced by the number of shares acquired by the corporation, effective upon amendment of the articles of incorporation; and</subsection><subsection number="16-10a-631(2)(b)"> as provided in Section <xref depth="3" refnumber="16-10a-1002" start="0">16-10a-1002</xref>, the board of directors may adopt an amendment to the articles of incorporation under Subsection <xref depth="4" refnumber="16-10a-631(2)(a)" start="0">(2)(a)</xref> without shareholder action in order to reduce the number of authorized shares by an amount equal to the number of shares acquired by the corporation.</subsection></subsection><subsection number="16-10a-631(3)"> A corporation amending its articles of incorporation pursuant to Subsection <xref depth="4" refnumber="16-10a-631(2)" start="0">(2)</xref> shall deliver to the division for filing articles of amendment setting forth: <subsection number="16-10a-631(3)(a)"> the name of the corporation;</subsection><subsection number="16-10a-631(3)(b)"> the reduction in the number of authorized shares, itemized by class and series;</subsection><subsection number="16-10a-631(3)(c)"> the total number of authorized shares, itemized by class and series, remaining after reduction of the shares; and</subsection><subsection number="16-10a-631(3)(d)"> a statement that the amendment was adopted by the board of directors without shareholder action and that shareholder action was not required.</subsection></subsection></section><section number="16-10a-640"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Distributions to shareholders.</catchline><subsection number="16-10a-640(1)"> A board of directors may authorize and the corporation may make distributions to its shareholders subject to any restriction in the articles of incorporation and the limitations in Subsection <xref depth="4" refnumber="16-10a-640(3)" start="0">(3)</xref>.</subsection><subsection number="16-10a-640(2)"> The bylaws or, in the absence of an applicable bylaw, the board of directors may fix a future date as the record date for determining shareholders entitled to a distribution, other than one involving a purchase, redemption, or other acquisition of the corporation's shares. If a record date is necessary but no future date is so fixed, the record date is the date the board of directors authorizes the distribution.</subsection><subsection number="16-10a-640(3)"> No distribution may be made if, after giving it effect: <subsection number="16-10a-640(3)(a)"> the corporation would not be able to pay its debts as they become due in the usual course of business; or</subsection><subsection number="16-10a-640(3)(b)"> the corporation's total assets would be less than the sum of its total liabilities plus, unless the articles of incorporation permit otherwise, the amount that would be needed, if the corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution.</subsection></subsection><subsection number="16-10a-640(4)"> The board of directors may base a determination that a distribution is not prohibited under Subsection <xref depth="4" refnumber="16-10a-640(3)" start="0">(3)</xref> either on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances, including consolidated financial statements, or on a fair valuation or other method that is reasonable in the circumstances.</subsection><subsection number="16-10a-640(5)"> Except as provided in Subsection <xref depth="4" refnumber="16-10a-640(7)" start="0">(7)</xref>, the effect of a distribution under Subsection <xref depth="4" refnumber="16-10a-640(3)" start="0">(3)</xref> is measured: <subsection number="16-10a-640(5)(a)"> in the case of distribution by purchase, redemption, or other acquisition of the corporation's shares, as of the earlier of:<subsection number="16-10a-640(5)(a)(i)"> the date money or other property is transferred or debt is incurred by the corporation; or</subsection><subsection number="16-10a-640(5)(a)(ii)"> the date the shareholder ceases to be a shareholder with respect to the acquired shares;</subsection></subsection><subsection number="16-10a-640(5)(b)"> in the case of any other distribution of indebtedness, as of the date the indebtedness is distributed; and</subsection><subsection number="16-10a-640(5)(c)"> in all other cases, as of:<subsection number="16-10a-640(5)(c)(i)"> the date the distribution is authorized if the payment occurs within 120 days after the date of authorization; or</subsection><subsection number="16-10a-640(5)(c)(ii)"> the date the payment is made if it occurs more than 120 days after the date of authorization.</subsection></subsection></subsection><subsection number="16-10a-640(6)"> A corporation's indebtedness to a shareholder incurred by reason of a distribution made in accordance with this section, if the indebtedness is unsecured, is on a parity with the corporation's indebtedness to its general, unsecured creditors except to the extent subordinated by agreement.</subsection><subsection number="16-10a-640(7)"> Indebtedness of a corporation, including indebtedness issued as a distribution, is not considered a liability for purposes of determinations under Subsection <xref depth="4" refnumber="16-10a-640(3)" start="0">(3)</xref> if its terms provide that payment of principal and interest are made only if and to the extent that payment of a distribution to shareholders could then be made under this section. If the indebtedness is issued as a distribution, each payment of principal or interest on the indebtedness is treated as a distribution, the effect of which is measured on the date the payment is actually made.</subsection></section><section number="16-10a-641"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Unclaimed distributions.</catchline><tab/>If a corporation has mailed three successive distributions to a shareholder addressed to the shareholder's address shown on the corporation's current record of shareholders and the distributions have been returned as undeliverable, no further attempt to deliver distributions to the shareholder need be made until another address for the shareholder is made known to the corporation, at which time all distributions accumulated by reason of this section shall, except as otherwise provided by law, be mailed to the shareholder at the other address. </section></part><part number="16-10a-7"><catchline>Shareholders</catchline><section number="16-10a-701"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Annual meeting.</catchline><subsection number="16-10a-701(1)"> A corporation shall hold a meeting of shareholders annually at a time stated in or fixed in accordance with the bylaws.</subsection><subsection number="16-10a-701(2)"> Annual shareholders' meetings may be held in or out of this state at the place stated in or fixed in accordance with the bylaws. If no place is stated in or fixed in accordance with the bylaws, annual meetings shall be held at the corporation's principal office.</subsection><subsection number="16-10a-701(3)"> The failure to hold an annual meeting at the time stated in or fixed in accordance with a corporation's bylaws does not affect the validity of any corporate action or work a forfeiture or dissolution of the corporation.</subsection></section><section number="16-10a-702"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Special meeting.</catchline><subsection number="16-10a-702(1)"> A corporation shall hold a special meeting of shareholders: <subsection number="16-10a-702(1)(a)"> on call of its board of directors or the person or persons authorized by the bylaws to call a special meeting; or</subsection><subsection number="16-10a-702(1)(b)"> if the holders of shares representing at least 10% of all the votes entitled to be cast on any issue proposed to be considered at the proposed special meeting sign, date, and deliver to the corporation's secretary one or more written demands for the meeting, stating the purpose or purposes for which it is to be held.</subsection></subsection><subsection number="16-10a-702(2)"> If not otherwise fixed under Sections <xref depth="3" refnumber="16-10a-703" start="0">16-10a-703</xref> or <xref depth="3" refnumber="16-10a-707" start="0">16-10a-707</xref>, the record date for determining shareholders entitled to demand a special meeting pursuant to Subsection <xref depth="4" refnumber="16-10a-702(1)(b)" start="0">(1)(b)</xref> is the earliest date of any of the demands pursuant to which the meeting is called or the date that is 60 days prior to the date the first of the written demands pursuant to which the meeting is called is received by the corporation, whichever is later.</subsection><subsection number="16-10a-702(3)"> Special shareholders' meetings may be held in or out of this state at the place stated in or fixed in accordance with the bylaws. If no place is stated or fixed in accordance with the bylaws, special meetings shall be held at the corporation's principal office.</subsection><subsection number="16-10a-702(4)"> Only business within the purpose or purposes described in the meeting notice required by Subsection <xref depth="4" refnumber="16-10a-705(3)" start="0">16-10a-705(3)</xref> may be conducted at a special shareholders' meeting, unless notice of the meeting is waived by all shareholders pursuant to Section <xref depth="3" refnumber="16-10a-706" start="0">16-10a-706</xref>.</subsection></section><section number="16-10a-703"><histories><history>Amended by Chapter <modchap sess="2023GS">401</modchap>, 2023 General Session</history><modyear>2023</modyear></histories><catchline>Court-ordered meeting.</catchline><subsection number="16-10a-703(1)"> A court may summarily order a meeting of shareholders to be held: <subsection number="16-10a-703(1)(a)"> upon a petition by a shareholder of the corporation entitled to participate in an annual meeting or any director of the corporation, if an annual meeting was not held within 15 months after its last annual meeting, or if there has been no annual meeting, the date of incorporation; or</subsection><subsection number="16-10a-703(1)(b)"> upon a petition by a person who participated in a call of or demand for a special meeting effective under Subsection <xref depth="4" refnumber="16-10a-702(1)" start="0">16-10a-702(1)</xref>, if:<subsection number="16-10a-703(1)(b)(i)"> notice of the special meeting was not given within 60 days after the date of the call or the date the last of the demands necessary to require the calling of the meeting was delivered to the corporation pursuant to Subsection <xref depth="4" refnumber="16-10a-702(1)(b)" start="0">16-10a-702(1)(b)</xref>, as the case may be; or</subsection><subsection number="16-10a-703(1)(b)(ii)"> the special meeting was not held in accordance with the notice.</subsection></subsection></subsection><subsection number="16-10a-703(2)"> The court may fix the time and place of the meeting, state whether or not it is an annual or special meeting, determine the shares entitled to participate in the meeting, specify a record date for determining shareholders entitled to notice of and to vote at the meeting, prescribe the form and content of the meeting notice, fix the quorum required for specific matters to be considered at the meeting, or direct that the votes represented at the meeting constitute a quorum for action on those matters, and enter other orders necessary or appropriate to accomplish the purpose or purposes of holding the meeting.</subsection></section><section number="16-10a-704"><histories><history>Amended by Chapter <modchap sess="2011GS">424</modchap>, 2011 General Session</history><modyear>2011</modyear></histories><catchline>Action without meeting.</catchline><subsection number="16-10a-704(1)"><subsection number="16-10a-704(1)(a)"> Unless otherwise provided in the articles of incorporation, and subject to the limitations of Subsection <xref depth="4" refnumber="16-10a-1704(4)" start="0">16-10a-1704(4)</xref>, any action that may be taken at an annual or special meeting of shareholders may be taken without a meeting and without prior notice, if one or more consents in writing, setting forth the action so taken are signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take the action at a meeting at which all shares entitled to vote on the action were present and voted.</subsection><subsection number="16-10a-704(1)(b)"> A shareholder shall deliver written consent under this section to the corporation by delivering the written consent to:<subsection number="16-10a-704(1)(b)(i)"> the corporation's principal place of business; or</subsection><subsection number="16-10a-704(1)(b)(ii)"> an officer or agent of the corporation having custody of the book in which a proceeding of a meeting of shareholders is recorded.</subsection></subsection><subsection number="16-10a-704(1)(c)"> A written consent under this section shall bear the date of signature of each shareholder who signs the consent.</subsection><subsection number="16-10a-704(1)(d)"><subsection number="16-10a-704(1)(d)(i)"> Notwithstanding Subsection <xref depth="4" refnumber="16-10a-704(1)(c)" start="0">(1)(c)</xref>, and unless otherwise provided by the bylaws, a shareholder may deliver a written consent under this section by an electronic transmission that provides the corporation with a complete copy of the written consent.</subsection><subsection number="16-10a-704(1)(d)(ii)"> An electronic transmission consenting to an action under this section is considered to be written, signed, and dated for purposes of this section if the electronic transmission is delivered with information from which the corporation can determine: <subsection number="16-10a-704(1)(d)(ii)(A)"> that the electronic transmission is transmitted by the shareholder, proxyholder, or other person authorized to act for the shareholder or proxyholder; and</subsection><subsection number="16-10a-704(1)(d)(ii)(B)"> the date on which the electronic transmission is transmitted.</subsection></subsection><subsection number="16-10a-704(1)(d)(iii)"> The date on which an electronic transmission is transmitted is considered the date on which a consent is signed.</subsection></subsection><subsection number="16-10a-704(1)(e)"> A consent signed pursuant to this section has the effect of a vote taken at a meeting and may be described as such in a document.</subsection></subsection><subsection number="16-10a-704(2)"><subsection number="16-10a-704(2)(a)"> Except as provided in Subsection <xref depth="4" refnumber="16-10a-704(3)" start="0">(3)</xref>, unless the written consents of all shareholders entitled to vote are obtained, written notice of shareholder approval of an action without a meeting shall be given at least 10 days before the consummation of the transaction, action, or event authorized by the shareholder action to:<subsection number="16-10a-704(2)(a)(i)"> those shareholders entitled to vote who have not consented in writing; and</subsection><subsection number="16-10a-704(2)(a)(ii)"> those shareholders not entitled to vote and to whom this chapter requires that notice of the proposed action be given.</subsection></subsection><subsection number="16-10a-704(2)(b)"> Notice under this Subsection <xref depth="4" refnumber="16-10a-704(2)" start="0">(2)</xref> shall contain or be accompanied by the same material that, under this chapter, would have been required to be sent in a notice of meeting at which the proposed action would have been submitted to the shareholders for action.</subsection></subsection><subsection number="16-10a-704(3)"><subsection number="16-10a-704(3)(a)"> A transaction, action, or event authorized by shareholder action under this section may take effect in accordance with Subsection <xref depth="4" refnumber="16-10a-704(5)" start="0">(5)</xref> notwithstanding that the written consents of all shareholders entitled to vote are not obtained if the articles of incorporation or bylaws of the corporation provide for notice under this Subsection <xref depth="4" refnumber="16-10a-704(3)" start="0">(3)</xref>.</subsection><subsection number="16-10a-704(3)(b)"> A corporation may provide in its articles of incorporation or bylaws that if the written consents of all shareholders entitled to vote are not obtained, the corporation shall give written notice of shareholder approval of an action without a meeting:<subsection number="16-10a-704(3)(b)(i)"> not more than 10 days after the later of the day on which: <subsection number="16-10a-704(3)(b)(i)(A)"> the written consents sufficient to take the action are delivered to the corporation; or</subsection><subsection number="16-10a-704(3)(b)(i)(B)"> the tabulation of the written consents is completed in accordance with Subsection <xref depth="4" refnumber="16-10a-704(1)" start="0">(1)</xref>; and</subsection></subsection><subsection number="16-10a-704(3)(b)(ii)"> to a shareholder who: <subsection number="16-10a-704(3)(b)(ii)(A)"> would be entitled to notice of a meeting at which the action could be taken;</subsection><subsection number="16-10a-704(3)(b)(ii)(B)"> would be entitled to vote if the action were taken at a meeting; and</subsection><subsection number="16-10a-704(3)(b)(ii)(C)"> did not consent in writing to the action.</subsection></subsection></subsection><subsection number="16-10a-704(3)(c)"> Notice under this Subsection <xref depth="4" refnumber="16-10a-704(3)" start="0">(3)</xref> shall contain or be accompanied by the same material that, under this chapter, would have been required to be sent in a notice of meeting at which the proposed action would have been submitted to the shareholders for action.</subsection><subsection number="16-10a-704(3)(d)"> The notice requirement in this Subsection <xref depth="4" refnumber="16-10a-704(3)" start="0">(3)</xref> does not delay the effectiveness of an action taken by written consent in accordance with Subsection <xref depth="4" refnumber="16-10a-704(5)" start="0">(5)</xref>. Failure to comply with the notice requirement under this Subsection <xref depth="4" refnumber="16-10a-704(3)" start="0">(3)</xref> by itself does not invalidate an action taken by written consent, except this Subsection <xref depth="4" refnumber="16-10a-704(3)(d)" start="0">(3)(d)</xref> does not limit judicial power to fashion an appropriate remedy in favor of a shareholder adversely affected by a failure to give notice within the time period required under Subsection <xref depth="4" refnumber="16-10a-704(3)(b)" start="0">(3)(b)</xref>.</subsection></subsection><subsection number="16-10a-704(4)"> The following may revoke a written consent under this section by a signed writing describing the action and stating that a shareholder's prior consent is revoked, if the writing is received by the corporation before the effectiveness of the action: <subsection number="16-10a-704(4)(a)"> the shareholder that gave the written consent;</subsection><subsection number="16-10a-704(4)(b)"> the proxyholder for the shareholder described in Subsection <xref depth="4" refnumber="16-10a-704(4)(a)" start="0">(4)(a)</xref>;</subsection><subsection number="16-10a-704(4)(c)"> a transferee of the shares of the shareholder described in Subsection <xref depth="4" refnumber="16-10a-704(4)(a)" start="0">(4)(a)</xref>;</subsection><subsection number="16-10a-704(4)(d)"> a personal representative of the shareholder described in Subsection <xref depth="4" refnumber="16-10a-704(4)(a)" start="0">(4)(a)</xref>; or</subsection><subsection number="16-10a-704(4)(e)"> a proxyholder for a person described in this Subsection <xref depth="4" refnumber="16-10a-704(4)" start="0">(4)</xref>.</subsection></subsection><subsection number="16-10a-704(5)"><subsection number="16-10a-704(5)(a)"> An action taken pursuant to this section is not effective unless all written consents on which the corporation relies for taking the action pursuant to Subsection <xref depth="4" refnumber="16-10a-704(1)" start="0">(1)</xref> are:<subsection number="16-10a-704(5)(a)(i)"> received by the corporation by no later than 60 days after the date the earliest written consent is delivered to the corporation as provided in Subsection <xref depth="4" refnumber="16-10a-704(1)" start="0">(1)</xref>; and</subsection><subsection number="16-10a-704(5)(a)(ii)"> not revoked pursuant to Subsection <xref depth="4" refnumber="16-10a-704(4)" start="0">(4)</xref>.</subsection></subsection><subsection number="16-10a-704(5)(b)"><subsection number="16-10a-704(5)(b)(i)"> Unless otherwise provided by this Subsection <xref depth="4" refnumber="16-10a-704(5)" start="0">(5)</xref> and subject to Subsection <xref depth="4" refnumber="16-10a-704(2)" start="0">(2)</xref>, an action taken by the shareholders pursuant to this section is effective as of the date the last written consent necessary to effect the action is received by the corporation.</subsection><subsection number="16-10a-704(5)(b)(ii)"> If all of the written consents necessary to effect an action specify a later date as the effective date of the action, the later date is the effective date of the action.</subsection><subsection number="16-10a-704(5)(b)(iii)"> If the corporation receives written consents as contemplated by Subsection <xref depth="4" refnumber="16-10a-704(1)" start="0">(1)</xref> signed by all shareholders entitled to vote with respect to an action, the effective date of the shareholder action may be any date that is specified in all the written consents as the effective date of the shareholder action.</subsection></subsection></subsection><subsection number="16-10a-704(6)"> Notwithstanding Subsection <xref depth="4" refnumber="16-10a-704(1)" start="0">(1)</xref>, directors may not be elected by written consent except by unanimous written consent of all shares entitled to vote for the election of directors.</subsection><subsection number="16-10a-704(7)"> If not otherwise determined under Sections <xref depth="3" refnumber="16-10a-703" start="0">16-10a-703</xref> or <xref depth="3" refnumber="16-10a-707" start="0">16-10a-707</xref>, the record date for determining shareholders entitled to take action without a meeting or entitled to be given notice under Subsection <xref depth="4" refnumber="16-10a-704(2)" start="0">(2)</xref> or <xref depth="4" refnumber="16-10a-704(3)" start="0">(3)</xref> is the date the first shareholder delivers to the corporation a writing upon which the action is taken pursuant to Subsection <xref depth="4" refnumber="16-10a-704(1)" start="0">(1)</xref>.</subsection><subsection number="16-10a-704(8)"> Action taken under this section has the same effect as action taken at a meeting of shareholders and may be so described in any document.</subsection></section><section number="16-10a-705"><histories><history>Amended by Chapter <modchap sess="2011GS">424</modchap>, 2011 General Session</history><modyear>2011</modyear></histories><catchline>Notice of meeting.</catchline><subsection number="16-10a-705(1)"> A corporation shall give notice to shareholders of the date, time, and place of each annual and special shareholders' meeting no fewer than 10 nor more than 60 days before the meeting date. Unless this chapter or the articles of incorporation require otherwise, the corporation is required to give notice only to shareholders entitled to vote at the meeting.</subsection><subsection number="16-10a-705(2)"> Unless this chapter or the articles of incorporation require otherwise, notice of an annual meeting need not include a description of the purpose or purposes for which the meeting is called.</subsection><subsection number="16-10a-705(3)"> Notice of a special meeting shall include a description of the purpose or purposes for which the meeting is called.</subsection><subsection number="16-10a-705(4)"><subsection number="16-10a-705(4)(a)"> Subject to Subsection <xref depth="4" refnumber="16-10a-705(4)(b)" start="0">(4)(b)</xref>, unless the bylaws require otherwise, if an annual or special shareholders' meeting is adjourned to a different date, time, or place, notice need not be given of the new date, time, or place if the new date, time, or place is announced at the meeting before adjournment.</subsection><subsection number="16-10a-705(4)(b)"> If the adjournment is for more than 30 days, or if after the adjournment a new record date for the adjourned meeting is or shall be fixed under Section <xref depth="3" refnumber="16-10a-707" start="0">16-10a-707</xref>, notice of the adjourned meeting shall be given pursuant to the requirements of this section to shareholders of record who are entitled to vote at the meeting.</subsection></subsection><subsection number="16-10a-705(5)"><subsection number="16-10a-705(5)(a)"> Notwithstanding a requirement that notice be given under any provision of this chapter, the articles of incorporation, or bylaws of any corporation, notice is not required to be given to any shareholder to whom:<subsection number="16-10a-705(5)(a)(i)"> a notice of two consecutive annual meetings, and all notices of meetings or of the taking of action by written consent without a meeting during the period between the two consecutive annual meetings, have been mailed, addressed to the shareholder at the shareholder's address as shown on the records of the corporation, and have been returned undeliverable; or</subsection><subsection number="16-10a-705(5)(a)(ii)"> at least two payments, if sent by first class mail, of dividends or interest on securities during a 12 month period, have been mailed, addressed to the shareholder at the shareholder's address as shown on the records of the corporation, and have been returned undeliverable.</subsection></subsection><subsection number="16-10a-705(5)(b)"> Any action taken at a meeting held without notice to a shareholder to whom notice is excused under Subsection <xref depth="4" refnumber="16-10a-705(5)" start="0">(5)</xref> has the same force and effect as if notice had been duly given. If a shareholder to whom notice is excused under Subsection <xref depth="4" refnumber="16-10a-705(5)" start="0">(5)</xref> delivers to the corporation a written notice setting forth the shareholder's current address, or if another address for the shareholder is otherwise made known to the corporation, the requirement that notice be given to the shareholder is reinstated. In the event that the action taken by the corporation requires the filing of a certificate under any provision of this chapter, the certificate need not state that notice was not given to shareholders to whom notice was not required pursuant to this Subsection <xref depth="4" refnumber="16-10a-705(5)" start="0">(5)</xref>.</subsection></subsection></section><section number="16-10a-706"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Waiver of notice.</catchline><subsection number="16-10a-706(1)"> A shareholder may waive any notice required by this chapter, the articles of incorporation, or the bylaws before or after the date and time stated in the notice as the date or time when any action will occur or has occurred. The waiver shall be in writing, be signed by the shareholder entitled to the notice, and be delivered to the corporation for inclusion in the minutes or filing with the corporate records.</subsection><subsection number="16-10a-706(2)"> A shareholder's attendance at a meeting: <subsection number="16-10a-706(2)(a)"> waives objection to lack of notice or defective notice of the meeting, unless the shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting because of lack of notice or defective notice; and</subsection><subsection number="16-10a-706(2)(b)"> waives objection to consideration of a particular matter at the meeting that is not within the purposes described in the meeting notice, unless the shareholder objects to considering the matter when it is presented.</subsection></subsection></section><section number="16-10a-707"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Record date.</catchline><subsection number="16-10a-707(1)"> The bylaws may fix or provide the manner of fixing the record date for one or more voting groups in order to determine the shareholders entitled to be given notice of a shareholders' meeting, to determine shareholders entitled to take action without a meeting, to demand a special meeting, to vote, or to take any other action. If the bylaws do not fix or provide for the manner of fixing a record date, the board of directors of the corporation may fix a future date as the record date.</subsection><subsection number="16-10a-707(2)"> If not otherwise fixed under Section <xref depth="3" refnumber="16-10a-703" start="0">16-10a-703</xref> or Subsection <xref depth="4" refnumber="16-10a-707(1)" start="0">(1)</xref>, the record date for determining shareholders entitled to notice of and to vote at an annual or special shareholders' meeting is the close of business on the day before the first notice is delivered to shareholders.</subsection><subsection number="16-10a-707(3)"> A record date fixed under this section may not be more than 70 days before the meeting or action requiring a determination of shareholders.</subsection><subsection number="16-10a-707(4)"> A determination of shareholders entitled to notice of or to vote at a shareholders' meeting is effective for any adjournment of the meeting unless the board of directors fixes a new record date, which it shall do if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting.</subsection><subsection number="16-10a-707(5)"> If a court orders a meeting adjourned to a date more than 120 days after the date fixed for the original meeting, it may provide that the original record date continues in effect or it may fix a new record date.</subsection></section><section number="16-10a-708"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Meetings by telecommunication.</catchline><tab/>Unless otherwise provided in the bylaws, any or all of the shareholders may participate in an annual or special meeting of shareholders by, or the meeting may be conducted through the use of, any means of communication by which all persons participating in the meeting can hear each other during the meeting. A shareholder participating in a meeting by this means is considered to be present in person at the meeting. </section><section number="16-10a-720"><histories><history>Amended by Chapter <modchap sess="2023GS">401</modchap>, 2023 General Session</history><modyear>2023</modyear></histories><catchline>Shareholders' list for meeting.</catchline><subsection number="16-10a-720(1)"><subsection number="16-10a-720(1)(a)"> After fixing a record date for a shareholders' meeting, a corporation shall prepare a list of the names of all the corporation's shareholders who are entitled to be given notice of the meeting.</subsection><subsection number="16-10a-720(1)(b)"> The list shall be arranged by voting group, and within each voting group by class or series of shares.</subsection><subsection number="16-10a-720(1)(c)"> The list shall be alphabetical within each class or series and shall show the address of, and the number of shares held by, each shareholder.</subsection></subsection><subsection number="16-10a-720(2)"><subsection number="16-10a-720(2)(a)"> The shareholders' list shall be available for inspection by any shareholder, beginning on the earlier of 10 days before the meeting for which the list was prepared or two business days after notice of the meeting is given and continuing through the meeting and any meeting adjournments, at the corporation's principal office or at a place identified in the meeting notice in the city where the meeting will be held.</subsection><subsection number="16-10a-720(2)(b)"> A shareholder or a shareholder's agent or attorney is entitled on written demand to the corporation and, subject to the requirements of Subsections <xref depth="4" refnumber="16-10a-1602(3)" start="0">16-10a-1602(3)</xref> and <xref depth="4" refnumber="16-10a-1602(7)" start="0">(7)</xref>, and the provisions of Subsections <xref depth="4" refnumber="16-10a-1603(2)" start="0">16-10a-1603(2)</xref> and <xref depth="4" refnumber="16-10a-1603(3)" start="0">(3)</xref>, to inspect and copy the list, during regular business hours and during the period the list is available for inspection.</subsection></subsection><subsection number="16-10a-720(3)"> The corporation shall make the shareholders' list available at the meeting, and any shareholder, or any shareholder's agent or attorney is entitled to inspect the list at any time during the meeting or any adjournment, for any purposes germane to the meeting.</subsection><subsection number="16-10a-720(4)"> If the corporation refuses to allow a shareholder, or the shareholder's agent or attorney, to inspect the shareholders' list before or at the meeting, or to copy the list as permitted by Subsection <xref depth="4" refnumber="16-10a-720(2)" start="0">(2)</xref>, a court may, upon the petition of a shareholder: <subsection number="16-10a-720(4)(a)"> summarily order the inspection or copying at the corporation's expense; and</subsection><subsection number="16-10a-720(4)(b)"> postpone the meeting for which the list was prepared until the inspection or copying is complete.</subsection></subsection><subsection number="16-10a-720(5)"> If a court orders inspection or copying of the shareholders' list pursuant to Subsection <xref depth="4" refnumber="16-10a-720(4)" start="0">(4)</xref>, unless the corporation proves that the corporation refused inspection or copying of the list in good faith because the corporation had a reasonable basis for doubt about the right of the shareholder or the shareholder's agent or attorney to inspect or copy the shareholders' list: <subsection number="16-10a-720(5)(a)"> the court shall also order the corporation to pay the shareholder's costs, including reasonable counsel fees, incurred to obtain the order;</subsection><subsection number="16-10a-720(5)(b)"> the court may order the corporation to pay the shareholder for any damages incurred; and</subsection><subsection number="16-10a-720(5)(c)"> the court may grant the shareholder any other remedy afforded by law.</subsection></subsection><subsection number="16-10a-720(6)"> If a court orders inspection or copying of the shareholders' list pursuant to Subsection <xref depth="4" refnumber="16-10a-720(4)" start="0">(4)</xref>, the court may impose reasonable restrictions on the use or distribution of the list by the shareholder.</subsection><subsection number="16-10a-720(7)"> Refusal or failure to prepare or make available the shareholders' list does not affect the validity of action taken at the meeting.</subsection></section><section number="16-10a-721"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Voting entitlement of shares.</catchline><subsection number="16-10a-721(1)"> Except as otherwise provided in Subsections <xref depth="4" refnumber="16-10a-721(2)" start="0">(2)</xref> and <xref depth="4" refnumber="16-10a-721(4)" start="0">(4)</xref>, in Section <xref depth="3" refnumber="61-6-10" start="0">61-6-10</xref>, or in the articles of incorporation, each outstanding share, regardless of class, is entitled to one vote, and each fractional share is entitled to a corresponding fractional vote, on each matter voted on at a shareholders' meeting. Only shares are entitled to vote.</subsection><subsection number="16-10a-721(2)"> Except as otherwise ordered by a court of competent jurisdiction upon a finding that the purpose of this subsection would not be violated in the circumstances presented to the court, the shares of a corporation are not entitled to be voted or to be counted in determining the total number of outstanding shares eligible to be voted if they are owned, directly or indirectly, by a second corporation, domestic or foreign, and the first corporation owns, directly or indirectly, a majority of the shares entitled to vote for directors of the second corporation.</subsection><subsection number="16-10a-721(3)"> Subsection <xref depth="4" refnumber="16-10a-721(2)" start="0">(2)</xref> does not limit the power of a corporation to vote any shares, including its own shares, held by it in a fiduciary capacity.</subsection><subsection number="16-10a-721(4)"> Redeemable shares are not entitled to be voted after notice of redemption is mailed to the holders and a sum sufficient to redeem the shares has been deposited with a bank, trust company, or other financial institution under an irrevocable obligation to pay the holders the redemption price on surrender of the shares.</subsection></section><section number="16-10a-722"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Proxies.</catchline><subsection number="16-10a-722(1)"> A shareholder may vote his shares in person or by proxy.</subsection><subsection number="16-10a-722(2)"> A shareholder, his agent, or attorney-in-fact, may appoint a proxy to vote or otherwise act for the shareholder by signing an appointment form or by an electronic transmission. An electronic transmission shall contain or be accompanied by information that indicates that the shareholder, the shareholder's agent, or the shareholder's attorney-in-fact authorized the transmission.</subsection><subsection number="16-10a-722(3)"> An appointment of a proxy is effective when a signed appointment form or an electronic transmission of the appointment is received by the inspector of election or the officer or agent of the corporation authorized to tabulate votes. An appointment is valid for 11 months unless a longer period is expressly provided in the appointment form.</subsection><subsection number="16-10a-722(4)"> An appointment of a proxy is revocable unless the appointment form or electronic transmission states that it is irrevocable and the appointment is coupled with an interest. Appointments coupled with an interest include the appointment of any of the following persons or their designees: <subsection number="16-10a-722(4)(a)"> a pledgee;</subsection><subsection number="16-10a-722(4)(b)"> a person who purchased or agreed to purchase the shares;</subsection><subsection number="16-10a-722(4)(c)"> a creditor of the corporation who extended its credit under terms requiring the appointment;</subsection><subsection number="16-10a-722(4)(d)"> an employee of the corporation whose employment contract requires the appointment; or</subsection><subsection number="16-10a-722(4)(e)"> a party to a voting agreement created under Section <xref depth="3" refnumber="16-10a-731" start="0">16-10a-731</xref>.</subsection></subsection><subsection number="16-10a-722(5)"> The death or incapacity of the shareholder appointing a proxy does not affect the right of the corporation to accept the proxy's authority unless the appointment is not irrevocable and coupled with an interest, and notice of the death or incapacity is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises the authority under the appointment.</subsection><subsection number="16-10a-722(6)"> An appointment made irrevocable under Subsection <xref depth="4" refnumber="16-10a-722(4)" start="0">(4)</xref> is revoked when the interest with which it is coupled is extinguished but the revocation does not affect the right of the corporation to accept the proxy's authority unless: <subsection number="16-10a-722(6)(a)"> the corporation had notice that the appointment was coupled with that interest and notice that the interest is extinguished is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises the authority under the appointment; or</subsection><subsection number="16-10a-722(6)(b)"> other notice of the revocation of the appointment is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises the authority under the appointment.</subsection></subsection><subsection number="16-10a-722(7)"> The corporation is not required to recognize an appointment made irrevocable under Subsection <xref depth="4" refnumber="16-10a-722(4)" start="0">(4)</xref> if it has received a writing revoking the appointment signed by the shareholder either personally or by the shareholder's attorney-in-fact, notwithstanding that the revocation may be a breach of an obligation of the shareholder to another person not to revoke the appointment. This provision does not affect any claim the other person may have against the shareholder with respect to the revocation.</subsection><subsection number="16-10a-722(8)"> A transferee for value of shares subject to an irrevocable appointment may revoke the appointment if the transferee did not know of its existence when acquiring the shares and the existence of the irrevocable appointment was not noted conspicuously on the certificate representing the shares or on the information statement for shares without certificates.</subsection><subsection number="16-10a-722(9)"> Subject to Section <xref depth="3" refnumber="16-10a-724" start="0">16-10a-724</xref> and to any express limitation on the proxy's authority stated in the appointment form or electronic transmission, a corporation is entitled to accept the proxy's vote or other action as that of the shareholder making the appointment.</subsection></section><section number="16-10a-723"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Shares held by nominees.</catchline><subsection number="16-10a-723(1)"> A corporation may establish a procedure by which the beneficial owner of shares that are registered in the name of a nominee is recognized by the corporation as the shareholder. The extent of this recognition may be determined in the procedure.</subsection><subsection number="16-10a-723(2)"> The procedure described in Subsection <xref depth="4" refnumber="16-10a-723(1)" start="0">(1)</xref> may set forth: <subsection number="16-10a-723(2)(a)"> the types of nominees to which it applies;</subsection><subsection number="16-10a-723(2)(b)"> the rights or privileges that the corporation recognizes in a beneficial owner, which may include rights or privileges other than voting;</subsection><subsection number="16-10a-723(2)(c)"> the manner in which the procedure may be used by the nominee;</subsection><subsection number="16-10a-723(2)(d)"> the information that shall be provided by the nominee when the procedure is used;</subsection><subsection number="16-10a-723(2)(e)"> the period for which the nominee's use of the procedure is effective; and</subsection><subsection number="16-10a-723(2)(f)"> other aspects of the rights and duties created.</subsection></subsection></section><section number="16-10a-724"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Corporation's acceptance of votes.</catchline><subsection number="16-10a-724(1)"> If the name signed on a vote, consent, waiver, proxy appointment, or proxy appointment revocation corresponds to the name of a shareholder, the corporation, if acting in good faith, is entitled to accept the vote, consent, waiver, proxy appointment, or proxy appointment revocation and give it effect as the act of the shareholder.</subsection><subsection number="16-10a-724(2)"> If the name signed on a vote, consent, waiver, proxy appointment, or proxy appointment revocation does not correspond to the name of a shareholder, the corporation, if acting in good faith, is nevertheless entitled to accept the vote, consent, waiver, proxy appointment, or proxy appointment revocation and give it effect as the act of the shareholder if: <subsection number="16-10a-724(2)(a)"> the shareholder is an entity and the name signed purports to be that of an officer or agent of the entity;</subsection><subsection number="16-10a-724(2)(b)"> the name signed purports to be that of an administrator, executor, guardian, or conservator representing the shareholder and, if the corporation requests, evidence of fiduciary status acceptable to the corporation has been presented with respect to the vote, consent, waiver, proxy appointment, or proxy appointment revocation;</subsection><subsection number="16-10a-724(2)(c)"> the name signed purports to be that of a receiver or trustee in bankruptcy of the shareholder and, if the corporation requests, evidence of this status acceptable to the corporation has been presented with respect to the vote, consent, waiver, proxy appointment, or proxy appointment revocation;</subsection><subsection number="16-10a-724(2)(d)"> the name signed purports to be that of a pledgee, beneficial owner, or attorney-in-fact of the shareholder and, if the corporation requests, evidence acceptable to the corporation of the signatory's authority to sign for the shareholder has been presented with respect to the vote, consent, waiver, proxy appointment, or proxy appointment revocation;</subsection><subsection number="16-10a-724(2)(e)"> two or more persons are the shareholder as cotenants or fiduciaries and the name signed purports to be the name of at least one of the cotenants or fiduciaries and the person signing appears to be acting on behalf of all cotenants or fiduciaries; or</subsection><subsection number="16-10a-724(2)(f)"> the acceptance of the vote, consent, waiver, proxy appointment, or proxy appointment revocation is otherwise proper under rules established by the corporation that are not inconsistent with the provisions of this section.</subsection></subsection><subsection number="16-10a-724(3)"> If shares are registered in the names of two or more persons, whether fiduciaries, members of a partnership, cotenants, husband and wife as community property, voting trustees, persons entitled to vote under a shareholder voting agreement or otherwise, or if two or more persons, including proxyholders, have the same fiduciary relationship respecting the same shares, unless the secretary of the corporation or other officer or agent entitled to tabulate votes is given written notice to the contrary and is furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, their acts with respect to voting shall have the following effect: <subsection number="16-10a-724(3)(a)"> if only one votes, the act binds all;</subsection><subsection number="16-10a-724(3)(b)"> if more than one vote, the act of the majority so voting binds all;</subsection><subsection number="16-10a-724(3)(c)"> if more than one vote, but the vote is evenly split on any particular matter, each faction may vote the securities in question proportionately;</subsection><subsection number="16-10a-724(3)(d)"> if the instrument so filed or the registration of the shares shows that any tenancy is held in unequal interests, a majority or even split for the purpose of this section shall be a majority or even split in interest.</subsection></subsection><subsection number="16-10a-724(4)"> The corporation is entitled to reject a vote, consent, waiver, proxy appointment, or proxy appointment revocation if the secretary or other officer or agent authorized to tabulate votes, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatory's authority to sign for the shareholder.</subsection><subsection number="16-10a-724(5)"> The corporation and its officer or agent who accepts or rejects a vote, consent, waiver, proxy appointment, or proxy appointment revocation in good faith and in accordance with the standards of this section are not liable in damages to the shareholder for the consequences of the acceptance or rejection.</subsection><subsection number="16-10a-724(6)"> Corporate action based on the acceptance or rejection of a vote, consent, waiver, proxy appointment, or proxy appointment revocation under this section is valid unless a court of competent jurisdiction determines otherwise.</subsection></section><section number="16-10a-725"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Quorum and voting requirements for voting groups.</catchline><subsection number="16-10a-725(1)"> Shares entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those shares exists with respect to that matter. Unless the articles of incorporation or this chapter provide otherwise, a majority of the votes entitled to be cast on the matter by the voting group constitutes a quorum of that voting group for action on that matter.</subsection><subsection number="16-10a-725(2)"> Once a share is represented for any purpose at a meeting, including the purpose of determining that a quorum exists, it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting, unless a new record date is or shall be set for that adjourned meeting.</subsection><subsection number="16-10a-725(3)"> If a quorum exists, action on a matter, other than the election of directors, by a voting group is approved if the votes cast within the voting group favoring the action exceed the votes cast within the voting group opposing the action, unless the articles of incorporation or this chapter requires a greater number of affirmative votes.</subsection><subsection number="16-10a-725(4)"> The election of directors is governed by Section <xref depth="3" refnumber="16-10a-728" start="0">16-10a-728</xref>.</subsection></section><section number="16-10a-726"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Action by single and multiple voting groups.</catchline><subsection number="16-10a-726(1)"> If the articles of incorporation or this chapter provide for voting by a single voting group on a matter, action on that matter is taken when voted upon by that voting group as provided in Section <xref depth="3" refnumber="16-10a-725" start="0">16-10a-725</xref>.</subsection><subsection number="16-10a-726(2)"> If the articles of incorporation or this chapter provide for voting by two or more voting groups on a matter, action on that matter is taken only when voted upon by each of those voting groups counted separately as provided in Section <xref depth="3" refnumber="16-10a-725" start="0">16-10a-725</xref>. One voting group may vote on a matter even though another voting group entitled to vote on the matter has not voted.</subsection></section><section number="16-10a-727"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Greater quorum or voting requirements.</catchline><subsection number="16-10a-727(1)"> The articles of incorporation may provide for a greater quorum or voting requirement for shareholders, or voting groups of shareholders, than is provided for by this chapter.</subsection><subsection number="16-10a-727(2)"> An amendment to the articles of incorporation that changes or deletes a greater quorum or voting requirement shall meet the same quorum requirement and be adopted by the same vote and voting groups required to take action under the quorum and voting requirements then in effect.</subsection></section><section number="16-10a-728"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Voting for directors -- Cumulative voting.</catchline><subsection number="16-10a-728(1)"> At each election of directors, unless otherwise provided in the articles of incorporation or this chapter, every shareholder entitled to vote at the election has the right to cast, in person or by proxy, all of the votes to which the shareholder's shares are entitled for as many persons as there are directors to be elected and for whose election the shareholder has the right to vote.</subsection><subsection number="16-10a-728(2)"> Unless otherwise provided in the articles of incorporation or this chapter, directors are elected by a plurality of the votes cast by the shares entitled to vote in the election, at a meeting of shareholders at which a quorum is present.</subsection><subsection number="16-10a-728(3)"> Shareholders do not have a right to cumulate their votes for the election of directors unless the articles of incorporation so provide.</subsection><subsection number="16-10a-728(4)"> A statement included in the articles of incorporation to the effect that all or a designated voting group of shareholders are entitled to cumulate their votes for directors, means that the shareholders designated are entitled to multiply the number of votes they are entitled to cast by the number of directors for whom they are entitled to vote and cast the product for a single candidate or distribute the product among two or more candidates.</subsection><subsection number="16-10a-728(5)"> Shares entitled to vote cumulatively may be voted cumulatively at each election of directors unless the articles of incorporation provide alternative procedures for the exercise of the cumulative voting rights.</subsection></section><section number="16-10a-730"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Voting trusts.</catchline><subsection number="16-10a-730(1)"> One or more shareholders may create a voting trust, conferring on a trustee the right to vote or otherwise act for them, by signing an agreement setting out the provisions of the trust, and transferring to the trustee the shares with respect to which the trustee is to act. When a voting trust agreement is signed, the trustee shall prepare a list of the names and addresses of all owners of beneficial interests in the trust, together with the number and class of shares each transferred to the trust, and promptly cause the corporation to receive copies of the list and agreement. Thereafter the trustee shall cause the corporation to receive changes to the list promptly as they occur and amendments to the agreement promptly as they are made.</subsection><subsection number="16-10a-730(2)"> A voting trust becomes effective on the date the first shares subject to the trust are registered in the trustee's name. A voting trust is valid for the period provided in the agreement, but not more than 10 years after its effective date unless extended under Subsection <xref depth="4" refnumber="16-10a-730(3)" start="0">(3)</xref>.</subsection><subsection number="16-10a-730(3)"> All or some of the parties to a voting trust may extend the voting trust for additional terms of not more than 10 years each by signing an extension agreement and obtaining the trustee's written consent to the extension. An extension is valid for not more than 10 years from the date the first shareholder signs the extension agreement. The trustee shall deliver copies of the extension agreement and list of beneficial owners to the corporation's principal office. An extension agreement binds only those parties signing it.</subsection></section><section number="16-10a-731"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Voting agreements.</catchline><subsection number="16-10a-731(1)"> Two or more persons, one or more of whom are shareholders, may provide for the manner in which the shareholders will vote their shares by signing an agreement for that purpose. A voting agreement created under this section is not subject to the provisions of Section <xref depth="3" refnumber="16-10a-730" start="0">16-10a-730</xref>.</subsection><subsection number="16-10a-731(2)"> A voting agreement created under this section may be specifically enforceable.</subsection></section><section number="16-10a-732"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Shareholder agreements.</catchline><subsection number="16-10a-732(1)"> An agreement among the shareholders of a corporation that complies with this section is effective among the shareholders and the corporation even though it is inconsistent with one or more other provisions of this chapter in that it: <subsection number="16-10a-732(1)(a)"> eliminates the board of directors or restricts the discretion or powers of the board of directors;</subsection><subsection number="16-10a-732(1)(b)"> governs the authorization or making of distributions whether or not in proportion to ownership of shares, subject to the limitations in Section <xref depth="3" refnumber="16-10a-640" start="0">16-10a-640</xref>;</subsection><subsection number="16-10a-732(1)(c)"> establishes who shall be directors or officers of the corporation, or their terms of office or manner of selection or removal;</subsection><subsection number="16-10a-732(1)(d)"> governs, in general or in regard to specific matters, the exercise or division of voting power by or between the shareholders and directors or by or among any of them, including use of weighted voting rights or director proxies;</subsection><subsection number="16-10a-732(1)(e)"> establishes the terms and conditions of any agreement for the transfer or use of property or the provision of services between the corporation and any shareholder, director, officer or employee of the corporation or among any of them;</subsection><subsection number="16-10a-732(1)(f)"> transfers to one or more shareholders or other persons all or part of the authority to exercise the corporate powers or to manage the business and affairs of the corporation, including the resolution of any issue about which there exists a deadlock among directors or shareholders;</subsection><subsection number="16-10a-732(1)(g)"> requires dissolution of the corporation at the request of one or more of the shareholders or upon the occurrence of a specified event or contingency; or</subsection><subsection number="16-10a-732(1)(h)"> otherwise governs the exercise of the corporate powers or the management of the business and affairs of the corporation or the relationship among the shareholders, the directors and the corporation, or among any of them, and is not contrary to public policy.</subsection></subsection><subsection number="16-10a-732(2)"> An agreement authorized by this section shall be: <subsection number="16-10a-732(2)(a)"> set forth:<subsection number="16-10a-732(2)(a)(i)"> in the articles of incorporation or bylaws and approved by all persons who are shareholders at the time of the agreement; or</subsection><subsection number="16-10a-732(2)(a)(ii)"> in a written agreement that is signed by all persons who are shareholders at the time of the agreement and is made known to the corporation;</subsection></subsection><subsection number="16-10a-732(2)(b)"> subject to amendment only by all persons who are shareholders at the time of the amendment, unless the agreement provides otherwise; and</subsection><subsection number="16-10a-732(2)(c)"> valid for 10 years, unless the agreement provides otherwise.</subsection></subsection><subsection number="16-10a-732(3)"> The existence of an agreement authorized by this section shall be noted conspicuously on the front or back of each certificate for outstanding shares or on the information statement required by Section <xref depth="4" refnumber="16-10a-626(2)" start="0">16-10a-626(2)</xref>. If at the time of the agreement the corporation has shares outstanding represented by certificates, the corporation shall recall the outstanding certificates and issue substitute certificates that comply with this subsection. The failure to note the existence of the agreement on the certificate or information statement does not affect the validity of the agreement or any action taken pursuant to it. Any purchaser of shares who, at the time of purchase, did not have knowledge of the existence of the agreement is entitled to rescission of the purchase. A purchaser is considered to have knowledge of the existence of the agreement if its existence is noted on the certificate or information statement for the shares in compliance with this subsection and, if the shares are not represented by a certificate, the information statement is delivered to the purchaser at or prior to the time of purchase of the shares. An action to enforce the right of rescission authorized by this subsection shall be commenced within the earlier of 90 days after discovery of the existence of the agreement or two years after the time of purchase of the shares.</subsection><subsection number="16-10a-732(4)"> An agreement authorized by this section shall cease to be effective when shares of the corporation are listed on a national securities exchange or regularly traded in a market maintained by one or more members of a national or affiliated securities association. If the agreement ceases to be effective for any reason, the board of directors may, if the agreement is contained or referred to in the corporation's articles of incorporation or bylaws, adopt an amendment to the articles of incorporation or bylaws, without shareholder action, to delete the agreement and any references to it.</subsection><subsection number="16-10a-732(5)"> An agreement authorized by this section that limits the discretion or powers of the board of directors shall relieve the directors of, and impose upon the person or persons in whom the discretion or powers are vested, liability for acts or omissions imposed by laws on directors to the extent that the discretion or powers of the directors are limited by the agreement.</subsection><subsection number="16-10a-732(6)"> The existence or performance of an agreement authorized by this section may not be a ground for imposing personal liability on any shareholder for the acts or debts of the corporation even if the agreement or its performance treats the corporation as if it were a partnership or results in failure to observe the corporate formalities otherwise applicable to the matters governed by the agreement.</subsection><subsection number="16-10a-732(7)"> Incorporators or subscribers for shares may act as shareholders with respect to an agreement authorized by this section if no shares have been issued when the agreement is made.</subsection></section><section number="16-10a-740"><histories><history>Amended by Chapter <modchap sess="2012GS">369</modchap>, 2012 General Session</history><modyear>2012</modyear></histories><catchline>Procedure in derivative proceedings.</catchline><subsection number="16-10a-740(1)"> As used in this section: <subsection number="16-10a-740(1)(a)"> "derivative proceeding" means a civil suit in the right of:<subsection number="16-10a-740(1)(a)(i)"> a domestic corporation; or</subsection><subsection number="16-10a-740(1)(a)(ii)"> to the extent provided in Subsection <xref depth="4" refnumber="16-10a-740(7)" start="0">(7)</xref>, a foreign corporation; and</subsection></subsection><subsection number="16-10a-740(1)(b)"> "shareholder" includes a beneficial owner whose shares are held:<subsection number="16-10a-740(1)(b)(i)"> in a voting trust; or</subsection><subsection number="16-10a-740(1)(b)(ii)"> by a nominee on the beneficial owner's behalf.</subsection></subsection></subsection><subsection number="16-10a-740(2)"> A shareholder may not commence or maintain a derivative proceeding unless the shareholder: <subsection number="16-10a-740(2)(a)"><subsection number="16-10a-740(2)(a)(i)"> was a shareholder of the corporation at the time of the act or omission complained of; or</subsection><subsection number="16-10a-740(2)(a)(ii)"> became a shareholder through transfer by operation of law from one who was a shareholder at the time of the act or omission complained of; and</subsection></subsection><subsection number="16-10a-740(2)(b)"> fairly and adequately represents the interests of the corporation in enforcing the right of the corporation.</subsection></subsection><subsection number="16-10a-740(3)"><subsection number="16-10a-740(3)(a)"> A shareholder may not commence a derivative proceeding until:<subsection number="16-10a-740(3)(a)(i)"> a written demand has been made upon the corporation to take suitable action; and</subsection><subsection number="16-10a-740(3)(a)(ii)"> 90 days have expired from the date the demand described in Subsection <xref depth="4" refnumber="16-10a-740(3)(a)(i)" start="0">(3)(a)(i)</xref> is made unless: <subsection number="16-10a-740(3)(a)(ii)(A)"> the shareholder is notified before the 90 days have expired that the demand has been rejected by the corporation; or</subsection><subsection number="16-10a-740(3)(a)(ii)(B)"> irreparable injury to the corporation would result by waiting for the expiration of the 90-day period.</subsection></subsection></subsection><subsection number="16-10a-740(3)(b)"> A complaint in a derivative proceeding shall be:<subsection number="16-10a-740(3)(b)(i)"> verified; and</subsection><subsection number="16-10a-740(3)(b)(ii)"> allege with particularity the demand made to obtain action by the board of directors.</subsection></subsection><subsection number="16-10a-740(3)(c)"> A derivative proceeding shall comply with the procedures of Utah Rules of Civil Procedure, Rule 23A.</subsection><subsection number="16-10a-740(3)(d)"> The court shall stay any derivative proceeding until the inquiry is completed and for such additional period as the court considers appropriate if:<subsection number="16-10a-740(3)(d)(i)"> the corporation commences an inquiry into the allegations made in the demand or complaint; and</subsection><subsection number="16-10a-740(3)(d)(ii)"> a person or group described in Subsection <xref depth="4" refnumber="16-10a-740(4)" start="0">(4)</xref> is conducting an active review of the allegations in good faith.</subsection></subsection><subsection number="16-10a-740(3)(e)"> If a corporation proposes to dismiss a derivative proceeding pursuant to Subsection <xref depth="4" refnumber="16-10a-740(4)(a)" start="0">(4)(a)</xref>, discovery by a shareholder following the filing of the derivative proceeding in accordance with this section:<subsection number="16-10a-740(3)(e)(i)"> shall be limited to facts relating to: <subsection number="16-10a-740(3)(e)(i)(A)"> whether the person or group described in Subsection <xref depth="4" refnumber="16-10a-740(4)(b)" start="0">(4)(b)</xref> or <xref depth="4" refnumber="16-10a-740(4)(f)" start="0">(4)(f)</xref> is independent and disinterested;</subsection><subsection number="16-10a-740(3)(e)(i)(B)"> the good faith of the inquiry and review by the person or group described in Subsection <xref depth="4" refnumber="16-10a-740(4)(b)" start="0">(4)(b)</xref> or <xref depth="4" refnumber="16-10a-740(4)(f)" start="0">(4)(f)</xref>; and</subsection><subsection number="16-10a-740(3)(e)(i)(C)"> the reasonableness of the procedures followed by the person or group described in Subsection <xref depth="4" refnumber="16-10a-740(4)(b)" start="0">(4)(b)</xref> or <xref depth="4" refnumber="16-10a-740(4)(f)" start="0">(4)(f)</xref> in conducting its review; and</subsection></subsection><subsection number="16-10a-740(3)(e)(ii)"> may not extend to any facts or substantive matters with respect to the act, omission, or other matter that is the subject matter of the derivative proceeding.</subsection></subsection></subsection><subsection number="16-10a-740(4)"><subsection number="16-10a-740(4)(a)"> A derivative proceeding shall be dismissed by the court on motion by the corporation if a person or group specified in Subsections <xref depth="4" refnumber="16-10a-740(4)(b)" start="0">(4)(b)</xref> or <xref depth="4" refnumber="16-10a-740(4)(f)" start="0">(4)(f)</xref> determines in good faith after conducting a reasonable inquiry upon which its conclusions are based that the maintenance of the derivative proceeding is not in the best interests of the corporation.</subsection><subsection number="16-10a-740(4)(b)"> Unless a panel is appointed pursuant to Subsection <xref depth="4" refnumber="16-10a-740(4)(f)" start="0">(4)(f)</xref>, the determination in Subsection <xref depth="4" refnumber="16-10a-740(4)(a)" start="0">(4)(a)</xref> shall be made by:<subsection number="16-10a-740(4)(b)(i)"> a majority vote of independent directors present at a meeting of the board of directors if the independent directors constitute a quorum; or</subsection><subsection number="16-10a-740(4)(b)(ii)"> a majority vote of a committee consisting of two or more independent directors appointed by a majority vote of independent directors present at a meeting of the board of directors, whether or not such independent directors appointing the committee constituted a quorum.</subsection></subsection><subsection number="16-10a-740(4)(c)"> None of the following shall by itself cause a director to be considered not independent for purposes of this section:<subsection number="16-10a-740(4)(c)(i)"> the nomination or election of the director by persons: <subsection number="16-10a-740(4)(c)(i)(A)"> who are defendants in the derivative proceeding; or</subsection><subsection number="16-10a-740(4)(c)(i)(B)"> against whom action is demanded;</subsection></subsection><subsection number="16-10a-740(4)(c)(ii)"> the naming of the director as: <subsection number="16-10a-740(4)(c)(ii)(A)"> a defendant in the derivative proceeding; or</subsection><subsection number="16-10a-740(4)(c)(ii)(B)"> a person against whom action is demanded; or</subsection></subsection><subsection number="16-10a-740(4)(c)(iii)"> the approval by the director of the act being challenged in the derivative proceeding or demand if the act resulted in no personal benefit to the director.</subsection></subsection><subsection number="16-10a-740(4)(d)"> If a derivative proceeding is commenced after a determination has been made rejecting a demand by a shareholder, the complaint shall allege with particularity facts establishing either:<subsection number="16-10a-740(4)(d)(i)"> that a majority of the board of directors did not consist of independent directors at the time the determination was made; or</subsection><subsection number="16-10a-740(4)(d)(ii)"> that the requirements of Subsection <xref depth="4" refnumber="16-10a-740(4)(a)" start="0">(4)(a)</xref> have not been met.</subsection></subsection><subsection number="16-10a-740(4)(e)"><subsection number="16-10a-740(4)(e)(i)"> If a majority of the board of directors does not consist of independent directors at the time the determination is made rejecting a demand by a shareholder, the corporation has the burden of proving that the requirements of Subsection <xref depth="4" refnumber="16-10a-740(4)(a)" start="0">(4)(a)</xref> have been met.</subsection><subsection number="16-10a-740(4)(e)(ii)"> If a majority of the board of directors consists of independent directors at the time the determination is made rejecting a demand by a shareholder, the plaintiff has the burden of proving that the requirements of Subsection <xref depth="4" refnumber="16-10a-740(4)(a)" start="0">(4)(a)</xref> have not been met.</subsection></subsection><subsection number="16-10a-740(4)(f)"><subsection number="16-10a-740(4)(f)(i)"> The court may appoint a panel of one or more independent persons upon motion by the corporation to make a determination whether the maintenance of the derivative proceeding is in the best interests of the corporation.</subsection><subsection number="16-10a-740(4)(f)(ii)"> If the court appoints a panel under Subsection <xref depth="4" refnumber="16-10a-740(4)(f)(i)" start="0">(4)(f)(i)</xref>, the plaintiff has the burden of proving that the requirements of Subsection <xref depth="4" refnumber="16-10a-740(4)(a)" start="0">(4)(a)</xref> have not been met.</subsection></subsection><subsection number="16-10a-740(4)(g)"> A person may appeal from an interlocutory order of a court that grants or denies a motion to dismiss brought pursuant to Subsection <xref depth="4" refnumber="16-10a-740(4)(a)" start="0">(4)(a)</xref>.</subsection></subsection><subsection number="16-10a-740(5)"><subsection number="16-10a-740(5)(a)"> A derivative proceeding may not be discontinued or settled without the court's approval.</subsection><subsection number="16-10a-740(5)(b)"> If the court determines that a proposed discontinuance or settlement will substantially affect the interests of the corporation's shareholders or a class of shareholders, the court shall direct that notice be given to the shareholders affected.</subsection></subsection><subsection number="16-10a-740(6)"> On termination of the derivative proceeding the court may order: <subsection number="16-10a-740(6)(a)"> the corporation to pay the plaintiff's reasonable expenses, including counsel fees, incurred in the proceeding, if it finds that the proceeding has resulted in a substantial benefit to the corporation;</subsection><subsection number="16-10a-740(6)(b)"> the plaintiff to pay any defendant's reasonable expenses, including counsel fees, incurred in defending the proceeding, if it finds that the proceeding was commenced or maintained:<subsection number="16-10a-740(6)(b)(i)"> without reasonable cause; or</subsection><subsection number="16-10a-740(6)(b)(ii)"> for an improper purpose; or</subsection></subsection><subsection number="16-10a-740(6)(c)"> a party to pay an opposing party's reasonable expenses, including counsel fees, incurred because of the filing of a pleading, motion, or other paper, if it finds that the pleading, motion, or other paper was:<subsection number="16-10a-740(6)(c)(i)"><subsection number="16-10a-740(6)(c)(i)(A)"> not well grounded in fact, after reasonable inquiry; or</subsection><subsection number="16-10a-740(6)(c)(i)(B)"> not warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law; and</subsection></subsection><subsection number="16-10a-740(6)(c)(ii)"> interposed for an improper purpose, such as to: <subsection number="16-10a-740(6)(c)(ii)(A)"> harass;</subsection><subsection number="16-10a-740(6)(c)(ii)(B)"> cause unnecessary delay; or</subsection><subsection number="16-10a-740(6)(c)(ii)(C)"> cause needless increase in the cost of litigation.</subsection></subsection></subsection></subsection><subsection number="16-10a-740(7)"><subsection number="16-10a-740(7)(a)"> In any derivative proceeding in the right of a foreign corporation, the matters covered by this section shall be governed by the laws of the jurisdiction of incorporation of the foreign corporation except for Subsections <xref depth="4" refnumber="16-10a-740(3)(c)" start="0">(3)(c)</xref>, <xref depth="4" refnumber="16-10a-740(3)(d)" start="0">(3)(d)</xref>, <xref depth="4" refnumber="16-10a-740(5)" start="0">(5)</xref>, and <xref depth="4" refnumber="16-10a-740(6)" start="0">(6)</xref>, which are procedural and not matters relating to the internal affairs of the foreign corporation.</subsection><subsection number="16-10a-740(7)(b)"> In the case of matters relating to a foreign corporation under Subsection <xref depth="4" refnumber="16-10a-740(3)(c)" start="0">(3)(c)</xref>:<subsection number="16-10a-740(7)(b)(i)"> references to a person or group described in Subsection <xref depth="4" refnumber="16-10a-740(4)" start="0">(4)</xref> are considered to refer to a person or group entitled under the laws of the jurisdiction of incorporation of the foreign corporation to review and dispose of a derivative proceeding; and</subsection><subsection number="16-10a-740(7)(b)(ii)"> the standard of review of a decision by the person or group to dismiss the derivative proceeding is to be governed by the laws of the jurisdiction of incorporation of the foreign corporation.</subsection></subsection></subsection></section></part><part number="16-10a-8"><catchline>Directors and Officers</catchline><section number="16-10a-801"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Requirement for and duties of board of directors.</catchline><subsection number="16-10a-801(1)"> Except as provided in Section <xref depth="3" refnumber="16-10a-732" start="0">16-10a-732</xref>, each corporation shall have a board of directors.</subsection><subsection number="16-10a-801(2)"> All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation managed under the direction of, its board of directors, subject to any limitation set forth in the articles of incorporation or in an agreement authorized under Section <xref depth="3" refnumber="16-10a-732" start="0">16-10a-732</xref>.</subsection></section><section number="16-10a-802"><histories><history>Amended by Chapter <modchap sess="1996GS">41</modchap>, 1996 General Session</history><modyear>1996</modyear></histories><catchline>Qualifications of directors.</catchline><tab/>The articles of incorporation or bylaws may prescribe qualifications for directors, except a director shall be a natural person. A director need not be a resident of this state or a shareholder of the corporation unless the articles of incorporation or bylaws so prescribe. </section><section number="16-10a-803"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Number and election of directors.</catchline><subsection number="16-10a-803(1)"><subsection number="16-10a-803(1)(a)"> Except as provided in Subsection <xref depth="4" refnumber="16-10a-803(1)(b)" start="0">(1)(b)</xref>, a corporation's board of directors shall consist of a minimum of three individuals.</subsection><subsection number="16-10a-803(1)(b)"><subsection number="16-10a-803(1)(b)(i)"> Before any shares are issued, a corporation's board of directors may consist of one or more individuals.</subsection><subsection number="16-10a-803(1)(b)(ii)"> After shares are issued and for as long as a corporation has fewer than three shareholders entitled to vote for the election of directors, its board of directors may consist of a number of individuals equal to or greater than the number of those shareholders.</subsection></subsection><subsection number="16-10a-803(1)(c)"> The number of directors shall be specified in or fixed in accordance with the bylaws. Unless otherwise provided in the articles of incorporation, the number of initial directors stated in the articles of incorporation as originally filed with the division, if initial directors are so named in the articles of incorporation, shall be superseded by a provision in the bylaws specifying the number of authorized directors.</subsection><subsection number="16-10a-803(1)(d)"> The number of directors may be increased or decreased from time to time by amendment to the bylaws, but no decrease may have the effect of shortening the term of any incumbent director.</subsection><subsection number="16-10a-803(1)(e)"> In the absence of a provision in the bylaws or articles of incorporation fixing the number of individuals composing a board of directors, the number shall be the greater of:<subsection number="16-10a-803(1)(e)(i)"> the number of directors then in office; or</subsection><subsection number="16-10a-803(1)(e)(ii)"> the minimum number of directors permitted by this section.</subsection></subsection></subsection><subsection number="16-10a-803(2)"> The bylaws may establish a variable range for the size of the board of directors by fixing a minimum and maximum number of directors. If a range is established, the number of directors may be fixed or changed from time to time within the range by the shareholders or the board of directors.</subsection><subsection number="16-10a-803(3)"> Directors are elected at each annual meeting of the shareholders except as provided in Section <xref depth="3" refnumber="16-10a-806" start="0">16-10a-806</xref>.</subsection></section><section number="16-10a-804"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Election of directors by certain classes of shareholders.</catchline><tab/>If the articles of incorporation authorize dividing the shares into classes or series, the articles of incorporation may also authorize the election of all or a specified number or portion of directors by the holders of one or more authorized classes or series of shares. A class or series of shares entitled to elect one or more directors is a separate voting group for purposes of the election of directors. </section><section number="16-10a-805"><histories><history>Amended by Chapter <modchap sess="2007GS">85</modchap>, 2007 General Session</history><modyear>2007</modyear></histories><catchline>Terms of directors generally.</catchline><subsection number="16-10a-805(1)"> Except as provided in Section <xref depth="3" refnumber="16-10a-806" start="0">16-10a-806</xref>, the terms of the initial directors of a corporation expire at the first shareholders' meeting at which directors are elected.</subsection><subsection number="16-10a-805(2)"> The terms of all other directors expire at the next annual shareholders' meeting following their election: <subsection number="16-10a-805(2)(a)"> except as provided in:<subsection number="16-10a-805(2)(a)(i)"> Section <xref depth="3" refnumber="16-10a-806" start="0">16-10a-806</xref>; or</subsection><subsection number="16-10a-805(2)(a)(ii)"> Section <xref depth="3" refnumber="16-10a-1023" start="0">16-10a-1023</xref>, if a bylaw electing to be governed by Section <xref depth="3" refnumber="16-10a-1023" start="0">16-10a-1023</xref> applies; or</subsection></subsection><subsection number="16-10a-805(2)(b)"> unless a shorter term is specified in the articles of incorporation in the event a director nominee fails to receive a specified vote for election.</subsection></subsection><subsection number="16-10a-805(3)"> A decrease in the number of directors does not shorten an incumbent director's term.</subsection><subsection number="16-10a-805(4)"><subsection number="16-10a-805(4)(a)"> A director elected to fill a vacancy created other than by an increase in the number of directors shall be elected for the unexpired term of the director's predecessor in office, or for any lesser period as may be prescribed by the board of directors.</subsection><subsection number="16-10a-805(4)(b)"> If a director is elected to fill a vacancy created by reason of an increase in the number of directors, then the term of the director so elected expires at the next shareholders' meeting at which directors are elected, unless the vacancy is filled by a vote of the shareholders, in which case the term shall expire on the later of:<subsection number="16-10a-805(4)(b)(i)"> the next meeting of shareholders at which directors are elected; or</subsection><subsection number="16-10a-805(4)(b)(ii)"> the term designated for the director at the time of the creation of the position being filled.</subsection></subsection></subsection><subsection number="16-10a-805(5)"><tab/>Except as otherwise provided in the articles of incorporation, or Section <xref depth="3" refnumber="16-10a-1023" start="0">16-10a-1023</xref>, if a bylaw electing to be governed by Section <xref depth="3" refnumber="16-10a-1023" start="0">16-10a-1023</xref> applies, despite the expiration of a director's term, the director continues to serve until the election and qualification of a successor or there is a decrease in the number of directors.</subsection><subsection number="16-10a-805(6)"> A director whose term has ended may deliver to the division for filing a statement to that effect pursuant to Section <xref depth="3" refnumber="16-10a-1608" start="0">16-10a-1608</xref>.</subsection></section><section number="16-10a-806"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Staggered terms for directors.</catchline><tab/>The articles of incorporation may provide for staggering the terms of directors by dividing the total number of directors into two or three groups, with each group containing 1/2 or 1/3 of the total, as near as may be. In that event, the terms of directors in the first group expire at the first annual shareholders' meeting after their election, the terms of directors in the second group expire at the second annual shareholders' meeting after their election, and the terms of directors in the third group, if any, expire at the third annual shareholders' meeting after their election. Upon the expiration of the initial staggered terms directors shall be elected for terms of two years or three years, as the case may be, to succeed those whose terms expire. </section><section number="16-10a-807"><histories><history>Amended by Chapter <modchap sess="2007GS">85</modchap>, 2007 General Session</history><modyear>2007</modyear></histories><catchline>Resignation of directors.</catchline><subsection number="16-10a-807(1)"> A director may resign at any time by giving a written notice of resignation to the board of directors, the board's chair, or the corporation's secretary.</subsection><subsection number="16-10a-807(2)"><subsection number="16-10a-807(2)(a)"> A resignation of a director is effective when the notice is received by the corporation unless the notice specifies a later effective date or an effective date determined by the happening of an event.</subsection><subsection number="16-10a-807(2)(b)"> A notice of resignation that is conditioned upon failing to receive a specified vote for election as a director may provide that it is irrevocable.</subsection></subsection><subsection number="16-10a-807(3)"> A director who resigns may deliver to the division for filing a statement of the director's resignation pursuant to Section <xref depth="3" refnumber="16-10a-1608" start="0">16-10a-1608</xref>.</subsection></section><section number="16-10a-808"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Removal of directors by shareholders.</catchline><subsection number="16-10a-808(1)"> The shareholders may remove one or more directors with or without cause unless the articles of incorporation provide that directors may be removed only for cause.</subsection><subsection number="16-10a-808(2)"> If a director is elected by a voting group of shareholders, only the shareholders of that voting group may participate in the vote to remove him.</subsection><subsection number="16-10a-808(3)"> If cumulative voting is in effect, a director may not be removed if the number of votes sufficient to elect the director under cumulative voting is voted against removal. If cumulative voting is not in effect, a director may be removed only if the number of votes cast to remove the director exceeds the number of votes cast against removal.</subsection><subsection number="16-10a-808(4)"> A director may be removed by the shareholders only at a meeting called for the purpose of removing the director and the meeting notice shall state that the purpose, or one of the purposes, of the meeting is removal of the director.</subsection><subsection number="16-10a-808(5)"> A director who is removed pursuant to this section may deliver to the division for filing a statement to that effect pursuant to Section <xref depth="3" refnumber="16-10a-1608" start="0">16-10a-1608</xref>.</subsection></section><section number="16-10a-809"><histories><history>Amended by Chapter <modchap sess="2024GS">158</modchap>, 2024 General Session</history><modyear>2024</modyear></histories><catchline>Removal of directors by judicial proceeding.</catchline><subsection number="16-10a-809(1)">A court with jurisdiction under Title 78A, Judiciary and Judicial Administration, may remove a director in a proceeding commenced by the corporation or by the corporation's shareholders holding at least 10% of the outstanding shares of any class if the court finds that:<subsection number="16-10a-809(1)(a)">the director engaged in fraudulent or dishonest conduct or gross abuse of authority or discretion with respect to the corporation; and</subsection><subsection number="16-10a-809(1)(b)">removal is in the best interest of the corporation.</subsection></subsection><subsection number="16-10a-809(2)">The court that removes a director may bar the director from reelection for a period prescribed by the court.</subsection><subsection number="16-10a-809(3)">If shareholders commence a proceeding under Subsection (1), they shall make the corporation a party defendant.</subsection><subsection number="16-10a-809(4)">A director who is removed pursuant to this section may deliver to the division for filing a statement to that effect pursuant to Section <xref depth="3" refnumber="16-10a-1608">16-10a-1608</xref>.</subsection></section><section number="16-10a-810"><histories><history>Amended by Chapter <modchap sess="1993GS">184</modchap>, 1993 General Session</history><modyear>1993</modyear></histories><catchline>Vacancy on board.</catchline><subsection number="16-10a-810(1)"> Unless the articles of incorporation provide otherwise, if a vacancy occurs on a board of directors, including a vacancy resulting from an increase in the number of directors: <subsection number="16-10a-810(1)(a)"> the shareholders may fill the vacancy;</subsection><subsection number="16-10a-810(1)(b)"> the board of directors may fill the vacancy; or</subsection><subsection number="16-10a-810(1)(c)"> if the directors remaining in office constitute fewer than a quorum of the board, they may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office.</subsection></subsection><subsection number="16-10a-810(2)"> Unless otherwise provided in the articles of incorporation, if the vacant office was held or is to be held by a director elected by a voting group of shareholders: <subsection number="16-10a-810(2)(a)"> if one or more of the other directors elected by the same voting group are serving, only they are entitled to vote to fill the vacancy if it is filled by the directors; and</subsection><subsection number="16-10a-810(2)(b)"> only the holders of shares of that voting group are entitled to vote to fill the vacancy if it is filled by the shareholders.</subsection></subsection><subsection number="16-10a-810(3)"> A vacancy that will occur at a specific later date, by reason of a resignation effective at a later date under Section <xref depth="3" refnumber="16-10a-807" start="0">16-10a-807</xref> or otherwise, may be filled before the vacancy occurs, but the new director may not take office until the vacancy occurs.</subsection></section><section number="16-10a-811"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Compensation of directors.</catchline><tab/>Unless the articles of incorporation or bylaws provide otherwise, the board of directors may fix the compensation of directors. </section><section number="16-10a-820"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Meetings.</catchline><subsection number="16-10a-820(1)"> The board of directors may hold regular or special meetings in or out of this state.</subsection><subsection number="16-10a-820(2)"> Unless the articles of incorporation or bylaws provide otherwise, the board of directors may permit any or all directors to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may hear each other during the meeting. A director participating in a meeting by this means is considered to be present in person at the meeting.</subsection></section><section number="16-10a-821"><histories><history>Amended by Chapter <modchap sess="2011GS">227</modchap>, 2011 General Session</history><modyear>2011</modyear></histories><catchline>Action without meeting.</catchline><subsection number="16-10a-821(1)"> Unless the articles of incorporation, bylaws, or this chapter provide otherwise, action required or permitted by this chapter to be taken at a board of directors' meeting may be taken without a meeting if all members of the board consent to the action in writing.</subsection><subsection number="16-10a-821(2)"><subsection number="16-10a-821(2)(a)"> Action is taken under this section at the time the last director signs a writing describing the action taken, unless, prior to that time, any director has revoked a consent by a writing signed by the director and received by the secretary or any other person authorized by the bylaws or the board of directors to receive the revocation.</subsection><subsection number="16-10a-821(2)(b)"><subsection number="16-10a-821(2)(b)(i)"> Unless otherwise provided by the bylaws, a director may deliver a written consent under this section by an electronic transmission that provides the corporation with a complete copy of the written consent.</subsection><subsection number="16-10a-821(2)(b)(ii)"> An electronic transmission consenting to an action under this section is considered to be written, signed, and dated for purposes of this section if the electronic transmission is delivered with information from which the corporation can determine: <subsection number="16-10a-821(2)(b)(ii)(A)"> that the electronic transmission is transmitted by the director; and</subsection><subsection number="16-10a-821(2)(b)(ii)(B)"> the date on which the electronic transmission is transmitted.</subsection></subsection><subsection number="16-10a-821(2)(b)(iii)"> The date on which an electronic transmission is transmitted is considered the date on which a consent is signed.</subsection></subsection></subsection><subsection number="16-10a-821(3)"> Action under this section is effective at the time it is taken under Subsection <xref depth="4" refnumber="16-10a-821(2)" start="0">(2)</xref>, unless the board of directors establishes a different effective date.</subsection><subsection number="16-10a-821(4)"> Action taken under this section has the same effect as action taken at a meeting of directors and may be described as such in any document.</subsection></section><section number="16-10a-822"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Notice of meeting.</catchline><subsection number="16-10a-822(1)"> Unless the articles of incorporation, bylaws, or this chapter provide otherwise, regular meetings of the board of directors may be held without notice of the date, time, place, or purposes of the meeting.</subsection><subsection number="16-10a-822(2)"> Unless the articles of incorporation or bylaws provide for a longer or shorter period, special meetings of the board of directors shall be preceded by at least two days' notice of the date, time, and place of the meeting. The notice need not describe the purpose of the special meeting unless required by the articles of incorporation, bylaws, or this chapter.</subsection></section><section number="16-10a-823"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Waiver of notice.</catchline><subsection number="16-10a-823(1)"> A director may waive any notice of a meeting before or after the date and time of the meeting stated in the notice. Except as provided by Subsection <xref depth="4" refnumber="16-10a-823(2)" start="0">(2)</xref>, the waiver shall be in writing and signed by the director entitled to the notice. The waiver shall be delivered to the corporation for filing with the corporate records, but delivery and filing are not conditions to its effectiveness.</subsection><subsection number="16-10a-823(2)"> A director's attendance at or participation in a meeting waives any required notice to the director of the meeting unless the director at the beginning of the meeting, or promptly upon the director's arrival, objects to holding the meeting or transacting business at the meeting because of lack of notice or defective notice, and does not thereafter vote for or assent to action taken at the meeting.</subsection></section><section number="16-10a-824"><histories><history>Amended by Chapter <modchap sess="2025GS">302</modchap>, 2025 General Session</history><modyear>2025</modyear></histories><catchline>Quorum and voting.</catchline><subsection number="16-10a-824(1)">Unless the articles of incorporation or bylaws require a greater number, or, as permitted in Subsection <xref depth="4" refnumber="16-10a-824(2)" start="0">(2)</xref>, a lower number, a quorum of a board of directors consists of:<subsection number="16-10a-824(1)(a)">a majority of the fixed number of directors if the corporation has a fixed board size; or</subsection><subsection number="16-10a-824(1)(b)">a majority of the number of directors prescribed, or if no number is prescribed, of the number in office immediately before the meeting begins, if a range for the size of the board is established pursuant to Subsection <xref depth="4" refnumber="16-10a-803(2)" start="0">16-10a-803(2)</xref>.</subsection></subsection><subsection number="16-10a-824(2)">The articles of incorporation or bylaws may authorize a quorum of a board of directors to consist of no fewer than 1/3 of the fixed or prescribed number of directors determined under Subsection <xref depth="4" refnumber="16-10a-824(1)" start="0">(1)</xref>.</subsection><subsection number="16-10a-824(3)">If a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act of the board of directors unless the articles of incorporation, bylaws, or this chapter require the vote of a greater number of directors.</subsection><subsection number="16-10a-824(4)">A director who is present at a meeting of the board of directors when corporate action is taken is considered to have assented to the action taken at the meeting unless:<subsection number="16-10a-824(4)(a)">the director objects at the beginning of the meeting, or promptly upon arrival, to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to any action taken at the meeting;</subsection><subsection number="16-10a-824(4)(b)">the director contemporaneously requests the director's dissent or abstention as to any specific action to be entered into the minutes of the meeting; or</subsection><subsection number="16-10a-824(4)(c)">the director causes written notice of a dissent or abstention as to any specific action to be received by the presiding officer of the meeting before adjournment of the meeting or by the corporation promptly after adjournment of the meeting.</subsection></subsection><subsection number="16-10a-824(5)">The right of dissent or abstention as to a specific action pursuant to Subsection <xref depth="4" refnumber="16-10a-824(4)" start="0">(4)</xref> is not available to a director who votes in favor of the action taken.</subsection></section><section number="16-10a-825"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Committees.</catchline><subsection number="16-10a-825(1)"> Unless the articles of incorporation or bylaws provide otherwise, a board of directors may create one or more committees and appoint members of the board of directors to serve on them. Each committee shall have two or more members, who serve at the pleasure of the board of directors.</subsection><subsection number="16-10a-825(2)"> The creation of a committee and appointment of members to it shall be approved by the greater of: <subsection number="16-10a-825(2)(a)"> a majority of all the directors in office when the action is taken; or</subsection><subsection number="16-10a-825(2)(b)"> the number of directors required by the articles of incorporation or bylaws to take action under Section <xref depth="3" refnumber="16-10a-824" start="0">16-10a-824</xref>.</subsection></subsection><subsection number="16-10a-825(3)"> Sections <xref depth="3" refnumber="16-10a-820" start="0">16-10a-820</xref> through <xref depth="3" refnumber="16-10a-824" start="0">16-10a-824</xref>, which govern meetings, action without meeting, notice, waiver of notice, and quorum and voting requirements of the board of directors, apply to committees and their members as well.</subsection><subsection number="16-10a-825(4)"> To the extent specified by the board of directors or in the articles of incorporation or bylaws, each committee may exercise the authority of the board of directors under Section <xref depth="3" refnumber="16-10a-801" start="0">16-10a-801</xref>.</subsection><subsection number="16-10a-825(5)"> The creation of, delegation of authority to, or action by a committee does not alone constitute compliance by a director with the standards of conduct described in Section <xref depth="3" refnumber="16-10a-840" start="0">16-10a-840</xref>.</subsection></section><section number="16-10a-830"><histories><history>Amended by Chapter <modchap sess="1996GS">41</modchap>, 1996 General Session</history><modyear>1996</modyear></histories><catchline>Required officers.</catchline><subsection number="16-10a-830(1)"> A corporation shall have the officers designated in its bylaws or by the board of directors in a manner not inconsistent with the bylaws. Any officer shall be a natural person.</subsection><subsection number="16-10a-830(2)"> Officers may be appointed by the board of directors or in any other manner as the board of directors or bylaws may provide. A duly appointed officer may appoint one or more officers or assistant officers if authorized by the bylaws or the board of directors.</subsection><subsection number="16-10a-830(3)"> The bylaws or the board of directors shall delegate to one of the officers responsibility for the preparation and maintenance of minutes of the directors' and shareholders' meetings and other records and information required to be kept by the corporation under Section <xref depth="3" refnumber="16-10a-1601" start="0">16-10a-1601</xref> and for authenticating records of the corporation.</subsection><subsection number="16-10a-830(4)"> The same individual may simultaneously hold more than one office in a corporation.</subsection></section><section number="16-10a-831"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Duties of officers.</catchline><tab/>Each officer has the authority and shall perform the duties set forth in the bylaws or, to the extent not inconsistent with the bylaws, the duties prescribed by the board of directors or by an officer authorized by the board of directors to prescribe the duties of other officers. </section><section number="16-10a-832"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Resignation and removal of officers.</catchline><subsection number="16-10a-832(1)"> An officer may resign at any time by giving written notice of the resignation to the corporation.</subsection><subsection number="16-10a-832(2)"> A resignation of an officer is effective when the notice is received by the corporation, unless the notice specifies a later effective date.</subsection><subsection number="16-10a-832(3)"> If a resignation is made effective at a later date, the board of directors may permit the officer to remain in office until the effective date and may fill the pending vacancy before the effective date if the board of directors provides that the successor does not take office until the effective date, or the board of directors may remove the officer at any time prior to the effective date and may fill the resulting vacancy.</subsection><subsection number="16-10a-832(4)"> Unless otherwise provided in the bylaws, the board of directors may remove any officer at any time with or without cause. The bylaws or the board of directors may make provision for the removal of officers by other officers or by the shareholders.</subsection><subsection number="16-10a-832(5)"> An officer who resigns or is removed or whose appointment has expired may deliver to the division for filing a statement to that effect pursuant to Section <xref depth="3" refnumber="16-10a-1608" start="0">16-10a-1608</xref>.</subsection></section><section number="16-10a-833"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Contract rights with respect to officers.</catchline><subsection number="16-10a-833(1)"> The appointment of an officer does not itself create contract rights.</subsection><subsection number="16-10a-833(2)"> An officer's removal does not affect the officer's contract rights, if any, with the corporation. An officer's resignation does not affect the corporation's contract rights, if any, with the officer.</subsection></section><section number="16-10a-840"><histories><history>Amended by Chapter <modchap sess="2017GS">439</modchap>, 2017 General Session</history><modyear>2017</modyear></histories><catchline>General standards of conduct for directors and officers.</catchline><subsection number="16-10a-840(1)"> Each director shall discharge the director's duties as a director, including duties as a member of a committee, and each officer with discretionary authority shall discharge the officer's duties under that authority: <subsection number="16-10a-840(1)(a)"> in good faith;</subsection><subsection number="16-10a-840(1)(b)"> with the care an ordinarily prudent person in a like position would exercise under similar circumstances; and</subsection><subsection number="16-10a-840(1)(c)"> in a manner the director or officer reasonably believes to be in the best interests of the corporation.</subsection></subsection><subsection number="16-10a-840(2)"> In discharging the director's or officer's duties, a director or officer is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by: <subsection number="16-10a-840(2)(a)"> one or more officers or employees of the corporation, or of any other corporation of which at least 50% of the outstanding shares of stock entitling the holder of the shares to vote in the election of directors is owned directly or indirectly by the corporation, whom the director or officer reasonably believes to be reliable and competent in the matters presented;</subsection><subsection number="16-10a-840(2)(b)"> legal counsel, public accountants, or other persons as to matters the director or officer reasonably believes are within the person's professional or expert competence; or</subsection><subsection number="16-10a-840(2)(c)"> in the case of a director, a committee of the board of directors of which the director is not a member:<subsection number="16-10a-840(2)(c)(i)"> if the committee is designated in accordance with the articles of incorporation or the bylaws;</subsection><subsection number="16-10a-840(2)(c)(ii)"> if the information, opinion, report, or statement is within the committee's designated authority;</subsection><subsection number="16-10a-840(2)(c)(iii)"> if the director reasonably believes the committee merits confidence; and</subsection><subsection number="16-10a-840(2)(c)(iv)"> subject to Subsection <xref depth="4" refnumber="16-10a-840(3)" start="0">(3)</xref>, so long as in so relying the director is acting in good faith with the degree of care contemplated by Subsection <xref depth="4" refnumber="16-10a-840(1)(b)" start="0">(1)(b)</xref>.</subsection></subsection></subsection><subsection number="16-10a-840(3)"> A director or officer is not acting in good faith if the director or officer has knowledge concerning the matter in question that makes reliance otherwise permitted by Subsection <xref depth="4" refnumber="16-10a-840(2)" start="0">(2)</xref> unwarranted.</subsection><subsection number="16-10a-840(4)"> A director or officer is not liable to the corporation, its shareholders, or any conservator or receiver, or any assignee or successor-in-interest thereof, for any action taken, or any failure to take any action, as an officer or director, as the case may be, unless: <subsection number="16-10a-840(4)(a)"> the director or officer has breached or failed to perform the duties of the office in compliance with this section; and</subsection><subsection number="16-10a-840(4)(b)"> the breach or failure to perform constitutes gross negligence, willful misconduct, or intentional infliction of harm on the corporation or the shareholders.</subsection></subsection><subsection number="16-10a-840(5)"><subsection number="16-10a-840(5)(a)"> For purposes of this Subsection <xref depth="4" refnumber="16-10a-840(5)" start="0">(5)</xref> and notwithstanding Section <xref depth="3" refnumber="16-10a-102" start="0">16-10a-102</xref>, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of the corporation whether through the ownership of voting stock, by contract, or otherwise.</subsection><subsection number="16-10a-840(5)(b)"> In taking action, including action that may involve or relate to a change or potential change in the control of the corporation, the director is entitled to consider:<subsection number="16-10a-840(5)(b)(i)"> both the long-term and the short-term interests of the corporation and the corporation's shareholders; and</subsection><subsection number="16-10a-840(5)(b)(ii)"> the effects that the corporation's actions may have in the long-term or short-term on any of the following: <subsection number="16-10a-840(5)(b)(ii)(A)"> the prospects for potential growth, development, productivity, and profitability of the corporation;</subsection><subsection number="16-10a-840(5)(b)(ii)(B)"> the corporation's current employees;</subsection><subsection number="16-10a-840(5)(b)(ii)(C)"> the corporation's retired employees and other beneficiaries receiving or entitled to receive retirement, welfare, or similar benefits from or pursuant to any plan sponsored, or agreement entered into, by the corporation;</subsection><subsection number="16-10a-840(5)(b)(ii)(D)"> the corporation's customers and creditors; and</subsection><subsection number="16-10a-840(5)(b)(ii)(E)"> the ability of the corporation to provide, as a going concern, goods, services, employment opportunities, employment benefits, and otherwise contribute to the communities in which the corporation does business.</subsection></subsection></subsection><subsection number="16-10a-840(5)(c)"> This Subsection <xref depth="4" refnumber="16-10a-840(5)" start="0">(5)</xref> does not create any duty owed by a director to any person to consider or afford any particular weight to any factor listed in Subsection <xref depth="4" refnumber="16-10a-840(5)(b)" start="0">(5)(b)</xref> or abrogate any duty of the director, either statutory or recognized by common law or court decisions.</subsection></subsection></section><section number="16-10a-841"><histories><history>Amended by Chapter <modchap sess="2025GS">302</modchap>, 2025 General Session</history><modyear>2025</modyear></histories><catchline>Limitation of liability of directors.</catchline><subsection number="16-10a-841(1)">Without limiting the generality of Subsection <xref depth="4" refnumber="16-10a-840(4)" start="0">16-10a-840(4)</xref>, if so provided in the articles of incorporation or in the bylaws or a resolution to the extent permitted in Subsection <xref depth="4" refnumber="16-10a-841(3)" start="0">(3)</xref>, a corporation may eliminate or limit the liability of a director to the corporation or to its shareholders for monetary damages for any action taken or any failure to take any action as a director, except liability for:<subsection number="16-10a-841(1)(a)">the amount of a financial benefit received by a director to which the director is not entitled;</subsection><subsection number="16-10a-841(1)(b)">an intentional infliction of harm on the corporation or the shareholders;</subsection><subsection number="16-10a-841(1)(c)">a violation of Section <xref depth="3" refnumber="16-10a-842" start="0">16-10a-842</xref>; or</subsection><subsection number="16-10a-841(1)(d)">an intentional violation of criminal law.</subsection></subsection><subsection number="16-10a-841(2)">No provision authorized under this section may eliminate or limit the liability of a director for any act or omission occurring prior to the date when the provision becomes effective.</subsection><subsection number="16-10a-841(3)">Any provision authorized under this section to be included in the articles of incorporation may also be adopted in the bylaws or by resolution, but only if the provision is approved by the same percentage of shareholders of each voting group as would be required to approve an amendment to the articles of incorporation including the provision.</subsection><subsection number="16-10a-841(4)">Any foreign corporation authorized to transact business in this state, including any federally chartered depository institution authorized under federal law to transact business in this state, may adopt any provision authorized under this section.</subsection><subsection number="16-10a-841(5)">With respect to a corporation that is a depository institution regulated by the Department of Financial Institutions or by an agency of the federal government, any provision authorized under this section may include the elimination or limitation of the personal liability of a director or officer to the corporation's members or depositors.</subsection></section><section number="16-10a-842"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Liability of directors for unlawful distributions.</catchline><subsection number="16-10a-842(1)"> A director who votes for or assents to a distribution made in violation of Section <xref depth="3" refnumber="16-10a-640" start="0">16-10a-640</xref> or the articles of incorporation is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating Section <xref depth="3" refnumber="16-10a-640" start="0">16-10a-640</xref> or the articles of incorporation, if it is established that the director's duties were not performed in compliance with Section <xref depth="3" refnumber="16-10a-840" start="0">16-10a-840</xref>. In any proceeding commenced under this section, a director has all of the defenses ordinarily available to a director.</subsection><subsection number="16-10a-842(2)"> A director held liable under Subsection <xref depth="4" refnumber="16-10a-842(1)" start="0">(1)</xref> for an unlawful distribution is entitled to contribution: <subsection number="16-10a-842(2)(a)"> from every other director who could be held liable under Subsection <xref depth="4" refnumber="16-10a-842(1)" start="0">(1)</xref> for the unlawful distribution; and</subsection><subsection number="16-10a-842(2)(b)"> from each shareholder, who accepted the distribution knowing the distribution was made in violation of Section <xref depth="3" refnumber="16-10a-640" start="0">16-10a-640</xref> or the articles of incorporation, the amount of the contribution from each shareholder being the amount of the distribution to the shareholder multiplied by the percentage of the amount of distribution to all shareholders that exceeded what could have been distributed to shareholders without violating Section <xref depth="3" refnumber="16-10a-640" start="0">16-10a-640</xref> or the articles of incorporation.</subsection></subsection><subsection number="16-10a-842(3)"> A proceeding under this section is barred unless it is commenced within two years after the date on which the effect of the distribution is measured under Subsection <xref depth="4" refnumber="16-10a-640(5)" start="0">16-10a-640(5)</xref> or <xref depth="4" refnumber="16-10a-640(7)" start="0">(7)</xref>.</subsection></section><section number="16-10a-850"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Definitions relating to conflicting interest transactions.</catchline><tab/>As used in Sections <xref depth="3" refnumber="16-10a-850" start="0">16-10a-850</xref> through <xref depth="3" refnumber="16-10a-853" start="0">16-10a-853</xref>:<subsection number="16-10a-850(1)"> "Conflicting interest" with respect to a corporation means the interest a director has respecting a transaction effected or proposed to be effected by the corporation or by any entity in which the corporation has a controlling interest if: <subsection number="16-10a-850(1)(a)"> whether or not the transaction is brought before the board of directors of the corporation for action, the director knows at the time of commitment that the director or a related person of the director is a party to the transaction or has a beneficial financial interest in or is so closely linked to, the transaction and the transaction is so financially significant to the director or a related person of the director that the interest would reasonably be expected to exert an influence on the director's judgment if the director were called upon to vote on the transaction; or</subsection><subsection number="16-10a-850(1)(b)"> the transaction is brought, or is of a character and significance to the corporation that it would in the normal course be brought, before the board of directors for action, and the director knows at the time of commitment that any of the following persons is either a party to the transaction or has a beneficial financial interest in, or is so closely linked to, the transaction and the transaction is so financially significant to the person that the interest would reasonably be expected to exert an influence on the director's judgment if the director were called upon to vote on the transaction:<subsection number="16-10a-850(1)(b)(i)"> an entity, other than the corporation, of which the director is a director, general partner, agent, or employee or an entity to which the director owes a fiduciary duty, other than a fiduciary duty arising because the director is a director of the corporation;</subsection><subsection number="16-10a-850(1)(b)(ii)"> an individual who is a general partner, principal, or employer of the director or who is a beneficiary of a fiduciary duty owed by the director, other than a fiduciary duty arising because the director is a director of the corporation; or</subsection><subsection number="16-10a-850(1)(b)(iii)"> a person that controls one or more of the entities specified in Subsection <xref depth="4" refnumber="16-10a-850(1)(b)(i)" start="0">(1)(b)(i)</xref> or an entity that is controlled by, or is under common control with, one or more of the entities or individuals specified in Subsection <xref depth="4" refnumber="16-10a-850(1)(b)(i)" start="0">(1)(b)(i)</xref> or <xref depth="4" refnumber="16-10a-850(1)(b)(ii)" start="0">(1)(b)(ii)</xref>.</subsection></subsection></subsection><subsection number="16-10a-850(2)"> "Director's conflicting interest transaction" with respect to a corporation means a transaction effected or proposed to be effected by the corporation, or by any entity controlled by the corporation respecting which a director has a conflicting interest.</subsection><subsection number="16-10a-850(3)"> "Qualified director" means, with respect to a director's conflicting interest transaction, any director who does not have either a conflicting interest respecting the transaction, or a familial, financial, professional, or employment relationship with a second director who does have a conflicting interest respecting the transaction, which relationship would, in the circumstances, reasonably be expected to exert an influence on the first director's judgment when voting on the transaction.</subsection><subsection number="16-10a-850(4)"> "Required disclosure" means disclosure by the director who has a conflicting interest of: <subsection number="16-10a-850(4)(a)"> the existence and nature of the conflicting interest; and</subsection><subsection number="16-10a-850(4)(b)"> all facts known to the director respecting the subject matter of the transaction that an ordinarily prudent person would reasonably believe to be material to a judgment about whether or not to proceed with the transaction.</subsection></subsection><subsection number="16-10a-850(5)"> "Time of commitment" respecting a transaction means the time when the transaction is consummated or, if made pursuant to contract, the time when the corporation or the entity controlled by the corporation becomes contractually obligated so that its unilateral withdrawal from the transaction would entail significant loss, liability, or other damage.</subsection></section><section number="16-10a-851"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Judicial action.</catchline><subsection number="16-10a-851(1)"> A transaction effected or proposed to be effected by a corporation or by any entity controlled by the corporation that is not a director's conflicting interest transaction may not be enjoined, be set aside, or give rise to an award of damages or other sanctions, in a proceeding by a shareholder or by or in the right of the corporation, solely because a director, or any person with whom or which the director has a personal, economic, or other association, has an interest in the transaction.</subsection><subsection number="16-10a-851(2)"> A director's conflicting interest transaction may not be enjoined, be set aside, or give rise to an award of damages or other sanctions, in a proceeding by a shareholder or by or in the right of the corporation, solely because the director, or any person with whom or which the director has a personal, economic, or other association, has an interest in the transaction, if: <subsection number="16-10a-851(2)(a)"> directors' action respecting the transaction was at any time taken in compliance with Section <xref depth="3" refnumber="16-10a-852" start="0">16-10a-852</xref>;</subsection><subsection number="16-10a-851(2)(b)"> shareholders' action respecting the transaction was at any time taken in compliance with Section <xref depth="3" refnumber="16-10a-853" start="0">16-10a-853</xref>; or</subsection><subsection number="16-10a-851(2)(c)"> the transaction, judged according to the circumstances at the time of commitment, is established to have been fair to the corporation.</subsection></subsection></section><section number="16-10a-852"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Directors' action.</catchline><subsection number="16-10a-852(1)"> Directors' action respecting a transaction is taken for purposes of Subsection <xref depth="4" refnumber="16-10a-851(2)(a)" start="0">16-10a-851(2)(a)</xref> if the transaction received the affirmative vote of a majority of those qualified directors on the board of directors or on a duly empowered committee of the board who voted on the transaction after either required disclosure to them, to the extent the information was not known by them, or compliance with Subsection <xref depth="4" refnumber="16-10a-852(2)" start="0">(2)</xref>, provided that action by a committee is effective under this subsection only if: <subsection number="16-10a-852(1)(a)"> all its members are qualified directors; and</subsection><subsection number="16-10a-852(1)(b)"> its members are either all of the qualified directors or are appointed by the affirmative vote of a majority of the qualified directors.</subsection></subsection><subsection number="16-10a-852(2)"> If a director has a conflicting interest respecting a transaction, but neither the director nor a related person of the director is a party to the transaction, and if the director has a duty under law or professional canon, or a duty of confidentiality to another person, respecting information relating to the transaction so that the director may not make the disclosure described in Section <xref depth="4" refnumber="16-10a-850(4)(b)" start="0">16-10a-850(4)(b)</xref>, then disclosure is sufficient for purposes of Subsection <xref depth="4" refnumber="16-10a-852(1)" start="0">(1)</xref> if the director discloses to the directors voting on the transaction, before their vote, the existence and nature of the conflicting interest and informs them of the character and limitations imposed by that duty.</subsection><subsection number="16-10a-852(3)"> A majority of the qualified directors on the board of directors or on the committee, as the case may be, constitutes a quorum for purposes of action that complies with this section. Directors' action that otherwise complies with this section is not affected by the presence or vote of a director who is not a qualified director.</subsection></section><section number="16-10a-853"><histories><history>Amended by Chapter <modchap sess="2025GS">302</modchap>, 2025 General Session</history><modyear>2025</modyear></histories><catchline>Shareholders' action.</catchline><subsection number="16-10a-853(1)">Shareholders' action respecting a transaction is effective for purposes of Subsection <xref depth="4" refnumber="16-10a-851(2)(b)" start="0">16-10a-851(2)(b)</xref> if a quorum existed pursuant to Subsection <xref depth="4" refnumber="16-10a-853(2)" start="0">(2)</xref> and a majority of the votes entitled to be cast by holders of qualified shares present in person or by proxy at the meeting were cast in favor of the transaction after notice to shareholders describing the director's conflicting interest transaction, provision of the information referred to in Subsection <xref depth="4" refnumber="16-10a-853(3)" start="0">(3)</xref>, and required disclosure to the shareholders who voted on the transaction, to the extent the information was not known by them.</subsection><subsection number="16-10a-853(2)">A majority of the votes entitled to be cast by the holders of all qualified shares constitutes a quorum for purposes of action that complies with this section. Subject to the provisions of Subsections <xref depth="4" refnumber="16-10a-853(3)" start="0">(3)</xref> and <xref depth="4" refnumber="16-10a-853(4)" start="0">(4)</xref>, shareholders' action that otherwise complies with this section is not affected by the presence of holders of, or the voting of, shares that are not qualified shares.</subsection><subsection number="16-10a-853(3)">For purposes of compliance with Subsection <xref depth="4" refnumber="16-10a-853(1)" start="0">(1)</xref>, a director who has a conflicting interest respecting the transaction shall, before the shareholders vote, inform the secretary or other officer or agent of the corporation authorized to tabulate votes of the number and the identity of persons holding or controlling the vote, of all shares that the director knows are beneficially owned, or the voting of which is controlled, by the director or by a related person of the director, or both.</subsection><subsection number="16-10a-853(4)">If a shareholders' vote does not comply with Subsection <xref depth="4" refnumber="16-10a-853(1)" start="0">(1)</xref> solely because of a failure of a director to comply with Subsection <xref depth="4" refnumber="16-10a-853(3)" start="0">(3)</xref>, and if the director establishes that the failure did not determine and was not intended by the director to influence the outcome of the vote, the court may, with or without further proceedings under Subsection <xref depth="4" refnumber="16-10a-851(2)(c)" start="0">16-10a-851(2)(c)</xref>, take any action respecting the transaction and the director, and give any effect to the shareholders' vote, as it considers appropriate in the circumstances.</subsection></section></part><part number="16-10a-9"><catchline>Indemnification</catchline><section number="16-10a-901"><histories><history>Amended by Chapter <modchap sess="2014GS">189</modchap>, 2014 General Session</history><modyear>2014</modyear></histories><catchline>Definitions.</catchline><tab/>As used in <xref depth="2" refnumber="16-10a-9" start="2">Part 9, Indemnification</xref>:<subsection number="16-10a-901(1)"> "Corporation" includes any domestic or foreign entity that is a predecessor of a corporation by reason of a merger or other transaction in which the predecessor's existence ceased upon consummation of the transaction.</subsection><subsection number="16-10a-901(2)"> "Director" means an individual who is or was a director of a corporation or an individual who, while a director of a corporation, is or was serving at the corporation's request as a director, officer, partner, trustee, employee, fiduciary, or agent of another domestic or foreign corporation or other person or of an employee benefit plan. A director is considered to be serving an employee benefit plan at the corporation's request if his duties to the corporation also impose duties on, or otherwise involve services by, him to the plan or to participants in or beneficiaries of the plan. "Director" includes, unless the context requires otherwise, the estate or personal representative of a director.</subsection><subsection number="16-10a-901(3)"> "Expenses" include counsel fees.</subsection><subsection number="16-10a-901(4)"> "Liability" means the obligation incurred with respect to a proceeding to pay a judgment, settlement, penalty, fine (including an excise tax assessed with respect to an employee benefit plan), or reasonable expenses.</subsection><subsection number="16-10a-901(5)"> "Officer," "employee," "fiduciary," and "agent" include any person who, while serving the indicated relationship to the corporation, is or was serving at the corporation's request as a director, officer, partner, trustee, employee, fiduciary, or agent of another domestic or foreign corporation or other person or of an employee benefit plan. An officer, employee, fiduciary, or agent is considered to be serving an employee benefit plan at the corporation's request if that person's duties to the corporation also impose duties on, or otherwise involve services by, that person to the plan or participants in, or beneficiaries of the plan. Unless the context requires otherwise, such terms include the estates or personal representatives of such persons.</subsection><subsection number="16-10a-901(6)"><subsection number="16-10a-901(6)(a)"> "Official capacity" means:<subsection number="16-10a-901(6)(a)(i)"> when used with respect to a director, the office of director in a corporation; and</subsection><subsection number="16-10a-901(6)(a)(ii)"> when used with respect to a person other than a director, as contemplated in Section <xref depth="3" refnumber="16-10a-907" start="0">16-10a-907</xref>, the office in a corporation held by the officer or the employment, fiduciary, or agency relationship undertaken by him on behalf of the corporation.</subsection></subsection><subsection number="16-10a-901(6)(b)"> "Official capacity" does not include service for any other foreign or domestic corporation, other person, or employee benefit plan.</subsection></subsection><subsection number="16-10a-901(7)"> "Party" includes an individual who was, is, or is threatened to be made a named defendant or respondent in a proceeding.</subsection><subsection number="16-10a-901(8)"> "Proceeding" means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative and whether formal or informal.</subsection></section><section number="16-10a-902"><histories><history>Amended by Chapter <modchap sess="2025GS">302</modchap>, 2025 General Session</history><modyear>2025</modyear></histories><catchline>Authority to indemnify directors.</catchline><subsection number="16-10a-902(1)">Except as provided in Subsection <xref depth="4" refnumber="16-10a-902(4)" start="0">(4)</xref>, a corporation may indemnify an individual made a party to a proceeding because the individual is or was a director, against liability incurred in the proceeding if:<subsection number="16-10a-902(1)(a)">the individual's conduct was in good faith; </subsection><subsection number="16-10a-902(1)(b)">the individual reasonably believed that the individual's conduct was in, or not opposed to, the corporation's best interests; and</subsection><subsection number="16-10a-902(1)(c)">in the case of any criminal proceeding, the individual had no reasonable cause to believe the individual's conduct was unlawful.</subsection></subsection><subsection number="16-10a-902(2)">A director's conduct with respect to any employee benefit plan for a purpose the director reasonably believed to be in or not opposed to the interests of the participants in and beneficiaries of the plan is conduct that satisfies the requirement of Subsection <xref depth="4" refnumber="16-10a-902(1)(b)" start="0">(1)(b)</xref>.</subsection><subsection number="16-10a-902(3)">The termination of a proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent is not, of itself, determinative that the director did not meet the standard of conduct described in this section.</subsection><subsection number="16-10a-902(4)">A corporation may not indemnify a director under this section:<subsection number="16-10a-902(4)(a)">in connection with a proceeding by or in the right of the corporation in which the director was adjudged liable to the corporation; or</subsection><subsection number="16-10a-902(4)(b)">in connection with any other proceeding charging that the director derived an improper personal benefit, whether or not involving action in the director's official capacity, in which proceeding the director was adjudged liable on the basis that the director derived an improper personal benefit.</subsection></subsection><subsection number="16-10a-902(5)">Indemnification permitted under this section in connection with a proceeding by or in the right of the corporation is limited to reasonable expenses incurred in connection with the proceeding.</subsection></section><section number="16-10a-903"><histories><history>Amended by Chapter <modchap sess="2025GS">302</modchap>, 2025 General Session</history><modyear>2025</modyear></histories><catchline>Mandatory indemnification of directors.</catchline><tab/>Unless limited by its articles of incorporation, a corporation shall indemnify a director who was successful, on the merits or otherwise, in the defense of any proceeding, or in the defense of any claim, issue, or matter in the proceeding, to which the director was a party because the director is or was a director of the corporation, against reasonable expenses incurred by the director in connection with the proceeding or claim with respect to which the director has been successful.</section><section number="16-10a-904"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Advance of expenses for directors.</catchline><subsection number="16-10a-904(1)"> A corporation may pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if: <subsection number="16-10a-904(1)(a)"> the director furnishes the corporation a written affirmation of his good faith belief that he has met the applicable standard of conduct described in Section <xref depth="3" refnumber="16-10a-902" start="0">16-10a-902</xref>;</subsection><subsection number="16-10a-904(1)(b)"> the director furnishes to the corporation a written undertaking, executed personally or on his behalf, to repay the advance if it is ultimately determined that he did not meet the standard of conduct; and</subsection><subsection number="16-10a-904(1)(c)"> a determination is made that the facts then known to those making the determination would not preclude indemnification under this part.</subsection></subsection><subsection number="16-10a-904(2)"> The undertaking required by Subsection <xref depth="4" refnumber="16-10a-904(1)(b)" start="0">(1)(b)</xref> shall be an unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make repayment.</subsection><subsection number="16-10a-904(3)"> Determinations and authorizations of payments under this section shall be made in the manner specified in Section <xref depth="3" refnumber="16-10a-906" start="0">16-10a-906</xref>.</subsection></section><section number="16-10a-905"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Court-ordered indemnification of directors.</catchline><tab/>Unless a corporation's articles of incorporation provide otherwise, a director of the corporation who is or was a party to a proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction. On receipt of an application, the court, after giving any notice the court considers necessary, may order indemnification in the following manner:<subsection number="16-10a-905(1)"> if the court determines that the director is entitled to mandatory indemnification under Section <xref depth="3" refnumber="16-10a-903" start="0">16-10a-903</xref>, the court shall order indemnification, in which case the court shall also order the corporation to pay the director's reasonable expenses incurred to obtain court-ordered indemnification; and</subsection><subsection number="16-10a-905(2)"> if the court determines that the director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not the director met the applicable standard of conduct set forth in Section <xref depth="3" refnumber="16-10a-902" start="0">16-10a-902</xref> or was adjudged liable as described in Subsection <xref depth="4" refnumber="16-10a-902(4)" start="0">16-10a-902(4)</xref>, the court may order indemnification as the court determines to be proper, except that the indemnification with respect to any proceeding in which liability has been adjudged in the circumstances described in Subsection <xref depth="4" refnumber="16-10a-902(4)" start="0">16-10a-902(4)</xref> is limited to reasonable expenses incurred.</subsection></section><section number="16-10a-906"><histories><history>Amended by Chapter <modchap sess="2010GS">324</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Determination and authorization of indemnification of directors.</catchline><subsection number="16-10a-906(1)"> A corporation may not indemnify a director under Section <xref depth="3" refnumber="16-10a-902" start="0">16-10a-902</xref> unless authorized and a determination has been made in the specific case that indemnification of the director is permissible in the circumstances because the director has met the applicable standard of conduct set forth in Section <xref depth="3" refnumber="16-10a-902" start="0">16-10a-902</xref>. A corporation may not advance expenses to a director under Section <xref depth="3" refnumber="16-10a-904" start="0">16-10a-904</xref> unless authorized in the specific case after the written affirmation and undertaking required by Subsections <xref depth="4" refnumber="16-10a-904(1)(a)" start="0">16-10a-904(1)(a)</xref> and <xref depth="4" refnumber="16-10a-904(1)(b)" start="0">(b)</xref> are received and the determination required by Subsection <xref depth="4" refnumber="16-10a-904(1)(c)" start="0">16-10a-904(1)(c)</xref> has been made.</subsection><subsection number="16-10a-906(2)"> The determinations required by Subsection <xref depth="4" refnumber="16-10a-906(1)" start="0">(1)</xref> shall be made: <subsection number="16-10a-906(2)(a)"> by the board of directors by a majority vote of those present at a meeting at which a quorum is present, and only those directors not parties to the proceeding shall be counted in satisfying the quorum; or</subsection><subsection number="16-10a-906(2)(b)"> if a quorum cannot be obtained as contemplated in Subsection <xref depth="4" refnumber="16-10a-906(2)(a)" start="0">(2)(a)</xref>, by a majority vote of a committee of the board of directors designated by the board of directors, which committee shall consist of two or more directors not parties to the proceeding, except that directors who are parties to the proceeding may participate in the designation of directors for the committee;</subsection><subsection number="16-10a-906(2)(c)"> by special legal counsel:<subsection number="16-10a-906(2)(c)(i)"> selected by the board of directors or its committee in the manner prescribed in Subsection <xref depth="4" refnumber="16-10a-906(2)(a)" start="0">(2)(a)</xref> or <xref depth="4" refnumber="16-10a-906(2)(b)" start="0">(b)</xref>; or</subsection><subsection number="16-10a-906(2)(c)(ii)"> if a quorum of the board of directors cannot be obtained under Subsection <xref depth="4" refnumber="16-10a-906(2)(a)" start="0">(2)(a)</xref> and a committee cannot be designated under Subsection <xref depth="4" refnumber="16-10a-906(2)(b)" start="0">(2)(b)</xref>, selected by a majority vote of the full board of directors, in which selection directors who are parties to the proceeding may participate; or</subsection></subsection><subsection number="16-10a-906(2)(d)"> by the shareholders, by a majority of the votes entitled to be cast by holders of qualified shares present in person or by proxy at a meeting.</subsection></subsection><subsection number="16-10a-906(3)"> A majority of the votes entitled to be cast by the holders of all qualified shares constitutes a quorum for purposes of action that complies with this section. Shareholders' action that otherwise complies with this section is not affected by the presence of holders, or the voting, of shares that are not qualified shares.</subsection><subsection number="16-10a-906(4)"> Unless authorization is required by the bylaws, authorization of indemnification and advance of expenses shall be made in the same manner as the determination that indemnification or advance of expenses is permissible. However, if the determination that indemnification or advance of expenses is permissible is made by special legal counsel, authorization of indemnification and advance of expenses shall be made by a body entitled under Subsection <xref depth="4" refnumber="16-10a-906(2)(c)" start="0">(2)(c)</xref> to select legal counsel.</subsection></section><section number="16-10a-907"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Indemnification of officers, employees, fiduciaries, and agents.</catchline><tab/>Unless a corporation's articles of incorporation provide otherwise:<subsection number="16-10a-907(1)"> an officer of the corporation is entitled to mandatory indemnification under Section <xref depth="3" refnumber="16-10a-903" start="0">16-10a-903</xref>, and is entitled to apply for court-ordered indemnification under Section <xref depth="3" refnumber="16-10a-905" start="0">16-10a-905</xref>, in each case to the same extent as a director;</subsection><subsection number="16-10a-907(2)"> the corporation may indemnify and advance expenses to an officer, employee, fiduciary, or agent of the corporation to the same extent as to a director; and</subsection><subsection number="16-10a-907(3)"> a corporation may also indemnify and advance expenses to an officer, employee, fiduciary, or agent who is not a director to a greater extent, if not inconsistent with public policy, and if provided for by its articles of incorporation, bylaws, general or specific action of its board of directors, or contract.</subsection></section><section number="16-10a-908"><histories><history>Amended by Chapter <modchap sess="2025GS">302</modchap>, 2025 General Session</history><modyear>2025</modyear></histories><catchline>Insurance.</catchline><tab/>A corporation may purchase and maintain liability insurance on behalf of a person who is or was a director, officer, employee, fiduciary, or agent of the corporation, or who, while serving as a director, officer, employee, fiduciary, or agent of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, fiduciary, or agent of another foreign or domestic corporation or other person, or of an employee benefit plan, against liability asserted against or incurred by the person in that capacity or arising from the person's status as a director, officer, employee, fiduciary, or agent, whether or not the corporation would have power to indemnify the person against the same liability under Section <xref depth="3" refnumber="16-10a-902" start="0">16-10a-902</xref>, <xref depth="3" refnumber="16-10a-903" start="0">16-10a-903</xref>, or <xref depth="3" refnumber="16-10a-907" start="0">16-10a-907</xref>. Insurance may be procured from any insurance company designated by the board of directors, whether the insurance company is formed under the laws of this state or any other jurisdiction of the United States or elsewhere, including any insurance company in which the corporation has an equity or any other interest through stock ownership or otherwise.</section><section number="16-10a-909"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Limitations on indemnification of directors.</catchline><subsection number="16-10a-909(1)"> A provision treating a corporation's indemnification of, or advance for expenses to, directors that is contained in its articles of incorporation or bylaws, in a resolution of its shareholders or board of directors, or in a contract (except an insurance policy) or otherwise, is valid only if and to the extent the provision is not inconsistent with this part. If the articles of incorporation limit indemnification or advance of expenses, indemnification and advance of expenses are valid only to the extent not inconsistent with the articles of incorporation.</subsection><subsection number="16-10a-909(2)"> This part does not limit a corporation's power to pay or reimburse expenses incurred by a director in connection with the director's appearance as a witness in a proceeding at a time when the director has not been made a named defendant or respondent to the proceeding.</subsection></section></part><part number="16-10a-10"><catchline>Amendment of Articles of Incorporation and Bylaws</catchline><section number="16-10a-1001"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Authority to amend.</catchline><subsection number="16-10a-1001(1)"> A corporation may amend its articles of incorporation at any time to add or change a provision that is required or permitted in the articles of incorporation or to delete a provision not required in the articles of incorporation. Whether a provision is required or permitted in the articles of incorporation is determined as of the effective date of the amendment.</subsection><subsection number="16-10a-1001(2)"> A shareholder does not have a vested property right resulting from any provision in the articles of incorporation, including any provision relating to management, control, capital structure, purpose, duration of the corporation, or dividend entitlement.</subsection></section><section number="16-10a-1002"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Amendment by board of directors.</catchline><subsection number="16-10a-1002(1)">Unless otherwise provided in the articles of incorporation, a corporation's board of directors may adopt, without shareholder action, one or more amendments to the corporation's articles of incorporation to:<subsection number="16-10a-1002(1)(a)">delete the names and addresses of incorporators or initial directors or both from the articles of incorporation;</subsection><subsection number="16-10a-1002(1)(b)">change the information required by Section <xref depth="3" refnumber="16-1a-404">16-1a-404</xref>, but an amendment is not required to change the information;</subsection><subsection number="16-10a-1002(1)(c)">change each issued and unissued authorized share of a class into a greater number of whole shares if the corporation has only shares of that class outstanding;</subsection><subsection number="16-10a-1002(1)(d)">change the corporate name by adding the word "corporation," "incorporated," or "company," or an abbreviation of these words, or by substituting any such word or abbreviation for a similar word or abbreviation in the name; or</subsection><subsection number="16-10a-1002(1)(e)">make any other change expressly permitted by this chapter to be made without shareholder action.</subsection></subsection><subsection number="16-10a-1002(2)">The board of directors may adopt, without shareholder action, one or more amendments to the articles of incorporation to change the corporate name, if necessary, in connection with the reinstatement of a corporation pursuant to Section <xref depth="3" refnumber="16-1a-604">16-1a-604</xref>.</subsection></section><section number="16-10a-1003"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Amendment by board of directors and shareholders.</catchline><subsection number="16-10a-1003(1)"> A corporation's board of directors may propose one or more amendments to the articles of incorporation for submission to the shareholders.</subsection><subsection number="16-10a-1003(2)"> For an amendment to the articles of incorporation proposed pursuant to Subsection <xref depth="4" refnumber="16-10a-1003(1)" start="0">(1)</xref> to be adopted: <subsection number="16-10a-1003(2)(a)"> the board of directors shall recommend the amendment to the shareholders unless the board determines that, because of conflicts of interest or other special circumstances, it should make no recommendation and communicates the basis for its determination to the shareholders with the amendment; and</subsection><subsection number="16-10a-1003(2)(b)"> shareholders entitled to vote on the amendment shall approve the amendment as provided in Subsection <xref depth="4" refnumber="16-10a-1003(5)" start="0">(5)</xref>.</subsection></subsection><subsection number="16-10a-1003(3)"> The board of directors may condition its submission of the proposed amendment on any basis.</subsection><subsection number="16-10a-1003(4)"> The corporation shall give notice, in accordance with Section <xref depth="3" refnumber="16-10a-705" start="0">16-10a-705</xref>, of the shareholders' meeting at which the amendment will be voted upon, to each shareholder entitled to vote on the proposed amendment. The notice of the meeting shall state that one of the purposes of the meeting is to consider the proposed amendment and it shall contain or be accompanied by a copy or summary of the amendment.</subsection><subsection number="16-10a-1003(5)"> Unless this chapter, the articles of incorporation, the bylaws, if authorized by the articles of incorporation, or the board of directors acting pursuant to Subsection <xref depth="4" refnumber="16-10a-1003(3)" start="0">(3)</xref> require a greater vote or a vote by voting groups, the amendment to be adopted must be approved by: <subsection number="16-10a-1003(5)(a)"> a majority of the votes entitled to be cast on the amendment by any voting group with respect to which the amendment would create dissenters' rights;</subsection><subsection number="16-10a-1003(5)(b)"> a majority of the votes entitled to be cast on the amendment by any voting group with respect to which the amendment would materially and adversely affect rights in respect of the shares of the voting group because it:<subsection number="16-10a-1003(5)(b)(i)"> alters or abolishes a preferential right of the shares;</subsection><subsection number="16-10a-1003(5)(b)(ii)"> creates, alters, or abolishes a right in respect of redemption, including a provision respecting a sinking fund for the redemption or repurchase, of the shares;</subsection><subsection number="16-10a-1003(5)(b)(iii)"> alters or abolishes a preemptive right of the holder of the shares to acquire shares or other securities;</subsection><subsection number="16-10a-1003(5)(b)(iv)"> excludes or limits the right of the shares to vote on any matter, or to cumulate votes, other than a limitation by dilution through issuance of shares or other securities with similar voting rights; or</subsection><subsection number="16-10a-1003(5)(b)(v)"> reduces the number of shares owned by the shareholder to a fraction of a share or scrip if the fractional share or scrip so created is to be acquired for cash or the scrip is to be voided under Section <xref depth="3" refnumber="16-10a-604" start="0">16-10a-604</xref>; and</subsection></subsection><subsection number="16-10a-1003(5)(c)"> the votes required by Sections <xref depth="3" refnumber="16-10a-725" start="0">16-10a-725</xref> and <xref depth="3" refnumber="16-10a-726" start="0">16-10a-726</xref> by every other voting group entitled to vote on the amendment.</subsection></subsection><subsection number="16-10a-1003(6)"> If any amendment to the articles of incorporation would impose personal liability on shareholders for the debts of a corporation, it must be approved by all of the outstanding shares affected, regardless of limitations or restrictions on the voting rights of the shares.</subsection></section><section number="16-10a-1004"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Voting on amendments by voting groups.</catchline><subsection number="16-10a-1004(1)"> Except as otherwise provided in Subsection <xref depth="4" refnumber="16-10a-1004(5)" start="0">(5)</xref>, the holders of the outstanding shares of a class are entitled to vote as a separate voting group, if shareholder voting is otherwise required by this chapter, on a proposed amendment if the amendment would: <subsection number="16-10a-1004(1)(a)"> increase or decrease the aggregate number of authorized shares of the class;</subsection><subsection number="16-10a-1004(1)(b)"> effect an exchange or reclassification of all or part of the shares of the class into shares of another class;</subsection><subsection number="16-10a-1004(1)(c)"> effect an exchange or reclassification, or create the right of exchange, of all or part of the shares of another class into shares of the class;</subsection><subsection number="16-10a-1004(1)(d)"> change the designation, rights, preferences, or limitations of all or part of the shares of the class;</subsection><subsection number="16-10a-1004(1)(e)"> change the shares of all or part of the class into a different number of shares of the same class;</subsection><subsection number="16-10a-1004(1)(f)"> create a new class of shares having rights or preferences with respect to distributions or to dissolution that are prior, superior, or substantially equal to the shares of the class;</subsection><subsection number="16-10a-1004(1)(g)"> increase the rights, preferences, or number of authorized shares of any class that, after giving effect to the amendment, have rights or preferences with respect to distributions or to dissolution that are prior, superior, or substantially equal to the shares of the class;</subsection><subsection number="16-10a-1004(1)(h)"> limit or deny an existing preemptive right of all or part of the shares of the class; or</subsection><subsection number="16-10a-1004(1)(i)"> cancel or otherwise affect rights to distributions or dividends that have accumulated but not yet been declared on all or part of the shares of the class.</subsection></subsection><subsection number="16-10a-1004(2)"> Except as otherwise provided in Subsection <xref depth="4" refnumber="16-10a-1004(3)" start="0">(3)</xref>, if a proposed amendment would affect a series of a class of shares in one or more of the ways described in Subsection <xref depth="4" refnumber="16-10a-1004(1)" start="0">(1)</xref>, the shares of that series are entitled to vote as a separate voting group on the proposed amendment.</subsection><subsection number="16-10a-1004(3)"> If a proposed amendment that entitles two or more series of a class of shares to vote as separate voting groups under this section would affect those two or more series in the same or a substantially similar way, the shares of all the series so affected shall instead vote together as a single voting group on the proposed amendment.</subsection><subsection number="16-10a-1004(4)"> Except as otherwise provided in Subsection <xref depth="4" refnumber="16-10a-1004(5)" start="0">(5)</xref>, a class or series of shares is entitled to the voting rights granted by this section although the articles of incorporation provide that the shares are nonvoting shares.</subsection><subsection number="16-10a-1004(5)"> Notwithstanding the rights granted by this section to holders of the outstanding shares of a class or series to vote as a separate voting group, the rights may be otherwise restricted if so provided in the original articles of incorporation, in any amendment thereto which created the class or series or which was adopted prior to the issuance of any shares of the class or series, or in any amendment thereto which was authorized by a resolution or resolutions adopted by the affirmative vote of the holders of a majority of the class or series.</subsection></section><section number="16-10a-1005"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Amendment before issuance of shares.</catchline><tab/>If a corporation has not yet issued shares, its board of directors or, if no board of directors has been appointed, its incorporators, may adopt any amendments to the corporation's articles of incorporation. </section><section number="16-10a-1006"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Articles of amendment.</catchline><tab/>A corporation amending its articles of incorporation shall deliver to the division for filing articles of amendment setting forth:<subsection number="16-10a-1006(1)"> the name of the corporation;</subsection><subsection number="16-10a-1006(2)"> the text of each amendment adopted;</subsection><subsection number="16-10a-1006(3)"> if an amendment provides for an exchange, reclassification, or cancellation of issued shares, provisions for implementing the amendment if not contained in the amendment itself;</subsection><subsection number="16-10a-1006(4)"> the date of each amendment's adoption;</subsection><subsection number="16-10a-1006(5)"> if an amendment was adopted by the incorporators or board of directors without shareholder action, a statement to that effect and that shareholder action was not required; and</subsection><subsection number="16-10a-1006(6)"> if an amendment was approved by the shareholders: <subsection number="16-10a-1006(6)(a)"> the designation, number of outstanding shares, number of votes entitled to be cast by each voting group entitled to vote separately on the amendment, and number of votes of each voting group indisputably represented at the meeting; and</subsection><subsection number="16-10a-1006(6)(b)"> either the total number of votes cast for and against the amendment by each voting group entitled to vote separately on the amendment or the total number of undisputed votes cast for the amendment by each voting group and a statement that the number of votes cast for the amendment by each voting group entitled to vote separately on the amendment was sufficient for approval by that voting group.</subsection></subsection></section><section number="16-10a-1007"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Restated articles of incorporation.</catchline><subsection number="16-10a-1007(1)">A corporation's board of directors may restate its articles of incorporation at any time with or without shareholder action. A corporation's incorporators may restate its articles of incorporation at any time if the corporation has not issued shares and if no directors have been appointed.</subsection><subsection number="16-10a-1007(2)">The restatement may include one or more amendments to the articles of incorporation. If the restatement includes an amendment requiring shareholder approval, it must be adopted as provided in Section <xref depth="3" refnumber="16-10a-1003" start="0">16-10a-1003</xref>.</subsection><subsection number="16-10a-1007(3)">If the board of directors submits a restatement for shareholder action, the corporation shall give notice, in accordance with Section <xref depth="3" refnumber="16-10a-705" start="0">16-10a-705</xref>, to each shareholder entitled to vote on the restatement, of the proposed shareholders' meeting at which the restatement will be voted upon. The notice shall state that the purpose, or one of the purposes, of the meeting is to consider the proposed restatement and the notice shall contain or be accompanied by a copy of the restatement that identifies any amendment or other change it would make in the articles of incorporation.</subsection><subsection number="16-10a-1007(4)">A corporation restating its articles of incorporation shall deliver to the division for filing articles of restatement setting forth:<subsection number="16-10a-1007(4)(a)">the name of the corporation;</subsection><subsection number="16-10a-1007(4)(b)">the text of the restated articles of incorporation;</subsection><subsection number="16-10a-1007(4)(c)">if the restatement contains an amendment to the articles of incorporation, the information required to be set forth in articles of amendment by Section <xref depth="3" refnumber="16-10a-1006" start="0">16-10a-1006</xref>;</subsection><subsection number="16-10a-1007(4)(d)">if the restatement does not contain an amendment to the articles of incorporation, a statement to that effect; and</subsection><subsection number="16-10a-1007(4)(e)">if the restatement was adopted by the board of directors or incorporators without shareholder action, a statement as to how the restatement was adopted and that shareholder action was not required.</subsection></subsection><subsection number="16-10a-1007(5)">Upon filing by the division or at any later effective date determined pursuant to Section <xref depth="3" refnumber="16-1a-204">16-1a-204</xref>, restated articles of incorporation supersede the original articles of incorporation and all prior amendments to them.</subsection></section><section number="16-10a-1008"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Amendment pursuant to reorganization.</catchline><subsection number="16-10a-1008(1)"> A corporation's articles of incorporation may be amended without action by the board of directors or shareholders to carry out a plan or reorganization ordered or decreed by a court of competent jurisdiction under a statute of the United States if the articles of incorporation after amendment contain only provisions required or permitted by Section <xref depth="3" refnumber="16-10a-202" start="0">16-10a-202</xref>.</subsection><subsection number="16-10a-1008(2)"> For an amendment to the articles of incorporation to be made pursuant to Subsection <xref depth="4" refnumber="16-10a-1008(1)" start="0">(1)</xref>, the individual or individuals designated by the court shall deliver to the division for filing articles of amendment setting forth: <subsection number="16-10a-1008(2)(a)"> the name of the corporation;</subsection><subsection number="16-10a-1008(2)(b)"> the text of each amendment approved by the court;</subsection><subsection number="16-10a-1008(2)(c)"> the date of the court's order or decree approving the articles of amendment;</subsection><subsection number="16-10a-1008(2)(d)"> the title of the reorganization proceeding in which the order or decree was entered; and</subsection><subsection number="16-10a-1008(2)(e)"> a statement that the court had jurisdiction of the proceeding under a specified statute of the United States.</subsection></subsection><subsection number="16-10a-1008(3)"> Shareholders of a corporation undergoing reorganization do not have dissenters' rights except as and to the extent provided in the reorganization plan.</subsection><subsection number="16-10a-1008(4)"> This section does not apply after entry of a final decree in the reorganization proceeding even though the court retains jurisdiction of the proceeding for limited purposes unrelated to consummation of the reorganization plan.</subsection></section><section number="16-10a-1008.5"><histories><history>Amended by Chapter <modchap sess="2009GS">386</modchap>, 2009 General Session</history><modyear>2009</modyear></histories><catchline>Conversion to a nonprofit corporation.</catchline><subsection number="16-10a-1008.5(1)"><subsection number="16-10a-1008.5(1)(a)"> A corporation may convert to a nonprofit corporation subject to <xref depth="1" refnumber="16-6a" start="0">Title 16, Chapter 6a, Utah Revised Nonprofit Corporation Act</xref>, by filing an amendment of its articles of incorporation pursuant to this section.</subsection><subsection number="16-10a-1008.5(1)(b)"> The day on which a corporation files an amendment under this section, the corporation becomes a nonprofit corporation subject to <xref depth="1" refnumber="16-6a" start="0">Title 16, Chapter 6a, Utah Revised Nonprofit Corporation Act</xref>, except that, notwithstanding Section <xref depth="3" refnumber="16-6a-203" start="0">16-6a-203</xref>, the existence of the nonprofit corporation is considered to commence on the day on which the converting corporation:<subsection number="16-10a-1008.5(1)(b)(i)"> commenced its existence under this chapter; or</subsection><subsection number="16-10a-1008.5(1)(b)(ii)"> otherwise was created, formed, incorporated, or came into being.</subsection></subsection></subsection><subsection number="16-10a-1008.5(2)"> The amendment of the articles of incorporation to convert to a nonprofit corporation shall: <subsection number="16-10a-1008.5(2)(a)"> revise the statement of purposes of the corporation;</subsection><subsection number="16-10a-1008.5(2)(b)"> delete:<subsection number="16-10a-1008.5(2)(b)(i)"> the authorization for shares; and</subsection><subsection number="16-10a-1008.5(2)(b)(ii)"> any provision relating to authorized or issued shares;</subsection></subsection><subsection number="16-10a-1008.5(2)(c)"> if any shares have been issued, provide for:<subsection number="16-10a-1008.5(2)(c)(i)"> the cancellation of issued shares; or</subsection><subsection number="16-10a-1008.5(2)(c)(ii)"> the conversion of the shares to membership interests in the nonprofit corporation; and</subsection></subsection><subsection number="16-10a-1008.5(2)(d)"> make such other changes as may be necessary or desired.</subsection></subsection><subsection number="16-10a-1008.5(3)"> If the corporation has issued shares, an amendment to convert to a nonprofit corporation shall be approved by all of the outstanding shares of all classes of shares regardless of limitations or restrictions on the voting rights of the shares.</subsection><subsection number="16-10a-1008.5(4)"> If an amendment pursuant to this section is included in a merger agreement, this section applies, except that any provision for the cancellation or conversion of shares shall be set forth in the merger agreement and not in the amendment of the articles of incorporation.</subsection><subsection number="16-10a-1008.5(5)"> The conversion of a corporation into a nonprofit corporation does not affect: <subsection number="16-10a-1008.5(5)(a)"> an obligation or liability of the converting corporation incurred before its conversion to a nonprofit corporation; or</subsection><subsection number="16-10a-1008.5(5)(b)"> the personal liability of any person incurred before the conversion.</subsection></subsection><subsection number="16-10a-1008.5(6)"><subsection number="16-10a-1008.5(6)(a)"><subsection number="16-10a-1008.5(6)(a)(i)"> When a conversion is effective under this section, for purposes of the laws of this state, the things listed in Subsection <xref depth="4" refnumber="16-10a-1008.5(6)(a)(ii)" start="0">(6)(a)(ii)</xref>: <subsection number="16-10a-1008.5(6)(a)(i)(A)"> vest in the nonprofit corporation to which the corporation converts;</subsection><subsection number="16-10a-1008.5(6)(a)(i)(B)"> are the property of the nonprofit corporation; and</subsection><subsection number="16-10a-1008.5(6)(a)(i)(C)"> are not considered transferred by the converting corporation to the nonprofit corporation by operation of this Subsection <xref depth="4" refnumber="16-10a-1008.5(6)(a)" start="0">(6)(a)</xref>.</subsection></subsection><subsection number="16-10a-1008.5(6)(a)(ii)"> This Subsection <xref depth="4" refnumber="16-10a-1008.5(6)(a)" start="0">(6)(a)</xref> applies to the following of the converting corporation: <subsection number="16-10a-1008.5(6)(a)(ii)(A)"> its rights, privileges, and powers;</subsection><subsection number="16-10a-1008.5(6)(a)(ii)(B)"> its interests in property, whether real, personal, or mixed;</subsection><subsection number="16-10a-1008.5(6)(a)(ii)(C)"> debts due to the converting corporation;</subsection><subsection number="16-10a-1008.5(6)(a)(ii)(D)"> debts, liabilities, and duties of the converting corporation;</subsection><subsection number="16-10a-1008.5(6)(a)(ii)(E)"> rights and obligations under contract of the converting corporation; and</subsection><subsection number="16-10a-1008.5(6)(a)(ii)(F)"> other things and causes of action belonging to the converting corporation.</subsection></subsection></subsection><subsection number="16-10a-1008.5(6)(b)"> The title to any real property vested by deed or otherwise in a corporation converting to a nonprofit corporation does not revert and is not in any way impaired by reason of this chapter or of the conversion.</subsection><subsection number="16-10a-1008.5(6)(c)"> A right of a creditor or a lien on property of a converting corporation that is described in Subsection <xref depth="4" refnumber="16-10a-1008.5(6)(a)" start="0">(6)(a)</xref> or <xref depth="4" refnumber="16-10a-1008.5(6)(b)" start="0">(b)</xref> is preserved unimpaired.</subsection><subsection number="16-10a-1008.5(6)(d)"> A debt, liability, or duty of a converting corporation:<subsection number="16-10a-1008.5(6)(d)(i)"> remains attached to the nonprofit corporation to which the corporation converts; and</subsection><subsection number="16-10a-1008.5(6)(d)(ii)"> may be enforced against the nonprofit corporation to the same extent as if the debts, liabilities, and duties had been incurred or contracted by the nonprofit corporation in its capacity as a nonprofit corporation.</subsection></subsection><subsection number="16-10a-1008.5(6)(e)"> A converted corporation upon conversion to a nonprofit corporation pursuant to this section is considered the same entity as the nonprofit corporation.</subsection><subsection number="16-10a-1008.5(6)(f)"> In connection with a conversion of a corporation to a nonprofit corporation under this section, the interests or rights in the corporation which is to be converted may be exchanged or converted into one or more of the following:<subsection number="16-10a-1008.5(6)(f)(i)"> cash, property, interests, or rights in the nonprofit corporation to which it is converted; or</subsection><subsection number="16-10a-1008.5(6)(f)(ii)"> cash, property or interests in, or rights in another entity.</subsection></subsection><subsection number="16-10a-1008.5(6)(g)"> Unless otherwise agreed:<subsection number="16-10a-1008.5(6)(g)(i)"> a converting corporation is not required solely as a result of the conversion to: <subsection number="16-10a-1008.5(6)(g)(i)(A)"> wind up its affairs;</subsection><subsection number="16-10a-1008.5(6)(g)(i)(B)"> pay its liabilities; or</subsection><subsection number="16-10a-1008.5(6)(g)(i)(C)"> distribute its assets; and</subsection></subsection><subsection number="16-10a-1008.5(6)(g)(ii)"> a conversion is not considered to constitute a dissolution of the corporation, but constitutes a continuation of the existence of the corporation in the form of a nonprofit corporation.</subsection></subsection></subsection></section><section number="16-10a-1008.7"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Conversion to or from a domestic limited liability company.</catchline><subsection number="16-10a-1008.7(1)"><subsection number="16-10a-1008.7(1)(a)">A corporation may convert to a domestic limited liability company subject to Chapter 20, Utah Revised Uniform Limited Liability Company Act, as appropriate pursuant to Section <xref depth="3" refnumber="16-20-1205">16-20-1205</xref> by complying with:<subsection number="16-10a-1008.7(1)(a)(i)">this Subsection <xref depth="4" refnumber="16-10a-1008.7(1)" start="0">(1)</xref>; and</subsection><subsection number="16-10a-1008.7(1)(a)(ii)">Section <xref depth="3" refnumber="16-1a-902">16-1a-902</xref>.</subsection></subsection><subsection number="16-10a-1008.7(1)(b)">If a corporation converts to a domestic limited liability company in accordance with this Subsection <xref depth="4" refnumber="16-10a-1008.7(1)" start="0">(1)</xref>, the articles of conversion shall:<subsection number="16-10a-1008.7(1)(b)(i)">comply with Sections <xref depth="3" refnumber="16-1a-906">16-1a-906</xref> and <xref depth="3" refnumber="16-1a-907">16-1a-907</xref>; and</subsection><subsection number="16-10a-1008.7(1)(b)(ii)">if the corporation has issued shares, provide for:<subsection number="16-10a-1008.7(1)(b)(ii)(A)">the cancellation of any issued share; or</subsection><subsection number="16-10a-1008.7(1)(b)(ii)(B)">the conversion of any issued share to a membership interest in the domestic limited liability company.</subsection></subsection></subsection><subsection number="16-10a-1008.7(1)(c)">Before a statement of conversion, in accordance with Section <xref depth="3" refnumber="16-1a-906">16-1a-906</xref>, may be filed with the division, the conversion shall be approved:<subsection number="16-10a-1008.7(1)(c)(i)">in the manner provided for the articles of incorporation or bylaws of the corporation; or</subsection><subsection number="16-10a-1008.7(1)(c)(ii)">if the articles of incorporation or bylaws of the corporation do not provide the method for approval:<subsection number="16-10a-1008.7(1)(c)(ii)(A)">if the corporation has issued shares, by all of the outstanding shares of all classes of shares of the corporation regardless of limitations or restrictions on the voting rights of the shares; or</subsection><subsection number="16-10a-1008.7(1)(c)(ii)(B)">if the corporation has not issued shares, by a majority of:<subsection number="16-10a-1008.7(1)(c)(ii)(B)(I)">the directors in office at the time that the conversion is approved by the board of directors; or</subsection><subsection number="16-10a-1008.7(1)(c)(ii)(B)(II)">if directors have not been appointed or elected, the incorporators.</subsection></subsection></subsection></subsection></subsection><subsection number="16-10a-1008.7(2)">A domestic limited liability company may convert to a corporation subject to this chapter by:<subsection number="16-10a-1008.7(2)(a)">filing articles of incorporation in accordance with this chapter; and</subsection><subsection number="16-10a-1008.7(2)(b)">complying with Section <xref depth="3" refnumber="16-1a-902">16-1a-902</xref>, as appropriate pursuant to Section <xref depth="3" refnumber="16-20-1205">16-20-1205</xref>.</subsection></subsection></section><section number="16-10a-1009"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Effect of amendment.</catchline><tab/>An amendment to articles of incorporation does not affect a cause of action existing against or in favor of the corporation, a proceeding to which the corporation is a party, or the existing rights of persons other than shareholders of the corporation. An amendment changing a corporation's name does not abate a proceeding brought by or against the corporation in its former name. </section><section number="16-10a-1020"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Amendment of bylaws by board of directors or shareholders.</catchline><subsection number="16-10a-1020(1)"> A corporation's board of directors may amend the corporation's bylaws at any time, except to the extent that the articles of incorporation, the bylaws, or this chapter reserve this power exclusively to the shareholders, in whole or part.</subsection><subsection number="16-10a-1020(2)"> A corporation's shareholders may amend the corporation's bylaws at any time, even though the bylaws may also be amended at any time by the board of directors.</subsection></section><section number="16-10a-1021"><histories><history>Amended by Chapter <modchap sess="2007GS">85</modchap>, 2007 General Session</history><modyear>2007</modyear></histories><catchline>Bylaw changing quorum or voting requirement for shareholders.</catchline><subsection number="16-10a-1021(1)"> If authorized by the articles of incorporation or this chapter, the shareholders may adopt, amend, or repeal a bylaw that fixes a greater quorum or voting requirement for shareholders, or voting groups of shareholders, than is required by this chapter. Such action is subject to the provisions of <xref depth="2" refnumber="16-10a-7" start="2">Part 7, Shareholders</xref>.</subsection><subsection number="16-10a-1021(2)"> A bylaw that fixes a greater quorum or voting requirement for shareholders under Subsection <xref depth="4" refnumber="16-10a-1021(1)" start="0">(1)</xref> may not be adopted, amended, or repealed by the board of directors.</subsection></section><section number="16-10a-1022"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Bylaw changing quorum or voting requirement for directors.</catchline><subsection number="16-10a-1022(1)"> A bylaw that fixes a greater quorum or voting requirement for the board of directors than is required by this chapter may be amended or repealed: <subsection number="16-10a-1022(1)(a)"> if originally adopted by the shareholders, only by the shareholders, unless otherwise permitted as contemplated by Subsection <xref depth="4" refnumber="16-10a-1022(2)" start="0">(2)</xref>; or</subsection><subsection number="16-10a-1022(1)(b)"> if originally adopted by the board of directors, by the shareholders or unless otherwise provided in the articles of incorporation or bylaws, by the board of directors.</subsection></subsection><subsection number="16-10a-1022(2)"> A bylaw adopted or amended by the shareholders that fixes a greater quorum or voting requirement for the board of directors may provide that it may be amended or repealed only by a specified vote of either the shareholders or the board of directors.</subsection><subsection number="16-10a-1022(3)"> Action by the board of directors under Subsection <xref depth="4" refnumber="16-10a-1022(1)(b)" start="0">(1)(b)</xref> to amend or repeal a bylaw that changes the quorum or voting requirement for the board of directors shall meet the same quorum requirement and be adopted by the same vote required to take action under the quorum and voting requirement then in effect or proposed to be adopted, whichever is greater.</subsection></section><section number="16-10a-1023"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Bylaw provisions relating to election of directors.</catchline><subsection number="16-10a-1023(1)"> A corporation that has shares listed on a national securities exchange or regularly traded in a market maintained by one or more members of a national or affiliated securities association may elect in its bylaws to be governed in the election of directors by Subsection <xref depth="4" refnumber="16-10a-1023(2)" start="0">(2)</xref> unless the articles of incorporation: <subsection number="16-10a-1023(1)(a)"> specifically prohibit the adoption of a bylaw electing to be governed by this section;</subsection><subsection number="16-10a-1023(1)(b)"> alter the vote required by Subsection <xref depth="4" refnumber="16-10a-728(2)" start="0">16-10a-728(2)</xref>; or</subsection><subsection number="16-10a-1023(1)(c)"> provide for cumulative voting.</subsection></subsection><subsection number="16-10a-1023(2)"> A corporation may elect to be governed in the election of directors as follows: <subsection number="16-10a-1023(2)(a)"> Each vote entitled to be cast may be voted for or against up to that number of candidates that is equal to the number of directors to be elected, or the shareholder may indicate abstention, but without cumulating the votes.</subsection><subsection number="16-10a-1023(2)(b)"> To be elected, a nominee shall receive a plurality of the votes cast by shareholders of shares entitled to vote in the election at a meeting at which a quorum is present.</subsection><subsection number="16-10a-1023(2)(c)"> Notwithstanding Subsection <xref depth="4" refnumber="16-10a-1023(2)(b)" start="0">(2)(b)</xref>, a nominee who is elected but receives more votes against than for election shall serve as a director for a term that terminates on the earlier of:<subsection number="16-10a-1023(2)(c)(i)"> 90 days after the day on which the corporation certifies the voting results; or</subsection><subsection number="16-10a-1023(2)(c)(ii)"> the day on which a person is selected by the board of directors to fill the office held by the director, which selection constitutes the filling of a vacancy by the board for the purpose of Section <xref depth="3" refnumber="16-10a-810" start="0">16-10a-810</xref>.</subsection></subsection><subsection number="16-10a-1023(2)(d)"> Subject to Subsection <xref depth="4" refnumber="16-10a-1023(2)(e)" start="0">(2)(e)</xref>, a nominee who is elected but receives more votes against than for election may not serve as a director beyond the 90-day period allowed by Subsection <xref depth="4" refnumber="16-10a-1023(2)(c)" start="0">(2)(c)</xref>.</subsection><subsection number="16-10a-1023(2)(e)"> The board of directors may select any qualified person to fill the office held by a director who receives more votes against than for election.</subsection></subsection><subsection number="16-10a-1023(3)"><subsection number="16-10a-1023(3)(a)"> Subsection <xref depth="4" refnumber="16-10a-1023(2)" start="0">(2)</xref> does not apply to an election of a director by a voting group if there are more candidates for election by the voting group than the number of directors to be elected, one or more of whom are properly proposed by shareholders.</subsection><subsection number="16-10a-1023(3)(b)"> The determination of the number of candidates under Subsection <xref depth="4" refnumber="16-10a-1023(3)(a)" start="0">(3)(a)</xref> is made:<subsection number="16-10a-1023(3)(b)(i)"> at the expiration of a time fixed by the articles of incorporation or bylaws for the advance notification of director candidates; or</subsection><subsection number="16-10a-1023(3)(b)(ii)"> if there is no provision under Subsection <xref depth="4" refnumber="16-10a-1023(3)(b)(i)" start="0">(3)(b)(i)</xref>, at a time fixed by the board of directors not more than 14 days before notice is given of the meeting at which the election is to occur.</subsection></subsection></subsection><subsection number="16-10a-1023(4)"> A person may not be considered a candidate for the purpose of Subsection <xref depth="4" refnumber="16-10a-1023(3)" start="0">(3)</xref> if the board of directors determines before the notice of meeting is given that the person's candidacy does not create a bona fide election contest.</subsection><subsection number="16-10a-1023(5)"> A bylaw electing to be governed by this section may be repealed: <subsection number="16-10a-1023(5)(a)"> by the shareholders if originally adopted by the shareholders, unless otherwise provided by the bylaws; or</subsection><subsection number="16-10a-1023(5)(b)"> by the board of directors or the shareholders, if originally adopted by the board of directors.</subsection></subsection></section></part><part number="16-10a-11"><catchline>Merger and Share Exchange</catchline><section number="16-10a-1103"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Action on plan.</catchline><subsection number="16-10a-1103(1)"> After adopting a plan of merger or share exchange, the board of directors of each corporation party to the merger, and the board of directors of each corporation whose shares will be acquired in the share exchange, shall submit the plan of merger to its shareholders for approval, except as provided in: <subsection number="16-10a-1103(1)(a)"> Subsection <xref depth="4" refnumber="16-10a-1103(7)" start="0">(7)</xref>;</subsection><subsection number="16-10a-1103(1)(b)"> Section <xref depth="3" refnumber="16-10a-1104" start="0">16-10a-1104</xref>; or</subsection><subsection number="16-10a-1103(1)(c)"> the plan of share exchange.</subsection></subsection><subsection number="16-10a-1103(2)"> For a plan of merger or share exchange to be approved: <subsection number="16-10a-1103(2)(a)"> the board of directors shall recommend the plan of merger or share exchange to the shareholders, unless the board of directors determines that because of conflict of interest or other special circumstances it should make no recommendation and communicates the basis for its determination to the shareholders with the plan; and</subsection><subsection number="16-10a-1103(2)(b)"> the shareholders entitled to vote on the plan of merger or share exchange shall approve the plan as provided in Subsection <xref depth="4" refnumber="16-10a-1103(5)" start="0">(5)</xref>.</subsection></subsection><subsection number="16-10a-1103(3)"> The board of directors may condition its submission of the proposed merger or share exchange on any basis.</subsection><subsection number="16-10a-1103(4)"> The corporation shall give notice of the shareholders' meeting in accordance with Section <xref depth="3" refnumber="16-10a-705" start="0">16-10a-705</xref> to each shareholder entitled to vote on the plan of merger or share exchange. The notice shall state that one of the purposes of the meeting is to consider the plan of merger or share exchange and contain or be accompanied by a copy or summary of the plan.</subsection><subsection number="16-10a-1103(5)"> Unless this chapter, the articles of incorporation, the initial bylaws, the amended bylaws, or the board of directors acting pursuant to Subsection <xref depth="4" refnumber="16-10a-1103(3)" start="0">(3)</xref> requires a greater vote, the plan of merger or share exchange to be authorized shall be approved by each voting group entitled to vote separately on the plan by a majority of all the votes entitled to be cast on the plan by that voting group.</subsection><subsection number="16-10a-1103(6)"> Separate voting by voting groups is required on a plan of: <subsection number="16-10a-1103(6)(a)"> merger if the plan contains a provision that, if contained in an amendment to the articles of incorporation, would require action by one or more separate voting groups on the amendment under Section <xref depth="3" refnumber="16-10a-1004" start="0">16-10a-1004</xref>; and</subsection><subsection number="16-10a-1103(6)(b)"> share exchange by each class or series of shares included in the share exchange, with each class or series constituting a separate voting group.</subsection></subsection><subsection number="16-10a-1103(7)"> Action by the shareholders of the surviving corporation on a plan of merger is not required if: <subsection number="16-10a-1103(7)(a)"> the articles of incorporation of the surviving corporation will not differ, except for amendments enumerated in Section <xref depth="3" refnumber="16-10a-1002" start="0">16-10a-1002</xref>, from its articles of incorporation before the merger;</subsection><subsection number="16-10a-1103(7)(b)"> each shareholder of the surviving corporation whose shares were outstanding immediately before the merger will hold the same number of shares, with identical designations, preferences, limitations, and relative rights, immediately after the merger;</subsection><subsection number="16-10a-1103(7)(c)"> the number of voting shares outstanding immediately after the merger, plus the number of voting shares issuable as a result of the merger either by the conversion of securities issued pursuant to the merger or the exercise of rights and warrants issued pursuant to the merger, will not exceed by more than 20% the total number of voting shares of the surviving corporation outstanding immediately before the merger; and</subsection><subsection number="16-10a-1103(7)(d)"> the number of participating shares outstanding immediately after the merger, plus the number of participating shares issuable as a result of the merger either by the conversion of securities issued pursuant to the merger or the exercise of rights and warrants issued pursuant to the merger, will not exceed by more than 20% the total number of participating shares outstanding immediately before the merger.</subsection></subsection><subsection number="16-10a-1103(8)"> As used in Subsection <xref depth="4" refnumber="16-10a-1103(7)" start="0">(7)</xref>: <subsection number="16-10a-1103(8)(a)"> "Participating shares" means shares that entitle their holders to participate without limitation in distributions.</subsection><subsection number="16-10a-1103(8)(b)"> "Voting shares" means shares that entitle their holders to vote unconditionally in elections of directors.</subsection></subsection><subsection number="16-10a-1103(9)"> After a plan of merger or share exchange is approved, and at any time before the merger or share exchange becomes effective the merger or share exchange may be abandoned, subject to any contractual rights, without further shareholder action, in accordance with the procedure set forth in the plan of merger or share exchange or, if none is set forth, in the manner determined by the board of directors.</subsection><subsection number="16-10a-1103(10)"> If a merger or share exchange is abandoned after articles of merger or share exchange have been filed by the division pursuant to Section <xref depth="3" refnumber="16-10a-1105" start="0">16-10a-1105</xref> specifying a delayed effective date, the merger or share exchange may be prevented from becoming effective by delivering to the division for filing prior to the specified effective time and date a statement of abandonment stating that by appropriate corporate action the merger or share exchange has been abandoned. The statement of abandonment shall be executed in the same manner as the articles of merger or share exchange.</subsection></section><section number="16-10a-1104"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Merger of parent and subsidiary.</catchline><subsection number="16-10a-1104(1)">By complying with the provision of this section, a parent corporation owning at least 90% of the outstanding shares of each class of a subsidiary corporation may either merge the subsidiary into itself or merge itself into the subsidiary.</subsection><subsection number="16-10a-1104(2)">The board of directors of the parent shall adopt and its shareholders, if required by Subsection <xref depth="4" refnumber="16-10a-1104(3)" start="0">(3)</xref>, shall approve a plan of merger that sets forth:<subsection number="16-10a-1104(2)(a)">the names of the parent and subsidiary and the name of the surviving entity;</subsection><subsection number="16-10a-1104(2)(b)">the terms and conditions of the merger;</subsection><subsection number="16-10a-1104(2)(c)">the manner and basis of converting the shares of each corporation into shares, obligations, or other securities of the surviving or any other corporation or into money or other property in whole or part;</subsection><subsection number="16-10a-1104(2)(d)">any amendments to the articles of incorporation of the surviving corporation to be effected by the merger; and</subsection><subsection number="16-10a-1104(2)(e)">any other provisions relating to the merger as may be determined to be necessary or desirable.</subsection></subsection><subsection number="16-10a-1104(3)">A vote of the shareholders of the subsidiary is not required with respect to the merger. If the subsidiary will be the surviving corporation, the approval of the shareholders of the parent shall be sought in the manner provided in Section <xref depth="3" refnumber="16-1a-704">16-1a-704</xref>. If the parent will be the surviving corporation, no vote of its shareholders is required if all of the provisions of Section <xref depth="3" refnumber="16-1a-704">16-1a-704</xref> are met with respect to the merger. If all the provisions are not met, the approval of the shareholders of the parent shall be sought in the manner provided in Section <xref depth="3" refnumber="16-1a-704">16-1a-704</xref>.</subsection><subsection number="16-10a-1104(4)">The parent shall mail a copy or summary of the plan of merger to each shareholder of the subsidiary (other than the parent) who does not waive this mailing requirement in writing.</subsection><subsection number="16-10a-1104(5)">The effective date of the merger may not be earlier than the date on which all shareholders of the subsidiary waived the mailing requirement of Subsection <xref depth="4" refnumber="16-10a-1104(4)" start="0">(4)</xref> or 10 days after the date the parent mailed a copy or summary of the plan of merger to each shareholder of the subsidiary who did not waive the mailing requirement.</subsection></section><section number="16-10a-1105"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Articles of merger or share exchange.</catchline><subsection number="16-10a-1105(1)"> After a plan of merger or share exchange is approved by the shareholders, or adopted by the board of directors if shareholder approval is not required, the surviving or acquiring corporation shall deliver to the division for filing articles of merger or share exchange setting forth: <subsection number="16-10a-1105(1)(a)"> the plan of merger or share exchange;</subsection><subsection number="16-10a-1105(1)(b)"> if shareholder approval was not required, a statement to that effect;</subsection><subsection number="16-10a-1105(1)(c)"> if approval of the shareholders of one or more corporations party to the merger or share exchange was required:<subsection number="16-10a-1105(1)(c)(i)"> the designation and number of outstanding shares, and number of votes entitled to be cast by each voting group entitled to vote separately on the plan as to each corporation; and</subsection><subsection number="16-10a-1105(1)(c)(ii)"> either the total number of votes cast for and against the plan by each voting group entitled to vote separately on the plan or the total number of undisputed votes cast for the plan separately by each voting group and a statement that the number of votes cast for the plan by each voting group entitled to vote separately was sufficient for approval by that voting group; and</subsection></subsection><subsection number="16-10a-1105(1)(d)"> if the merger is being effected pursuant to Section <xref depth="3" refnumber="16-10a-1104" start="0">16-10a-1104</xref>:<subsection number="16-10a-1105(1)(d)(i)"> a statement that immediately prior to the merger the parent owned at least 90% of the outstanding shares of each class of the subsidiary; and</subsection><subsection number="16-10a-1105(1)(d)(ii)"> the effective date of the merger and a statement that the effective date complies with Subsection <xref depth="4" refnumber="16-10a-1104(5)" start="0">16-10a-1104(5)</xref>.</subsection></subsection></subsection><subsection number="16-10a-1105(2)"> A merger or share exchange takes effect upon the effective date of the articles of merger or share exchange, which may not be prior to the date of filing.</subsection></section></part><part number="16-10a-12"><catchline>Sale of Property</catchline><section number="16-10a-1201"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Sale or mortgage of property without shareholder approval.</catchline><subsection number="16-10a-1201(1)"> A corporation may, on the terms and conditions and for the consideration determined by the board of directors: <subsection number="16-10a-1201(1)(a)"> sell, lease, exchange, or otherwise dispose of all, or substantially all, of its property in the usual and regular course of business or in a transaction not requiring shareholder approval as provided in Section <xref depth="3" refnumber="16-10a-1202" start="0">16-10a-1202</xref>;</subsection><subsection number="16-10a-1201(1)(b)"> mortgage, pledge, dedicate to the repayment of indebtedness, whether with or without recourse, or otherwise encumber any or all of its property whether or not in the usual and regular course of business; or</subsection><subsection number="16-10a-1201(1)(c)"> transfer any or all of its property to a corporation all the shares of which are owned by the corporation.</subsection></subsection><subsection number="16-10a-1201(2)"> Unless otherwise provided in the articles of incorporation, approval by the shareholders of a transaction described in Subsection <xref depth="4" refnumber="16-10a-1201(1)" start="0">(1)</xref> is not required.</subsection></section><section number="16-10a-1202"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Sale of property requiring shareholder approval.</catchline><subsection number="16-10a-1202(1)"> A corporation may sell, lease, exchange, or otherwise dispose of all, or substantially all, of its property, with or without the good will, otherwise than in the usual and regular course of business, on the terms and conditions and for the consideration determined by the board of directors, if the board of directors proposes and the shareholders approve the transaction. A sale, lease, exchange, or other disposition of all, or substantially all, of the property of a corporation, with or without the good will, other than in the usual and regular course of business and other than pursuant to a court order, in connection with its dissolution is subject to the requirements of this section, but a sale, lease, exchange, or other disposition of all, or substantially all, of the property of a corporation, with or without the good will, that is pursuant to a court order is not subject to the requirements of this section.</subsection><subsection number="16-10a-1202(2)"> If a corporation is entitled to vote or otherwise consent, other than in the usual and regular course of its business, with respect to the sale, lease, exchange, or other disposition of all, or substantially all, of the property, with or without the good will, of another entity which it controls, and if the shares or other interests held by the corporation in the other entity constitute all, or substantially all, of the property of the corporation, then the corporation shall consent to the transaction only if the board of directors proposes and the shareholders approve the consent.</subsection><subsection number="16-10a-1202(3)"> For a transaction described in Subsection <xref depth="4" refnumber="16-10a-1202(1)" start="0">(1)</xref> or a consent described in Subsection <xref depth="4" refnumber="16-10a-1202(2)" start="0">(2)</xref> to be authorized: <subsection number="16-10a-1202(3)(a)"> the board of directors shall recommend the transaction or the consent to the shareholders unless the board of directors determines that because of conflict of interest or other special circumstances it should make no recommendation and communicates the basis for its determination to the shareholders with the submission of the proposed transaction; and</subsection><subsection number="16-10a-1202(3)(b)"> the shareholders entitled to vote on the transaction or the consent shall approve the transaction or the consent as provided in Subsections <xref depth="4" refnumber="16-10a-1202(5)" start="0">(5)</xref> and <xref depth="4" refnumber="16-10a-1202(6)" start="0">(6)</xref>.</subsection></subsection><subsection number="16-10a-1202(4)"> The board of directors may condition the effectiveness of the transaction or the consent on any basis.</subsection><subsection number="16-10a-1202(5)"> The corporation shall give notice in accordance with Section <xref depth="3" refnumber="16-10a-705" start="0">16-10a-705</xref> to each shareholder entitled to vote on the transaction described in Subsection <xref depth="4" refnumber="16-10a-1202(1)" start="0">(1)</xref> or the consent described in Subsection <xref depth="4" refnumber="16-10a-1202(2)" start="0">(2)</xref>, of the shareholders' meeting at which the transaction or the consent will be voted upon. The notice shall: <subsection number="16-10a-1202(5)(a)"> state that the purpose, or one of the purposes, of the meeting is to consider:<subsection number="16-10a-1202(5)(a)(i)"> in the case of action pursuant to Subsection <xref depth="4" refnumber="16-10a-1202(1)" start="0">(1)</xref>, the sale, lease, exchange, or other disposition of all, or substantially all, of the property of the corporation; or</subsection><subsection number="16-10a-1202(5)(a)(ii)"> in the case of action pursuant to Subsection <xref depth="4" refnumber="16-10a-1202(2)" start="0">(2)</xref>, the corporation's consent to the sale, lease, exchange, or other disposition of all, or substantially all, of the property of another entity, which shall be identified in the notice, the shares or other interests of which held by the corporation constitute all, or substantially all, of the property of the corporation; and</subsection></subsection><subsection number="16-10a-1202(5)(b)"> contain or be accompanied by a description of the transaction, in the case of action pursuant to Subsection <xref depth="4" refnumber="16-10a-1202(1)" start="0">(1)</xref>, or by a description of the transaction underlying the consent, in the case of action pursuant to Subsection <xref depth="4" refnumber="16-10a-1202(2)" start="0">(2)</xref>.</subsection></subsection><subsection number="16-10a-1202(6)"> Unless this chapter, the articles of incorporation, the initial bylaws or the bylaws as amended pursuant to Section <xref depth="3" refnumber="16-10a-1021" start="0">16-10a-1021</xref>, or the board of directors acting pursuant to Subsection <xref depth="4" refnumber="16-10a-1202(4)" start="0">(4)</xref> requires a greater vote, the transaction described in Subsection <xref depth="4" refnumber="16-10a-1202(1)" start="0">(1)</xref> or the consent described in Subsection <xref depth="4" refnumber="16-10a-1202(2)" start="0">(2)</xref> shall be approved by each voting group entitled to vote on the transaction or the consent by a majority of all the votes entitled to be cast on the transaction or the consent by that voting group.</subsection><subsection number="16-10a-1202(7)"> After a transaction described in Subsection <xref depth="4" refnumber="16-10a-1202(1)" start="0">(1)</xref> or a consent described in Subsection <xref depth="4" refnumber="16-10a-1202(2)" start="0">(2)</xref> is authorized, the transaction may be abandoned or the consent withheld or revoked by the corporation's board of directors subject to any contractual rights or other limitation on the abandonment, withholding, or revocation, without further shareholder action.</subsection><subsection number="16-10a-1202(8)"> A transaction that constitutes a distribution is governed by Section <xref depth="3" refnumber="16-10a-640" start="0">16-10a-640</xref> and not by this section.</subsection></section></part><part number="16-10a-13"><catchline>Dissenters' Rights</catchline><section number="16-10a-1301"><histories><history>Amended by Chapter <modchap sess="2014GS">189</modchap>, 2014 General Session</history><modyear>2014</modyear></histories><catchline>Definitions.</catchline><tab/>For purposes of <xref depth="2" refnumber="16-10a-13" start="2">Part 13, Dissenters' Rights</xref>:<subsection number="16-10a-1301(1)"> "Beneficial shareholder" means the person who is a beneficial owner of shares held in a voting trust or by a nominee as the record shareholder.</subsection><subsection number="16-10a-1301(2)"> "Corporation" means the issuer of the shares held by a dissenter before the corporate action, or the surviving or acquiring corporation by merger or share exchange of that issuer.</subsection><subsection number="16-10a-1301(3)"> "Dissenter" means a shareholder who is entitled to dissent from corporate action under Section <xref depth="3" refnumber="16-10a-1302" start="0">16-10a-1302</xref> and who exercises that right when and in the manner required by Sections <xref depth="3" refnumber="16-10a-1320" start="0">16-10a-1320</xref> through <xref depth="3" refnumber="16-10a-1328" start="0">16-10a-1328</xref>.</subsection><subsection number="16-10a-1301(4)"> "Fair value" with respect to a dissenter's shares, means the value of the shares immediately before the effectuation of the corporate action to which the dissenter objects, excluding any appreciation or depreciation in anticipation of the corporate action.</subsection><subsection number="16-10a-1301(5)"> "Interest" means interest from the effective date of the corporate action until the date of payment, at the statutory rate set forth in Section <xref depth="3" refnumber="15-1-1" start="0">15-1-1</xref>, compounded annually.</subsection><subsection number="16-10a-1301(6)"> "Record shareholder" means the person in whose name shares are registered in the records of a corporation or the beneficial owner of shares that are registered in the name of a nominee to the extent the beneficial owner is recognized by the corporation as the shareholder as provided in Section <xref depth="3" refnumber="16-10a-723" start="0">16-10a-723</xref>.</subsection><subsection number="16-10a-1301(7)"> "Shareholder" means the record shareholder or the beneficial shareholder.</subsection></section><section number="16-10a-1302"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Right to dissent.</catchline><subsection number="16-10a-1302(1)">A shareholder, whether or not entitled to vote, is entitled to dissent from, and obtain payment of the fair value of shares held by the shareholder in the event of, any of the following corporate actions:<subsection number="16-10a-1302(1)(a)">consummation of a plan of merger to which the corporation is a party if:<subsection number="16-10a-1302(1)(a)(i)">shareholder approval is required for the merger by Section <xref depth="3" refnumber="16-1a-703">16-1a-703</xref> or the articles of incorporation; or</subsection><subsection number="16-10a-1302(1)(a)(ii)">the corporation is a subsidiary that is merged with its parent under Section <xref depth="3" refnumber="16-10a-1104" start="0">16-10a-1104</xref>;</subsection></subsection><subsection number="16-10a-1302(1)(b)">consummation of a plan of share exchange to which the corporation is a party as the corporation whose shares will be acquired;</subsection><subsection number="16-10a-1302(1)(c)">consummation of a sale, lease, exchange, or other disposition of all, or substantially all, of the property of the corporation for which a shareholder vote is required under Subsection <xref depth="4" refnumber="16-10a-1202(1)" start="0">16-10a-1202(1)</xref>, but not including a sale for cash pursuant to a plan by which all or substantially all of the net proceeds of the sale will be distributed to the shareholders within one year after the date of sale; and</subsection><subsection number="16-10a-1302(1)(d)">consummation of a sale, lease, exchange, or other disposition of all, or substantially all, of the property of an entity controlled by the corporation if the shareholders of the corporation were entitled to vote upon the consent of the corporation to the disposition pursuant to Subsection <xref depth="4" refnumber="16-10a-1202(2)" start="0">16-10a-1202(2)</xref>.</subsection></subsection><subsection number="16-10a-1302(2)">A shareholder is entitled to dissent and obtain payment of the fair value of the shareholder's shares in the event of any other corporate action to the extent the articles of incorporation, bylaws, or a resolution of the board of directors so provides.</subsection><subsection number="16-10a-1302(3)">Notwithstanding the other provisions of this part, except to the extent otherwise provided in the articles of incorporation, bylaws, or a resolution of the board of directors, and subject to the limitations set forth in Subsection <xref depth="4" refnumber="16-10a-1302(4)" start="0">(4)</xref>, a shareholder is not entitled to dissent and obtain payment under Subsection <xref depth="4" refnumber="16-10a-1302(1)" start="0">(1)</xref> of the fair value of the shares of any class or series of shares which either were listed on a national securities exchange registered under the federal Securities Exchange Act of 1934, as amended, or on the National Market System of the National Association of Securities Dealers Automated Quotation System, or were held of record by more than 2,000 shareholders, at the time of:<subsection number="16-10a-1302(3)(a)">the record date fixed under Section <xref depth="3" refnumber="16-10a-707" start="0">16-10a-707</xref> to determine the shareholders entitled to receive notice of the shareholders' meeting at which the corporate action is submitted to a vote;</subsection><subsection number="16-10a-1302(3)(b)">the record date fixed under Section <xref depth="3" refnumber="16-10a-704" start="0">16-10a-704</xref> to determine shareholders entitled to sign writings consenting to the proposed corporate action; or</subsection><subsection number="16-10a-1302(3)(c)">the effective date of the corporate action if the corporate action is authorized other than by a vote of shareholders.</subsection></subsection><subsection number="16-10a-1302(4)">The limitation set forth in Subsection <xref depth="4" refnumber="16-10a-1302(3)" start="0">(3)</xref> does not apply if the shareholder will receive for the shareholder's shares, pursuant to the corporate action, anything except:<subsection number="16-10a-1302(4)(a)">shares of the corporation surviving the consummation of the plan of merger or share exchange;</subsection><subsection number="16-10a-1302(4)(b)">shares of a corporation which at the effective date of the plan of merger or share exchange either will be listed on a national securities exchange registered under the federal Securities Exchange Act of 1934, as amended, or on the National Market System of the National Association of Securities Dealers Automated Quotation System, or will be held of record by more than 2,000 shareholders;</subsection><subsection number="16-10a-1302(4)(c)">cash in lieu of fractional shares; or</subsection><subsection number="16-10a-1302(4)(d)">any combination of the shares described in Subsection <xref depth="4" refnumber="16-10a-1302(4)" start="0">(4)</xref>, or cash in lieu of fractional shares.</subsection></subsection><subsection number="16-10a-1302(5)">A shareholder entitled to dissent and obtain payment for the shareholder's shares under this part may not challenge the corporate action creating the entitlement unless the action is unlawful or fraudulent with respect to the shareholder or to the corporation.</subsection></section><section number="16-10a-1303"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Dissent by nominees and beneficial owners.</catchline><subsection number="16-10a-1303(1)"> A record shareholder may assert dissenters' rights as to fewer than all the shares registered in his name only if the shareholder dissents with respect to all shares beneficially owned by any one person and causes the corporation to receive written notice which states the dissent and the name and address of each person on whose behalf dissenters' rights are being asserted. The rights of a partial dissenter under this subsection are determined as if the shares as to which the shareholder dissents and the other shares held of record by him were registered in the names of different shareholders.</subsection><subsection number="16-10a-1303(2)"> A beneficial shareholder may assert dissenters' rights as to shares held on his behalf only if: <subsection number="16-10a-1303(2)(a)"> the beneficial shareholder causes the corporation to receive the record shareholder's written consent to the dissent not later than the time the beneficial shareholder asserts dissenters' rights; and</subsection><subsection number="16-10a-1303(2)(b)"> the beneficial shareholder dissents with respect to all shares of which he is the beneficial shareholder.</subsection></subsection><subsection number="16-10a-1303(3)"> The corporation may require that, when a record shareholder dissents with respect to the shares held by any one or more beneficial shareholders, each beneficial shareholder shall certify to the corporation that both he and the record shareholders of all shares owned beneficially by him have asserted, or will timely assert, dissenters' rights as to all the shares unlimited on the ability to exercise dissenters' rights. The certification requirement shall be stated in the dissenters' notice given pursuant to Section <xref depth="3" refnumber="16-10a-1322" start="0">16-10a-1322</xref>.</subsection></section><section number="16-10a-1320"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Notice of dissenters' rights.</catchline><subsection number="16-10a-1320(1)"> If a proposed corporate action creating dissenters' rights under Section <xref depth="3" refnumber="16-10a-1302" start="0">16-10a-1302</xref> is submitted to a vote at a shareholders' meeting, the meeting notice shall be sent to all shareholders of the corporation as of the applicable record date, whether or not they are entitled to vote at the meeting. The notice shall state that shareholders are or may be entitled to assert dissenters' rights under this part. The notice shall be accompanied by a copy of this part and the materials, if any, that under this chapter are required to be given the shareholders entitled to vote on the proposed action at the meeting. Failure to give notice as required by this subsection does not affect any action taken at the shareholders' meeting for which the notice was to have been given.</subsection><subsection number="16-10a-1320(2)"> If a proposed corporate action creating dissenters' rights under Section <xref depth="3" refnumber="16-10a-1302" start="0">16-10a-1302</xref> is authorized without a meeting of shareholders pursuant to Section <xref depth="3" refnumber="16-10a-704" start="0">16-10a-704</xref>, any written or oral solicitation of a shareholder to execute a written consent to the action contemplated by Section <xref depth="3" refnumber="16-10a-704" start="0">16-10a-704</xref> shall be accompanied or preceded by a written notice stating that shareholders are or may be entitled to assert dissenters' rights under this part, by a copy of this part, and by the materials, if any, that under this chapter would have been required to be given to shareholders entitled to vote on the proposed action if the proposed action were submitted to a vote at a shareholders' meeting. Failure to give written notice as provided by this subsection does not affect any action taken pursuant to Section <xref depth="3" refnumber="16-10a-704" start="0">16-10a-704</xref> for which the notice was to have been given.</subsection></section><section number="16-10a-1321"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Demand for payment -- Eligibility and notice of intent.</catchline><subsection number="16-10a-1321(1)"> If a proposed corporate action creating dissenters' rights under Section <xref depth="3" refnumber="16-10a-1302" start="0">16-10a-1302</xref> is submitted to a vote at a shareholders' meeting, a shareholder who wishes to assert dissenters' rights: <subsection number="16-10a-1321(1)(a)"> shall cause the corporation to receive, before the vote is taken, written notice of his intent to demand payment for shares if the proposed action is effectuated; and</subsection><subsection number="16-10a-1321(1)(b)"> may not vote any of his shares in favor of the proposed action.</subsection></subsection><subsection number="16-10a-1321(2)"> If a proposed corporate action creating dissenters' rights under Section <xref depth="3" refnumber="16-10a-1302" start="0">16-10a-1302</xref> is authorized without a meeting of shareholders pursuant to Section <xref depth="3" refnumber="16-10a-704" start="0">16-10a-704</xref>, a shareholder who wishes to assert dissenters' rights may not execute a writing consenting to the proposed corporate action.</subsection><subsection number="16-10a-1321(3)"> In order to be entitled to payment for shares under this part, unless otherwise provided in the articles of incorporation, bylaws, or a resolution adopted by the board of directors, a shareholder shall have been a shareholder with respect to the shares for which payment is demanded as of the date the proposed corporate action creating dissenters' rights under Section <xref depth="3" refnumber="16-10a-1302" start="0">16-10a-1302</xref> is approved by the shareholders, if shareholder approval is required, or as of the effective date of the corporate action if the corporate action is authorized other than by a vote of shareholders.</subsection><subsection number="16-10a-1321(4)"> A shareholder who does not satisfy the requirements of Subsections <xref depth="4" refnumber="16-10a-1321(1)" start="0">(1)</xref> through <xref depth="4" refnumber="16-10a-1321(3)" start="0">(3)</xref> is not entitled to payment for shares under this part.</subsection></section><section number="16-10a-1322"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Dissenters' notice.</catchline><subsection number="16-10a-1322(1)"> If proposed corporate action creating dissenters' rights under Section <xref depth="3" refnumber="16-10a-1302" start="0">16-10a-1302</xref> is authorized, the corporation shall give a written dissenters' notice to all shareholders who are entitled to demand payment for their shares under this part.</subsection><subsection number="16-10a-1322(2)"> The dissenters' notice required by Subsection <xref depth="4" refnumber="16-10a-1322(1)" start="0">(1)</xref> shall be sent no later than 10 days after the effective date of the corporate action creating dissenters' rights under Section <xref depth="3" refnumber="16-10a-1302" start="0">16-10a-1302</xref>, and shall: <subsection number="16-10a-1322(2)(a)"> state that the corporate action was authorized and the effective date or proposed effective date of the corporate action;</subsection><subsection number="16-10a-1322(2)(b)"> state an address at which the corporation will receive payment demands and an address at which certificates for certificated shares shall be deposited;</subsection><subsection number="16-10a-1322(2)(c)"> inform holders of uncertificated shares to what extent transfer of the shares will be restricted after the payment demand is received;</subsection><subsection number="16-10a-1322(2)(d)"> supply a form for demanding payment, which form requests a dissenter to state an address to which payment is to be made;</subsection><subsection number="16-10a-1322(2)(e)"> set a date by which the corporation must receive the payment demand and by which certificates for certificated shares must be deposited at the address indicated in the dissenters' notice, which dates may not be fewer than 30 nor more than 70 days after the date the dissenters' notice required by Subsection <xref depth="4" refnumber="16-10a-1322(1)" start="0">(1)</xref> is given;</subsection><subsection number="16-10a-1322(2)(f)"> state the requirement contemplated by Subsection <xref depth="4" refnumber="16-10a-1303(3)" start="0">16-10a-1303(3)</xref>, if the requirement is imposed; and</subsection><subsection number="16-10a-1322(2)(g)"> be accompanied by a copy of this part.</subsection></subsection></section><section number="16-10a-1323"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Procedure to demand payment.</catchline><subsection number="16-10a-1323(1)"> A shareholder who is given a dissenters' notice described in Section <xref depth="3" refnumber="16-10a-1322" start="0">16-10a-1322</xref>, who meets the requirements of Section <xref depth="3" refnumber="16-10a-1321" start="0">16-10a-1321</xref>, and wishes to assert dissenters' rights shall, in accordance with the terms of the dissenters' notice: <subsection number="16-10a-1323(1)(a)"> cause the corporation to receive a payment demand, which may be the payment demand form contemplated in Subsection <xref depth="4" refnumber="16-10a-1322(2)(d)" start="0">16-10a-1322(2)(d)</xref>, duly completed, or may be stated in another writing;</subsection><subsection number="16-10a-1323(1)(b)"> deposit certificates for his certificated shares in accordance with the terms of the dissenters' notice; and</subsection><subsection number="16-10a-1323(1)(c)"> if required by the corporation in the dissenters' notice described in Section <xref depth="3" refnumber="16-10a-1322" start="0">16-10a-1322</xref>, as contemplated by Section <xref depth="3" refnumber="16-10a-1327" start="0">16-10a-1327</xref>, certify in writing, in or with the payment demand, whether or not he or the person on whose behalf he asserts dissenters' rights acquired beneficial ownership of the shares before the date of the first announcement to news media or to shareholders of the terms of the proposed corporate action creating dissenters' rights under Section <xref depth="3" refnumber="16-10a-1302" start="0">16-10a-1302</xref>.</subsection></subsection><subsection number="16-10a-1323(2)"> A shareholder who demands payment in accordance with Subsection <xref depth="4" refnumber="16-10a-1323(1)" start="0">(1)</xref> retains all rights of a shareholder except the right to transfer the shares until the effective date of the proposed corporate action giving rise to the exercise of dissenters' rights and has only the right to receive payment for the shares after the effective date of the corporate action.</subsection><subsection number="16-10a-1323(3)"> A shareholder who does not demand payment and deposit share certificates as required, by the date or dates set in the dissenters' notice, is not entitled to payment for shares under this part.</subsection></section><section number="16-10a-1324"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Uncertificated shares.</catchline><subsection number="16-10a-1324(1)"> Upon receipt of a demand for payment under Section <xref depth="3" refnumber="16-10a-1323" start="0">16-10a-1323</xref> from a shareholder holding uncertificated shares, and in lieu of the deposit of certificates representing the shares, the corporation may restrict the transfer of the shares until the proposed corporate action is taken or the restrictions are released under Section <xref depth="3" refnumber="16-10a-1326" start="0">16-10a-1326</xref>.</subsection><subsection number="16-10a-1324(2)"> In all other respects, the provisions of Section <xref depth="3" refnumber="16-10a-1323" start="0">16-10a-1323</xref> apply to shareholders who own uncertificated shares.</subsection></section><section number="16-10a-1325"><histories><history>Amended by Chapter <modchap sess="2010GS">324</modchap>, 2010 General Session</history><modyear>2010</modyear><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Payment.</catchline><subsection number="16-10a-1325(1)"> Except as provided in Section <xref depth="3" refnumber="16-10a-1327" start="0">16-10a-1327</xref>, upon the later of the effective date of the corporate action creating dissenters' rights under Section <xref depth="3" refnumber="16-10a-1302" start="0">16-10a-1302</xref>, and receipt by the corporation of each payment demand pursuant to Section <xref depth="3" refnumber="16-10a-1323" start="0">16-10a-1323</xref>, the corporation shall pay the amount the corporation estimates to be the fair value of the dissenter's shares, plus interest to each dissenter who has complied with Section <xref depth="3" refnumber="16-10a-1323" start="0">16-10a-1323</xref>, and who meets the requirements of Section <xref depth="3" refnumber="16-10a-1321" start="0">16-10a-1321</xref>, and who has not yet received payment.</subsection><subsection number="16-10a-1325(2)"> Each payment made pursuant to Subsection <xref depth="4" refnumber="16-10a-1325(1)" start="0">(1)</xref> shall be accompanied by: <subsection number="16-10a-1325(2)(a)"><subsection number="16-10a-1325(2)(a)(i)"><subsection number="16-10a-1325(2)(a)(i)(A)"> the corporation's balance sheet as of the end of its most recent fiscal year, or if not available, a fiscal year ending not more than 16 months before the date of payment;</subsection><subsection number="16-10a-1325(2)(a)(i)(B)"> an income statement for that year;</subsection><subsection number="16-10a-1325(2)(a)(i)(C)"> a statement of changes in shareholders' equity for that year and a statement of cash flow for that year, if the corporation customarily provides such statements to shareholders; and</subsection><subsection number="16-10a-1325(2)(a)(i)(D)"> the latest available interim financial statements, if any;</subsection></subsection><subsection number="16-10a-1325(2)(a)(ii)"> the balance sheet and statements referred to in Subsection <xref depth="4" refnumber="16-10a-1325(2)(a)(i)" start="0">(2)(a)(i)</xref> shall be audited if the corporation customarily provides audited financial statements to shareholders;</subsection></subsection><subsection number="16-10a-1325(2)(b)"> a statement of the corporation's estimate of the fair value of the shares and the amount of interest payable with respect to the shares;</subsection><subsection number="16-10a-1325(2)(c)"> a statement of the dissenter's right to demand payment under Section <xref depth="3" refnumber="16-10a-1328" start="0">16-10a-1328</xref>; and</subsection><subsection number="16-10a-1325(2)(d)"> a copy of this part.</subsection></subsection></section><section number="16-10a-1326"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Failure to take action.</catchline><subsection number="16-10a-1326(1)"> If the effective date of the corporate action creating dissenters' rights under Section <xref depth="3" refnumber="16-10a-1302" start="0">16-10a-1302</xref> does not occur within 60 days after the date set by the corporation as the date by which the corporation must receive payment demands as provided in Section <xref depth="3" refnumber="16-10a-1322" start="0">16-10a-1322</xref>, the corporation shall return all deposited certificates and release the transfer restrictions imposed on uncertificated shares, and all shareholders who submitted a demand for payment pursuant to Section <xref depth="3" refnumber="16-10a-1323" start="0">16-10a-1323</xref> shall thereafter have all rights of a shareholder as if no demand for payment had been made.</subsection><subsection number="16-10a-1326(2)"> If the effective date of the corporate action creating dissenters' rights under Section <xref depth="3" refnumber="16-10a-1302" start="0">16-10a-1302</xref> occurs more than 60 days after the date set by the corporation as the date by which the corporation must receive payment demands as provided in Section <xref depth="3" refnumber="16-10a-1322" start="0">16-10a-1322</xref>, then the corporation shall send a new dissenters' notice, as provided in Section <xref depth="3" refnumber="16-10a-1322" start="0">16-10a-1322</xref>, and the provisions of Sections <xref depth="3" refnumber="16-10a-1323" start="0">16-10a-1323</xref> through <xref depth="3" refnumber="16-10a-1328" start="0">16-10a-1328</xref> shall again be applicable.</subsection></section><section number="16-10a-1327"><histories><history>Amended by Chapter <modchap sess="2025GS">302</modchap>, 2025 General Session</history><modyear>2025</modyear></histories><catchline>Special provisions relating to shares acquired after announcement of proposed corporate action.</catchline><subsection number="16-10a-1327(1)">A corporation may, with the dissenters' notice given pursuant to Section <xref depth="3" refnumber="16-10a-1322" start="0">16-10a-1322</xref>, state the date of the first announcement to news media or to shareholders of the terms of the proposed corporate action creating dissenters' rights under Section <xref depth="3" refnumber="16-10a-1302" start="0">16-10a-1302</xref> and state that a shareholder who asserts dissenters' rights must certify in writing, in or with the payment demand, whether or not the dissenter or the person on whose behalf the dissenters' rights are being asserted acquired beneficial ownership of the shares before that date. With respect to any dissenter who does not certify in writing, in or with the payment demand that the dissenter or the person on whose behalf the dissenters' rights are being asserted, acquired beneficial ownership of the shares before that date, the corporation may, in lieu of making the payment provided in Section <xref depth="3" refnumber="16-10a-1325" start="0">16-10a-1325</xref>, offer to make payment if the dissenter agrees to accept it in full satisfaction of the dissenter's demand.</subsection><subsection number="16-10a-1327(2)">An offer to make payment under Subsection <xref depth="4" refnumber="16-10a-1327(1)" start="0">(1)</xref> shall include or be accompanied by the information required by Subsection <xref depth="4" refnumber="16-10a-1325(2)" start="0">16-10a-1325(2)</xref>.</subsection></section><section number="16-10a-1328"><histories><history>Amended by Chapter <modchap sess="2025GS">302</modchap>, 2025 General Session</history><modyear>2025</modyear></histories><catchline>Procedure for shareholder dissatisfied with payment or offer.</catchline><subsection number="16-10a-1328(1)">A dissenter who has not accepted an offer made by a corporation under Section <xref depth="3" refnumber="16-10a-1327" start="0">16-10a-1327</xref> may notify the corporation in writing of the dissenter's own estimate of the fair value of the dissenter's shares and demand payment of the estimated amount, plus interest, less any payment made under Section <xref depth="3" refnumber="16-10a-1325" start="0">16-10a-1325</xref>, if:<subsection number="16-10a-1328(1)(a)">the dissenter believes that the amount paid under Section <xref depth="3" refnumber="16-10a-1325" start="0">16-10a-1325</xref> or offered under Section <xref depth="3" refnumber="16-10a-1327" start="0">16-10a-1327</xref> is less than the fair value of the shares;</subsection><subsection number="16-10a-1328(1)(b)">the corporation fails to make payment under Section <xref depth="3" refnumber="16-10a-1325" start="0">16-10a-1325</xref> within 60 days after the date set by the corporation as the date by which it must receive the payment demand; or</subsection><subsection number="16-10a-1328(1)(c)">the corporation, having failed to take the proposed corporate action creating dissenters' rights, does not return the deposited certificates or release the transfer restrictions imposed on uncertificated shares as required by Section <xref depth="3" refnumber="16-10a-1326" start="0">16-10a-1326</xref>.</subsection></subsection><subsection number="16-10a-1328(2)">A dissenter waives the right to demand payment under this section unless the dissenter causes the corporation to receive the notice required by Subsection <xref depth="4" refnumber="16-10a-1328(1)" start="0">(1)</xref> within 30 days after the corporation made or offered payment for the dissenter's shares.</subsection></section><section number="16-10a-1330"><histories><history>Amended by Chapter <modchap sess="2023GS">401</modchap>, 2023 General Session</history><modyear>2023</modyear></histories><catchline>Judicial appraisal of shares -- Court action.</catchline><subsection number="16-10a-1330(1)"><subsection number="16-10a-1330(1)(a)"> If a demand for payment under Section <xref depth="3" refnumber="16-10a-1328" start="0">16-10a-1328</xref> remains unresolved, the corporation shall bring an action in a court with jurisdiction under <xref depth="0" refnumber="78A" start="0">Title 78A, Judiciary and Judicial Administration</xref>, within 60 days after receiving the payment demand contemplated by Section <xref depth="3" refnumber="16-10a-1328" start="0">16-10a-1328</xref>, for the court to determine the fair value of the shares and the amount of interest.</subsection><subsection number="16-10a-1330(1)(b)"> If the corporation does not bring an action within the 60-day period, the corporation shall pay each dissenter whose demand remains unresolved the amount demanded.</subsection></subsection><subsection number="16-10a-1330(2)"><subsection number="16-10a-1330(2)(a)"> The corporation shall make all dissenters who have satisfied the requirements of Sections <xref depth="3" refnumber="16-10a-1321" start="0">16-10a-1321</xref>, <xref depth="3" refnumber="16-10a-1323" start="0">16-10a-1323</xref>, and <xref depth="3" refnumber="16-10a-1328" start="0">16-10a-1328</xref>, whether or not they are residents of this state whose demands remain unresolved, parties to the action brought under Subsection <xref depth="4" refnumber="16-10a-1330(1)" start="0">(1)</xref> as an action against their shares.</subsection><subsection number="16-10a-1330(2)(b)"> All such dissenters who are named as parties shall be served with a copy of the complaint.</subsection><subsection number="16-10a-1330(2)(c)"><subsection number="16-10a-1330(2)(c)(i)"> Service on each dissenter may be by registered or certified mail to the address stated in the dissenter's payment demand made pursuant to Section <xref depth="3" refnumber="16-10a-1328" start="0">16-10a-1328</xref>.</subsection><subsection number="16-10a-1330(2)(c)(ii)"> If no address is stated in the payment demand, service may be made at the address stated in the payment demand given pursuant to Section <xref depth="3" refnumber="16-10a-1323" start="0">16-10a-1323</xref>.</subsection><subsection number="16-10a-1330(2)(c)(iii)"> If no address is stated in the payment demand, service may be made at the address shown on the corporation's current record of shareholders for the record shareholder holding the dissenter's shares.</subsection><subsection number="16-10a-1330(2)(c)(iv)"> Service may also be made otherwise as provided by law.</subsection></subsection></subsection><subsection number="16-10a-1330(3)"><subsection number="16-10a-1330(3)(a)"> The jurisdiction of the court in which the action filed under Subsection <xref depth="4" refnumber="16-10a-1330(1)" start="0">(1)</xref> is plenary and exclusive.</subsection><subsection number="16-10a-1330(3)(b)"> The court may appoint one or more persons as appraisers to receive evidence and recommend decision on the question of fair value.</subsection><subsection number="16-10a-1330(3)(c)"> The appraisers have the powers described in the order appointing them, or in any amendment to it.</subsection><subsection number="16-10a-1330(3)(d)"> The dissenters are entitled to the same discovery rights as parties in other civil proceedings.</subsection></subsection><subsection number="16-10a-1330(4)"> Each dissenter made a party to the action filed under Subsection <xref depth="4" refnumber="16-10a-1330(1)" start="0">(1)</xref> is entitled to judgment: <subsection number="16-10a-1330(4)(a)"> for the amount, if any, by which the court finds that the fair value of the dissenter's shares, plus interest, exceeds the amount paid by the corporation pursuant to Section <xref depth="3" refnumber="16-10a-1325" start="0">16-10a-1325</xref>; or</subsection><subsection number="16-10a-1330(4)(b)"> for the fair value, plus interest, of the dissenter's after-acquired shares for which the corporation elected to withhold payment under Section <xref depth="3" refnumber="16-10a-1327" start="0">16-10a-1327</xref>.</subsection></subsection></section><section number="16-10a-1331"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Court costs and counsel fees.</catchline><subsection number="16-10a-1331(1)"> The court in an appraisal proceeding commenced under Section <xref depth="3" refnumber="16-10a-1330" start="0">16-10a-1330</xref> shall determine all costs of the proceeding, including the reasonable compensation and expenses of appraisers appointed by the court. The court shall assess the costs against the corporation, except that the court may assess costs against all or some of the dissenters, in amounts the court finds equitable, to the extent the court finds that the dissenters acted arbitrarily, vexatiously, or not in good faith in demanding payment under Section <xref depth="3" refnumber="16-10a-1328" start="0">16-10a-1328</xref>.</subsection><subsection number="16-10a-1331(2)"> The court may also assess the fees and expenses of counsel and experts for the respective parties, in amounts the court finds equitable: <subsection number="16-10a-1331(2)(a)"> against the corporation and in favor of any or all dissenters if the court finds the corporation did not substantially comply with the requirements of Sections <xref depth="3" refnumber="16-10a-1320" start="0">16-10a-1320</xref> through <xref depth="3" refnumber="16-10a-1328" start="0">16-10a-1328</xref>; or</subsection><subsection number="16-10a-1331(2)(b)"> against either the corporation or one or more dissenters, in favor of any other party, if the court finds that the party against whom the fees and expenses are assessed acted arbitrarily, vexatiously, or not in good faith with respect to the rights provided by this part.</subsection></subsection><subsection number="16-10a-1331(3)"> If the court finds that the services of counsel for any dissenter were of substantial benefit to other dissenters similarly situated, and that the fees for those services should not be assessed against the corporation, the court may award to those counsel reasonable fees to be paid out of the amounts awarded the dissenters who were benefited.</subsection></section></part><part number="16-10a-14"><catchline>Dissolution</catchline><section number="16-10a-1401"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Authorization of dissolution prior to issuance of shares.</catchline><tab/>If a corporation has not yet issued shares, a majority of its directors, or if no directors have been elected or if elected directors are no longer serving, a majority of its incorporators may authorize the dissolution of the corporation. </section><section number="16-10a-1402"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Authorization of dissolution after issuance of shares.</catchline><subsection number="16-10a-1402(1)"> After shares have been issued, dissolution of a corporation may be authorized in the manner provided in Subsection <xref depth="4" refnumber="16-10a-1402(2)" start="0">(2)</xref>.</subsection><subsection number="16-10a-1402(2)"> For a proposal to dissolve the corporation to be authorized: <subsection number="16-10a-1402(2)(a)"> the board of directors must recommend dissolution to the shareholders unless the board of directors determines that because of a conflict of interest or other special circumstances it should make no recommendation and communicates the basis for its determination to the shareholders; and</subsection><subsection number="16-10a-1402(2)(b)"> the shareholders entitled to vote on the proposal must approve the proposal to dissolve as provided in Subsection <xref depth="4" refnumber="16-10a-1402(5)" start="0">(5)</xref>.</subsection></subsection><subsection number="16-10a-1402(3)"> The board of directors may condition the effectiveness of the dissolution on any basis.</subsection><subsection number="16-10a-1402(4)"> The corporation shall give notice in accordance with Section <xref depth="3" refnumber="16-10a-705" start="0">16-10a-705</xref> to each shareholder entitled to vote on the proposal to dissolve, of the proposed shareholders' meeting at which the proposal to dissolve will be voted upon. The notice shall state that the purpose or one of the purposes of the meeting is to consider the proposal to dissolve the corporation.</subsection><subsection number="16-10a-1402(5)"> The proposal to dissolve must be approved by each voting group entitled to vote separately on the proposal, by a majority of all the votes entitled to be cast on the proposal by that voting group, unless a greater vote is required by the articles of incorporation, the initial bylaws or the bylaws amended pursuant to Section <xref depth="3" refnumber="16-10a-1021" start="0">16-10a-1021</xref>, or the board of directors acting pursuant to Subsection <xref depth="4" refnumber="16-10a-1402(3)" start="0">(3)</xref>.</subsection></section><section number="16-10a-1403"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Articles of dissolution.</catchline><subsection number="16-10a-1403(1)"> At any time after dissolution is authorized, the corporation may dissolve by delivering to the division for filing articles of dissolution setting forth: <subsection number="16-10a-1403(1)(a)"> the name of the corporation;</subsection><subsection number="16-10a-1403(1)(b)"> the address of the corporation's principal office or, if none is to be maintained, a statement that the corporation will not maintain a principal office, and, if different from the address of the principal office or if no principal office is to be maintained, the address to which service of process may be mailed pursuant to Section <xref depth="3" refnumber="16-10a-1409" start="0">16-10a-1409</xref>;</subsection><subsection number="16-10a-1403(1)(c)"> the date dissolution was authorized;</subsection><subsection number="16-10a-1403(1)(d)"> if dissolution was authorized by the directors or the incorporators pursuant to Section <xref depth="3" refnumber="16-10a-1401" start="0">16-10a-1401</xref>, a statement to that effect;</subsection><subsection number="16-10a-1403(1)(e)"> if dissolution was approved by the shareholders pursuant to Section <xref depth="3" refnumber="16-10a-1402" start="0">16-10a-1402</xref>:<subsection number="16-10a-1403(1)(e)(i)"> the number of votes entitled to be cast on the proposal to dissolve by each voting group entitled to vote separately thereon; and</subsection><subsection number="16-10a-1403(1)(e)(ii)"> either the total number of votes cast for and against dissolution by each voting group or the total number of undisputed votes cast for dissolution by each voting group and a statement that the number cast for dissolution was sufficient for approval; and</subsection></subsection><subsection number="16-10a-1403(1)(f)"> any additional information the division determines is necessary or appropriate.</subsection></subsection><subsection number="16-10a-1403(2)"> A corporation is dissolved upon the effective date of its articles of dissolution.</subsection></section><section number="16-10a-1404"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Revocation of dissolution.</catchline><subsection number="16-10a-1404(1)">A corporation may revoke its dissolution within 120 days after the effective date of the dissolution.</subsection><subsection number="16-10a-1404(2)">Revocation of dissolution shall be authorized in the same manner as the dissolution was authorized unless, in the case of authorization pursuant to Section <xref depth="3" refnumber="16-10a-1402" start="0">16-10a-1402</xref>, that authorization permitted revocation by action of the board of directors alone, in which event the board of directors may revoke the dissolution without shareholder action.</subsection><subsection number="16-10a-1404(3)">After the revocation of dissolution is authorized, the corporation may revoke the dissolution by delivering to the division for filing articles of revocation of dissolution, together with a copy of its articles of dissolution, that set forth:<subsection number="16-10a-1404(3)(a)">the name of the corporation;</subsection><subsection number="16-10a-1404(3)(b)">the effective date of the dissolution that was revoked;</subsection><subsection number="16-10a-1404(3)(c)">the date that the revocation of dissolution was authorized;</subsection><subsection number="16-10a-1404(3)(d)">if pursuant to Subsection <xref depth="4" refnumber="16-10a-1404(2)" start="0">(2)</xref> the corporation's board of directors or incorporators revoked the dissolution authorized under Section <xref depth="3" refnumber="16-10a-1401" start="0">16-10a-1401</xref>, a statement to that effect;</subsection><subsection number="16-10a-1404(3)(e)">if pursuant to Subsection <xref depth="4" refnumber="16-10a-1404(2)" start="0">(2)</xref> the corporation's board of directors revoked a dissolution approved by the shareholders, a statement that the revocation was permitted by action by the board of directors alone pursuant to that authorization; and</subsection><subsection number="16-10a-1404(3)(f)">if the revocation of dissolution was approved pursuant to Subsection <xref depth="4" refnumber="16-10a-1404(2)" start="0">(2)</xref> by the shareholders, the information required by Subsection <xref depth="4" refnumber="16-10a-1403(1)(e)" start="0">16-10a-1403(1)(e)</xref>.</subsection></subsection><subsection number="16-10a-1404(4)">Revocation of dissolution is effective as provided in Section <xref depth="3" refnumber="16-1a-204">16-1a-204</xref>. A provision may not be made for a delayed effective date for revocation in accordance with Section <xref depth="3" refnumber="16-1a-204">16-1a-204</xref>.</subsection><subsection number="16-10a-1404(5)">When the revocation of dissolution is effective, it relates back to and takes effect as of the effective date of the dissolution and the corporation may carry on its business as if dissolution had never occurred.</subsection></section><section number="16-10a-1405"><histories><history>Amended by Chapter <modchap sess="2014GS">189</modchap>, 2014 General Session</history><modyear>2014</modyear></histories><catchline>Effect of dissolution.</catchline><subsection number="16-10a-1405(1)"> A dissolved corporation continues its corporate existence but may not carry on any business except that appropriate to wind up and liquidate its business and affairs, including: <subsection number="16-10a-1405(1)(a)"> collecting its assets;</subsection><subsection number="16-10a-1405(1)(b)"> disposing of its properties that will not be distributed in kind to its shareholders;</subsection><subsection number="16-10a-1405(1)(c)"> discharging or making provision for discharging its liabilities;</subsection><subsection number="16-10a-1405(1)(d)"> distributing its remaining property among its shareholders according to their interests; and</subsection><subsection number="16-10a-1405(1)(e)"> doing every other act necessary to wind up and liquidate its business and affairs.</subsection></subsection><subsection number="16-10a-1405(2)"> Dissolution of a corporation does not: <subsection number="16-10a-1405(2)(a)"> transfer title to the corporation's property;</subsection><subsection number="16-10a-1405(2)(b)"> prevent transfer of its shares or securities, although the authorization to dissolve may provide for closing the corporation's share transfer records;</subsection><subsection number="16-10a-1405(2)(c)"> subject its directors or officers to standards of conduct different from those prescribed in <xref depth="2" refnumber="16-10a-8" start="2">Part 8, Directors and Officers</xref>;</subsection><subsection number="16-10a-1405(2)(d)"> change:<subsection number="16-10a-1405(2)(d)(i)"> quorum or voting requirements for its board of directors or shareholders;</subsection><subsection number="16-10a-1405(2)(d)(ii)"> provisions for selection, resignation, or removal of its directors or officers or both; or</subsection><subsection number="16-10a-1405(2)(d)(iii)"> provisions for amending its bylaws or its articles of incorporation;</subsection></subsection><subsection number="16-10a-1405(2)(e)"> prevent commencement of a proceeding by or against the corporation in its corporate name;</subsection><subsection number="16-10a-1405(2)(f)"> abate or suspend a proceeding pending by or against the corporation on the effective date of dissolution; or</subsection><subsection number="16-10a-1405(2)(g)"> terminate the authority of the registered agent of the corporation.</subsection></subsection></section><section number="16-10a-1406"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Disposition of known claims by notification.</catchline><subsection number="16-10a-1406(1)"> A dissolved corporation may dispose of the known claims against it by following the procedures described in this section.</subsection><subsection number="16-10a-1406(2)"> A dissolved corporation electing to dispose of known claims pursuant to this section may give written notice of the dissolution to known claimants at any time after the effective date of the dissolution. The written notice shall: <subsection number="16-10a-1406(2)(a)"> describe the information that must be included in a claim;</subsection><subsection number="16-10a-1406(2)(b)"> provide an address to which written notice of any claim must be given to the corporation;</subsection><subsection number="16-10a-1406(2)(c)"> state the deadline, which may not be fewer than 120 days after the effective date of the notice, by which the dissolved corporation must receive the claim; and</subsection><subsection number="16-10a-1406(2)(d)"> state that unless sooner barred by any other state statute limiting actions, the claim will be barred if not received by the deadline.</subsection></subsection><subsection number="16-10a-1406(3)"> Unless sooner barred by any other statute limiting actions, a claim against the dissolved corporation is barred if: <subsection number="16-10a-1406(3)(a)"> a claimant was given notice under Subsection <xref depth="4" refnumber="16-10a-1406(2)" start="0">(2)</xref> and the claim is not received by the dissolved corporation by the deadline; or</subsection><subsection number="16-10a-1406(3)(b)"> the dissolved corporation delivers to the claimant written notice of rejection of the claim within 90 days after receipt of the claim and the claimant whose claim was rejected by the dissolved corporation does not commence a proceeding to enforce the claim within 90 days after the effective date of the rejection notice.</subsection></subsection><subsection number="16-10a-1406(4)"> Claims which are not rejected by the dissolved corporation in writing within 90 days after receipt of the claim by the dissolved corporation shall be considered accepted.</subsection><subsection number="16-10a-1406(5)"> The failure of the dissolved corporation to give notice to any known claimant pursuant to Subsection <xref depth="4" refnumber="16-10a-1406(2)" start="0">(2)</xref> does not affect the disposition under this section of any claim held by any other known claimant.</subsection><subsection number="16-10a-1406(6)"> For purposes of this section, "claim" does not include a contingent liability or a claim based on an event occurring after the effective date of dissolution.</subsection></section><section number="16-10a-1407"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Disposition of claims by publication -- Disposition in absence of publication.</catchline><subsection number="16-10a-1407(1)"> A dissolved corporation may publish notice of its dissolution and request that persons with claims against the corporation present them in accordance with the notice.</subsection><subsection number="16-10a-1407(2)"> The notice contemplated in Subsection <xref depth="4" refnumber="16-10a-1407(1)" start="0">(1)</xref> shall: <subsection number="16-10a-1407(2)(a)"> be published:<subsection number="16-10a-1407(2)(a)(i)"> one time in a newspaper of general circulation in the county where the dissolved corporation's principal office is or was located or, if it has no principal office in this state, in Salt Lake County; and</subsection><subsection number="16-10a-1407(2)(a)(ii)"> as required in Section <xref depth="3" refnumber="45-1-101" start="0">45-1-101</xref>;</subsection></subsection><subsection number="16-10a-1407(2)(b)"> describe the information that must be included in a claim and provide an address at which any claim must be given to the corporation; and</subsection><subsection number="16-10a-1407(2)(c)"> state that unless sooner barred by any other statute limiting actions, the claim will be barred if an action to enforce the claim is not commenced within five years after the publication of the notice.</subsection></subsection><subsection number="16-10a-1407(3)"> If the dissolved corporation publishes a newspaper or website notice in accordance with Subsection <xref depth="4" refnumber="16-10a-1407(2)" start="0">(2)</xref>, then unless sooner barred under Section <xref depth="3" refnumber="16-10a-1406" start="0">16-10a-1406</xref> or under any other statute limiting actions, the claim of any claimant against the dissolved corporation is barred unless the claimant commences an action to enforce the claim against the dissolved corporation within five years after the publication date of the notice.</subsection><subsection number="16-10a-1407(4)"><subsection number="16-10a-1407(4)(a)"> For purposes of this section, "claim" means any claim, including claims of this state, whether known, due or to become due, absolute or contingent, liquidated or unliquidated, founded on contract, tort, or other legal basis, or otherwise.</subsection><subsection number="16-10a-1407(4)(b)"> For purposes of this section, an action to enforce a claim includes any civil action, and any arbitration under any agreement for binding arbitration between the dissolved corporation and the claimant.</subsection></subsection><subsection number="16-10a-1407(5)"> If a dissolved corporation does not publish a newspaper notice in accordance with Subsection <xref depth="4" refnumber="16-10a-1407(2)" start="0">(2)</xref>, then unless sooner barred under Section <xref depth="3" refnumber="16-10a-1406" start="0">16-10a-1406</xref> or under any other statute limiting actions, the claim of any claimant against the dissolved corporation is barred unless the claimant commences an action to enforce the claim against the dissolved corporation within seven years after the date the corporation was dissolved.</subsection></section><section number="16-10a-1408"><histories><history>Amended by Chapter <modchap sess="2025GS">302</modchap>, 2025 General Session</history><modyear>2025</modyear></histories><catchline>Enforcement of claims against dissolved corporations.</catchline><tab/>A claim may be enforced:<subsection number="16-10a-1408(1)">under Section <xref depth="3" refnumber="16-10a-1406" start="0">16-10a-1406</xref> or <xref depth="3" refnumber="16-10a-1407" start="0">16-10a-1407</xref> against the dissolved corporation, to the extent of its undistributed assets; or</subsection><subsection number="16-10a-1408(2)">against a shareholder of the dissolved corporation, if the assets have been distributed in liquidation; but a shareholder's total liability for all claims under this section may not exceed the total value of assets distributed to the shareholder, as that value is determined at the time of distribution. Any shareholder required to return any portion of the value of assets received by the shareholder in liquidation shall be entitled to contribution from all other shareholders. The contributions shall be in accordance with the shareholders' respective rights and interests and may not exceed the value of the assets received in liquidation.</subsection></section><section number="16-10a-1409"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Service on dissolved corporation.</catchline><subsection number="16-10a-1409(1)"> A dissolved corporation shall either: <subsection number="16-10a-1409(1)(a)"> maintain a registered agent in this state to accept service of process on its behalf; or</subsection><subsection number="16-10a-1409(1)(b)"> be deemed to have authorized service of process on it by registered or certified mail, return receipt requested, to the address of its principal office, if any, as set forth in its articles of dissolution or as last changed by notice delivered to the division for filing or to the address for service of process that is stated in its articles of dissolution or as last changed by notice delivered to the division for filing.</subsection></subsection><subsection number="16-10a-1409(2)"> Service effected pursuant to Subsection <xref depth="4" refnumber="16-10a-1409(1)(b)" start="0">(1)(b)</xref> is perfected at the earliest of: <subsection number="16-10a-1409(2)(a)"> the date the dissolved corporation receives the process, notice, or demand;</subsection><subsection number="16-10a-1409(2)(b)"> the date shown on the return receipt, if signed on behalf of the dissolved corporation; or</subsection><subsection number="16-10a-1409(2)(c)"> five days after mailing.</subsection></subsection><subsection number="16-10a-1409(3)"> Subsection <xref depth="4" refnumber="16-10a-1409(1)" start="0">(1)</xref> does not prescribe the only means, or necessarily the required means, of service on a dissolved corporation.</subsection></section><section number="16-10a-1430"><histories><history>Amended by Chapter <modchap sess="2023GS">401</modchap>, 2023 General Session</history><modyear>2023</modyear></histories><catchline>Grounds and procedure for judicial dissolution.</catchline><subsection number="16-10a-1430(1)"> The attorney general or the division director may bring an action in a court with jurisdiction under <xref depth="0" refnumber="78A" start="0">Title 78A, Judiciary and Judicial Administration</xref>, to dissolve a corporation if it is established that: <subsection number="16-10a-1430(1)(a)"> the corporation obtained its articles of incorporation through fraud; or</subsection><subsection number="16-10a-1430(1)(b)"> the corporation has continued to exceed or abuse the authority conferred upon the corporation by law.</subsection></subsection><subsection number="16-10a-1430(2)"> A shareholder may bring an action in a court with jurisdiction under <xref depth="0" refnumber="78A" start="0">Title 78A, Judiciary and Judicial Administration</xref>, to dissolve a corporation if it is established that: <subsection number="16-10a-1430(2)(a)"> the directors are deadlocked in the management of the corporate affairs, the shareholders are unable to break the deadlock, irreparable injury to the corporation is threatened or being suffered, or the business and affairs of the corporation can no longer be conducted to the advantage of the shareholders generally, because of the deadlock;</subsection><subsection number="16-10a-1430(2)(b)"> the directors or those in control of the corporation have acted, are acting, or will act in a manner that is illegal, oppressive, or fraudulent;</subsection><subsection number="16-10a-1430(2)(c)"> the shareholders are deadlocked in voting power and have failed, for a period that includes at least two consecutive annual meeting dates, to elect successors to directors whose terms have expired or would have expired upon the election of their successors; or</subsection><subsection number="16-10a-1430(2)(d)"> the corporate assets are being misapplied or wasted.</subsection></subsection><subsection number="16-10a-1430(3)"> A creditor may bring an action in a court with jurisdiction under <xref depth="0" refnumber="78A" start="0">Title 78A, Judiciary and Judicial Administration</xref>, to dissolve a corporation if it is established that: <subsection number="16-10a-1430(3)(a)"> the creditor's claim has been reduced to judgment, the execution on the judgment has been returned unsatisfied, and the corporation is insolvent; or</subsection><subsection number="16-10a-1430(3)(b)"> the corporation is insolvent and the corporation has admitted in writing that the creditor's claim is due and owing.</subsection></subsection><subsection number="16-10a-1430(4)"> A corporation may bring an action in a court with jurisdiction under <xref depth="0" refnumber="78A" start="0">Title 78A, Judiciary and Judicial Administration</xref>, to dissolve the corporation by voluntary dissolution continued under court supervision.</subsection><subsection number="16-10a-1430(5)"> If an action is brought under this section, it is not necessary to make shareholders parties to the action to dissolve a corporation unless relief is sought against them individually.</subsection><subsection number="16-10a-1430(6)"> In a proceeding under this section, a court may: <subsection number="16-10a-1430(6)(a)"> issue injunctions;</subsection><subsection number="16-10a-1430(6)(b)"> appoint a receiver or custodian pendente lite with all powers and duties the court directs; or</subsection><subsection number="16-10a-1430(6)(c)"> take other action required to preserve the corporate assets wherever located and carry on the business of the corporation until a full hearing can be held.</subsection></subsection></section><section number="16-10a-1432"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Receivership or custodianship.</catchline><subsection number="16-10a-1432(1)"> A court in a judicial proceeding brought to dissolve a corporation may appoint one or more receivers to wind up and liquidate, or one or more custodians to manage, the business and affairs of the corporation. The court shall hold a hearing, after giving notice to all parties to the proceeding and any interested persons designated by the court, before appointing a receiver or custodian. The court appointing a receiver or custodian has exclusive jurisdiction over the corporation and all of its property wherever located.</subsection><subsection number="16-10a-1432(2)"> The court may appoint an individual or a domestic or foreign corporation authorized to transact business in this state as a receiver or custodian. The court may require the receiver or custodian to post bond, with or without sureties, in an amount the court directs.</subsection><subsection number="16-10a-1432(3)"> The court shall describe the powers and duties of the receiver or custodian in its appointing order, which may be amended from time to time. Among other powers: <subsection number="16-10a-1432(3)(a)"> the receiver:<subsection number="16-10a-1432(3)(a)(i)"> may dispose of all or any part of the assets of the corporation wherever located, at a public or private sale, if authorized by the court; and</subsection><subsection number="16-10a-1432(3)(a)(ii)"> may sue and defend in its own name as receiver of the corporation in all courts of this state; or</subsection></subsection><subsection number="16-10a-1432(3)(b)"> the custodian may exercise all of the powers of the corporation, through or in place of its board of directors or officers, to the extent necessary to manage the affairs of the corporation in the best interests of its shareholders and creditors.</subsection></subsection><subsection number="16-10a-1432(4)"> The court during a receivership may redesignate the receiver a custodian, and during a custodianship may redesignate the custodian a receiver, if doing so is in the best interests of the corporation, its shareholders, and its creditors.</subsection><subsection number="16-10a-1432(5)"> The court from time to time during the receivership or custodianship may order compensation paid and expense disbursements or reimbursements made to the receiver or custodian and the custodian's or receiver's counsel from the assets of the corporation or proceeds from the sale of the assets.</subsection></section><section number="16-10a-1433"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Decree of dissolution.</catchline><subsection number="16-10a-1433(1)"> If after a hearing the court determines that one or more grounds for judicial dissolution described in Section <xref depth="3" refnumber="16-10a-1430" start="0">16-10a-1430</xref> exist, it may enter a decree dissolving the corporation and specifying the effective date of the dissolution. The clerk of the court shall deliver a certified copy of the decree to the division for filing.</subsection><subsection number="16-10a-1433(2)"> After entering the decree of dissolution, the court shall direct the winding up and liquidation of the corporation's business and affairs in accordance with Section <xref depth="3" refnumber="16-10a-1405" start="0">16-10a-1405</xref> and the giving of notice to its registered agent, or to the division if it has no registered agent, and to claimants in accordance with Sections <xref depth="3" refnumber="16-10a-1406" start="0">16-10a-1406</xref> and <xref depth="3" refnumber="16-10a-1407" start="0">16-10a-1407</xref>.</subsection><subsection number="16-10a-1433(3)"> The court's order may be appealed as in other civil proceedings.</subsection></section><section number="16-10a-1434"><histories><history>Amended by Chapter <modchap sess="2023GS">401</modchap>, 2023 General Session</history><modyear>2023</modyear></histories><catchline>Election to purchase in lieu of dissolution.</catchline><subsection number="16-10a-1434(1)"> In an action under Subsection <xref depth="4" refnumber="16-10a-1430(2)" start="0">16-10a-1430(2)</xref> to dissolve a corporation that has no shares listed on a national securities exchange or regularly traded in a market maintained by one or more members of a national or affiliated securities association, the corporation may elect, or if it fails to elect, one or more shareholders may elect to purchase all shares of the corporation owned by the petitioning shareholder, at the fair value of the shares, determined as provided in this section. An election pursuant to this section is irrevocable unless the court determines that it is equitable to set aside or modify the election.</subsection><subsection number="16-10a-1434(2)"><subsection number="16-10a-1434(2)(a)"> An election to purchase pursuant to this section may be filed with the court at any time within 90 days after the filing of the action under Subsection <xref depth="4" refnumber="16-10a-1430(2)" start="0">16-10a-1430(2)</xref> or at any later time as the court in its discretion may allow. If the corporation files an election with the court within the 90-day period, or at any later time allowed by the court, to purchase all shares of the corporation owned by the petitioning shareholder, the corporation shall purchase the shares in the manner provided in this section.</subsection><subsection number="16-10a-1434(2)(b)"> If the corporation does not file an election with the court within the time period, but an election to purchase all shares of the corporation owned by the petitioning shareholder is filed by one or more shareholders within the time period, the corporation shall, within 10 days after the later of:<subsection number="16-10a-1434(2)(b)(i)"> the end of the time period allowed for the filing of elections to purchase under this section; or</subsection><subsection number="16-10a-1434(2)(b)(ii)"> notification from the court of an election by shareholders to purchase all shares of the corporation owned by the petitioning shareholder as provided in this section, give written notice of the election to purchase to all shareholders of the corporation, other than the petitioning shareholder. The notice shall state the name and number of shares owned by the petitioning shareholder and the name and number of shares owned by each electing shareholder. The notice shall advise any recipients who have not participated in the election of their right to join in the election to purchase shares in accordance with this section, and of the date by which any notice of intent to participate must be filed with the court.</subsection></subsection><subsection number="16-10a-1434(2)(c)"> Shareholders who wish to participate in the purchase of shares from the petitioning shareholder shall file notice of their intention to join in the purchase by the electing shareholders, no later than 30 days after the effective date of the corporation's notice of their right to join in the election to purchase.</subsection><subsection number="16-10a-1434(2)(d)"> All shareholders who have filed with the court an election or notice of their intention to participate in the election to purchase the shares of the corporation owned by the petitioning shareholder thereby become irrevocably obligated to participate in the purchase of shares from the petitioning shareholders upon the terms and conditions of this section, unless the court otherwise directs.</subsection><subsection number="16-10a-1434(2)(e)"> After an election has been filed by the corporation or one or more shareholders, the action under Subsection <xref depth="4" refnumber="16-10a-1430(2)" start="0">16-10a-1430(2)</xref> may not be discontinued or settled, nor may the petitioning shareholder sell or otherwise dispose of any shares of the corporation, unless the court determines that it would be equitable to the corporation and the shareholders, other than the petitioning shareholders, to permit any discontinuance, settlement, sale, or other disposition.</subsection></subsection><subsection number="16-10a-1434(3)"> If, within 60 days after the earlier of: <subsection number="16-10a-1434(3)(a)"> the corporation's filing of an election to purchase all shares of the corporation owned by the petitioning shareholder; or</subsection><subsection number="16-10a-1434(3)(b)"> the corporation's mailing of a notice to its shareholders of the filing of an election by the shareholders to purchase all shares of the corporation owned by the petitioning shareholder, the petitioning shareholder and electing corporation or shareholders reach agreement as to the fair value and terms of purchase of the petitioning shareholder's shares, the court shall enter an order directing the purchase of petitioner's shares, upon the terms and conditions agreed to by the parties.</subsection></subsection><subsection number="16-10a-1434(4)"> If the parties are unable to reach an agreement as provided for in Subsection <xref depth="4" refnumber="16-10a-1434(3)" start="0">(3)</xref>, upon application of any party the court shall stay the proceedings under Subsection <xref depth="4" refnumber="16-10a-1430(2)" start="0">16-10a-1430(2)</xref> and determine the fair value of the petitioning shareholder's shares as of the day before the date on which the action under Subsection <xref depth="4" refnumber="16-10a-1430(2)" start="0">16-10a-1430(2)</xref> was filed or as of any other date the court determines to be appropriate under the circumstances and based on the factors the court determines to be appropriate.</subsection><subsection number="16-10a-1434(5)"><subsection number="16-10a-1434(5)(a)"> Upon determining the fair value of the shares of the corporation owned by the petitioning shareholder, the court shall enter an order directing the purchase of the shares upon terms and conditions the court determines to be appropriate. The terms and conditions may include payment of the purchase price in installments, where necessary in the interests of equity, provision for security to assure payment of the purchase price and any additional costs, fees, and expenses awarded by the court, and an allocation of shares among shareholders if the shares are to be purchased by shareholders.</subsection><subsection number="16-10a-1434(5)(b)"> In allocating the petitioning shareholders' shares among holders of different classes of shares, the court shall attempt to preserve the existing distribution of voting rights among holders of different share classes to the extent practicable. The court may direct that holders of a specific class or classes may not participate in the purchase. The court may not require any electing shareholder to purchase more of the shares of the corporation owned by the petitioning shareholder than the number of shares that the purchasing shareholder may have set forth in his election or notice of intent to participate filed with the court as the maximum number of shares he is willing to purchase.</subsection><subsection number="16-10a-1434(5)(c)"> Interest may be allowed at the rate and from the date determined by the court to be equitable. However, if the court finds that the refusal of the petitioning shareholder to accept an offer of payment was arbitrary or otherwise not in good faith, interest may not be allowed.</subsection><subsection number="16-10a-1434(5)(d)"> If the court finds that the petitioning shareholder had probable grounds for relief under Subsection <xref depth="4" refnumber="16-10a-1430(2)(b)" start="0">16-10a-1430(2)(b)</xref> or <xref depth="4" refnumber="16-10a-1430(2)(d)" start="0">(d)</xref>, it may award to the petitioning shareholder reasonable fees and expenses of counsel and experts employed by the petitioning shareholder.</subsection></subsection><subsection number="16-10a-1434(6)"> Upon entry of an order under Subsection <xref depth="4" refnumber="16-10a-1434(3)" start="0">(3)</xref> or <xref depth="4" refnumber="16-10a-1434(5)" start="0">(5)</xref>, the court shall dismiss the action to dissolve the corporation under Section <xref depth="3" refnumber="16-10a-1430" start="0">16-10a-1430</xref>, and the petitioning shareholder shall no longer have any rights or status as a shareholder of the corporation, except the right to receive the amounts awarded to him by the court. The award is enforceable in the same manner as any other judgment.</subsection><subsection number="16-10a-1434(7)"><subsection number="16-10a-1434(7)(a)"> The purchase ordered pursuant to Subsection <xref depth="4" refnumber="16-10a-1434(5)" start="0">(5)</xref> shall be made within 10 days after the date the order becomes final, unless before that time the corporation files with the court a notice of its intention to adopt articles of dissolution pursuant to Sections <xref depth="3" refnumber="16-10a-1402" start="0">16-10a-1402</xref> and <xref depth="3" refnumber="16-10a-1403" start="0">16-10a-1403</xref>. The articles of dissolution must then be adopted and filed within 50 days after notice.</subsection><subsection number="16-10a-1434(7)(b)"> Upon filing of the articles of dissolution, the corporation is dissolved in accordance with the provisions of Sections <xref depth="3" refnumber="16-10a-1405" start="0">16-10a-1405</xref> through <xref depth="3" refnumber="16-10a-1408" start="0">16-10a-1408</xref>, and the order entered pursuant to Subsection <xref depth="4" refnumber="16-10a-1434(5)" start="0">(5)</xref> is no longer of any force or effect. However, the court may award the petitioning shareholder reasonable fees and expenses in accordance with the provisions of Subsection <xref depth="4" refnumber="16-10a-1434(5)(d)" start="0">(5)(d)</xref>. The petitioning shareholder may continue to pursue any claims previously asserted on behalf of the corporation.</subsection></subsection><subsection number="16-10a-1434(8)"> Any payment by the corporation pursuant to an order under Subsection <xref depth="4" refnumber="16-10a-1434(3)" start="0">(3)</xref> or <xref depth="4" refnumber="16-10a-1434(5)" start="0">(5)</xref>, other than an award of fees and expenses pursuant to Subsection <xref depth="4" refnumber="16-10a-1434(5)(d)" start="0">(5)(d)</xref>, is subject to the provisions of Section <xref depth="3" refnumber="16-10a-640" start="0">16-10a-640</xref>.</subsection></section><section number="16-10a-1440"><histories><history>Amended by Chapter <modchap sess="1995GS">198</modchap>, 1995 General Session</history><modyear>1995</modyear></histories><catchline>Deposit with state treasurer.</catchline><tab/>Assets of a dissolved corporation that should be transferred to a creditor, claimant, or shareholder of the corporation who cannot be found or who is not competent to receive them shall be reduced to cash and deposited with the state treasurer in accordance with <xref depth="1" refnumber="67-4a" start="0">Title 67, Chapter 4a, Revised Uniform Unclaimed Property Act</xref>. </section></part><part number="16-10a-15"><catchline>Transfer To Another State</catchline><section number="16-10a-1533.5"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Transfer to another state.</catchline><subsection number="16-10a-1533.5(1)">A domestic corporation may transfer to or domesticate in a jurisdiction other than this state if:<subsection number="16-10a-1533.5(1)(a)">that jurisdiction permits the transfer to or domestication of the corporation in the jurisdiction; and</subsection><subsection number="16-10a-1533.5(1)(b)">the transfer is approved by the shareholders as provided in the corporation's bylaws or, if the bylaws do not so provide, by all of the shareholders.</subsection></subsection><subsection number="16-10a-1533.5(2)"><subsection number="16-10a-1533.5(2)(a)">A domestic corporation transfers to or domesticates in a jurisdiction other than this state by delivering to the division for filing articles of transfer meeting the requirements of Subsection <xref depth="4" refnumber="16-10a-1533.5(2)(b)" start="0">(2)(b)</xref>.</subsection><subsection number="16-10a-1533.5(2)(b)">Articles of transfer shall state:<subsection number="16-10a-1533.5(2)(b)(i)">the name of the corporation;</subsection><subsection number="16-10a-1533.5(2)(b)(ii)">the date of filing of the corporation's original articles of incorporation with the division;</subsection><subsection number="16-10a-1533.5(2)(b)(iii)">the jurisdiction to which the corporation is to be transferred or in which it is to be domesticated;</subsection><subsection number="16-10a-1533.5(2)(b)(iv)">the future effective date, which shall be a date certain, of the transfer or domestication if it is not to be effective upon the filing of the articles of transfer;</subsection><subsection number="16-10a-1533.5(2)(b)(v)">that the transfer or domestication has been approved by the shareholders;</subsection><subsection number="16-10a-1533.5(2)(b)(vi)">that the existence of the corporation as a domestic corporation of this state shall cease when the articles of transfer become effective;</subsection><subsection number="16-10a-1533.5(2)(b)(vii)">the agreement of the corporation that it may be served with process in this state in any proceeding for enforcement of any obligation of the corporation arising while it was a corporation under the laws of this state; and</subsection><subsection number="16-10a-1533.5(2)(b)(viii)">if the corporation does not apply for authority to transact business in this state as a foreign corporation pursuant to Section <xref depth="3" refnumber="16-1a-504">16-1a-504</xref>, the address to which a copy of service of process may be made under Subsection <xref depth="4" refnumber="16-10a-1533.5(2)(b)(vii)" start="0">(2)(b)(vii)</xref>.</subsection></subsection></subsection><subsection number="16-10a-1533.5(3)">When the articles of transfer are filed with the division, or upon the future, delayed effective date of the articles of transfer, and after payment to the division of the fees prescribed under this chapter, the corporation shall cease to exist as a domestic corporation of this state. Thereafter, a certificate of the division as to the transfer is prima facie evidence of the transfer or domestication by the corporation out of this state.</subsection><subsection number="16-10a-1533.5(4)">Transfer or domestication of a corporation out of this state in accordance with this section and the resulting cessation of its existence as a domestic corporation of this state may not be considered to affect:<subsection number="16-10a-1533.5(4)(a)">an obligation or liability of the corporation incurred before the transfer or domestication or the personal liability of any person incurred before the transfer or domestication, including, any taxes owing to this state; or</subsection><subsection number="16-10a-1533.5(4)(b)">the choice of law applicable to the corporation with respect to matters arising before the transfer or domestication.</subsection></subsection></section></part><part number="16-10a-16"><catchline>Records, Information, and Reports</catchline><section number="16-10a-1601"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Corporate records.</catchline><subsection number="16-10a-1601(1)">A corporation shall keep as permanent records minutes of all meetings of its shareholders and board of directors, a record of all actions taken by the shareholders or board of directors without a meeting, and a record of all actions taken on behalf of the corporation by a committee of the board of directors in place of the board of directors, and a record of all waivers of notices of meetings of shareholders, meetings of the board of directors, or any meetings of committees of the board of directors.</subsection><subsection number="16-10a-1601(2)">A corporation shall maintain appropriate accounting records.</subsection><subsection number="16-10a-1601(3)">A corporation or its agent shall maintain a record of the names and addresses of its shareholders, in a form that permits preparation of a list of shareholders:<subsection number="16-10a-1601(3)(a)">that is arranged by voting group and within each voting group by class or series of shares;</subsection><subsection number="16-10a-1601(3)(b)">that is in alphabetical order within each class or series; and</subsection><subsection number="16-10a-1601(3)(c)">that shows the address of and the number of shares of each class and series held by each shareholder.</subsection></subsection><subsection number="16-10a-1601(4)">A corporation shall maintain its records in written form or in any form capable of conversion into written form within a reasonable time.</subsection><subsection number="16-10a-1601(5)">A corporation shall keep a copy of the following records at its principal office:<subsection number="16-10a-1601(5)(a)">its articles of incorporation currently in effect;</subsection><subsection number="16-10a-1601(5)(b)">its bylaws currently in effect;</subsection><subsection number="16-10a-1601(5)(c)">the minutes of all shareholders' meetings, and records of all action taken by shareholders without a meeting, for the past three years;</subsection><subsection number="16-10a-1601(5)(d)">all written communications within the past three years to shareholders as a group or to the holders of any class or series of shares as a group;</subsection><subsection number="16-10a-1601(5)(e)">a list of the names and business addresses of its current officers and directors;</subsection><subsection number="16-10a-1601(5)(f)">its most recent annual report delivered to the division under Section <xref depth="3" refnumber="16-1a-212">16-1a-212</xref>; and</subsection><subsection number="16-10a-1601(5)(g)">all financial statements prepared for periods ending during the last three years that a shareholder could request under Section <xref depth="3" refnumber="16-10a-1605" start="0">16-10a-1605</xref>.</subsection></subsection></section><section number="16-10a-1602"><histories><history>Amended by Chapter <modchap sess="2025GS">302</modchap>, 2025 General Session</history><modyear>2025</modyear></histories><catchline>Inspection of records by shareholders and directors.</catchline><subsection number="16-10a-1602(1)">A shareholder or director of a corporation is entitled to inspect and copy, during regular business hours at the corporation's principal office, any of the records of the corporation described in Subsection <xref depth="4" refnumber="16-10a-1601(5)" start="0">16-10a-1601(5)</xref> if the shareholder or director gives the corporation written notice of the demand at least five business days before the date on which the shareholder or director wishes to inspect and copy.</subsection><subsection number="16-10a-1602(2)">In addition to the rights set forth in Subsection <xref depth="4" refnumber="16-10a-1602(1)" start="0">(1)</xref>, a shareholder or director of a corporation is entitled to inspect and copy, during regular business hours at a reasonable location specified by the corporation, any of the following records of the corporation if the shareholder or director meets the requirements of Subsection <xref depth="4" refnumber="16-10a-1602(3)" start="0">(3)</xref> and gives the corporation written notice of the demand at least five business days before the date on which the shareholder or director wishes to inspect and copy:<subsection number="16-10a-1602(2)(a)">excerpts from:<subsection number="16-10a-1602(2)(a)(i)">minutes of any meeting, records of any action taken by the board of directors, or by a committee of the board of directors while acting on behalf of the corporation in place of the board of directors;</subsection><subsection number="16-10a-1602(2)(a)(ii)">minutes of any meeting of the shareholders;</subsection><subsection number="16-10a-1602(2)(a)(iii)">records of any action taken by the shareholders without a meeting; and</subsection><subsection number="16-10a-1602(2)(a)(iv)">waivers of notices of any meeting of the shareholders, of any meeting of the board of directors, or of any meeting of a committee of the board of directors;</subsection></subsection><subsection number="16-10a-1602(2)(b)">accounting records of the corporation; and</subsection><subsection number="16-10a-1602(2)(c)">the record of shareholders described in Subsection <xref depth="4" refnumber="16-10a-1601(3)" start="0">16-10a-1601(3)</xref>.</subsection></subsection><subsection number="16-10a-1602(3)">A shareholder or director is entitled to inspect and copy records as described in Subsection <xref depth="4" refnumber="16-10a-1602(2)" start="0">(2)</xref> only if:<subsection number="16-10a-1602(3)(a)">the demand is made in good faith and for a proper purpose;</subsection><subsection number="16-10a-1602(3)(b)">the shareholder or director describes with reasonable particularity the shareholder's or director's purpose and the records the shareholder or director desires to inspect; and</subsection><subsection number="16-10a-1602(3)(c)">the records are directly connected with the shareholder's or director's purpose.</subsection></subsection><subsection number="16-10a-1602(4)">For purposes of this section:<subsection number="16-10a-1602(4)(a)">"proper purpose" means a purpose reasonably related to the demanding shareholder's or director's interest as a shareholder or director; and</subsection><subsection number="16-10a-1602(4)(b)">"shareholder" includes a beneficial owner whose shares are held in a voting trust and any other beneficial owner who establishes beneficial ownership.</subsection></subsection><subsection number="16-10a-1602(5)">The right of inspection granted by this section may not be abolished by a corporation's articles of incorporation or bylaws.</subsection><subsection number="16-10a-1602(6)">This section does not affect:<subsection number="16-10a-1602(6)(a)">the right of a shareholder or director to inspect records under Section <xref depth="3" refnumber="16-10a-720" start="0">16-10a-720</xref> or, if the shareholder or director is in litigation with the corporation, to the same extent as any other litigant; or</subsection><subsection number="16-10a-1602(6)(b)">the power of a court, independent of this chapter, to compel the production of corporate records for examination.</subsection></subsection><subsection number="16-10a-1602(7)">A shareholder or director may not use any information obtained through the inspection or copying of records permitted by Subsection <xref depth="4" refnumber="16-10a-1602(2)" start="0">(2)</xref> for any purposes other than those set forth in a demand made under Subsection <xref depth="4" refnumber="16-10a-1602(3)" start="0">(3)</xref>.</subsection></section><section number="16-10a-1603"><histories><history>Amended by Chapter <modchap sess="2025GS">302</modchap>, 2025 General Session</history><modyear>2025</modyear></histories><catchline>Scope of inspection right.</catchline><subsection number="16-10a-1603(1)">A shareholder's or director's agent or attorney has the same inspection and copying rights as the shareholder or director represented by the agent or attorney.</subsection><subsection number="16-10a-1603(2)">The right to copy records under Section <xref depth="3" refnumber="16-10a-1602" start="0">16-10a-1602</xref> includes, if reasonable, the right to receive copies made by photographic, xerographic, or other means.</subsection><subsection number="16-10a-1603(3)">Except as provided in Section <xref depth="3" refnumber="16-10a-1606" start="0">16-10a-1606</xref>, the corporation may impose a reasonable charge, payable in advance, covering the costs of labor and material, for copies of any documents to be provided to the shareholder or director. The charge may not exceed the estimated cost of production or reproduction of the records.</subsection><subsection number="16-10a-1603(4)">The corporation may comply with a shareholder's or director's demand to inspect the record of shareholders under Subsection <xref depth="4" refnumber="16-10a-1602(2)(c)" start="0">16-10a-1602(2)(c)</xref> by providing the shareholder or director with a list of the corporation's shareholders that complies with Subsection <xref depth="4" refnumber="16-10a-1601(3)" start="0">16-10a-1601(3)</xref> and was compiled no earlier than the date of the shareholder's or director's demand.</subsection></section><section number="16-10a-1604"><histories><history>Amended by Chapter <modchap sess="2023GS">401</modchap>, 2023 General Session</history><modyear>2023</modyear></histories><catchline>Court-ordered inspection.</catchline><subsection number="16-10a-1604(1)"><subsection number="16-10a-1604(1)(a)"> If a corporation does not allow a shareholder or director, or the shareholder's or director's agent or attorney, who complies with Subsection <xref depth="4" refnumber="16-10a-1602(1)" start="0">16-10a-1602(1)</xref> to inspect or copy any records required by that subsection to be available for inspection, the shareholder or director may petition a court with jurisdiction under <xref depth="0" refnumber="78A" start="0">Title 78A, Judiciary and Judicial Administration</xref>.</subsection><subsection number="16-10a-1604(1)(b)"> If a petition is filed under Subsection <xref depth="4" refnumber="16-10a-1604(1)(a)" start="0">(1)(a)</xref>, a court may summarily order inspection and copying of the records demanded at the corporation's expense.</subsection></subsection><subsection number="16-10a-1604(2)"><subsection number="16-10a-1604(2)(a)"> If a corporation does not within a reasonable time allow a shareholder or director, or the shareholder's or director's agent or attorney, who complies with Subsections <xref depth="4" refnumber="16-10a-1602(2)" start="0">16-10a-1602(2)</xref> and <xref depth="4" refnumber="16-10a-1602(3)" start="0">(3)</xref>, to inspect and copy any records which the shareholder or director is entitled to inspect or copy by this part, the shareholder or director may petition a court with jurisdiction under <xref depth="0" refnumber="78A" start="0">Title 78A, Judiciary and Judicial Administration</xref>.</subsection><subsection number="16-10a-1604(2)(b)"> If a petition is filed under Subsection <xref depth="4" refnumber="16-10a-1604(2)(a)" start="0">(2)(a)</xref>, the court may summarily order the inspection or copying of the records demanded.</subsection><subsection number="16-10a-1604(2)(c)"> The court shall dispose of a petition under this subsection on an expedited basis.</subsection></subsection><subsection number="16-10a-1604(3)"> If a court orders inspection or copying of records demanded, the court shall also order the corporation to pay the shareholder's or director's costs incurred to obtain the order, including reasonable counsel fees, unless the corporation proves that it refused inspection in good faith because it had a reasonable basis for doubt about the right of the shareholder or director, or the shareholder's or director's agent or attorney, to inspect the records demanded.</subsection><subsection number="16-10a-1604(4)"> If a court orders inspection or copying of records demanded, the court may: <subsection number="16-10a-1604(4)(a)"> impose reasonable restrictions on the use or distribution of the records by the demanding shareholder or director;</subsection><subsection number="16-10a-1604(4)(b)"> order the corporation to pay the shareholder or director for any damages incurred as a result of the corporation's denial if the court determines that the corporation did not act in good faith in refusing to allow the inspection or copying;</subsection><subsection number="16-10a-1604(4)(c)"> if inspection or copying is ordered pursuant to Subsection <xref depth="4" refnumber="16-10a-1604(2)" start="0">(2)</xref>, order the corporation to pay the expenses of inspection and copying if the court determines that the corporation did not act in good faith in refusing to allow the inspection or copying; and</subsection><subsection number="16-10a-1604(4)(d)"> grant the shareholder or director any other available legal remedy.</subsection></subsection></section><section number="16-10a-1605"><histories><history>Amended by Chapter <modchap sess="2025GS">302</modchap>, 2025 General Session</history><modyear>2025</modyear></histories><catchline>Financial statements.</catchline><tab/>Upon the written request of any shareholder, a corporation shall mail to the shareholder its most recent annual or quarterly financial statements showing in reasonable detail its assets and liabilities and the results of its operations.</section><section number="16-10a-1606"><histories><history>Amended by Chapter <modchap sess="2025GS">302</modchap>, 2025 General Session</history><modyear>2025</modyear></histories><catchline>Information respecting shares.</catchline><tab/>Upon the written request of any shareholder, a corporation at its own expense shall mail to the shareholder the information specified by Subsection <xref depth="4" refnumber="16-10a-625(3)" start="0">16-10a-625(3)</xref>, whether or not the information is also contained or summarized on any share certificate of the shareholder. The corporation may comply with this section by mailing articles of incorporation including the designations, preferences, limitations, and relative rights applicable to each class and series of shares and the authority of the board of directors to determine variations for any existing or future class or series. </section><section number="16-10a-1608"><histories><history>Amended by Chapter <modchap sess="2025GS">302</modchap>, 2025 General Session</history><modyear>2025</modyear></histories><catchline>Statement of person named as director or officer.</catchline>Any person named as a director or officer of a domestic or foreign corporation in an annual report or other document on file with the division may, if the person does not hold the named position, deliver to the division for filing a statement setting forth:<subsection number="16-10a-1608(1)">the person's name;</subsection><subsection number="16-10a-1608(2)">the domestic or foreign corporation's name;</subsection><subsection number="16-10a-1608(3)">information sufficient to identify the report or other document in which the person is named as a director or officer; and</subsection><subsection number="16-10a-1608(4)">the date on which the person ceased to be a director or officer of the domestic or foreign corporation, or a statement that the person did not hold the position for which the person was named in the corporate report or other document.</subsection></section></part><part number="16-10a-17"><catchline>Transitional Provisions</catchline><section number="16-10a-1701"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Application to existing domestic corporations.</catchline><tab/>Except as otherwise provided in Section <xref depth="3" refnumber="16-10a-1704" start="0">16-10a-1704</xref>, this chapter applies to all domestic corporations in existence on July 1, 1992, that were incorporated under any general statute of this state providing for incorporation of corporations for profit, and to actions taken by the directors, officers, and shareholders of such corporations after July 1, 1992. </section><section number="16-10a-1702"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Application to foreign corporations.</catchline><tab/>A foreign corporation authorized to transact business in this state on July 1, 1992, is subject to this chapter, but is not required to obtain a new certificate of authority to transact business under this chapter. </section><section number="16-10a-1703"><histories><history>Amended by Chapter <modchap sess="2010GS">278</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Publication.</catchline><subsection number="16-10a-1703(1)"> The division shall annually publish copies of this chapter, together with applicable annotations and commentary, for sale and distribution to the public.</subsection><subsection number="16-10a-1703(2)"> The division may charge a reasonable amount for copies of the chapter sold or distributed.</subsection><subsection number="16-10a-1703(3)"> The proceeds from all sales and distributions shall be deposited into the Commerce Service Account created by Section <xref depth="3" refnumber="13-1-2" start="0">13-1-2</xref>, and may be appropriated to the division for use in defraying past or future production, publication, republication, or distribution costs.</subsection></section><section number="16-10a-1704"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Saving provisions.</catchline><subsection number="16-10a-1704(1)"> Except as provided in Subsection <xref depth="4" refnumber="16-10a-1704(2)" start="0">(2)</xref>, the repeal of any statute by this act does not affect: <subsection number="16-10a-1704(1)(a)"> the operation of the statute or any action taken under it before its repeal;</subsection><subsection number="16-10a-1704(1)(b)"> any ratification, right, remedy, privilege, obligation, or liability acquired, accrued, or incurred under the statute before its repeal;</subsection><subsection number="16-10a-1704(1)(c)"> any violation of the statute, or any penalty, forfeiture, or punishment incurred because of the violation of the statute before its repeal; or</subsection><subsection number="16-10a-1704(1)(d)"> any proceeding, reorganization, or dissolution commenced under the statute before its repeal, and any proceeding, reorganization, or dissolution may be completed in accordance with the repealed statute as if the statute had not been repealed.</subsection></subsection><subsection number="16-10a-1704(2)"> If a penalty or punishment imposed for violation of a statute repealed by this act is reduced by this act, the penalty or punishment if not already imposed shall be imposed in accordance with this act.</subsection><subsection number="16-10a-1704(3)"> The provisions of Subsection <xref depth="4" refnumber="16-10a-630(1)" start="0">16-10a-630(1)</xref> may not operate to deny preemptive rights to shareholders who, immediately prior to July 1, 1992, were entitled to preemptive rights by reason of the failure of the articles of incorporation of the corporation of which they are shareholders to deny preemptive rights, and the corporation shall be treated for all purposes as if its articles of incorporation included the statement "the corporation elects to have preemptive rights," until the date a resolution providing otherwise is approved by the same percentage of shareholders of each voting group as would be required to include the resolution in an amendment to the corporation's articles of incorporation. Any preemptive rights existing by virtue of Subsection <xref depth="4" refnumber="16-10a-1704(3)" start="0">(3)</xref> are subject to the terms and provisions of Subsection <xref depth="4" refnumber="16-10a-630(2)" start="0">16-10a-630(2)</xref>.</subsection><subsection number="16-10a-1704(4)"> The provisions of Section <xref depth="3" refnumber="16-10a-704" start="0">16-10a-704</xref> may not operate to permit a corporation in existence prior to July 1, 1992, to take action by the written consent of fewer than all of the shareholders entitled to vote with respect to the subject matter of the action, until the date a resolution providing otherwise is approved either: <subsection number="16-10a-1704(4)(a)"> by a consent in writing, setting forth the proposed resolution, signed by all of the shareholders entitled to vote with respect to the subject matter of the resolution; or</subsection><subsection number="16-10a-1704(4)(b)"> at a duly convened meeting of shareholders, by the vote of the same percentage of shareholders of each voting group as would be required to include the resolution in an amendment to the corporation's articles of incorporation.</subsection></subsection></section><section number="16-10a-1705"><histories><history>Enacted by Chapter <modchap sess="1992GS">277</modchap>, 1992 General Session</history><modyear>1992</modyear></histories><catchline>Severability clause.</catchline><tab/>If any provision of this act, or the application of any provision to any person or circumstance, is held invalid, the remainder of this act is given effect without the invalid provision or application. </section></part><part number="16-10a-18"><catchline>Business Combinations</catchline><section number="16-10a-1801"><histories><history>Enacted by Chapter <modchap sess="2017GS">439</modchap>, 2017 General Session</history><modyear>2017</modyear></histories><catchline>Title.</catchline><tab/>This part is known as "Business Combinations."</section><section number="16-10a-1802"><histories><history>Enacted by Chapter <modchap sess="2017GS">439</modchap>, 2017 General Session</history><modyear>2017</modyear></histories><catchline>Definitions.</catchline><tab/>As used in this part:<subsection number="16-10a-1802(1)"> "Affiliate" means the same as that term is defined in Section <xref depth="3" refnumber="16-10a-102" start="0">16-10a-102</xref>.</subsection><subsection number="16-10a-1802(2)"> "Announcement date," when used in reference to a business combination, means the date of the first public announcement of the final, definitive proposal for the business combination.</subsection><subsection number="16-10a-1802(3)"> "Associate," when used to indicate a relationship with a person, means: <subsection number="16-10a-1802(3)(a)"> a corporation or organization of which the person is an officer or partner or is, directly or indirectly, the beneficial owner of 10% or more of any class of voting stock;</subsection><subsection number="16-10a-1802(3)(b)"> a trust or other estate in which the person has a substantial beneficial interest or as to which the person serves as trustee or in a similar fiduciary capacity; and</subsection><subsection number="16-10a-1802(3)(c)"> a relative or spouse of the person, or any relative of the spouse, who has the same home as the person.</subsection></subsection><subsection number="16-10a-1802(4)"> "Beneficial owner," when used with respect to stock, means a person: <subsection number="16-10a-1802(4)(a)"> that, individually or with or through any of its affiliates or associates, beneficially owns the stock, directly or indirectly;</subsection><subsection number="16-10a-1802(4)(b)"> that, individually or with or through any of its affiliates or associates, has:<subsection number="16-10a-1802(4)(b)(i)"> the right to acquire the stock: <subsection number="16-10a-1802(4)(b)(i)(A)"> whether the right is exercisable immediately or only after the passage of time, pursuant to an agreement, arrangement, or understanding, whether or not in writing; or</subsection><subsection number="16-10a-1802(4)(b)(i)(B)"> upon the exercise of conversion rights, exchange rights, warrants, or options, or otherwise, except that a person may not be considered the beneficial owner of stock tendered pursuant to a tender or exchange offer made by the person or an affiliate or associate of the person until the tendered stock is accepted for purchase or exchange; or</subsection></subsection><subsection number="16-10a-1802(4)(b)(ii)"> the right to vote the stock pursuant to an agreement, arrangement, or understanding, whether or not in writing, except that a person may not be considered the beneficial owner of any stock under this Subsection <xref depth="4" refnumber="16-10a-1802(4)(b)(ii)" start="0">(4)(b)(ii)</xref> if the agreement, arrangement, or understanding to vote the stock arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made in accordance with the applicable regulations under the Exchange Act and is not then reportable on a Schedule 13D under the Exchange Act, or any comparable or successor report; or</subsection></subsection><subsection number="16-10a-1802(4)(c)"> that has an agreement, arrangement, or understanding, whether or not in writing, for the purpose of acquiring, holding, voting, except voting pursuant to a revocable proxy or consent as described in Subsection <xref depth="4" refnumber="16-10a-1802(4)(b)(ii)" start="0">(4)(b)(ii)</xref>, or disposing of the stock with any other person that beneficially owns, or whose affiliates or associates beneficially own, directly or indirectly, the stock.</subsection></subsection><subsection number="16-10a-1802(5)"> "Business combination," when used in reference to any domestic corporation and an interested shareholder of the corporation, means: <subsection number="16-10a-1802(5)(a)"> a merger or consolidation of the corporation or any subsidiary of the corporation with:<subsection number="16-10a-1802(5)(a)(i)"> the interested shareholder; or</subsection><subsection number="16-10a-1802(5)(a)(ii)"> any other corporation, whether or not that corporation is an interested shareholder of the corporation, that is, or after the merger or consolidation would be, an affiliate or associate of the interested shareholder;</subsection></subsection><subsection number="16-10a-1802(5)(b)"> any sale, lease, exchange, mortgage, pledge, transfer, or other disposition, in one transaction or a series of transactions, to or with the interested shareholder or any affiliate or associate of the interested shareholder of assets of the corporation or any subsidiary of the corporation:<subsection number="16-10a-1802(5)(b)(i)"> having an aggregate market value equal to 10% or more of the aggregate market value of all the assets, determined on a consolidated basis, of the corporation;</subsection><subsection number="16-10a-1802(5)(b)(ii)"> having an aggregate market value equal to 10% or more of the aggregate market value of all the outstanding stock of the corporation; or</subsection><subsection number="16-10a-1802(5)(b)(iii)"> representing 10% or more of the earning power or net income, determined on a consolidated basis, of the corporation;</subsection></subsection><subsection number="16-10a-1802(5)(c)"> the issuance or transfer by the corporation or any subsidiary of the corporation, in one transaction or a series of transactions, of any stock of the corporation or any subsidiary of the corporation that has an aggregate market value equal to 5% or more of the aggregate market value of all the outstanding stock of the corporation to the interested shareholder or any affiliate or associate of the interested shareholder except pursuant to the exercise of warrants or rights to purchase stock offered, or a dividend or distribution paid or made, pro rata to all shareholders of the corporation;</subsection><subsection number="16-10a-1802(5)(d)"> the adoption of any plan or proposal for the liquidation or dissolution of the corporation proposed by, or pursuant to any agreement, arrangement, or understanding, whether or not in writing, with, the interested shareholder or any affiliate or associate of the interested shareholder;</subsection><subsection number="16-10a-1802(5)(e)"> any reclassification of securities, including a stock split, stock dividend, or other distribution of stock in respect of stock, or any reverse stock split, or recapitalization of the corporation, or any merger or consolidation of the corporation with any subsidiary of the corporation, or any other transaction, whether or not with, into, or otherwise involving the interested shareholder:<subsection number="16-10a-1802(5)(e)(i)"> proposed by, or pursuant to any agreement, arrangement, or understanding, whether or not in writing, with, the interested shareholder or any affiliate or associate of the interested shareholder; and</subsection><subsection number="16-10a-1802(5)(e)(ii)"> that has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class or series of voting stock or securities convertible into voting stock of the corporation or any subsidiary of the corporation that is directly or indirectly owned by the interested shareholder or any affiliate or associate of the interested shareholder, except as a result of immaterial changes due to fractional share adjustments; or</subsection></subsection><subsection number="16-10a-1802(5)(f)"> a receipt by the interested shareholder or an affiliate or associate of the interested shareholder of the benefit, directly or indirectly, except proportionately as a shareholder of the corporation, of a loan, advance, guarantee, pledge, or other financial assistance or any tax credit or other tax advantage provided by or through the corporation.</subsection></subsection><subsection number="16-10a-1802(6)"> "Common stock" means stock other than preferred stock.</subsection><subsection number="16-10a-1802(7)"> "Consummation date," with respect to a business combination, means: <subsection number="16-10a-1802(7)(a)"> the date of consummation of the business combination; or</subsection><subsection number="16-10a-1802(7)(b)"> in the case of a business combination as to which a shareholder vote is taken, the later of:<subsection number="16-10a-1802(7)(b)(i)"> the business day before the vote; or</subsection><subsection number="16-10a-1802(7)(b)(ii)"> 20 days before the date of consummation of the business combination.</subsection></subsection></subsection><subsection number="16-10a-1802(8)"><subsection number="16-10a-1802(8)(a)"> "Control," including the terms "controlling," "controlled by," and "under common control with," means the same as that term is defined in Section <xref depth="3" refnumber="16-10a-102" start="0">16-10a-102</xref>.</subsection><subsection number="16-10a-1802(8)(b)"> A person's beneficial ownership of 10% or more of a corporation's outstanding voting stock creates a presumption that the person has control of the corporation.</subsection><subsection number="16-10a-1802(8)(c)"> Notwithstanding the other provisions of this Subsection <xref depth="4" refnumber="16-10a-1802(8)" start="0">(8)</xref>, a person may not be considered to have control of a corporation if the person holds voting stock, in good faith and not for the purpose of circumventing this part, as an agent, bank, broker, nominee, custodian, or trustee for one or more beneficial owners that do not individually or as a group have control of the corporation.</subsection></subsection><subsection number="16-10a-1802(9)"> "Exchange Act" means the Securities Exchange Act of 1934, 15 U.S.C. Sec. 78a et seq. as amended.</subsection><subsection number="16-10a-1802(10)"><subsection number="16-10a-1802(10)(a)"> "Interested shareholder," when used in reference to a domestic corporation, means a person, other than the corporation or a subsidiary of the corporation, that:<subsection number="16-10a-1802(10)(a)(i)"> is the beneficial owner, directly or indirectly, of 20% or more of the outstanding voting stock of the corporation; or</subsection><subsection number="16-10a-1802(10)(a)(ii)"> is an affiliate or associate of the corporation and at any time within the five-year period immediately before the date in question was the beneficial owner, directly or indirectly, of 20% or more of the then outstanding voting stock of the corporation.</subsection></subsection><subsection number="16-10a-1802(10)(b)"> For the purpose of determining whether a person is an interested shareholder, the number of shares of voting stock of the corporation considered to be outstanding shall include shares considered to be beneficially owned by the person through application of Subsection <xref depth="4" refnumber="16-10a-1802(4)" start="0">(4)</xref>, but may not include any other unissued shares of voting stock of the corporation that may be issuable pursuant to any agreement, arrangement, or understanding, or upon exercise of conversion rights, warrants, or options, or otherwise.</subsection></subsection><subsection number="16-10a-1802(11)"> "Market value," when used in reference to stock or property of a domestic corporation, means: <subsection number="16-10a-1802(11)(a)"> in the case of stock:<subsection number="16-10a-1802(11)(a)(i)"> the highest closing sale price during the 30-day period immediately preceding the date in question of a share of the stock on the composite tape for New York stock exchange-listed stocks;</subsection><subsection number="16-10a-1802(11)(a)(ii)"> if the stock is not quoted on the composite tape or listed on the exchange described in Subsection <xref depth="4" refnumber="16-10a-1802(11)(a)(i)" start="0">(11)(a)(i)</xref>, the highest closing sale price during the 30-day period immediately preceding the date in question on the principal United States securities exchange registered under the Exchange Act on which the stock is listed; or</subsection><subsection number="16-10a-1802(11)(a)(iii)"> if no quotation is available under Subsection <xref depth="4" refnumber="16-10a-1802(11)(a)(i)" start="0">(11)(a)(i)</xref> or <xref depth="4" refnumber="16-10a-1802(11)(a)(ii)" start="0">(ii)</xref>, the fair market value on the date in question of a share of the stock as determined by the board of directors of the corporation in good faith; and</subsection></subsection><subsection number="16-10a-1802(11)(b)"> in the case of property other than cash or stock, the fair market value of the property on the date in question as determined by the board of directors of the corporation in good faith.</subsection></subsection><subsection number="16-10a-1802(12)"> "Preferred stock" means a class or series of stock of a domestic corporation that under the bylaws or articles of incorporation of the corporation: <subsection number="16-10a-1802(12)(a)"> is entitled to receive payment of dividends before any payment of dividends on some other class or series of stock; or</subsection><subsection number="16-10a-1802(12)(b)"> is entitled in the event of a voluntary liquidation, dissolution, or winding up of the corporation to receive payment or distribution of a preferential amount before a payment or distribution is received by some other class or series of stock.</subsection></subsection><subsection number="16-10a-1802(13)"> "Stock" means: <subsection number="16-10a-1802(13)(a)"> a stock or similar security, a certificate of interest, any participation in a profit sharing agreement, a voting trust certificate, or a certificate of deposit for stock;</subsection><subsection number="16-10a-1802(13)(b)"> a security convertible, with or without consideration, into stock;</subsection><subsection number="16-10a-1802(13)(c)"> a warrant, call, or other option or privilege of buying stock without being bound to do so; or</subsection><subsection number="16-10a-1802(13)(d)"> any other security carrying a right to acquire, subscribe to, or purchase stock.</subsection></subsection><subsection number="16-10a-1802(14)"> "Stock acquisition date," with respect to a person and a domestic corporation, means the date that the person first becomes an interested shareholder of the corporation.</subsection><subsection number="16-10a-1802(15)"> "Subsidiary" of a person means any other corporation of which a majority of the voting stock is owned, directly or indirectly, by the person.</subsection><subsection number="16-10a-1802(16)"> "Voting stock" means shares of capital stock of a corporation entitled to vote generally in the election of directors.</subsection></section><section number="16-10a-1803"><histories><history>Enacted by Chapter <modchap sess="2017GS">439</modchap>, 2017 General Session</history><modyear>2017</modyear></histories><catchline>Business combinations.</catchline><subsection number="16-10a-1803(1)"> Notwithstanding anything to the contrary in this chapter, except Section <xref depth="3" refnumber="16-10a-1804" start="0">16-10a-1804</xref>, a domestic corporation may not engage in a business combination with an interested shareholder of the corporation for a period of five years following the interested shareholder's stock acquisition date unless the business combination or the purchase of stock made by the interested shareholder on the interested shareholder's stock acquisition date is approved by the board of directors of the corporation before the interested shareholder's stock acquisition date.</subsection><subsection number="16-10a-1803(2)"><subsection number="16-10a-1803(2)(a)"> If a good faith proposal is made in writing to the board of directors of the corporation regarding a business combination, the board of directors shall respond in writing, within 30 days or such shorter period, if any, as may be required by the Exchange Act, setting forth the board of directors' reasons for the board of directors' decision regarding the proposal.</subsection><subsection number="16-10a-1803(2)(b)"> If a good faith proposal to purchase stock is made in writing to the board of directors of the corporation, unless the board of directors responds affirmatively in writing within 30 days or such shorter period, if any, as may be required by the Exchange Act, the board of directors is considered to have disapproved the proposal.</subsection></subsection><subsection number="16-10a-1803(3)"> Notwithstanding anything to the contrary in this chapter, except Subsection <xref depth="4" refnumber="16-10a-1803(2)" start="0">(2)</xref> and Section <xref depth="3" refnumber="16-10a-1804" start="0">16-10a-1804</xref>, a domestic corporation may not engage at any time in any business combination with an interested shareholder of the corporation other than a business combination specified in Subsection <xref depth="4" refnumber="16-10a-1803(4)" start="0">(4)</xref>, <xref depth="4" refnumber="16-10a-1803(5)" start="0">(5)</xref>, or <xref depth="4" refnumber="16-10a-1803(6)" start="0">(6)</xref>.</subsection><subsection number="16-10a-1803(4)"> A domestic corporation may engage in a business combination with an interested shareholder of the corporation if: <subsection number="16-10a-1803(4)(a)"> the business combination is approved by the board of directors of the corporation before the interested shareholder's stock acquisition date; or</subsection><subsection number="16-10a-1803(4)(b)"> the purchase of stock made by the interested shareholder on the interested shareholder's stock acquisition date is approved by the board of directors of the corporation before the interested shareholder's stock acquisition date.</subsection></subsection><subsection number="16-10a-1803(5)"> A domestic corporation may engage in a business combination with an interested shareholder of the corporation if the business combination is approved by the affirmative vote of the holders of a majority of the outstanding voting stock not beneficially owned by the interested shareholder or an affiliate or associate of the interested shareholder at a meeting called for that purpose no earlier than five years after the interested shareholder's stock acquisition date.</subsection><subsection number="16-10a-1803(6)"> A domestic corporation may engage in a business combination with an interested shareholder of the corporation if the business combination meets all of the following conditions: <subsection number="16-10a-1803(6)(a)"> the aggregate amount of the cash and the market value as of the consummation date of consideration, other than cash to be received per share by holders of outstanding shares of common stock of the corporation in the business combination, is at least equal to the higher of the following:<subsection number="16-10a-1803(6)(a)(i)"> the sum of: <subsection number="16-10a-1803(6)(a)(i)(A)"> the highest per share price paid by the interested shareholder at a time when the interested shareholder was the beneficial owner, directly or indirectly, of 5% or more of the outstanding voting stock of the corporation, for any shares of common stock of the same class or series acquired by the interested shareholder within the five-year period immediately before the announcement date with respect to the business combination, or within the five-year period immediately before, or in, the transaction in which the interested shareholder became an interested shareholder, whichever is higher; and</subsection><subsection number="16-10a-1803(6)(a)(i)(B)"> interest compounded annually from the earliest date on which the highest per share acquisition price was paid through the consummation date at the rate for one-year United States treasury obligations from time to time in effect, less the aggregate amount of any cash dividends paid, and the market value of any dividends paid other than in cash, per share of common stock since the earliest date, up to the amount of the interest; and</subsection></subsection><subsection number="16-10a-1803(6)(a)(ii)"> the sum of: <subsection number="16-10a-1803(6)(a)(ii)(A)"> the higher of the market value per share of common stock on the announcement date with respect to the business combination or on the interested shareholder's stock acquisition date; and</subsection><subsection number="16-10a-1803(6)(a)(ii)(B)"> interest compounded annually from the acquisition date through the consummation date at the rate for one-year United States treasury obligations from time to time in effect, less the aggregate amount of any cash dividends paid, and the market value of any dividends paid other than in cash, per share of common stock since the acquisition date, up to the amount of the interest;</subsection></subsection></subsection><subsection number="16-10a-1803(6)(b)"> the aggregate amount of the cash and the market value as of the consummation date of consideration other than cash to be received per share by holders of outstanding shares of any class or series of stock, other than common stock, of the corporation is at least equal to the highest of the following, whether or not the interested shareholder has previously acquired any shares of the class or series of stock:<subsection number="16-10a-1803(6)(b)(i)"> the sum of: <subsection number="16-10a-1803(6)(b)(i)(A)"> the higher of the highest per share price paid by the interested shareholder at a time when the interested shareholder was the beneficial owner, directly or indirectly, of 5% or more of the outstanding voting stock of the corporation, for any shares of the class or series of stock acquired by the interested shareholder within the five-year period immediately before the announcement date with respect to the business combination, or within the five-year period immediately before, or in, the transaction in which the interested shareholder became an interested shareholder, whichever is higher; and</subsection><subsection number="16-10a-1803(6)(b)(i)(B)"> interest compounded annually from the earliest date on which the highest per share acquisition price was paid through the consummation date at the rate for one-year United States treasury obligations from time to time in effect, less the aggregate amount of any cash dividends paid, and the market value of any dividends paid other than in cash, per share of the class or series of stock since the earliest date, up to the amount of the interest;</subsection></subsection><subsection number="16-10a-1803(6)(b)(ii)"> the sum of: <subsection number="16-10a-1803(6)(b)(ii)(A)"> the highest preferential amount per share to which the holders of shares of the class or series of stock are entitled in the event of a voluntary liquidation, dissolution, or winding up of the corporation; and</subsection><subsection number="16-10a-1803(6)(b)(ii)(B)"> the aggregate amount of any dividends declared or due as to which the holders are entitled before payment of dividends on some other class or series of stock, unless the aggregate amount of the dividends is included in the preferential amount; and</subsection></subsection><subsection number="16-10a-1803(6)(b)(iii)"> the sum of: <subsection number="16-10a-1803(6)(b)(iii)(A)"> the market value per share of the class or series of stock on the announcement date with respect to the business combination or on the interested shareholder's stock acquisition date, whichever is higher; and</subsection><subsection number="16-10a-1803(6)(b)(iii)(B)"> interest compounded annually from the acquisition date through the consummation date at the rate for one-year United States treasury obligations from time to time in effect, less the aggregate amount of any cash dividends paid, and the market value of any dividends paid other than in cash, per share of the class or series of stock since the acquisition date, up to the amount of the interest;</subsection></subsection></subsection><subsection number="16-10a-1803(6)(c)"> the consideration to be received by holders of a particular class or series of outstanding stock, including common stock of the corporation, in the business combination is in cash or in the same form as the interested shareholder has used to acquire the largest number of shares of the class or series of stock previously acquired by the interested shareholder, and the consideration shall be distributed promptly;</subsection><subsection number="16-10a-1803(6)(d)"> the holders of all outstanding shares of stock of the corporation not beneficially owned by the interested shareholder immediately before the consummation of the business combination are entitled to receive in the business combination cash or other consideration for the shares in compliance with Subsections <xref depth="4" refnumber="16-10a-1803(6)(a)" start="0">(6)(a)</xref>, <xref depth="4" refnumber="16-10a-1803(6)(b)" start="0">(b)</xref>, and <xref depth="4" refnumber="16-10a-1803(6)(c)" start="0">(c)</xref>; and</subsection><subsection number="16-10a-1803(6)(e)"> after the interested shareholder's stock acquisition date and before the consummation date with respect to the business combination, the interested shareholder has not become the beneficial owner of any additional shares of voting stock of the corporation except:<subsection number="16-10a-1803(6)(e)(i)"> as part of the transaction that resulted in the interested shareholder becoming an interested shareholder;</subsection><subsection number="16-10a-1803(6)(e)(ii)"> by virtue of proportionate stock splits, stock dividends, or other distributions of stock in respect of stock not constituting a business combination under Subsection <xref depth="4" refnumber="16-10a-1802(5)(e)" start="0">16-10a-1802(5)(e)</xref>;</subsection><subsection number="16-10a-1803(6)(e)(iii)"> through a business combination meeting the conditions of Subsection <xref depth="4" refnumber="16-10a-1803(5)" start="0">(5)</xref>; or</subsection><subsection number="16-10a-1803(6)(e)(iv)"> through purchase by the interested shareholder at any price that, if the price is paid in an otherwise permissible business combination the announcement date and consummation date of which were the date of the purchase, would have satisfied the requirements of Subsections <xref depth="4" refnumber="16-10a-1803(4)" start="0">(4)</xref> and <xref depth="4" refnumber="16-10a-1803(5)" start="0">(5)</xref> and this Subsection <xref depth="4" refnumber="16-10a-1803(6)" start="0">(6)</xref>.</subsection></subsection></subsection></section><section number="16-10a-1804"><histories><history>Enacted by Chapter <modchap sess="2017GS">439</modchap>, 2017 General Session</history><modyear>2017</modyear></histories><catchline>Scope of part.</catchline><tab/>This part does not apply to:<subsection number="16-10a-1804(1)"> a business combination of a domestic corporation that does not have a class of voting stock registered with the Securities and Exchange Commission pursuant to Exchange Act, Sec. 12, 15 U.S.C. Sec. 78l, unless the articles of incorporation provide otherwise;</subsection><subsection number="16-10a-1804(2)"> a business combination of a domestic corporation whose articles of incorporation are amended to provide that the domestic corporation is subject to this part that: <subsection number="16-10a-1804(2)(a)"> did not have a class of voting stock registered with the Securities and Exchange Commission pursuant to Exchange Act, Sec. 12, 15 U.S.C. Sec. 78l, on the effective date of the amendment; and</subsection><subsection number="16-10a-1804(2)(b)"> is a business combination with an interested shareholder whose stock acquisition date is before the effective date of the amendment;</subsection></subsection><subsection number="16-10a-1804(3)"> a business combination of a domestic corporation: <subsection number="16-10a-1804(3)(a)"> the original articles of incorporation of which contain a provision expressly electing not to be governed by this part;</subsection><subsection number="16-10a-1804(3)(b)"> that adopts an amendment to the corporation's bylaws before December 31, 2017, expressly electing not to be governed by this part; or</subsection><subsection number="16-10a-1804(3)(c)"> that adopts an amendment to the corporation's bylaws, approved by the affirmative vote of a majority of votes of the outstanding voting stock of the corporation, excluding the voting stock of interested shareholders and the interested shareholders' affiliates and associates, expressly electing not to be governed by this part, provided that the amendment to the bylaws:<subsection number="16-10a-1804(3)(c)(i)"> may not be effective until 18 months after the vote of the corporation's shareholders; and</subsection><subsection number="16-10a-1804(3)(c)(ii)"> may not apply to a business combination of the corporation with an interested shareholder whose stock acquisition date is on or before the effective date of the amendment;</subsection></subsection></subsection><subsection number="16-10a-1804(4)"> a domestic corporation in the mineral extractive industry, including exploration, development, sand and gravel, mining, smelting, or refining of mineral properties;</subsection><subsection number="16-10a-1804(5)"> any business combination of a domestic corporation with an interested shareholder of the corporation that became an interested shareholder inadvertently, if the interested shareholder: <subsection number="16-10a-1804(5)(a)"> as soon as practicable, divests itself of a sufficient amount of the voting stock of the corporation so that it no longer is the beneficial owner, directly or indirectly, of 20% or more of the outstanding voting stock of the corporation; and</subsection><subsection number="16-10a-1804(5)(b)"> would not at any time within the five-year period preceding the announcement date with respect to the business combination have been an interested shareholder but for the inadvertent acquisition; or</subsection></subsection><subsection number="16-10a-1804(6)"> any business combination with an interested shareholder who was the beneficial owner, directly or indirectly, of 5% or more of the outstanding voting stock of the corporation on May 9, 2017, and remained so to the interested shareholder's stock acquisition date.</subsection></section></part><part number="16-10a-19"><catchline>Oppressive Conduct in a Closely Held Corporation</catchline><section number="16-10a-1901"><histories><history>Enacted by Chapter <modchap sess="2019GS">272</modchap>, 2019 General Session</history><modyear>2019</modyear></histories><catchline>Definition.</catchline><tab/>As used in this part:<subsection number="16-10a-1901(1)"> "Oppressive conduct" means a continuing course of conduct, a significant action, or a series of actions that substantially interferes with the interests of a shareholder as a shareholder.</subsection><subsection number="16-10a-1901(2)"> "Oppressive conduct" may include: <subsection number="16-10a-1901(2)(a)"> termination of a shareholder's employment; or</subsection><subsection number="16-10a-1901(2)(b)"> limitations on a shareholder's employment benefits to the extent that the limitations interfere with distributions or other shareholder interests disproportionately as to the affected shareholder.</subsection></subsection><subsection number="16-10a-1901(3)"> "Oppressive conduct" does not include an action allowed by an agreement, the corporation's articles of incorporation, the corporation's bylaws, or a consistently applied written corporate policy or procedure.</subsection></section><section number="16-10a-1902"><histories><history>Enacted by Chapter <modchap sess="2019GS">272</modchap>, 2019 General Session</history><modyear>2019</modyear></histories><catchline>Shareholder cause of action -- Relief.</catchline><subsection number="16-10a-1902(1)"> A shareholder of a closely held corporation who is injured by oppressive conduct may bring a private cause of action against the closely held corporation.</subsection><subsection number="16-10a-1902(2)"><subsection number="16-10a-1902(2)(a)"> If a court finds that oppressive conduct toward the shareholder occurred, the court shall order one or more persons described in Subsection <xref depth="4" refnumber="16-10a-1902(2)(b)" start="0">(2)(b)</xref> to purchase the injured shareholder's shares in the closely held corporation at fair value.</subsection><subsection number="16-10a-1902(2)(b)"> A court may order that any of the following purchase the shares of the shareholder as described in Subsection <xref depth="4" refnumber="16-10a-1902(2)(a)" start="0">(2)(a)</xref>:<subsection number="16-10a-1902(2)(b)(i)"> the closely held corporation;</subsection><subsection number="16-10a-1902(2)(b)(ii)"> an officer of the closely held corporation;</subsection><subsection number="16-10a-1902(2)(b)(iii)"> a director of the closely held corporation; or</subsection><subsection number="16-10a-1902(2)(b)(iv)"> a shareholder of the closely held corporation that is responsible for the oppressive conduct.</subsection></subsection></subsection></section></part></chapter><chapter number="16-10b"><catchline>Benefit Corporation Act</catchline><part number="16-10b-1"><catchline>General Provisions</catchline><section number="16-10b-101"><histories><history>Enacted by Chapter <modchap sess="2014GS">394</modchap>, 2014 General Session</history><modyear>2014</modyear></histories><catchline>Title.</catchline><tab/>This chapter is known as the "Benefit Corporation Act."</section><section number="16-10b-102"><histories><history>Enacted by Chapter <modchap sess="2014GS">394</modchap>, 2014 General Session</history><modyear>2014</modyear></histories><catchline>Application and effect of chapter.</catchline><subsection number="16-10b-102(1)"> This chapter applies to a benefit corporation organized under this chapter.</subsection><subsection number="16-10b-102(2)"> The existence of a provision of this chapter does not of itself create an implication that a contrary or different rule of law is applicable to a business corporation that is not a benefit corporation. This chapter does not affect a statute or rule of law that is applicable to a business corporation that is not a benefit corporation.</subsection><subsection number="16-10b-102(3)"><subsection number="16-10b-102(3)(a)"> Except as otherwise provided in this chapter, <xref depth="1" refnumber="16-10a" start="1">Chapter 10a, Utah Revised Business Corporation Act</xref>, is applicable to a benefit corporation.</subsection><subsection number="16-10b-102(3)(b)"> A benefit corporation may be subject simultaneously to this chapter and other chapters of this title, including <xref depth="1" refnumber="16-11" start="1">Chapter 11, Professional Corporation Act</xref>.</subsection><subsection number="16-10b-102(3)(c)"> This chapter controls over <xref depth="1" refnumber="16-10a" start="1">Chapter 10a, Utah Revised Business Corporation Act</xref>, and <xref depth="1" refnumber="16-11" start="1">Chapter 11, Professional Corporation Act</xref>, or other laws.</subsection></subsection><subsection number="16-10b-102(4)"> The articles of incorporation or bylaws of a benefit corporation may not limit, be inconsistent with, or supersede a provision of this chapter.</subsection></section><section number="16-10b-103"><histories><history>Amended by Chapter <modchap sess="2015GS">20</modchap>, 2015 General Session</history><modyear>2015</modyear></histories><catchline>Definitions.</catchline><tab/>As used in this chapter:<subsection number="16-10b-103(1)"> "Annual benefit report" means a report required under Section <xref depth="3" refnumber="16-10b-401" start="0">16-10b-401</xref>.</subsection><subsection number="16-10b-103(2)"> "Benefit corporation" means a business corporation: <subsection number="16-10b-103(2)(a)"> that elects to become subject to this chapter; and</subsection><subsection number="16-10b-103(2)(b)"> the status of which as a benefit corporation has not been terminated.</subsection></subsection><subsection number="16-10b-103(3)"> "Benefit director" means the director designated as the benefit director of a benefit corporation under Section <xref depth="3" refnumber="16-10b-302" start="0">16-10b-302</xref>.</subsection><subsection number="16-10b-103(4)"> "Benefit enforcement proceeding" means a proceeding in a court of competent jurisdiction for: <subsection number="16-10b-103(4)(a)"> failure of a benefit corporation to pursue or create general public benefit or a specific public benefit purpose set forth in its articles of incorporation; or</subsection><subsection number="16-10b-103(4)(b)"> a violation of an obligation, duty, or standard of conduct under this chapter.</subsection></subsection><subsection number="16-10b-103(5)"> "Benefit officer" means the individual designated as the benefit officer of a benefit corporation under Section <xref depth="3" refnumber="16-10b-304" start="0">16-10b-304</xref>.</subsection><subsection number="16-10b-103(6)"> "Business corporation" means a corporation formed under <xref depth="1" refnumber="16-10a" start="1">Chapter 10a, Utah Revised Business Corporation Act</xref>, or <xref depth="1" refnumber="16-11" start="1">Chapter 11, Professional Corporation Act</xref>.</subsection><subsection number="16-10b-103(7)"> "Division" means the Division of Corporations and Commercial Code.</subsection><subsection number="16-10b-103(8)"> "Executive officer" means: <subsection number="16-10b-103(8)(a)"> a benefit corporation's president;</subsection><subsection number="16-10b-103(8)(b)"> a vice president of the benefit corporation in charge of a principal business unit, division, or function; or</subsection><subsection number="16-10b-103(8)(c)"> any other officer who performs a policy-making function for the benefit corporation.</subsection></subsection><subsection number="16-10b-103(9)"> "General public benefit" means a material positive impact on society and the environment: <subsection number="16-10b-103(9)(a)"> taken as a whole;</subsection><subsection number="16-10b-103(9)(b)"> assessed against a third-party standard; and</subsection><subsection number="16-10b-103(9)(c)"> from the business of a benefit corporation.</subsection></subsection><subsection number="16-10b-103(10)"> "Immediate family" means a parent, spouse, surviving spouse, child, or sibling of a person.</subsection><subsection number="16-10b-103(11)"><subsection number="16-10b-103(11)(a)"> "Independent" means having no material relationship with a benefit corporation or a subsidiary of the benefit corporation.</subsection><subsection number="16-10b-103(11)(b)"> Serving as a benefit director or benefit officer does not make an individual not independent.</subsection><subsection number="16-10b-103(11)(c)"> A material relationship between an individual and a benefit corporation or any of its subsidiaries will be conclusively presumed to exist if one or more of the following apply:<subsection number="16-10b-103(11)(c)(i)"> the individual is, or has been within the last three years, an employee other than a benefit officer of the benefit corporation or a subsidiary of the benefit corporation;</subsection><subsection number="16-10b-103(11)(c)(ii)"> an immediate family member of the individual is, or has been within the last three years, an executive officer other than a benefit officer of the benefit corporation or a subsidiary of the benefit corporation; or</subsection><subsection number="16-10b-103(11)(c)(iii)"> there is beneficial or record ownership of 5% or more of the outstanding shares of the benefit corporation, calculated as if all outstanding rights to acquire equity interests in the benefit corporation had been exercised, by: <subsection number="16-10b-103(11)(c)(iii)(A)"> the individual; or</subsection><subsection number="16-10b-103(11)(c)(iii)(B)"> an entity of which the individual is a director, an officer, or a manager, or in which the individual owns beneficially or of record 5% or more of the outstanding equity interests, calculated as if all outstanding rights to acquire equity interests in the entity had been exercised.</subsection></subsection></subsection></subsection><subsection number="16-10b-103(12)"> "Minimum status vote" means: <subsection number="16-10b-103(12)(a)"> in the case of a business corporation, in addition to any other required approval or vote, the satisfaction of the following conditions:<subsection number="16-10b-103(12)(a)(i)"> the shareholders of every class or series may vote as a separate voting group on the corporate action regardless of a limitation stated in the articles of incorporation or bylaws on the voting rights of a class or series; and</subsection><subsection number="16-10b-103(12)(a)(ii)"> the corporate action is required to be approved by vote of the shareholders of each class or series entitled to cast at least two-thirds of the votes that all shareholders of the class or series are entitled to cast on the action; or</subsection></subsection><subsection number="16-10b-103(12)(b)"> in the case of a domestic entity other than a business corporation, in addition to any other required approval, vote, or consent, the satisfaction of the following conditions:<subsection number="16-10b-103(12)(b)(i)"> the holders of every class or series of equity interest in the entity that are entitled to receive a distribution of any kind from the entity may vote on or consent to the action regardless of any otherwise applicable limitation on the voting or consent rights of a class or series; and</subsection><subsection number="16-10b-103(12)(b)(ii)"> the action must be approved by vote or consent of the holders described in Subsection <xref depth="4" refnumber="16-10b-103(12)(b)(i)" start="0">(12)(b)(i)</xref> entitled to cast at least two-thirds of the votes or consents that all of those holders are entitled to cast on the action.</subsection></subsection></subsection><subsection number="16-10b-103(13)"> "Publicly traded corporation" means a business corporation that has shares listed on a national securities exchange or traded in a market maintained by one or more members of a national securities association.</subsection><subsection number="16-10b-103(14)"> "Specific public benefit" includes: <subsection number="16-10b-103(14)(a)"> providing low-income or underserved individuals or communities with beneficial products or services;</subsection><subsection number="16-10b-103(14)(b)"> promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business;</subsection><subsection number="16-10b-103(14)(c)"> protecting or restoring the environment;</subsection><subsection number="16-10b-103(14)(d)"> improving human health;</subsection><subsection number="16-10b-103(14)(e)"> promoting the arts, sciences, or advancement of knowledge;</subsection><subsection number="16-10b-103(14)(f)"> increasing the flow of capital to entities with a purpose to benefit society or the environment; and</subsection><subsection number="16-10b-103(14)(g)"> conferring any other particular benefit on society or the environment.</subsection></subsection><subsection number="16-10b-103(15)"> "Subsidiary" means, in relation to a person, an entity in which the person owns beneficially or of record 50% or more of the outstanding equity interests, calculated as if all outstanding rights to acquire equity interests in the entity had been exercised.</subsection><subsection number="16-10b-103(16)"> "Third-party standard" means a recognized standard for defining, reporting, and assessing corporate social and environmental performance that: <subsection number="16-10b-103(16)(a)"> assesses the effect of the business and its operations upon the interests listed in Subsections <xref depth="4" refnumber="16-10b-301(1)(a)(ii)" start="0">16-10b-301(1)(a)(ii)</xref>, <xref depth="4" refnumber="16-10b-301(1)(a)(iii)" start="0">(iii)</xref>, <xref depth="4" refnumber="16-10b-301(1)(a)(iv)" start="0">(iv)</xref>, and <xref depth="4" refnumber="16-10b-301(1)(a)(v)" start="0">(v)</xref>;</subsection><subsection number="16-10b-103(16)(b)"> is developed by an entity that is not controlled by the benefit corporation;</subsection><subsection number="16-10b-103(16)(c)"> is developed by an entity that both:<subsection number="16-10b-103(16)(c)(i)"> has access to necessary expertise to assess overall corporate social and environmental performance; and</subsection><subsection number="16-10b-103(16)(c)(ii)"> uses a balanced multistakeholder approach to develop the standard, including a reasonable public comment period; or</subsection></subsection><subsection number="16-10b-103(16)(d)"> makes the following information publicly available:<subsection number="16-10b-103(16)(d)(i)"> about the standard: <subsection number="16-10b-103(16)(d)(i)(A)"> the criteria considered when measuring the overall social and environmental performance of a business; and</subsection><subsection number="16-10b-103(16)(d)(i)(B)"> the relative weightings, if any, of those criteria; and</subsection></subsection><subsection number="16-10b-103(16)(d)(ii)"> about the development and revision of the standard: <subsection number="16-10b-103(16)(d)(ii)(A)"> the identity of the directors, officers, material owners, and the governing body of the entity that developed and controls revisions to the standard;</subsection><subsection number="16-10b-103(16)(d)(ii)(B)"> the process by which revisions to the standard and changes to the membership of the governing body are made; or</subsection><subsection number="16-10b-103(16)(d)(ii)(C)"> an accounting of the revenue and sources of financial support for the entity, with sufficient detail to disclose a relationship that could reasonably be considered to present a potential conflict of interest.</subsection></subsection></subsection></subsection></section><section number="16-10b-104"><histories><history>Enacted by Chapter <modchap sess="2014GS">394</modchap>, 2014 General Session</history><modyear>2014</modyear></histories><catchline>Incorporation of benefit corporation.</catchline><tab/>A person shall incorporate a benefit corporation in accordance with <xref depth="2" refnumber="16-10a-2" start="1">Chapter 10a, Part 2, Incorporation</xref>, but its articles of incorporation shall also state that it is a benefit corporation.</section><section number="16-10b-105"><histories><history>Enacted by Chapter <modchap sess="2014GS">394</modchap>, 2014 General Session</history><modyear>2014</modyear></histories><catchline>Election of benefit corporation status.</catchline><subsection number="16-10b-105(1)"> A business corporation may become a benefit corporation under this chapter by amending its articles of incorporation so that the articles of incorporation contain, in addition to the requirements of Section <xref depth="3" refnumber="16-10a-202" start="0">16-10a-202</xref>, a statement that the corporation is a benefit corporation. To be effective, the amendment must be adopted by at least the minimum status vote.</subsection><subsection number="16-10b-105(2)"><subsection number="16-10b-105(2)(a)"> Except as provided in Subsection <xref depth="4" refnumber="16-10b-105(2)(b)" start="0">(2)(b)</xref>, if a domestic entity that is not a benefit corporation is a party to a merger or the exchanging entity in a share exchange and the surviving entity in the merger or share exchange is to be a benefit corporation, the plan of merger or share exchange must be approved by the domestic entity by at least the minimum status vote.</subsection><subsection number="16-10b-105(2)(b)"> Subsection <xref depth="4" refnumber="16-10b-105(2)(a)" start="0">(2)(a)</xref> does not apply in the case of a corporation that is a party to a merger if the shareholders of the corporation are not entitled to vote on the merger pursuant to Section <xref depth="3" refnumber="16-10a-1104" start="0">16-10a-1104</xref>.</subsection></subsection></section><section number="16-10b-106"><histories><history>Enacted by Chapter <modchap sess="2014GS">394</modchap>, 2014 General Session</history><modyear>2014</modyear></histories><catchline>Termination of benefit corporation status.</catchline><subsection number="16-10b-106(1)"> A benefit corporation may terminate its status as a benefit corporation and cease to be subject to this chapter by amending its articles of incorporation to delete the provision required by Section <xref depth="3" refnumber="16-10b-104" start="0">16-10b-104</xref> or <xref depth="3" refnumber="16-10b-105" start="0">16-10b-105</xref> to be stated in the articles of incorporation of a benefit corporation. To be effective, the amendment must be adopted by at least the minimum status vote.</subsection><subsection number="16-10b-106(2)"><subsection number="16-10b-106(2)(a)"> Except as provided in Subsection <xref depth="4" refnumber="16-10b-106(2)(b)" start="0">(2)(b)</xref>, if a plan of merger or share exchange would have the effect of terminating the status of a business corporation as a benefit corporation, the plan must be adopted by at least the minimum status vote to be effective.</subsection><subsection number="16-10b-106(2)(b)"> Subsection <xref depth="4" refnumber="16-10b-106(2)(a)" start="0">(2)(a)</xref> does not apply in the case of a corporation that is a party to a merger if the shareholders of the corporation are not entitled to vote on the merger pursuant to Section <xref depth="3" refnumber="16-10a-1104" start="0">16-10a-1104</xref>.</subsection></subsection><subsection number="16-10b-106(3)"> A sale, lease, exchange, or other disposition of all or substantially all of the assets of a benefit corporation, unless the transaction is in the usual and regular course of business, is not effective unless the transaction is approved by at least the minimum status vote.</subsection></section><section number="16-10b-107"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Provisions Applicable to All Business Entities applicable.</catchline>Chapter 1a, Provisions Applicable to All Business Entities, applies to the provisions of this chapter.</section></part><part number="16-10b-2"><catchline>Corporate Purposes</catchline><section number="16-10b-201"><histories><history>Enacted by Chapter <modchap sess="2014GS">394</modchap>, 2014 General Session</history><modyear>2014</modyear></histories><catchline>Corporate purposes.</catchline><subsection number="16-10b-201(1)"> A benefit corporation shall have a purpose of creating general public benefit. This purpose is in addition to its purpose under Section <xref depth="3" refnumber="16-10a-301" start="0">16-10a-301</xref>.</subsection><subsection number="16-10b-201(2)"> The articles of incorporation of a benefit corporation may identify one or more specific public benefits that it is the purpose of the benefit corporation to create in addition to its purposes under Section <xref depth="3" refnumber="16-10a-301" start="0">16-10a-301</xref> and Subsection <xref depth="4" refnumber="16-10b-201(1)" start="0">(1)</xref>. The identification of a specific public benefit under this Subsection <xref depth="4" refnumber="16-10b-201(2)" start="0">(2)</xref> does not limit the purpose of a benefit corporation to create general public benefit under Subsection <xref depth="4" refnumber="16-10b-201(1)" start="0">(1)</xref>.</subsection><subsection number="16-10b-201(3)"> The creation of general public benefit and a specific public benefit under Subsections <xref depth="4" refnumber="16-10b-201(1)" start="0">(1)</xref> and <xref depth="4" refnumber="16-10b-201(2)" start="0">(2)</xref> is considered in the best interests of the benefit corporation.</subsection><subsection number="16-10b-201(4)"> A benefit corporation may amend its articles of incorporation to add, amend, or delete the identification of a specific public benefit that it is the purpose of the benefit corporation to create. To be effective, the amendment must be adopted by at least the minimum status vote.</subsection><subsection number="16-10b-201(5)"> A professional corporation that is a benefit corporation does not violate Section <xref depth="3" refnumber="16-11-6" start="0">16-11-6</xref> by having the purpose to create general public benefit or a specific public benefit.</subsection></section></part><part number="16-10b-3"><catchline>Accountability</catchline><section number="16-10b-301"><histories><history>Enacted by Chapter <modchap sess="2014GS">394</modchap>, 2014 General Session</history><modyear>2014</modyear></histories><catchline>Standard of conduct for directors.</catchline><subsection number="16-10b-301(1)"> Subject to Subsection <xref depth="4" refnumber="16-10b-301(2)" start="0">(2)</xref>, the board of directors, committees of the board of directors, and individual directors of a benefit corporation, in discharging the duties of their respective positions and in considering the best interests of the benefit corporation: <subsection number="16-10b-301(1)(a)"> shall consider the effects of an action or inaction upon:<subsection number="16-10b-301(1)(a)(i)"> the shareholders of the benefit corporation;</subsection><subsection number="16-10b-301(1)(a)(ii)"> the employees and workforce of the benefit corporation, its subsidiaries, and its suppliers;</subsection><subsection number="16-10b-301(1)(a)(iii)"> the interests of customers as beneficiaries of the general public benefit or specific public benefit purposes of the benefit corporation;</subsection><subsection number="16-10b-301(1)(a)(iv)"> community and societal factors, including those of each community in which offices or facilities of the benefit corporation, its subsidiaries, or its suppliers are located;</subsection><subsection number="16-10b-301(1)(a)(v)"> the local and global environment;</subsection><subsection number="16-10b-301(1)(a)(vi)"> the short-term and long-term interests of the benefit corporation, including benefits that may accrue to the benefit corporation from its long-term plans and the possibility that these interests may be best served by the continued independence of the benefit corporation; and</subsection><subsection number="16-10b-301(1)(a)(vii)"> the ability of the benefit corporation to accomplish its general public benefit purpose and a specific public benefit purpose; and</subsection></subsection><subsection number="16-10b-301(1)(b)"> may consider other pertinent factors or the interests of any other group that they consider appropriate.</subsection></subsection><subsection number="16-10b-301(2)"><subsection number="16-10b-301(2)(a)"> Subject to Subsection <xref depth="4" refnumber="16-10b-301(2)(b)" start="0">(2)(b)</xref>, in discharging the duties of their respective positions and in considering the best interests of the benefit corporation, the board of directors, committees of the board of directors, and individual directors of a benefit corporation need not give priority to a particular interest or factor referred to in Subsection <xref depth="4" refnumber="16-10b-301(1)" start="0">(1)</xref> over any other interest or factor.</subsection><subsection number="16-10b-301(2)(b)"> Subsection <xref depth="4" refnumber="16-10b-301(2)(a)" start="0">(2)(a)</xref> does not apply if the benefit corporation has stated in its articles of incorporation its intention to give priority to certain interests or factors related to its accomplishment of its general public benefit purpose or of a specific public benefit purpose identified in its articles of incorporation.</subsection></subsection><subsection number="16-10b-301(3)"> The consideration of interests and factors in the manner required by Subsections <xref depth="4" refnumber="16-10b-301(1)" start="0">(1)</xref> and <xref depth="4" refnumber="16-10b-301(2)" start="0">(2)</xref> does not constitute a violation of Section <xref depth="3" refnumber="16-10a-840" start="0">16-10a-840</xref>.</subsection><subsection number="16-10b-301(4)"> Except as provided in the articles of incorporation or bylaws, a director is not personally liable for monetary damages for: <subsection number="16-10b-301(4)(a)"> an action or inaction in the course of performing the duties of a director under Subsections <xref depth="4" refnumber="16-10b-301(1)" start="0">(1)</xref> and <xref depth="4" refnumber="16-10b-301(2)" start="0">(2)</xref> if the director performed the duties of office in compliance with Section <xref depth="3" refnumber="16-10a-840" start="0">16-10a-840</xref> and this section; or</subsection><subsection number="16-10b-301(4)(b)"> failure of the benefit corporation to pursue or create general public benefit or specific public benefit.</subsection></subsection><subsection number="16-10b-301(5)"> A director does not have a duty to a person that is a beneficiary of the general public benefit purpose or a specific public benefit purpose of a benefit corporation arising from the status of the person as a beneficiary.</subsection></section><section number="16-10b-302"><histories><history>Enacted by Chapter <modchap sess="2014GS">394</modchap>, 2014 General Session</history><modyear>2014</modyear></histories><catchline>Benefit director.</catchline><subsection number="16-10b-302(1)"> The board of directors of a benefit corporation that is a publicly traded corporation shall, and the board of directors of any other benefit corporation may, include a director, who: <subsection number="16-10b-302(1)(a)"> is designated the benefit director; and</subsection><subsection number="16-10b-302(1)(b)"> shall have, in addition to the powers, duties, rights, and immunities of the other directors of the benefit corporation, the powers, duties, rights, and immunities provided in this chapter.</subsection></subsection><subsection number="16-10b-302(2)"><subsection number="16-10b-302(2)(a)"> A benefit director shall be elected, and may be removed, in the manner provided by Sections <xref depth="3" refnumber="16-10a-801" start="0">16-10a-801</xref> through <xref depth="3" refnumber="16-10a-810" start="0">16-10a-810</xref>.</subsection><subsection number="16-10b-302(2)(b)"> Except as provided in Subsection <xref depth="4" refnumber="16-10b-302(6)" start="0">(6)</xref>, the benefit director shall be an individual who is independent.</subsection><subsection number="16-10b-302(2)(c)"> The benefit director may serve as the benefit officer at the same time as serving as the benefit director.</subsection><subsection number="16-10b-302(2)(d)"> The articles of incorporation or bylaws of a benefit corporation may prescribe additional qualifications of the benefit director not inconsistent with this Subsection <xref depth="4" refnumber="16-10b-302(2)" start="0">(2)</xref>.</subsection></subsection><subsection number="16-10b-302(3)"> The benefit director shall prepare, and the benefit corporation shall include in the annual benefit report to shareholders required by Section <xref depth="3" refnumber="16-10b-401" start="0">16-10b-401</xref>, the opinion of the benefit director on all of the following: <subsection number="16-10b-302(3)(a)"> whether the benefit corporation acted in accordance with its general public benefit purpose and any specific public benefit purpose in all material respects during the period covered by the report;</subsection><subsection number="16-10b-302(3)(b)"> whether the directors and officers complied with Subsections <xref depth="4" refnumber="16-10b-301(1)" start="0">16-10b-301(1)</xref> and <xref depth="4" refnumber="16-10b-303(1)" start="0">16-10b-303(1)</xref>, respectively; and</subsection><subsection number="16-10b-302(3)(c)"> if, in the opinion of the benefit director, the benefit corporation or its directors or officers failed to act or comply in the manner described in Subsections <xref depth="4" refnumber="16-10b-302(3)(a)" start="0">(3)(a)</xref> and <xref depth="4" refnumber="16-10b-302(3)(b)" start="0">(b)</xref>, a description of the ways in which the benefit corporation or its directors or officers failed to act or comply.</subsection></subsection><subsection number="16-10b-302(4)"> The act or inaction of an individual in the capacity of a benefit director shall constitute for all purposes an act or inaction of that individual in the capacity of a director of the benefit corporation.</subsection><subsection number="16-10b-302(5)"> Regardless of whether the articles of incorporation or bylaws of a benefit corporation include a provision eliminating or limiting the personal liability of directors authorized by Section <xref depth="3" refnumber="16-10a-841" start="0">16-10a-841</xref>, a benefit director may not be personally liable for an act or omission in the capacity of a benefit director unless the act or omission constitutes self-dealing, willful misconduct, or a knowing violation of law.</subsection><subsection number="16-10b-302(6)"> The benefit director of a professional corporation does not need to be independent.</subsection></section><section number="16-10b-303"><histories><history>Enacted by Chapter <modchap sess="2014GS">394</modchap>, 2014 General Session</history><modyear>2014</modyear></histories><catchline>Standard of conduct for officers.</catchline><subsection number="16-10b-303(1)"> An officer of a benefit corporation shall consider the interests and factors described in Subsection <xref depth="4" refnumber="16-10b-301(1)" start="0">16-10b-301(1)</xref> in the manner provided in Subsections <xref depth="4" refnumber="16-10b-301(1)" start="0">16-10b-301(1)</xref> and <xref depth="4" refnumber="16-10b-301(2)" start="0">(2)</xref> if: <subsection number="16-10b-303(1)(a)"> the officer has discretion to act with respect to a matter; and</subsection><subsection number="16-10b-303(1)(b)"> it reasonably appears to the officer that the matter may have a material effect on the creation by the benefit corporation of general public benefit or a specific public benefit identified in the articles of incorporation of the benefit corporation.</subsection></subsection><subsection number="16-10b-303(2)"> The consideration of interests and factors in the manner described in Subsection <xref depth="4" refnumber="16-10b-303(1)" start="0">(1)</xref> may not constitute a violation of Section <xref depth="3" refnumber="16-10a-831" start="0">16-10a-831</xref> or <xref depth="3" refnumber="16-10a-840" start="0">16-10a-840</xref>.</subsection><subsection number="16-10b-303(3)"> Except as provided in the articles of incorporation or bylaws of a benefit corporation, an officer is not personally liable for monetary damages for: <subsection number="16-10b-303(3)(a)"> an action or inaction as an officer in the course of performing the duties of an officer under Subsection <xref depth="4" refnumber="16-10b-303(1)" start="0">(1)</xref> if the officer performed the duties of the position in compliance with Section <xref depth="3" refnumber="16-10a-831" start="0">16-10a-831</xref> or <xref depth="3" refnumber="16-10a-840" start="0">16-10a-840</xref> and this section; or</subsection><subsection number="16-10b-303(3)(b)"> failure of the benefit corporation to pursue or create general public benefit or specific public benefit.</subsection></subsection><subsection number="16-10b-303(4)"> An officer does not have a duty to a person that is a beneficiary of the general public benefit purpose or a specific public benefit purpose of a benefit corporation arising from the status of the person as a beneficiary.</subsection></section><section number="16-10b-304"><histories><history>Enacted by Chapter <modchap sess="2014GS">394</modchap>, 2014 General Session</history><modyear>2014</modyear></histories><catchline>Benefit officer.</catchline><subsection number="16-10b-304(1)"> A benefit corporation may have an officer designated as the benefit officer.</subsection><subsection number="16-10b-304(2)"> A benefit officer has: <subsection number="16-10b-304(2)(a)"> the powers and duties relating to the purpose of the corporation to create general public benefit or specific public benefit provided:<subsection number="16-10b-304(2)(a)(i)"> by the bylaws; or</subsection><subsection number="16-10b-304(2)(a)(ii)"> absent controlling provisions in the bylaws, by resolutions or orders of the board of directors; and</subsection></subsection><subsection number="16-10b-304(2)(b)"> the duty to prepare the benefit report required by Section <xref depth="3" refnumber="16-10b-401" start="0">16-10b-401</xref>.</subsection></subsection></section><section number="16-10b-305"><histories><history>Enacted by Chapter <modchap sess="2014GS">394</modchap>, 2014 General Session</history><modyear>2014</modyear></histories><catchline>Right of action.</catchline><subsection number="16-10b-305(1)"> Except in a benefit enforcement proceeding, a person may not bring an action or assert a claim against a benefit corporation or its directors or officers with respect to: <subsection number="16-10b-305(1)(a)"> failure to pursue or create general public benefit or a specific public benefit set forth in its articles of incorporation; or</subsection><subsection number="16-10b-305(1)(b)"> violation of an obligation, duty, or standard of conduct under this chapter.</subsection></subsection><subsection number="16-10b-305(2)"> A benefit corporation may not be liable for monetary damages under this chapter for a failure of the benefit corporation to pursue or create general public benefit or a specific public benefit.</subsection><subsection number="16-10b-305(3)"><subsection number="16-10b-305(3)(a)"> A benefit enforcement proceeding may be commenced or maintained only:<subsection number="16-10b-305(3)(a)(i)"> directly by the benefit corporation; or</subsection><subsection number="16-10b-305(3)(a)(ii)"> derivatively by: <subsection number="16-10b-305(3)(a)(ii)(A)"> a person or group of persons that owns beneficially or of record at least 2% of the total number of shares of a class or series outstanding at the time of the act or omission complained of;</subsection><subsection number="16-10b-305(3)(a)(ii)(B)"> a director;</subsection><subsection number="16-10b-305(3)(a)(ii)(C)"> a person or group of persons that own beneficially or of record 5% or more of the outstanding equity interests in an entity of which the benefit corporation is a subsidiary at the time of the act or omission complained of; or</subsection><subsection number="16-10b-305(3)(a)(ii)(D)"> other persons as specified in the articles of incorporation or bylaws of the benefit corporation.</subsection></subsection></subsection><subsection number="16-10b-305(3)(b)"> A benefit corporation may provide in its articles of incorporation a greater degree of ownership by a person or group of persons than those listed under Subsection <xref depth="4" refnumber="16-10b-305(3)(a)" start="0">(3)(a)</xref> to bring a derivative action.</subsection></subsection><subsection number="16-10b-305(4)"> For purposes of this section, a person is the beneficial owner of shares or equity interests if the shares or equity interests are held in a voting trust or by a nominee on behalf of the beneficial owner.</subsection></section></part><part number="16-10b-4"><catchline>Transparency</catchline><section number="16-10b-401"><histories><history>Enacted by Chapter <modchap sess="2014GS">394</modchap>, 2014 General Session</history><modyear>2014</modyear></histories><catchline>Preparation of annual benefit report.</catchline><subsection number="16-10b-401(1)"> A benefit corporation shall prepare an annual benefit report that includes all of the following: <subsection number="16-10b-401(1)(a)"> a narrative description of:<subsection number="16-10b-401(1)(a)(i)"> the ways in which the benefit corporation pursued general public benefit during the year and the extent to which general public benefit was created;</subsection><subsection number="16-10b-401(1)(a)(ii)"><subsection number="16-10b-401(1)(a)(ii)(A)"> the ways in which the benefit corporation pursued a specific public benefit that the articles of incorporation state it is the purpose of the benefit corporation to create; and</subsection><subsection number="16-10b-401(1)(a)(ii)(B)"> the extent to which that specific public benefit was created; and</subsection></subsection><subsection number="16-10b-401(1)(a)(iii)"> circumstances that have hindered the creation by the benefit corporation of general public benefit or specific public benefit;</subsection></subsection><subsection number="16-10b-401(1)(b)"> an assessment of the overall social and environmental performance of the benefit corporation against a third-party standard:<subsection number="16-10b-401(1)(b)(i)"> applied consistently with the application of that third-party standard in prior benefit reports; or</subsection><subsection number="16-10b-401(1)(b)(ii)"> accompanied by an explanation of the reasons for an inconsistent application;</subsection></subsection><subsection number="16-10b-401(1)(c)"> the name of the benefit director and the benefit officer, if any, and the address to which correspondence to each of them may be directed;</subsection><subsection number="16-10b-401(1)(d)"> the statement of the benefit director described in Subsection <xref depth="4" refnumber="16-10b-302(3)" start="0">16-10b-302(3)</xref>;</subsection><subsection number="16-10b-401(1)(e)"> an identification of the third-party standard that will be used to prepare the next benefit report of the benefit corporation and a discussion of:<subsection number="16-10b-401(1)(e)(i)"> the process and rationale for selecting that third-party standard and, if it is different from the previous third-party standard used by the benefit corporation, the reasons for the change; and</subsection><subsection number="16-10b-401(1)(e)(ii)"> any connection between the organization that established the third-party standard, or its directors, officers, or a holder of 5% or more of the governance interests in the organization, and the benefit corporation or its directors, officers, or a holder of 5% or more of the outstanding shares of the benefit corporation, including a financial or governance relationship that might materially affect the credibility of the use of the third-party standard; and</subsection></subsection><subsection number="16-10b-401(1)(f)"> if the benefit corporation has dispensed with, or restricted the discretion or powers of, the board of directors, a description of the persons that exercise the powers, duties, and rights and who have the immunities of the board of directors.</subsection></subsection><subsection number="16-10b-401(2)"> If, during the year covered by a benefit report, a benefit director resigns, refuses to stand for reelection to the position of benefit director, or is removed from the position of benefit director, and the benefit director furnishes the benefit corporation with written correspondence concerning the circumstances surrounding the resignation, refusal, or removal, the benefit report shall include that correspondence as an exhibit.</subsection><subsection number="16-10b-401(3)"> Neither the benefit report nor the assessment of the performance of the benefit corporation in the benefit report required by Subsection <xref depth="4" refnumber="16-10b-401(1)(b)" start="0">(1)(b)</xref> needs to be audited or certified by a third party.</subsection></section><section number="16-10b-402"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Availability of annual benefit report.</catchline><subsection number="16-10b-402(1)">A benefit corporation shall send its annual benefit report required by Section <xref depth="3" refnumber="16-10b-401" start="0">16-10b-401</xref> to each shareholder on the earlier of:<subsection number="16-10b-402(1)(a)">120 days following the end of the fiscal year of the benefit corporation; or</subsection><subsection number="16-10b-402(1)(b)">the same time that the benefit corporation delivers another annual report to its shareholders.</subsection></subsection><subsection number="16-10b-402(2)">A benefit corporation shall post all of its annual benefit reports on the public portion of its Internet website, if any, but financial or proprietary information included in the annual benefit reports may be omitted from the annual benefit reports as posted.</subsection><subsection number="16-10b-402(3)">If a benefit corporation does not have an Internet website, the benefit corporation shall provide a copy of its most recent annual benefit report, without charge, to a person that requests a copy, but financial or proprietary information included in the annual benefit report may be omitted from the copy of the benefit report provided.</subsection><subsection number="16-10b-402(4)"><subsection number="16-10b-402(4)(a)">At the same time that the benefit corporation files its annual report with the division in accordance with Section <xref depth="3" refnumber="16-1a-212">16-1a-212</xref>, the benefit corporation shall deliver the most recent copy of the annual benefit report to the division for filing, but financial or proprietary information included in the annual benefit report may be omitted from the annual benefit report as delivered to the division.</subsection><subsection number="16-10b-402(4)(b)">The division shall charge a fee established by the division in accordance with Section <xref depth="3" refnumber="63J-1-504" start="0">63J-1-504</xref> for filing an annual benefit report.</subsection><subsection number="16-10b-402(4)(c)">The benefit corporation shall file the annual benefit report in addition to the annual report required by Section <xref depth="3" refnumber="16-1a-212">16-1a-212</xref>.</subsection></subsection></section></part></chapter><chapter number="16-11"><catchline>Professional Corporation Act</catchline><section number="16-11-1"><histories><history>Enacted by Chapter <modchap sess="1963GS">20</modchap>, 1963 General Session</history><modyear>1963</modyear></histories><catchline>Short title.</catchline><tab/>This act shall be known and may be cited as the "Professional Corporation Act." </section><section number="16-11-2"><histories><history>Amended by Chapter <modchap sess="2019GS">349</modchap>, 2019 General Session</history><modyear>2019</modyear></histories><catchline>Definitions.</catchline><tab/>As used in this chapter:<subsection number="16-11-2(1)"> "Filed" means the division has received and approved, as to form, a document submitted under this chapter, and has marked on the face of the document a stamp or seal indicating the time of day and date of approval, the name of the division, the division director's signature and division seal, or facsimiles of the signature or seal.</subsection><subsection number="16-11-2(2)"> "Professional corporation" means a corporation organized under this chapter.</subsection><subsection number="16-11-2(3)"> "Professional service" means the personal service rendered by: <subsection number="16-11-2(3)(a)"> a physician, surgeon, or doctor of medicine holding a license under <xref depth="1" refnumber="58-67" start="0">Title 58, Chapter 67, Utah Medical Practice Act</xref>, and any subsequent laws regulating the practice of medicine;</subsection><subsection number="16-11-2(3)(b)"> a doctor of dentistry holding a license under <xref depth="1" refnumber="58-69" start="0">Title 58, Chapter 69, Dentist and Dental Hygienist Practice Act</xref>, and any subsequent laws regulating the practice of dentistry;</subsection><subsection number="16-11-2(3)(c)"> an osteopathic physician or surgeon holding a license under <xref depth="1" refnumber="58-68" start="0">Title 58, Chapter 68, Utah Osteopathic Medical Practice Act</xref>, and any subsequent laws regulating the practice of osteopathy;</subsection><subsection number="16-11-2(3)(d)"> a physician assistant holding a license under <xref depth="1" refnumber="58-70a" start="0">Title 58, Chapter 70a, Utah Physician Assistant Act</xref>, and any subsequent laws regulating the practice as a physician assistant;</subsection><subsection number="16-11-2(3)(e)"> a chiropractor holding a license under <xref depth="1" refnumber="58-73" start="0">Title 58, Chapter 73, Chiropractic Physician Practice Act</xref>, and any subsequent laws regulating the practice of chiropractics;</subsection><subsection number="16-11-2(3)(f)"> a podiatric physician holding a license under <xref depth="1" refnumber="58-5a" start="0">Title 58, Chapter 5a, Podiatric Physician Licensing Act</xref>, and any subsequent laws regulating the practice of podiatry;</subsection><subsection number="16-11-2(3)(g)"> an optometrist holding a license under <xref depth="1" refnumber="58-16a" start="0">Title 58, Chapter 16a, Utah Optometry Practice Act</xref>, and any subsequent laws regulating the practice of optometry;</subsection><subsection number="16-11-2(3)(h)"> a veterinarian holding a license under <xref depth="1" refnumber="58-28" start="0">Title 58, Chapter 28, Veterinary Practice Act</xref>, and any subsequent laws regulating the practice of veterinary medicine;</subsection><subsection number="16-11-2(3)(i)"> an architect holding a license under <xref depth="1" refnumber="58-3a" start="0">Title 58, Chapter 3a, Architects Licensing Act</xref>, and any subsequent laws regulating the practice of architecture;</subsection><subsection number="16-11-2(3)(j)"> a public accountant holding a license under <xref depth="1" refnumber="58-26a" start="0">Title 58, Chapter 26a, Certified Public Accountant Licensing Act</xref>, and any subsequent laws regulating the practice of public accounting;</subsection><subsection number="16-11-2(3)(k)"> a naturopath holding a license under <xref depth="1" refnumber="58-71" start="0">Title 58, Chapter 71, Naturopathic Physician Practice Act</xref>, and any subsequent laws regulating the practice of naturopathy;</subsection><subsection number="16-11-2(3)(l)"> a pharmacist holding a license under <xref depth="1" refnumber="58-17b" start="0">Title 58, Chapter 17b, Pharmacy Practice Act</xref>, and any subsequent laws regulating the practice of pharmacy;</subsection><subsection number="16-11-2(3)(m)"> an attorney granted the authority to practice law by:<subsection number="16-11-2(3)(m)(i)"> the Utah Supreme Court; or</subsection><subsection number="16-11-2(3)(m)(ii)"> the Supreme Court, other court, agency, instrumentality, or regulating board that licenses or regulates the authority to practice law in any state or territory of the United States other than Utah;</subsection></subsection><subsection number="16-11-2(3)(n)"> a professional engineer registered under <xref depth="1" refnumber="58-22" start="0">Title 58, Chapter 22, Professional Engineers and Professional Land Surveyors Licensing Act</xref>;</subsection><subsection number="16-11-2(3)(o)"> a principal broker, associate broker, or sales agent holding a license under <xref depth="1" refnumber="61-2f" start="0">Title 61, Chapter 2f, Real Estate Licensing and Practices Act</xref>, and any subsequent laws regulating the selling, exchanging, purchasing, renting, or leasing of real estate;</subsection><subsection number="16-11-2(3)(p)"> a psychologist holding a license under <xref depth="1" refnumber="58-61" start="0">Title 58, Chapter 61, Psychologist Licensing Act</xref>, and any subsequent laws regulating the practice of psychology;</subsection><subsection number="16-11-2(3)(q)"> a clinical or certified social worker holding a license under <xref depth="2" refnumber="58-60-2" start="0">Title 58, Chapter 60, Part 2, Social Worker Licensing Act</xref>, and any subsequent laws regulating the practice of social work;</subsection><subsection number="16-11-2(3)(r)"> a physical therapist holding a license under <xref depth="1" refnumber="58-24b" start="0">Title 58, Chapter 24b, Physical Therapy Practice Act</xref>, and any subsequent laws regulating the practice of physical therapy;</subsection><subsection number="16-11-2(3)(s)"> a nurse licensed under <xref depth="1" refnumber="58-31b" start="0">Title 58, Chapter 31b, Nurse Practice Act</xref>, or <xref depth="1" refnumber="58-44a" start="0">Title 58, Chapter 44a, Nurse Midwife Practice Act</xref>;</subsection><subsection number="16-11-2(3)(t)"> a landscape architect licensed under <xref depth="1" refnumber="58-53" start="0">Title 58, Chapter 53, Landscape Architects Licensing Act</xref>, and any subsequent laws regulating landscape architects; or</subsection><subsection number="16-11-2(3)(u)"> an individual licensed, certified, or registered under <xref depth="1" refnumber="61-2g" start="0">Title 61, Chapter 2g, Real Estate Appraiser Licensing and Certification Act</xref>, and any subsequent laws regulating the practice of appraising real estate.</subsection></subsection><subsection number="16-11-2(4)"> "Regulating board" means the board that is charged with the licensing and regulation of the practice of the profession which the professional corporation is organized to render. The definitions of <xref depth="1" refnumber="16-10a" start="0">Title 16, Chapter 10a, Utah Revised Business Corporation Act</xref>, apply to this chapter unless the context clearly indicates that a different meaning is intended.</subsection></section><section number="16-11-3"><histories><history>Enacted by Chapter <modchap sess="1963GS">20</modchap>, 1963 General Session</history><modyear>1963</modyear></histories><catchline>Purpose of act.</catchline><tab/>This act shall be so construed as to effectuate its general purpose of making available to professional persons the benefits of the corporate form for the business aspects of their practices while preserving the established professional aspects of the personal relationship between the professional person and those he serves. </section><section number="16-11-4"><histories><history>Amended by Chapter <modchap sess="2006GS">242</modchap>, 2006 General Session</history><modyear>2006</modyear></histories><catchline>Incorporators -- Articles of incorporation.</catchline><subsection number="16-11-4(1)"> One or more individuals, each of whom is licensed to render a professional service, may incorporate a professional corporation by filing articles of incorporation with the Division of Corporations and Commercial Code. </subsection><subsection number="16-11-4(2)"> Articles of incorporation under Subsection <xref depth="4" refnumber="16-11-4(1)" start="0">(1)</xref> shall meet the requirements of <xref depth="1" refnumber="16-10a" start="0">Title 16, Chapter 10a, Utah Revised Business Corporation Act</xref>, and in addition thereto contain the following: <subsection number="16-11-4(2)(a)"> the profession to be practiced through the professional corporation;</subsection><subsection number="16-11-4(2)(b)"> the names and street or mailing addresses of all of the original shareholders, directors, and officers of the professional corporation; and</subsection><subsection number="16-11-4(2)(c)"> the number of shareholder members of the board of directors may be less than the number of shareholders, except if a corporation has only one shareholder, the board may consist of that shareholder.</subsection></subsection></section><section number="16-11-5"><histories><history>Amended by Chapter <modchap sess="1992S3">6</modchap>, 1992 Special Session 3</history><modyear>1992</modyear><history>Amended by Chapter <modchap sess="199203">6</modchap>, 1992 Special Session 3</history><modyear>1992</modyear></histories><catchline>Application of Utah Revised Business Corporation Act -- Conflicts.</catchline><tab/>The provisions of <xref depth="1" refnumber="16-10a" start="0">Title 16, Chapter 10a, Utah Revised Business Corporation Act</xref>, shall be applicable to professional corporations, and they shall enjoy the powers and privileges and be subject to the duties, restrictions and liabilities of other corporations, except where inconsistent with this act. This act shall take precedence in the event of any conflict with provisions of <xref depth="1" refnumber="16-10a" start="0">Title 16, Chapter 10a, Utah Revised Business Corporation Act</xref> or other laws. </section><section number="16-11-6"><histories><history>Amended by Chapter <modchap sess="2014GS">394</modchap>, 2014 General Session</history><modyear>2014</modyear></histories><catchline>Purpose of professional corporation -- Power to own property and invest funds.</catchline><subsection number="16-11-6(1)"> A professional corporation may be organized pursuant to the provisions of this chapter only for the purpose of rendering one specific type of professional service and services ancillary to the specific type of professional service and may not engage in any business other than rendering the professional service that it was organized to render and services ancillary to the specific type of professional service.</subsection><subsection number="16-11-6(2)"> Notwithstanding Subsection <xref depth="4" refnumber="16-11-6(1)" start="0">(1)</xref>, a professional corporation may: <subsection number="16-11-6(2)(a)"> own real and personal property necessary or appropriate for rendering the type of professional service it was organized to render;</subsection><subsection number="16-11-6(2)(b)"> invest its funds in real estate, mortgages, stocks, bonds, and any other type of investments; and</subsection><subsection number="16-11-6(2)(c)"> if a benefit corporation, have as a purpose creating a general public benefit and a specific public benefit as provided in <xref depth="1" refnumber="16-10b" start="1">Chapter 10b, Benefit Corporation Act</xref>.</subsection></subsection></section><section number="16-11-7"><histories><history>Amended by Chapter <modchap sess="2000GS">261</modchap>, 2000 General Session</history><modyear>2000</modyear></histories><catchline>Issuance of shares of capital stock -- Restrictions.</catchline><subsection number="16-11-7(1)"> A professional corporation may issue the shares of its capital stock and a shareholder may voluntarily transfer shares of capital stock in a professional corporation only to: <subsection number="16-11-7(1)(a)"> persons who are duly licensed to render the same specific professional services as those for which the corporation was organized; or</subsection><subsection number="16-11-7(1)(b)"> persons other than those meeting the requirements of Subsection <xref depth="4" refnumber="16-11-7(1)(a)" start="0">(1)(a)</xref> to the extent and in the proportions allowed by the applicable licensing act for the profession for which the corporation is organized.</subsection></subsection><subsection number="16-11-7(2)"> Any shares issued in violation of this section are void.</subsection></section><section number="16-11-8"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Officer, director, or shareholder shall be licensed professional -- Nonlicensed person as secretary or treasurer.</catchline><subsection number="16-11-8(1)"><subsection number="16-11-8(1)(a)"> Except as provided in Subsection <xref depth="4" refnumber="16-11-8(1)(b)" start="0">(1)(b)</xref>, a person may not be an officer, director, or shareholder of a professional corporation unless that person is:<subsection number="16-11-8(1)(a)(i)"> an individual licensed to render the same specific professional services as those for which the corporation is organized; or</subsection><subsection number="16-11-8(1)(a)(ii)"> qualified to be an officer, director, or shareholder under the applicable licensing act for the profession for which the corporation is organized.</subsection></subsection><subsection number="16-11-8(1)(b)"> Notwithstanding Subsection <xref depth="4" refnumber="16-11-8(1)(a)" start="0">(1)(a)</xref>, a nonlicensed person may serve as secretary or treasurer of the professional corporation.</subsection></subsection><subsection number="16-11-8(2)"> For purposes of Subsection <xref depth="4" refnumber="16-11-8(1)" start="0">(1)</xref>, professional services are considered the same specific professional services as those for which the corporation is organized if: <subsection number="16-11-8(2)(a)"> the corporation is organized to provide services described in:<subsection number="16-11-8(2)(a)(i)"><xref depth="1" refnumber="58-67" start="0">Title 58, Chapter 67, Utah Medical Practice Act</xref>; or</subsection><subsection number="16-11-8(2)(a)(ii)"><xref depth="1" refnumber="58-68" start="0">Title 58, Chapter 68, Utah Osteopathic Medical Practice Act</xref>; and</subsection></subsection><subsection number="16-11-8(2)(b)"> the officer, director, or shareholder is licensed under either of the chapters listed in Subsection <xref depth="4" refnumber="16-11-8(2)(a)" start="0">(2)(a)</xref>.</subsection></subsection></section><section number="16-11-9"><histories><history>Enacted by Chapter <modchap sess="1963GS">20</modchap>, 1963 General Session</history><modyear>1963</modyear></histories><catchline>Licensed persons to render professional services.</catchline><tab/>A professional corporation may render professional services only through its officers, employees and agents who are duly licensed to render such professional services. </section><section number="16-11-10"><histories><history>Enacted by Chapter <modchap sess="1963GS">20</modchap>, 1963 General Session</history><modyear>1963</modyear></histories><catchline>Laws as to professional relationships not altered.</catchline><tab/>This act does not alter any law applicable to the relationship between a person rendering professional services and a person receiving such services, including liability arising out of such professional services. </section><section number="16-11-11"><histories><history>Enacted by Chapter <modchap sess="1963GS">20</modchap>, 1963 General Session</history><modyear>1963</modyear></histories><catchline>Authority of regulating boards not restricted or limited.</catchline><tab/>Nothing in this act shall restrict or limit in any manner the authority and duty of the regulating board for the licensing of individual persons rendering professional services or the practice of the profession which is within the jurisdiction of such regulating board, notwithstanding that such person is an officer, director, shareholder or employee of a professional corporation and rendering such professional services or engaging in the practice of such profession through such professional corporation. </section><section number="16-11-12"><histories><history>Enacted by Chapter <modchap sess="1963GS">20</modchap>, 1963 General Session</history><modyear>1963</modyear></histories><catchline>Prohibited acts of professional corporations.</catchline><tab/>No professional corporation may do any act which is prohibited to be done by individual persons licensed to practice the profession which the professional corporation is organized to render. </section><section number="16-11-13"><histories><history>Amended by Chapter <modchap sess="2023GS">401</modchap>, 2023 General Session</history><modyear>2023</modyear></histories><catchline>Purchase or redemption of shares of disqualified shareholder.</catchline><subsection number="16-11-13(1)"><subsection number="16-11-13(1)(a)"> The articles of incorporation may provide for the purchase or redemption of the shares of any shareholder upon the failure to qualify or disqualification of that shareholder, or the same may be provided in the bylaws or by private agreement.</subsection><subsection number="16-11-13(1)(b)"> In the absence of such a provision in the articles of incorporation, the bylaws, or by private agreement, the professional corporation shall purchase the shares of a shareholder who is not qualified to own shares in the corporation within 90 days after the failure to qualify or disqualification of the shareholder.</subsection></subsection><subsection number="16-11-13(2)"> The price for shares purchased under this section shall be their reasonable fair value as of the date of failure to qualify or disqualification of the shareholder.</subsection><subsection number="16-11-13(3)"><subsection number="16-11-13(3)(a)"> If the professional corporation fails to purchase shares as required by Subsection <xref depth="4" refnumber="16-11-13(1)" start="0">(1)</xref>, any disqualified shareholder or personal representative of a disqualified shareholder may bring an action in a court with jurisdiction under <xref depth="0" refnumber="78A" start="0">Title 78A, Judiciary and Judicial Administration</xref>, for the enforcement of this section.</subsection><subsection number="16-11-13(3)(b)"> In an action under Subsection <xref depth="4" refnumber="16-11-13(3)(a)" start="0">(3)(a)</xref>, the court may:<subsection number="16-11-13(3)(b)(i)"> award the plaintiff the reasonable fair value of the plaintiff's shares; or</subsection><subsection number="16-11-13(3)(b)(ii)"> within the court's jurisdiction, order the liquidation of the professional corporation.</subsection></subsection><subsection number="16-11-13(3)(c)"> If the plaintiff is successful in the action, the plaintiff is entitled to recover a reasonable attorney's fee and costs.</subsection></subsection><subsection number="16-11-13(4)"> The professional corporation shall repurchase shares as required by this section without regard to restrictions upon the repurchase of shares provided by <xref depth="1" refnumber="16-10a" start="0">Title 16, Chapter 10a, Utah Revised Business Corporation Act</xref>.</subsection></section><section number="16-11-14"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Annual certificate -- Filing -- Contents -- Filing fee.</catchline><tab/>During the month of the anniversary date of incorporation, each professional corporation shall file with the division an annual report as specified by Section <xref depth="3" refnumber="16-1a-212">16-1a-212</xref>, giving the names and residence addresses of all shareholders of the professional corporation as of its anniversary date of incorporation next preceding, and certifying that all of the shareholders are duly licensed to render the same specific professional services as those for which the corporation was organized or otherwise qualify to be shareholders pursuant to the applicable licensing act for the profession for which the corporation was organized.</section><section number="16-11-15"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Incorporation under Utah Revised Business Corporation Act permitted -- Existing corporations may come under Professional Corporation Act.</catchline><tab/>This act does not preclude incorporation by professional persons under <xref depth="1" refnumber="16-10a" start="0">Title 16, Chapter 10a, Utah Revised Business Corporation Act</xref>, where such persons would be permitted to organize a corporation and perform professional services by means of such corporation in the absence of this act. This act does not apply to any corporation organized by such persons prior to the passage of this act, but any such persons or any such corporation may bring themselves and such corporation within the provisions of this act by amending the articles of incorporation in such a manner as to be consistent with all of the provisions of this act and by affirmatively stating in the amended articles of incorporation that the shareholders have elected to bring the corporation within the provisions of this act. </section><section number="16-11-17"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Provisions Applicable to All Business Entities applicable.</catchline>Chapter 1a, Provisions Applicable to All Business Entities, applies to the provisions of this chapter.</section></chapter><chapter number="16-12"><catchline>Real Estate Investment Trust Act</catchline><section number="16-12-1"><histories><history>Enacted by Chapter <modchap sess="1965GS">114</modchap>, 1965 General Session</history><modyear>1965</modyear></histories><catchline>Short title.</catchline><tab/>This act shall be known and cited as the "Real Estate Investment Trust Act." </section><section number="16-12-2"><histories><history>Enacted by Chapter <modchap sess="1965GS">114</modchap>, 1965 General Session</history><modyear>1965</modyear></histories><catchline>Definition of real estate investment trust.</catchline><tab/>A real estate investment trust is an unincorporated trust or association which has complied or intends to comply with Sections 856, 857, and 858 of the federal Internal Revenue Code of 1954, as amended, or such sections or section of any subsequent internal revenue code as may be applicable to organizations described in Public Law 86-779. </section><section number="16-12-3"><histories><history>Amended by Chapter <modchap sess="2009GS">183</modchap>, 2009 General Session</history><modyear>2009</modyear></histories><catchline>Declaration of trust -- Filing fee.</catchline><tab/>An original and one copy of the declaration of trust of a real estate investment trust shall be delivered to the Division of Corporations and Commercial Code, and the division shall endorse on the original and one copy the word "filed." The Division of Corporations and Commercial Code shall file the original in the division's office, and shall return the copy to the trustees or their representatives. The Division of Corporations and Commercial Code may charge a fee pursuant to Section <xref depth="3" refnumber="63J-1-504" start="0">63J-1-504</xref> for the filing. </section><section number="16-12-4"><histories><history>Enacted by Chapter <modchap sess="1965GS">114</modchap>, 1965 General Session</history><modyear>1965</modyear></histories><catchline>Powers of real estate investment trust.</catchline><tab/>A real estate investment trust shall have power to sue and be sued, in its trust name, and to acquire title, lease, mortgage, convey or otherwise deal with real and personal property, or any interest therein in its trust name. </section><section number="16-12-5"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Limited liability of shareholders or beneficiaries.</catchline><tab/>The shareholders or beneficiaries of a real estate investment trust are not, as such, personally liable for obligations of the real estate investment trust, and shall be under no obligation to the trust or its creditors with respect to such shares or interest other than the obligation to pay the trust the full amount of consideration for which such shares were issued or to be issued. </section><section number="16-12-6"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Trustee governed by declaration of trust -- Liability.</catchline><tab/>A trustee of a real estate investment trust shall be governed by all the provisions of the declaration of trust and is not liable for any claims or damages that may result from his acts in the discharge of any duty imposed or power conferred upon him by the trust, if he exercises ordinary care, and acts in good faith, but shall be liable for his own willful misfeasance or malfeasance. Persons dealing with the trust through the trustees or agents shall look to the trust estate for performance of obligations. </section><section number="16-12-7"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Provisions Applicable to All Business Entities applicable.</catchline>Chapter 1a, Provisions Applicable to All Business Entities, applies to the provisions of this chapter.</section></chapter><chapter number="16-13"><catchline>Business Development Corporations</catchline><section number="16-13-1"><histories><history>Amended by Chapter <modchap sess="1992S3">6</modchap>, 1992 Special Session 3</history><modyear>1992</modyear><history>Amended by Chapter <modchap sess="199203">6</modchap>, 1992 Special Session 3</history><modyear>1992</modyear></histories><catchline>Organization of development corporations under Utah Revised Business Corporation Act -- Corporate name.</catchline><tab/>Corporations to conduct a development business as specified in this act may be formed under the provisions of <xref depth="1" refnumber="16-10a" start="0">Title 16, Chapter 10a, Utah Revised Business Corporation Act</xref>, and all the rights, privileges, and powers and all the duties and obligations of such corporations and of the officers and stockholders thereof shall be as provided in <xref depth="1" refnumber="16-10a" start="0">Title 16, Chapter 10a, Utah Revised Business Corporation Act</xref>, except as otherwise provided in this act. The name of any corporation organized in accordance with the provisions of this act shall include the words "business development corporation." </section><section number="16-13-2"><histories><history>Amended by Chapter <modchap sess="1979GS">55</modchap>, 1979 General Session</history><modyear>1979</modyear></histories><catchline>Definitions.</catchline><tab/>As used in this act:<subsection number="16-13-2(1)"> The words "financial institution" mean any corporation engaged in a banking business, loan and trust company, or corporation, partnership, foundation, or other institution engaged primarily in lending or investing funds.</subsection><subsection number="16-13-2(2)"> The word "lender" means any person, partnership, association, corporation including any financial institution and any corporation, agency or instrumentality organized or authorized by an act of Congress which lends money to a corporation organized in accordance with this act upon its call and in accordance with the provisions of this chapter.</subsection><subsection number="16-13-2(3)"> The words "loan limit" mean for any lender the total of the maximum amount prescribed to be outstanding at one time on loans made by such lender to a corporation organized under this act and the amount of the investment in the capital stock of such corporation then held by such lender, as determined under the provisions of this act, and the amount of the investment in the capital stock of such corporation then held by such lender, as determined under the provisions of this act.</subsection><subsection number="16-13-2(4)"> The words "development corporation" means a corporation organized in accordance with the provisions of this act.</subsection></section><section number="16-13-3"><histories><history>Amended by Chapter <modchap sess="1979GS">55</modchap>, 1979 General Session</history><modyear>1979</modyear></histories><catchline>Purposes of development corporation.</catchline><tab/>The purposes of a development corporation shall include the following:<eol/><tab/>The purposes of a development corporation shall be to assist, promote, encourage and, through the cooperative efforts of the institutions and corporations which, from time to time, shall become lenders thereto, to develop and advance the business prosperity and economic welfare of the state and its citizens; to encourage and assist in the location of new business and industry in the state and to rehabilitate existing business and industry; to stimulate and assist in the expansion of all kinds of business activity which will tend to promote the business development and maintain the economic stability of the state, provide maximum opportunities for employment, encourage thrift and improve the standard of living of the citizens of the state; to cooperate and act in conjunction with other organizations, public or private, the objects of which are the promotion and advancement of industrial, commercial, agricultural and recreational developments in the state; to furnish either equity capital, debt capital, or both, to approved and deserving applicants for the promotion, development and conduct of all kinds of business activity in the state, thereby establishing a source of capital and credit not otherwise readily available for such purposes. </section><section number="16-13-4"><histories><history>Amended by Chapter <modchap sess="2010GS">218</modchap>, 2010 General Session</history><modyear>2010</modyear><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>General powers of business development corporation.</catchline><tab/>In furtherance of the purposes of a development corporation, and in addition to the powers conferred on corporations by <xref depth="1" refnumber="16-10a" start="0">Title 16, Chapter 10a, Utah Revised Business Corporation Act</xref>, such corporation, subject to the restrictions and limitations contained in this act, shall have the following powers:<subsection number="16-13-4(1)"> To borrow money from lenders, and otherwise incur indebtedness for any of its purposes; to issue its bonds, debentures, notes, or other evidences of indebtedness whether secured or unsecured therefor; and to secure the same by mortgage, pledge, deed of trust, or other lien on its property, franchises, rights and privileges of every kind and nature or any part thereof.</subsection><subsection number="16-13-4(2)"> To lend money to, and to guarantee, indorse, or act as surety on the bonds, notes, contracts, or other obligations of, or otherwise assist financially, any person, firm, corporation, or association, and to establish and regulate the terms and conditions with respect to any such loans or financial assistance and the charges for interest and service connected therewith; provided, however, that the corporation may not approve any application for a loan unless and until the applicant shall have shown that the applicant has applied for the loan through ordinary financial channels and that the loan has been refused by at least one financial institution doing business in this state and, in the ordinary course of its business, granting loans similar in amount and kind to the requested loan.</subsection><subsection number="16-13-4(3)"> To purchase, receive, hold, lease, or otherwise acquire, and to sell, convey, mortgage, lease, pledge, or otherwise dispose of, upon such terms and conditions as its board of directors may deem advisable, real and personal property, together with such rights and privileges as may be incidental and appurtenant thereto and the use thereof, including, but not restricted to, any real or personal property acquired by such corporation from time to time in the satisfaction of debts or enforcement of obligations.</subsection><subsection number="16-13-4(4)"> To acquire the good will, business, rights, real and personal property, and other assets, or any part thereof, of such persons, firms, corporations, joint stock companies, associations, or trusts as may be in furtherance of the corporate purposes provided herein, and to assume, undertake, guarantee, or pay the obligations, debts, and liabilities of any such person, firm, corporation, joint stock company, association, or trust; to acquire improved or unimproved real estate for the purpose of constructing industrial plants or other business establishments thereon or for the purpose of disposing of such real estate to others for the construction of industrial plants or other business establishments, and, in furtherance of the corporate purposes, to acquire, construct, or reconstruct, alter, repair, maintain, operate, sell, lease, or otherwise dispose of industrial plants or business establishments.</subsection><subsection number="16-13-4(5)"> To acquire, subscribe for, own, hold, sell, assign, transfer, mortgage, pledge, or otherwise dispose of the stock, shares, bonds, debentures, notes, or other securities and evidences of interest in, or indebtedness of, any person, firm, corporation, joint stock company, association, or trust, and while the owner or holder thereof, to exercise all the rights, powers, and privileges of ownership, including the right to vote thereon, but nothing herein provided shall authorize the holding of securities of or otherwise engaging directly or indirectly in a business where such holding of securities or engaging in business is not authorized for corporations by general law.</subsection><subsection number="16-13-4(6)"> To cooperate with and avail itself of the facilities of state departments and other government agencies; and to cooperate with and assist, and otherwise encourage, local organizations in the various communities in the state in the promotion, assistance, and development of the business prosperity and economic welfare of such communities and of the state.</subsection></section><section number="16-13-5"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Bonds or securities, capital stock of development corporations -- Authority to purchase, hold, or dispose of -- Rights of holders -- Rights of financial institutions.</catchline><subsection number="16-13-5(1)"> All persons, firms, partnerships, associations, trusts and domestic and foreign corporations organized or authorized to do business in this state, including, without implied limitation, all financial institutions, public utility corporations and insurance corporations, are hereby authorized to acquire, purchase, hold, sell, assign, transfer, mortgage, pledge, or otherwise dispose of any bonds, securities or other evidences of indebtedness created by a development corporation, and to exercise all the rights, powers and privileges of ownership thereof, all without the approval of any regulatory authority of the state.</subsection><subsection number="16-13-5(2)"> All persons, firms, partnerships, associations, trusts, domestic and foreign corporations organized or authorized to do business in this state, including without implied limitation all public utility corporations and insurance corporations, other than financial institutions, are hereby authorized to acquire, purchase, hold, sell, assign, transfer, mortgage, pledge, or otherwise dispose of any of the shares of the capital stock of a development corporation, and while owners of said stock to exercise all the rights, powers and privileges of ownership, including the right to vote thereon, all without the approval of any regulatory authority of the state.</subsection><subsection number="16-13-5(3)"> All financial institutions are hereby authorized to become lenders to development corporations and to make loans to the corporations as provided herein, without the approval of any regulatory authority of the state.</subsection><subsection number="16-13-5(4)"> A financial institution is authorized to acquire, purchase, hold, sell, assign, transfer, mortgage, pledge, or otherwise dispose of, any bonds, securities or other evidences of indebtedness created by the corporation in accordance with its provisions for the call of loans, and any of the shares of the capital stock of the corporation, and while owners thereof, to exercise all the rights, powers and privileges of ownership, including the right to vote, all without approval of any regulatory authority of the state; provided, that the amount of the capital stock of the corporation which may be acquired by any lender pursuant to the authority granted herein may not exceed 10% of the loan limit of such lender. The amount of capital stock of the corporation which any lender is authorized to acquire pursuant to the authority granted herein is in addition to the amount of capital stock in corporations which such lender may otherwise be authorized to acquire.</subsection></section><section number="16-13-8"><histories><history>Amended by Chapter <modchap sess="1979GS">55</modchap>, 1979 General Session</history><modyear>1979</modyear></histories><catchline>Board of directors -- Number and election of members.</catchline><tab/>The board of directors of a development corporation shall be of such number in multiples of three, but not less than six, as shall be determined in the first instance by the articles of incorporation and thereafter annually by the stockholders of the corporation. The names and addresses of the members of the first board of directors shall be stated in the articles of incorporation. Said persons shall hold office until the first annual meeting of the corporation and until their successors have been elected and qualified. At the first annual meeting of a development corporation and at each annual meeting thereafter, or, if no annual meeting shall be held in any year at the time fixed by the bylaws, at a special meeting held in lieu thereof, the shareholders shall elect the directors. The directors shall hold office until the next annual meeting, after their elections, and until their successors are elected and qualified unless sooner removed.<eol/><tab/>Any vacancy in the office of a director shall be filled by the remaining directors. </section><section number="16-13-9"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Requirement before commencing business -- Cash consideration for shares -- Minimum stated capital.</catchline><tab/>A development corporation incorporated after July 1, 1979, may not transact any business or incur any indebtedness, except as is incidental to its organization or to obtain subscriptions to or payment for its shares, until there has been paid in for the issuance of shares consideration in cash of at least $300,000. A development corporation shall have a stated capital of not less than $300,000. </section><section number="16-13-10"><histories><history>Enacted by Chapter <modchap sess="1965GS">27</modchap>, 1965 General Session</history><modyear>1965</modyear></histories><catchline>Amount of net earnings set apart as earned surplus.</catchline><tab/>Each year a development corporation shall set apart as earned surplus not less than 10% of its net earnings for its preceding fiscal year until such surplus is equal in value to one-half of the amount paid in on the shares of the corporation then outstanding. Whenever the amount of surplus so established shall become impaired, it shall be restored to the required amount in the manner hereinbefore provided. Net earnings and surplus shall be determined by the board of directors, after providing for such reserves as said directors deem desirable, and the directors' determination made in good faith shall be conclusive on all persons. </section><section number="16-13-11"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Designation of depository.</catchline><tab/>A development corporation may not deposit any of its funds in any banking institution unless such institution has been designated as a depository by a vote of a majority of the directors present at an authorized meeting of the board of directors, exclusive of any director who is an officer or director of the depository so designated. A development corporation may not receive money on deposit. </section><section number="16-13-12"><histories><history>Amended by Chapter <modchap sess="2009GS">183</modchap>, 2009 General Session</history><modyear>2009</modyear></histories><catchline>Licensing, supervision, and examination by commissioner of financial institutions -- Fees.</catchline><tab/>A development corporation shall be licensed, supervised, and examined by the commissioner of financial institutions and shall make such report of its condition from time to time as the commissioner shall require. A development corporation shall pay a fee determined by the commissioner pursuant to Section <xref depth="3" refnumber="63J-1-504" start="0">63J-1-504</xref> for a license and for each examination. </section></chapter><chapter number="16-15"><catchline>Utah Business Trust Registration Act</catchline><section number="16-15-101"><histories><history>Enacted by Chapter <modchap sess="1995GS">310</modchap>, 1995 General Session</history><modyear>1995</modyear></histories><catchline>Title.</catchline><tab/>This act is known as the "Utah Business Trust Registration Act." </section><section number="16-15-102"><histories><history>Amended by Chapter <modchap sess="2026GS">112</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Definition of business trust.</catchline><tab/>As used in this chapter:<subsection number="16-15-102(1)">"Beneficiary" means a person holding a certificate representing a beneficial interest in the trust estate and assets.</subsection><subsection number="16-15-102(2)">"Business trust" means the same as that term is defined in Section <xref depth="3" refnumber="7-5-101">7-5-101</xref>.</subsection><subsection number="16-15-102(3)">"Division" means the Division of Corporations and Commercial Code.</subsection><subsection number="16-15-102(4)">"Person" means an individual, general partnership, limited liability partnership, limited partnership, limited liability company, limited association, domestic or foreign trust, estate, association, or corporation.</subsection></section><section number="16-15-104"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Registration required -- Certificate of registration.</catchline><subsection number="16-15-104(1)">A business trust shall register with the division before doing business in the state.</subsection><subsection number="16-15-104(2)">The certificate of registration of a business trust shall set forth:<subsection number="16-15-104(2)(a)">the name of the business trust;</subsection><subsection number="16-15-104(2)(b)">the period of its duration;</subsection><subsection number="16-15-104(2)(c)">the business purpose for which the business trust is organized;</subsection><subsection number="16-15-104(2)(d)">the information required by Section <xref depth="3" refnumber="16-1a-404">16-1a-404</xref>; and</subsection><subsection number="16-15-104(2)(e)">the name, signature, and street address of all trustees of the business trust.</subsection></subsection></section><section number="16-15-106"><histories><history>Enacted by Chapter <modchap sess="1995GS">310</modchap>, 1995 General Session</history><modyear>1995</modyear></histories><catchline>Powers.</catchline><subsection number="16-15-106(1)"> A business trust registered under this chapter may in its trust name: <subsection number="16-15-106(1)(a)"> sue;</subsection><subsection number="16-15-106(1)(b)"> subject to the limitations in the declaration of trust, acquire title, lease, mortgage, convey or otherwise deal with real and personal property, or any interest in real and personal property.</subsection></subsection><subsection number="16-15-106(2)"><subsection number="16-15-106(2)(a)"> A business trust may not maintain any action, suit, or proceeding in this state unless the business trust is registered under this chapter.</subsection><subsection number="16-15-106(2)(b)"> A business trust may be sued whether or not the business trust is registered under this chapter.</subsection></subsection></section><section number="16-15-107"><histories><history>Amended by Chapter <modchap sess="2009GS">183</modchap>, 2009 General Session</history><modyear>2009</modyear></histories><catchline>Expiration of filing -- Notice.</catchline><subsection number="16-15-107(1)"> A filing under this chapter shall be effective for a period of three years from the date of filing plus the notice period provided in Subsection <xref depth="4" refnumber="16-15-107(2)" start="0">(2)</xref>.</subsection><subsection number="16-15-107(2)"><subsection number="16-15-107(2)(a)"> If no new filing is made by or on behalf of the trust who made the original filing within three years of the date of filing, the division shall send a notice by regular mail, postage prepaid, to the address shown for the registered office in the filing indicating that it will expire 30 days after the division mailed the notice.</subsection><subsection number="16-15-107(2)(b)"> If no new filing is made within 30 days after the date of the division mailing the notice, the business trust's registration expires.</subsection></subsection><subsection number="16-15-107(3)"> If the registration of a business trust has expired or has been canceled for failure to maintain a registered agent, the business trust may not conduct business in this state until it has newly registered with the division under this chapter.</subsection><subsection number="16-15-107(4)"> The division may charge a fee in accordance with Section <xref depth="3" refnumber="63J-1-504" start="0">63J-1-504</xref> for the renewal of a registration.</subsection></section><section number="16-15-108"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>When amendments are required.</catchline><subsection number="16-15-108(1)">An amended certificate shall be filed with the division not later than 30 days after any change in:<subsection number="16-15-108(1)(a)">any person acting as a trustee of the trust, or the address of any trustee;</subsection><subsection number="16-15-108(1)(b)">the registered agent of the trust;</subsection><subsection number="16-15-108(1)(c)">the registered office of the business trust; or</subsection><subsection number="16-15-108(1)(d)">in any information required to be filed with the division under this chapter.</subsection></subsection><subsection number="16-15-108(2)">The amended certificate shall be signed by each trustee of the business trust and filed in the same manner as an entity filing under Section <xref depth="3" refnumber="16-1a-202">16-1a-202</xref>.</subsection><subsection number="16-15-108(3)">The division may charge a fee in accordance with Section <xref depth="3" refnumber="63J-1-504" start="0">63J-1-504</xref> for amending a certificate of registration.</subsection></section><section number="16-15-110"><histories><history>Enacted by Chapter <modchap sess="1995GS">310</modchap>, 1995 General Session</history><modyear>1995</modyear></histories><catchline>Trustee and beneficiary governed by declaration of trust -- Common law.</catchline><subsection number="16-15-110(1)"> A trustee or beneficiary of a business trust shall be governed by all the provisions of the declaration of trust of the business trust.</subsection><subsection number="16-15-110(2)"> This chapter neither affects nor alters in any way the rights, powers, and obligations, of a trustee or beneficiary of a business trust under common law.</subsection></section><section number="16-15-111"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Provisions Applicable to All Business Entities applicable.</catchline>Chapter 1a, Provisions Applicable to All Business Entities, applies to the provisions of this chapter.</section></chapter><chapter number="16-16"><catchline>Uniform Limited Cooperative Association Act</catchline><part number="16-16-1"><catchline>General Provisions</catchline><section number="16-16-101"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Title.</catchline><tab/>This chapter is known as the "Uniform Limited Cooperative Association Act." </section><section number="16-16-102"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Definitions.</catchline><tab/>In this chapter:<subsection number="16-16-102(1)"> "Articles of organization" means the articles of organization of a limited cooperative association required by Section <xref depth="3" refnumber="16-16-302" start="0">16-16-302</xref>. The term includes the articles as amended or restated.</subsection><subsection number="16-16-102(2)"> "Board of directors" means the board of directors of a limited cooperative association.</subsection><subsection number="16-16-102(3)"> "Bylaws" means the bylaws of a limited cooperative association. The term includes the bylaws as amended or restated.</subsection><subsection number="16-16-102(4)"> "Certificate of authority" means a certificate issued by the division for a foreign cooperative to transact business in this state.</subsection><subsection number="16-16-102(5)"> "Contribution," except as used in Subsection <xref depth="4" refnumber="16-16-1008(3)" start="0">16-16-1008(3)</xref>, means a benefit that a person provides to a limited cooperative association to become or remain a member or in the person's capacity as a member.</subsection><subsection number="16-16-102(6)"> "Cooperative" means a limited cooperative association or an entity organized under any cooperative law of any jurisdiction.</subsection><subsection number="16-16-102(7)"> "Designated office" means the office that a limited cooperative association or a foreign cooperative is required to designate and maintain under Subsection <xref depth="4" refnumber="16-16-117(1)(a)" start="0">16-16-117(1)(a)</xref>.</subsection><subsection number="16-16-102(8)"> "Director" means a director of a limited cooperative association.</subsection><subsection number="16-16-102(9)"> "Distribution," except as used in Subsection <xref depth="4" refnumber="16-16-1007(5)" start="0">16-16-1007(5)</xref>, means a transfer of money or other property from a limited cooperative association to a member because of the member's financial rights or to a transferee of a member's financial rights.</subsection><subsection number="16-16-102(10)"> "Division" means the Division of Corporations and Commercial Code.</subsection><subsection number="16-16-102(11)"> "Entity" means a person other than an individual.</subsection><subsection number="16-16-102(12)"> "Financial rights" means the right to participate in allocations and distributions as provided in <xref depth="2" refnumber="16-16-10" start="2">Part 10, Contributions, Allocations, and Distributions</xref>, and <xref depth="2" refnumber="16-16-12" start="2">Part 12, Dissolution</xref>, but does not include rights or obligations under a marketing contract governed by <xref depth="2" refnumber="16-16-7" start="2">Part 7, Marketing Contracts</xref>.</subsection><subsection number="16-16-102(13)"> "Foreign cooperative" means an entity organized in a jurisdiction other than this state under a law similar to this chapter.</subsection><subsection number="16-16-102(14)"> "Governance rights" means the right to participate in governance of a limited cooperative association.</subsection><subsection number="16-16-102(15)"> "Investor member" means a member that has made a contribution to a limited cooperative association and: <subsection number="16-16-102(15)(a)"> is not required by the organic rules to conduct patronage with the association in the member's capacity as an investor member in order to receive the member's interest; or</subsection><subsection number="16-16-102(15)(b)"> is not permitted by the organic rules to conduct patronage with the association in the member's capacity as an investor member in order to receive the member's interest.</subsection></subsection><subsection number="16-16-102(16)"> "Limited cooperative association" means an association organized under this chapter.</subsection><subsection number="16-16-102(17)"> "Member" means a person that is admitted as a patron member or investor member, or both, in a limited cooperative association. The term does not include a person that has dissociated as a member.</subsection><subsection number="16-16-102(18)"> "Member's interest" means the interest of a patron member or investor member under Section <xref depth="3" refnumber="16-16-601" start="0">16-16-601</xref>.</subsection><subsection number="16-16-102(19)"> "Members meeting" means an annual members meeting or special meeting of members.</subsection><subsection number="16-16-102(20)"> "Organic law" means the statute providing for the creation of an entity or principally governing its internal affairs.</subsection><subsection number="16-16-102(21)"> "Organic rules" means the articles of organization and bylaws of a limited cooperative association.</subsection><subsection number="16-16-102(22)"> "Organizer" means an individual who signs the initial articles of organization.</subsection><subsection number="16-16-102(23)"> "Patron member" means a member that has made a contribution to a limited cooperative association and: <subsection number="16-16-102(23)(a)"> is required by the organic rules to conduct patronage with the association in the member's capacity as a patron member in order to receive the member's interest; or</subsection><subsection number="16-16-102(23)(b)"> is permitted by the organic rules to conduct patronage with the association in the member's capacity as a patron member in order to receive the member's interest.</subsection></subsection><subsection number="16-16-102(24)"> "Patronage" means business transactions between a limited cooperative association and a person which entitle the person to receive financial rights based on the value or quantity of business done between the association and the person.</subsection><subsection number="16-16-102(25)"> "Person" means an individual, corporation, business trust, cooperative, estate, trust, partnership, limited partnership, limited liability company, limited cooperative association, joint venture, association, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.</subsection><subsection number="16-16-102(26)"> "Principal office" means the principal executive office of a limited cooperative association or foreign cooperative, whether or not in this state.</subsection><subsection number="16-16-102(27)"> "Record," used as a noun, means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.</subsection><subsection number="16-16-102(28)"> "Required information" means the information a limited cooperative association is required to maintain under Section <xref depth="3" refnumber="16-16-114" start="0">16-16-114</xref>.</subsection><subsection number="16-16-102(29)"> "Sign" means, with present intent to authenticate or adopt a record: <subsection number="16-16-102(29)(a)"> to execute or adopt a tangible symbol; or</subsection><subsection number="16-16-102(29)(b)"> to attach to or logically associate with the record an electronic symbol, sound, or process.</subsection></subsection><subsection number="16-16-102(30)"> "State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.</subsection><subsection number="16-16-102(31)"> "Transfer" includes an assignment, conveyance, deed, bill of sale, lease, mortgage, security interest, encumbrance, gift, and transfer by operation of law.</subsection><subsection number="16-16-102(32)"> "Voting group" means any combination of one or more voting members in one or more districts or classes that under the organic rules or this chapter are entitled to vote and can be counted together collectively on a matter at a members meeting.</subsection><subsection number="16-16-102(33)"> "Voting member" means a member that, under the organic law or organic rules, has a right to vote on matters subject to vote by members under the organic law or organic rules.</subsection><subsection number="16-16-102(34)"> "Voting power" means the total current power of members to vote on a particular matter for which a vote may or is to be taken.</subsection></section><section number="16-16-103"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Limited cooperative association subject to amendment or repeal of chapter.</catchline><tab/>A limited cooperative association governed by this chapter is subject to any amendment or repeal of this chapter. </section><section number="16-16-104"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Nature of limited cooperative association.</catchline><subsection number="16-16-104(1)"> A limited cooperative association organized under this chapter is an autonomous, unincorporated association of persons united to meet their mutual interests through a jointly owned enterprise primarily controlled by those persons, which permits combining: <subsection number="16-16-104(1)(a)"> ownership, financing, and receipt of benefits by the members for whose interests the association is formed; and</subsection><subsection number="16-16-104(1)(b)"> separate investments in the association by members who may receive returns on their investments and a share of control.</subsection></subsection><subsection number="16-16-104(2)"> The fact that a limited cooperative association does not have one or more of the characteristics described in Subsection <xref depth="4" refnumber="16-16-104(1)" start="0">(1)</xref> does not alone prevent the association from being formed under and governed by this chapter nor does it alone provide a basis for an action against the association.</subsection></section><section number="16-16-105"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Purpose and duration of limited cooperative association.</catchline><subsection number="16-16-105(1)"> A limited cooperative association is an entity distinct from its members.</subsection><subsection number="16-16-105(2)"> A limited cooperative association may be organized for any lawful purpose, whether or not for profit, except for the operation of a financial institution as defined in Section <xref depth="3" refnumber="7-1-103" start="0">7-1-103</xref>.</subsection><subsection number="16-16-105(3)"> Unless the articles of organization state a term for a limited cooperative association's existence, the association has perpetual duration.</subsection></section><section number="16-16-106"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Powers.</catchline><tab/>A limited cooperative association may sue and be sued in its own name and do all things necessary or convenient to carry on its activities. An association may maintain an action against a member for harm caused to the association by the member's violation of a duty to the association or of the organic law or organic rules. </section><section number="16-16-107"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Governing law.</catchline><tab/>The law of this state governs:<subsection number="16-16-107(1)"> the internal affairs of a limited cooperative association; and</subsection><subsection number="16-16-107(2)"> the liability of a member as member and a director as director for the debts, obligations, or other liabilities of a limited cooperative association.</subsection></section><section number="16-16-108"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Supplemental principles of law.</catchline><tab/>Unless displaced by particular provisions of this chapter, the principles of law and equity supplement this chapter. </section><section number="16-16-109"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Requirements of other laws.</catchline><subsection number="16-16-109(1)"> This chapter does not alter or amend any law that governs the licensing and regulation of an individual or entity in carrying on a specific business or profession even if that law permits the business or profession to be conducted by a limited cooperative association, a foreign cooperative, or its members.</subsection><subsection number="16-16-109(2)"> A limited cooperative association may not conduct an activity that, under law of this state other than this chapter, may be conducted only by an entity that meets specific requirements for the internal affairs of that entity unless the organic rules of the association conform to those requirements.</subsection></section><section number="16-16-110"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Relation to restraint of trade and antitrust laws.</catchline><tab/>To the extent a limited cooperative association or activities conducted by the association in this state meet the material requirements for other cooperatives entitled to an exemption from or immunity under any provision of the restraint of trade or antitrust laws of this state, the association and its activities are entitled to the exemption or immunity. This section does not create any new exemption or immunity for an association or affect any exemption or immunity provided to a cooperative organized under any other law. </section><section number="16-16-113"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Effect of organic rules.</catchline><subsection number="16-16-113(1)">The relations between a limited cooperative association and its members are consensual. Unless required, limited, or prohibited by this chapter, the organic rules may provide for any matter concerning the relations among the members of the association and between the members and the association, the activities of the association, and the conduct of its activities.</subsection><subsection number="16-16-113(2)">The matters referred to in Subsections <xref depth="4" refnumber="16-16-113(2)(a)" start="0">(2)(a)</xref> through <xref depth="4" refnumber="16-16-113(2)(i)" start="0">(i)</xref> may be varied only in the articles of organization. The articles may:<subsection number="16-16-113(2)(a)">state a term of existence for the association under Subsection <xref depth="4" refnumber="16-16-105(3)" start="0">16-16-105(3)</xref>;</subsection><subsection number="16-16-113(2)(b)">limit or eliminate the acceptance of new or additional members by the initial board of directors under Subsection <xref depth="4" refnumber="16-16-303(2)" start="0">16-16-303(2)</xref>;</subsection><subsection number="16-16-113(2)(c)">vary the limitations on the obligations and liability of members for association obligations under Section <xref depth="3" refnumber="16-16-504" start="0">16-16-504</xref>;</subsection><subsection number="16-16-113(2)(d)">require a notice of an annual members meeting to state a purpose of the meeting under Subsection <xref depth="4" refnumber="16-16-508(2)" start="0">16-16-508(2)</xref>;</subsection><subsection number="16-16-113(2)(e)">vary the board of directors meeting quorum under Subsection <xref depth="4" refnumber="16-16-815(1)" start="0">16-16-815(1)</xref>;</subsection><subsection number="16-16-113(2)(f)">vary the matters the board of directors may consider in making a decision under Section <xref depth="3" refnumber="16-16-820" start="0">16-16-820</xref>;</subsection><subsection number="16-16-113(2)(g)">specify causes of dissolution under Subsection <xref depth="4" refnumber="16-16-1202(1)" start="0">16-16-1202(1)</xref>;</subsection><subsection number="16-16-113(2)(h)">delegate amendment of the bylaws to the board of directors pursuant to Subsection <xref depth="4" refnumber="16-16-405(6)" start="0">16-16-405(6)</xref>;</subsection><subsection number="16-16-113(2)(i)">provide for member approval of asset dispositions under Section <xref depth="3" refnumber="16-16-1501" start="0">16-16-1501</xref>; and</subsection><subsection number="16-16-113(2)(j)">provide for any matters that may be contained in the organic rules, including those under Subsection <xref depth="4" refnumber="16-16-113(3)" start="0">(3)</xref>.</subsection></subsection><subsection number="16-16-113(3)">The matters referred to in Subsections <xref depth="4" refnumber="16-16-113(3)(a)" start="0">(3)(a)</xref> through <xref depth="4" refnumber="16-16-113(3)(y)" start="0">(y)</xref> may be varied only in the organic rules. The organic rules may:<subsection number="16-16-113(3)(a)">require more information to be maintained under Section <xref depth="3" refnumber="16-16-114" start="0">16-16-114</xref> or provided to members under Subsection <xref depth="4" refnumber="16-16-505(11)" start="0">16-16-505(11)</xref>;</subsection><subsection number="16-16-113(3)(b)">provide restrictions on transactions between a member and an association under Section <xref depth="3" refnumber="16-16-115" start="0">16-16-115</xref>;</subsection><subsection number="16-16-113(3)(c)">provide for the percentage and manner of voting on amendments to the organic rules by district, class, or voting group under Subsection <xref depth="4" refnumber="16-16-404(1)" start="0">16-16-404(1)</xref>;</subsection><subsection number="16-16-113(3)(d)">provide for the percentage vote required to amend the bylaws concerning the admission of new members under Subsection <xref depth="4" refnumber="16-16-405(5)(e)" start="0">16-16-405(5)(e)</xref>;</subsection><subsection number="16-16-113(3)(e)">provide for terms and conditions to become a member under Section <xref depth="3" refnumber="16-16-502" start="0">16-16-502</xref>;</subsection><subsection number="16-16-113(3)(f)">restrict the manner of conducting members meetings under Subsections <xref depth="4" refnumber="16-16-506(3)" start="0">16-16-506(3)</xref> and <xref depth="4" refnumber="16-16-507(5)" start="0">16-16-507(5)</xref>;</subsection><subsection number="16-16-113(3)(g)">designate the presiding officer of members meetings under Subsections <xref depth="4" refnumber="16-16-506(5)" start="0">16-16-506(5)</xref> and <xref depth="4" refnumber="16-16-507(7)" start="0">16-16-507(7)</xref>;</subsection><subsection number="16-16-113(3)(h)">require a statement of purposes in the annual meeting notice under Subsection <xref depth="4" refnumber="16-16-508(2)" start="0">16-16-508(2)</xref>;</subsection><subsection number="16-16-113(3)(i)">increase quorum requirements for members meetings under Section <xref depth="3" refnumber="16-16-510" start="0">16-16-510</xref> and board of directors meetings under Section <xref depth="3" refnumber="16-16-815" start="0">16-16-815</xref>;</subsection><subsection number="16-16-113(3)(j)">allocate voting power among members, including patron members and investor members, and provide for the manner of member voting and action as permitted by Sections <xref depth="3" refnumber="16-16-511" start="0">16-16-511</xref> through <xref depth="3" refnumber="16-16-517" start="0">16-16-517</xref>;</subsection><subsection number="16-16-113(3)(k)">authorize investor members and expand or restrict the transferability of members' interests to the extent provided in Sections <xref depth="3" refnumber="16-16-602" start="0">16-16-602</xref> through <xref depth="3" refnumber="16-16-604" start="0">16-16-604</xref>;</subsection><subsection number="16-16-113(3)(l)">provide for enforcement of a marketing contract under Subsection <xref depth="4" refnumber="16-16-704(1)" start="0">16-16-704(1)</xref>;</subsection><subsection number="16-16-113(3)(m)">provide for qualification, election, terms, removal, filling vacancies, and member approval for compensation of directors in accordance with Sections <xref depth="3" refnumber="16-16-803" start="0">16-16-803</xref> through <xref depth="3" refnumber="16-16-805" start="0">16-16-805</xref>, <xref depth="3" refnumber="16-16-807" start="0">16-16-807</xref>, <xref depth="3" refnumber="16-16-809" start="0">16-16-809</xref>, and <xref depth="3" refnumber="16-16-810" start="0">16-16-810</xref>;</subsection><subsection number="16-16-113(3)(n)">restrict the manner of conducting board meetings and taking action without a meeting under Sections <xref depth="3" refnumber="16-16-811" start="0">16-16-811</xref> and <xref depth="3" refnumber="16-16-812" start="0">16-16-812</xref>;</subsection><subsection number="16-16-113(3)(o)">provide for frequency, location, notice and waivers of notice for board meetings under Sections <xref depth="3" refnumber="16-16-813" start="0">16-16-813</xref> and <xref depth="3" refnumber="16-16-814" start="0">16-16-814</xref>;</subsection><subsection number="16-16-113(3)(p)">increase the percentage of votes necessary for board action under Subsection <xref depth="4" refnumber="16-16-816(2)" start="0">16-16-816(2)</xref>;</subsection><subsection number="16-16-113(3)(q)">provide for the creation of committees of the board of directors and matters related to the committees in accordance with Section <xref depth="3" refnumber="16-16-817" start="0">16-16-817</xref>;</subsection><subsection number="16-16-113(3)(r)">provide for officers and their appointment, designation, and authority under Section <xref depth="3" refnumber="16-16-822" start="0">16-16-822</xref>;</subsection><subsection number="16-16-113(3)(s)">provide for forms and values of contributions under Section <xref depth="3" refnumber="16-16-1002" start="0">16-16-1002</xref>;</subsection><subsection number="16-16-113(3)(t)">provide for remedies for failure to make a contribution under Subsection <xref depth="4" refnumber="16-16-1003(2)" start="0">16-16-1003(2)</xref>;</subsection><subsection number="16-16-113(3)(u)">provide for the allocation of profits and losses of the association, distributions, and the redemption or repurchase of distributed property other than money in accordance with Sections <xref depth="3" refnumber="16-16-1004" start="0">16-16-1004</xref> through <xref depth="3" refnumber="16-16-1007" start="0">16-16-1007</xref>;</subsection><subsection number="16-16-113(3)(v)">specify when a member's dissociation is wrongful and the liability incurred by the dissociating member for damage to the association under Subsections <xref depth="4" refnumber="16-16-1101(2)" start="0">16-16-1101(2)</xref> and <xref depth="4" refnumber="16-16-1101(3)" start="0">(3)</xref>;</subsection><subsection number="16-16-113(3)(w)">provide the personal representative, or other legal representative of, a deceased member or a member adjudged incompetent with additional rights under Section <xref depth="3" refnumber="16-16-1103" start="0">16-16-1103</xref>;</subsection><subsection number="16-16-113(3)(x)">increase the percentage of votes required for board of director approval of:<subsection number="16-16-113(3)(x)(i)">a resolution to dissolve under Subsection <xref depth="4" refnumber="16-16-1205(1)(a)" start="0">16-16-1205(1)(a)</xref>;</subsection><subsection number="16-16-113(3)(x)(ii)">a proposed amendment to the organic rules under Subsection <xref depth="4" refnumber="16-16-402(1)(a)" start="0">16-16-402(1)(a)</xref>;</subsection><subsection number="16-16-113(3)(x)(iii)">a plan of conversion under Section <xref depth="3" refnumber="16-1a-904">16-1a-904</xref>;</subsection><subsection number="16-16-113(3)(x)(iv)">a plan of merger under Section <xref depth="3" refnumber="16-1a-704">16-1a-704</xref>; and</subsection><subsection number="16-16-113(3)(x)(v)">a proposed disposition of assets under Subsection <xref depth="4" refnumber="16-16-1503(1)" start="0">16-16-1503(1)</xref>; and</subsection></subsection><subsection number="16-16-113(3)(y)">vary the percentage of votes required for members' approval of:<subsection number="16-16-113(3)(y)(i)">a resolution to dissolve under Section <xref depth="3" refnumber="16-16-1205" start="0">16-16-1205</xref>;</subsection><subsection number="16-16-113(3)(y)(ii)">an amendment to the organic rules under Section <xref depth="3" refnumber="16-16-405" start="0">16-16-405</xref>;</subsection><subsection number="16-16-113(3)(y)(iii)">a plan of conversion under Section <xref depth="3" refnumber="16-1a-904">16-1a-904</xref>;</subsection><subsection number="16-16-113(3)(y)(iv)">a plan of merger under Section <xref depth="3" refnumber="16-1a-704">16-1a-704</xref>; and</subsection><subsection number="16-16-113(3)(y)(v)">a disposition of assets under Section <xref depth="3" refnumber="16-16-1504" start="0">16-16-1504</xref>.</subsection></subsection></subsection><subsection number="16-16-113(4)">The organic rules shall address members' contributions pursuant to Section <xref depth="3" refnumber="16-16-1001" start="0">16-16-1001</xref>.</subsection></section><section number="16-16-114"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Required information.</catchline><subsection number="16-16-114(1)"> Subject to Subsection <xref depth="4" refnumber="16-16-114(2)" start="0">(2)</xref>, a limited cooperative association shall maintain in a record available at its principal office: <subsection number="16-16-114(1)(a)"> a list containing the name, last known street address and, if different, mailing address, and term of office of each director and officer;</subsection><subsection number="16-16-114(1)(b)"> the initial articles of organization and all amendments to and restatements of the articles, together with a signed copy of any power of attorney under which any article, amendment, or restatement has been signed;</subsection><subsection number="16-16-114(1)(c)"> the initial bylaws and all amendments to and restatements of the bylaws;</subsection><subsection number="16-16-114(1)(d)"> all filed articles of merger and statements of conversion;</subsection><subsection number="16-16-114(1)(e)"> all financial statements of the association for the six most recent years;</subsection><subsection number="16-16-114(1)(f)"> the six most recent annual reports delivered by the association to the division;</subsection><subsection number="16-16-114(1)(g)"> the minutes of members meetings for the six most recent years;</subsection><subsection number="16-16-114(1)(h)"> evidence of all actions taken by members without a meeting for the six most recent years;</subsection><subsection number="16-16-114(1)(i)"> a list containing:<subsection number="16-16-114(1)(i)(i)"> the name, in alphabetical order, and last known street address and, if different, mailing address of each patron member and each investor member; and</subsection><subsection number="16-16-114(1)(i)(ii)"> if the association has districts or classes of members, information from which each current member in a district or class may be identified;</subsection></subsection><subsection number="16-16-114(1)(j)"> the federal income tax returns, any state and local income tax returns, and any tax reports of the association for the six most recent years;</subsection><subsection number="16-16-114(1)(k)"> accounting records maintained by the association in the ordinary course of its operations for the six most recent years;</subsection><subsection number="16-16-114(1)(l)"> the minutes of directors meetings for the six most recent years;</subsection><subsection number="16-16-114(1)(m)"> evidence of all actions taken by directors without a meeting for the six most recent years;</subsection><subsection number="16-16-114(1)(n)"> the amount of money contributed and agreed to be contributed by each member;</subsection><subsection number="16-16-114(1)(o)"> a description and statement of the agreed value of contributions other than money made and agreed to be made by each member;</subsection><subsection number="16-16-114(1)(p)"> the times at which, or events on the happening of which, any additional contribution is to be made by each member;</subsection><subsection number="16-16-114(1)(q)"> for each member, a description and statement of the member's interest or information from which the description and statement can be derived; and</subsection><subsection number="16-16-114(1)(r)"> all communications concerning the association made in a record to all members, or to all members in a district or class, for the six most recent years.</subsection></subsection><subsection number="16-16-114(2)"> If a limited cooperative association has existed for less than the period for which records are required to be maintained under Subsection <xref depth="4" refnumber="16-16-114(1)" start="0">(1)</xref>, the period records shall be kept is the period of the association's existence.</subsection><subsection number="16-16-114(3)"> The organic rules may require that more information be maintained.</subsection></section><section number="16-16-115"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Business transactions of member with limited cooperative association.</catchline><tab/>Subject to Sections <xref depth="3" refnumber="16-16-818" start="0">16-16-818</xref> and <xref depth="3" refnumber="16-16-819" start="0">16-16-819</xref> and except as otherwise provided in the organic rules or a specific contract relating to a transaction, a member may lend money to and transact other business with a limited cooperative association in the same manner as a person that is not a member. </section><section number="16-16-116"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Dual capacity.</catchline><tab/>A person may have both a patron member's interest and an investor member's interest. When such person acts as a patron member, the person is subject to this chapter and the organic rules governing patron members. When such person acts as an investor member, the person is subject to this chapter and the organic rules governing investor members. </section><section number="16-16-117"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Designated office and agent for service of process.</catchline><subsection number="16-16-117(1)"> A limited cooperative association, or a foreign cooperative that has a certificate of authority under Section <xref depth="3" refnumber="16-16-1404" start="0">16-16-1404</xref>, shall designate and continuously maintain in this state: <subsection number="16-16-117(1)(a)"> an office, as its designated office, which need not be a place of the association's or foreign cooperative's activity in this state; and</subsection><subsection number="16-16-117(1)(b)"> an agent for service of process at the designated office.</subsection></subsection><subsection number="16-16-117(2)"> An agent for service of process of a limited cooperative association or foreign cooperative shall be an individual who is a resident of this state or an entity that is authorized to do business in this state.</subsection></section><section number="16-16-118"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Change of designated office or agent for service of process.</catchline><subsection number="16-16-118(1)">Except as otherwise provided in Section <xref depth="3" refnumber="16-1a-407">16-1a-407</xref>, to change its designated office, its agent for service of process, or the street address or, if different, mailing address of its principal office, a limited cooperative association shall deliver to the division for filing a statement of change containing:<subsection number="16-16-118(1)(a)">the name of the limited cooperative association;</subsection><subsection number="16-16-118(1)(b)">the street address and, if different, mailing address of its designated office;</subsection><subsection number="16-16-118(1)(c)">if the designated office is to be changed, the street address and, if different, mailing address of the new designated office;</subsection><subsection number="16-16-118(1)(d)">the name of its agent for service of process; and</subsection><subsection number="16-16-118(1)(e)">if the agent for service of process is to be changed, the name of the new agent.</subsection></subsection><subsection number="16-16-118(2)">Except as otherwise provided in Section <xref depth="3" refnumber="16-1a-407">16-1a-407</xref>, to change its agent for service of process, the address of its designated office, or the street address or, if different, mailing address of its principal office, a foreign cooperative shall deliver to the division for filing a statement of change containing:<subsection number="16-16-118(2)(a)">the name of the foreign cooperative;</subsection><subsection number="16-16-118(2)(b)">the name, street address and, if different, mailing address of its designated office;</subsection><subsection number="16-16-118(2)(c)">if the current agent for service of process or an address of the designated office is to be changed, the new information;</subsection><subsection number="16-16-118(2)(d)">the street address and, if different, mailing address of its principal office; and</subsection><subsection number="16-16-118(2)(e)">if the street address or, if different, the mailing address of its principal office is to be changed, the street address and, if different, the mailing address of the new principal office.</subsection></subsection><subsection number="16-16-118(3)">Except as otherwise provided in Section <xref depth="3" refnumber="16-16-204" start="0">16-16-204</xref>, a statement of change is effective when filed by the division.</subsection></section><section number="16-16-119"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Resignation of agent for service of process.</catchline><subsection number="16-16-119(1)"> To resign as an agent for service of process of a limited cooperative association or foreign cooperative, the agent shall deliver to the division for filing a statement of resignation containing the name of the agent and the name of the association or foreign cooperative.</subsection><subsection number="16-16-119(2)"> After receiving a statement of resignation under Subsection <xref depth="4" refnumber="16-16-119(1)" start="0">(1)</xref>, the division shall file it and mail or otherwise provide or deliver a copy to the limited cooperative association or foreign cooperative at its principal office.</subsection><subsection number="16-16-119(3)"> An agency for service of process of a limited cooperative association or foreign cooperative terminates on the earlier of: <subsection number="16-16-119(3)(a)"> the 31st day after the division files a statement of resignation under Subsection <xref depth="4" refnumber="16-16-119(2)" start="0">(2)</xref>; or</subsection><subsection number="16-16-119(3)(b)"> when a record designating a new agent for service of process is delivered to the division for filing on behalf of the association or foreign cooperative and becomes effective.</subsection></subsection></section><section number="16-16-120"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Service of process.</catchline><subsection number="16-16-120(1)"> An agent for service of process appointed by a limited cooperative association or foreign cooperative is an agent of the association or foreign cooperative for service of process, notice, or a demand required or permitted by law to be served upon the association or foreign cooperative.</subsection><subsection number="16-16-120(2)"> If a limited cooperative association or foreign cooperative does not appoint or maintain an agent for service of process in this state or the agent for service of process cannot with reasonable diligence be found at the address of the designated office on file with the division, the division is an agent of the association or foreign cooperative upon which process, notice, or a demand may be served.</subsection><subsection number="16-16-120(3)"> Service of process, notice, or a demand on the division as agent of a limited cooperative association or foreign cooperative may be made by delivering to the division two copies of the process, notice, or demand. The division shall forward one copy by registered or certified mail, return receipt requested, to the association or foreign cooperative at its principal office.</subsection><subsection number="16-16-120(4)"> Service is effected under Subsection <xref depth="4" refnumber="16-16-120(3)" start="0">(3)</xref> on the earliest of: <subsection number="16-16-120(4)(a)"> the date the limited cooperative association or foreign cooperative receives the process, notice, or demand;</subsection><subsection number="16-16-120(4)(b)"> the date shown on the return receipt, if signed on behalf of the association or foreign cooperative; or</subsection><subsection number="16-16-120(4)(c)"> five days after the process, notice, or demand is deposited by the division for delivery by the United States Postal Service, if mailed postage prepaid to the address of the principal office on file with the division.</subsection></subsection><subsection number="16-16-120(5)"> The division shall keep a record of each process, notice, and demand served pursuant to this section and record the time of, and the action taken regarding, the service.</subsection><subsection number="16-16-120(6)"> This section does not affect the right to serve process, notice, or a demand in any other manner provided by law.</subsection></section><section number="16-16-121"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Provisions Applicable to All Business Entities applicable.</catchline>Chapter 1a, Provisions Applicable to All Business Entities, applies to the provisions of this chapter.</section></part><part number="16-16-2"><catchline>Filing and Annual Reports</catchline><section number="16-16-202"><histories><history>Amended by Chapter <modchap sess="2023GS">401</modchap>, 2023 General Session</history><modyear>2023</modyear></histories><catchline>Signing and filing of records pursuant to judicial order.</catchline><subsection number="16-16-202(1)"> If a person required by this chapter to sign or deliver a record to the division for filing does not sign or deliver the record to the division for filing, the court may order, upon the petition of an aggrieved person: <subsection number="16-16-202(1)(a)"> the person to sign the record and deliver the record to the division for filing; or</subsection><subsection number="16-16-202(1)(b)"> delivery of the unsigned record to the division for filing.</subsection></subsection><subsection number="16-16-202(2)"> An aggrieved person under Subsection <xref depth="4" refnumber="16-16-202(1)" start="0">(1)</xref>, other than the limited cooperative association or foreign cooperative to which the record pertains, shall make the association or foreign cooperative a party to the action brought to obtain the order.</subsection><subsection number="16-16-202(3)"> An unsigned record filed pursuant to this section is effective.</subsection></section><section number="16-16-204"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Correcting filed record.</catchline><subsection number="16-16-204(1)"> A limited cooperative association or foreign cooperative may deliver to the division for filing a statement of correction to correct a record previously delivered by the association or foreign cooperative to the division and filed by the division if, at the time of filing, the record contained inaccurate information or was defectively signed.</subsection><subsection number="16-16-204(2)"> A statement of correction may not state a delayed effective date and shall: <subsection number="16-16-204(2)(a)"> describe the record to be corrected, including its filing date, or have attached a copy of the record as filed;</subsection><subsection number="16-16-204(2)(b)"> specify the inaccurate information and the reason it is inaccurate or the manner in which the signing was defective; and</subsection><subsection number="16-16-204(2)(c)"> correct the inaccurate information or defective signature.</subsection></subsection><subsection number="16-16-204(3)"> When filed by the division, a statement of correction is effective: <subsection number="16-16-204(3)(a)"> when filed as to persons relying on the inaccurate information or defective signature before its correction and adversely affected by the correction; and</subsection><subsection number="16-16-204(3)(b)"> as to all other persons, retroactively as of the effective date and time of the record the statement corrects.</subsection></subsection></section><section number="16-16-205"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Liability for inaccurate information in filed record.</catchline><tab/>If a record delivered to the division for filing under this chapter and filed by the division contains inaccurate information, a person that suffers a loss by reliance on the information may recover damages for the loss from a person that signed the record or caused another to sign it on the person's behalf and knew at the time the record was signed that the information was inaccurate. </section><section number="16-16-206"><histories><history>Amended by Chapter <modchap sess="2018GS">149</modchap>, 2018 General Session</history><modyear>2018</modyear></histories><catchline>Certificate of existence or authorization.</catchline><subsection number="16-16-206(1)"> The division, upon request and payment of the required fee, shall furnish any person that requests it a certificate of existence for a limited cooperative association if the records filed in the office of the division show that the division has filed the association's articles of organization, that the association is registered with the division, and that the division has not filed a statement of termination.</subsection><subsection number="16-16-206(2)"> The division, upon request and payment of the required fee, shall furnish to any person that requests it a certificate of authority for a foreign cooperative if the records filed in the office of the division show that the division has filed the foreign cooperative's certificate of authority, has not revoked nor has reason to revoke the certificate of authority, and has not filed a notice of cancellation.</subsection><subsection number="16-16-206(3)"> Subject to any exceptions stated in the certificate, a certificate of existence or authority issued by the division establishes conclusively that the limited cooperative association or foreign cooperative is registered with the division or is authorized to transact business in this state.</subsection></section></part><part number="16-16-3"><catchline>Formation and Initial Articles of Organization of Limited Cooperative Association</catchline><section number="16-16-301"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Organizers.</catchline><tab/>A limited cooperative association shall be organized by one or more organizers. </section><section number="16-16-302"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Formation of limited cooperative association -- Articles of organization.</catchline><subsection number="16-16-302(1)">To form a limited cooperative association, an organizer of the association shall deliver articles of organization to the division for filing. The articles shall state:<subsection number="16-16-302(1)(a)">the name of the association;</subsection><subsection number="16-16-302(1)(b)">the purposes for which the association is formed;</subsection><subsection number="16-16-302(1)(c)">the street address and, if different, mailing address of the association's initial designated office and the name of the association's initial agent for service of process at the designated office;</subsection><subsection number="16-16-302(1)(d)">the street address and, if different, mailing address of the initial principal office;</subsection><subsection number="16-16-302(1)(e)">the name and street address and, if different, mailing address of each organizer; and</subsection><subsection number="16-16-302(1)(f)">the term for which the association is to exist if other than perpetual.</subsection></subsection><subsection number="16-16-302(2)">Subject to Subsection <xref depth="4" refnumber="16-16-113(1)" start="0">16-16-113(1)</xref>, articles of organization may contain any other provisions in addition to those required by Subsection <xref depth="4" refnumber="16-16-302(1)" start="0">(1)</xref>.</subsection><subsection number="16-16-302(3)">A limited cooperative association is formed after articles of organization that substantially comply with Subsection <xref depth="4" refnumber="16-16-302(1)" start="0">(1)</xref> are delivered to the division, are filed, and become effective under Section <xref depth="3" refnumber="16-1a-204">16-1a-204</xref>.</subsection><subsection number="16-16-302(4)">If articles of organization filed by the division state a delayed effective date, a limited cooperative association is not formed if, before the articles take effect, an organizer signs and delivers to the division for filing a statement of cancellation.</subsection></section><section number="16-16-303"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Organization of limited cooperative association.</catchline><subsection number="16-16-303(1)"> After a limited cooperative association is formed: <subsection number="16-16-303(1)(a)"> if initial directors are named in the articles of organization, the initial directors shall hold an organizational meeting to adopt initial bylaws and carry on any other business necessary or proper to complete the organization of the association; or</subsection><subsection number="16-16-303(1)(b)"> if initial directors are not named in the articles of organization, the organizers shall designate the initial directors and call a meeting of the initial directors to adopt initial bylaws and carry on any other business necessary or proper to complete the organization of the association.</subsection></subsection><subsection number="16-16-303(2)"> Unless the articles of organization otherwise provide, the initial directors may cause the limited cooperative association to accept members, including those necessary for the association to begin business.</subsection><subsection number="16-16-303(3)"> Initial directors need not be members.</subsection><subsection number="16-16-303(4)"> An initial director serves until a successor is elected and qualified at a members meeting or the director is removed, resigns, is adjudged incompetent, or dies.</subsection></section><section number="16-16-304"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Bylaws.</catchline><subsection number="16-16-304(1)"> Bylaws shall be in a record and, if not stated in the articles of organization, shall include: <subsection number="16-16-304(1)(a)"> a statement of the capital structure of the limited cooperative association, including:<subsection number="16-16-304(1)(a)(i)"> the classes or other types of members' interests and relative rights, preferences, and restrictions granted to or imposed upon each class or other type of member's interest; and</subsection><subsection number="16-16-304(1)(a)(ii)"> the rights to share in profits or distributions of the association;</subsection></subsection><subsection number="16-16-304(1)(b)"> a statement of the method for admission of members;</subsection><subsection number="16-16-304(1)(c)"> a statement designating voting and other governance rights, including which members have voting power and any restriction on voting power;</subsection><subsection number="16-16-304(1)(d)"> a statement that a member's interest is transferable if it is to be transferable and a statement of the conditions upon which it may be transferred;</subsection><subsection number="16-16-304(1)(e)"> a statement concerning the manner in which profits and losses are allocated and distributions are made among patron members and, if investor members are authorized, the manner in which profits and losses are allocated and how distributions are made among investor members and between patron members and investor members;</subsection><subsection number="16-16-304(1)(f)"> a statement concerning:<subsection number="16-16-304(1)(f)(i)"> whether persons that are not members but conduct business with the association may be permitted to share in allocations of profits and losses and receive distributions; and</subsection><subsection number="16-16-304(1)(f)(ii)"> the manner in which profits and losses are allocated and distributions are made with respect to those persons; and</subsection></subsection><subsection number="16-16-304(1)(g)"> a statement of the number and terms of directors or the method by which the number and terms are determined.</subsection></subsection><subsection number="16-16-304(2)"> Subject to Subsection <xref depth="4" refnumber="16-16-113(3)" start="0">16-16-113(3)</xref> and the articles of organization, bylaws may contain any other provision for managing and regulating the affairs of the association.</subsection><subsection number="16-16-304(3)"> In addition to amendments permitted under <xref depth="2" refnumber="16-16-4" start="2">Part 4, Amendment of Organic Rules of Limited Cooperative Association</xref>, the initial board of directors may amend the bylaws by a majority vote of the directors at any time before the admission of members.</subsection></section></part><part number="16-16-4"><catchline>Amendment of Organic Rules of Limited Cooperative Association</catchline><section number="16-16-401"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Authority to amend organic rules.</catchline><subsection number="16-16-401(1)"> A limited cooperative association may amend its organic rules under this part for any lawful purpose. In addition, the initial board of directors may amend the bylaws of an association under Section <xref depth="3" refnumber="16-16-304" start="0">16-16-304</xref>.</subsection><subsection number="16-16-401(2)"> Unless the organic rules otherwise provide, a member does not have a vested property right resulting from any provision in the organic rules, including a provision relating to the management, control, capital structure, distribution, entitlement, purpose, or duration of the limited cooperative association.</subsection></section><section number="16-16-402"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Notice and action on amendment of organic rules.</catchline><subsection number="16-16-402(1)"> Except as provided in Subsections <xref depth="4" refnumber="16-16-401(1)" start="0">16-16-401(1)</xref> and <xref depth="4" refnumber="16-16-405(6)" start="0">16-16-405(6)</xref>, the organic rules of a limited cooperative association may be amended only at a members meeting. An amendment may be proposed by either: <subsection number="16-16-402(1)(a)"> a majority of the board of directors, or a greater percentage if required by the organic rules; or</subsection><subsection number="16-16-402(1)(b)"> one or more petitions signed by at least 10% of the patron members or at least 10% of the investor members.</subsection></subsection><subsection number="16-16-402(2)"> The board of directors shall call a members meeting to consider an amendment proposed pursuant to Subsection <xref depth="4" refnumber="16-16-402(1)" start="0">(1)</xref>. The meeting shall be held not later than 90 days following the proposal of the amendment by the board or receipt of a petition. The board shall mail or otherwise transmit or deliver in a record to each member: <subsection number="16-16-402(2)(a)"> the proposed amendment, or a summary of the proposed amendment and a statement of the manner in which a copy of the amendment in a record may be reasonably obtained by a member;</subsection><subsection number="16-16-402(2)(b)"> a recommendation that the members approve the amendment, or if the board determines that because of conflict of interest or other special circumstances it should not make a favorable recommendation, the basis for that determination;</subsection><subsection number="16-16-402(2)(c)"> a statement of any condition of the board's submission of the amendment to the members; and</subsection><subsection number="16-16-402(2)(d)"> notice of the meeting at which the proposed amendment will be considered, which shall be given in the same manner as notice for a special meeting of members.</subsection></subsection></section><section number="16-16-403"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Change to amendment of organic rules at meeting.</catchline><subsection number="16-16-403(1)"> A substantive change to a proposed amendment of the organic rules may not be made at the members meeting at which a vote on the amendment occurs.</subsection><subsection number="16-16-403(2)"> A nonsubstantive change to a proposed amendment of the organic rules may be made at the members meeting at which the vote on the amendment occurs and need not be separately voted upon by the board of directors.</subsection><subsection number="16-16-403(3)"> A vote to adopt a nonsubstantive change to a proposed amendment to the organic rules shall be by the same percentage of votes required to pass a proposed amendment.</subsection></section><section number="16-16-404"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Voting by district, class, or voting group.</catchline><subsection number="16-16-404(1)"> This section applies if the organic rules provide for voting by district or class, or if there is one or more identifiable voting groups that a proposed amendment to the organic rules would affect differently from other members with respect to matters identified in Subsections <xref depth="4" refnumber="16-16-405(5)(a)" start="0">16-16-405(5)(a)</xref> through <xref depth="4" refnumber="16-16-405(5)(e)" start="0">(e)</xref>. Approval of the amendment requires the same percentage of votes of the members of that district, class, or voting group required in Sections <xref depth="3" refnumber="16-16-405" start="0">16-16-405</xref> and <xref depth="3" refnumber="16-16-514" start="0">16-16-514</xref>.</subsection><subsection number="16-16-404(2)"> If a proposed amendment to the organic rules would affect members in two or more districts or classes entitled to vote separately under Subsection <xref depth="4" refnumber="16-16-404(1)" start="0">(1)</xref> in the same or a substantially similar way, the districts or classes affected shall vote as a single voting group unless the organic rules otherwise provide for separate voting.</subsection></section><section number="16-16-405"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Approval of amendment.</catchline><subsection number="16-16-405(1)"> Subject to Section <xref depth="3" refnumber="16-16-404" start="0">16-16-404</xref> and Subsections <xref depth="4" refnumber="16-16-405(3)" start="0">(3)</xref> and <xref depth="4" refnumber="16-16-405(4)" start="0">(4)</xref>, an amendment to the articles of organization shall be approved by: <subsection number="16-16-405(1)(a)"> at least two-thirds of the voting power of members present at a members meeting called under Section <xref depth="3" refnumber="16-16-402" start="0">16-16-402</xref>; and</subsection><subsection number="16-16-405(1)(b)"> if the limited cooperative association has investor members, at least a majority of the votes cast by patron members, unless the organic rules require a greater percentage vote by patron members.</subsection></subsection><subsection number="16-16-405(2)"> Subject to Section <xref depth="3" refnumber="16-16-404" start="0">16-16-404</xref> and Subsections <xref depth="4" refnumber="16-16-405(3)" start="0">(3)</xref>, <xref depth="4" refnumber="16-16-405(4)" start="0">(4)</xref>, <xref depth="4" refnumber="16-16-405(5)" start="0">(5)</xref>, and <xref depth="4" refnumber="16-16-405(6)" start="0">(6)</xref>, an amendment to the bylaws shall be approved by: <subsection number="16-16-405(2)(a)"> at least a majority vote of the voting power of all members present at a members meeting called under Section <xref depth="3" refnumber="16-16-402" start="0">16-16-402</xref>, unless the organic rules require a greater percentage; and</subsection><subsection number="16-16-405(2)(b)"> if a limited cooperative association has investor members, a majority of the votes cast by patron members, unless the organic rules require a larger affirmative vote by patron members.</subsection></subsection><subsection number="16-16-405(3)"> The organic rules may require that the percentage of votes under Subsection <xref depth="4" refnumber="16-16-405(1)(a)" start="0">(1)(a)</xref> or <xref depth="4" refnumber="16-16-405(2)(a)" start="0">(2)(a)</xref> be: <subsection number="16-16-405(3)(a)"> a different percentage that is not less than a majority of members voting at the meeting;</subsection><subsection number="16-16-405(3)(b)"> measured against the voting power of all members; or</subsection><subsection number="16-16-405(3)(c)"> a combination of Subsections <xref depth="4" refnumber="16-16-405(3)(a)" start="0">(3)(a)</xref> and <xref depth="4" refnumber="16-16-405(3)(b)" start="0">(b)</xref>.</subsection></subsection><subsection number="16-16-405(4)"> Consent in a record by a member shall be delivered to a limited cooperative association before delivery of an amendment to the articles of organization or restated articles of organization for filing pursuant to Section <xref depth="3" refnumber="16-16-407" start="0">16-16-407</xref>, if as a result of the amendment the member will have: <subsection number="16-16-405(4)(a)"> personal liability for an obligation of the association; or</subsection><subsection number="16-16-405(4)(b)"> an obligation or liability for an additional contribution.</subsection></subsection><subsection number="16-16-405(5)"> The vote required to amend bylaws shall satisfy the requirements of Subsection <xref depth="4" refnumber="16-16-405(1)" start="0">(1)</xref> if the proposed amendment modifies: <subsection number="16-16-405(5)(a)"> the equity capital structure of the limited cooperative association, including the rights of the association's members to share in profits or distributions, or the relative rights, preferences, and restrictions granted to or imposed upon one or more districts, classes, or voting groups of similarly situated members;</subsection><subsection number="16-16-405(5)(b)"> the transferability of a member's interest;</subsection><subsection number="16-16-405(5)(c)"> the manner or method of allocation of profits or losses among members;</subsection><subsection number="16-16-405(5)(d)"> the quorum for a meeting and the rights of voting and governance; or</subsection><subsection number="16-16-405(5)(e)"> unless otherwise provided in the organic rules, the terms for admission of new members.</subsection></subsection><subsection number="16-16-405(6)"> Except for the matters described in Subsection <xref depth="4" refnumber="16-16-405(5)" start="0">(5)</xref>, the articles of organization may delegate amendment of all or a part of the bylaws to the board of directors without requiring member approval.</subsection><subsection number="16-16-405(7)"> If the articles of organization delegate amendment of bylaws to the board of directors, the board shall provide a description of any amendment of the bylaws made by the board to the members in a record not later than 30 days after the amendment, but the description may be provided at the next annual members meeting if the meeting is held within the 30-day period.</subsection></section><section number="16-16-406"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Restated articles of organization.</catchline><tab/>A limited cooperative association, by the affirmative vote of a majority of the board of directors taken at a meeting for which the purpose is stated in the notice of the meeting, may adopt restated articles of organization that contain the original articles as previously amended. Restated articles may contain amendments if the restated articles are adopted in the same manner and with the same vote as required for amendments to the articles under Subsection <xref depth="4" refnumber="16-16-405(1)" start="0">16-16-405(1)</xref>. Upon filing, restated articles supersede the existing articles and all amendments. </section><section number="16-16-407"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Amendment or restatement of articles of organization -- Filing.</catchline><subsection number="16-16-407(1)">To amend its articles of organization, a limited cooperative association shall deliver to the division for filing an amendment of the articles, or restated articles of organization or articles of conversion or merger pursuant to Chapter 1a, Part 7, Merger, or Chapter 1a, Part 9, Conversion, which contain one or more amendments of the articles of organization, stating:<subsection number="16-16-407(1)(a)">the name of the association;</subsection><subsection number="16-16-407(1)(b)">the date of filing of the association's initial articles; and</subsection><subsection number="16-16-407(1)(c)">the changes the amendment makes to the articles as most recently amended or restated.</subsection></subsection><subsection number="16-16-407(2)">Before the beginning of the initial meeting of the board of directors, an organizer who knows that information in the filed articles of organization was inaccurate when the articles were filed or has become inaccurate due to changed circumstances shall promptly:<subsection number="16-16-407(2)(a)">cause the articles to be amended; or</subsection><subsection number="16-16-407(2)(b)">if appropriate, deliver an amendment to the division for filing pursuant to Section <xref depth="3" refnumber="16-1a-206">16-1a-206</xref>.</subsection></subsection><subsection number="16-16-407(3)">If restated articles of organization are adopted, the restated articles may be delivered to the division for filing in the same manner as an amendment.</subsection><subsection number="16-16-407(4)">Upon filing, an amendment of the articles of organization or other record containing an amendment of the articles which has been properly adopted by the members is effective as provided in Section <xref depth="3" refnumber="16-1a-206">16-1a-206</xref>.</subsection></section></part><part number="16-16-5"><catchline>Members</catchline><section number="16-16-501"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Members.</catchline><tab/>To begin business, a limited cooperative association shall have at least two patron members unless the sole member is a cooperative. </section><section number="16-16-502"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Becoming a member.</catchline><tab/>A person becomes a member:<subsection number="16-16-502(1)">as provided in the organic rules;</subsection><subsection number="16-16-502(2)">as the result of a merger or conversion under Chapter 1a, Part 7, Merger, or Chapter 1a, Part 9, Conversion; or</subsection><subsection number="16-16-502(3)">with the consent of all the members.</subsection></section><section number="16-16-503"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>No power as member to bind association.</catchline><tab/>A member, solely by reason of being a member, may not act for or bind the limited cooperative association. </section><section number="16-16-504"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>No liability as member for association's obligations.</catchline><tab/>Unless the articles of organization otherwise provide, a debt, obligation, or other liability of a limited cooperative association is solely that of the association and is not the debt, obligation, or liability of a member solely by reason of being a member. </section><section number="16-16-505"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Right of member and former member to information.</catchline><subsection number="16-16-505(1)"> Not later than 10 business days after receipt of a demand made in a record, a limited cooperative association shall permit a member to obtain, inspect, and copy in the association's principal office required information listed in Subsections <xref depth="4" refnumber="16-16-114(1)(a)" start="0">16-16-114(1)(a)</xref> through <xref depth="4" refnumber="16-16-114(1)(h)" start="0">(h)</xref> during regular business hours. A member need not have any particular purpose for seeking the information. The association is not required to provide the same information listed in Subsections <xref depth="4" refnumber="16-16-114(1)(b)" start="0">16-16-114(1)(b)</xref> through <xref depth="4" refnumber="16-16-114(1)(h)" start="0">(h)</xref> to the same member more than once during a six-month period.</subsection><subsection number="16-16-505(2)"> On demand made in a record received by the limited cooperative association, a member may obtain, inspect, and copy in the association's principal office required information listed in Subsections <xref depth="4" refnumber="16-16-114(1)(i)" start="0">16-16-114(1)(i)</xref>, <xref depth="4" refnumber="16-16-114(1)(j)" start="0">(j)</xref>, <xref depth="4" refnumber="16-16-114(1)(l)" start="0">(l)</xref>, <xref depth="4" refnumber="16-16-114(1)(m)" start="0">(m)</xref>, <xref depth="4" refnumber="16-16-114(1)(p)" start="0">(p)</xref>, and <xref depth="4" refnumber="16-16-114(1)(r)" start="0">(r)</xref> during regular business hours, if: <subsection number="16-16-505(2)(a)"> the member seeks the information in good faith and for a proper purpose reasonably related to the member's interest;</subsection><subsection number="16-16-505(2)(b)"> the demand includes a description with reasonable particularity of the information sought and the purpose for seeking the information;</subsection><subsection number="16-16-505(2)(c)"> the information sought is directly connected to the member's purpose; and</subsection><subsection number="16-16-505(2)(d)"> the demand is reasonable.</subsection></subsection><subsection number="16-16-505(3)"> Not later than 10 business days after receipt of a demand pursuant to Subsection <xref depth="4" refnumber="16-16-505(2)" start="0">(2)</xref>, a limited cooperative association shall provide, in a record, the following information to the member that made the demand: <subsection number="16-16-505(3)(a)"> if the association agrees to provide the demanded information:<subsection number="16-16-505(3)(a)(i)"> what information the association will provide in response to the demand; and</subsection><subsection number="16-16-505(3)(a)(ii)"> a reasonable time and place at which the association will provide the information; or</subsection></subsection><subsection number="16-16-505(3)(b)"> if the association declines to provide some or all of the demanded information, the association's reasons for declining.</subsection></subsection><subsection number="16-16-505(4)"> A person dissociated as a member may obtain, inspect, and copy information available to a member under Subsection <xref depth="4" refnumber="16-16-505(1)" start="0">(1)</xref> or <xref depth="4" refnumber="16-16-505(2)" start="0">(2)</xref> by delivering a demand in a record to the limited cooperative association in the same manner and subject to the same conditions applicable to a member under Subsection <xref depth="4" refnumber="16-16-505(2)" start="0">(2)</xref> if: <subsection number="16-16-505(4)(a)"> the information pertains to the period during which the person was a member in the association; and</subsection><subsection number="16-16-505(4)(b)"> the person seeks the information in good faith.</subsection></subsection><subsection number="16-16-505(5)"> A limited cooperative association shall respond to a demand made pursuant to Subsection <xref depth="4" refnumber="16-16-505(4)" start="0">(4)</xref> in the manner provided in Subsection <xref depth="4" refnumber="16-16-505(3)" start="0">(3)</xref>.</subsection><subsection number="16-16-505(6)"> Not later than 10 business days after receipt by a limited cooperative association of a demand made by a member in a record, but not more often than once in a six-month period, the association shall deliver to the member a record stating the information with respect to the member required by Subsection <xref depth="4" refnumber="16-16-114(1)(q)" start="0">16-16-114(1)(q)</xref>.</subsection><subsection number="16-16-505(7)"> A limited cooperative association may impose reasonable restrictions, including nondisclosure restrictions, on the use of information obtained under this section. In a dispute concerning the reasonableness of a restriction under this Subsection <xref depth="4" refnumber="16-16-505(7)" start="0">(7)</xref>, the association has the burden of proving reasonableness.</subsection><subsection number="16-16-505(8)"> A limited cooperative association may charge a person that makes a demand under this section reasonable costs of copying, limited to the costs of labor and material.</subsection><subsection number="16-16-505(9)"> A person that may obtain information under this section may obtain the information through an attorney or other agent. A restriction imposed on the person under Subsection <xref depth="4" refnumber="16-16-505(7)" start="0">(7)</xref> or by the organic rules applies to the attorney or other agent.</subsection><subsection number="16-16-505(10)"> The rights stated in this section do not extend to a person as transferee.</subsection><subsection number="16-16-505(11)"> The organic rules may require a limited cooperative association to provide more information than required by this section and may establish conditions and procedures for providing the information.</subsection></section><section number="16-16-506"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Annual meeting of members.</catchline><subsection number="16-16-506(1)"> Members shall meet annually at a time provided in the organic rules or set by the board of directors not inconsistent with the organic rules.</subsection><subsection number="16-16-506(2)"> An annual members meeting may be held inside or outside this state at the place stated in the organic rules or selected by the board of directors not inconsistent with the organic rules.</subsection><subsection number="16-16-506(3)"> Unless the organic rules otherwise provide, members may attend or conduct an annual members meeting through any means of communication if all members attending the meeting can communicate with each other during the meeting.</subsection><subsection number="16-16-506(4)"> The board of directors shall report, or cause to be reported, at the association's annual members meeting the association's business and financial condition as of the close of the most recent fiscal year.</subsection><subsection number="16-16-506(5)"> Unless the organic rules otherwise provide, the board of directors shall designate the presiding officer of the association's annual members meeting.</subsection><subsection number="16-16-506(6)"> Failure to hold an annual members meeting does not affect the validity of any action by the limited cooperative association.</subsection></section><section number="16-16-507"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Special meeting of members.</catchline><subsection number="16-16-507(1)"> A special meeting of members may be called only: <subsection number="16-16-507(1)(a)"> as provided in the organic rules;</subsection><subsection number="16-16-507(1)(b)"> by a majority vote of the board of directors on a proposal stating the purpose of the meeting;</subsection><subsection number="16-16-507(1)(c)"> by demand in a record signed by members holding at least 20% of the voting power of the persons in any district or class entitled to vote on the matter that is the purpose of the meeting stated in the demand; or</subsection><subsection number="16-16-507(1)(d)"> by demand in a record signed by members holding at least 10% of the total voting power of all the persons entitled to vote on the matter that is the purpose of the meeting stated in the demand.</subsection></subsection><subsection number="16-16-507(2)"> A demand under Subsection <xref depth="4" refnumber="16-16-507(1)(c)" start="0">(1)(c)</xref> or <xref depth="4" refnumber="16-16-507(1)(d)" start="0">(d)</xref> shall be submitted to the officer of the limited cooperative association charged with keeping its records.</subsection><subsection number="16-16-507(3)"> Any voting member may withdraw its demand under Subsection <xref depth="4" refnumber="16-16-507(1)(c)" start="0">(1)(c)</xref> or <xref depth="4" refnumber="16-16-507(1)(d)" start="0">(d)</xref> before receipt by the limited cooperative association of demands sufficient to require a special meeting of members.</subsection><subsection number="16-16-507(4)"> A special meeting of members may be held inside or outside this state at the place stated in the organic rules or selected by the board of directors not inconsistent with the organic rules.</subsection><subsection number="16-16-507(5)"> Unless the organic rules otherwise provide, members may attend or conduct a special meeting of members through the use of any means of communication if all members attending the meeting can communicate with each other during the meeting.</subsection><subsection number="16-16-507(6)"> Only business within the purpose or purposes stated in the notice of a special meeting of members may be conducted at the meeting.</subsection><subsection number="16-16-507(7)"> Unless the organic rules otherwise provide, the presiding officer of a special meeting of members shall be designated by the board of directors.</subsection></section><section number="16-16-508"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Notice of members meeting.</catchline><subsection number="16-16-508(1)"> A limited cooperative association shall notify each member of the time, date, and place of a members meeting at least 15 and not more than 60 days before the meeting.</subsection><subsection number="16-16-508(2)"> Unless the articles of organization otherwise provide, notice of an annual members meeting need not include any purpose of the meeting.</subsection><subsection number="16-16-508(3)"> Notice of a special meeting of members shall include each purpose of the meeting as contained in the demand under Subsection <xref depth="4" refnumber="16-16-507(1)(c)" start="0">16-16-507(1)(c)</xref> or <xref depth="4" refnumber="16-16-507(1)(d)" start="0">(d)</xref> or as voted upon by the board of directors under Subsection <xref depth="4" refnumber="16-16-507(1)(b)" start="0">16-16-507(1)(b)</xref>.</subsection><subsection number="16-16-508(4)"> Notice of a members meeting shall be given in a record unless oral notice is reasonable under the circumstances.</subsection></section><section number="16-16-509"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Waiver of members meeting notice.</catchline><subsection number="16-16-509(1)"> A member may waive notice of a members meeting before, during, or after the meeting.</subsection><subsection number="16-16-509(2)"> A member's participation in a members meeting is a waiver of notice of that meeting unless the member objects to the meeting at the beginning of the meeting or promptly upon the member's arrival at the meeting and does not thereafter vote for or assent to action taken at the meeting.</subsection></section><section number="16-16-510"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Quorum of members.</catchline><tab/>Unless the organic rules otherwise require a greater number of members or percentage of the voting power, the voting member or members present at a members meeting constitute a quorum. </section><section number="16-16-511"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Voting by patron members.</catchline><tab/>Except as provided by Subsection <xref depth="4" refnumber="16-16-512(1)" start="0">16-16-512(1)</xref>, each patron member has one vote. The organic rules may allocate voting power among patron members as provided in Subsection <xref depth="4" refnumber="16-16-512(1)" start="0">16-16-512(1)</xref>. </section><section number="16-16-512"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Determination of voting power of patron member.</catchline><subsection number="16-16-512(1)"> The organic rules may allocate voting power among patron members on the basis of one or a combination of the following: <subsection number="16-16-512(1)(a)"> one member, one vote;</subsection><subsection number="16-16-512(1)(b)"> use or patronage;</subsection><subsection number="16-16-512(1)(c)"> equity; or</subsection><subsection number="16-16-512(1)(d)"> if a patron member is a cooperative, the number of its patron members.</subsection></subsection><subsection number="16-16-512(2)"> The organic rules may provide for the allocation of patron member voting power by districts or class, or any combination thereof.</subsection></section><section number="16-16-513"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Voting by investor members.</catchline><tab/>If the organic rules provide for investor members, each investor member has one vote, unless the organic rules otherwise provide. The organic rules may provide for the allocation of investor member voting power by class, classes, or any combination of classes. </section><section number="16-16-514"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Voting requirements for members.</catchline><subsection number="16-16-514(1)"> If a limited cooperative association has both patron and investor members, the following rules apply: <subsection number="16-16-514(1)(a)"> the total voting power of all patron members may not be less than a majority of the entire voting power entitled to vote; and</subsection><subsection number="16-16-514(1)(b)"> action on any matter is approved only upon the affirmative vote of at least a majority of:<subsection number="16-16-514(1)(b)(i)"> all members voting at the meeting unless more than a majority is required by this chapter or the organic rules; and</subsection><subsection number="16-16-514(1)(b)(ii)"> votes cast by patron members unless the organic rules require a larger affirmative vote by patron members.</subsection></subsection></subsection><subsection number="16-16-514(2)"> The organic rules may provide for the percentage of the affirmative votes that must be cast by investor members to approve the matter.</subsection></section><section number="16-16-515"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Manner of voting.</catchline><subsection number="16-16-515(1)"> Unless the organic rules otherwise provide, voting by a proxy at a members meeting is prohibited. This Subsection <xref depth="4" refnumber="16-16-515(1)" start="0">(1)</xref> does not prohibit delegate voting based on district or class.</subsection><subsection number="16-16-515(2)"> If voting by a proxy is permitted, a patron member may appoint only another patron member as a proxy and, if investor members are permitted, an investor member may appoint only another investor member as a proxy.</subsection><subsection number="16-16-515(3)"> The organic rules may provide for the manner of and provisions governing the appointment of a proxy.</subsection><subsection number="16-16-515(4)"> The organic rules may provide for voting on any question by ballot delivered by mail or voting by other means on questions that are subject to vote by members.</subsection></section><section number="16-16-516"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Action without a meeting.</catchline><subsection number="16-16-516(1)"> Unless the organic rules require that action be taken only at a members meeting, any action that may be taken by the members may be taken without a meeting if each member entitled to vote on the action consents in a record to the action.</subsection><subsection number="16-16-516(2)"> Consent under Subsection <xref depth="4" refnumber="16-16-516(1)" start="0">(1)</xref> may be withdrawn by a member in a record at any time before the limited cooperative association receives a consent from each member entitled to vote.</subsection><subsection number="16-16-516(3)"> Consent to any action may specify the effective date or time of the action.</subsection></section><section number="16-16-517"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Districts and delegates -- Classes of members.</catchline><subsection number="16-16-517(1)"> The organic rules may provide for the formation of geographic districts of patron members and: <subsection number="16-16-517(1)(a)"> for the conduct of patron member meetings by districts and the election of directors at the meetings; or</subsection><subsection number="16-16-517(1)(b)"> that districts may elect district delegates to represent and vote for the district at members meetings.</subsection></subsection><subsection number="16-16-517(2)"> A delegate elected under Subsection <xref depth="4" refnumber="16-16-517(1)(b)" start="0">(1)(b)</xref> has one vote unless voting power is otherwise allocated by the organic rules.</subsection><subsection number="16-16-517(3)"> The organic rules may provide for the establishment of classes of members, for the preferences, rights, and limitations of the classes, and: <subsection number="16-16-517(3)(a)"> for the conduct of members meetings by classes and the election of directors at the meetings; or</subsection><subsection number="16-16-517(3)(b)"> that classes may elect class delegates to represent and vote for the class in members meetings.</subsection></subsection><subsection number="16-16-517(4)"> A delegate elected under Subsection <xref depth="4" refnumber="16-16-517(3)(b)" start="0">(3)(b)</xref> has one vote unless voting power is otherwise allocated by the organic rules.</subsection></section></part><part number="16-16-6"><catchline>Member's Interest in Limited Cooperative Association</catchline><section number="16-16-601"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Member's interest.</catchline><tab/>A member's interest:<subsection number="16-16-601(1)"> is personal property;</subsection><subsection number="16-16-601(2)"> consists of: <subsection number="16-16-601(2)(a)"> governance rights;</subsection><subsection number="16-16-601(2)(b)"> financial rights; and</subsection><subsection number="16-16-601(2)(c)"> the right or obligation, if any, to do business with the limited cooperative association; and</subsection></subsection><subsection number="16-16-601(3)"> may be in certificated or uncertificated form.</subsection></section><section number="16-16-602"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Patron and investor members' interests.</catchline><subsection number="16-16-602(1)"> Unless the organic rules establish investor members' interests, a member's interest is a patron member's interest.</subsection><subsection number="16-16-602(2)"> Unless the organic rules otherwise provide, if a limited cooperative association has investor members, while a person is a member of the association, the person: <subsection number="16-16-602(2)(a)"> if admitted as a patron member, remains a patron member;</subsection><subsection number="16-16-602(2)(b)"> if admitted as an investor member, remains an investor member; and</subsection><subsection number="16-16-602(2)(c)"> if admitted as a patron member and investor member, remains a patron and investor member if not dissociated in one of the capacities.</subsection></subsection></section><section number="16-16-603"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Transferability of member's interest.</catchline><subsection number="16-16-603(1)"> The provisions of this chapter relating to the transferability of a member's interest are subject to <xref depth="0" refnumber="70A" start="0">Title 70A, Uniform Commercial Code</xref>.</subsection><subsection number="16-16-603(2)"> Unless the organic rules otherwise provide, a member's interest other than financial rights is not transferable.</subsection><subsection number="16-16-603(3)"> Unless a transfer is restricted or prohibited by the organic rules, a member may transfer the member's financial rights in the limited cooperative association.</subsection><subsection number="16-16-603(4)"> The terms of any restriction on transferability of financial rights shall be: <subsection number="16-16-603(4)(a)"> set forth in the organic rules and the member records of the association; and</subsection><subsection number="16-16-603(4)(b)"> conspicuously noted on any certificates evidencing a member's interest.</subsection></subsection><subsection number="16-16-603(5)"> A transferee of a member's financial rights, to the extent the rights are transferred, has the right to share in the allocation of profits or losses and to receive the distributions to the member transferring the interest to the same extent as the transferring member.</subsection><subsection number="16-16-603(6)"> A transferee of a member's financial rights does not become a member upon transfer of the rights unless the transferee is admitted as a member by the limited cooperative association.</subsection><subsection number="16-16-603(7)"> A limited cooperative association need not give effect to a transfer under this section until the association has notice of the transfer.</subsection><subsection number="16-16-603(8)"> A transfer of a member's financial rights in violation of a restriction on transfer contained in the organic rules is ineffective as to a person having notice of the restriction at the time of transfer.</subsection></section><section number="16-16-604"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Security interest and set-off.</catchline><subsection number="16-16-604(1)"> A member or transferee may create an enforceable security interest in its financial rights in a limited cooperative association.</subsection><subsection number="16-16-604(2)"> Unless the organic rules otherwise provide, a member may not create an enforceable security interest in the member's governance rights in a limited cooperative association.</subsection><subsection number="16-16-604(3)"> The organic rules may provide that a limited cooperative association has a security interest in the financial rights of a member to secure payment of any indebtedness or other obligation of the member to the association. A security interest provided for in the organic rules is enforceable under, and governed by, <xref depth="1" refnumber="70A-9a" start="0">Title 70A, Chapter 9a, Uniform Commercial Code - Secured Transactions</xref>.</subsection><subsection number="16-16-604(4)"> Unless the organic rules otherwise provide, a member may not compel the limited cooperative association to offset financial rights against any indebtedness or obligation owed to the association.</subsection></section><section number="16-16-605"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Charging orders for judgment creditor of member or transferee.</catchline><subsection number="16-16-605(1)"> On application by a judgment creditor of a member or transferee, a court may enter a charging order against the financial rights of the judgment debtor for the unsatisfied amount of the judgment. A charging order issued under this Subsection <xref depth="4" refnumber="16-16-605(1)" start="0">(1)</xref> constitutes a lien on the judgment debtor's financial rights and requires the limited cooperative association to pay over to the creditor or receiver, to the extent necessary to satisfy the judgment, any distribution that would otherwise be paid to the judgment debtor.</subsection><subsection number="16-16-605(2)"> To the extent necessary to effectuate the collection of distributions pursuant to a charging order under Subsection <xref depth="4" refnumber="16-16-605(1)" start="0">(1)</xref>, the court may: <subsection number="16-16-605(2)(a)"> appoint a receiver of the share of the distributions due or to become due to the judgment debtor under the judgment debtor's financial rights, with the power to make all inquiries the judgment debtor might have made; and</subsection><subsection number="16-16-605(2)(b)"> make all other orders that the circumstances of the case may require to give effect to the charging order.</subsection></subsection><subsection number="16-16-605(3)"> Upon a showing that distributions under a charging order will not pay the judgment debt within a reasonable time, the court may foreclose the lien and order the sale of the financial rights. The purchaser at the foreclosure sale obtains only the financial rights that are subject to the charging order, does not thereby become a member, and is subject to Section <xref depth="3" refnumber="16-16-603" start="0">16-16-603</xref>.</subsection><subsection number="16-16-605(4)"> At any time before a sale pursuant to a foreclosure, a member or transferee whose financial rights are subject to a charging order under Subsection <xref depth="4" refnumber="16-16-605(1)" start="0">(1)</xref> may extinguish the charging order by satisfying the judgment and filing a certified copy of the satisfaction with the court that issued the charging order.</subsection><subsection number="16-16-605(5)"> At any time before sale pursuant to a foreclosure, the limited cooperative association or one or more members whose financial rights are not subject to the charging order may pay to the judgment creditor the full amount due under the judgment and succeed to the rights of the judgment creditor, including the charging order. Unless the organic rules otherwise provide, the association may act under this Subsection <xref depth="4" refnumber="16-16-605(5)" start="0">(5)</xref> only with the consent of all members whose financial rights are not subject to the charging order.</subsection><subsection number="16-16-605(6)"> This chapter does not deprive any member or transferee of the benefit of any exemption laws applicable to the member's or transferee's financial rights.</subsection><subsection number="16-16-605(7)"> This section provides the exclusive remedy by which a judgment creditor of a member or transferee may satisfy the judgment from the member's or transferee's financial rights.</subsection></section></part><part number="16-16-7"><catchline>Marketing Contracts</catchline><section number="16-16-701"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Authority.</catchline><tab/>In this part, "marketing contract" means a contract between a limited cooperative association and another person, that need not be a patron member:<subsection number="16-16-701(1)"> requiring the other person to sell, or deliver for sale or marketing on the person's behalf, a specified part of the person's products, commodities, or goods exclusively to or through the association or any facilities furnished by the association; or</subsection><subsection number="16-16-701(2)"> authorizing the association to act for the person in any manner with respect to the products, commodities, or goods.</subsection></section><section number="16-16-702"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Marketing contracts.</catchline><subsection number="16-16-702(1)"> If a marketing contract provides for the sale of products, commodities, or goods to a limited cooperative association, the sale transfers title to the association upon delivery or at any other specific time expressly provided by the contract.</subsection><subsection number="16-16-702(2)"> A marketing contract may: <subsection number="16-16-702(2)(a)"> authorize a limited cooperative association to create an enforceable security interest in the products, commodities, or goods delivered; and</subsection><subsection number="16-16-702(2)(b)"> allow the association to sell the products, commodities, or goods delivered and pay the sales price on a pooled or other basis after deducting selling costs, processing costs, overhead, expenses, and other charges.</subsection></subsection><subsection number="16-16-702(3)"> Some or all of the provisions of a marketing contract between a patron member and a limited cooperative association may be contained in the organic rules.</subsection></section><section number="16-16-703"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Duration of marketing contract.</catchline><tab/>The initial duration of a marketing contract may not exceed 10 years, but the contract may be self-renewing for additional periods not exceeding five years each. Unless the contract provides for another manner or time for termination, either party may terminate the contract by giving notice in a record at least 90 days before the end of the current term. </section><section number="16-16-704"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Remedies for breach of contract.</catchline><subsection number="16-16-704(1)"> Damages to be paid to a limited cooperative association for breach or anticipatory repudiation of a marketing contract may be liquidated, but only at an amount or under a formula that is reasonable in light of the actual or anticipated harm caused by the breach or repudiation. A provision that so provides is not a penalty.</subsection><subsection number="16-16-704(2)"> Upon a breach of a marketing contract, whether by anticipatory repudiation or otherwise, a limited cooperative association may seek: <subsection number="16-16-704(2)(a)"> an injunction to prevent further breach; and</subsection><subsection number="16-16-704(2)(b)"> specific performance.</subsection></subsection><subsection number="16-16-704(3)"> The remedies in this section are in addition to any other remedies available to an association under law other than this chapter.</subsection></section></part><part number="16-16-8"><catchline>Directors and Officers</catchline><section number="16-16-801"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Board of directors.</catchline><subsection number="16-16-801(1)"> A limited cooperative association shall have a board of directors of at least three individuals, unless the association has fewer than three members. If the association has fewer than three members, the number of directors may not be fewer than the number of members.</subsection><subsection number="16-16-801(2)"> The affairs of a limited cooperative association shall be managed by, or under the direction of, the board of directors. The board may adopt policies and procedures that do not conflict with the organic rules or this chapter.</subsection><subsection number="16-16-801(3)"> An individual is not an agent for a limited cooperative association solely by being a director.</subsection></section><section number="16-16-802"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>No liability as director for limited cooperative association's obligations.</catchline><tab/>A debt, obligation, or other liability of a limited cooperative association is solely that of the association and is not a debt, obligation, or liability of a director solely by reason of being a director. An individual is not personally liable, directly or indirectly, for an obligation of an association solely by reason of being a director. </section><section number="16-16-803"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Qualifications of directors.</catchline><subsection number="16-16-803(1)"> Unless the organic rules otherwise provide, and subject to Subsection <xref depth="4" refnumber="16-16-803(3)" start="0">(3)</xref>, each director of a limited cooperative association shall be an individual who is a member of the association or an individual who is designated by a member that is not an individual for purposes of qualifying and serving as a director. Initial directors need not be members.</subsection><subsection number="16-16-803(2)"> Unless the organic rules otherwise provide, a director may be an officer or employee of the limited cooperative association.</subsection><subsection number="16-16-803(3)"> If the organic rules provide for nonmember directors, the number of nonmember directors may not exceed: <subsection number="16-16-803(3)(a)"> one, if there are two through four directors;</subsection><subsection number="16-16-803(3)(b)"> two, if there are five through eight directors; or</subsection><subsection number="16-16-803(3)(c)"> 1/3 of the total number of directors if there are at least nine directors.</subsection></subsection><subsection number="16-16-803(4)"> The organic rules may provide qualifications for directors in addition to those in this section.</subsection></section><section number="16-16-804"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Election of directors and composition of board.</catchline><subsection number="16-16-804(1)"> Unless the organic rules require a greater number: <subsection number="16-16-804(1)(a)"> the number of directors that shall be patron members may not be fewer than:<subsection number="16-16-804(1)(a)(i)"> one, if there are two or three directors;</subsection><subsection number="16-16-804(1)(a)(ii)"> two, if there are four or five directors;</subsection><subsection number="16-16-804(1)(a)(iii)"> three, if there are six through eight directors; or</subsection><subsection number="16-16-804(1)(a)(iv)"> 1/3 of the directors if there are at least nine directors; and</subsection></subsection><subsection number="16-16-804(1)(b)"> a majority of the board of directors shall be elected exclusively by patron members.</subsection></subsection><subsection number="16-16-804(2)"> Unless the organic rules otherwise provide, if a limited cooperative association has investor members, the directors who are not elected exclusively by patron members are elected by the investor members.</subsection><subsection number="16-16-804(3)"> Subject to Subsection <xref depth="4" refnumber="16-16-804(1)" start="0">(1)</xref>, the organic rules may provide for the election of all or a specified number of directors by one or more districts or classes of members.</subsection><subsection number="16-16-804(4)"> Subject to Subsection <xref depth="4" refnumber="16-16-804(1)" start="0">(1)</xref>, the organic rules may provide for the nomination or election of directors by districts or classes, directly or by district delegates.</subsection><subsection number="16-16-804(5)"> If a class of members consists of a single member, the organic rules may provide for the member to appoint a director or directors.</subsection><subsection number="16-16-804(6)"> Unless the organic rules otherwise provide, cumulative voting for directors is prohibited.</subsection><subsection number="16-16-804(7)"> Except as otherwise provided by the organic rules, Subsection <xref depth="4" refnumber="16-16-804(5)" start="0">(5)</xref>, or Sections <xref depth="3" refnumber="16-16-303" start="0">16-16-303</xref>, <xref depth="3" refnumber="16-16-516" start="0">16-16-516</xref>, <xref depth="3" refnumber="16-16-517" start="0">16-16-517</xref>, and <xref depth="3" refnumber="16-16-809" start="0">16-16-809</xref>, member directors shall be elected at an annual members meeting.</subsection></section><section number="16-16-805"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Term of director.</catchline><subsection number="16-16-805(1)"> Unless the organic rules otherwise provide, and subject to Subsections <xref depth="4" refnumber="16-16-805(3)" start="0">(3)</xref> and <xref depth="4" refnumber="16-16-805(4)" start="0">(4)</xref> and Subsection <xref depth="4" refnumber="16-16-303(3)" start="0">16-16-303(3)</xref>, the term of a director expires at the annual members meeting following the director's election or appointment. The term of a director may not exceed three years.</subsection><subsection number="16-16-805(2)"> Unless the organic rules otherwise provide, a director may be reelected.</subsection><subsection number="16-16-805(3)"> Except as otherwise provided in Subsection <xref depth="4" refnumber="16-16-805(4)" start="0">(4)</xref>, a director continues to serve until a successor director is elected or appointed and qualifies or the director is removed, resigns, is adjudged incompetent, or dies.</subsection><subsection number="16-16-805(4)"> Unless the organic rules otherwise provide, a director does not serve the remainder of the director's term if the director ceases to qualify to be a director.</subsection></section><section number="16-16-806"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Resignation of director.</catchline><tab/>A director may resign at any time by giving notice in a record to the limited cooperative association. Unless the notice states a later effective date, a resignation is effective when the notice is received by the association. </section><section number="16-16-807"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Removal of director.</catchline><tab/>Unless the organic rules otherwise provide, the following rules apply:<subsection number="16-16-807(1)"> Members may remove a director with or without cause.</subsection><subsection number="16-16-807(2)"> A member or members holding at least 10% of the total voting power entitled to be voted in the election of a director may demand removal of the director by one or more signed petitions submitted to the officer of the limited cooperative association charged with keeping its records.</subsection><subsection number="16-16-807(3)"> Upon receipt of a petition for removal of a director, an officer of the association or the board of directors shall: <subsection number="16-16-807(3)(a)"> call a special meeting of members to be held not later than 90 days after receipt of the petition by the association; and</subsection><subsection number="16-16-807(3)(b)"> mail or otherwise transmit or deliver in a record to the members entitled to vote on the removal, and to the director to be removed, notice of the meeting which complies with Section <xref depth="3" refnumber="16-16-508" start="0">16-16-508</xref>.</subsection></subsection><subsection number="16-16-807(4)"> A director is removed if the votes in favor of removal are equal to or greater than the votes required to elect the director.</subsection></section><section number="16-16-808"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Suspension of director by board.</catchline><subsection number="16-16-808(1)"> A board of directors may suspend a director if, considering the director's course of conduct and the inadequacy of other available remedies, immediate suspension is necessary for the best interests of the association and the director is engaging, or has engaged, in: <subsection number="16-16-808(1)(a)"> fraudulent conduct with respect to the association or its members;</subsection><subsection number="16-16-808(1)(b)"> gross abuse of the position of director;</subsection><subsection number="16-16-808(1)(c)"> intentional or reckless infliction of harm on the association; or</subsection><subsection number="16-16-808(1)(d)"> any other behavior, act, or omission as provided by the organic rules.</subsection></subsection><subsection number="16-16-808(2)"> A suspension under Subsection <xref depth="4" refnumber="16-16-808(1)" start="0">(1)</xref> is effective for 30 days unless the board of directors calls and gives notice of a special meeting of members for removal of the director before the end of the 30-day period in which case the suspension is effective until adjournment of the meeting or the director is removed.</subsection></section><section number="16-16-809"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Vacancy on board.</catchline><subsection number="16-16-809(1)"> Unless the organic rules otherwise provide, a vacancy on the board of directors shall be filled: <subsection number="16-16-809(1)(a)"> within a reasonable time by majority vote of the remaining directors until the next annual members meeting or a special meeting of members called to fill the vacancy; and</subsection><subsection number="16-16-809(1)(b)"> for the unexpired term by members at the next annual members meeting or a special meeting of members called to fill the vacancy.</subsection></subsection><subsection number="16-16-809(2)"> Unless the organic rules otherwise provide, if a vacating director was elected or appointed by a class of members or a district: <subsection number="16-16-809(2)(a)"> the new director shall be of that class or district; and</subsection><subsection number="16-16-809(2)(b)"> the selection of the director for the unexpired term shall be conducted in the same manner as would the selection for that position without a vacancy.</subsection></subsection><subsection number="16-16-809(3)"> If a member appointed a vacating director, the organic rules may provide for that member to appoint a director to fill the vacancy.</subsection></section><section number="16-16-810"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Remuneration of directors.</catchline><tab/>Unless the organic rules otherwise provide, the board of directors may set the remuneration of directors and of nondirector committee members appointed under Subsection <xref depth="4" refnumber="16-16-817(1)" start="0">16-16-817(1)</xref>. </section><section number="16-16-811"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Meetings.</catchline><subsection number="16-16-811(1)"> A board of directors shall meet at least annually and may hold meetings inside or outside this state.</subsection><subsection number="16-16-811(2)"> Unless the organic rules otherwise provide, a board of directors may permit directors to attend or conduct board meetings through the use of any means of communication, if all directors attending the meeting can communicate with each other during the meeting.</subsection></section><section number="16-16-812"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Action without meeting.</catchline><subsection number="16-16-812(1)"> Unless prohibited by the organic rules, any action that may be taken by a board of directors may be taken without a meeting if each director consents in a record to the action.</subsection><subsection number="16-16-812(2)"> Consent under Subsection <xref depth="4" refnumber="16-16-812(1)" start="0">(1)</xref> may be withdrawn by a director in a record at any time before the limited cooperative association receives consent from all directors.</subsection><subsection number="16-16-812(3)"> A record of consent for any action under Subsection <xref depth="4" refnumber="16-16-812(1)" start="0">(1)</xref> may specify the effective date or time of the action.</subsection></section><section number="16-16-813"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Meetings and notice.</catchline><subsection number="16-16-813(1)"> Unless the organic rules otherwise provide, a board of directors may establish a time, date, and place for regular board meetings, and notice of the time, date, place, or purpose of those meetings is not required.</subsection><subsection number="16-16-813(2)"> Unless the organic rules otherwise provide, notice of the time, date, and place of a special meeting of a board of directors shall be given to all directors at least three days before the meeting, the notice shall contain a statement of the purpose of the meeting, and the meeting is limited to the matters contained in the statement.</subsection></section><section number="16-16-814"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Waiver of notice of meeting.</catchline><subsection number="16-16-814(1)"> Unless the organic rules otherwise provide, a director may waive any required notice of a meeting of the board of directors in a record before, during, or after the meeting.</subsection><subsection number="16-16-814(2)"> Unless the organic rules otherwise provide, a director's participation in a meeting is a waiver of notice of that meeting unless: <subsection number="16-16-814(2)(a)"> the director objects to the meeting at the beginning of the meeting or promptly upon the director's arrival at the meeting and does not thereafter vote in favor of or otherwise assent to the action taken at the meeting; or</subsection><subsection number="16-16-814(2)(b)"> the director promptly objects upon the introduction of any matter for which notice under Section <xref depth="3" refnumber="16-16-813" start="0">16-16-813</xref> has not been given and does not thereafter vote in favor of or otherwise assent to the action taken on the matter.</subsection></subsection></section><section number="16-16-815"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Quorum.</catchline><subsection number="16-16-815(1)"> Unless the articles of organization provide for a greater number, a majority of the total number of directors specified by the organic rules constitutes a quorum for a meeting of the directors.</subsection><subsection number="16-16-815(2)"> If a quorum of the board of directors is present at the beginning of a meeting, any action taken by the directors present is valid even if withdrawal of directors originally present results in the number of directors being fewer than the number required for a quorum.</subsection><subsection number="16-16-815(3)"> A director present at a meeting but objecting to notice under Subsection <xref depth="4" refnumber="16-16-814(2)(a)" start="0">16-16-814(2)(a)</xref> or <xref depth="4" refnumber="16-16-814(2)(b)" start="0">(b)</xref> does not count toward a quorum.</subsection></section><section number="16-16-816"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Voting.</catchline><subsection number="16-16-816(1)"> Each director shall have one vote for purposes of decisions made by the board of directors.</subsection><subsection number="16-16-816(2)"> Unless the organic rules otherwise provide, the affirmative vote of a majority of directors present at a meeting is required for action by the board of directors.</subsection></section><section number="16-16-817"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Committees.</catchline><subsection number="16-16-817(1)"> Unless the organic rules otherwise provide, a board of directors may create one or more committees and appoint one or more individuals to serve on a committee.</subsection><subsection number="16-16-817(2)"> Unless the organic rules otherwise provide, an individual appointed to serve on a committee of a limited cooperative association need not be a director or member.</subsection><subsection number="16-16-817(3)"> An individual who is not a director and is serving on a committee has the same rights, duties, and obligations as a director serving on the committee.</subsection><subsection number="16-16-817(4)"> Unless the organic rules otherwise provide, each committee of a limited cooperative association may exercise the powers delegated to it by the board of directors, but a committee may not: <subsection number="16-16-817(4)(a)"> approve allocations or distributions except according to a formula or method prescribed by the board of directors;</subsection><subsection number="16-16-817(4)(b)"> approve or propose to members action requiring approval of members; or</subsection><subsection number="16-16-817(4)(c)"> fill vacancies on the board of directors or any of its committees.</subsection></subsection></section><section number="16-16-818"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Standards of conduct and liability.</catchline><tab/>Except as otherwise provided in Section <xref depth="3" refnumber="16-16-820" start="0">16-16-820</xref>:<subsection number="16-16-818(1)"> the discharge of the duties of a director or member of a committee of the board of directors is governed by the law applicable to directors of entities organized under <xref depth="0" refnumber="3" start="0">Title 3, Uniform Agricultural Cooperative Association Act</xref>; and</subsection><subsection number="16-16-818(2)"> the liability of a director or member of a committee of the board of directors is governed by the law applicable to directors of entities organized under <xref depth="0" refnumber="3" start="0">Title 3, Uniform Agricultural Cooperative Association Act</xref>.</subsection></section><section number="16-16-819"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Conflict of interest.</catchline><subsection number="16-16-819(1)"> The law applicable to conflicts of interest between a director of an entity organized under <xref depth="0" refnumber="3" start="0">Title 3, Uniform Agricultural Cooperative Association Act</xref>, governs conflicts of interest between a limited cooperative association and a director or member of a committee of the board of directors.</subsection><subsection number="16-16-819(2)"> A director does not have a conflict of interest under this chapter or the organic rules solely because the director's conduct relating to the duties of the director may further the director's own interest.</subsection></section><section number="16-16-820"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Other considerations of directors.</catchline><tab/>Unless the articles of organization otherwise provide, in considering the best interests of a limited cooperative association, a director of the association in discharging the duties of director, in conjunction with considering the long and short term interest of the association and its patron members, may consider:<subsection number="16-16-820(1)"> the interest of employees, customers, and suppliers of the association;</subsection><subsection number="16-16-820(2)"> the interest of the community in which the association operates; and</subsection><subsection number="16-16-820(3)"> other cooperative principles and values that may be applied in the context of the decision.</subsection></section><section number="16-16-821"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Right of director or committee member to information.</catchline><tab/>A director or a member of a committee appointed under Section <xref depth="3" refnumber="16-16-817" start="0">16-16-817</xref> may obtain, inspect, and copy all information regarding the state of activities and financial condition of the limited cooperative association and other information regarding the activities of the association if the information is reasonably related to the performance of the director's duties as director or the committee member's duties as a member of the committee. Information obtained in accordance with this section may not be used in any manner that would violate any duty of or to the association. </section><section number="16-16-822"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Appointment and authority of officers.</catchline><subsection number="16-16-822(1)"> A limited cooperative association has the officers: <subsection number="16-16-822(1)(a)"> provided in the organic rules; or</subsection><subsection number="16-16-822(1)(b)"> established by the board of directors in a manner not inconsistent with the organic rules.</subsection></subsection><subsection number="16-16-822(2)"> The organic rules may designate or, if the rules do not designate, the board of directors shall designate, one of the association's officers for preparing all records required by Section <xref depth="3" refnumber="16-16-114" start="0">16-16-114</xref> and for the authentication of records.</subsection><subsection number="16-16-822(3)"> Unless the organic rules otherwise provide, the board of directors shall appoint the officers of the limited cooperative association.</subsection><subsection number="16-16-822(4)"> Officers of a limited cooperative association shall perform the duties the organic rules prescribe or as authorized by the board of directors not in a manner inconsistent with the organic rules.</subsection><subsection number="16-16-822(5)"> The election or appointment of an officer of a limited cooperative association does not of itself create a contract between the association and the officer.</subsection><subsection number="16-16-822(6)"> Unless the organic rules otherwise provide, an individual may simultaneously hold more than one office in a limited cooperative association.</subsection></section><section number="16-16-823"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Resignation and removal of officers.</catchline><subsection number="16-16-823(1)"> The board of directors may remove an officer at any time with or without cause.</subsection><subsection number="16-16-823(2)"> An officer of a limited cooperative association may resign at any time by giving notice in a record to the association. Unless the notice specifies a later time, the resignation is effective when the notice is given.</subsection></section></part><part number="16-16-9"><catchline>Indemnification</catchline><section number="16-16-901"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Indemnification.</catchline><subsection number="16-16-901(1)"> Indemnification of an individual who has incurred liability or is a party, or is threatened to be made a party, to litigation because of the performance of a duty to, or activity on behalf of, a limited cooperative association is governed by <xref depth="0" refnumber="3" start="0">Title 3, Uniform Agricultural Cooperative Association Act</xref>.</subsection><subsection number="16-16-901(2)"> A limited cooperative association may purchase and maintain insurance on behalf of any individual against liability asserted against or incurred by the individual to the same extent and subject to the same conditions as provided by <xref depth="0" refnumber="3" start="0">Title 3, Uniform Agricultural Cooperative Association Act</xref>.</subsection></section></part><part number="16-16-10"><catchline>Contributions, Allocations, and Distributions</catchline><section number="16-16-1001"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Members' contributions.</catchline><tab/>The organic rules shall establish the amount, manner, or method of determining any contribution requirements for members or shall authorize the board of directors to establish the amount, manner, or other method of determining any contribution requirements for members. </section><section number="16-16-1002"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Contribution and valuation.</catchline><subsection number="16-16-1002(1)"> Unless the organic rules otherwise provide, the contributions of a member to a limited cooperative association may consist of tangible or intangible property or other benefit to the association, including money, labor or other services performed or to be performed, promissory notes, other agreements to contribute money or property, and contracts to be performed.</subsection><subsection number="16-16-1002(2)"> The receipt and acceptance of contributions and the valuation of contributions shall be reflected in a limited cooperative association's records.</subsection><subsection number="16-16-1002(3)"> Unless the organic rules otherwise provide, the board of directors shall determine the value of a member's contributions received or to be received and the determination by the board of directors of valuation is conclusive for purposes of determining whether the member's contribution obligation has been met.</subsection></section><section number="16-16-1003"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Contribution agreements.</catchline><subsection number="16-16-1003(1)"> Except as otherwise provided in the agreement, the following rules apply to an agreement made by a person before formation of a limited cooperative association to make a contribution to the association: <subsection number="16-16-1003(1)(a)"> The agreement is irrevocable for six months after the agreement is signed by the person unless all parties to the agreement consent to the revocation.</subsection><subsection number="16-16-1003(1)(b)"> If a person does not make a required contribution:<subsection number="16-16-1003(1)(b)(i)"> the person is obligated, at the option of the association, once formed, to contribute money equal to the value of that part of the contribution that has not been made, and the obligation may be enforced as a debt to the association; or</subsection><subsection number="16-16-1003(1)(b)(ii)"> the association, once formed, may rescind the agreement if the debt remains unpaid more than 20 days after the association demands payment from the person, and upon rescission the person has no further rights or obligations with respect to the association.</subsection></subsection></subsection><subsection number="16-16-1003(2)"> Unless the organic rules or an agreement to make a contribution to a limited cooperative association otherwise provide, if a person does not make a required contribution to an association, the person or the person's estate is obligated, at the option of the association, to contribute money equal to the value of the part of the contribution which has not been made.</subsection></section><section number="16-16-1004"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Allocations of profits and losses.</catchline><subsection number="16-16-1004(1)"> The organic rules may provide for allocating profits of a limited cooperative association among members, among persons that are not members but conduct business with the association, to an unallocated account, or to any combination thereof. Unless the organic rules otherwise provide, losses of the association shall be allocated in the same proportion as profits.</subsection><subsection number="16-16-1004(2)"> Unless the organic rules otherwise provide, all profits and losses of a limited cooperative association shall be allocated to patron members.</subsection><subsection number="16-16-1004(3)"> If a limited cooperative association has investor members, the organic rules may not reduce the allocation to patron members to less than 50% of profits. For purposes of this Subsection <xref depth="4" refnumber="16-16-1004(3)" start="0">(3)</xref>, the following rules apply: <subsection number="16-16-1004(3)(a)"> Amounts paid or due on contracts for the delivery to the association by patron members of products, goods, or services are not considered amounts allocated to patron members.</subsection><subsection number="16-16-1004(3)(b)"> Amounts paid, due, or allocated to investor members as a stated fixed return on equity are not considered amounts allocated to investor members.</subsection></subsection><subsection number="16-16-1004(4)"> Unless prohibited by the organic rules, in determining the profits for allocation under Subsections <xref depth="4" refnumber="16-16-1004(1)" start="0">(1)</xref>, <xref depth="4" refnumber="16-16-1004(2)" start="0">(2)</xref>, and <xref depth="4" refnumber="16-16-1004(3)" start="0">(3)</xref>, the board of directors may first deduct and set aside a part of the profits to create or accumulate: <subsection number="16-16-1004(4)(a)"> an unallocated capital reserve; and</subsection><subsection number="16-16-1004(4)(b)"> reasonable unallocated reserves for specific purposes, including expansion and replacement of capital assets; education, training, cooperative development; creation and distribution of information concerning principles of cooperation; and community responsibility.</subsection></subsection><subsection number="16-16-1004(5)"> Subject to Subsections <xref depth="4" refnumber="16-16-1004(2)" start="0">(2)</xref> and <xref depth="4" refnumber="16-16-1004(6)" start="0">(6)</xref> and the organic rules, the board of directors shall allocate the amount remaining after any deduction or setting aside of profits for unallocated reserves under Subsection <xref depth="4" refnumber="16-16-1004(4)" start="0">(4)</xref>: <subsection number="16-16-1004(5)(a)"> to patron members in the ratio of each member's patronage to the total patronage of all patron members during the period for which allocations are to be made; and</subsection><subsection number="16-16-1004(5)(b)"> to investor members, if any, in the ratio of each investor member's contributions to the total contributions of all investor members.</subsection></subsection><subsection number="16-16-1004(6)"> For purposes of allocation of profits and losses or specific items of profits or losses of a limited cooperative association to members, the organic rules may establish allocation units or methods based on separate classes of members or, for patron members, on class, function, division, district, department, allocation units, pooling arrangements, members' contributions, or other equitable methods.</subsection></section><section number="16-16-1005"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Distributions.</catchline><subsection number="16-16-1005(1)"> Unless the organic rules otherwise provide and subject to Section <xref depth="3" refnumber="16-16-1007" start="0">16-16-1007</xref>, the board of directors may authorize, and the limited cooperative association may make, distributions to members.</subsection><subsection number="16-16-1005(2)"> Unless the organic rules otherwise provide, distributions to members may be made in any form, including money, capital credits, allocated patronage equities, revolving fund certificates, and the limited cooperative association's own or other securities.</subsection></section><section number="16-16-1006"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Redemption or repurchase.</catchline><tab/>Property distributed to a member by a limited cooperative association, other than money, may be redeemed or repurchased as provided in the organic rules but a redemption or repurchase may not be made without authorization by the board of directors. The board may withhold authorization for any reason in its sole discretion. A redemption or repurchase is treated as a distribution for purposes of Section <xref depth="3" refnumber="16-16-1007" start="0">16-16-1007</xref>. </section><section number="16-16-1007"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Limitations on distributions.</catchline><subsection number="16-16-1007(1)"> A limited cooperative association may not make a distribution if, after the distribution: <subsection number="16-16-1007(1)(a)"> the association would not be able to pay its debts as they become due in the ordinary course of the association's activities; or</subsection><subsection number="16-16-1007(1)(b)"> the association's assets would be less than the sum of its total liabilities.</subsection></subsection><subsection number="16-16-1007(2)"> A limited cooperative association may base a determination that a distribution is not prohibited under Subsection <xref depth="4" refnumber="16-16-1007(1)" start="0">(1)</xref> on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances.</subsection><subsection number="16-16-1007(3)"> Except as otherwise provided in Subsection <xref depth="4" refnumber="16-16-1007(4)" start="0">(4)</xref>, the effect of a distribution allowed under Subsection <xref depth="4" refnumber="16-16-1007(2)" start="0">(2)</xref> is measured: <subsection number="16-16-1007(3)(a)"> in the case of distribution by purchase, redemption, or other acquisition of financial rights in the limited cooperative association, as of the date money or other property is transferred or debt is incurred by the association; and</subsection><subsection number="16-16-1007(3)(b)"> in all other cases, as of the date:<subsection number="16-16-1007(3)(b)(i)"> the distribution is authorized, if the payment occurs not later than 120 days after that date; or</subsection><subsection number="16-16-1007(3)(b)(ii)"> the payment is made, if payment occurs more than 120 days after the distribution is authorized.</subsection></subsection></subsection><subsection number="16-16-1007(4)"> If indebtedness is issued as a distribution, each payment of principal or interest on the indebtedness is treated as a distribution, the effect of which is measured on the date the payment is made.</subsection><subsection number="16-16-1007(5)"> For purposes of this section, "distribution" does not include reasonable amounts paid to a member in the ordinary course of business as payment or compensation for commodities, goods, past or present services, or reasonable payments made in the ordinary course of business under a bona fide retirement or other benefits program.</subsection></section><section number="16-16-1008"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Liability for improper distributions -- Limitation of action.</catchline><subsection number="16-16-1008(1)"> A director who consents to a distribution that violates Section <xref depth="3" refnumber="16-16-1007" start="0">16-16-1007</xref> is personally liable to the limited cooperative association for the amount of the distribution which exceeds the amount that could have been distributed without the violation if it is established that in consenting to the distribution the director failed to comply with Section <xref depth="3" refnumber="16-16-818" start="0">16-16-818</xref> or <xref depth="3" refnumber="16-16-819" start="0">16-16-819</xref>.</subsection><subsection number="16-16-1008(2)"> A member or transferee of financial rights which received a distribution knowing that the distribution was made in violation of Section <xref depth="3" refnumber="16-16-1007" start="0">16-16-1007</xref> is personally liable to the limited cooperative association to the extent the distribution exceeded the amount that could have been properly paid.</subsection><subsection number="16-16-1008(3)"> A director against whom an action is commenced under Subsection <xref depth="4" refnumber="16-16-1008(1)" start="0">(1)</xref> may: <subsection number="16-16-1008(3)(a)"> implead in the action any other director who is liable under Subsection <xref depth="4" refnumber="16-16-1008(1)" start="0">(1)</xref> and compel contribution from the person; and</subsection><subsection number="16-16-1008(3)(b)"> implead in the action any person that is liable under Subsection <xref depth="4" refnumber="16-16-1008(2)" start="0">(2)</xref> and compel contribution from the person in the amount the person received as described in Subsection <xref depth="4" refnumber="16-16-1008(2)" start="0">(2)</xref>.</subsection></subsection><subsection number="16-16-1008(4)"> An action under this section is barred if it is commenced later than two years after the distribution.</subsection></section><section number="16-16-1009"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Alternative distribution of unclaimed property, distributions, redemptions, or payments.</catchline><tab/>A limited cooperative association may distribute unclaimed property, distributions, redemptions, or payments by complying with Section <xref depth="3" refnumber="3-1-11" start="0">3-1-11</xref>. </section></part><part number="16-16-11"><catchline>Dissociation</catchline><section number="16-16-1101"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Member's dissociation.</catchline><subsection number="16-16-1101(1)">A person has the power to dissociate as a member at any time, rightfully or wrongfully, by express will.</subsection><subsection number="16-16-1101(2)">Unless the organic rules otherwise provide, a member's dissociation from a limited cooperative association is wrongful only if the dissociation:<subsection number="16-16-1101(2)(a)">breaches an express provision of the organic rules; or</subsection><subsection number="16-16-1101(2)(b)">occurs before the termination of the limited cooperative association and:<subsection number="16-16-1101(2)(b)(i)">the person is expelled as a member under Subsection <xref depth="4" refnumber="16-16-1101(4)(c)" start="0">(4)(c)</xref> or <xref depth="4" refnumber="16-16-1101(4)(d)" start="0">(d)</xref>; or</subsection><subsection number="16-16-1101(2)(b)(ii)">in the case of a person that is not an individual, trust other than a business trust, or estate, the person is expelled or otherwise dissociated as a member because it dissolved or terminated in bad faith.</subsection></subsection></subsection><subsection number="16-16-1101(3)">Unless the organic rules otherwise provide, a person that wrongfully dissociates as a member is liable to the limited cooperative association for damages caused by the dissociation. The liability is in addition to any other debt, obligation, or liability of the person to the association.</subsection><subsection number="16-16-1101(4)">A member is dissociated from the limited cooperative association as a member when:<subsection number="16-16-1101(4)(a)">the association receives notice in a record of the member's express will to dissociate as a member, or if the member specifies in the notice an effective date later than the date the association received notice, on that later date;</subsection><subsection number="16-16-1101(4)(b)">an event stated in the organic rules as causing the member's dissociation as a member occurs;</subsection><subsection number="16-16-1101(4)(c)">the member is expelled as a member under the organic rules;</subsection><subsection number="16-16-1101(4)(d)">the member is expelled as a member by the board of directors because:<subsection number="16-16-1101(4)(d)(i)">it is unlawful to carry on the association's activities with the member as a member;</subsection><subsection number="16-16-1101(4)(d)(ii)">there has been a transfer of all the member's financial rights in the association, other than:<subsection number="16-16-1101(4)(d)(ii)(A)">a creation or perfection of a security interest; or</subsection><subsection number="16-16-1101(4)(d)(ii)(B)">a charging order in effect under Section <xref depth="3" refnumber="16-16-505" start="0">16-16-505</xref> which has not been foreclosed;</subsection></subsection><subsection number="16-16-1101(4)(d)(iii)">the member is a limited liability company, association, or partnership, it has been dissolved, and its business is being wound up;</subsection><subsection number="16-16-1101(4)(d)(iv)">the member is a corporation or cooperative and:<subsection number="16-16-1101(4)(d)(iv)(A)">the member filed a certificate of dissolution or the equivalent, or the jurisdiction of formation revoked the association's charter or right to conduct business;</subsection><subsection number="16-16-1101(4)(d)(iv)(B)">the association sends a notice to the member that it will be expelled as a member for a reason described in Subsection <xref depth="4" refnumber="16-16-1101(4)(d)(iv)(A)" start="0">(4)(d)(iv)(A)</xref>; and</subsection><subsection number="16-16-1101(4)(d)(iv)(C)">not later than 90 days after the notice was sent under Subsection <xref depth="4" refnumber="16-16-1101(4)(d)(iv)(B)" start="0">(4)(d)(iv)(B)</xref>, the member did not revoke the member's certificate of dissolution or the equivalent, or the jurisdiction of formation did not reinstate the association's charter or right to conduct business; or</subsection></subsection><subsection number="16-16-1101(4)(d)(v)">the member is an individual and is adjudged incompetent;</subsection></subsection><subsection number="16-16-1101(4)(e)">in the case of a member who is an individual, the individual dies;</subsection><subsection number="16-16-1101(4)(f)">in the case of a member that is a trust or is acting as a member by virtue of being a trustee of a trust, all the trust's financial rights in the association are distributed;</subsection><subsection number="16-16-1101(4)(g)">in the case of a member that is an estate, the estate's entire financial interest in the association is distributed;</subsection><subsection number="16-16-1101(4)(h)">in the case of a member that is not an individual, partnership, limited liability company, cooperative, corporation, trust, or estate, the member is terminated; or</subsection><subsection number="16-16-1101(4)(i)">the association's participation in a merger if, under the plan of merger as approved under Chapter 1a, Part 7, Merger, the member ceases to be a member.</subsection></subsection></section><section number="16-16-1102"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Effect of dissociation as member.</catchline><subsection number="16-16-1102(1)">Upon a member's dissociation:<subsection number="16-16-1102(1)(a)">subject to Section <xref depth="3" refnumber="16-16-1103" start="0">16-16-1103</xref>, the person has no further rights as a member; and</subsection><subsection number="16-16-1102(1)(b)">subject to Section <xref depth="3" refnumber="16-16-1103" start="0">16-16-1103</xref> and Chapter 1a, Part 7, Merger, and Chapter 1a, Part 9, Conversion, any financial rights owned by the person in the person's capacity as a member immediately before dissociation are owned by the person as a transferee.</subsection></subsection><subsection number="16-16-1102(2)">A person's dissociation as a member does not of itself discharge the person from any debt, obligation, or liability to the limited cooperative association which the person incurred under the organic rules, by contract, or by other means while a member.</subsection></section><section number="16-16-1103"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Power of estate of member.</catchline><tab/>Unless the organic rules provide for greater rights, if a member is dissociated because of death, dies, or is expelled by reason of being adjudged incompetent, the member's personal representative or other legal representative may exercise the rights of a transferee of the member's financial rights and, for purposes of settling the estate of a deceased member, may exercise the informational rights of a current member to obtain information under Section <xref depth="3" refnumber="16-16-505" start="0">16-16-505</xref>. </section></part><part number="16-16-12"><catchline>Dissolution</catchline><section number="16-16-1201"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Dissolution and winding up.</catchline><tab/>A limited cooperative association is dissolved only as provided in this part and upon dissolution winds up in accordance with this part. </section><section number="16-16-1202"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Nonjudicial dissolution.</catchline><tab/>Except as otherwise provided in Sections <xref depth="3" refnumber="16-16-1203" start="0">16-16-1203</xref> and <xref depth="3" refnumber="16-16-1211" start="0">16-16-1211</xref>, a limited cooperative association is dissolved and its activities shall be wound up:<subsection number="16-16-1202(1)"> upon the occurrence of an event or at a time specified in the articles of organization;</subsection><subsection number="16-16-1202(2)"> upon the action of the association's organizers, board of directors, or members under Section <xref depth="3" refnumber="16-16-1204" start="0">16-16-1204</xref> or <xref depth="3" refnumber="16-16-1205" start="0">16-16-1205</xref>; or</subsection><subsection number="16-16-1202(3)"> 90 days after the dissociation of a member, which results in the association having one patron member and no other members, unless the association: <subsection number="16-16-1202(3)(a)"> has a sole member that is a cooperative; or</subsection><subsection number="16-16-1202(3)(b)"> not later than the end of the 90-day period, admits at least one member in accordance with the organic rules and has at least two members, at least one of which is a patron member.</subsection></subsection></section><section number="16-16-1203"><histories><history>Amended by Chapter <modchap sess="2023GS">401</modchap>, 2023 General Session</history><modyear>2023</modyear></histories><catchline>Judicial dissolution.</catchline><subsection number="16-16-1203(1)"> The attorney general may bring an action in a court with jurisdiction under <xref depth="0" refnumber="78A" start="0">Title 78A, Judiciary and Judicial Administration</xref>, to dissolve a limited cooperative association if: <subsection number="16-16-1203(1)(a)"> the association obtained the association's articles of organization through fraud; or</subsection><subsection number="16-16-1203(1)(b)"> the association has continued to exceed or abuse the authority conferred upon the corporation by law.</subsection></subsection><subsection number="16-16-1203(2)"> A member may bring an action in a court with jurisdiction under <xref depth="0" refnumber="78A" start="0">Title 78A, Judiciary and Judicial Administration</xref>, to dissolve a limited cooperative association if: <subsection number="16-16-1203(2)(a)"> the directors are deadlocked in the management of the association's affairs, the members are unable to break the deadlock, and irreparable injury to the association is occurring or is threatened because of the deadlock;</subsection><subsection number="16-16-1203(2)(b)"> the directors or those in control of the association have acted, are acting, or will act in a manner that is illegal, oppressive, or fraudulent;</subsection><subsection number="16-16-1203(2)(c)"> the members are deadlocked in voting power and have failed to elect successors to directors whose terms have expired for two consecutive periods during which annual members meetings were held or were to be held; or</subsection><subsection number="16-16-1203(2)(d)"> the assets of the association are being misapplied or wasted.</subsection></subsection><subsection number="16-16-1203(3)"> If an action is brought under this section, a court may dissolve a limited cooperative association or order an action that under the circumstances is appropriate or equitable.</subsection></section><section number="16-16-1204"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Voluntary dissolution before commencement of activity.</catchline><tab/>A majority of the organizers or initial directors of a limited cooperative association that has not yet begun business activity or the conduct of its affairs may dissolve the association. </section><section number="16-16-1205"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Voluntary dissolution by the board and members.</catchline><subsection number="16-16-1205(1)"> Except as otherwise provided in Section <xref depth="3" refnumber="16-16-1204" start="0">16-16-1204</xref>, for a limited cooperative association to voluntarily dissolve: <subsection number="16-16-1205(1)(a)"> a resolution to dissolve shall be approved by a majority vote of the board of directors unless a greater percentage is required by the organic rules;</subsection><subsection number="16-16-1205(1)(b)"> the board of directors shall call a members meeting to consider the resolution, to be held not later than 90 days after adoption of the resolution; and</subsection><subsection number="16-16-1205(1)(c)"> the board of directors shall mail or otherwise transmit or deliver to each member in a record that complies with Section <xref depth="3" refnumber="16-16-508" start="0">16-16-508</xref>:<subsection number="16-16-1205(1)(c)(i)"> the resolution required by Subsection <xref depth="4" refnumber="16-16-1205(1)(a)" start="0">(1)(a)</xref>;</subsection><subsection number="16-16-1205(1)(c)(ii)"> a recommendation that the members vote in favor of the resolution or, if the board determines that because of conflict of interest or other special circumstances it should not make a favorable recommendation, the basis of that determination; and</subsection><subsection number="16-16-1205(1)(c)(iii)"> notice of the members meeting, which shall be given in the same manner as notice of a special meeting of members.</subsection></subsection></subsection><subsection number="16-16-1205(2)"> Subject to Subsection <xref depth="4" refnumber="16-16-1205(3)" start="0">(3)</xref>, a resolution to dissolve shall be approved by: <subsection number="16-16-1205(2)(a)"> at least two-thirds of the voting power of members present at a members meeting called under Subsection <xref depth="4" refnumber="16-16-1205(1)(b)" start="0">(1)(b)</xref>; and</subsection><subsection number="16-16-1205(2)(b)"> if the limited cooperative association has investor members, at least a majority of the votes cast by patron members, unless the organic rules require a greater percentage.</subsection></subsection><subsection number="16-16-1205(3)"> The organic rules may require that the percentage of votes under Subsection <xref depth="4" refnumber="16-16-1205(2)(a)" start="0">(2)(a)</xref> is: <subsection number="16-16-1205(3)(a)"> a different percentage that is not less than a majority of members voting at the meeting;</subsection><subsection number="16-16-1205(3)(b)"> measured against the voting power of all members; or</subsection><subsection number="16-16-1205(3)(c)"> a combination of Subsections <xref depth="4" refnumber="16-16-1205(3)(a)" start="0">(3)(a)</xref> and <xref depth="4" refnumber="16-16-1205(3)(b)" start="0">(b)</xref>.</subsection></subsection></section><section number="16-16-1206"><histories><history>Amended by Chapter <modchap sess="2023GS">401</modchap>, 2023 General Session</history><modyear>2023</modyear></histories><catchline>Winding up.</catchline><subsection number="16-16-1206(1)"> A limited cooperative association continues after dissolution only for purposes of winding up the association's activities.</subsection><subsection number="16-16-1206(2)"> In winding up a limited cooperative association's activities, the board of directors shall cause the association to: <subsection number="16-16-1206(2)(a)"> discharge the association's liabilities, settle and close the association's activities, and marshal and distribute the association's assets;</subsection><subsection number="16-16-1206(2)(b)"> preserve the association or its property as a going concern for no more than a reasonable time;</subsection><subsection number="16-16-1206(2)(c)"> prosecute and defend actions and proceedings;</subsection><subsection number="16-16-1206(2)(d)"> transfer association property; and</subsection><subsection number="16-16-1206(2)(e)"> perform other necessary acts.</subsection></subsection><subsection number="16-16-1206(3)"> After dissolution and upon application of a limited cooperative association, a member, or a holder of financial rights, a court may order judicial supervision of the winding up of the association, including the appointment of a person to wind up the association's activities, if: <subsection number="16-16-1206(3)(a)"> after a reasonable time, the association has not wound up the association's activities; or</subsection><subsection number="16-16-1206(3)(b)"> the applicant establishes other good cause.</subsection></subsection><subsection number="16-16-1206(4)"> If a person is appointed pursuant to Subsection <xref depth="4" refnumber="16-16-1206(3)" start="0">(3)</xref> to wind up the activities of a limited cooperative association, the association shall promptly deliver to the division for filing an amendment to the articles of organization to reflect the appointment.</subsection></section><section number="16-16-1207"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Distribution of assets in winding up limited cooperative association.</catchline><subsection number="16-16-1207(1)"> In winding up a limited cooperative association's business, the association shall apply its assets to discharge its obligations to creditors, including members that are creditors. The association shall apply any remaining assets to pay in money the net amount distributable to members in accordance with their right to distributions under Subsection <xref depth="4" refnumber="16-16-1207(2)" start="0">(2)</xref>.</subsection><subsection number="16-16-1207(2)"> Unless the organic rules otherwise provide, in this Subsection <xref depth="4" refnumber="16-16-1207(2)" start="0">(2)</xref> "financial interests" means the amounts recorded in the names of members in the records of a limited cooperative association at the time a distribution is made, including amounts paid to become a member, amounts allocated but not distributed to members, and amounts of distributions authorized but not yet paid to members. Unless the organic rules otherwise provide, each member is entitled to a distribution from the association of any remaining assets in the proportion of the member's financial interests to the total financial interests of the members after all other obligations are satisfied.</subsection></section><section number="16-16-1208"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Known claims against dissolved limited cooperative association.</catchline><subsection number="16-16-1208(1)"> Subject to Subsection <xref depth="4" refnumber="16-16-1208(4)" start="0">(4)</xref>, a dissolved limited cooperative association may dispose of the known claims against it by following the procedure in Subsections <xref depth="4" refnumber="16-16-1208(2)" start="0">(2)</xref> and <xref depth="4" refnumber="16-16-1208(3)" start="0">(3)</xref>.</subsection><subsection number="16-16-1208(2)"> A dissolved limited cooperative association may notify its known claimants of the dissolution in a record. The notice shall: <subsection number="16-16-1208(2)(a)"> specify that a claim be in a record;</subsection><subsection number="16-16-1208(2)(b)"> specify the information required to be included in the claim;</subsection><subsection number="16-16-1208(2)(c)"> provide an address to which the claim shall be sent;</subsection><subsection number="16-16-1208(2)(d)"> state the deadline for receipt of the claim, which may not be less than 120 days after the date the notice is received by the claimant; and</subsection><subsection number="16-16-1208(2)(e)"> state that the claim will be barred if not received by the deadline.</subsection></subsection><subsection number="16-16-1208(3)"> A claim against a dissolved limited cooperative association is barred if the requirements of Subsection <xref depth="4" refnumber="16-16-1208(2)" start="0">(2)</xref> are met, and: <subsection number="16-16-1208(3)(a)"> the association is not notified of the claimant's claim, in a record, by the deadline specified in the notice under Subsection <xref depth="4" refnumber="16-16-1208(2)(d)" start="0">(2)(d)</xref>;</subsection><subsection number="16-16-1208(3)(b)"> in the case of a claim that is timely received but rejected by the association, the claimant does not commence an action to enforce the claim against the association not later than 90 days after receipt of the notice of the rejection; or</subsection><subsection number="16-16-1208(3)(c)"> if a claim is timely received but is neither accepted nor rejected by the association not later than 120 days after the deadline for receipt of claims, the claimant does not commence an action to enforce the claim against the association:<subsection number="16-16-1208(3)(c)(i)"> after the 120-day period; and</subsection><subsection number="16-16-1208(3)(c)(ii)"> not later than 90 days after the 120-day period.</subsection></subsection></subsection><subsection number="16-16-1208(4)"> This section does not apply to a claim based on an event occurring after the date of dissolution or a liability that is contingent on that date.</subsection></section><section number="16-16-1209"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Other claims against dissolved limited cooperative association.</catchline><subsection number="16-16-1209(1)"> A dissolved limited cooperative association may publish notice of its dissolution and request persons having claims against the association to present them in accordance with the notice.</subsection><subsection number="16-16-1209(2)"> A notice under Subsection <xref depth="4" refnumber="16-16-1209(1)" start="0">(1)</xref> shall: <subsection number="16-16-1209(2)(a)"> be published:<subsection number="16-16-1209(2)(a)(i)"> at least once in a newspaper of general circulation in the county in which the dissolved limited cooperative association's principal office is located or, if the association does not have a principal office in this state, in the county in which the association's designated office is or was last located; and</subsection><subsection number="16-16-1209(2)(a)(ii)"> as required in Section <xref depth="3" refnumber="45-1-101" start="0">45-1-101</xref>;</subsection></subsection><subsection number="16-16-1209(2)(b)"> describe the information required to be contained in a claim and provide an address to which the claim is to be sent; and</subsection><subsection number="16-16-1209(2)(c)"> state that a claim against the association is barred unless an action to enforce the claim is commenced not later than three years after publication of the notice.</subsection></subsection><subsection number="16-16-1209(3)"> If a dissolved limited cooperative association publishes a notice in accordance with Subsection <xref depth="4" refnumber="16-16-1209(2)" start="0">(2)</xref>, the claim of each of the following claimants is barred unless the claimant commences an action to enforce the claim not later than three years after the first publication date of the notice: <subsection number="16-16-1209(3)(a)"> a claimant that is entitled to but did not receive notice in a record under Section <xref depth="3" refnumber="16-16-1208" start="0">16-16-1208</xref>; and</subsection><subsection number="16-16-1209(3)(b)"> a claimant whose claim is contingent or based on an event occurring after the effective date of dissolution.</subsection></subsection><subsection number="16-16-1209(4)"> A claim not barred under this section may be enforced: <subsection number="16-16-1209(4)(a)"> against a dissolved limited cooperative association, to the extent of its undistributed assets; or</subsection><subsection number="16-16-1209(4)(b)"> if the association's assets have been distributed in connection with winding up the association's activities against a member or holder of financial rights to the extent of that person's proportionate share of the claim or the association's assets distributed to the person in connection with the winding up, whichever is less. The person's total liability for all claims under this Subsection <xref depth="4" refnumber="16-16-1209(4)" start="0">(4)</xref> may not exceed the total amount of assets distributed to the person as part of the winding up of the association.</subsection></subsection></section><section number="16-16-1210"><histories><history>Amended by Chapter <modchap sess="2023GS">401</modchap>, 2023 General Session</history><modyear>2023</modyear></histories><catchline>Court proceeding.</catchline><subsection number="16-16-1210(1)"> Upon a petition by a dissolved limited cooperative association that has published a notice under Section <xref depth="3" refnumber="16-16-1209" start="0">16-16-1209</xref>, a court with jurisdiction under <xref depth="0" refnumber="78A" start="0">Title 78A, Judiciary and Judicial Administration</xref>, may determine the amount and form of security to be provided for payment of claims against the association that are contingent, have not been made known to the association, or are based on an event occurring after the effective date of dissolution but that, based on the facts known to the association, are reasonably anticipated to arise after the effective date of dissolution.</subsection><subsection number="16-16-1210(2)"> Not later than 10 days after filing a petition under Subsection <xref depth="4" refnumber="16-16-1210(1)" start="0">(1)</xref>, a dissolved limited cooperative association shall give notice of the proceeding to each known claimant holding a contingent claim.</subsection><subsection number="16-16-1210(3)"><subsection number="16-16-1210(3)(a)"> The court may appoint a representative in a proceeding brought under this section to represent all claimants whose identities are unknown.</subsection><subsection number="16-16-1210(3)(b)"> The dissolved limited cooperative association shall pay reasonable fees and expenses of the representative, including all reasonable attorney and expert witness fees.</subsection></subsection><subsection number="16-16-1210(4)"> Provision by the dissolved limited cooperative association for security in the amount and the form ordered by the court satisfies the association's obligations with respect to claims that are contingent, have not been made known to the association, or are based on an event occurring after the effective date of dissolution, and the claims may not be enforced against a member that received a distribution.</subsection></section><section number="16-16-1211"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Administrative dissolution.</catchline><subsection number="16-16-1211(1)"> The division may dissolve a limited cooperative association administratively if the association does not: <subsection number="16-16-1211(1)(a)"> pay, not later than 60 days after the due date, any fee, tax, or penalty due to the division under this chapter or other law; or</subsection><subsection number="16-16-1211(1)(b)"> deliver not later than 60 days after the due date its annual report to the division.</subsection></subsection><subsection number="16-16-1211(2)"> If the division determines that a ground exists for dissolving a limited cooperative association administratively, the division shall file a record of the determination and serve the association with a copy of the record.</subsection><subsection number="16-16-1211(3)"> If, not later than 60 days after service of a copy of the division's determination under Subsection <xref depth="4" refnumber="16-16-1211(2)" start="0">(2)</xref>, the association does not correct each ground for dissolution or demonstrate to the satisfaction of the division that each uncorrected ground determined by the division does not exist, the division shall dissolve the association administratively by preparing and filing a declaration of dissolution which states the grounds for dissolution. The division shall serve the association with a copy of the declaration.</subsection><subsection number="16-16-1211(4)"> A limited cooperative association that has been dissolved administratively continues its existence only for purposes of winding up its activities.</subsection><subsection number="16-16-1211(5)"> The administrative dissolution of a limited cooperative association does not terminate the authority of its agent for service of process.</subsection></section><section number="16-16-1213"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Denial of reinstatement -- Appeal.</catchline><subsection number="16-16-1213(1)"> If the division denies a limited cooperative association's application for reinstatement following administrative dissolution, the division shall prepare and file a notice that explains the reason for denial and serve the association with a copy of the notice.</subsection><subsection number="16-16-1213(2)"> Not later than 30 days after service of a notice of denial of reinstatement by the division, a limited cooperative association may appeal the denial by petitioning the district court to set aside the dissolution. The petition shall be served on the division and contain a copy of the division's declaration of dissolution, the association's application for reinstatement, and the division's notice of denial.</subsection><subsection number="16-16-1213(3)"> The court may summarily order the division to reinstate the dissolved cooperative association or may take other action the court considers appropriate.</subsection></section><section number="16-16-1214"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Statement of dissolution.</catchline><subsection number="16-16-1214(1)"> A limited cooperative association that has dissolved or is about to dissolve may deliver to the division for filing a statement of dissolution that states: <subsection number="16-16-1214(1)(a)"> the name of the association;</subsection><subsection number="16-16-1214(1)(b)"> the date the association dissolved or will dissolve; and</subsection><subsection number="16-16-1214(1)(c)"> any other information the association considers relevant.</subsection></subsection><subsection number="16-16-1214(2)"> A person has notice of a limited cooperative association's dissolution on the later of: <subsection number="16-16-1214(2)(a)"> 90 days after a statement of dissolution is filed; or</subsection><subsection number="16-16-1214(2)(b)"> the effective date stated in the statement of dissolution.</subsection></subsection></section><section number="16-16-1215"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Statement of termination.</catchline><subsection number="16-16-1215(1)"> A dissolved limited cooperative association that has completed winding up may deliver to the division for filing a statement of termination that states: <subsection number="16-16-1215(1)(a)"> the name of the association;</subsection><subsection number="16-16-1215(1)(b)"> the date of filing of its initial articles of organization; and</subsection><subsection number="16-16-1215(1)(c)"> that the association is terminated.</subsection></subsection><subsection number="16-16-1215(2)"> The filing of a statement of termination does not itself terminate the limited cooperative association.</subsection></section></part><part number="16-16-13"><catchline>Action by Member</catchline><section number="16-16-1301"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Derivative action.</catchline><tab/>A member may maintain a derivative action to enforce a right of a limited cooperative association if:<subsection number="16-16-1301(1)"> the member demands that the association bring an action to enforce the right; and</subsection><subsection number="16-16-1301(2)"> any of the following occur: <subsection number="16-16-1301(2)(a)"> the association does not, not later than 90 days after the member makes the demand, agree to bring the action;</subsection><subsection number="16-16-1301(2)(b)"> the association notifies the member that it has rejected the demand;</subsection><subsection number="16-16-1301(2)(c)"> irreparable harm to the association would result by waiting 90 days after the member makes the demand; or</subsection><subsection number="16-16-1301(2)(d)"> the association agrees to bring an action demanded and fails to bring the action within a reasonable time.</subsection></subsection></section><section number="16-16-1302"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Proper plaintiff.</catchline><subsection number="16-16-1302(1)"> A derivative action to enforce a right of a limited cooperative association may be maintained only by a person that: <subsection number="16-16-1302(1)(a)"> is a member or a dissociated member at the time the action is commenced and:<subsection number="16-16-1302(1)(a)(i)"> was a member when the conduct giving rise to the action occurred; or</subsection><subsection number="16-16-1302(1)(a)(ii)"> whose status as a member devolved upon the person by operation of law or the organic rules from a person that was a member at the time of the conduct; and</subsection></subsection><subsection number="16-16-1302(1)(b)"> adequately represents the interests of the association.</subsection></subsection><subsection number="16-16-1302(2)"> If the sole plaintiff in a derivative action dies while the action is pending, the court may permit another member who meets the requirements of Subsection <xref depth="4" refnumber="16-16-1302(1)" start="0">(1)</xref> to be substituted as plaintiff.</subsection></section><section number="16-16-1303"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Pleading.</catchline><tab/>In a derivative action to enforce a right of a limited cooperative association, the complaint shall state:<subsection number="16-16-1303(1)"> the date and content of the plaintiff's demand under Subsection <xref depth="4" refnumber="16-16-1301(1)" start="0">16-16-1301(1)</xref> and the association's response;</subsection><subsection number="16-16-1303(2)"> if 90 days have not expired since the demand, how irreparable harm to the association would result by waiting for the expiration of 90 days; and</subsection><subsection number="16-16-1303(3)"> if the association agreed to bring an action demanded, that the action has not been brought within a reasonable time.</subsection></section><section number="16-16-1304"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Approval for discontinuance or settlement.</catchline><tab/>A derivative action to enforce a right of a limited cooperative association may not be discontinued or settled without the court's approval. </section><section number="16-16-1305"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Proceeds and expenses.</catchline><subsection number="16-16-1305(1)"> Except as otherwise provided in Subsection <xref depth="4" refnumber="16-16-1305(2)" start="0">(2)</xref>: <subsection number="16-16-1305(1)(a)"> any proceeds or other benefits of a derivative action to enforce a right of a limited cooperative association, whether by judgment, compromise, or settlement, belong to the association and not to the plaintiff; and</subsection><subsection number="16-16-1305(1)(b)"> if the plaintiff in the derivative action receives any proceeds, the plaintiff shall immediately remit them to the association.</subsection></subsection><subsection number="16-16-1305(2)"> If a derivative action to enforce a right of a limited cooperative association is successful in whole or in part, the court may award the plaintiff reasonable expenses, including reasonable attorney fees and costs, from the recovery of the association.</subsection></section></part><part number="16-16-14"><catchline>Foreign Cooperatives</catchline><section number="16-16-1401"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Governing law.</catchline><subsection number="16-16-1401(1)"> The law of the state or other jurisdiction under which a foreign cooperative is organized governs relations among the members of the foreign cooperative and between the members and the foreign cooperative.</subsection><subsection number="16-16-1401(2)"> A foreign cooperative may not be denied a certificate of authority because of any difference between the law of the jurisdiction under which the foreign cooperative is organized and the law of this state.</subsection><subsection number="16-16-1401(3)"> A certificate of authority does not authorize a foreign cooperative to engage in any activity or exercise any power that a limited cooperative association may not engage in or exercise in this state.</subsection></section><section number="16-16-1402"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Application for certificate of authority.</catchline><subsection number="16-16-1402(1)">A foreign cooperative may apply for a certificate of authority by delivering an application to the division for filing. The application shall state:<subsection number="16-16-1402(1)(a)">the name of the foreign cooperative and, if the name does not comply with Section <xref depth="3" refnumber="16-1a-302">16-1a-302</xref>, an alternative name adopted pursuant to Section <xref depth="3" refnumber="16-16-1405" start="0">16-16-1405</xref>;</subsection><subsection number="16-16-1402(1)(b)">the name of the state or other jurisdiction under whose law the foreign cooperative is organized;</subsection><subsection number="16-16-1402(1)(c)">the street address and, if different, mailing address of the principal office and, if the law of the jurisdiction under which the foreign cooperative is organized requires the foreign cooperative to maintain another office in that jurisdiction, the street address and, if different, mailing address of the required office;</subsection><subsection number="16-16-1402(1)(d)">the street address and, if different, mailing address of the foreign cooperative's designated office in this state, and the name of the foreign cooperative's agent for service of process at the designated office; and</subsection><subsection number="16-16-1402(1)(e)">the name, street address and, if different, mailing address of each of the foreign cooperative's current directors and officers.</subsection></subsection><subsection number="16-16-1402(2)">A foreign cooperative shall deliver with a completed application under Subsection <xref depth="4" refnumber="16-16-1402(1)" start="0">(1)</xref> a certificate of existence or a similar record signed by the division or other official having custody of the foreign cooperative's publicly filed records in the state or other jurisdiction under whose law the foreign cooperative is organized.</subsection></section><section number="16-16-1403"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Activities not constituting transacting business.</catchline><subsection number="16-16-1403(1)"> Activities of a foreign cooperative which do not constitute transacting business in this state under this part include: <subsection number="16-16-1403(1)(a)"> maintaining, defending, and settling an action or proceeding;</subsection><subsection number="16-16-1403(1)(b)"> holding meetings of the foreign cooperative's members or directors or carrying on any other activity concerning the foreign cooperative's internal affairs;</subsection><subsection number="16-16-1403(1)(c)"> maintaining accounts in financial institutions;</subsection><subsection number="16-16-1403(1)(d)"> maintaining offices or agencies for the transfer, exchange, and registration of the foreign cooperative's own securities or maintaining trustees or depositories with respect to those securities;</subsection><subsection number="16-16-1403(1)(e)"> selling through independent contractors;</subsection><subsection number="16-16-1403(1)(f)"> soliciting or obtaining orders, whether by mail or electronic means, through employees, agents, or otherwise, if the orders require acceptance outside this state before they become contracts;</subsection><subsection number="16-16-1403(1)(g)"> creating or acquiring indebtedness, mortgages, or security interests in real or personal property;</subsection><subsection number="16-16-1403(1)(h)"> securing or collecting debts or enforcing mortgages or other security interests in property securing the debts, and holding, protecting, and maintaining property so acquired;</subsection><subsection number="16-16-1403(1)(i)"> conducting an isolated transaction that is completed within 30 days and is not one in the course of similar transactions; and</subsection><subsection number="16-16-1403(1)(j)"> transacting business in interstate commerce.</subsection></subsection><subsection number="16-16-1403(2)"> For purposes of this part, the ownership in this state of income-producing real property or tangible personal property, other than property excluded under Subsection <xref depth="4" refnumber="16-16-1403(1)" start="0">(1)</xref>, constitutes transacting business in this state.</subsection><subsection number="16-16-1403(3)"> This section does not apply in determining the contacts or activities that may subject a foreign cooperative to service of process, taxation, or regulation under law of this state other than this chapter.</subsection></section><section number="16-16-1404"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Issuance of certificate of authority.</catchline><tab/>Unless the division determines that an application for a certificate of authority does not comply with the filing requirements of this chapter, the division, upon payment by the foreign cooperative of all filing fees, shall file the application, issue a certificate of authority, and send a copy of the filed certificate, together with a receipt for the fees, to the foreign cooperative or its representative. </section><section number="16-16-1405"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Noncomplying name of foreign cooperative.</catchline><subsection number="16-16-1405(1)"><subsection number="16-16-1405(1)(a)">A foreign cooperative whose name does not comply with Section <xref depth="3" refnumber="16-1a-302">16-1a-302</xref> may not obtain a certificate of authority until it adopts, for the purpose of transacting business in this state, an alternative name that complies with Section <xref depth="3" refnumber="16-1a-302">16-1a-302</xref>.</subsection><subsection number="16-16-1405(1)(b)">A foreign cooperative that adopts an alternative name under this Subsection <xref depth="4" refnumber="16-16-1405(1)" start="0">(1)</xref> and then obtains a certificate of authority with that name need not also comply with Section <xref depth="3" refnumber="42-2-201">42-2-201</xref>.</subsection><subsection number="16-16-1405(1)(c)">After obtaining a certificate of authority with an alternative name, a foreign cooperative's business in this state shall be transacted under that name unless the foreign cooperative is authorized under Section <xref depth="3" refnumber="42-2-201">42-2-201</xref> to transact business in this state under another name.</subsection></subsection><subsection number="16-16-1405(2)">If a foreign cooperative authorized to transact business in this state changes its name to one that does not comply with Section <xref depth="3" refnumber="16-1a-302">16-1a-302</xref>, it may not thereafter transact business in this state until it complies with Subsection <xref depth="4" refnumber="16-16-1405(1)" start="0">(1)</xref> and obtains an amended certificate of authority.</subsection></section><section number="16-16-1406"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Revocation of certificate of authority.</catchline><subsection number="16-16-1406(1)"> A certificate of authority may be revoked by the division in the manner provided in Subsection <xref depth="4" refnumber="16-16-1406(2)" start="0">(2)</xref> if the foreign cooperative does not: <subsection number="16-16-1406(1)(a)"> pay, not later than 60 days after the due date, any fee, tax, or penalty due to the division under this chapter or any other law of this state;</subsection><subsection number="16-16-1406(1)(b)"> deliver, not later than 60 days after the due date, its annual report;</subsection><subsection number="16-16-1406(1)(c)"> appoint and maintain an agent for service of process; or</subsection><subsection number="16-16-1406(1)(d)"> deliver for filing a statement of change not later than 30 days after a change has occurred in the name of the agent or the address of the foreign cooperative's designated office.</subsection></subsection><subsection number="16-16-1406(2)"> To revoke a certificate of authority, the division shall file a notice of revocation and send a copy to the foreign cooperative's registered agent for service of process in this state or, if the foreign cooperative does not appoint and maintain an agent for service of process in this state, to the foreign cooperative's principal office. The notice shall state: <subsection number="16-16-1406(2)(a)"> the revocation's effective date, which shall be at least 60 days after the date the division sends the copy; and</subsection><subsection number="16-16-1406(2)(b)"> the foreign cooperative's noncompliance that is the reason for the revocation.</subsection></subsection><subsection number="16-16-1406(3)"> The authority of a foreign cooperative to transact business in this state ceases on the effective date of the notice of revocation unless before that date the foreign cooperative cures each failure to comply stated in the notice. If the foreign cooperative cures the failures, the division shall so indicate on the filed notice.</subsection></section><section number="16-16-1407"><histories><history>Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Cancellation of certificate of authority -- Effect of failure to have certificate.</catchline><subsection number="16-16-1407(1)">To cancel its certificate of authority, a foreign cooperative shall deliver to the division for filing a notice of cancellation. The certificate is canceled when the notice becomes effective under Section <xref depth="3" refnumber="16-1a-204">16-1a-204</xref>.</subsection><subsection number="16-16-1407(2)">A foreign cooperative transacting business in this state may not maintain an action or proceeding in this state unless it has a certificate of authority.</subsection><subsection number="16-16-1407(3)">The failure of a foreign cooperative to have a certificate of authority does not impair the validity of a contract or act of the foreign cooperative or prevent the foreign cooperative from defending an action or proceeding in this state.</subsection><subsection number="16-16-1407(4)">A member of a foreign cooperative is not liable for the obligations of the foreign cooperative solely by reason of the foreign cooperative's having transacted business in this state without a certificate of authority.</subsection><subsection number="16-16-1407(5)">If a foreign cooperative transacts business in this state without a certificate of authority or cancels its certificate, it appoints the division as its agent for service of process for an action arising out of the transaction of business in this state.</subsection></section><section number="16-16-1408"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Action by attorney general.</catchline><tab/>The attorney general may maintain an action to restrain a foreign cooperative from transacting business in this state in violation of this part. </section></part><part number="16-16-15"><catchline>Disposition of Assets</catchline><section number="16-16-1501"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Disposition of assets not requiring member approval.</catchline><tab/>Unless the articles of organization otherwise provide, member approval under Section <xref depth="3" refnumber="16-16-1502" start="0">16-16-1502</xref> is not required for a limited cooperative association to:<subsection number="16-16-1501(1)"> sell, lease, exchange, license, or otherwise dispose of all or any part of the assets of the association in the usual and regular course of business; or</subsection><subsection number="16-16-1501(2)"> mortgage, pledge, dedicate to the repayment of indebtedness, or encumber in any way all or any part of the assets of the association whether or not in the usual and regular course of business.</subsection></section><section number="16-16-1502"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Member approval of other disposition of assets.</catchline><tab/>A sale, lease, exchange, license, or other disposition of assets of a limited cooperative association, other than a disposition described in Section <xref depth="3" refnumber="16-16-1501" start="0">16-16-1501</xref>, requires approval of the association's members under Sections <xref depth="3" refnumber="16-16-1503" start="0">16-16-1503</xref> and <xref depth="3" refnumber="16-16-1504" start="0">16-16-1504</xref> if the disposition leaves the association without significant continuing business activity. </section><section number="16-16-1503"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Notice and action on disposition of assets.</catchline><tab/>For a limited cooperative association to dispose of assets under Section <xref depth="3" refnumber="16-16-1502" start="0">16-16-1502</xref>:<subsection number="16-16-1503(1)"> a majority of the board of directors, or a greater percentage if required by the organic rules, shall approve the proposed disposition; and</subsection><subsection number="16-16-1503(2)"> the board of directors shall call a members meeting to consider the proposed disposition, hold the meeting not later than 90 days after approval of the proposed disposition by the board, and mail or otherwise transmit or deliver in a record to each member: <subsection number="16-16-1503(2)(a)"> the terms of the proposed disposition;</subsection><subsection number="16-16-1503(2)(b)"> a recommendation that the members approve the disposition, or if the board determines that because of conflict of interest or other special circumstances it should not make a favorable recommendation, the basis for that determination;</subsection><subsection number="16-16-1503(2)(c)"> a statement of any condition of the board's submission of the proposed disposition to the members; and</subsection><subsection number="16-16-1503(2)(d)"> notice of the meeting at which the proposed disposition will be considered, which shall be given in the same manner as notice of a special meeting of members.</subsection></subsection></section><section number="16-16-1504"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Disposition of assets.</catchline><subsection number="16-16-1504(1)"> Subject to Subsection <xref depth="4" refnumber="16-16-1504(2)" start="0">(2)</xref>, a disposition of assets under Section <xref depth="3" refnumber="16-16-1502" start="0">16-16-1502</xref> shall be approved by: <subsection number="16-16-1504(1)(a)"> at least two-thirds of the voting power of members present at a members meeting called under Subsection <xref depth="4" refnumber="16-16-1503(2)" start="0">16-16-1503(2)</xref>; and</subsection><subsection number="16-16-1504(1)(b)"> if the limited cooperative association has investor members, at least a majority of the votes cast by patron members, unless the organic rules require a greater percentage vote by patron members.</subsection></subsection><subsection number="16-16-1504(2)"> The organic rules may require that the percentage of votes under Subsection <xref depth="4" refnumber="16-16-1504(1)(a)" start="0">(1)(a)</xref> is: <subsection number="16-16-1504(2)(a)"> a different percentage that is not less than a majority of members voting at the meeting;</subsection><subsection number="16-16-1504(2)(b)"> measured against the voting power of all members; or</subsection><subsection number="16-16-1504(2)(c)"> a combination of Subsections <xref depth="4" refnumber="16-16-1504(2)(a)" start="0">(2)(a)</xref> and <xref depth="4" refnumber="16-16-1504(2)(b)" start="0">(b)</xref>.</subsection></subsection><subsection number="16-16-1504(3)"> Subject to any contractual obligations, after a disposition of assets is approved and at any time before the consummation of the disposition, a limited cooperative association may approve an amendment to the contract for disposition or the resolution authorizing the disposition or approve abandonment of the disposition: <subsection number="16-16-1504(3)(a)"> as provided in the contract or the resolution; and</subsection><subsection number="16-16-1504(3)(b)"> except as prohibited by the resolution, with the same affirmative vote of the board of directors and of the members as was required to approve the disposition.</subsection></subsection><subsection number="16-16-1504(4)"> The voting requirements for districts, classes, or voting groups under Section <xref depth="3" refnumber="16-16-404" start="0">16-16-404</xref> apply to approval of a disposition of assets under this part.</subsection></section></part><part number="16-16-17"><catchline>Miscellaneous Provisions</catchline><section number="16-16-1701"><histories><history>Amended by Chapter <modchap sess="2010GS">378</modchap>, 2010 General Session</history><modyear>2010</modyear></histories><catchline>Uniformity of application and construction.</catchline><tab/>In applying and construing this uniform act, consideration shall be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it. </section><section number="16-16-1702"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Relation to Electronic Signatures in Global and National Commerce Act.</catchline><tab/>This chapter modifies, limits, or supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. Sec. 7001 et seq., but does not modify, limit, or supersede Section 101(c) of that act, 15 U.S.C. Sec. 7001(c), or authorize electronic delivery of any of the notices described in Section 103(b) of that act, 15 U.S.C. Sec. 7003(b). </section><section number="16-16-1703"><histories><history>Enacted by Chapter <modchap sess="2008GS">363</modchap>, 2008 General Session</history><modyear>2008</modyear></histories><catchline>Savings clause.</catchline><tab/>This chapter does not affect an action or proceeding commenced, or right accrued, before May 5, 2008. </section></part></chapter><chapter number="16-18"><catchline>Utah Uniform Partnership Act</catchline><part number="16-18-1"><catchline>General Provisions</catchline><section number="16-18-101"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Definitions.</catchline><tab/>As used in this chapter:<subsection number="16-18-101(1)">"Business" includes every trade, occupation, and profession.<note>Note: </note></subsection><subsection number="16-18-101(2)">"Contribution," except in the phrase "right of contribution," means property or a benefit described in Section <xref depth="3" refnumber="16-18-501">16-18-501</xref> which is provided by a person to a partnership to become a partner or in the person's capacity as a partner.</subsection><subsection number="16-18-101(3)">"Debtor in bankruptcy" means a person that is the subject of:<subsection number="16-18-101(3)(a)">an order for relief under Title 11 of the United States Code or a comparable order under a successor statute of general application; or</subsection><subsection number="16-18-101(3)(b)">a comparable order under federal, state, or foreign law governing insolvency.</subsection></subsection><subsection number="16-18-101(4)"><subsection number="16-18-101(4)(a)">"Distribution" means a transfer of money or other property from a partnership to a person on account of a transferable interest or in a person's capacity as a partner.</subsection><subsection number="16-18-101(4)(b)">"Distribution" includes:<subsection number="16-18-101(4)(b)(i)">a redemption or other purchase by a partnership of a transferable interest; and</subsection><subsection number="16-18-101(4)(b)(ii)">a transfer to a partner in return for the partner's relinquishment of any right to participate as a partner in the management or conduct of the partnership's activities and affairs or have access to records or other information concerning the partnership's activities and affairs.</subsection></subsection><subsection number="16-18-101(4)(c)">"Distribution" does not include amounts constituting reasonable compensation for present or past service or payments made in the ordinary course of business under a bona fide retirement plan or other bona fide benefits program.</subsection></subsection><subsection number="16-18-101(5)">"Division" means the Division of Corporations and Commercial Code.</subsection><subsection number="16-18-101(6)">"Foreign limited liability partnership" means a foreign partnership whose partners have limited liability for the debts, obligations, or other liabilities of the foreign partnership under a provision similar to Subsection <xref depth="4" refnumber="16-18-306(3)">16-18-306(3)</xref>.</subsection><subsection number="16-18-101(7)"><subsection number="16-18-101(7)(a)">"Foreign partnership" means an unincorporated entity formed under the law of a jurisdiction other than this state which would be a partnership if formed under the law of this state.</subsection><subsection number="16-18-101(7)(b)">"Foreign partnership" includes a foreign limited liability partnership.</subsection></subsection><subsection number="16-18-101(8)">"Jurisdiction," used to refer to a political entity, means the United States, a state, a foreign country, or a political subdivision of a foreign country.</subsection><subsection number="16-18-101(9)">"Jurisdiction of formation" means, with respect to an entity, the jurisdiction:<subsection number="16-18-101(9)(a)">under whose law the entity is formed; or</subsection><subsection number="16-18-101(9)(b)">in the case of a limited liability partnership or foreign limited liability partnership, in which the partnership's statement of qualification is filed.</subsection></subsection><subsection number="16-18-101(10)">"Limited liability partnership," except in the phrase "foreign limited liability partnership," means a partnership that has filed a statement of qualification under Section <xref depth="3" refnumber="16-18-1001">16-18-1001</xref> and does not have a similar statement in effect in any other jurisdiction.</subsection><subsection number="16-18-101(11)">"Partner" means a person that:<subsection number="16-18-101(11)(a)">has become a partner in a partnership under Section <xref depth="3" refnumber="16-18-401">16-18-401</xref> or was a partner in a partnership when the partnership became subject to this chapter under Section <xref depth="3" refnumber="16-18-1205">16-18-1205</xref>; and</subsection><subsection number="16-18-101(11)(b)">has not dissociated as a partner under Section <xref depth="3" refnumber="16-18-701">16-18-701</xref>.</subsection></subsection><subsection number="16-18-101(12)"><subsection number="16-18-101(12)(a)">"Partnership" means an association of two or more persons to carry on as co-owners a business for profit formed under this chapter or that becomes subject to this chapter under:<subsection number="16-18-101(12)(a)(i)">Chapter 1a, Part 7, Merger;</subsection><subsection number="16-18-101(12)(a)(ii)">Chapter 1a, Part 8, Interest Exchange;</subsection><subsection number="16-18-101(12)(a)(iii)">Chapter 1a, Part 9, Conversion;</subsection><subsection number="16-18-101(12)(a)(iv)">Chapter 1a, Part 10, Domestication; or </subsection><subsection number="16-18-101(12)(a)(v)">Section <xref depth="3" refnumber="16-18-1205">16-18-1205</xref>.</subsection></subsection><subsection number="16-18-101(12)(b)">"Partnership" includes a limited liability partnership.</subsection></subsection><subsection number="16-18-101(13)"><subsection number="16-18-101(13)(a)">"Partnership agreement" means the agreement, whether or not referred to as a partnership agreement, and whether oral, implied, in a record, or in any combination thereof, of all the partners of a partnership concerning the matters described in Subsection <xref depth="4" refnumber="16-18-105(1)">16-18-105(1)</xref>.</subsection><subsection number="16-18-101(13)(b)">"Partnership agreement" includes the agreement as amended or restated.</subsection></subsection><subsection number="16-18-101(14)">"Partnership at will" means a partnership in which the partners have not agreed to remain partners until the expiration of a definite term or the completion of a particular undertaking.</subsection><subsection number="16-18-101(15)">"Person" means an individual, business corporation, nonprofit corporation, partnership, limited partnership, limited liability company, limited cooperative association, unincorporated nonprofit association, statutory trust, business trust, common-law business trust, estate, trust, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.</subsection><subsection number="16-18-101(16)">"Principal office" means the principal executive office of a partnership or a foreign limited liability partnership, whether or not the office is located in this state.</subsection><subsection number="16-18-101(17)">"Professional services" means a personal service provided by:<subsection number="16-18-101(17)(a)">a public accountant holding a license under <xref depth="1" refnumber="58-26a" start="0">Title 58, Chapter 26a, Certified Public Accountant Licensing Act</xref>, or a subsequent law regulating the practice of public accounting;</subsection><subsection number="16-18-101(17)(b)">an architect holding a license under <xref depth="1" refnumber="58-3a" start="0">Title 58, Chapter 3a, Architects Licensing Act</xref>, or a subsequent law regulating the practice of architecture;</subsection><subsection number="16-18-101(17)(c)">an attorney granted the authority to practice law by the:<subsection number="16-18-101(17)(c)(i)">Utah Supreme Court; or</subsection><subsection number="16-18-101(17)(c)(ii)">one or more of the following that licenses or regulates the authority to practice law in a state or territory of the United States other than Utah:<subsection number="16-18-101(17)(c)(ii)(A)">a supreme court;</subsection><subsection number="16-18-101(17)(c)(ii)(B)">a court other than a supreme court;</subsection><subsection number="16-18-101(17)(c)(ii)(C)">an agency;</subsection><subsection number="16-18-101(17)(c)(ii)(D)">an instrumentality; or</subsection><subsection number="16-18-101(17)(c)(ii)(E)">a regulating board;</subsection></subsection></subsection><subsection number="16-18-101(17)(d)">a chiropractor holding a license under <xref depth="1" refnumber="58-73" start="0">Title 58, Chapter 73, Chiropractic Physician Practice Act</xref>, or a subsequent law regulating the practice of chiropractics;</subsection><subsection number="16-18-101(17)(e)">a doctor of dentistry holding a license under <xref depth="1" refnumber="58-69" start="0">Title 58, Chapter 69, Dentist and Dental Hygienist Practice Act</xref>, or a subsequent law regulating the practice of dentistry;</subsection><subsection number="16-18-101(17)(f)">a professional engineer registered under <xref depth="1" refnumber="58-22" start="0">Title 58, Chapter 22, Professional Engineers and Professional Land Surveyors Licensing Act</xref>, or a subsequent law regulating the practice of engineers or land surveyors;</subsection><subsection number="16-18-101(17)(g)">a naturopath holding a license under <xref depth="1" refnumber="58-71" start="0">Title 58, Chapter 71, Naturopathic Physician Practice Act</xref>, or a subsequent law regulating the practice of naturopathy;</subsection><subsection number="16-18-101(17)(h)">a nurse licensed under <xref depth="1" refnumber="58-31b" start="0">Title 58, Chapter 31b, Nurse Practice Act</xref>, or <xref depth="1" refnumber="58-44a" start="1">Chapter 44a, Nurse Midwife Practice Act</xref>, or a subsequent law regulating the practice of nursing;</subsection><subsection number="16-18-101(17)(i)">an optometrist holding a license under <xref depth="1" refnumber="58-16a" start="0">Title 58, Chapter 16a, Utah Optometry Practice Act</xref>, or a subsequent law regulating the practice of optometry;</subsection><subsection number="16-18-101(17)(j)">an osteopathic physician or surgeon holding a license under <xref depth="1" refnumber="58-68" start="0">Title 58, Chapter 68, Utah Osteopathic Medical Practice Act</xref>, or a subsequent law regulating the practice of osteopathy;</subsection><subsection number="16-18-101(17)(k)">a pharmacist holding a license under <xref depth="1" refnumber="58-17b" start="0">Title 58, Chapter 17b, Pharmacy Practice Act</xref>, or a subsequent law regulating the practice of pharmacy;</subsection><subsection number="16-18-101(17)(l)">a physician, surgeon, or doctor of medicine holding a license under <xref depth="1" refnumber="58-67" start="0">Title 58, Chapter 67, Utah Medical Practice Act</xref>, or a subsequent law regulating the practice of medicine;</subsection><subsection number="16-18-101(17)(m)">a physician assistant holding a license under <xref depth="1" refnumber="58-70a" start="0">Title 58, Chapter 70a, Utah Physician Assistant Act</xref>, or a subsequent law regulating the practice as a physician assistant;</subsection><subsection number="16-18-101(17)(n)">a physical therapist holding a license under <xref depth="1" refnumber="58-24b" start="0">Title 58, Chapter 24b, Physical Therapy Practice Act</xref>, or a subsequent law regulating the practice of physical therapy;</subsection><subsection number="16-18-101(17)(o)">a podiatric physician holding a license under <xref depth="1" refnumber="58-5a" start="0">Title 58, Chapter 5a, Podiatric Physician Licensing Act</xref>, or a subsequent law regulating the practice of podiatry;</subsection><subsection number="16-18-101(17)(p)">a psychologist holding a license under <xref depth="1" refnumber="58-61" start="0">Title 58, Chapter 61, Psychologist Licensing Act</xref>, or a subsequent law regulating the practice of psychology;</subsection><subsection number="16-18-101(17)(q)">a principal broker, associate broker, or sales agent holding a license under <xref depth="1" refnumber="61-2f" start="0">Title 61, Chapter 2f, Real Estate Licensing and Practices Act</xref>, or a subsequent law regulating the sale, exchange, purchase, rental, or leasing of real estate;</subsection><subsection number="16-18-101(17)(r)">a clinical or certified social worker holding a license under <xref depth="2" refnumber="58-60-2" start="0">Title 58, Chapter 60, Part 2, Social Worker Licensing Act</xref>, or a subsequent law regulating the practice of social work;</subsection><subsection number="16-18-101(17)(s)">a mental health therapist holding a license under <xref depth="1" refnumber="58-60" start="0">Title 58, Chapter 60, Mental Health Professional Practice Act</xref>, or a subsequent law regulating the practice of mental health therapy;</subsection><subsection number="16-18-101(17)(t)">a veterinarian holding a license under <xref depth="1" refnumber="58-28" start="0">Title 58, Chapter 28, Veterinary Practice Act</xref>, or a subsequent law regulating the practice of veterinary medicine; or</subsection><subsection number="16-18-101(17)(u)">an individual licensed, certified, or registered under <xref depth="1" refnumber="61-2g" start="0">Title 61, Chapter 2g, Real Estate Appraiser Licensing and Certification Act</xref>, or a subsequent law regulating the practice of appraising real estate.</subsection></subsection><subsection number="16-18-101(18)">"Property" means all property, whether real, personal, or mixed, or tangible or intangible, or any right or interest therein.</subsection><subsection number="16-18-101(19)">"Record," used as a noun, means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.</subsection><subsection number="16-18-101(20)">"Registered agent" means an agent of a limited liability partnership or foreign limited liability partnership which is authorized to receive service of any process, notice, or demand required or permitted by law to be served on the partnership.</subsection><subsection number="16-18-101(21)">"Registered foreign limited liability partnership" means a foreign limited liability partnership that is registered to do business in this state in accordance with a statement of registration filed by the division.</subsection><subsection number="16-18-101(22)">"Sign" means, with present intent to authenticate or adopt a record:<subsection number="16-18-101(22)(a)">to execute or adopt a tangible symbol; or</subsection><subsection number="16-18-101(22)(b)">to attach to or logically associate with the record an electronic symbol, sound, or process.</subsection></subsection><subsection number="16-18-101(23)">"State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.</subsection><subsection number="16-18-101(24)">"Transfer" includes:<subsection number="16-18-101(24)(a)">an assignment;</subsection><subsection number="16-18-101(24)(b)">a conveyance;</subsection><subsection number="16-18-101(24)(c)">a sale;</subsection><subsection number="16-18-101(24)(d)">a lease;</subsection><subsection number="16-18-101(24)(e)">an encumbrance, including a mortgage or security interest;</subsection><subsection number="16-18-101(24)(f)">a gift; and</subsection><subsection number="16-18-101(24)(g)">a transfer by operation of law.</subsection></subsection><subsection number="16-18-101(25)"><subsection number="16-18-101(25)(a)">"Transferable interest" means the right, as initially owned by a person in the person's capacity as a partner, to receive distributions from a partnership in accordance with the partnership agreement, whether or not the person remains a partner or continues to own any part of the right.</subsection><subsection number="16-18-101(25)(b)">"Transferable interest" applies to any fraction of the interest, by whomever owned.</subsection></subsection><subsection number="16-18-101(26)">"Transferee" means a person to which all or part of a transferable interest has been transferred, whether or not the transferor is a partner.</subsection><subsection number="16-18-101(27)">"Tribal partnership" means a partnership:<subsection number="16-18-101(27)(a)">formed under the law of a tribe; and</subsection><subsection number="16-18-101(27)(b)">that is at least 51% owned or controlled by the tribe under whose law the partnership is formed.</subsection></subsection><subsection number="16-18-101(28)">"Tribe" means a tribe, band, nation, pueblo, or other organized group or community of Indians, including an Alaska Native village, that is legally recognized as eligible for and is consistent with a special program, service, or entitlement provided by the United States to Indians because of their status as Indians.</subsection></section><section number="16-18-102"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Knowledge -- Notice.</catchline><subsection number="16-18-102(1)">A person knows a fact if the person:<subsection number="16-18-102(1)(a)">has actual knowledge of it; or</subsection><subsection number="16-18-102(1)(b)">is deemed to know it under Subsection <xref depth="4" refnumber="48-1d-103(4)(a)" start="0">(4)(a)</xref> or law other than this chapter.</subsection></subsection><subsection number="16-18-102(2)">A person has notice of a fact if the person:<subsection number="16-18-102(2)(a)">has reason to know the fact from all the facts known to the person at the time in question; or</subsection><subsection number="16-18-102(2)(b)">is deemed to have notice of the fact under Subsection <xref depth="4" refnumber="48-1d-103(4)(b)" start="0">(4)(b)</xref>.</subsection></subsection><subsection number="16-18-102(3)">Subject to Section <xref depth="3" refnumber="16-1a-211">16-1a-211</xref>, a person notifies another person of a fact by taking steps reasonably required to inform the other person in ordinary course, whether or not those steps cause the other person to know the fact.</subsection><subsection number="16-18-102(4)">A person not a partner is deemed:<subsection number="16-18-102(4)(a)">to know of a limitation on authority to transfer real property as provided in Subsection <xref depth="4" refnumber="16-18-303(7)">16-18-303(7)</xref>; and</subsection><subsection number="16-18-102(4)(b)">to have notice of:<subsection number="16-18-102(4)(b)(i)">a partner's dissociation 90 days after a statement of dissociation under Section <xref depth="3" refnumber="16-18-804">16-18-804</xref> becomes effective; and</subsection><subsection number="16-18-102(4)(b)(ii)">a partnership's:<subsection number="16-18-102(4)(b)(ii)(A)">dissolution 90 days after a statement of dissolution under Subsection <xref tempid="750">16-18-902(2)(b)(i)</xref> becomes effective;</subsection><subsection number="16-18-102(4)(b)(ii)(B)">termination 90 days after a statement of termination under Subsection <xref tempid="344">16-18-902(2)(b)(vi)</xref> becomes effective;</subsection><subsection number="16-18-102(4)(b)(ii)(C)">participation in a merger, interest exchange, conversion, or domestication 90 days after a statement of merger, interest exchange, conversion, or domestication under Chapter 1a, Part 7, Merger, Chapter 1a, Part 8, Interest Exchange, Chapter 1a, Part 9, Conversion, or Chapter 1a, Part 10, Domestication, becomes effective; and</subsection><subsection number="16-18-102(4)(b)(ii)(D)">abandonment of a merger, interest exchange, conversion, or domestication 90 days after a statement of abandonment of merger, interest exchange, conversion, or domestication under Chapter 1a, Part 7, Merger, Chapter 1a, Part 8, Interest Exchange, Chapter 1a, Part 9, Conversion, or Chapter 1a, Part 10, Domestication, becomes effective.</subsection></subsection></subsection></subsection><subsection number="16-18-102(5)">A partner's knowledge or notice of a fact relating to the partnership is effective immediately as knowledge of or notice to the partnership, except in the case of a fraud on the partnership committed by or with the consent of that partner.</subsection></section><section number="16-18-103"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Governing law.</catchline><tab/>The internal affairs of a partnership and the liability of a partner as a partner for the debts, obligations, or other liabilities of the partnership are governed by:<subsection number="16-18-103(1)">in the case of a limited liability partnership, the law of this state; and</subsection><subsection number="16-18-103(2)">in the case of a partnership that is not a limited liability partnership, the law of the state of the jurisdiction in which the partnership has its principal office.</subsection></section><section number="16-18-104"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Supplemental principles of law.</catchline><tab/>Unless displaced by particular provisions of this chapter, the principles of law and equity supplement this chapter.</section><section number="16-18-105"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Partnership agreement -- Scope, function, and limitations.</catchline><subsection number="16-18-105(1)">Except as otherwise provided in Subsections <xref depth="4" refnumber="48-1d-106(3)" start="0">(3)</xref> and <xref depth="4" refnumber="48-1d-106(4)" start="0">(4)</xref>, the partnership agreement governs:<subsection number="16-18-105(1)(a)">relations among the partners as partners and between the partners and the partnership;</subsection><subsection number="16-18-105(1)(b)">the activities and affairs of the partnership and the conduct of those activities and affairs; and</subsection><subsection number="16-18-105(1)(c)">the means and conditions for amending the partnership agreement.</subsection></subsection><subsection number="16-18-105(2)">To the extent the partnership agreement does not provide for a matter described in Subsection <xref depth="4" refnumber="48-1d-106(1)" start="0">(1)</xref>, this chapter governs the matter.</subsection><subsection number="16-18-105(3)">A partnership agreement may not:<subsection number="16-18-105(3)(a)">vary the law applicable under Section <xref depth="3" refnumber="16-18-103">16-18-103</xref>;</subsection><subsection number="16-18-105(3)(b)">vary the provisions of Section <xref depth="3" refnumber="16-1a-209">16-1a-209</xref>;</subsection><subsection number="16-18-105(3)(c)">vary the provisions of Section <xref depth="3" refnumber="16-18-307">16-18-307</xref>;</subsection><subsection number="16-18-105(3)(d)">unreasonably restrict the duties and rights under Section <xref depth="3" refnumber="16-18-403">16-18-403</xref>, but the partnership agreement may impose reasonable restrictions on the availability and use of information obtained under that section and may define appropriate remedies, including liquidated damages, for a breach of any reasonable restriction on use;</subsection><subsection number="16-18-105(3)(e)">eliminate the duty of loyalty or the duty of care, except as otherwise provided in Subsection <xref depth="4" refnumber="48-1d-106(4)" start="0">(4)</xref>;</subsection><subsection number="16-18-105(3)(f)">eliminate the contractual obligation of good faith and fair dealing under Subsection <xref refnumber="192-null-10">16-18-405(4)</xref>, but the partnership agreement may prescribe the standards, if not unconscionable or against public policy, by which the performance of the obligation is to be measured;</subsection><subsection number="16-18-105(3)(g)">relieve or exonerate a person from liability for conduct involving bad faith, willful misconduct, or recklessness;</subsection><subsection number="16-18-105(3)(h)">vary the power to dissociate as a partner under Subsection <xref refnumber="220-null-1">16-18-702(1)</xref>, except to require the notice under Subsection <xref refnumber="218-null-1">16-18-701(1)</xref> to be in a record;</subsection><subsection number="16-18-105(3)(i)">vary the right of a court to expel a partner in the events specified in Subsection <xref refnumber="218-null-13">16-18-701(5)</xref>;</subsection><subsection number="16-18-105(3)(j)">vary the causes of dissolution specified in Subsection <xref refnumber="234-null-7">16-18-901(4)</xref>, <xref depth="4" refnumber="48-1d-901(5)" start="0">(5)</xref>, or <xref depth="4" refnumber="48-1d-901(6)" start="0">(6)</xref>;</subsection><subsection number="16-18-105(3)(k)">vary the requirement to wind up the partnership's activities and affairs as specified in Subsections <xref depth="4" refnumber="16-18-902(1)">16-18-902(1)</xref>, <xref depth="4" refnumber="48-1d-902(2)(a)" start="0">(2)(a)</xref>, and <xref depth="4" refnumber="48-1d-902(4)" start="0">(4)</xref>;</subsection><subsection number="16-18-105(3)(l)">vary the right of a partner to approve a merger, interest exchange, conversion, or domestication under Section <xref depth="3" refnumber="16-1a-704">16-1a-704</xref>, <xref depth="3" refnumber="16-1a-804">16-1a-804</xref>, <xref depth="3" refnumber="16-1a-904">16-1a-904</xref>, or <xref depth="3" refnumber="16-1a-1004">16-1a-1004</xref>;</subsection><subsection number="16-18-105(3)(m)">vary any requirement, procedure, or other provision of this chapter pertaining to:<subsection number="16-18-105(3)(m)(i)">registered agents; or</subsection><subsection number="16-18-105(3)(m)(ii)">the division, including provisions pertaining to records authorized or required to be delivered to the division for filing under this chapter; or</subsection></subsection><subsection number="16-18-105(3)(n)">except as otherwise provided in Section <xref depth="3" refnumber="16-18-106">16-18-106</xref> and Subsection <xref refnumber="138-null-2">16-18-107(2)</xref>, restrict the rights under this chapter of a person other than a partner.</subsection></subsection><subsection number="16-18-105(4)">Subject to Subsection <xref depth="4" refnumber="48-1d-106(3)(e)" start="0">(3)(e)</xref>, without limiting other terms that may be included in a partnership agreement, the following rules apply:<subsection number="16-18-105(4)(a)">The partnership agreement may specify the method by which a specific act or transaction that would otherwise violate the duty of loyalty may be authorized or ratified by one or more disinterested and independent persons after full disclosure of all material facts.</subsection><subsection number="16-18-105(4)(b)">If not unconscionable or against public policy, the partnership agreement may:<subsection number="16-18-105(4)(b)(i)">alter or eliminate the aspects of the duty of loyalty stated in Subsection <xref depth="4" refnumber="16-18-405(2)">16-18-405(2)</xref>;</subsection><subsection number="16-18-105(4)(b)(ii)">identify specific types or categories of activities that do not violate the duty of loyalty;</subsection><subsection number="16-18-105(4)(b)(iii)">alter the duty of care, except to authorize intentional misconduct or knowing violation of law; and</subsection><subsection number="16-18-105(4)(b)(iv)">alter or eliminate any other fiduciary duty.</subsection></subsection></subsection><subsection number="16-18-105(5)"><subsection number="16-18-105(5)(a)">The court shall decide as a matter of law whether a term of a partnership agreement is unconscionable or against public policy under Subsection <xref depth="4" refnumber="48-1d-106(3)(f)" start="0">(3)(f)</xref> or <xref depth="4" refnumber="48-1d-106(4)(b)" start="0">(4)(b)</xref>.</subsection><subsection number="16-18-105(5)(b)">The court:<subsection number="16-18-105(5)(b)(i)">shall make the court's determination as of the time the challenged term became part of the partnership agreement and by considering only circumstances existing at that time; and</subsection><subsection number="16-18-105(5)(b)(ii)">may invalidate the term only if, in light of the purposes and business of the partnership, it is readily apparent that:<subsection number="16-18-105(5)(b)(ii)(A)">the objective of the term is unconscionable or against public policy; or</subsection><subsection number="16-18-105(5)(b)(ii)(B)">the means to achieve the term's objective is unconscionable or against public policy.</subsection></subsection></subsection></subsection></section><section number="16-18-106"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Partnership agreement -- Effect on partnership and person becoming partner -- Preformation agreement.</catchline><subsection number="16-18-106(1)">A partnership is bound by and may enforce the partnership agreement, whether or not the partnership has itself manifested assent to the partnership agreement.</subsection><subsection number="16-18-106(2)">A person that becomes a partner of a partnership is deemed to assent to the partnership agreement.</subsection><subsection number="16-18-106(3)">Two or more persons intending to become the initial partners of a partnership may make an agreement providing that upon the formation of the partnership the agreement will become the partnership agreement.</subsection></section><section number="16-18-107"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Partnership agreement -- Effect on third parties and relationship to records effective on behalf of partnership.</catchline><subsection number="16-18-107(1)"><subsection number="16-18-107(1)(a)">A partnership agreement may specify that the partnership's amendment requires the approval of a person that is not a party to the partnership agreement or the satisfaction of a condition.</subsection><subsection number="16-18-107(1)(b)">An amendment is ineffective if the amendment's adoption does not include the required approval or satisfy the specified condition.</subsection></subsection><subsection number="16-18-107(2)"><subsection number="16-18-107(2)(a)">The obligations of a partnership and the partnership's partners to a person in the person's capacity as a transferee or person dissociated as a partner are governed by the partnership agreement.</subsection><subsection number="16-18-107(2)(b)">Subject only to a court order issued under Subsection <xref refnumber="214-null-4">16-18-604(2)(b)</xref> to effectuate a charging order, an amendment to the partnership agreement made after a person becomes a transferee or is dissociated as a partner:<subsection number="16-18-107(2)(b)(i)">is effective with regard to any debt, obligation, or other liability of the partnership or its partners to the person in the person's capacity as a transferee or person dissociated as a partner; and</subsection><subsection number="16-18-107(2)(b)(ii)">is not effective to the extent the amendment:<subsection number="16-18-107(2)(b)(ii)(A)">imposes a new debt, obligation, or other liability on the transferee or person dissociated as a partner; or</subsection><subsection number="16-18-107(2)(b)(ii)(B)">prejudices the rights under Section <xref depth="3" refnumber="16-18-801">16-18-801</xref> of a person that dissociated as a partner before the amendment was made.</subsection></subsection></subsection></subsection><subsection number="16-18-107(3)">If a record delivered by a partnership to the division for filing becomes effective under this chapter and contains a provision that would be ineffective under Subsection <xref depth="4" refnumber="16-18-105(3)">16-18-105(3)</xref> or <xref depth="4" refnumber="48-1d-106(4)(b)" start="0">(4)(b)</xref> if contained in the partnership agreement, the provision is ineffective in the record.</subsection><subsection number="16-18-107(4)">Subject to Subsection <xref depth="4" refnumber="48-1d-108(3)" start="0">(3)</xref>, if a record delivered by a partnership to the division for filing becomes effective under this chapter and conflicts with a provision of the partnership agreement:<subsection number="16-18-107(4)(a)">the partnership agreement prevails as to partners, persons dissociated as partners, and transferees; and</subsection><subsection number="16-18-107(4)(b)">the record prevails as to other persons to the extent the persons reasonably rely on the record.</subsection></subsection></section><section number="16-18-108"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Reservation of power to amend or repeal.</catchline><tab/>The Legislature of this state has power to amend or repeal all or part of this chapter at any time, and all domestic and foreign limited liability partnerships subject to this chapter are governed by the amendment or repeal.</section><section number="16-18-109"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Provisions Applicable to All Business Entities applicable.</catchline>Chapter 1a, Provisions Applicable to All Business Entities, applies to the provisions of this chapter.</section></part><part number="16-18-2"><catchline>Nature Of Partnership</catchline><section number="16-18-201"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Partnership as entity.</catchline><subsection number="16-18-201(1)">A partnership is an entity distinct from the partnership's partners.</subsection><subsection number="16-18-201(2)">A partnership is the same entity regardless of whether the partnership has a statement of qualification in effect under Section <xref depth="3" refnumber="16-18-1001">16-18-1001</xref>.</subsection></section><section number="16-18-202"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Formation of partnership.</catchline><subsection number="16-18-202(1)">Except as otherwise provided in Subsection <xref depth="4" refnumber="48-1d-202(2)" start="0">(2)</xref>, the association of two or more persons to carry on as co-owners a business for profit forms a partnership, whether or not the persons intend to form a partnership.</subsection><subsection number="16-18-202(2)">An association formed under a statute other than this chapter, a predecessor statute, or a comparable statute of another jurisdiction is not a partnership under this chapter.</subsection><subsection number="16-18-202(3)">In determining whether a partnership is formed, the following rules apply:<subsection number="16-18-202(3)(a)">Joint tenancy, tenancy in common, tenancy by the entireties, joint property, common property, or part ownership does not by itself establish a partnership, even if the co-owners share profits made by the use of the property.</subsection><subsection number="16-18-202(3)(b)">The sharing of gross returns does not by itself establish a partnership, even if the persons sharing them have a joint or common right or interest in property from which the returns are derived.</subsection><subsection number="16-18-202(3)(c)">A person who receives a share of the profits of a business is presumed to be a partner in the business, unless the profits were received in payment:<subsection number="16-18-202(3)(c)(i)">of a debt by installments or otherwise;</subsection><subsection number="16-18-202(3)(c)(ii)">for services as an independent contractor or of wages or other compensation to an employee;</subsection><subsection number="16-18-202(3)(c)(iii)">of rent;</subsection><subsection number="16-18-202(3)(c)(iv)">of an annuity or other retirement or health benefit to a deceased or retired partner or a beneficiary, representative, or designee of a deceased or retired partner;</subsection><subsection number="16-18-202(3)(c)(v)">of interest or other charge on a loan, even if the amount of payment varies with the profits of the business, including a direct or indirect present or future ownership of the collateral, or rights to income, proceeds, or increase in value derived from the collateral; or</subsection><subsection number="16-18-202(3)(c)(vi)">for the sale of the goodwill of a business or other property by installments or otherwise.</subsection></subsection></subsection></section><section number="16-18-203"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Partnership property.</catchline><tab/>Property acquired by a partnership is property of the partnership and not of the partners individually.</section><section number="16-18-204"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>When property is partnership property.</catchline><subsection number="16-18-204(1)">Property is partnership property if acquired in the name of:<subsection number="16-18-204(1)(a)">the partnership; or</subsection><subsection number="16-18-204(1)(b)">one or more partners with an indication in the instrument transferring title to the property of the person's capacity as a partner or of the existence of a partnership but without an indication of the name of the partnership.</subsection></subsection><subsection number="16-18-204(2)">Property is acquired in the name of the partnership by a transfer to:<subsection number="16-18-204(2)(a)">the partnership in the partnership's name; or</subsection><subsection number="16-18-204(2)(b)">one or more partners in the partners' capacity as partners in the partnership, if the name of the partnership is indicated in the instrument transferring title to the property.</subsection></subsection><subsection number="16-18-204(3)">Property is presumed to be partnership property if purchased with partnership assets, even if not acquired in the name of the partnership or of one or more partners with an indication in the instrument transferring title to the property of the person's capacity as a partner or of the existence of a partnership.</subsection><subsection number="16-18-204(4)">Property acquired in the name of one or more of the partners, without an indication in the instrument transferring title to the property of the person's capacity as a partner or of the existence of a partnership and without use of partnership assets, is presumed to be separate property, even if used for partnership purposes.</subsection></section></part><part number="16-18-3"><catchline>Relations Of Partners To Persons Dealing With Partnership</catchline><section number="16-18-301"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Partner agent of partnership.</catchline><tab/>Subject to the effect of a statement of partnership authority under Section <xref depth="3" refnumber="16-18-303">16-18-303</xref>, the following rules apply:<subsection number="16-18-301(1)"><subsection number="16-18-301(1)(a)">Each partner is an agent of the partnership for the purpose of its activities and affairs.</subsection><subsection number="16-18-301(1)(b)">An act of a partner, including the signing of an instrument in the partnership name, for apparently carrying on in the ordinary course the partnership's activities and affairs or activities and affairs of the kind carried on by the partnership binds the partnership, unless the partner did not have authority to act for the partnership in the particular matter and the person with which the partner was dealing knew, or had notice, that the partner lacked authority.</subsection></subsection><subsection number="16-18-301(2)">An act of a partner, which is not apparently for carrying on in the ordinary course the partnership's activities and affairs or activities and affairs of the kind carried on by the partnership, binds the partnership only if the act was actually authorized by all the other partners.</subsection></section><section number="16-18-302"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Transfer of partnership property.</catchline><subsection number="16-18-302(1)">Partnership property may be transferred as follows:<subsection number="16-18-302(1)(a)">Subject to the effect of a statement of partnership authority under Section <xref depth="3" refnumber="16-18-303">16-18-303</xref>, partnership property held in the name of the partnership may be transferred by an instrument of transfer executed by a partner in the partnership name.</subsection><subsection number="16-18-302(1)(b)">Partnership property held in the name of one or more partners with an indication in the instrument transferring the property to them of their capacity as partners or of the existence of a partnership, but without an indication of the name of the partnership, may be transferred by an instrument of transfer executed by the persons in whose name the property is held.</subsection><subsection number="16-18-302(1)(c)">Partnership property held in the name of one or more persons other than the partnership, without an indication in the instrument transferring the property to them of their capacity as partners or of the existence of a partnership, may be transferred by an instrument of transfer executed by the persons in whose name the property is held.</subsection></subsection><subsection number="16-18-302(2)">A partnership may recover partnership property from a transferee only if the partnership proves that execution of the instrument of initial transfer did not bind the partnership under Section <xref depth="3" refnumber="16-18-301">16-18-301</xref> and:<subsection number="16-18-302(2)(a)">as to a subsequent transferee who gave value for property transferred under Subsection <xref depth="4" refnumber="48-1d-302(1)(a)" start="0">(1)(a)</xref> or <xref depth="4" refnumber="48-1d-302(1)(b)" start="0">(1)(b)</xref>, proves that the subsequent transferee knew or had received a notification that the person who executed the instrument of initial transfer lacked authority to bind the partnership; or</subsection><subsection number="16-18-302(2)(b)">as to a transferee who gave value for property transferred under Subsection <xref depth="4" refnumber="48-1d-302(1)(c)" start="0">(1)(c)</xref>, proves that the transferee knew or had received a notification that the property was partnership property and that the person who executed the instrument of initial transfer lacked authority to bind the partnership.</subsection></subsection><subsection number="16-18-302(3)">A partnership may not recover partnership property from a subsequent transferee if the partnership would not have been entitled to recover the property, under Subsection <xref depth="4" refnumber="48-1d-302(2)" start="0">(2)</xref>, from any earlier transferee of the property.</subsection><subsection number="16-18-302(4)"><subsection number="16-18-302(4)(a)">If a person holds all the partners' interests in the partnership, all the partnership property vests in that person.</subsection><subsection number="16-18-302(4)(b)">The person may execute a document in the name of the partnership to evidence vesting of the property in that person and may file or record the document.</subsection></subsection></section><section number="16-18-303"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Statement of partnership authority.</catchline><subsection number="16-18-303(1)"><subsection number="16-18-303(1)(a)">A partnership may deliver to the division for filing a statement of partnership authority.</subsection><subsection number="16-18-303(1)(b)">The statement:<subsection number="16-18-303(1)(b)(i)">must include:<subsection number="16-18-303(1)(b)(i)(A)">the name of the partnership; and</subsection><subsection number="16-18-303(1)(b)(i)(B)">if the partnership is not a limited liability partnership, the street and mailing addresses of its principal office;</subsection></subsection><subsection number="16-18-303(1)(b)(ii)">with respect to any position that exists in or with respect to the partnership, may state the authority, or limitations on the authority, of all persons holding the position to:<subsection number="16-18-303(1)(b)(ii)(A)">execute an instrument transferring real property held in the name of the partnership; or</subsection><subsection number="16-18-303(1)(b)(ii)(B)">enter into other transactions on behalf of, or otherwise act for or bind, the partnership; and</subsection></subsection><subsection number="16-18-303(1)(b)(iii)">may state the authority, or limitations on the authority, of a specific person to:<subsection number="16-18-303(1)(b)(iii)(A)">execute an instrument transferring real property held in the name of the partnership; or</subsection><subsection number="16-18-303(1)(b)(iii)(B)">enter into other transactions on behalf of, or otherwise act for or bind, the partnership.</subsection></subsection></subsection></subsection><subsection number="16-18-303(2)">To amend or cancel a statement of authority filed by the division, a partnership must deliver to the division for filing an amendment or cancellation stating:<subsection number="16-18-303(2)(a)">the name of the partnership;</subsection><subsection number="16-18-303(2)(b)">the street and mailing addresses of the partnership's principal office;</subsection><subsection number="16-18-303(2)(c)">the date the statement of authority being affected became effective; and</subsection><subsection number="16-18-303(2)(d)">the contents of the amendment or a declaration that the statement of authority is canceled.</subsection></subsection><subsection number="16-18-303(3)">A statement of authority affects only the power of a person to bind a partnership to persons that are not partners.</subsection><subsection number="16-18-303(4)">Subject to Subsection <xref depth="4" refnumber="48-1d-303(3)" start="0">(3)</xref> and Subsection <xref depth="4" refnumber="16-18-102(4)(a)">16-18-102(4)(a)</xref>, and except as otherwise provided in Subsections <xref depth="4" refnumber="48-1d-303(6)" start="0">(6)</xref>, <xref depth="4" refnumber="48-1d-303(7)" start="0">(7)</xref>, and <xref depth="4" refnumber="48-1d-303(8)" start="0">(8)</xref>, a limitation on the authority of a person or a position contained in an effective statement of authority is not by itself evidence of any person's knowledge or notice of the limitation.</subsection><subsection number="16-18-303(5)">Subject to Subsection <xref depth="4" refnumber="48-1d-303(3)" start="0">(3)</xref>, a grant of authority not pertaining to transfers of real property and contained in an effective statement of authority is conclusive in favor of a person that gives value in reliance on the grant, except to the extent that if the person gives value:<subsection number="16-18-303(5)(a)">the person has knowledge to the contrary;</subsection><subsection number="16-18-303(5)(b)">the statement of authority has been canceled or restrictively amended under Subsection <xref depth="4" refnumber="48-1d-303(2)" start="0">(2)</xref>; or</subsection><subsection number="16-18-303(5)(c)">a limitation on the grant is contained in another statement of authority that became effective after the statement of authority containing the grant became effective.</subsection></subsection><subsection number="16-18-303(6)">Subject to Subsection <xref depth="4" refnumber="48-1d-303(3)" start="0">(3)</xref>, an effective statement of authority that grants authority to transfer real property held in the name of the partnership and a certified copy of which is recorded in the office for recording transfers of the real property is conclusive in favor of a person that gives value in reliance on the grant without knowledge to the contrary, except to the extent that when the person gives value:<subsection number="16-18-303(6)(a)">the statement of authority has been canceled or restrictively amended under Subsection <xref depth="4" refnumber="48-1d-303(2)" start="0">(2)</xref>, and a certified copy of the cancellation or restrictive amendment has been recorded in the office for recording transfers of the real property; or</subsection><subsection number="16-18-303(6)(b)">a limitation on the grant is contained in another statement of authority that became effective after the statement of authority containing the grant became effective, and a certified copy of the later-effective statement of authority is recorded in the office for recording transfers of the real property.</subsection></subsection><subsection number="16-18-303(7)">Subject to Subsection <xref depth="4" refnumber="48-1d-303(3)" start="0">(3)</xref>, if a certified copy of an effective statement of authority containing a limitation on the authority to transfer real property held in the name of a partnership is recorded in the office for recording transfers of that real property, all persons are deemed to know of the limitation.</subsection><subsection number="16-18-303(8)">Subject to Subsection <xref depth="4" refnumber="48-1d-303(9)" start="0">(9)</xref>, an effective statement of dissolution is a cancellation of any filed statement of authority for the purposes of Subsection <xref depth="4" refnumber="48-1d-303(6)" start="0">(6)</xref> and is a limitation on authority for purposes of Subsection <xref depth="4" refnumber="48-1d-303(7)" start="0">(7)</xref>.</subsection><subsection number="16-18-303(9)"><subsection number="16-18-303(9)(a)">After a statement of dissolution becomes effective, a partnership may deliver to the division for filing and, if appropriate, may record a statement of authority that is designated as a postdissolution statement of authority.</subsection><subsection number="16-18-303(9)(b)">The postdissolution statement of authority operates as provided in Subsections <xref depth="4" refnumber="48-1d-303(6)" start="0">(6)</xref> and <xref depth="4" refnumber="48-1d-303(7)" start="0">(7)</xref>.</subsection></subsection><subsection number="16-18-303(10)"><subsection number="16-18-303(10)(a)">Unless canceled earlier, an effective statement of authority is canceled by operation of law five years after the date on which the statement of authority, or the statement of authority's most recent amendment, becomes effective.</subsection><subsection number="16-18-303(10)(b)">Cancellation is effective without recording under Subsection <xref depth="4" refnumber="48-1d-303(6)" start="0">(6)</xref> or <xref depth="4" refnumber="48-1d-303(7)" start="0">(7)</xref>.</subsection></subsection><subsection number="16-18-303(11)">An effective statement of denial operates as a restrictive amendment under this section and may be recorded by certified copy for purposes of Subsection <xref depth="4" refnumber="48-1d-303(6)(a)" start="0">(6)(a)</xref>.</subsection></section><section number="16-18-304"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Statement of denial.</catchline><tab/>A person named in a filed statement of authority granting that person authority may deliver to the division for filing a statement of denial that:<subsection number="16-18-304(1)">provides the name of the partnership and the caption of the statement of authority to which the statement of denial pertains; and</subsection><subsection number="16-18-304(2)">denies the grant of authority.</subsection></section><section number="16-18-305"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Partnership liable for partner's actionable conduct.</catchline><subsection number="16-18-305(1)">A partnership is liable for loss or injury caused to a person, or for a penalty incurred, as a result of a wrongful act or omission, or other actionable conduct, of a partner acting in the ordinary course of activities and affairs of the partnership or with the actual or apparent authority of the partnership.</subsection><subsection number="16-18-305(2)">If, in the course of the partnership's activities and affairs or while acting with actual or apparent authority of the partnership, a partner receives or causes the partnership to receive money or property of a person not a partner, and the money or property is misapplied by a partner, the partnership is liable for the loss.</subsection></section><section number="16-18-306"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Partner's liability.</catchline><subsection number="16-18-306(1)">Except as otherwise provided in Subsections <xref depth="4" refnumber="48-1d-306(2)" start="0">(2)</xref> and <xref depth="4" refnumber="48-1d-306(3)" start="0">(3)</xref>, all partners are liable jointly and severally for all debts, obligations, and other liabilities of the partnership unless otherwise agreed to by the claimant or provided by law.</subsection><subsection number="16-18-306(2)">A person that becomes a partner is not personally liable for a debt, obligation, or other liability of the partnership incurred before the person became a partner.</subsection><subsection number="16-18-306(3)"><subsection number="16-18-306(3)(a)">A debt, obligation, or other liability of a partnership incurred while the partnership is a limited liability partnership is solely the debt, obligation, or other liability of the limited liability partnership.</subsection><subsection number="16-18-306(3)(b)">A partner is not personally liable, directly or indirectly, by way of contribution or otherwise, for a debt, obligation, or other liability of the limited liability partnership solely by reason of being or acting as a partner.</subsection><subsection number="16-18-306(3)(c)">This Subsection <xref depth="4" refnumber="48-1d-306(3)" start="0">(3)</xref> applies:<subsection number="16-18-306(3)(c)(i)">despite anything inconsistent in the partnership agreement that existed immediately before the vote or consent required to become a limited liability partnership under Subsection <xref depth="4" refnumber="16-18-1001(2)">16-18-1001(2)</xref>; and</subsection><subsection number="16-18-306(3)(c)(ii)">regardless of the dissolution of the limited liability partnership.</subsection></subsection></subsection><subsection number="16-18-306(4)">The failure of a limited liability partnership to observe any formalities relating to the exercise of its powers or management of its activities and affairs is not a ground for imposing liability on any partner of the limited liability partnership for a debt, obligation, or other liability of the limited liability partnership.</subsection><subsection number="16-18-306(5)">The cancellation or administrative revocation of a limited liability partnership's statement of qualification does not affect the limitation under this section on the liability of a partner for a debt, obligation, or other liability of the partnership incurred while the statement was in effect.</subsection><subsection number="16-18-306(6)"><subsection number="16-18-306(6)(a)">Subsection <xref depth="4" refnumber="48-1d-306(3)" start="0">(3)</xref> and Part 10, Limited Liability Partnerships, do not alter any law applicable to the relationship between a person providing a professional service and a person receiving the professional service, including liability arising out of those professional services.</subsection><subsection number="16-18-306(6)(b)">A person providing a professional service remains personally liable for a result of that person's act or omission.</subsection></subsection></section><section number="16-18-307"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Actions by and against partnership and partners.</catchline><subsection number="16-18-307(1)">A partnership may sue and be sued in the name of the partnership.</subsection><subsection number="16-18-307(2)">To the extent not inconsistent with Section <xref depth="3" refnumber="16-18-306">16-18-306</xref>, a partner may be joined in an action against the partnership or named in a separate action.</subsection><subsection number="16-18-307(3)"><subsection number="16-18-307(3)(a)">A judgment against a partnership is not by itself a judgment against a partner.</subsection><subsection number="16-18-307(3)(b)">A judgment against a partnership may not be satisfied from a partner's assets unless there is also a judgment against the partner.</subsection></subsection><subsection number="16-18-307(4)">A judgment creditor of a partner may not levy execution against the assets of the partner to satisfy a judgment based on a claim against the partnership unless the partner is personally liable for the claim under Section <xref depth="3" refnumber="16-18-306">16-18-306</xref>, and:<subsection number="16-18-307(4)(a)">a judgment based on the same claim has been obtained against the partnership and a writ of execution on the judgment has been returned unsatisfied in whole or in part;</subsection><subsection number="16-18-307(4)(b)">the partnership is a debtor in bankruptcy;</subsection><subsection number="16-18-307(4)(c)">the partner has agreed that the creditor need not exhaust partnership assets;</subsection><subsection number="16-18-307(4)(d)">a court grants permission to the judgment creditor to levy execution against the assets of a partner based on a finding that partnership assets subject to execution are clearly insufficient to satisfy the judgment, that exhaustion of partnership assets is excessively burdensome, or that the grant of permission is an appropriate exercise of the court's equitable powers; or</subsection><subsection number="16-18-307(4)(e)">liability is imposed on the partner by law or contract independent of the existence of the partnership.</subsection></subsection><subsection number="16-18-307(5)">This section applies to any partnership liability or obligation resulting from a representation by a partner or purported partner under Section <xref depth="3" refnumber="16-18-308">16-18-308</xref>.</subsection></section><section number="16-18-308"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Liability of purported partner.</catchline><subsection number="16-18-308(1)"><subsection number="16-18-308(1)(a)">If a person, by words or conduct, purports to be a partner, or consents to being represented by another as a partner, in a partnership or with one or more persons not partners, the purported partner is liable to a person to whom the representation is made, if that person, relying on the representation, enters into a transaction with the actual or purported partnership.</subsection><subsection number="16-18-308(1)(b)">If the representation, either by the purported partner or by a person with the purported partner's consent, is made in a public manner, the purported partner is liable to a person who relies upon the purported partnership even if the purported partner is not aware of being held out as a partner to the claimant.</subsection><subsection number="16-18-308(1)(c)">If partnership liability results, the purported partner is liable with respect to that liability as if the purported partner were a partner.</subsection><subsection number="16-18-308(1)(d)">If no partnership liability results, the purported partner is liable with respect to that liability jointly and severally with any other person consenting to the representation.</subsection></subsection><subsection number="16-18-308(2)"><subsection number="16-18-308(2)(a)">If a person is thus represented to be a partner in an existing partnership, or with one or more persons not partners, the purported partner is an agent of persons consenting to the representation to bind them to the same extent and in the same manner as if the purported partner were a partner, with respect to persons who enter into transactions in reliance upon the representation.</subsection><subsection number="16-18-308(2)(b)">If all the partners of the existing partnership consent to the representation, a partnership act or obligation results.</subsection><subsection number="16-18-308(2)(c)">If fewer than all the partners of the existing partnership consent to the representation, the person acting and the partners consenting to the representation are jointly and severally liable.</subsection></subsection><subsection number="16-18-308(3)">A person is not liable as a partner merely because the person is named by another in a statement of partnership authority.</subsection><subsection number="16-18-308(4)">A person does not continue to be liable as a partner merely because of a failure to file a statement of dissociation or to amend a statement of partnership authority to indicate the partner's dissociation from the partnership.</subsection><subsection number="16-18-308(5)">Except as otherwise provided in Subsections <xref depth="4" refnumber="48-1d-308(1)" start="0">(1)</xref> and <xref depth="4" refnumber="48-1d-308(2)" start="0">(2)</xref>, persons who are not partners as to each other are not liable as partners to other persons.</subsection></section></part><part number="16-18-4"><catchline>Relations Of Partners To Each Other And To Partnership</catchline><section number="16-18-401"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Becoming partner.</catchline><subsection number="16-18-401(1)">Upon formation of a partnership, a person becomes a partner under Subsection <xref depth="4" refnumber="16-18-202(1)">16-18-202(1)</xref>.</subsection><subsection number="16-18-401(2)">After formation of a partnership, a person becomes a partner:<subsection number="16-18-401(2)(a)">as provided in the partnership agreement;</subsection><subsection number="16-18-401(2)(b)">as a result of a transaction effective under Chapter 1a, Part 7, Merger, Chapter 1a, Part 8, Interest Exchange, Chapter 1a, Part 9, Conversion, or Chapter 1a, Part 10, Domestication; or</subsection><subsection number="16-18-401(2)(c)">with the consent of all the partners.</subsection></subsection><subsection number="16-18-401(3)">A person may become a partner without either:<subsection number="16-18-401(3)(a)">acquiring a transferable interest; or</subsection><subsection number="16-18-401(3)(b)">making or being obligated to make a contribution to the partnership.</subsection></subsection></section><section number="16-18-402"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Management rights of partners.</catchline><subsection number="16-18-402(1)">Each partner has equal rights in the management and conduct of the partnership's activities and affairs.</subsection><subsection number="16-18-402(2)">A partner may use or possess partnership property only on behalf of the partnership.</subsection><subsection number="16-18-402(3)">A partner is not entitled to remuneration for services performed for the partnership, except for reasonable compensation for services rendered in winding up the activities and affairs of the partnership.</subsection><subsection number="16-18-402(4)">A difference arising among partners as to a matter in the ordinary course of the activities of the partnership shall be decided by a majority of the partners.</subsection><subsection number="16-18-402(5)"><subsection number="16-18-402(5)(a)">An act outside the ordinary course of the activities and affairs of the partnership may be undertaken only with the consent of all partners.</subsection><subsection number="16-18-402(5)(b)">An act outside the ordinary course of business of a partnership, an amendment to the partnership agreement, and the approval of a transaction under Chapter 1a, Part 7, Merger, Chapter 1a, Part 8, Interest Exchange, Chapter 1a, Part 9, Conversion, or Chapter 1a, Part 10, Domestication, may be undertaken only with the affirmative vote or consent of all of the partners.</subsection></subsection></section><section number="16-18-403"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Rights of partners and person dissociated as partner to information.</catchline><subsection number="16-18-403(1)">A partnership shall keep the partnership's books and records, if any, at the partnership's principal office.</subsection><subsection number="16-18-403(2)">On reasonable notice, a partner may inspect and copy during regular business hours, at a reasonable location specified by the partnership, any record maintained by the partnership regarding the partnership's activities, affairs, financial condition, and other circumstances, to the extent the information is material to the partner's rights and duties under the partnership agreement or this chapter.</subsection><subsection number="16-18-403(3)">The partnership shall furnish to each partner:<subsection number="16-18-403(3)(a)">without demand, any information concerning the partnership's activities, affairs, financial condition, and other circumstances which the partnership knows and is material to the proper exercise of the partner's rights and duties under the partnership agreement or this chapter, except to the extent the partnership can establish that the partnership reasonably believes the partner already knows the information; and</subsection><subsection number="16-18-403(3)(b)">on demand, any other information concerning the partnership's activities, affairs, financial condition, and other circumstances, except to the extent the demand or information demanded is unreasonable or otherwise improper under the circumstances.</subsection></subsection><subsection number="16-18-403(4)">The duty to furnish information under Subsection <xref depth="4" refnumber="48-1d-403(3)" start="0">(3)</xref> also applies to each partner to the extent the partner knows any of the information described in Subsection <xref depth="4" refnumber="48-1d-403(3)" start="0">(3)</xref>.</subsection><subsection number="16-18-403(5)">Subject to Subsection <xref depth="4" refnumber="48-1d-403(8)" start="0">(8)</xref>, on 10 days' demand made in a record received by a partnership, a person dissociated as a partner may have access to information to which the person was entitled while a partner if:<subsection number="16-18-403(5)(a)">the information pertains to the period during which the person was a partner;</subsection><subsection number="16-18-403(5)(b)">the person seeks the information in good faith; and</subsection><subsection number="16-18-403(5)(c)">the person satisfies the requirements imposed on a partner by Subsection <xref depth="4" refnumber="48-1d-403(2)" start="0">(2)</xref>.</subsection></subsection><subsection number="16-18-403(6)">Not later than 10 days after receiving a demand under Subsection <xref depth="4" refnumber="48-1d-403(5)" start="0">(5)</xref>, the partnership in a record shall inform the person that made the demand of:<subsection number="16-18-403(6)(a)">the information that the partnership will provide in response to the demand and when and where the partnership will provide the information; and</subsection><subsection number="16-18-403(6)(b)">the partnership's reasons for declining, if the partnership declines to provide any demanded information.</subsection></subsection><subsection number="16-18-403(7)">A partnership may charge a person that makes a demand under this section the reasonable costs of copying, limited to the costs of labor and material.</subsection><subsection number="16-18-403(8)"><subsection number="16-18-403(8)(a)">A partner or person dissociated as a partner may exercise rights under this section through an agent or, in the case of an individual under legal disability, a legal representative.</subsection><subsection number="16-18-403(8)(b)">Any restriction or condition imposed by the partnership agreement or under Subsection <xref depth="4" refnumber="48-1d-403(11)" start="0">(11)</xref> applies both to the agent or legal representative and the partner or person dissociated as a partner.</subsection></subsection><subsection number="16-18-403(9)">The rights under this section do not extend to a person as transferee.</subsection><subsection number="16-18-403(10)">If a partner dies, Section <xref depth="3" refnumber="16-18-605">16-18-605</xref> applies.</subsection><subsection number="16-18-403(11)"><subsection number="16-18-403(11)(a)">In addition to any restriction or condition stated in the partnership agreement, a partnership, as a matter within the ordinary course of its business, may impose reasonable restrictions and conditions on access to and use of information to be furnished under this section, including designating information confidential and imposing nondisclosure and safeguarding obligations on the recipient.</subsection><subsection number="16-18-403(11)(b)">In a dispute concerning the reasonableness of a restriction under this subsection, the partnership has the burden of proving reasonableness.</subsection></subsection></section><section number="16-18-404"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Reimbursement, indemnification, advancement, and insurance.</catchline><subsection number="16-18-404(1)">A partnership shall reimburse a partner for any payment made by the partner in the course of the partner's activities on behalf of the partnership, if the partner complied with Sections <xref depth="3" refnumber="16-18-402">16-18-402</xref> and <xref depth="3" refnumber="16-18-405">16-18-405</xref> in making the payment.</subsection><subsection number="16-18-404(2)">A partnership shall indemnify and hold harmless a person with respect to any claim or demand against the person and any debt, obligation, or other liability incurred by the person by reason of the person's former or present capacity as a partner, if the claim, demand, debt, obligation, or other liability does not arise from the person's breach of Section <xref depth="3" refnumber="16-18-402">16-18-402</xref>, <xref depth="3" refnumber="16-18-405">16-18-405</xref>, or <xref depth="3" refnumber="16-18-504">16-18-504</xref>.</subsection><subsection number="16-18-404(3)">In the ordinary course of the partnership's activities and affairs, a partnership may advance reasonable expenses, including attorney's fees and costs, incurred by a person in connection with a claim or demand against the person by reason of the person's former or present capacity as a partner, if the person promises to repay the partnership if the person ultimately is determined not to be entitled to be indemnified under Subsection <xref depth="4" refnumber="48-1d-404(2)" start="0">(2)</xref>.</subsection><subsection number="16-18-404(4)">A partnership may purchase and maintain insurance on behalf of a partner against liability asserted against or incurred by the partner in that capacity or arising from that status even if, under Subsection <xref depth="4" refnumber="16-18-105(3)(g)">16-18-105(3)(g)</xref>, the partnership agreement could not eliminate or limit the person's liability to the partnership for the conduct giving rise to the liability.</subsection><subsection number="16-18-404(5)">A partnership shall reimburse a partner for an advance to the partnership beyond the amount of capital the partner agreed to contribute.</subsection><subsection number="16-18-404(6)">A payment or advance made by a partner which gives rise to a partnership obligation under Subsection <xref depth="4" refnumber="48-1d-404(1)" start="0">(1)</xref> or <xref depth="4" refnumber="48-1d-404(5)" start="0">(5)</xref> constitutes a loan to the partnership which accrues interest from the date of the payment or advance.</subsection></section><section number="16-18-405"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Standards of conduct for partners.</catchline><subsection number="16-18-405(1)">A partner owes to the partnership and the other partners the duties of loyalty and care stated in Subsections <xref depth="4" refnumber="48-1d-405(2)" start="0">(2)</xref> and <xref depth="4" refnumber="48-1d-405(3)" start="0">(3)</xref>.</subsection><subsection number="16-18-405(2)">The duty of loyalty of a partner includes the duties:<subsection number="16-18-405(2)(a)">to account to the partnership and hold as trustee for it any property, profit, or benefit derived by the partner:<subsection number="16-18-405(2)(a)(i)">in the conduct or winding up of the partnership's activities and affairs;</subsection><subsection number="16-18-405(2)(a)(ii)">from a use by the partner of the partnership's property; or</subsection><subsection number="16-18-405(2)(a)(iii)">from the appropriation of a partnership opportunity;</subsection></subsection><subsection number="16-18-405(2)(b)">to refrain from dealing with the partnership in the conduct or winding up of the partnership's activities and affairs as or on behalf of a person having an interest adverse to the partnership; and</subsection><subsection number="16-18-405(2)(c)">to refrain from competing with the partnership in the conduct of the partnership's activities and affairs before the dissolution of the partnership.</subsection></subsection><subsection number="16-18-405(3)">The duty of care of a partner in the conduct or winding up of the partnership's activities and affairs is to refrain from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law.</subsection><subsection number="16-18-405(4)">A partner shall discharge the duties and obligations under this chapter or under the partnership agreement and exercise any rights consistently with the contractual obligation of good faith and fair dealing.</subsection><subsection number="16-18-405(5)">A partner does not violate a duty or obligation under this chapter or under the partnership agreement solely because the partner's conduct furthers the partner's own interest.</subsection><subsection number="16-18-405(6)">All the partners may authorize or ratify, after full disclosure of all material facts, a specific act or transaction that otherwise would violate the duty of loyalty.</subsection><subsection number="16-18-405(7)">It is a defense to a claim under Subsection <xref depth="4" refnumber="48-1d-405(2)(b)" start="0">(2)(b)</xref> and any comparable claim in equity or at common law that the transaction was fair to the partnership.</subsection><subsection number="16-18-405(8)">If, as permitted by Subsection <xref depth="4" refnumber="48-1d-405(6)" start="0">(6)</xref> or the partnership agreement, a partner enters into a transaction with the partnership which otherwise would be prohibited by Subsection <xref depth="4" refnumber="48-1d-405(2)(b)" start="0">(2)(b)</xref>, the partner's rights and obligations arising from the transaction are the same as those of a person that is not a partner.</subsection></section><section number="16-18-406"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Actions by partnership and partners.</catchline><subsection number="16-18-406(1)">A partnership may maintain an action against a partner for a breach of the partnership agreement, or for the violation of a duty to the partnership, causing harm to the partnership.</subsection><subsection number="16-18-406(2)">A partner may maintain an action against the partnership or another partner for legal or equitable relief, with or without an accounting as to the partnership's activities and affairs, to:<subsection number="16-18-406(2)(a)">enforce the partner's rights under the partnership agreement;</subsection><subsection number="16-18-406(2)(b)">enforce the partner's rights under this chapter; or</subsection><subsection number="16-18-406(2)(c)">enforce the rights and otherwise protect the interests of the partner, including rights and interests arising independently of the partnership relationship.</subsection></subsection><subsection number="16-18-406(3)"><subsection number="16-18-406(3)(a)">The accrual of, and any time limitation on, a right of action for a remedy under this section is governed by other law.</subsection><subsection number="16-18-406(3)(b)">A right to an accounting upon a dissolution and winding up does not revive a claim barred by law.</subsection></subsection></section><section number="16-18-407"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Continuation of partnership beyond definite term or particular undertaking.</catchline><subsection number="16-18-407(1)">If a partnership for a definite term or particular undertaking is continued, without an express agreement, after the expiration of the term or completion of the undertaking, the rights and duties of the partners remain the same as they were at the expiration or completion, so far as is consistent with a partnership at will.</subsection><subsection number="16-18-407(2)">If the partners, or those of them who habitually acted in the business during the term or undertaking, continue the business without any settlement or liquidation of the partnership, they are presumed to have agreed that the partnership will continue.</subsection></section></part><part number="16-18-5"><catchline>Contributions And Distributions</catchline><section number="16-18-501"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Form of contribution.</catchline><tab/>A contribution may consist of property transferred to, services performed for, or other benefit provided to the partnership or an agreement to transfer property to, perform services for, or provide another benefit to the partnership.</section><section number="16-18-502"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Liability for contribution.</catchline><subsection number="16-18-502(1)">A person's obligation to make a contribution to a partnership is not excused by the person's death, disability, dissolution, or other inability to perform personally.</subsection><subsection number="16-18-502(2)">If a person does not fulfill an obligation to make a contribution other than money, the person is obligated at the option of the partnership to contribute money equal to the value of the part of the contribution which has not been made.</subsection><subsection number="16-18-502(3)"><subsection number="16-18-502(3)(a)">The obligation of a person to make a contribution may be compromised only by consent of all partners.</subsection><subsection number="16-18-502(3)(b)">If a creditor of a limited liability partnership extends credit or otherwise acts in reliance on an obligation described in Subsection <xref depth="4" refnumber="48-1d-502(1)" start="0">(1)</xref>, without notice of a compromise under this Subsection <xref depth="4" refnumber="48-1d-502(3)" start="0">(3)</xref>, the creditor may enforce the obligation.</subsection></subsection></section><section number="16-18-503"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Sharing of and right to distributions before dissolution.</catchline><subsection number="16-18-503(1)">Any distributions made by a partnership before the partnership's dissolution and winding up must be in equal shares among partners, except to the extent necessary to comply with a transfer effective under Section <xref depth="3" refnumber="16-18-603">16-18-603</xref> or charging order in effect under Section <xref depth="3" refnumber="16-18-604">16-18-604</xref>.</subsection><subsection number="16-18-503(2)">A person has a right to a distribution before the dissolution and winding up of a partnership only if the partnership decides to make an interim distribution.</subsection><subsection number="16-18-503(3)"><subsection number="16-18-503(3)(a)">A person does not have a right to demand or receive a distribution from a partnership in any form other than money.</subsection><subsection number="16-18-503(3)(b)">Except as otherwise provided in Section <xref depth="3" refnumber="16-18-906">16-18-906</xref>, a partnership may distribute an asset in kind only if each part of the asset is fungible with each other part and each person receives a percentage of the asset equal in value to the person's share of distributions.</subsection></subsection><subsection number="16-18-503(4)"><subsection number="16-18-503(4)(a)">If a partner or transferee becomes entitled to receive a distribution, the partner or transferee has the status of, and is entitled to all remedies available to, a creditor of the partnership with respect to the distribution.</subsection><subsection number="16-18-503(4)(b)">However, the partnership's obligation to make a distribution is subject to offset for any amount owed to the partnership by the partner or a person dissociated as partner on whose account the distribution is made.</subsection></subsection></section><section number="16-18-504"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Limitation on distributions by limited liability partnership.</catchline><subsection number="16-18-504(1)">A limited liability partnership may not make a distribution, including a distribution under Section <xref depth="3" refnumber="16-18-906">16-18-906</xref>, if after the distribution:<subsection number="16-18-504(1)(a)">the limited liability partnership would not be able to pay the limited liability partnership's debts as the debts become due in the ordinary course of the partnership's activities and affairs; or</subsection><subsection number="16-18-504(1)(b)">the limited liability partnership's total assets would be less than the sum of the limited liability partnership's total liabilities plus, unless the partnership agreement permits otherwise, the amount that would be needed, if the partnership were to be dissolved and wound up at the time of the distribution, to satisfy the preferential rights upon dissolution and winding up of partners and transferees whose preferential rights are superior to the right to receive distributions of the persons receiving the distribution.</subsection></subsection><subsection number="16-18-504(2)">A limited liability partnership may base a determination that a distribution is not prohibited under Subsection <xref depth="4" refnumber="48-1d-504(1)" start="0">(1)</xref> on:<subsection number="16-18-504(2)(a)">financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances; or</subsection><subsection number="16-18-504(2)(b)">a fair valuation or other method that is reasonable under the circumstances.</subsection></subsection><subsection number="16-18-504(3)">Except as otherwise provided in Subsection <xref depth="4" refnumber="48-1d-504(5)" start="0">(5)</xref>, the effect of a distribution under Subsection <xref depth="4" refnumber="48-1d-504(1)" start="0">(1)</xref> is measured:<subsection number="16-18-504(3)(a)">in the case of a distribution as defined in Subsection <xref depth="4" refnumber="16-18-101(4)(a)">16-18-101(4)(a)</xref>, as of the earlier of the date:<subsection number="16-18-504(3)(a)(i)">money or other property is transferred or debt is incurred by the limited liability partnership; or</subsection><subsection number="16-18-504(3)(a)(ii)">the person entitled to the distribution ceases to own the interest or rights being acquired by the limited liability partnership in return for the distribution;</subsection></subsection><subsection number="16-18-504(3)(b)">in the case of any other distribution of indebtedness, as of the date the indebtedness is distributed; and</subsection><subsection number="16-18-504(3)(c)">in all other cases, as of the date:<subsection number="16-18-504(3)(c)(i)">the distribution is authorized, if the payment occurs not later than 120 days after that date; or</subsection><subsection number="16-18-504(3)(c)(ii)">the payment is made, if the payment occurs more than 120 days after the distribution is authorized.</subsection></subsection></subsection><subsection number="16-18-504(4)">A limited liability partnership's indebtedness to a partner or transferee incurred by reason of a distribution made in accordance with this section is at parity with the limited liability partnership's indebtedness to its general, unsecured creditors, except to the extent subordinated by agreement.</subsection><subsection number="16-18-504(5)"><subsection number="16-18-504(5)(a)">A limited liability partnership's indebtedness, including indebtedness issued as a distribution, is not a liability for purposes of Subsection <xref depth="4" refnumber="48-1d-504(1)" start="0">(1)</xref> if the terms of the indebtedness provide that payment of principal and interest is made only if and to the extent that a payment of a distribution could then be made under this section.</subsection><subsection number="16-18-504(5)(b)">If the indebtedness is issued as a distribution, each payment of principal or interest is treated as a distribution, the effect of which is measured on the date the payment is made.</subsection></subsection><subsection number="16-18-504(6)">In measuring the effect of a distribution under Section <xref depth="3" refnumber="16-18-906">16-18-906</xref>, the liabilities of a dissolved limited liability partnership do not include any claim that has been disposed of under Sections <xref depth="3" refnumber="16-18-907">16-18-907</xref>, <xref depth="3" refnumber="16-18-908">16-18-908</xref>, and <xref depth="3" refnumber="16-18-909">16-18-909</xref>.</subsection></section><section number="16-18-505"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Liability for improper distributions by a limited liability partnership.</catchline><subsection number="16-18-505(1)">If a partner of a limited liability partnership consents to a distribution made in violation of Section <xref depth="3" refnumber="16-18-504">16-18-504</xref> and in consenting to the distribution fails to comply with Section <xref depth="3" refnumber="16-18-405">16-18-405</xref>, the partner is personally liable to the limited liability partnership for the amount of the distribution which exceeds the amount that could have been distributed without the violation of Section <xref depth="3" refnumber="16-18-504">16-18-504</xref>.</subsection><subsection number="16-18-505(2)">A person that receives a distribution knowing that the distribution violated Section <xref depth="3" refnumber="16-18-504">16-18-504</xref> is personally liable to the limited liability partnership but only to the extent that the distribution received by the person exceeded the amount that could have been properly paid under Section <xref depth="3" refnumber="16-18-504">16-18-504</xref>.</subsection><subsection number="16-18-505(3)">A person against which an action is commenced because the person is liable under Subsection <xref depth="4" refnumber="48-1d-505(1)" start="0">(1)</xref> may:<subsection number="16-18-505(3)(a)">implead any other person that is liable under Subsection <xref depth="4" refnumber="48-1d-505(1)" start="0">(1)</xref> and seek to enforce a right of contribution from the person; and</subsection><subsection number="16-18-505(3)(b)">implead any person that received a distribution in violation of Subsection <xref depth="4" refnumber="48-1d-505(2)" start="0">(2)</xref> and seek to enforce a right of contribution from the person in the amount the person received in violation of Subsection <xref depth="4" refnumber="48-1d-505(2)" start="0">(2)</xref>.</subsection></subsection><subsection number="16-18-505(4)">An action under this section is barred unless commenced not later than two years after the distribution.</subsection></section></part><part number="16-18-6"><catchline>Transfer Interests And Rights Of Transferees And Creditors</catchline><section number="16-18-601"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Partner not co-owner of partnership property.</catchline><tab/>A partner is not a co-owner of partnership property and has no interest in partnership property which can be transferred, either voluntarily or involuntarily.</section><section number="16-18-602"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Nature of transferable interest.</catchline><tab/>A transferable interest is personal property.</section><section number="16-18-603"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Transfer of transferable interest.</catchline><subsection number="16-18-603(1)">A transfer, in whole or in part, of a transferable interest:<subsection number="16-18-603(1)(a)">is permissible;</subsection><subsection number="16-18-603(1)(b)">does not by itself cause a person's dissociation or a dissolution and winding up of the partnership's activities and affairs; and</subsection><subsection number="16-18-603(1)(c)">subject to Section <xref depth="3" refnumber="16-18-605">16-18-605</xref>, does not entitle the transferee to:<subsection number="16-18-603(1)(c)(i)">participate in the management or conduct of the partnership's activities and affairs; or</subsection><subsection number="16-18-603(1)(c)(ii)">except as otherwise provided in Subsection <xref depth="4" refnumber="48-1d-603(3)" start="0">(3)</xref>, have access to records or other information concerning the partnership's activities and affairs.</subsection></subsection></subsection><subsection number="16-18-603(2)">A transferee has the right to:<subsection number="16-18-603(2)(a)">receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled; and</subsection><subsection number="16-18-603(2)(b)">seek under Subsection <xref depth="4" refnumber="16-18-901(5)">16-18-901(5)</xref> a judicial determination that it is equitable to wind up the partnership's activities and affairs.</subsection></subsection><subsection number="16-18-603(3)">In a dissolution and winding up of a partnership, a transferee is entitled to an account of the partnership's transactions only from the date of the last account agreed to by the partners.</subsection><subsection number="16-18-603(4)">A partnership need not give effect to a transferee's rights under this section until the partnership knows or has notice of the transfer.</subsection><subsection number="16-18-603(5)">A transfer of a transferable interest in violation of a restriction on transfer contained in the partnership agreement is ineffective as to a person having knowledge or notice of the restriction at the time of transfer.</subsection><subsection number="16-18-603(6)">Except as otherwise provided in Subsection <xref depth="4" refnumber="16-18-701(4)(b)">16-18-701(4)(b)</xref>, if a partner transfers a transferable interest, the transferor retains the rights of a partner other than the transferable interest transferred and retains all duties and obligations of a partner.</subsection><subsection number="16-18-603(7)">If a partner transfers a transferable interest to a person that becomes a partner with respect to the transferred interest, the transferee is liable for the transferor's obligations under Sections <xref depth="3" refnumber="16-18-502">16-18-502</xref> and <xref depth="3" refnumber="16-18-505">16-18-505</xref> known to the transferee when the transferee becomes a partner.</subsection></section><section number="16-18-604"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Charging order.</catchline><subsection number="16-18-604(1)"><subsection number="16-18-604(1)(a)">On application by a judgment creditor of a partner or transferee, a court may enter a charging order against the transferable interest of the judgment debtor for the unsatisfied amount of the judgment.</subsection><subsection number="16-18-604(1)(b)">A charging order constitutes a lien on a judgment debtor's transferable interest and, after the partnership has been served with the charging order, requires the partnership to pay over to the person to which the charging order was issued any distribution that otherwise would be paid to the judgment debtor.</subsection></subsection><subsection number="16-18-604(2)">To the extent necessary to effectuate the collection of distributions pursuant to a charging order in effect under Subsection <xref depth="4" refnumber="48-1d-604(1)" start="0">(1)</xref>, the court may:<subsection number="16-18-604(2)(a)">appoint a receiver of the distributions subject to the charging order, with the power to make all inquiries the judgment debtor might have made; and</subsection><subsection number="16-18-604(2)(b)">make all other orders necessary to give effect to the charging order.</subsection></subsection><subsection number="16-18-604(3)"><subsection number="16-18-604(3)(a)">Upon a showing that distributions under a charging order will not pay the judgment debt within a reasonable time, the court may foreclose the lien and order the sale of the transferable interest.</subsection><subsection number="16-18-604(3)(b)">The purchaser at the foreclosure sale obtains only the transferable interest, does not thereby become a partner, and is subject to Section <xref depth="3" refnumber="16-18-603">16-18-603</xref>.</subsection></subsection><subsection number="16-18-604(4)">At any time before foreclosure under Subsection <xref depth="4" refnumber="48-1d-604(3)" start="0">(3)</xref>, the partner or transferee whose transferable interest is subject to a charging order under Subsection <xref depth="4" refnumber="48-1d-604(1)" start="0">(1)</xref> may extinguish the charging order by satisfying the judgment and filing a certified copy of the satisfaction with the court that issued the charging order.</subsection><subsection number="16-18-604(5)">At any time before foreclosure under Subsection <xref depth="4" refnumber="48-1d-604(3)" start="0">(3)</xref>, a partnership or one or more partners whose transferable interests are not subject to the charging order may pay to the judgment creditor the full amount due under the judgment and thereby succeed to the rights of the judgment creditor, including the charging order.</subsection><subsection number="16-18-604(6)">This chapter does not deprive any partner or transferee of the benefit of any exemption law applicable to the transferable interest of the partner or transferee.</subsection><subsection number="16-18-604(7)">This section provides the exclusive remedy by which a person seeking to enforce a judgment against a partner or transferee, in the capacity of judgment creditor, may satisfy the judgment from the judgment debtor's transferable interest.</subsection></section><section number="16-18-605"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Power of legal representative of deceased partner.</catchline><tab/>If a partner dies, the deceased partner's legal representative may exercise:<subsection number="16-18-605(1)">the rights of a transferee provided in Subsection <xref depth="4" refnumber="16-18-603(3)">16-18-603(3)</xref>; and</subsection><subsection number="16-18-605(2)">for purposes of settling the estate, the rights the deceased partner had under Section <xref depth="3" refnumber="16-18-403">16-18-403</xref>.</subsection></section></part><part number="16-18-7"><catchline>Dissociation</catchline><section number="16-18-701"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Events causing dissociation.</catchline><tab/>A person is dissociated as a partner when:<subsection number="16-18-701(1)">the partnership has notice of the person's express will to withdraw as a partner, but, if the person specified a withdrawal date later than the date the partnership had notice, on that later date;</subsection><subsection number="16-18-701(2)">an event stated in the partnership agreement as causing the person's dissociation occurs;</subsection><subsection number="16-18-701(3)">the person is expelled as a partner in accordance with the partnership agreement;</subsection><subsection number="16-18-701(4)">the person is expelled as a partner by the unanimous vote or consent of the other partners if:<subsection number="16-18-701(4)(a)">it is unlawful to carry on the partnership's activities and affairs with the person as a partner;</subsection><subsection number="16-18-701(4)(b)">there has been a transfer of all of the person's transferable interest in the partnership, other than:<subsection number="16-18-701(4)(b)(i)">a transfer for security purposes; or</subsection><subsection number="16-18-701(4)(b)(ii)">a charging order in effect under Section <xref depth="3" refnumber="16-18-604">16-18-604</xref>, which has not been foreclosed;</subsection></subsection><subsection number="16-18-701(4)(c)">the person is a corporation and:<subsection number="16-18-701(4)(c)(i)">the partnership notifies the person that the person will be expelled as a partner because the person has filed a statement of dissolution or the equivalent, the person's charter has been revoked, or the person's right to conduct business has been suspended by the jurisdiction of the person's incorporation; and</subsection><subsection number="16-18-701(4)(c)(ii)">not later than 90 days after the notification, the statement of dissolution or the equivalent has not been revoked or the charter or right to conduct business has not been reinstated; or</subsection></subsection><subsection number="16-18-701(4)(d)">the person is an unincorporated entity that has been dissolved and whose business is being wound up;</subsection></subsection><subsection number="16-18-701(5)">on application by the partnership or another partner, the person is expelled as a partner by judicial order because the person:<subsection number="16-18-701(5)(a)">has engaged or is engaging in wrongful conduct that has affected adversely and materially, or will affect adversely and materially, the partnership's activities and affairs;</subsection><subsection number="16-18-701(5)(b)">has committed willfully or persistently, or is committing willfully or persistently, a material breach of the partnership agreement or a duty or obligation under Section <xref depth="3" refnumber="16-18-405">16-18-405</xref>; or</subsection><subsection number="16-18-701(5)(c)">engaged or is engaging in conduct relating to the partnership's activities and affairs which makes it not reasonably practicable to carry on the partnership's activities and affairs with the person as a partner;</subsection></subsection><subsection number="16-18-701(6)">in the case of an individual:<subsection number="16-18-701(6)(a)">the individual dies;</subsection><subsection number="16-18-701(6)(b)">a guardian or general conservator for the individual is appointed; or</subsection><subsection number="16-18-701(6)(c)">a court orders that the individual has otherwise become incapable of performing the individual's duties as a partner under this chapter or the partnership agreement;</subsection></subsection><subsection number="16-18-701(7)">the person:<subsection number="16-18-701(7)(a)">becomes a debtor in bankruptcy;</subsection><subsection number="16-18-701(7)(b)">executes an assignment for the benefit of creditors; or</subsection><subsection number="16-18-701(7)(c)">seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator of the person or of all, or substantially all, of the person's property;</subsection></subsection><subsection number="16-18-701(8)">in the case of a person that is a testamentary or inter vivos trust or is acting as a partner by virtue of being a trustee of such a trust, the trust's entire transferable interest in the partnership is distributed;</subsection><subsection number="16-18-701(9)">in the case of a person that is an estate or is acting as a partner by virtue of being a personal representative of an estate, the estate's entire transferable interest in the partnership is distributed, but not merely by reason of the substitution of a successor personal representative;</subsection><subsection number="16-18-701(10)">in the case of a person that is not an individual, corporation, unincorporated entity, trust, or estate, the existence of the person terminates;</subsection><subsection number="16-18-701(11)">the partnership participates in a merger under Chapter 1a, Part 7, Merger, and:<subsection number="16-18-701(11)(a)">the partnership is not the surviving entity; or</subsection><subsection number="16-18-701(11)(b)">otherwise as a result of the merger, the person ceases to be a partner;</subsection></subsection><subsection number="16-18-701(12)">the partnership participates in an interest exchange under Chapter 1a, Part 8, Interest Exchange, and, as a result of the interest exchange, the person ceases to be a partner;</subsection><subsection number="16-18-701(13)">the partnership participates in a conversion under Chapter 1a, Part 9, Conversion;</subsection><subsection number="16-18-701(14)">the partnership participates in a domestication under Chapter 1a, Part 10, Domestication, and, as a result of the domestication, the person ceases to be a partner; or</subsection><subsection number="16-18-701(15)">the partnership dissolves and completes winding up.</subsection></section><section number="16-18-702"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Power to dissociate as partner -- Wrongful dissociation.</catchline><subsection number="16-18-702(1)">A person has the power to dissociate as a partner at any time, rightfully or wrongfully, by withdrawing as a partner by express will under Subsection <xref refnumber="218-null-1">16-18-701(1)</xref>.</subsection><subsection number="16-18-702(2)">A person's dissociation as a partner is wrongful only if the dissociation:<subsection number="16-18-702(2)(a)">is in breach of an express provision of the partnership agreement; or</subsection><subsection number="16-18-702(2)(b)">in the case of a partnership for a definite term or particular undertaking, occurs before the expiration of the term or the completion of the undertaking and:<subsection number="16-18-702(2)(b)(i)">the person withdraws by express will, unless the withdrawal follows not later than 90 days after another person's dissociation by death or otherwise under Subsections <xref refnumber="218-null-17">16-18-701(6)</xref> through <xref depth="4" refnumber="48-1d-701(10)" start="0">(10)</xref> or wrongful dissociation under this subsection;</subsection><subsection number="16-18-702(2)(b)(ii)">the person is expelled by judicial order under Subsection <xref refnumber="218-null-13">16-18-701(5)</xref>;</subsection><subsection number="16-18-702(2)(b)(iii)">the person is dissociated under Subsection <xref depth="4" refnumber="16-18-701(7)">16-18-701(7)</xref>; or</subsection><subsection number="16-18-702(2)(b)(iv)">in the case of a person that is not a trust other than a business trust, an estate, an individual, or a trust other than a business trust, the person is expelled or otherwise dissociated because it willfully dissolved or terminated.</subsection></subsection></subsection><subsection number="16-18-702(3)"><subsection number="16-18-702(3)(a)">A person that wrongfully dissociates is liable to the partnership and to the other partners for damages caused by the dissociation.</subsection><subsection number="16-18-702(3)(b)">The liability is in addition to any debt, obligation, or other liability of the partner to the partnership or the other partners.</subsection></subsection></section><section number="16-18-703"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Effect of dissociation.</catchline><subsection number="16-18-703(1)">If a person's dissociation results in a dissolution and winding up of the partnership's activities and affairs, <xref depth="2" refnumber="48-1d-9" start="2">Part 9, Dissolution and Winding Up</xref>, applies, otherwise, <xref depth="2" refnumber="48-1d-8" start="2">Part 8, Partner's Dissociation When Business Not Wound Up</xref>, applies.</subsection><subsection number="16-18-703(2)">If a person is dissociated as a partner:<subsection number="16-18-703(2)(a)">the person's right to participate in the management and conduct of the partnership's activities and affairs terminates, except as otherwise provided in Subsection <xref depth="4" refnumber="16-18-902(3)">16-18-902(3)</xref>; and</subsection><subsection number="16-18-703(2)(b)">the person's duties and obligations under Section <xref depth="3" refnumber="16-18-405">16-18-405</xref>:<subsection number="16-18-703(2)(b)(i)">end with regard to matters arising and events occurring after the person's dissociation; and</subsection><subsection number="16-18-703(2)(b)(ii)">continue only with regard to matters arising and events occurring before the person's dissociation, unless the partner participates in winding up the partnership's activities and affairs in accordance with Section <xref depth="3" refnumber="16-18-902">16-18-902</xref>.</subsection></subsection></subsection><subsection number="16-18-703(3)">A person's dissociation does not of itself discharge the person from a debt, obligation, or other liability to the partnership or the other partners which the person incurred while a partner.</subsection></section></part><part number="16-18-8"><catchline>Partner's Dissociation When Business Not Wound Up</catchline><section number="16-18-801"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Purchase of interest of person dissociated as partner.</catchline><subsection number="16-18-801(1)">If a person is dissociated as a partner without the dissociation resulting in a dissolution and winding up of the partnership's activities and affairs under Section <xref depth="3" refnumber="16-18-901">16-18-901</xref>, the partnership shall cause the person's interest in the partnership to be purchased for a buyout price determined in accordance with Subsection <xref depth="4" refnumber="48-1d-801(2)" start="0">(2)</xref>.</subsection><subsection number="16-18-801(2)">The buyout price of the interest of a person dissociated as a partner is the amount that would have been distributable to the person under Subsection <xref depth="4" refnumber="16-18-906(2)">16-18-906(2)</xref> if, on the date of dissociation, the assets of the partnership were sold and the partnership were wound up, with the sale price equal to the greater of:<subsection number="16-18-801(2)(a)">the liquidation value; or</subsection><subsection number="16-18-801(2)(b)">the value based on a sale of the entire business as a going concern without the person.</subsection></subsection><subsection number="16-18-801(3)">Interest accrues on the buyout price from the date of dissociation to the date of payment, but damages for wrongful dissociation under Subsection <xref depth="4" refnumber="16-18-702(2)">16-18-702(2)</xref>, and all other amounts owing, whether or not presently due, from the person dissociated as a partner to the partnership, must be offset against the buyout price.</subsection><subsection number="16-18-801(4)">A partnership shall defend, indemnify, and hold harmless a person dissociated as a partner whose interest is being purchased against all partnership liabilities, whether incurred before or after the dissociation, except liabilities incurred by an act of the person dissociated as a partner under Section <xref depth="3" refnumber="16-18-802">16-18-802</xref>.</subsection><subsection number="16-18-801(5)">If no agreement for the purchase of the interest of a person dissociated as a partner is reached not later than 120 days after a written demand for payment, the partnership shall pay, or cause to be paid, in money to the person the amount the partnership estimates to be the buyout price and accrued interest, reduced by any offsets and accrued interest under Subsection <xref depth="4" refnumber="48-1d-801(3)" start="0">(3)</xref>.</subsection><subsection number="16-18-801(6)">If a deferred payment is authorized under Subsection <xref depth="4" refnumber="48-1d-801(8)" start="0">(8)</xref>, the partnership may tender a written offer to pay the amount it estimates to be the buyout price and accrued interest, reduced by any offsets under Subsection <xref depth="4" refnumber="48-1d-801(3)" start="0">(3)</xref>, stating the time of payment, the amount and type of security for payment, and the other terms and conditions of the obligation.</subsection><subsection number="16-18-801(7)">The payment or tender required by Subsection <xref depth="4" refnumber="48-1d-801(5)" start="0">(5)</xref> or <xref depth="4" refnumber="48-1d-801(6)" start="0">(6)</xref> must be accompanied by the following:<subsection number="16-18-801(7)(a)">a statement of partnership assets and liabilities as of the date of dissociation;</subsection><subsection number="16-18-801(7)(b)">the latest available partnership balance sheet and income statement, if any;</subsection><subsection number="16-18-801(7)(c)">an explanation of how the estimated amount of the payment was calculated; and</subsection><subsection number="16-18-801(7)(d)">written notice that the payment is in full satisfaction of the obligation to purchase unless, not later than 120 days after the written notice, the person dissociated as a partner commences an action to determine the buyout price, any offsets under Subsection <xref depth="4" refnumber="48-1d-801(3)" start="0">(3)</xref>, or other terms of the obligation to purchase.</subsection></subsection><subsection number="16-18-801(8)"><subsection number="16-18-801(8)(a)">A person that wrongfully dissociates as a partner before the expiration of a definite term or the completion of a particular undertaking is not entitled to payment of any part of the buyout price until the expiration of the term or completion of the undertaking, unless the person establishes to the satisfaction of the court that earlier payment will not cause undue hardship to the business of the partnership.</subsection><subsection number="16-18-801(8)(b)">A deferred payment must be adequately secured and bear interest.</subsection></subsection><subsection number="16-18-801(9)"><subsection number="16-18-801(9)(a)">A person dissociated as a partner may maintain an action against the partnership, in accordance with Subsection <xref depth="4" refnumber="16-18-406(2)">16-18-406(2)</xref>, to determine the buyout price of that person's interest, any offsets under Subsection <xref depth="4" refnumber="48-1d-801(3)" start="0">(3)</xref>, or other terms of the obligation to purchase.</subsection><subsection number="16-18-801(9)(b)">The action must be commenced not later than 120 days after the partnership has tendered payment or an offer to pay or within one year after written demand for payment if no payment or offer to pay is tendered.</subsection><subsection number="16-18-801(9)(c)">The court shall determine the buyout price of the person's interest, any offset due under Subsection <xref depth="4" refnumber="48-1d-801(3)" start="0">(3)</xref>, and accrued interest, and enter judgment for any additional payment or refund.</subsection><subsection number="16-18-801(9)(d)">If deferred payment is authorized under Subsection <xref depth="4" refnumber="48-1d-801(8)" start="0">(8)</xref>, the court shall also determine the security for payment and other terms of the obligation to purchase.</subsection><subsection number="16-18-801(9)(e)">The court may assess reasonable attorney's fees and the fees and expenses of appraisers or other experts for a party to the action, in amounts the court finds equitable, against a party that the court finds acted arbitrarily, vexatiously, or not in good faith.</subsection><subsection number="16-18-801(9)(f)">The finding may be based on the partnership's failure to tender payment or an offer to pay or to comply with Subsection <xref depth="4" refnumber="48-1d-801(7)" start="0">(7)</xref>.</subsection></subsection></section><section number="16-18-802"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Power to bind and liability of person dissociated as partner.</catchline><subsection number="16-18-802(1)">After a person is dissociated as a partner without the dissociation resulting in a dissolution and winding up of the partnership's activities and affairs and before the partnership is merged out of existence, converted, or domesticated under Chapter 1a, Part 7, Merger, Chapter 1a, Part 8, Interest Exchange, Chapter 1a, Part 9, Conversion, or Chapter 1a, Part 10, Domestication, or dissolved, the partnership is bound by an act of the person only if:<subsection number="16-18-802(1)(a)">the act would have bound the partnership under Section <xref depth="3" refnumber="16-18-301">16-18-301</xref> before dissociation; and</subsection><subsection number="16-18-802(1)(b)">at the time the other party enters into the transaction:<subsection number="16-18-802(1)(b)(i)">less than two years has passed since the dissociation; and</subsection><subsection number="16-18-802(1)(b)(ii)">the other party does not know or have notice of the dissociation and reasonably believes that the person is a partner.</subsection></subsection></subsection><subsection number="16-18-802(2)">If a partnership is bound under Subsection <xref depth="4" refnumber="48-1d-802(1)" start="0">(1)</xref>, the person dissociated as a partner which caused the partnership to be bound is liable:<subsection number="16-18-802(2)(a)">to the partnership for any damage caused to the partnership arising from the obligation incurred under Subsection <xref depth="4" refnumber="48-1d-802(1)" start="0">(1)</xref>; and</subsection><subsection number="16-18-802(2)(b)">if a partner or another person dissociated as a partner is liable for the obligation, to the partner or other person for any damage caused to the partner or other person arising from the liability.</subsection></subsection></section><section number="16-18-803"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Liability of person dissociated as partner to other persons.</catchline><subsection number="16-18-803(1)"><subsection number="16-18-803(1)(a)">A person's dissociation as a partner does not of itself discharge the person's liability as a partner for a debt, obligation, or other liability of the partnership incurred before dissociation.</subsection><subsection number="16-18-803(1)(b)">Except as otherwise provided in Subsection <xref depth="4" refnumber="48-1d-803(2)" start="0">(2)</xref>, the person is not liable for a partnership obligation incurred after dissociation.</subsection></subsection><subsection number="16-18-803(2)">A person that has dissociated as a partner without the dissociation resulting in a dissolution and winding up of the partnership's activities and affairs is liable on a transaction entered into by the partnership after the dissociation only if:<subsection number="16-18-803(2)(a)">a partner would be liable on the transaction; and</subsection><subsection number="16-18-803(2)(b)">at the time the other party enters into the transaction:<subsection number="16-18-803(2)(b)(i)">less than two years has passed since the dissociation; and</subsection><subsection number="16-18-803(2)(b)(ii)">the other party does not have knowledge or notice of the dissociation and reasonably believes that the person is a partner.</subsection></subsection></subsection><subsection number="16-18-803(3)">By agreement with a creditor of a partnership and the partnership, a person dissociated as a partner may be released from liability for an obligation of the partnership.</subsection><subsection number="16-18-803(4)">A person dissociated as a partner is released from liability for an obligation of the partnership if the partnership's creditor, with knowledge or notice of the person's dissociation but without the person's consent, agrees to a material alteration in the nature or time of payment of the obligation.</subsection></section><section number="16-18-804"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Statement of dissociation.</catchline><subsection number="16-18-804(1)">A person dissociated as a partner or the partnership may file a statement of dissociation stating the name of the partnership and that the partner is dissociated from the partnership.</subsection><subsection number="16-18-804(2)">A statement of dissociation is a limitation on the authority of a person dissociated as a partner for the purposes of Subsections <xref depth="4" refnumber="16-18-303(4)">16-18-303(4)</xref> and <xref depth="4" refnumber="48-1d-303(5)" start="0">(5)</xref>.</subsection></section><section number="16-18-805"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Continued use of partnership name.</catchline><tab/>Continued use of a partnership name, or name of a person dissociated as a partner as part of the partnership name, by partners continuing the business does not of itself make the person dissociated as a partner liable for an obligation of the partners or the partnership continuing the business.</section></part><part number="16-18-9"><catchline>Dissolution And Winding Up</catchline><section number="16-18-901"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Events causing dissolution.</catchline><tab/>A partnership is dissolved, and the partnership's activities and affairs must be wound up, upon the occurrence of any of the following:<subsection number="16-18-901(1)">in a partnership at will, the partnership has notice of a person's express will to withdraw as a partner, other than a partner that has dissociated under Subsections <xref refnumber="218-null-2">16-18-701(2)</xref> through <xref depth="4" refnumber="48-1d-701(10)" start="0">(10)</xref>, but, if the person specifies a withdrawal date later than the date the partnership had notice, on the later date;</subsection><subsection number="16-18-901(2)">in a partnership for a definite term or particular undertaking:<subsection number="16-18-901(2)(a)">within 90 days after a person's dissociation by death or otherwise under Subsections <xref refnumber="218-null-17">16-18-701(6)</xref> through <xref depth="4" refnumber="48-1d-701(10)" start="0">(10)</xref> or wrongful dissociation under Subsection <xref depth="4" refnumber="16-18-702(2)">16-18-702(2)</xref>, the affirmative vote or consent of at least half of the remaining partners to wind up the partnership's activities and affairs, for which purpose a person's rightful dissociation in accordance with Subsection <xref depth="4" refnumber="16-18-702(2)(b)(i)">16-18-702(2)(b)(i)</xref> constitutes the expression of that partner's consent to wind up the partnership's activities and affairs;</subsection><subsection number="16-18-901(2)(b)">the express consent of all the partners to wind up the partnership's activities and affairs; or</subsection><subsection number="16-18-901(2)(c)">the expiration of the term or the completion of the undertaking;</subsection></subsection><subsection number="16-18-901(3)">an event or circumstance that the partnership agreement states causes dissolution;</subsection><subsection number="16-18-901(4)">upon a petition brought by a partner, the entry of a court order dissolving the partnership on the ground that:<subsection number="16-18-901(4)(a)">the conduct of all or substantially all the partnership's activities and affairs is unlawful;</subsection><subsection number="16-18-901(4)(b)">the economic purpose of the partnership is likely to be unreasonably frustrated;</subsection><subsection number="16-18-901(4)(c)">another partner has engaged in conduct relating to the partnership's activities and affairs which makes it not reasonably practicable to carry on the business in partnership with that partner; or</subsection><subsection number="16-18-901(4)(d)">it is not otherwise reasonably practicable to carry on the partnership's activities and affairs in conformity with the partnership agreement;</subsection></subsection><subsection number="16-18-901(5)">upon a petition brought by a transferee, the entry of a court order dissolving the partnership on the ground that it is equitable to wind up the partnership's activities and affairs:<subsection number="16-18-901(5)(a)">after the expiration of the term or completion of the undertaking, if the partnership was for a definite term or particular undertaking at the time of the transfer or entry of the charging order that gave rise to the transfer; or</subsection><subsection number="16-18-901(5)(b)">at any time, if the partnership was a partnership at will at the time of the transfer or entry of the charging order that gave rise to the transfer; or</subsection></subsection><subsection number="16-18-901(6)">the passage of 90 consecutive days during which the partnership does not have at least two partners.</subsection></section><section number="16-18-902"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Winding up.</catchline><subsection number="16-18-902(1)"><subsection number="16-18-902(1)(a)">A dissolved partnership shall wind up the partnership's activities and affairs.</subsection><subsection number="16-18-902(1)(b)">Except as otherwise provided in Section <xref depth="3" refnumber="16-18-903">16-18-903</xref>, a partnership only continues after dissolution for the purpose of winding up.</subsection></subsection><subsection number="16-18-902(2)">In winding up a partnership's activities and affairs, the partnership:<subsection number="16-18-902(2)(a)">shall discharge the partnership's debts, obligations, and other liabilities, settle and close the partnership's activities and affairs, and marshal and distribute the assets of the partnership; and</subsection><subsection number="16-18-902(2)(b)">may:<subsection number="16-18-902(2)(b)(i)">deliver to the division for filing a statement of dissolution stating the name of the partnership and that the partnership is dissolved;</subsection><subsection number="16-18-902(2)(b)(ii)">preserve the partnership's activities and affairs and property as a going concern for a reasonable time;</subsection><subsection number="16-18-902(2)(b)(iii)">prosecute and defend actions and proceedings, whether civil, criminal, or administrative;</subsection><subsection number="16-18-902(2)(b)(iv)">transfer the partnership's property;</subsection><subsection number="16-18-902(2)(b)(v)">settle disputes by mediation or arbitration;</subsection><subsection number="16-18-902(2)(b)(vi)">deliver to the division for filing a statement of termination stating the name of the partnership and that the partnership is terminated; and</subsection><subsection number="16-18-902(2)(b)(vii)">perform other acts necessary or appropriate to the winding up.</subsection></subsection></subsection><subsection number="16-18-902(3)">A person whose dissociation as a partner resulted in dissolution may participate in winding up as if still a partner, unless the dissociation was wrongful.</subsection><subsection number="16-18-902(4)"><subsection number="16-18-902(4)(a)">If a dissolved partnership does not have a partner and no person has the right to participate in winding up under Subsection <xref depth="4" refnumber="48-1d-902(3)" start="0">(3)</xref>, the personal or legal representative of the last person to have been a partner may wind up the partnership's activities and affairs.</subsection><subsection number="16-18-902(4)(b)">If the representative does not exercise that right, a person to wind up the partnership's activities and affairs may be appointed by the consent of transferees owning a majority of the rights to receive distributions at the time the consent is to be effective.</subsection><subsection number="16-18-902(4)(c)">A person appointed under this Subsection <xref depth="4" refnumber="48-1d-902(4)" start="0">(4)</xref> has the powers of a partner under Section <xref depth="3" refnumber="16-18-904">16-18-904</xref> but is not liable for the debts, obligations, and other liabilities of the partnership solely by reason of having or exercising those powers or otherwise acting to wind up the partnership's activities and affairs.</subsection></subsection><subsection number="16-18-902(5)">Upon a petition brought by any partner or person entitled under Subsection <xref depth="4" refnumber="48-1d-902(3)" start="0">(3)</xref> to participate in winding up, a court may order judicial supervision of the winding up of a dissolved partnership, including the appointment of a person to wind up the partnership's activities and affairs, if:<subsection number="16-18-902(5)(a)">the partnership does not have a partner, and within a reasonable time following the dissolution no person has been appointed under Subsection <xref depth="4" refnumber="48-1d-902(4)" start="0">(4)</xref>; or</subsection><subsection number="16-18-902(5)(b)">the applicant establishes other good cause.</subsection></subsection></section><section number="16-18-903"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Rescinding dissolution.</catchline><subsection number="16-18-903(1)">A partnership may rescind the partnership's dissolution, unless a statement of termination applicable to the partnership is effective or the court has entered an order under Subsection <xref depth="4" refnumber="16-18-901(4)">16-18-901(4)</xref> or <xref depth="4" refnumber="48-1d-901(5)" start="0">(5)</xref> dissolving the partnership.</subsection><subsection number="16-18-903(2)">Rescinding dissolution under this section requires:<subsection number="16-18-903(2)(a)">the affirmative vote or consent of each partner;</subsection><subsection number="16-18-903(2)(b)">if a statement of dissolution applicable to the partnership has been filed by the division but has not become effective, delivery to the division for filing of a statement of withdrawal under Section <xref depth="3" refnumber="16-1a-205">16-1a-205</xref> applicable to the statement of dissolution; and</subsection><subsection number="16-18-903(2)(c)">if a statement of dissolution applicable to the partnership is effective, the delivery to the division for filing of a statement of correction under Section <xref depth="3" refnumber="16-1a-206">16-1a-206</xref> stating that dissolution has been rescinded under this section.</subsection></subsection><subsection number="16-18-903(3)">If a partnership rescinds the partnership's dissolution:<subsection number="16-18-903(3)(a)">the partnership resumes carrying on the partnership's activities and affairs as if dissolution had never occurred;</subsection><subsection number="16-18-903(3)(b)">subject to Subsection <xref depth="4" refnumber="48-1d-903(3)(c)" start="0">(3)(c)</xref>, any liability incurred by the partnership after the dissolution and before the rescission is effective is determined as if dissolution had never occurred; and</subsection><subsection number="16-18-903(3)(c)">the rights of a third party arising out of conduct in reliance on the dissolution before the third party knew or had notice of the rescission may not be adversely affected.</subsection></subsection></section><section number="16-18-904"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Power to bind partnership after dissolution.</catchline><subsection number="16-18-904(1)">A partnership is bound by a partner's act after dissolution which:<subsection number="16-18-904(1)(a)">is appropriate for winding up the partnership's activities and affairs; or</subsection><subsection number="16-18-904(1)(b)">would have bound the partnership under Section <xref depth="3" refnumber="16-18-301">16-18-301</xref> before dissolution, if, at the time the other party enters into the transaction, the other party does not know or have notice of the dissolution.</subsection></subsection><subsection number="16-18-904(2)">A person dissociated as a partner binds a partnership through an act occurring after dissolution if at the time the other party enters into the transaction:<subsection number="16-18-904(2)(a)">less than two years has passed since the dissociation;</subsection><subsection number="16-18-904(2)(b)">the other party does not have notice of the dissociation and reasonably believes that the person is a partner; and</subsection><subsection number="16-18-904(2)(c)">the act:<subsection number="16-18-904(2)(c)(i)">is appropriate for winding up the partnership's activities and affairs; or</subsection><subsection number="16-18-904(2)(c)(ii)">would have bound the partnership under Section <xref depth="3" refnumber="16-18-301">16-18-301</xref> before dissolution, and at the time the other party enters into the transaction the other party does not know or have notice of the dissolution.</subsection></subsection></subsection></section><section number="16-18-905"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Liability after dissolution.</catchline><subsection number="16-18-905(1)">If a partner having knowledge of the dissolution causes a partnership to incur an obligation under Subsection <xref depth="4" refnumber="16-18-904(1)">16-18-904(1)</xref> by an act that is not appropriate for winding up the partnership's activities and affairs, the partner is liable:<subsection number="16-18-905(1)(a)">to the partnership for any damage caused to the partnership arising from the obligation; and</subsection><subsection number="16-18-905(1)(b)">if another partner or person dissociated as a partner is liable for the obligation, to that other partner or person for any damage caused to that other partner or person arising from the liability.</subsection></subsection><subsection number="16-18-905(2)">If a person dissociated as a partner causes a partnership to incur an obligation under Subsection <xref refnumber="240-null-4">16-18-904(2)</xref>, the person is liable:<subsection number="16-18-905(2)(a)">to the partnership for any damage caused to the partnership arising from the obligation; and</subsection><subsection number="16-18-905(2)(b)">if a partner or another person dissociated as a partner is liable for the obligation, to the partner or other person for any damage caused to the partner or other person arising from the obligation.</subsection></subsection></section><section number="16-18-906"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Disposition of assets in winding up -- When contributions required.</catchline><subsection number="16-18-906(1)">In winding up a partnership's activities and affairs, a partnership shall apply the partnership's assets, including the contributions required by this section, to discharge the partnership's obligations to creditors, including partners that are creditors.</subsection><subsection number="16-18-906(2)">After a partnership complies with Subsection <xref depth="4" refnumber="48-1d-906(1)" start="0">(1)</xref>, any surplus must be distributed in the following order, subject to any charging order in effect under Section <xref depth="3" refnumber="16-18-604">16-18-604</xref>:<subsection number="16-18-906(2)(a)">to each person owning a transferable interest that reflects contributions made and not previously returned, an amount equal to the value of the unreturned contributions; and</subsection><subsection number="16-18-906(2)(b)">among partners in proportion to the partners' respective rights to share in distributions immediately before the dissolution of the partnership, except to the extent necessary to comply with any transfer effective under Section <xref depth="3" refnumber="16-18-603">16-18-603</xref>.</subsection></subsection><subsection number="16-18-906(3)">If a partnership's assets are insufficient to satisfy all the partnership's obligations under Subsection <xref depth="4" refnumber="48-1d-906(1)" start="0">(1)</xref>, with respect to each unsatisfied obligation incurred when the partnership was not a limited liability partnership, the following rules apply:<subsection number="16-18-906(3)(a)"><subsection number="16-18-906(3)(a)(i)">Each person that was a partner when the obligation was incurred and that has not been released from the obligation under Subsections <xref depth="4" refnumber="16-18-803(3)">16-18-803(3)</xref> and <xref depth="4" refnumber="48-1d-803(4)" start="0">(4)</xref> shall contribute to the partnership to enable the partnership to satisfy the obligation.</subsection><subsection number="16-18-906(3)(a)(ii)">The contribution due from each of those persons is in proportion to the right to receive distributions in the capacity of partner in effect for each of those persons when the obligation was incurred.</subsection></subsection><subsection number="16-18-906(3)(b)"><subsection number="16-18-906(3)(b)(i)">If a person does not contribute the full amount required under Subsection <xref depth="4" refnumber="48-1d-906(3)(a)" start="0">(3)(a)</xref> with respect to an unsatisfied obligation of the partnership, the other persons required to contribute by Subsection <xref depth="4" refnumber="48-1d-906(3)(a)" start="0">(3)(a)</xref> on account of the obligation shall contribute the additional amount necessary to discharge the obligation.</subsection><subsection number="16-18-906(3)(b)(ii)">The additional contribution due from each of those other persons is in proportion to the right to receive distributions in the capacity of partner in effect for each of those other persons when the obligation was incurred.</subsection></subsection><subsection number="16-18-906(3)(c)">If a person does not make the additional contribution required by Subsection <xref depth="4" refnumber="48-1d-906(3)(b)" start="0">(3)(b)</xref>, further additional contributions are determined and due in the same manner as provided in that subsection.</subsection><subsection number="16-18-906(3)(d)"><subsection number="16-18-906(3)(d)(i)">A person that makes an additional contribution under Subsection <xref depth="4" refnumber="48-1d-906(3)(b)" start="0">(3)(b)</xref> or <xref depth="4" refnumber="48-1d-906(3)(c)" start="0">(3)(c)</xref> may recover from any person whose failure to contribute under Subsection <xref depth="4" refnumber="48-1d-906(3)(a)" start="0">(3)(a)</xref> or <xref depth="4" refnumber="48-1d-906(3)(b)" start="0">(3)(b)</xref> necessitated the additional contribution.</subsection><subsection number="16-18-906(3)(d)(ii)">A person may not recover under this Subsection <xref depth="4" refnumber="48-1d-906(3)" start="0">(3)</xref> more than the amount additionally contributed.</subsection><subsection number="16-18-906(3)(d)(iii)">A person's liability under this Subsection <xref depth="4" refnumber="48-1d-906(3)" start="0">(3)</xref> may not exceed the amount the person failed to contribute.</subsection></subsection></subsection><subsection number="16-18-906(4)">If a partnership does not have sufficient surplus to comply with Subsection <xref depth="4" refnumber="48-1d-906(2)(a)" start="0">(2)(a)</xref>, any surplus must be distributed among the owners of transferable interests in proportion to the value of the respective unreturned contributions.</subsection><subsection number="16-18-906(5)">All distributions made under Subsections <xref depth="4" refnumber="48-1d-906(2)" start="0">(2)</xref> and <xref depth="4" refnumber="48-1d-906(4)" start="0">(4)</xref> must be paid in money.</subsection></section><section number="16-18-907"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Known claims against dissolved limited liability partnership.</catchline><subsection number="16-18-907(1)">Except as otherwise provided in Subsection <xref depth="4" refnumber="48-1d-907(4)" start="0">(4)</xref>, a dissolved limited liability partnership may give notice of a known claim under Subsection <xref depth="4" refnumber="48-1d-907(2)" start="0">(2)</xref>, which has the effect provided in Subsection <xref depth="4" refnumber="48-1d-907(3)" start="0">(3)</xref>.</subsection><subsection number="16-18-907(2)"><subsection number="16-18-907(2)(a)">A dissolved limited liability partnership may in a record notify the dissolved limited liability partnership's known claimants of the dissolution.</subsection><subsection number="16-18-907(2)(b)">The notice shall:<subsection number="16-18-907(2)(b)(i)">specify the information required to be included in a claim;</subsection><subsection number="16-18-907(2)(b)(ii)">state that the claim must be in writing and provide a mailing address to which the claim is to be sent;</subsection><subsection number="16-18-907(2)(b)(iii)">state the deadline for receipt of a claim, which may not be less than 120 days after the date of the notice is received by the claimant;</subsection><subsection number="16-18-907(2)(b)(iv)">state that the claim will be barred if not received by the deadline; and</subsection><subsection number="16-18-907(2)(b)(v)">unless the partnership has been throughout the partnership's existence a limited liability partnership, state that the barring of a claim against the partnership will also bar any corresponding claim against any partner or person dissociated as a partner which is based on Section <xref depth="3" refnumber="16-18-305">16-18-305</xref>.</subsection></subsection></subsection><subsection number="16-18-907(3)">A claim against a dissolved limited liability partnership is barred if the requirements of Subsection <xref depth="4" refnumber="48-1d-907(2)" start="0">(2)</xref> are met and:<subsection number="16-18-907(3)(a)">the claim is not received by the specified deadline; or</subsection><subsection number="16-18-907(3)(b)">if the claim is timely received but rejected by the limited liability partnership:<subsection number="16-18-907(3)(b)(i)">the partnership causes the claimant to receive a notice in a record stating that the claim is rejected and will be barred unless the claimant commences an action against the partnership to enforce the claim not later than 90 days after the claimant receives the notice; and</subsection><subsection number="16-18-907(3)(b)(ii)">the claimant does not commence the required action not later than 90 days after the claimant receives the notice.</subsection></subsection></subsection><subsection number="16-18-907(4)">This section does not apply to a claim based on an event occurring after the effective date of dissolution or a liability that on that date is contingent.</subsection></section><section number="16-18-908"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Other claims against dissolved limited liability partnership.</catchline><subsection number="16-18-908(1)">A dissolved limited liability partnership may publish notice of the dissolved limited liability partnership's dissolution and request persons having claims against the dissolved limited liability partnership to present them in accordance with the notice.</subsection><subsection number="16-18-908(2)">A notice under Subsection <xref depth="4" refnumber="48-1d-908(1)" start="0">(1)</xref> must:<subsection number="16-18-908(2)(a)">be published at least once in a newspaper of general circulation in the county in this state in which the dissolved limited liability partnership's principal office is located or, if the principal office is not located in this state, in the county in which the office of the dissolved limited liability partnership's registered agent is or was last located and in accordance with Section <xref depth="3" refnumber="45-1-101" start="0">45-1-101</xref>;</subsection><subsection number="16-18-908(2)(b)">describe the information required to be contained in a claim, state that the claim must be in writing, and provide a mailing address to which the claim is to be sent;</subsection><subsection number="16-18-908(2)(c)">state that a claim against the dissolved limited liability partnership is barred unless an action to enforce the claim is commenced not later than three years after publication of the notice; and</subsection><subsection number="16-18-908(2)(d)">unless the dissolved limited liability partnership has been throughout the limited liability partnership's existence a limited liability partnership, state that the barring of a claim against the dissolved limited liability partnership will also bar any corresponding claim against any partner or person dissociated as a partner which is based on Section <xref depth="3" refnumber="16-18-306">16-18-306</xref>.</subsection></subsection><subsection number="16-18-908(3)">If a dissolved limited liability partnership publishes a notice in accordance with Subsection <xref depth="4" refnumber="48-1d-908(2)" start="0">(2)</xref>, the claim of each of the following claimants is barred unless the claimant commences an action to enforce the claim against the dissolved limited liability partnership not later than three years after the publication date of the notice:<subsection number="16-18-908(3)(a)">a claimant that did not receive notice in a record under Section <xref depth="3" refnumber="16-18-907">16-18-907</xref>;</subsection><subsection number="16-18-908(3)(b)">a claimant whose claim was timely sent to the partnership but not acted on; and</subsection><subsection number="16-18-908(3)(c)">a claimant whose claim is contingent at, or based on an event occurring after, the effective date of dissolution.</subsection></subsection><subsection number="16-18-908(4)">A claim not barred under this section or Section <xref depth="3" refnumber="16-18-907">16-18-907</xref> may be enforced:<subsection number="16-18-908(4)(a)">against a dissolved limited liability partnership, to the extent of the dissolved limited liability partnership's undistributed assets;</subsection><subsection number="16-18-908(4)(b)">except as otherwise provided in Section <xref depth="3" refnumber="16-18-909">16-18-909</xref>, if assets of the dissolved limited liability partnership have been distributed after dissolution, against a partner or transferee to the extent of that person's proportionate share of the claim or of the dissolved limited liability partnership's assets distributed to the partner or transferee after dissolution, whichever is less, but a person's total liability for all claims under this subsection may not exceed the total amount of assets distributed to the person after dissolution; and</subsection><subsection number="16-18-908(4)(c)">against any person liable on the claim under Sections <xref depth="3" refnumber="16-18-306">16-18-306</xref>, <xref depth="3" refnumber="16-18-803">16-18-803</xref>, and <xref depth="3" refnumber="16-18-905">16-18-905</xref>.</subsection></subsection></section><section number="16-18-909"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Court proceedings.</catchline><subsection number="16-18-909(1)"><subsection number="16-18-909(1)(a)">A dissolved limited liability partnership that has published a notice under Section <xref depth="3" refnumber="16-18-908">16-18-908</xref> may petition a court with jurisdiction under <xref depth="0" refnumber="78A" start="0">Title 78A, Judiciary and Judicial Administration</xref>, for a determination of the amount and form of security to be provided for payment of claims that are contingent, have not been made known to the dissolved limited liability partnership, or are based on an event occurring after the effective date of dissolution but which, based on the facts known to the dissolved limited liability partnership, are reasonably expected to arise after the effective date of dissolution.</subsection><subsection number="16-18-909(1)(b)">Security is not required for any claim that is or is reasonably anticipated to be barred under Subsection <xref depth="4" refnumber="16-18-907(3)">16-18-907(3)</xref>.</subsection></subsection><subsection number="16-18-909(2)">No later than 10 days after the filing of an application under Subsection <xref depth="4" refnumber="48-1d-909(1)" start="0">(1)</xref>, the dissolved limited liability partnership shall give notice of the proceeding to each claimant holding a contingent claim known to the dissolved limited liability partnership.</subsection><subsection number="16-18-909(3)"><subsection number="16-18-909(3)(a)">In any proceeding under this section, the court may appoint a guardian ad litem to represent all claimants whose identities are unknown.</subsection><subsection number="16-18-909(3)(b)">The reasonable fees and expenses of the guardian, including all reasonable expert witness fees, must be paid by the dissolved limited liability partnership.</subsection></subsection><subsection number="16-18-909(4)">A dissolved limited liability partnership that provides security in the amount and form ordered by the court under Subsection <xref depth="4" refnumber="48-1d-909(1)" start="0">(1)</xref> satisfies the dissolved limited liability partnership's obligations with respect to claims that are contingent, have not been made known to the dissolved limited liability partnership, or are based on an event occurring after the effective date of dissolution, and the claims may not be enforced against a partner or transferee who receives assets in liquidation.</subsection><subsection number="16-18-909(5)">This section applies only to a debt, obligation, or other liability incurred while a partnership was a limited liability partnership.</subsection></section><section number="16-18-910"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Liability of partner and person dissociation as partner when claim against limited liability partnership is barred.</catchline><tab/>If a claim against a dissolved limited liability partnership is barred under Section <xref depth="3" refnumber="16-18-907">16-18-907</xref>, <xref depth="3" refnumber="16-18-908">16-18-908</xref>, or <xref depth="3" refnumber="16-18-909">16-18-909</xref>, any corresponding claim under Section <xref depth="3" refnumber="16-18-306">16-18-306</xref>, <xref depth="3" refnumber="16-18-803">16-18-803</xref>, or <xref depth="3" refnumber="16-18-905">16-18-905</xref> is also barred.</section></part><part number="16-18-10"><catchline>Limited Liability Partnerships</catchline><section number="16-18-1001"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Statement of qualification.</catchline><subsection number="16-18-1001(1)">A partnership may become a limited liability partnership in accordance with this section.</subsection><subsection number="16-18-1001(2)">The terms and conditions on which a partnership becomes a limited liability partnership must be approved by the vote or consent necessary to amend the partnership agreement except, in the case of a partnership agreement that expressly addresses obligations to contribute to the partnership, the vote or consent necessary to amend those provisions.</subsection><subsection number="16-18-1001(3)">After the approval required by Subsection <xref depth="4" refnumber="48-1d-1101(2)" start="0">(2)</xref>, a partnership may become a limited liability partnership by delivering to the division for filing a statement of qualification. The statement of qualification must contain:<subsection number="16-18-1001(3)(a)">the name of the limited liability partnership;</subsection><subsection number="16-18-1001(3)(b)">the street address of the limited liability partnership's principal office and, if different, the street address of an office in this state, if any;</subsection><subsection number="16-18-1001(3)(c)">the information required by Section <xref depth="3" refnumber="16-1a-404">16-1a-404</xref>; and</subsection><subsection number="16-18-1001(3)(d)">a statement that the partnership elects to become a limited liability partnership.</subsection></subsection><subsection number="16-18-1001(4)">A partnership's status as a limited liability partnership remains effective, regardless of changes in the limited liability partnership, until it is canceled in accordance with Subsection <xref depth="4" refnumber="48-1d-1101(6)" start="0">(6)</xref> or administratively revoked in accordance with Section <xref depth="3" refnumber="16-18-1002">16-18-1002</xref>.</subsection><subsection number="16-18-1001(5)">The status of a partnership as a limited liability partnership and the liability of its partners for the debts, obligations, or other liabilities of the partnership while it is a limited liability partnership is not affected by errors or later changes in the information required to be contained in the statement of qualification.</subsection><subsection number="16-18-1001(6)"><subsection number="16-18-1001(6)(a)">A limited liability partnership may amend or cancel the limited liability partnership's statement of qualification by delivering to the division for filing a statement of amendment or cancellation.</subsection><subsection number="16-18-1001(6)(b)">The statement must be consented to by all partners and state the name of the limited liability partnership and in the case of:<subsection number="16-18-1001(6)(b)(i)">an amendment, state the amendment; and</subsection><subsection number="16-18-1001(6)(b)(ii)">a cancellation, state that the statement of qualification is canceled.</subsection></subsection></subsection></section><section number="16-18-1002"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Administrative revocation of statement of qualification.</catchline><subsection number="16-18-1002(1)">The division may commence a proceeding under Subsections <xref depth="4" refnumber="48-1d-1102(2)" start="0">(2)</xref> and <xref depth="4" refnumber="48-1d-1102(3)" start="0">(3)</xref> to revoke the statement of qualification of a limited liability partnership administratively if the limited liability partnership does not:<subsection number="16-18-1002(1)(a)">pay any fee, tax, or penalty required to be paid to the division not later than 60 days after it is due;</subsection><subsection number="16-18-1002(1)(b)">deliver an annual report to the division not later than 60 days after it is due; or</subsection><subsection number="16-18-1002(1)(c)">have a registered agent in this state for 60 consecutive days.</subsection></subsection><subsection number="16-18-1002(2)">If the division determines that one or more grounds exist for administratively revoking a statement of qualification, the division shall serve the limited liability partnership with notice in a record of the division's determination.</subsection><subsection number="16-18-1002(3)"><subsection number="16-18-1002(3)(a)">If a limited liability partnership, not later than 60 days after service of the notice is effected under Subsection <xref depth="4" refnumber="48-1d-1102(2)" start="0">(2)</xref>, does not cure each ground for revocation or demonstrate to the satisfaction of the division that each ground determined by the division does not exist, the division shall administratively revoke the statement of qualification by signing a statement of administrative revocation that recites the grounds for revocation and the effective date of the revocation.</subsection><subsection number="16-18-1002(3)(b)">The division shall file the statement and serve a copy on the limited liability partnership in accordance with Section <xref depth="3" refnumber="16-1a-207">16-1a-207</xref>.</subsection></subsection><subsection number="16-18-1002(4)">An administrative revocation under Subsection <xref depth="4" refnumber="48-1d-1102(3)" start="0">(3)</xref> affects only a partnership's status as a limited liability partnership and is not an event causing dissolution of the partnership.</subsection><subsection number="16-18-1002(5)">The administrative revocation of a statement of qualification of a limited liability partnership does not terminate the authority of the limited liability partnership's registered agent.</subsection></section></part><part number="16-18-11"><catchline>Professional Services Limited Liability Partnerships</catchline><section number="16-18-1101"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Definitions.</catchline><tab/>As used in this part:<subsection number="16-18-1101(1)">"Professional services partnership" means a limited liability partnership organized in accordance with this part to provide professional services.</subsection><subsection number="16-18-1101(2)">"Regulating board" means the entity organized pursuant to state law that licenses and regulates the practice of the profession that a limited liability partnership is organized to provide.</subsection></section><section number="16-18-1102"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Application of this part.</catchline><tab/>If a conflict arises between this part and another provision of this chapter, this part controls.</section><section number="16-18-1103"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Providing a professional service.</catchline><subsection number="16-18-1103(1)">Subject to Section <xref depth="3" refnumber="16-18-1104">16-18-1104</xref>, a professional services partnership may provide a professional service in this state only through an individual licensed or otherwise authorized in this state to provide the professional service.</subsection><subsection number="16-18-1103(2)">Subsection <xref depth="4" refnumber="48-1d-1304(1)" start="0">(1)</xref> does not:<subsection number="16-18-1103(2)(a)">require an individual employed by a professional services partnership to be licensed to perform a service for the professional services company if a license is not otherwise required;</subsection><subsection number="16-18-1103(2)(b)">prohibit a licensed individual from providing a professional service in the individual's professional capacity although the individual is a partner, employee, or agent of a professional services partnership; or</subsection><subsection number="16-18-1103(2)(c)">prohibit an individual licensed in another state from providing a professional service for a professional services partnership in this state if not prohibited by the regulating board.</subsection></subsection></section><section number="16-18-1104"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Limit of one profession.</catchline><subsection number="16-18-1104(1)">A professional services partnership organized to provide a professional service under this part may provide only:<subsection number="16-18-1104(1)(a)">one specific type of professional service; and</subsection><subsection number="16-18-1104(1)(b)">services ancillary to the professional service described in Subsection <xref depth="4" refnumber="48-1d-1305(1)(a)" start="0">(1)(a)</xref>.</subsection></subsection><subsection number="16-18-1104(2)">A professional services partnership organized to provide a professional service under this part may not engage in a business other than to provide:<subsection number="16-18-1104(2)(a)">the professional service that it was organized to provide; and</subsection><subsection number="16-18-1104(2)(b)">services ancillary to the professional service described in Subsection <xref depth="4" refnumber="48-1d-1305(2)(a)" start="0">(2)(a)</xref>.</subsection></subsection><subsection number="16-18-1104(3)">Notwithstanding Subsections <xref depth="4" refnumber="48-1d-1305(1)" start="0">(1)</xref> and <xref depth="4" refnumber="48-1d-1305(2)" start="0">(2)</xref>, a professional services partnership may:<subsection number="16-18-1104(3)(a)">own real and personal property necessary or appropriate for providing the type of professional service it was organized to provide; and</subsection><subsection number="16-18-1104(3)(b)">invest the professional services partnership's money in one or more of the following:<subsection number="16-18-1104(3)(b)(i)">real estate;</subsection><subsection number="16-18-1104(3)(b)(ii)">mortgages;</subsection><subsection number="16-18-1104(3)(b)(iii)">stocks;</subsection><subsection number="16-18-1104(3)(b)(iv)">bonds; or</subsection><subsection number="16-18-1104(3)(b)(v)">another type of investment.</subsection></subsection></subsection></section><section number="16-18-1105"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Activity limitations.</catchline><tab/>A professional services partnership may not do anything that an individual licensed to practice the profession that the professional services partnership is organized to provide is prohibited from doing.</section><section number="16-18-1106"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>This part does not limit regulating board.</catchline><tab/>This part does not restrict the authority or duty of a regulating board to license an individual providing a professional service or the practice of the profession that is within the jurisdiction of the regulating board, notwithstanding that the individual:<subsection number="16-18-1106(1)">is a partner or employee of a professional services partnership; or</subsection><subsection number="16-18-1106(2)">provides the professional service or engages in the practice of the profession through a professional services partnership.</subsection></section><section number="16-18-1107"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Partner of a professional services partnership.</catchline><tab/>A professional services partnership organized to provide a professional service:<subsection number="16-18-1107(1)">may include a partner or employee who is authorized under the laws of the jurisdiction where the partner or employee resides to provide a similar professional service;</subsection><subsection number="16-18-1107(2)">may include a partner who is not licensed or registered by the state to provide the professional service to the extent allowed by the applicable licensing or registration act relating to the professional service; and</subsection><subsection number="16-18-1107(3)">may render a professional service in this state only through a partner or employee who is licensed or registered by this state to render the professional service.</subsection></section><section number="16-18-1108"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Restriction on transfer by partner.</catchline><subsection number="16-18-1108(1)">Except as provided in Subsections <xref depth="4" refnumber="48-1d-1309(2)" start="0">(2)</xref> and <xref depth="4" refnumber="48-1d-1309(3)" start="0">(3)</xref>, a partner of a professional services partnership may sell or transfer the partner's interest in the professional services partnership only to:<subsection number="16-18-1108(1)(a)">the professional services partnership; or</subsection><subsection number="16-18-1108(1)(b)">an individual who is licensed or registered by this state to provide the same type of professional service as the professional service for which the professional services partnership is organized, or who otherwise satisfies the requirements of Subsection <xref depth="4" refnumber="16-18-1107(1)">16-18-1107(1)</xref> or <xref depth="4" refnumber="48-1d-1308(2)" start="0">(2)</xref>.</subsection></subsection><subsection number="16-18-1108(2)">Upon the death or incapacity of a partner of a professional services partnership, the partner's interest in the professional services partnership may be transferred to the personal representative or estate of the deceased or incapacitated partner.</subsection><subsection number="16-18-1108(3)">The person to whom an interest is transferred under Subsection <xref depth="4" refnumber="48-1d-1309(2)" start="0">(2)</xref> may continue to hold the interest for a reasonable period, but may not participate in a decision concerning the providing of a professional service.</subsection></section><section number="16-18-1109"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Purchase of interest upon death, incapacity, or disqualification of member.</catchline><subsection number="16-18-1109(1)">Subject to this part, one or more of the following may provide for the purchase of a partner's interest in a professional services partnership upon the death, incapacity, or disqualification of the partner:<subsection number="16-18-1109(1)(a)">the partnership agreement; or</subsection><subsection number="16-18-1109(1)(b)">a private agreement.</subsection></subsection><subsection number="16-18-1109(2)">In the absence of a provision described in Subsection <xref depth="4" refnumber="48-1d-1310(1)" start="0">(1)</xref>, a professional services partnership shall purchase the interest of a partner who is deceased, incapacitated, or no longer qualified to own an interest in the professional services partnership within 90 days after the day on which the professional services partnership is notified of the death, incapacity, or disqualification.</subsection><subsection number="16-18-1109(3)">If a professional services partnership purchases a partner's interest under Subsection <xref depth="4" refnumber="48-1d-1310(2)" start="0">(2)</xref>, the professional services company shall purchase the interest at a price that is the reasonable fair market value as of the date of death, incapacity, or disqualification.</subsection><subsection number="16-18-1109(4)">If a professional services partnership fails to purchase a partner's interest as required by Subsection <xref depth="4" refnumber="48-1d-1310(2)" start="0">(2)</xref> at the end of the 90-day period described in Subsection <xref depth="4" refnumber="48-1d-1310(2)" start="0">(2)</xref>, the following persons may bring an action in a court with jurisdiction under <xref depth="0" refnumber="78A" start="0">Title 78A, Judiciary and Judicial Administration</xref>, to enforce Subsection <xref depth="4" refnumber="48-1d-1310(2)" start="0">(2)</xref>:<subsection number="16-18-1109(4)(a)">the personal representative of a deceased partner;</subsection><subsection number="16-18-1109(4)(b)">the guardian or conservator of an incapacitated partner; or</subsection><subsection number="16-18-1109(4)(c)">the disqualified partner.</subsection></subsection><subsection number="16-18-1109(5)">A court in which an action is brought under Subsection <xref depth="4" refnumber="48-1d-1310(4)" start="0">(4)</xref> may:<subsection number="16-18-1109(5)(a)">award the person bringing the action the reasonable fair market value of the interest; or</subsection><subsection number="16-18-1109(5)(b)">within the court's jurisdiction, order the liquidation of the professional services partnership.</subsection></subsection><subsection number="16-18-1109(6)">If a person described in Subsections <xref depth="4" refnumber="48-1d-1310(4)(a)" start="0">(4)(a)</xref> through <xref depth="4" refnumber="48-1d-1310(4)(c)" start="0">(c)</xref> is successful in an action under Subsection <xref depth="4" refnumber="48-1d-1310(4)" start="0">(4)</xref>, the court shall award the person reasonable attorney's fees and costs.</subsection></section></part><part number="16-18-12"><catchline>Miscellaneous Provisions</catchline><section number="16-18-1201"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Uniformity of application and construction.</catchline><tab/>In applying and construing this chapter, consideration must be given to the need to promote uniformity of the law with respect to this chapter's subject matter among states that enact the uniform act upon which this chapter is based.</section><section number="16-18-1202"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Severability clause.</catchline><tab/>If any provision of this chapter or this chapter's application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.</section><section number="16-18-1203"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Relation to Electronic Signatures in Global and National Commerce Act.</catchline><tab/>This chapter modifies, limits, and supersedes the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. Sec. 7001 et seq., but this chapter does not modify, limit, or supersede Sec. 101(c) of that act, 15 U.S.C. Sec. 7001(c), or authorize electronic delivery of any of the notices described in Sec. 103(b) of that act, 15 U.S.C. Sec. 7003(b).</section><section number="16-18-1204"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Savings clause.</catchline><tab/>This chapter does not affect an action commenced, proceeding brought, or right accrued before this chapter takes effect.</section><section number="16-18-1205"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Application to existing relationships.</catchline><subsection number="16-18-1205(1)">Before January 1, 2016, this chapter governs only:<subsection number="16-18-1205(1)(a)">a partnership formed on or after January 1, 2014; and</subsection><subsection number="16-18-1205(1)(b)">except as otherwise provided in Subsection <xref depth="4" refnumber="48-1d-1405(3)" start="0">(3)</xref>, a partnership formed before January 1, 2014, which elects, in the manner provided in the partnership's partnership agreement or by law for amending the partnership agreement, to be subject to this chapter.</subsection></subsection><subsection number="16-18-1205(2)">Except as otherwise provided in Subsection <xref depth="4" refnumber="48-1d-1405(3)" start="0">(3)</xref>, on and after January 1, 2016, this chapter governs all partnerships.</subsection><subsection number="16-18-1205(3)">With respect to a partnership that elects pursuant to Subsection <xref depth="4" refnumber="48-1d-1405(1)(b)" start="0">(1)(b)</xref> to be subject to this chapter, after the election takes effect the provisions of this chapter relating to the liability of the partnership's partners to third parties apply:<subsection number="16-18-1205(3)(a)">before January 1, 2016, to:<subsection number="16-18-1205(3)(a)(i)">a third party that had not done business with the partnership in the year before the election took effect; and</subsection><subsection number="16-18-1205(3)(a)(ii)">a third party that had done business with the partnership in the year before the election took effect only if the third party knows or has received a notification of the election; and</subsection></subsection><subsection number="16-18-1205(3)(b)">on and after January 1, 2016, to all third parties, but those provisions remain inapplicable to any obligation incurred while those provisions were inapplicable under Subsection <xref depth="4" refnumber="48-1d-1405(3)(a)(ii)" start="0">(3)(a)(ii)</xref>.</subsection></subsection></section></part></chapter><chapter number="16-19"><catchline>Utah Uniform Limited Partnership Act</catchline><part number="16-19-1"><catchline>General Provisions</catchline><section number="16-19-101"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Definitions.</catchline><tab/>As used in this chapter:<subsection number="16-19-101(1)"><subsection number="16-19-101(1)(a)">"Certificate of limited partnership" means the certificate required by Section <xref depth="3" refnumber="16-19-201">16-19-201</xref>.</subsection><subsection number="16-19-101(1)(b)">"Certificate of limited partnership" includes the certificate as amended or restated.</subsection></subsection><subsection number="16-19-101(2)">"Contribution," except in the phrase "right of contribution," means property or a benefit described in Section <xref depth="3" refnumber="16-19-501">16-19-501</xref> which is provided by a person to a limited partnership to become a partner or in the person's capacity as a partner.</subsection><subsection number="16-19-101(3)">"Debtor in bankruptcy" means a person that is the subject of:<subsection number="16-19-101(3)(a)">an order for relief under Title 11 of the United States Code or a comparable order under a successor statute of general application; or</subsection><subsection number="16-19-101(3)(b)">a comparable order under federal, state, or foreign law governing insolvency.</subsection></subsection><subsection number="16-19-101(4)"><subsection number="16-19-101(4)(a)">"Distribution" means a transfer of money or other property from a limited partnership to a person on account of a transferable interest or in the person's capacity as a partner.</subsection><subsection number="16-19-101(4)(b)">"Distribution" includes:<subsection number="16-19-101(4)(b)(i)">a redemption or other purchase by a limited partnership of a transferable interest; and</subsection><subsection number="16-19-101(4)(b)(ii)">a transfer to a partner in return for the partner's relinquishment of any right to participate as a partner in the management or conduct of the limited partnership's activities and affairs or to have access to records or other information concerning the limited partnership's activities and affairs.</subsection></subsection><subsection number="16-19-101(4)(c)">"Distribution" does not include amounts constituting reasonable compensation for present or past service or payments made in the ordinary course of business under a bona fide retirement plan or other bona fide benefits program.</subsection></subsection><subsection number="16-19-101(5)">"Division" means the Division of Corporations and Commercial Code.</subsection><subsection number="16-19-101(6)">"Foreign limited liability limited partnership" means a foreign limited partnership whose general partners have limited liability for the debts, obligations, or other liabilities of the foreign limited partnership under a provision similar to Subsection <xref refnumber="468-null-3">16-19-404(3)</xref>.</subsection><subsection number="16-19-101(7)"><subsection number="16-19-101(7)(a)">"Foreign limited partnership" means an unincorporated entity formed under the law of a jurisdiction other than this state which would be a limited partnership if formed under the law of this state.</subsection><subsection number="16-19-101(7)(b)">"Foreign limited partnership" includes a foreign limited liability limited partnership.</subsection></subsection><subsection number="16-19-101(8)">"General partner" means a person that:<subsection number="16-19-101(8)(a)">has become a general partner under Section <xref depth="3" refnumber="16-19-401">16-19-401</xref> or was a general partner in a limited partnership when the limited partnership became subject to this chapter under Section <xref depth="3" refnumber="16-19-1005">16-19-1005</xref>; and</subsection><subsection number="16-19-101(8)(b)">has not dissociated as a general partner under Section <xref depth="3" refnumber="16-19-603">16-19-603</xref>.</subsection></subsection><subsection number="16-19-101(9)">"Jurisdiction," used to refer to a political entity, means the United States, a state, a foreign country, or a political subdivision of a foreign country.</subsection><subsection number="16-19-101(10)">"Jurisdiction of formation" means, with respect to an entity, the jurisdiction:<subsection number="16-19-101(10)(a)">under whose law the entity is formed; or</subsection><subsection number="16-19-101(10)(b)">in the case of a limited liability partnership or foreign limited liability partnership, in which the partnership's statement of qualification is filed.</subsection></subsection><subsection number="16-19-101(11)">"Limited liability limited partnership," except in the phrase "foreign limited liability limited partnership," means a limited partnership whose certificate of limited partnership states that the partnership is a limited liability limited partnership.</subsection><subsection number="16-19-101(12)">"Limited partner" means a person that:<subsection number="16-19-101(12)(a)">has become a limited partner under Section <xref depth="3" refnumber="16-19-301">16-19-301</xref> or was a limited partner in a limited partnership when the limited partnership became subject to this chapter under Section <xref depth="3" refnumber="16-19-1005">16-19-1005</xref>; and</subsection><subsection number="16-19-101(12)(b)">has not dissociated under Section <xref depth="3" refnumber="16-19-601">16-19-601</xref>.</subsection></subsection><subsection number="16-19-101(13)"><subsection number="16-19-101(13)(a)">"Limited partnership" means an entity formed under this chapter or which becomes subject to this chapter under:<subsection number="16-19-101(13)(a)(i)">Chapter 1a, Part 7, Merger;</subsection><subsection number="16-19-101(13)(a)(ii)">Chapter 1a, Part 8, Interest Exchange;</subsection><subsection number="16-19-101(13)(a)(iii)">Chapter 1a, Part 9, Conversion;</subsection><subsection number="16-19-101(13)(a)(iv)">Chapter 1a, Part 10, Domestication; or</subsection><subsection number="16-19-101(13)(a)(v)">Section <xref depth="3" refnumber="16-19-1005">16-19-1005</xref>.</subsection></subsection><subsection number="16-19-101(13)(b)">"Limited partnership" includes a limited liability limited partnership.</subsection></subsection><subsection number="16-19-101(14)">"Partner" means a limited partner or general partner.</subsection><subsection number="16-19-101(15)"><subsection number="16-19-101(15)(a)">"Partnership agreement" means the agreement, whether or not referred to as a partnership agreement, and whether oral, implied, in a record, or in any combination thereof, of all the partners of a limited partnership concerning the matters described in Subsection <xref depth="4" refnumber="16-19-107(1)">16-19-107(1)</xref>.</subsection><subsection number="16-19-101(15)(b)">"Partnership agreement" includes the agreement as amended or restated.</subsection></subsection><subsection number="16-19-101(16)">"Person" means an individual, business corporation, nonprofit corporation, partnership, limited partnership, limited liability company, limited cooperative association, unincorporated nonprofit association, statutory trust, business trust, common-law business trust, estate, trust, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.</subsection><subsection number="16-19-101(17)">"Principal office" means the principal executive office of a limited partnership or foreign limited partnership, whether or not the office is located in this state.</subsection><subsection number="16-19-101(18)">"Property" means all property, whether real, personal, or mixed or tangible or intangible, or any right or interest therein.</subsection><subsection number="16-19-101(19)">"Record," used as a noun, means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.</subsection><subsection number="16-19-101(20)">"Registered agent" means an agent of a limited partnership or foreign limited partnership which is authorized to receive service of any process, notice, or demand required or permitted by law to be served on the limited partnership.</subsection><subsection number="16-19-101(21)">"Registered foreign limited partnership" means a foreign limited partnership that is registered to do business in this state pursuant to a statement of registration filed by the division.</subsection><subsection number="16-19-101(22)">"Required information" means the information that a limited partnership is required to maintain under Section <xref depth="3" refnumber="16-19-110">16-19-110</xref>.</subsection><subsection number="16-19-101(23)">"Sign" means, with present intent to authenticate or adopt a record:<subsection number="16-19-101(23)(a)">to execute or adopt a tangible symbol; or</subsection><subsection number="16-19-101(23)(b)">to attach to or logically associate with the record an electronic symbol, sound, or process.</subsection></subsection><subsection number="16-19-101(24)">"State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.</subsection><subsection number="16-19-101(25)">"Transfer" includes:<subsection number="16-19-101(25)(a)">an assignment;</subsection><subsection number="16-19-101(25)(b)">a conveyance;</subsection><subsection number="16-19-101(25)(c)">a sale;</subsection><subsection number="16-19-101(25)(d)">a lease;</subsection><subsection number="16-19-101(25)(e)">an encumbrance, including a mortgage or security interest;</subsection><subsection number="16-19-101(25)(f)">a gift; and</subsection><subsection number="16-19-101(25)(g)">a transfer by operation of law.</subsection></subsection><subsection number="16-19-101(26)"><subsection number="16-19-101(26)(a)">"Transferable interest" means the right, as initially owned by a person in the person's capacity as a partner, to receive distributions from a limited partnership in accordance with the partnership agreement, whether or not the person remains a partner or continues to own any part of the right.</subsection><subsection number="16-19-101(26)(b)">"Transferable interest" applies to any fraction of the interest, by whomever owned.</subsection></subsection><subsection number="16-19-101(27)"><subsection number="16-19-101(27)(a)">"Transferee" means a person to which all or part of a transferable interest has been transferred, whether or not the transferor is a partner.</subsection><subsection number="16-19-101(27)(b)">"Transferee" includes a person that owns a transferable interest under Subsection <xref refnumber="492-null-4">16-19-602(1)(c)</xref> or <xref depth="4" refnumber="16-19-605(1)(d)">16-19-605(1)(d)</xref>.</subsection></subsection><subsection number="16-19-101(28)">"Tribal limited partnership" means a limited partnership:<subsection number="16-19-101(28)(a)">formed under the law of a tribe; and</subsection><subsection number="16-19-101(28)(b)">that is at least 51% owned or controlled by the tribe under whose law the limited partnership is formed.</subsection></subsection><subsection number="16-19-101(29)">"Tribe" means a tribe, band, nation, pueblo, or other organized group or community of Indians, including an Alaska Native village, that is legally recognized as eligible for and is consistent with a special program, service, or entitlement provided by the United States to Indians because of their status as Indians.</subsection></section><section number="16-19-102"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Knowledge -- Notice.</catchline><subsection number="16-19-102(1)">A person knows a fact if the person:<subsection number="16-19-102(1)(a)">has actual knowledge of it; or</subsection><subsection number="16-19-102(1)(b)">is deemed to know it under law other than this chapter.</subsection></subsection><subsection number="16-19-102(2)">A person has notice of a fact if the person:<subsection number="16-19-102(2)(a)">has reason to know the fact from all of the facts known to the person at the time in question; or</subsection><subsection number="16-19-102(2)(b)">is deemed to have notice of the fact under Subsection <xref depth="4" refnumber="48-2e-103(3)" start="0">(3)</xref> or <xref depth="4" refnumber="48-2e-103(4)" start="0">(4)</xref>.</subsection></subsection><subsection number="16-19-102(3)"><subsection number="16-19-102(3)(a)">A certificate of limited partnership on file in the office of the division is notice that the partnership is a limited partnership and the persons designated in the certificate as general partners are general partners.</subsection><subsection number="16-19-102(3)(b)">Except as otherwise provided in Subsection <xref depth="4" refnumber="48-2e-103(4)" start="0">(4)</xref>, the certificate is not notice of any other fact.</subsection></subsection><subsection number="16-19-102(4)">A person not a partner is deemed to have notice of:<subsection number="16-19-102(4)(a)">another person's dissociation as a general partner 90 days after the effective date of an amendment to the certificate of limited partnership which states that the other person has dissociated or 90 days after the effective date of a statement of dissociation pertaining to the other person, whichever occurs first;</subsection><subsection number="16-19-102(4)(b)">a limited partnership's:<subsection number="16-19-102(4)(b)(i)">dissolution 90 days after an amendment to the certificate of limited partnership stating that the limited partnership becomes effective;</subsection><subsection number="16-19-102(4)(b)(ii)">termination 90 days after a statement of termination under Subsection <xref depth="4" refnumber="16-19-802(2)(b)(vi)">16-19-802(2)(b)(vi)</xref> becomes effective;</subsection><subsection number="16-19-102(4)(b)(iii)">participation in a merger, interest exchange, conversion, or domestication 90 days after a statement of merger, interest exchange, conversion, or domestication under Chapter 1a, Part 7, Merger, Chapter 1a, Part 8, Interest Exchange, Chapter 1a, Part 9, Conversion, or Chapter 1a, Part 10, Domestication, becomes effective; and</subsection><subsection number="16-19-102(4)(b)(iv)">abandonment of a merger, interest exchange, conversion, or domestication 90 days after a statement of abandonment of merger, interest exchange, conversion, or domestication under Chapter 1a, Part 7, Merger, Chapter 1a, Part 8, Interest Exchange, Chapter 1a, Part 9, Conversion, or Chapter 1a, Part 10, Domestication, becomes effective.</subsection></subsection></subsection><subsection number="16-19-102(5)">Subject to Subsection <xref depth="3" refnumber="16-1a-211">16-1a-211</xref>, a person notifies another person of a fact by taking steps reasonably required to inform the other person in ordinary course, whether or not those steps cause the other person to know the fact.</subsection><subsection number="16-19-102(6)"><subsection number="16-19-102(6)(a)">A general partner's knowledge or notice of a fact relating to the limited partnership is effective immediately as knowledge of or notice to the limited partnership, except in the case of a fraud on the limited partnership committed by or with the consent of the general partner.</subsection><subsection number="16-19-102(6)(b)">A limited partner's knowledge or notice of a fact relating to the limited partnership is not effective as knowledge of or notice to the limited partnership.</subsection></subsection></section><section number="16-19-103"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Nature, purpose, and duration of limited partnership.</catchline><subsection number="16-19-103(1)"><subsection number="16-19-103(1)(a)">A limited partnership is an entity distinct from the limited partnership's partners.</subsection><subsection number="16-19-103(1)(b)">A limited partnership is the same entity regardless of whether the limited partnership's certificate states that the limited partnership is a limited liability limited partnership.</subsection></subsection><subsection number="16-19-103(2)">A limited partnership may have any lawful purpose, regardless of whether for profit.</subsection><subsection number="16-19-103(3)">A limited partnership has perpetual duration.</subsection></section><section number="16-19-104"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Powers.</catchline><tab/>A limited partnership has the capacity to sue and be sued in the limited partnership's own name and the power to do all things necessary or convenient to carry on the limited partnership's activities and affairs.</section><section number="16-19-105"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Governing law.</catchline><tab/>The law of this state governs:<subsection number="16-19-105(1)">the internal affairs of a limited partnership; and</subsection><subsection number="16-19-105(2)">the liability of a partner as partner for the debts, obligations, or other liabilities of a limited partnership.</subsection></section><section number="16-19-106"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Supplemental principles of law.</catchline><tab/>Unless displaced by particular provisions of this chapter, the principles of law and equity supplement this chapter.</section><section number="16-19-107"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Partnership agreement -- Scope, function, and limitations.</catchline><subsection number="16-19-107(1)">Except as otherwise provided in Subsections <xref depth="4" refnumber="48-2e-112(3)" start="0">(3)</xref> and <xref depth="4" refnumber="48-2e-112(4)" start="0">(4)</xref>, the partnership agreement governs:<subsection number="16-19-107(1)(a)">relations among the partners as partners and between the partners and the limited partnership;</subsection><subsection number="16-19-107(1)(b)">the activities and affairs of the limited partnership and the conduct of those activities and affairs; and</subsection><subsection number="16-19-107(1)(c)">the means and conditions for amending the partnership agreement.</subsection></subsection><subsection number="16-19-107(2)">To the extent the partnership agreement does not provide for a matter described in Subsection <xref depth="4" refnumber="48-2e-112(1)" start="0">(1)</xref>, this chapter governs the matter.</subsection><subsection number="16-19-107(3)">A partnership agreement may not:<subsection number="16-19-107(3)(a)">vary a limited partnership's capacity under Section <xref depth="3" refnumber="16-19-104">16-19-104</xref> to sue and be sued in the limited partnership's own name;</subsection><subsection number="16-19-107(3)(b)">vary the law applicable under Section <xref depth="3" refnumber="16-19-105">16-19-105</xref>;</subsection><subsection number="16-19-107(3)(c)">vary any requirement, procedure, or other provision of this chapter pertaining to:<subsection number="16-19-107(3)(c)(i)">registered agents; or</subsection><subsection number="16-19-107(3)(c)(ii)">the division, including provisions pertaining to records authorized or required to be delivered to the division for filing under this chapter;</subsection></subsection><subsection number="16-19-107(3)(d)">vary the provisions of Section <xref depth="3" refnumber="16-1a-209">16-1a-209</xref>;</subsection><subsection number="16-19-107(3)(e)">vary the right of a general partner under Subsection <xref refnumber="472-null-4">16-19-406(2)(b)</xref> to vote on or consent to an amendment to the certificate of limited partnership which deletes a statement that the limited partnership is a limited liability limited partnership;</subsection><subsection number="16-19-107(3)(f)">eliminate the duty of loyalty or the duty of care except as otherwise provided in Subsection <xref depth="4" refnumber="48-2e-112(4)" start="0">(4)</xref>;</subsection><subsection number="16-19-107(3)(g)">eliminate the contractual obligation of good faith and fair dealing under Subsections <xref refnumber="458-null-1">16-19-305(1)</xref> and <xref depth="4" refnumber="16-19-409(4)">16-19-409(4)</xref>, but the partnership agreement may prescribe the standards, if not unconscionable or against public policy, by which the performance of the obligation is to be measured;</subsection><subsection number="16-19-107(3)(h)">relieve or exonerate a person from liability for conduct involving bad faith, willful misconduct, or recklessness;</subsection><subsection number="16-19-107(3)(i)">vary the information required under Section <xref depth="3" refnumber="16-19-110">16-19-110</xref> or unreasonably restrict the duties and rights under Section <xref depth="3" refnumber="16-19-304">16-19-304</xref> or <xref depth="3" refnumber="16-19-407">16-19-407</xref>, but the partnership agreement may impose reasonable restrictions on the availability and use of information obtained under those sections and may define appropriate remedies, including liquidated damages, for a breach of any reasonable restriction on use;</subsection><subsection number="16-19-107(3)(j)">vary the power of a person to dissociate as a general partner under Subsection <xref depth="4" refnumber="16-19-604(1)">16-19-604(1)</xref> except to require that the notice under Subsection <xref depth="4" refnumber="16-19-603(1)">16-19-603(1)</xref> be in a record;</subsection><subsection number="16-19-107(3)(k)">vary the causes of dissolution specified in Subsection <xref depth="4" refnumber="16-19-801(1)(f)">16-19-801(1)(f)</xref>;</subsection><subsection number="16-19-107(3)(l)">vary the requirement to wind up the limited partnership's activities and affairs as specified in Subsections <xref depth="4" refnumber="16-19-802(1)">16-19-802(1)</xref>, <xref depth="4" refnumber="48-2e-802(2)(a)" start="0">(2)(a)</xref>, and <xref depth="4" refnumber="48-2e-802(4)" start="0">(4)</xref>;</subsection><subsection number="16-19-107(3)(m)">unreasonably restrict the right of a partner to maintain an action under Part 9, Actions by Partners;</subsection><subsection number="16-19-107(3)(n)">vary the provisions of Section <xref depth="3" refnumber="16-19-905">16-19-905</xref>, but the partnership agreement may provide that the limited partnership may not have a special litigation committee;</subsection><subsection number="16-19-107(3)(o)">vary the right of a partner to approve a merger, interest exchange, conversion, or domestication under Section <xref depth="3" refnumber="16-1a-704">16-1a-704</xref>, <xref depth="3" refnumber="16-1a-804">16-1a-804</xref>, <xref depth="3" refnumber="16-1a-904">16-1a-904</xref>, or <xref depth="3" refnumber="16-1a-1004">16-1a-1004</xref>; or</subsection><subsection number="16-19-107(3)(p)">except as otherwise provided in Section <xref depth="3" refnumber="16-19-108">16-19-108</xref> and Subsection <xref depth="4" refnumber="16-19-109(2)">16-19-109(2)</xref>, restrict the rights under this chapter of a person other than a partner.</subsection></subsection><subsection number="16-19-107(4)">Subject to Subsection <xref depth="4" refnumber="48-2e-112(3)(h)" start="0">(3)(h)</xref>, without limiting other terms that may be included in a partnership agreement, the following rules apply:<subsection number="16-19-107(4)(a)">The partnership agreement may specify the method by which a specific act or transaction that would otherwise violate the duty of loyalty may be authorized or ratified by one or more disinterested and independent persons after full disclosure of all material facts.</subsection><subsection number="16-19-107(4)(b)">If not unconscionable or against public policy, the partnership agreement may:<subsection number="16-19-107(4)(b)(i)">alter or eliminate the aspects of the duty of loyalty stated in Subsection <xref depth="4" refnumber="16-19-409(2)">16-19-409(2)</xref>;</subsection><subsection number="16-19-107(4)(b)(ii)">identify specific types or categories of activities that do not violate the duty of loyalty;</subsection><subsection number="16-19-107(4)(b)(iii)">alter the duty of care, but may not authorize intentional misconduct or knowing violation of law; and</subsection><subsection number="16-19-107(4)(b)(iv)">alter or eliminate any other fiduciary duty.</subsection></subsection></subsection><subsection number="16-19-107(5)">The court shall decide as a matter of law whether a term of a partnership agreement is unconscionable or against public policy under Subsection <xref depth="4" refnumber="48-2e-112(3)(g)" start="0">(3)(g)</xref> or <xref depth="4" refnumber="48-2e-112(4)(b)" start="0">(4)(b)</xref>. The court:<subsection number="16-19-107(5)(a)">shall make the court's determination as of the time the challenged term became part of the partnership agreement and by considering only circumstances existing at that time; and</subsection><subsection number="16-19-107(5)(b)">may invalidate the term only if, in light of the purposes, activities, and affairs of the limited partnership, it is readily apparent that:<subsection number="16-19-107(5)(b)(i)">the objective of the term is unconscionable or against public policy; or</subsection><subsection number="16-19-107(5)(b)(ii)">the means to achieve the term's objective is unconscionable or against public policy.</subsection></subsection></subsection></section><section number="16-19-108"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Partnership agreement -- Effect on limited partnership and person becoming partner -- Preformation agreement.</catchline><subsection number="16-19-108(1)">A limited partnership is bound by and may enforce the partnership agreement, whether or not the limited partnership has itself manifested assent to the partnership agreement.</subsection><subsection number="16-19-108(2)">A person that becomes a partner of a limited partnership is deemed to assent to the partnership agreement.</subsection><subsection number="16-19-108(3)">Two or more persons intending to become the initial partners of a limited partnership may make an agreement providing that upon the formation of the limited partnership the agreement will become the limited partnership agreement.</subsection></section><section number="16-19-109"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Partnership agreement -- Effect on third parties and relationship to records effective on behalf of limited partnership.</catchline><subsection number="16-19-109(1)"><subsection number="16-19-109(1)(a)">A partnership agreement may specify that an amendment to the partnership agreement requires the approval of a person that is not a party to the partnership agreement or the satisfaction of a condition.</subsection><subsection number="16-19-109(1)(b)">An amendment is ineffective if the amendment's adoption does not include the required approval or satisfy the specified condition.</subsection></subsection><subsection number="16-19-109(2)"><subsection number="16-19-109(2)(a)">The obligations of a limited partnership and the limited partnership's partners to a person in the person's capacity as a transferee or person dissociated as a partner are governed by the partnership agreement.</subsection><subsection number="16-19-109(2)(b)">Subject only to a court order issued under Subsection <xref depth="4" refnumber="16-19-703(2)(b)">16-19-703(2)(b)</xref> to effectuate a charging order, an amendment to the partnership agreement made after a person becomes a transferee or is dissociated as a partner:<subsection number="16-19-109(2)(b)(i)">is effective with regard to any debt, obligation, or other liability of the limited partnership or the limited partnership's partners to the person in the person's capacity as a transferee or person dissociated as a partner; and</subsection><subsection number="16-19-109(2)(b)(ii)">is not effective to the extent the amendment imposes a new debt, obligation, or other liability on the transferee or person dissociated as a partner.</subsection></subsection></subsection><subsection number="16-19-109(3)">If a record delivered by a limited partnership to the division for filing becomes effective and contains a provision that would be ineffective under Subsection <xref depth="4" refnumber="16-19-107(3)">16-19-107(3)</xref> or <xref depth="4" refnumber="48-2e-112(4)(b)" start="0">(4)(b)</xref> if contained in the partnership agreement, the provision is ineffective in the record.</subsection><subsection number="16-19-109(4)">Subject to Subsection <xref depth="4" refnumber="48-2e-114(3)" start="0">(3)</xref>, if a record delivered by a limited partnership to the division for filing becomes effective and conflicts with a provision of the partnership agreement:<subsection number="16-19-109(4)(a)">the partnership agreement prevails as to partners, persons dissociated as partners, and transferees; and</subsection><subsection number="16-19-109(4)(b)">the record prevails as to other persons to the extent they reasonably rely on the record.</subsection></subsection></section><section number="16-19-110"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Required information.</catchline><tab/>A limited partnership shall maintain at the limited partnership's principal office the following information:<subsection number="16-19-110(1)">a current list showing the full name and last known street and mailing address of each partner, separately identifying the general partners, in alphabetical order, and the limited partners, in alphabetical order;</subsection><subsection number="16-19-110(2)">a copy of the initial certificate of limited partnership and all amendments to and restatements of the certificate, together with signed copies of any powers of attorney under which any certificate, amendment, or restatement has been signed;</subsection><subsection number="16-19-110(3)">a copy of any filed statement of merger, interest exchange, conversion, or domestication;</subsection><subsection number="16-19-110(4)">a copy of the limited partnership's federal, state, and local income tax returns and reports, if any, for the three most recent years;</subsection><subsection number="16-19-110(5)">a copy of any partnership agreement made in a record and any amendment made in a record to any partnership agreement;</subsection><subsection number="16-19-110(6)">a copy of any financial statement of the limited partnership for the three most recent years;</subsection><subsection number="16-19-110(7)">a copy of the three most recent annual reports delivered by the limited partnership to the division pursuant to Section <xref depth="3" refnumber="16-1a-212">16-1a-212</xref>;</subsection><subsection number="16-19-110(8)">a copy of any record made by the limited partnership during the past three years of any consent given by or vote taken of any partner in accordance with this chapter or the partnership agreement; and</subsection><subsection number="16-19-110(9)">unless contained in a partnership agreement made in a record, a record stating:<subsection number="16-19-110(9)(a)">a description and statement of the agreed value of contributions other than money made and agreed to be made by each partner;</subsection><subsection number="16-19-110(9)(b)">the times at which, or events on the happening of which, any additional contributions agreed to be made by each partner are to be made;</subsection><subsection number="16-19-110(9)(c)">for any person that is both a general partner and a limited partner, a specification of what transferable interest the person owns in each capacity; and</subsection><subsection number="16-19-110(9)(d)">any events upon the happening of which the limited partnership is to be dissolved and the limited partnership's activities and affairs wound up.</subsection></subsection></section><section number="16-19-111"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Dual capacity.</catchline><subsection number="16-19-111(1)">A person may be both a general partner and a limited partner.</subsection><subsection number="16-19-111(2)">A person that is both a general and limited partner has the rights, powers, duties, and obligations provided by this chapter and the partnership agreement in each of those capacities.</subsection><subsection number="16-19-111(3)">When the person acts as a general partner, the person is subject to the obligations, duties, and restrictions under this chapter and the partnership agreement for general partners.</subsection><subsection number="16-19-111(4)">When the person acts as a limited partner, the person is subject to the obligations, duties, and restrictions under this chapter and the partnership agreement for limited partners.</subsection></section><section number="16-19-112"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Reservation of power to amend or repeal.</catchline><tab/>The Legislature of this state has power to amend or repeal all or part of this chapter at any time, and all domestic and foreign limited partnerships subject to this chapter are governed by the amendment or repeal.</section><section number="16-19-113"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Provisions Applicable to All Business Entities applicable.</catchline>Chapter 1a, Provisions Applicable to All Business Entities, applies to the provisions of this chapter.</section></part><part number="16-19-2"><catchline>Formation -- Certificate Of Limited Partnership And Other Filings</catchline><section number="16-19-201"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Formation of limited partnership -- Certificate of limited partnership.</catchline><subsection number="16-19-201(1)">To form a limited partnership, a person must deliver a certificate of limited partnership to the division for filing.</subsection><subsection number="16-19-201(2)">The certificate of limited partnership must state:<subsection number="16-19-201(2)(a)">the name of the limited partnership, which must comply with Section <xref depth="3" refnumber="16-1a-302">16-1a-302</xref>;</subsection><subsection number="16-19-201(2)(b)">the street and mailing address of the limited partnership's principal office;</subsection><subsection number="16-19-201(2)(c)">the information required by Section <xref depth="3" refnumber="16-1a-404">16-1a-404</xref>;</subsection><subsection number="16-19-201(2)(d)">the name and the street and mailing addresses of each general partner; and</subsection><subsection number="16-19-201(2)(e)">whether the limited partnership is a limited liability limited partnership.</subsection></subsection><subsection number="16-19-201(3)">A certificate of limited partnership may contain statements as to matters other than those required by Subsection <xref depth="4" refnumber="48-2e-201(2)" start="0">(2)</xref>, but may not vary or otherwise affect the provisions specified in Subsection <xref depth="4" refnumber="16-19-107(3)">16-19-107(3)</xref> in a manner inconsistent with that Subsection <xref depth="4" refnumber="48-2e-201(2)" start="0">(2)</xref>.</subsection><subsection number="16-19-201(4)">A limited partnership is formed when:<subsection number="16-19-201(4)(a)">the certificate of limited partnership has become effective;</subsection><subsection number="16-19-201(4)(b)">at least two persons have become partners;</subsection><subsection number="16-19-201(4)(c)">at least one person has become a general partner; and</subsection><subsection number="16-19-201(4)(d)">at least one person has become a limited partner.</subsection></subsection></section><section number="16-19-202"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Amendment of restatement of certificate of limited partnership.</catchline><subsection number="16-19-202(1)">A certificate of limited partnership may be amended or restated at any time.</subsection><subsection number="16-19-202(2)">To amend a limited partnership's certificate of limited partnership, a limited partnership must deliver to the division for filing an amendment stating:<subsection number="16-19-202(2)(a)">the name of the limited partnership;</subsection><subsection number="16-19-202(2)(b)">the date of filing of the limited partnership's initial certificate of limited partnership; and</subsection><subsection number="16-19-202(2)(c)">the changes the amendment makes to the certificate of limited partnership as most recently amended or restated.</subsection></subsection><subsection number="16-19-202(3)">To restate a limited partnership's certificate of limited partnership, a limited partnership must deliver to the division for filing a restatement designated as such in the restatement's heading.</subsection><subsection number="16-19-202(4)">A limited partnership shall promptly deliver to the division for filing an amendment to a certificate of limited partnership to reflect:<subsection number="16-19-202(4)(a)">the admission of a new general partner;</subsection><subsection number="16-19-202(4)(b)">the dissociation of a person as a general partner; or</subsection><subsection number="16-19-202(4)(c)">the appointment of a person to wind up the limited partnership's activities and affairs under Subsection <xref refnumber="514-null-14">16-19-802(3)</xref> or <xref depth="4" refnumber="48-2e-802(4)" start="0">(4)</xref>.</subsection></subsection><subsection number="16-19-202(5)">If a general partner knows that any information in a filed certificate of limited partnership was inaccurate when the certificate of limited partnership was filed or has become inaccurate due to changed circumstances, the general partner shall promptly:<subsection number="16-19-202(5)(a)">cause the certificate of limited partnership to be amended; or</subsection><subsection number="16-19-202(5)(b)">if appropriate, deliver to the division for filing a statement of change under Section <xref depth="3" refnumber="16-1a-407">16-1a-407</xref> or a statement of correction under Section <xref depth="3" refnumber="16-1a-206">16-1a-206</xref>.</subsection></subsection></section></part><part number="16-19-3"><catchline>Limited Partners</catchline><section number="16-19-301"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Becoming limited partners.</catchline><subsection number="16-19-301(1)">Upon formation of a limited partnership, a person becomes a limited partner as agreed among the persons that are to be the initial partners.</subsection><subsection number="16-19-301(2)">After formation, a person becomes a limited partner:<subsection number="16-19-301(2)(a)">as provided in the partnership agreement;</subsection><subsection number="16-19-301(2)(b)">as the result of a transaction effective under:<subsection number="16-19-301(2)(b)(i)">Chapter 1a, Part 7, Merger;</subsection><subsection number="16-19-301(2)(b)(ii)">Chapter 1a, Part 8, Interest Exchange;</subsection><subsection number="16-19-301(2)(b)(iii)">Chapter 1a, Part 9, Conversion; or</subsection><subsection number="16-19-301(2)(b)(iv)">Chapter 1a, Part 10, Domestication;</subsection></subsection><subsection number="16-19-301(2)(c)">with the affirmative vote or consent of all the partners; or</subsection><subsection number="16-19-301(2)(d)">as provided in Subsection <xref depth="4" refnumber="16-19-801(1)(d)">16-19-801(1)(d)</xref> or <xref depth="4" refnumber="48-2e-801(1)(e)" start="0">(1)(e)</xref>.</subsection></subsection><subsection number="16-19-301(3)">A person may become a partner without:<subsection number="16-19-301(3)(a)">acquiring a transferable interest; or</subsection><subsection number="16-19-301(3)(b)">making or being obligated to make a contribution to the limited partnership.</subsection></subsection></section><section number="16-19-302"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>No agency power of limited partner as limited partner.</catchline><subsection number="16-19-302(1)">A limited partner is not an agent of a limited partnership solely by reason of being a limited partner.</subsection><subsection number="16-19-302(2)">A person's status as a limited partner does not prevent or restrict law other than this chapter from imposing liability on a limited partnership because of the person's conduct.</subsection></section><section number="16-19-303"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>No liability as limited partner for limited partnership obligations.</catchline><subsection number="16-19-303(1)"><subsection number="16-19-303(1)(a)">A debt, obligation, or other liability of a limited partnership is not the debt, obligation, or other liability of a limited partner.</subsection><subsection number="16-19-303(1)(b)">A limited partner is not personally liable, directly or indirectly, by way of contribution or otherwise, for a debt, obligation, or other liability of the limited partnership solely by reason of being or acting as a limited partner, even if the limited partner participates in the management and control of the limited partnership.</subsection></subsection><subsection number="16-19-303(2)">The failure of a limited partnership to observe formalities relating to the exercise of the limited partnership's powers or management of the limited partnership's activities and affairs is not a ground for imposing liability on a limited partner for a debt, obligation, or other liability of the limited partnership.</subsection></section><section number="16-19-304"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Rights to information of limited partner and person dissociated as limited partner.</catchline><subsection number="16-19-304(1)"><subsection number="16-19-304(1)(a)">On 10 days' demand, made in a record received by the limited partnership, a limited partner may inspect and copy required information during regular business hours in the limited partnership's principal office.</subsection><subsection number="16-19-304(1)(b)">The limited partner need not have any particular purpose for seeking the information.</subsection></subsection><subsection number="16-19-304(2)">During regular business hours and at a reasonable location specified by the limited partnership, a limited partner may inspect and copy information regarding the activities, affairs, financial condition, and other circumstances of the limited partnership as is just and reasonable if:<subsection number="16-19-304(2)(a)">the limited partner seeks the information for a purpose reasonably related to the partner's interest as a limited partner;</subsection><subsection number="16-19-304(2)(b)">the limited partner makes a demand in a record received by the limited partnership, describing with reasonable particularity the information sought and the purpose for seeking the information; and</subsection><subsection number="16-19-304(2)(c)">the information sought is directly connected to the limited partner's purpose.</subsection></subsection><subsection number="16-19-304(3)">Not later than 10 days after receiving a demand pursuant to Subsection <xref depth="4" refnumber="48-2e-304(2)" start="0">(2)</xref>, the limited partnership in a record shall inform the limited partner that made the demand of:<subsection number="16-19-304(3)(a)">the information the limited partnership will provide in response to the demand and when and where the limited partnership will provide the information; and</subsection><subsection number="16-19-304(3)(b)">the limited partnership's reasons for declining, if the limited partnership declines to provide any demanded information.</subsection></subsection><subsection number="16-19-304(4)">Whenever this chapter or a partnership agreement provides for a limited partner to vote on or give or withhold consent to a matter, before the vote is cast or consent is given or withheld, the limited partnership shall, without demand, provide the limited partner with all information that is known to the limited partnership and is material to the limited partner's decision.</subsection><subsection number="16-19-304(5)">Subject to Subsection <xref depth="4" refnumber="48-2e-304(10)" start="0">(10)</xref>, on 10 days' demand made in a record received by a limited partnership, a person dissociated as a limited partner may have access to information to which the person was entitled while a limited partner if:<subsection number="16-19-304(5)(a)">the information pertains to the period during which the person was a limited partner;</subsection><subsection number="16-19-304(5)(b)">the person seeks the information in good faith; and</subsection><subsection number="16-19-304(5)(c)">the person satisfies the requirements imposed on a limited partner by Subsection <xref depth="4" refnumber="48-2e-304(2)" start="0">(2)</xref>.</subsection></subsection><subsection number="16-19-304(6)">The limited partnership shall respond to a demand made pursuant to Subsection <xref depth="4" refnumber="48-2e-304(5)" start="0">(5)</xref> in the manner provided in Subsection <xref depth="4" refnumber="48-2e-304(3)" start="0">(3)</xref>.</subsection><subsection number="16-19-304(7)">A limited partnership may charge a person that makes a demand under this section reasonable costs of copying, limited to the costs of labor and material.</subsection><subsection number="16-19-304(8)"><subsection number="16-19-304(8)(a)">A limited partner or person dissociated as a limited partner may exercise the rights under this section through an agent or, in the case of an individual under legal disability, a legal representative.</subsection><subsection number="16-19-304(8)(b)">Any restriction or condition imposed by the partnership agreement or under Subsection <xref depth="4" refnumber="48-2e-304(11)" start="0">(11)</xref> applies both to the agent or legal representative and to the limited partner or person dissociated as a limited partner.</subsection></subsection><subsection number="16-19-304(9)">Subject to Subsection <xref depth="4" refnumber="48-2e-304(10)" start="0">(10)</xref>, the rights under this section do not extend to a person as transferee.</subsection><subsection number="16-19-304(10)">If a limited partner dies, Section <xref depth="3" refnumber="16-19-704">16-19-704</xref> applies.</subsection><subsection number="16-19-304(11)"><subsection number="16-19-304(11)(a)">In addition to any restriction or condition stated in a limited partnership's partnership agreement, a limited partnership, as a matter within the ordinary course of the limited partnership's activities and affairs, may impose reasonable restrictions and conditions on access to and use of information to be furnished under this section, including designating information confidential and imposing nondisclosure and safeguarding obligations on the recipient.</subsection><subsection number="16-19-304(11)(b)">In a dispute concerning the reasonableness of a restriction under this Subsection <xref depth="4" refnumber="48-2e-304(11)" start="0">(11)</xref>, the limited partnership has the burden of proving reasonableness.</subsection></subsection></section><section number="16-19-305"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Limited duties of limited partners.</catchline><subsection number="16-19-305(1)">A limited partner shall discharge any duties to the limited partnership and the other partners under the partnership agreement and exercise any rights under this chapter or the partnership agreement consistently with the contractual obligation of good faith and fair dealing.</subsection><subsection number="16-19-305(2)">Except as otherwise provided in Subsection <xref depth="4" refnumber="48-2e-305(1)" start="0">(1)</xref>, a limited partner does not have any duty to the limited partnership or to any other partner solely by reason of acting as a limited partner.</subsection><subsection number="16-19-305(3)">If a limited partner enters into a transaction with a limited partnership, the limited partner's rights and obligations arising from the transaction are the same as those of a person that is not a partner.</subsection></section><section number="16-19-306"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Person erroneously believing self to be limited partner.</catchline><subsection number="16-19-306(1)">Except as otherwise provided in Subsection <xref depth="4" refnumber="48-2e-306(2)" start="0">(2)</xref>, a person that makes an investment in a business enterprise and erroneously but in good faith believes that the person has become a limited partner in the enterprise is not liable for the enterprise's obligations by reason of making the investment, receiving distributions from the enterprise, or exercising any rights of or appropriate to a limited partner, if, on ascertaining the mistake, the person:<subsection number="16-19-306(1)(a)">causes an appropriate certificate of limited partnership, amendment, or statement of correction to be signed and delivered to the division for filing; or</subsection><subsection number="16-19-306(1)(b)">withdraws from future participation as an owner in the enterprise by signing and delivering to the division for filing a statement of negation under this section.</subsection></subsection><subsection number="16-19-306(2)">A person that makes an investment described in Subsection <xref depth="4" refnumber="48-2e-306(1)" start="0">(1)</xref> is liable to the same extent as a general partner to any third party that enters into a transaction with the enterprise, believing in good faith that the person is a general partner, before the division files a statement of negation, certificate of limited partnership, amendment, or statement of correction to show that the person is not a general partner.</subsection><subsection number="16-19-306(3)">If a person makes a diligent effort in good faith to comply with Subsection <xref depth="4" refnumber="48-2e-306(1)(a)" start="0">(1)(a)</xref> and is unable to cause the appropriate certificate of limited partnership, amendment, or statement of correction to be signed and delivered to the division for filing, the person has the right to withdraw from the enterprise in accordance with Subsection <xref depth="4" refnumber="48-2e-306(1)(b)" start="0">(1)(b)</xref> even if the withdrawal would otherwise breach an agreement with others that are or have agreed to become co-owners of the enterprise.</subsection></section></part><part number="16-19-4"><catchline>General Partners</catchline><section number="16-19-401"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Becoming general partner.</catchline><subsection number="16-19-401(1)">A person becomes a general partner:<subsection number="16-19-401(1)(a)">upon formation of a limited partnership, as agreed among the persons that are to be the initial partners; and</subsection><subsection number="16-19-401(1)(b)">after formation:<subsection number="16-19-401(1)(b)(i)">as provided in the partnership agreement;</subsection><subsection number="16-19-401(1)(b)(ii)">under Subsection <xref depth="4" refnumber="16-19-801(1)(c)(ii)">16-19-801(1)(c)(ii)</xref> following the dissociation of a limited partnership's last general partner;</subsection><subsection number="16-19-401(1)(b)(iii)">as the result of a transaction effective under:<subsection number="16-19-401(1)(b)(iii)(A)">Chapter 1a, Part 7, Merger;</subsection><subsection number="16-19-401(1)(b)(iii)(B)">Chapter 1a, Part 8, Interest Exchange;</subsection><subsection number="16-19-401(1)(b)(iii)(C)">Chapter 1a, Part 9, Conversion; or</subsection><subsection number="16-19-401(1)(b)(iii)(D)">Chapter 1a, Part 10, Domestication; or</subsection></subsection><subsection number="16-19-401(1)(b)(iv)">with the affirmative vote or consent of all the partners.</subsection></subsection></subsection><subsection number="16-19-401(2)">A person may become a general partner without:<subsection number="16-19-401(2)(a)">acquiring a transferable interest; or</subsection><subsection number="16-19-401(2)(b)">making or being obligated to make a contribution to the limited partnership.</subsection></subsection></section><section number="16-19-402"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>General partner agent of limited partnership.</catchline><subsection number="16-19-402(1)"><subsection number="16-19-402(1)(a)">Each general partner is an agent of the limited partnership for the purposes of the limited partnership's activities and affairs.</subsection><subsection number="16-19-402(1)(b)">An act of a general partner, including the signing of a record in the limited partnership's name, for apparently carrying on in the ordinary course the limited partnership's activities and affairs or activities and affairs of the kind carried on by the limited partnership binds the limited partnership, unless the general partner did not have authority to act for the limited partnership in the particular matter and the person with which the general partner was dealing knew or had notice that the general partner lacked authority.</subsection></subsection><subsection number="16-19-402(2)">An act of a general partner which is not apparently for carrying on in the ordinary course the limited partnership's activities and affairs or activities and affairs of the kind carried on by the limited partnership binds the limited partnership only if the act was actually authorized by all the other partners.</subsection></section><section number="16-19-403"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Limited partnership liable for general partner's actionable conduct.</catchline><subsection number="16-19-403(1)">A limited partnership is liable for loss or injury caused to a person, or for a penalty incurred, as a result of a wrongful act or omission, or other actionable conduct, of a general partner acting in the ordinary course of activities and affairs of the limited partnership or with the actual or apparent authority of the limited partnership.</subsection><subsection number="16-19-403(2)">If, in the course of a limited partnership's activities and affairs or while acting with actual or apparent authority of the limited partnership, a general partner receives or causes the limited partnership to receive money or property of a person not a partner, and the money or property is misapplied by a general partner, the limited partnership is liable for the loss.</subsection></section><section number="16-19-404"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>General partner's liability.</catchline><subsection number="16-19-404(1)">Except as otherwise provided in Subsections <xref depth="4" refnumber="48-2e-404(2)" start="0">(2)</xref> and <xref depth="4" refnumber="48-2e-404(3)" start="0">(3)</xref>, all general partners are liable jointly and severally for all debts, obligations, and other liabilities of the limited partnership unless otherwise agreed by the claimant or provided by law.</subsection><subsection number="16-19-404(2)">A person that becomes a general partner of an existing limited partnership is not personally liable for a debt, obligation, or other liability of the limited partnership incurred before the person became a general partner.</subsection><subsection number="16-19-404(3)"><subsection number="16-19-404(3)(a)">A debt, obligation, or other liability of a limited partnership incurred while the limited partnership is a limited liability limited partnership is solely the debt, obligation, or other liability of the limited liability limited partnership.</subsection><subsection number="16-19-404(3)(b)">A general partner is not personally liable, directly or indirectly, by way of contribution or otherwise, for a debt, obligation, or other liability of the limited liability limited partnership solely by reason of being or acting as a general partner.</subsection><subsection number="16-19-404(3)(c)">This Subsection <xref depth="4" refnumber="48-2e-404(3)" start="0">(3)</xref> applies despite anything inconsistent in the partnership agreement that existed immediately before the vote or consent required to become a limited liability limited partnership under Subsection <xref depth="4" refnumber="16-19-406(2)(b)">16-19-406(2)(b)</xref>.</subsection></subsection><subsection number="16-19-404(4)">The failure of a limited liability limited partnership to observe formalities relating to the exercise of the limited liability limited partnership's powers or management of the limited liability limited partnership's activities and affairs is not a ground for imposing liability on a general partner of the limited liability limited partnership for a debt, obligation, or liability of the limited partnership.</subsection><subsection number="16-19-404(5)">An amendment of a certificate of limited partnership which deletes a statement that the limited partnership is a limited liability limited partnership does not affect the limitation in this section on liability of a general partner for a debt, obligation, or other liability of the limited partnership incurred before the amendment became effective.</subsection></section><section number="16-19-405"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Actions by and against partnership and partners.</catchline><subsection number="16-19-405(1)">To the extent not inconsistent with Section <xref depth="3" refnumber="16-19-404">16-19-404</xref>, a general partner may be joined in an action against the limited partnership or named in a separate action.</subsection><subsection number="16-19-405(2)"><subsection number="16-19-405(2)(a)">A judgment against a limited partnership is not by itself a judgment against a general partner.</subsection><subsection number="16-19-405(2)(b)">A judgment against a limited partnership may not be satisfied from a general partner's assets unless there is also a judgment against the general partner.</subsection></subsection><subsection number="16-19-405(3)">A judgment creditor of a general partner may not levy execution against the assets of the general partner to satisfy a judgment based on a claim against the limited partnership, unless the general partner is personally liable for the claim under Section <xref depth="3" refnumber="16-19-404">16-19-404</xref>, and:<subsection number="16-19-405(3)(a)">a judgment based on the same claim has been obtained against the limited partnership and a writ of execution on the judgment has been returned unsatisfied in whole or in part;</subsection><subsection number="16-19-405(3)(b)">the limited partnership is a debtor in bankruptcy;</subsection><subsection number="16-19-405(3)(c)">the general partner has agreed that the creditor need not exhaust limited partnership assets;</subsection><subsection number="16-19-405(3)(d)">a court grants permission to the judgment creditor to levy execution against the assets of a general partner based on a finding that the limited partnership assets subject to execution are clearly insufficient to satisfy the judgment, that exhaustion of assets is excessively burdensome, or that the grant of permission is an appropriate exercise of the court's equitable powers; or</subsection><subsection number="16-19-405(3)(e)">liability is imposed on the general partner by law or contract independent of the existence of the limited partnership.</subsection></subsection></section><section number="16-19-406"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Management rights of general partner.</catchline><subsection number="16-19-406(1)"><subsection number="16-19-406(1)(a)">Each general partner has equal rights in the management and conduct of the limited partnership's activities and affairs.</subsection><subsection number="16-19-406(1)(b)">Except as otherwise provided in this chapter, any matter relating to the activities and affairs of the limited partnership is decided exclusively by the general partner or, if there is more than one general partner, by a majority of the general partners.</subsection></subsection><subsection number="16-19-406(2)">The affirmative vote or consent of all partners is required to:<subsection number="16-19-406(2)(a)">amend the partnership agreement;</subsection><subsection number="16-19-406(2)(b)">amend the certificate of limited partnership to add or delete a statement that the limited partnership is a limited liability limited partnership;</subsection><subsection number="16-19-406(2)(c)">sell, lease, exchange, or otherwise dispose of all, or substantially all, of the limited partnership's property, with or without the good will, other than in the usual and regular course of the limited partnership's activities and affairs; and</subsection><subsection number="16-19-406(2)(d)">approve a transaction under:<subsection number="16-19-406(2)(d)(i)">Chapter 1a, Part 7, Merger;</subsection><subsection number="16-19-406(2)(d)(ii)">Chapter 1a, Part 8, Interest Exchange;</subsection><subsection number="16-19-406(2)(d)(iii)">Chapter 1a, Part 9, Conversion; or</subsection><subsection number="16-19-406(2)(d)(iv)">Chapter 1a, Part 10, Domestication.</subsection></subsection></subsection><subsection number="16-19-406(3)">A limited partnership shall reimburse a general partner for an advance to the limited partnership beyond the amount of capital the general partner agreed to contribute.</subsection><subsection number="16-19-406(4)">A payment or advance made by a general partner which gives rise to an obligation of the limited partnership under Subsection <xref depth="4" refnumber="48-2e-406(3)" start="0">(3)</xref> or Subsection <xref depth="4" refnumber="16-19-408(1)">16-19-408(1)</xref> constitutes a loan to the limited partnership which accrues interest from the date of the payment or advance.</subsection><subsection number="16-19-406(5)">A general partner is not entitled to remuneration for services performed for the limited partnership.</subsection></section><section number="16-19-407"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Rights to information of general partner and person dissociated as general partner.</catchline><subsection number="16-19-407(1)">A general partner may inspect and copy required information during regular business hours in the limited partnership's principal office, without having any particular purpose for seeking the information.</subsection><subsection number="16-19-407(2)">On reasonable notice, a general partner may inspect and copy during regular business hours, at a reasonable location specified by the limited partnership, any record maintained by the limited partnership regarding the limited partnership's activities, affairs, financial condition, and other circumstances, to the extent the information is material to the general partner's rights and duties under the partnership agreement or this chapter.</subsection><subsection number="16-19-407(3)">A limited partnership shall furnish to each general partner:<subsection number="16-19-407(3)(a)">without demand, any information concerning the limited partnership's activities, affairs, financial condition, and other circumstances which the limited partnership knows and are material to the proper exercise of the general partner's rights and duties under the partnership agreement or this chapter, except to the extent the limited partnership can establish that it reasonably believes the general partner already knows the information; and</subsection><subsection number="16-19-407(3)(b)">on demand, any other information concerning the limited partnership's activities, affairs, financial condition, and other circumstances, except to the extent the demand or the information demanded is unreasonable or otherwise improper under the circumstances.</subsection></subsection><subsection number="16-19-407(4)">The duty to furnish information under Subsection <xref depth="4" refnumber="48-2e-407(2)" start="0">(2)</xref> also applies to each general partner to the extent the general partner knows any of the information described in Subsection <xref depth="4" refnumber="48-2e-407(2)" start="0">(2)</xref>.</subsection><subsection number="16-19-407(5)">Subject to Subsection <xref depth="4" refnumber="48-2e-407(8)" start="0">(8)</xref>, on 10 days' demand made in a record received by the limited partnership, a person dissociated as a general partner may have access to the information and records described in Subsections <xref depth="4" refnumber="48-2e-407(1)" start="0">(1)</xref> and <xref depth="4" refnumber="48-2e-407(2)" start="0">(2)</xref> at the locations specified in those subsections if:<subsection number="16-19-407(5)(a)">the information or record pertains to the period during which the person was a general partner;</subsection><subsection number="16-19-407(5)(b)">the person seeks the information or record in good faith; and</subsection><subsection number="16-19-407(5)(c)">the person satisfies the requirements imposed on a limited partner by Subsection <xref refnumber="456-null-2">16-19-304(2)</xref>.</subsection></subsection><subsection number="16-19-407(6)">The limited partnership shall respond to a demand made in accordance with Subsection <xref depth="4" refnumber="48-2e-407(3)" start="0">(3)</xref> in the manner provided in Subsection <xref depth="4" refnumber="16-19-304(3)">16-19-304(3)</xref>.</subsection><subsection number="16-19-407(7)">A limited partnership may charge a person that makes a demand under this section the reasonable costs of copying, limited to the costs of labor and material.</subsection><subsection number="16-19-407(8)"><subsection number="16-19-407(8)(a)">A general partner or person dissociated as a general partner may exercise rights under this section through an agent or, in the case of an individual under legal disability, a legal representative.</subsection><subsection number="16-19-407(8)(b)">Any restriction or condition imposed by the partnership agreement or under Subsection <xref depth="4" refnumber="48-2e-407(9)" start="0">(9)</xref> applies both to the agent or legal representative and the general partner or person dissociated as a general partner.</subsection></subsection><subsection number="16-19-407(9)">The rights under this section do not extend to a person as transferee, but if:<subsection number="16-19-407(9)(a)">a general partner dies, Section <xref depth="3" refnumber="16-19-704">16-19-704</xref> applies; and</subsection><subsection number="16-19-407(9)(b)">an individual dissociates as a general partner under Subsection <xref depth="4" refnumber="16-19-603(7)(b)">16-19-603(7)(b)</xref> or <xref depth="4" refnumber="48-2e-603(7)(c)" start="0">(7)(c)</xref>, the legal representative of the individual may exercise the rights under Subsection <xref depth="4" refnumber="48-2e-407(4)" start="0">(4)</xref> of a person dissociated as a general partner.</subsection></subsection><subsection number="16-19-407(10)"><subsection number="16-19-407(10)(a)">In addition to any restriction or condition stated in the partnership agreement, a limited partnership, as a matter within the ordinary course of the limited partnership's activities and affairs, may impose reasonable restrictions and conditions on access to and use of information to be furnished under this section, including designating information confidential and imposing nondisclosure and safeguarding obligations on the recipient.</subsection><subsection number="16-19-407(10)(b)">In a dispute concerning the reasonableness of a restriction under this Subsection <xref depth="4" refnumber="48-2e-407(10)" start="0">(10)</xref>, the limited partnership has the burden of proving reasonableness.</subsection></subsection></section><section number="16-19-408"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Reimbursement, indemnification, advancement, and insurance.</catchline><subsection number="16-19-408(1)">A limited partnership shall reimburse a general partner for any payment made by the general partner in the course of the general partner's activities on behalf of the limited partnership, if the general partner complied with Sections <xref depth="3" refnumber="16-19-406">16-19-406</xref>, <xref depth="3" refnumber="16-19-409">16-19-409</xref>, and <xref depth="3" refnumber="16-19-504">16-19-504</xref> in making the payment.</subsection><subsection number="16-19-408(2)">A limited partnership shall indemnify and hold harmless a person with respect to any claim or demand against the person and any debt, obligation, or other liability incurred by the person by reason of the person's former or present capacity as a general partner, if the claim, demand, debt, obligation, or other liability does not arise from the person's breach of Section <xref depth="3" refnumber="16-19-406">16-19-406</xref>, <xref depth="3" refnumber="16-19-409">16-19-409</xref>, or <xref depth="3" refnumber="16-19-504">16-19-504</xref>.</subsection><subsection number="16-19-408(3)">In the ordinary course of a limited partnership's activities and affairs, a limited partnership may advance reasonable expenses, including attorney's fees and costs, incurred by a person in connection with a claim or demand against the person by reason of the person's former or present capacity as a general partner, if the person promises to repay the limited partnership if the person ultimately is determined not to be entitled to be indemnified under Subsection <xref depth="4" refnumber="48-2e-408(2)" start="0">(2)</xref>.</subsection><subsection number="16-19-408(4)">A limited partnership may purchase and maintain insurance on behalf of a general partner against liability asserted against or incurred by the general partner in that capacity or arising from that status even if, under Subsection <xref depth="4" refnumber="16-19-107(3)(h)">16-19-107(3)(h)</xref>, the partnership agreement could not eliminate or limit the person's liability to the limited partnership for the conduct giving rise to the liability.</subsection></section><section number="16-19-409"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Standards of conduct for general partners.</catchline><subsection number="16-19-409(1)">A general partner owes to the limited partnership and, subject to Subsection <xref depth="4" refnumber="16-19-901(1)">16-19-901(1)</xref>, the other partners the duties of loyalty and care stated in Subsections <xref depth="4" refnumber="48-2e-409(2)" start="0">(2)</xref> and <xref depth="4" refnumber="48-2e-409(3)" start="0">(3)</xref>.</subsection><subsection number="16-19-409(2)">The duty of loyalty of a general partner includes the duties:<subsection number="16-19-409(2)(a)">to account to the limited partnership and hold as trustee for the limited partnership any property, profit, or benefit derived by the general partner:<subsection number="16-19-409(2)(a)(i)">in the conduct or winding up of the limited partnership's activities and affairs;</subsection><subsection number="16-19-409(2)(a)(ii)">from a use by the general partner of the limited partnership's property; or</subsection><subsection number="16-19-409(2)(a)(iii)">from the appropriation of a limited partnership opportunity;</subsection></subsection><subsection number="16-19-409(2)(b)">to refrain from dealing with the limited partnership in the conduct or winding up of the limited partnership's activities and affairs as or on behalf of a person having an interest adverse to the limited partnership; and</subsection><subsection number="16-19-409(2)(c)">to refrain from competing with the limited partnership in the conduct or winding up of the limited partnership's activities and affairs.</subsection></subsection><subsection number="16-19-409(3)">The duty of care of a general partner in the conduct or winding up of the limited partnership's activities and affairs is to refrain from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law.</subsection><subsection number="16-19-409(4)">A general partner shall discharge the duties and obligations under this chapter or under the partnership agreement and exercise any rights consistently with the contractual obligation of good faith and fair dealing.</subsection><subsection number="16-19-409(5)">A general partner does not violate a duty or obligation under this chapter or under the partnership agreement solely because the general partner's conduct furthers the general partner's own interest.</subsection><subsection number="16-19-409(6)">All the partners of a limited partnership may authorize or ratify, after full disclosure of all material facts, a specific act or transaction by a general partner that otherwise would violate the duty of loyalty.</subsection><subsection number="16-19-409(7)">It is a defense to a claim under Subsection <xref depth="4" refnumber="48-2e-409(2)(b)" start="0">(2)(b)</xref> and any comparable claim in equity or at common law that the transaction was fair to the limited partnership.</subsection><subsection number="16-19-409(8)">If, as permitted by Subsection <xref depth="4" refnumber="48-2e-409(6)" start="0">(6)</xref> or the partnership agreement, a general partner enters into a transaction with the limited partnership which otherwise would be prohibited by Subsection <xref depth="4" refnumber="48-2e-409(2)(b)" start="0">(2)(b)</xref>, the general partner's rights and obligations arising from the transaction are the same as those of a person that is not a general partner.</subsection></section></part><part number="16-19-5"><catchline>Contributions And Distributions</catchline><section number="16-19-501"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Form of contribution.</catchline><tab/>A contribution may consist of property transferred to, services performed for, or another benefit provided to the limited partnership or an agreement to transfer property to, perform services for, or provide another benefit to the limited partnership.</section><section number="16-19-502"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Liability for contribution.</catchline><subsection number="16-19-502(1)">A person's obligation to make a contribution to a limited partnership is not excused by the person's death, disability, dissolution, or other inability to perform personally.</subsection><subsection number="16-19-502(2)">If a person does not fulfill an obligation to make a contribution other than money, the person is obligated at the option of the limited partnership to contribute money equal to the value, as stated in the required information, of the part of the contribution which has not been made.</subsection><subsection number="16-19-502(3)"><subsection number="16-19-502(3)(a)">The obligation of a person to make a contribution may be compromised only by the affirmative vote or consent of all partners.</subsection><subsection number="16-19-502(3)(b)">If a creditor of a limited partnership extends credit or otherwise acts in reliance on an obligation described in Subsection <xref depth="4" refnumber="48-2e-502(1)" start="0">(1)</xref> without notice of any compromise under this subsection, the creditor may enforce the original obligation.</subsection></subsection></section><section number="16-19-503"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Sharing of and right to distributions before dissolution.</catchline><subsection number="16-19-503(1)">Except to the extent necessary to comply with a transfer effective under Section <xref depth="3" refnumber="16-19-702">16-19-702</xref> or charging order in effect under Section <xref depth="3" refnumber="16-19-703">16-19-703</xref>, any distributions made by a limited partnership before the limited partnership's dissolution and winding up must be in equal shares among partners and persons dissociated as partners.</subsection><subsection number="16-19-503(2)">A person has a right to a distribution before the dissolution and winding up of a limited partnership only if the limited partnership decides to make an interim distribution. A person's dissociation does not entitle the person to a distribution.</subsection><subsection number="16-19-503(3)"><subsection number="16-19-503(3)(a)">A person does not have a right to demand or receive a distribution from a limited partnership in any form other than money.</subsection><subsection number="16-19-503(3)(b)">Except as otherwise provided in Subsection <xref depth="4" refnumber="16-19-811(5)">16-19-811(5)</xref>, a partnership may distribute an asset in kind only if each part of the asset is fungible with each other part and each person receives a percentage of the asset equal in value to the person's share of distributions.</subsection></subsection><subsection number="16-19-503(4)"><subsection number="16-19-503(4)(a)">If a partner or transferee becomes entitled to receive a distribution, the partner or transferee has the status of, and is entitled to all remedies available to, a creditor of the limited partnership with respect to the distribution.</subsection><subsection number="16-19-503(4)(b)">However, the limited partnership's obligation to make a distribution is subject to offset for any amount owed to the limited partnership by the partner or a person dissociated as a partner on whose account the distribution is made.</subsection></subsection></section><section number="16-19-504"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Limitations on distributions.</catchline><subsection number="16-19-504(1)">A limited partnership may not make a distribution, including a distribution under Section <xref depth="3" refnumber="16-19-811">16-19-811</xref>, if after the distribution:<subsection number="16-19-504(1)(a)">the limited partnership would not be able to pay the limited partnership's debts as the debts become due in the ordinary course of the limited partnership's activities and affairs; or</subsection><subsection number="16-19-504(1)(b)">the limited partnership's total assets would be less than the sum of the limited partnership's total liabilities plus, unless the partnership agreement permits otherwise, the amount that would be needed, if the limited partnership were to be dissolved and wound up at the time of the distribution, to satisfy the preferential rights upon dissolution and winding up of partners and transferees whose preferential rights are superior to those of persons receiving the distribution.</subsection></subsection><subsection number="16-19-504(2)">A limited partnership may base a determination that a distribution is not prohibited under Subsection <xref depth="4" refnumber="48-2e-504(1)" start="0">(1)</xref> on:<subsection number="16-19-504(2)(a)">financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances; or</subsection><subsection number="16-19-504(2)(b)">a fair valuation or other method that is reasonable under the circumstances.</subsection></subsection><subsection number="16-19-504(3)">Except as otherwise provided in Subsection <xref depth="4" refnumber="48-2e-504(5)" start="0">(5)</xref>, the effect of a distribution under Subsection <xref depth="4" refnumber="48-2e-504(1)" start="0">(1)</xref> is measured:<subsection number="16-19-504(3)(a)">in the case of distribution as defined in Subsection <xref depth="4" refnumber="16-19-101(4)(a)">16-19-101(4)(a)</xref>, as of the earlier of:<subsection number="16-19-504(3)(a)(i)">the date money or other property is transferred or debt is incurred by the limited partnership; or</subsection><subsection number="16-19-504(3)(a)(ii)">the date the person entitled to the distribution ceases to own the interest or right being acquired by the limited partnership in return for the distribution;</subsection></subsection><subsection number="16-19-504(3)(b)">in the case of any other distribution of indebtedness, as of the date the indebtedness is distributed; and</subsection><subsection number="16-19-504(3)(c)">in all other cases, as of the date:<subsection number="16-19-504(3)(c)(i)">the distribution is authorized, if the payment occurs not later than 120 days after that date; or</subsection><subsection number="16-19-504(3)(c)(ii)">the payment is made, if payment occurs more than 120 days after the distribution is authorized.</subsection></subsection></subsection><subsection number="16-19-504(4)">A limited partnership's indebtedness to a partner or transferee incurred by reason of a distribution made in accordance with this section is at parity with the limited partnership's indebtedness to the limited partnership's general, unsecured creditors, except to the extent subordinated by agreement.</subsection><subsection number="16-19-504(5)"><subsection number="16-19-504(5)(a)">A limited partnership's indebtedness, including indebtedness issued as a distribution, is not considered a liability for purposes of Subsection <xref depth="4" refnumber="48-2e-504(1)" start="0">(1)</xref> if the terms of the indebtedness provide that payment of principal and interest is made only if and to the extent that payment of a distribution could then be made under this section.</subsection><subsection number="16-19-504(5)(b)">If the indebtedness is issued as a distribution, each payment of principal or interest is treated as a distribution, the effect of which is measured on the date the payment is made.</subsection></subsection><subsection number="16-19-504(6)">In measuring the effect of a distribution under Section <xref depth="3" refnumber="16-19-811">16-19-811</xref>, the liabilities of a dissolved limited partnership do not include any claim that has been disposed of under Section <xref depth="3" refnumber="16-19-806">16-19-806</xref>, <xref depth="3" refnumber="16-19-807">16-19-807</xref>, or <xref depth="3" refnumber="16-19-808">16-19-808</xref>.</subsection></section><section number="16-19-505"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Liability for improper distributions.</catchline><subsection number="16-19-505(1)">If a general partner consents to a distribution made in violation of Section <xref depth="3" refnumber="16-19-504">16-19-504</xref> and in consenting to the distribution fails to comply with Section <xref depth="3" refnumber="16-19-409">16-19-409</xref>, the general partner is personally liable to the limited partnership for the amount of the distribution which exceeds the amount that could have been distributed without the violation of Section <xref depth="3" refnumber="16-19-504">16-19-504</xref>.</subsection><subsection number="16-19-505(2)">A person that receives a distribution knowing that the distribution violated Section <xref depth="3" refnumber="16-19-504">16-19-504</xref> is personally liable to the limited partnership but only to the extent that the distribution received by the person exceeded the amount that could have been properly paid under Section <xref depth="3" refnumber="16-19-504">16-19-504</xref>.</subsection><subsection number="16-19-505(3)">A general partner against which an action is commenced because the general partner is liable under Subsection <xref depth="4" refnumber="48-2e-505(1)" start="0">(1)</xref> may:<subsection number="16-19-505(3)(a)">implead any other person that is liable under Subsection <xref depth="4" refnumber="48-2e-505(1)" start="0">(1)</xref> and seek to enforce a right of contribution from the person; and</subsection><subsection number="16-19-505(3)(b)">implead any person that received a distribution in violation of Subsection <xref depth="4" refnumber="48-2e-505(2)" start="0">(2)</xref> and seek to enforce a right of contribution from the person in the amount the person received in violation of Subsection <xref depth="4" refnumber="48-2e-505(2)" start="0">(2)</xref>.</subsection></subsection><subsection number="16-19-505(4)">An action under this section is barred unless commenced not later than two years after the distribution.</subsection></section></part><part number="16-19-6"><catchline>Dissociation</catchline><section number="16-19-601"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Dissociation as limited partner.</catchline><subsection number="16-19-601(1)">A person does not have a right to dissociate as a limited partner before the completion of the winding up of the limited partnership.</subsection><subsection number="16-19-601(2)">A person is dissociated as a limited partner when:<subsection number="16-19-601(2)(a)">the limited partnership has notice of the person's express will to withdraw as a limited partner, but, if the person specified a withdrawal date later than the date the limited partnership had notice, on that later date;</subsection><subsection number="16-19-601(2)(b)">an event stated in the partnership agreement as causing the person's dissociation as a limited partner occurs;</subsection><subsection number="16-19-601(2)(c)">the person is expelled as a limited partner pursuant to the partnership agreement;</subsection><subsection number="16-19-601(2)(d)">the person is expelled as a limited partner by the unanimous vote or consent of the other partners if:<subsection number="16-19-601(2)(d)(i)">it is unlawful to carry on the limited partnership's activities and affairs with the person as a limited partner;</subsection><subsection number="16-19-601(2)(d)(ii)">there has been a transfer of all of the person's transferable interest in the limited partnership, other than:<subsection number="16-19-601(2)(d)(ii)(A)">a transfer for security purposes; or</subsection><subsection number="16-19-601(2)(d)(ii)(B)">a charging order in effect under Section <xref depth="3" refnumber="16-19-703">16-19-703</xref> which has not been foreclosed;</subsection></subsection><subsection number="16-19-601(2)(d)(iii)">the person is a corporation and:<subsection number="16-19-601(2)(d)(iii)(A)">the limited partnership notifies the person that the person will be expelled as a limited partner because the person has filed a statement of dissolution or the equivalent, the person's charter has been revoked, or the person's right to conduct business has been suspended by the jurisdiction of the person's incorporation; and</subsection><subsection number="16-19-601(2)(d)(iii)(B)">not later than 90 days after the notification the statement of dissolution or the equivalent has not been revoked or the person's charter or right to conduct business has not been reinstated; or</subsection></subsection><subsection number="16-19-601(2)(d)(iv)">the person is an unincorporated entity that has been dissolved and whose business is being wound up;</subsection></subsection><subsection number="16-19-601(2)(e)">on application by the limited partnership, the person is expelled as a limited partner by judicial order because the person:<subsection number="16-19-601(2)(e)(i)">has engaged or is engaging in wrongful conduct that has affected adversely and materially, or will affect adversely and materially, the limited partnership's activities and affairs;</subsection><subsection number="16-19-601(2)(e)(ii)">has committed willfully or persistently, or is committing willfully or persistently, a material breach of the partnership agreement or the contractual obligation of good faith and fair dealing under Subsection <xref depth="4" refnumber="16-19-305(1)">16-19-305(1)</xref>; or</subsection><subsection number="16-19-601(2)(e)(iii)">has engaged or is engaging in conduct relating to the limited partnership's activities and affairs which makes it not reasonably practicable to carry on the activities and affairs with the person as a limited partner;</subsection></subsection><subsection number="16-19-601(2)(f)">in the case of a person who is an individual, the individual dies;</subsection><subsection number="16-19-601(2)(g)">in the case of a person that is a testamentary or inter vivos trust or is acting as a limited partner by virtue of being a trustee of such a trust, the trust's entire transferable interest in the limited partnership is distributed;</subsection><subsection number="16-19-601(2)(h)">in the case of a person that is an estate or is acting as a limited partner by virtue of being a personal representative of an estate, the estate's entire transferable interest in the limited partnership is distributed;</subsection><subsection number="16-19-601(2)(i)">in the case of a person that is not an individual, corporation, unincorporated entity, trust, or estate, the existence of the person terminates;</subsection><subsection number="16-19-601(2)(j)">the limited partnership participates in a merger under Chapter 1a, Part 7, Merger, and:<subsection number="16-19-601(2)(j)(i)">the limited partnership is not the surviving entity; or</subsection><subsection number="16-19-601(2)(j)(ii)">otherwise as a result of the merger, the person ceases to be a limited partner;</subsection></subsection><subsection number="16-19-601(2)(k)">the limited partnership participates in an interest exchange under Chapter 1a, Part 8, Interest Exchange, and as a result of the interest exchange, the person ceases to be a limited partner;</subsection><subsection number="16-19-601(2)(l)">the limited partnership participates in a conversion under Chapter 1a, Part 9, Conversion;</subsection><subsection number="16-19-601(2)(m)">the limited partnership participates in a domestication under Chapter 1a, Part 10, Domestication, and as a result of the domestication, the person ceases to be a limited partner; or</subsection><subsection number="16-19-601(2)(n)">the limited partnership dissolves and completes winding up.</subsection></subsection></section><section number="16-19-602"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Effect of dissociation as limited partner.</catchline><subsection number="16-19-602(1)">If a person is dissociated as a limited partner:<subsection number="16-19-602(1)(a)">subject to Section <xref depth="3" refnumber="16-19-704">16-19-704</xref>, the person does not have further rights as a limited partner;</subsection><subsection number="16-19-602(1)(b)">the person's contractual obligation of good faith and fair dealing as a limited partner under Subsection <xref depth="4" refnumber="16-19-305(1)">16-19-305(1)</xref> ends with regard to matters arising and events occurring after the person's dissociation; and</subsection><subsection number="16-19-602(1)(c)">subject to Section <xref depth="3" refnumber="16-19-704">16-19-704</xref> and Chapter 1a, Part 7, Merger, Chapter 1a, Part 8, Interest Exchange, Chapter 1a, Part 9, Conversion, or Chapter 1a, Part 10, Domestication, any transferable interest owned by the person in the person's capacity as a limited partner immediately before dissociation is owned by the person solely as a transferee.</subsection></subsection><subsection number="16-19-602(2)">A person's dissociation as a limited partner does not of itself discharge the person from any debt, obligation, or other liability to the limited partnership or the other partners which the person incurred while a limited partner.</subsection></section><section number="16-19-603"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Dissociation as general partner.</catchline><tab/>A person is dissociated as a general partner when:<subsection number="16-19-603(1)">the limited partnership has notice of the person's express will to withdraw as a general partner, but, if the person specifies a withdrawal date later than the date the limited partnership had notice, on that later date;</subsection><subsection number="16-19-603(2)">an event stated in the partnership agreement as causing the person's dissociation as a general partner occurs;</subsection><subsection number="16-19-603(3)">the person is expelled as a general partner pursuant to the partnership agreement;</subsection><subsection number="16-19-603(4)">the person is expelled as a general partner by the unanimous vote or consent of the other partners if:<subsection number="16-19-603(4)(a)">it is unlawful to carry on the limited partnership's activities and affairs with the person as a general partner;</subsection><subsection number="16-19-603(4)(b)">there has been a transfer of all of the person's transferable interest in the limited partnership, other than:<subsection number="16-19-603(4)(b)(i)">a transfer for security purposes; or</subsection><subsection number="16-19-603(4)(b)(ii)">a charging order in effect under Section <xref depth="3" refnumber="16-19-703">16-19-703</xref> which has not been foreclosed;</subsection></subsection><subsection number="16-19-603(4)(c)">the person is a corporation, and:<subsection number="16-19-603(4)(c)(i)">the limited partnership notifies the person that the person will be expelled as a general partner because the person has filed a statement of dissolution or the equivalent, the person's charter has been revoked, or the person's right to conduct business has been suspended by the jurisdiction of the person's incorporation; and</subsection><subsection number="16-19-603(4)(c)(ii)">not later than 90 days after the notification of the statement of dissolution or the equivalent has not been revoked or the person's charter or right to conduct business has not been reinstated; or</subsection></subsection><subsection number="16-19-603(4)(d)">the person is an unincorporated entity that has been dissolved and whose business is being wound up;</subsection></subsection><subsection number="16-19-603(5)">on application by the limited partnership or a partner in a direct action under Section <xref depth="3" refnumber="16-19-901">16-19-901</xref>, the person is expelled as a general partner by judicial order because the person:<subsection number="16-19-603(5)(a)">has engaged or is engaging in wrongful conduct that has affected adversely and materially, or will affect adversely and materially, the limited partnership's activities and affairs;</subsection><subsection number="16-19-603(5)(b)">has committed willfully or persistently, or is committing willfully or persistently, a material breach of the partnership agreement or a duty or obligation under Section <xref depth="3" refnumber="16-19-409">16-19-409</xref>; or</subsection><subsection number="16-19-603(5)(c)">has engaged or is engaging in conduct relating to the limited partnership's activities and affairs which makes it not reasonably practicable to carry on the activities or affairs of the limited partnership with the person as a general partner;</subsection></subsection><subsection number="16-19-603(6)">in the case of a person who is an individual:<subsection number="16-19-603(6)(a)">the individual dies;</subsection><subsection number="16-19-603(6)(b)">a guardian or general conservator for the individual is appointed; or</subsection><subsection number="16-19-603(6)(c)">a court orders that the individual has otherwise become incapable of performing the individual's duties as a general partner under this chapter or the partnership agreement;</subsection></subsection><subsection number="16-19-603(7)">the person:<subsection number="16-19-603(7)(a)">becomes a debtor in bankruptcy;</subsection><subsection number="16-19-603(7)(b)">executes an assignment for the benefit of creditors; or</subsection><subsection number="16-19-603(7)(c)">seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator of the person or of all or substantially all of the person's property;</subsection></subsection><subsection number="16-19-603(8)">in the case of a person that is a testamentary or inter vivos trust or is acting as a general partner by virtue of being a trustee of such a trust, the trust's entire transferable interest in the limited partnership is distributed;</subsection><subsection number="16-19-603(9)">in the case of a person that is an estate or is acting as a general partner by virtue of being a personal representative of an estate, the estate's entire transferable interest in the limited partnership is distributed;</subsection><subsection number="16-19-603(10)">in the case of a person that is not an individual, corporation, unincorporated entity, trust, or estate, the existence of the person terminates;</subsection><subsection number="16-19-603(11)">the limited partnership participates in a merger under Chapter 1a, Part 7, Merger, and:<subsection number="16-19-603(11)(a)">the limited partnership is not the surviving entity; or</subsection><subsection number="16-19-603(11)(b)">otherwise as a result of the merger, the person ceases to be a general partner;</subsection></subsection><subsection number="16-19-603(12)">the limited partnership participates in an interest exchange under Chapter 1a, Part 8, Interest Exchange, and, as a result of the interest exchange, the person ceases to be a general partner;</subsection><subsection number="16-19-603(13)">the limited partnership participates in a conversion under Chapter 1a, Part 9, Conversion;</subsection><subsection number="16-19-603(14)">the limited partnership participates in a domestication under Chapter 1a, Part 10, Domestication, and, as a result of the domestication, the person ceases to be a general partner; or</subsection><subsection number="16-19-603(15)">the limited partnership dissolves and completes winding up.</subsection></section><section number="16-19-604"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Power to dissociate as general partner -- Wrongful dissociation.</catchline><subsection number="16-19-604(1)">A person has the power to dissociate as a general partner at any time, rightfully or wrongfully, by withdrawing as a general partner by express will under Subsection <xref refnumber="494-null-1">16-19-603(1)</xref>.</subsection><subsection number="16-19-604(2)">A person's dissociation as a general partner is wrongful only if the dissociation:<subsection number="16-19-604(2)(a)">is in breach of an express provision of the partnership agreement; or</subsection><subsection number="16-19-604(2)(b)">occurs before the completion of the winding up of the limited partnership, and:<subsection number="16-19-604(2)(b)(i)">the person withdraws as a general partner by express will;</subsection><subsection number="16-19-604(2)(b)(ii)">the person is expelled as a general partner by judicial order under Subsection <xref refnumber="494-null-13">16-19-603(5)</xref>;</subsection><subsection number="16-19-604(2)(b)(iii)">the person is dissociated as a general partner under Subsection <xref depth="4" refnumber="16-19-603(7)">16-19-603(7)</xref>; or</subsection><subsection number="16-19-604(2)(b)(iv)">in the case of a person that is not a trust other than a business trust, an estate, or an individual, the person is expelled or otherwise dissociated as a general partner because it willfully dissolved or terminated.</subsection></subsection></subsection><subsection number="16-19-604(3)"><subsection number="16-19-604(3)(a)">A person that wrongfully dissociates as a general partner is liable to the limited partnership and, subject to Section <xref depth="3" refnumber="16-19-901">16-19-901</xref>, to the other partners for damages caused by the dissociation.</subsection><subsection number="16-19-604(3)(b)">The liability is in addition to any debt, obligation, or other liability of the general partner to the limited partnership or the other partners.</subsection></subsection></section><section number="16-19-605"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Effect of dissociation as general partner.</catchline><subsection number="16-19-605(1)">If a person is dissociated as a general partner:<subsection number="16-19-605(1)(a)">the person's right to participate as a general partner in the management and conduct of the limited partnership's activities and affairs terminates;</subsection><subsection number="16-19-605(1)(b)">the person's duties and obligations as a general partner under Section <xref depth="3" refnumber="16-19-409">16-19-409</xref> end with regard to matters arising and events occurring after the person's dissociation;</subsection><subsection number="16-19-605(1)(c)">the person may sign and deliver to the division for filing a statement of dissociation pertaining to the person and, at the request of the limited partnership, shall sign an amendment to the certificate of limited partnership which states that the person has dissociated as a general partner; and</subsection><subsection number="16-19-605(1)(d)">subject to Section <xref depth="3" refnumber="16-19-704">16-19-704</xref> and Chapter 1a, Part 7, Merger, Chapter 1a, Part 8, Interest Exchange, Chapter 1a, Part 9, Conversion, or Chapter 1a, Part 10, Domestication, any transferable interest owned by the person immediately before dissociation in the person's capacity as a general partner is owned by the person solely as a transferee.</subsection></subsection><subsection number="16-19-605(2)">A person's dissociation as a general partner does not of itself discharge the person from any debt, obligation, or other liability to the limited partnership or the other partners which the person incurred while a general partner.</subsection></section><section number="16-19-606"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Power to bind and liability of person dissociated as general partner.</catchline><subsection number="16-19-606(1)">After a person is dissociated as a general partner and before the limited partnership is merged out of existence, converted, or domesticated under Chapter 1a, Part 7, Merger, Chapter 1a, Part 8, Interest Exchange, Chapter 1a, Part 9, Conversion, or Chapter 1a, Part 10, Domestication, or dissolved, the limited partnership is bound by an act of the person only if:<subsection number="16-19-606(1)(a)">the act would have bound the limited partnership under Section <xref depth="3" refnumber="16-19-402">16-19-402</xref> before the dissociation; and</subsection><subsection number="16-19-606(1)(b)">at the time the other party enters into the transaction:<subsection number="16-19-606(1)(b)(i)">less than two years has passed since the dissociation; and</subsection><subsection number="16-19-606(1)(b)(ii)">the other party does not know or have notice of the dissociation and reasonably believes that the person is a general partner.</subsection></subsection></subsection><subsection number="16-19-606(2)">If a limited partnership is bound under Subsection <xref depth="4" refnumber="48-2e-606(1)" start="0">(1)</xref>, the person dissociated as a general partner which caused the limited partnership to be bound is liable:<subsection number="16-19-606(2)(a)">to the limited partnership for any damage caused to the limited partnership arising from the obligation incurred under Subsection <xref depth="4" refnumber="48-2e-606(1)" start="0">(1)</xref>; and</subsection><subsection number="16-19-606(2)(b)">if a general partner or another person dissociated as a general partner is liable for the obligation, to the general partner or other person for any damage caused to the general partner or other person arising from the liability.</subsection></subsection></section><section number="16-19-607"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Liability to other persons of person dissociated as general partner.</catchline><subsection number="16-19-607(1)"><subsection number="16-19-607(1)(a)">A person's dissociation as a general partner does not of itself discharge the person's liability as a general partner for a debt, obligation, or other liability of the limited partnership incurred before dissociation.</subsection><subsection number="16-19-607(1)(b)">Except as otherwise provided in Subsections <xref depth="4" refnumber="48-2e-607(2)" start="0">(2)</xref> and <xref depth="4" refnumber="48-2e-607(3)" start="0">(3)</xref>, the person is not liable for a limited partnership obligation incurred after dissociation.</subsection></subsection><subsection number="16-19-607(2)">A person whose dissociation as a general partner resulted in a dissolution and winding up of the limited partnership's activities and affairs is liable to the same extent as a general partner under Section <xref depth="3" refnumber="16-19-404">16-19-404</xref> on an obligation incurred by the limited partnership under Section <xref depth="3" refnumber="16-19-804">16-19-804</xref>.</subsection><subsection number="16-19-607(3)">A person that has dissociated as a general partner but whose dissociation did not result in a dissolution and winding up of the limited partnership's activities and affairs is liable on a transaction entered into by the limited partnership after the dissociation only if:<subsection number="16-19-607(3)(a)">a general partner would be liable on the transaction; and</subsection><subsection number="16-19-607(3)(b)">at the time the other party enters into the transaction:<subsection number="16-19-607(3)(b)(i)">less than two years has passed since the dissociation; and</subsection><subsection number="16-19-607(3)(b)(ii)">the other party does not have knowledge or notice of the dissociation and reasonably believes that the person is a general partner.</subsection></subsection></subsection><subsection number="16-19-607(4)">By agreement with a creditor of a limited partnership and the limited partnership, a person dissociated as a general partner may be released from liability for an obligation of the limited partnership.</subsection><subsection number="16-19-607(5)">A person dissociated as a general partner is released from liability for an obligation of the limited partnership if the limited partnership's creditor, with knowledge or notice of the person's dissociation as a general partner but without the person's consent, agrees to a material alteration in the nature or time of payment of the obligation.</subsection></section></part><part number="16-19-7"><catchline>Transferable Interest And Rights</catchline><section number="16-19-701"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Nature of transferable interest.</catchline><tab/><subsection number="16-19-701(1)">The only interest of a partner which is transferable is the partner's transferable interest.</subsection><subsection number="16-19-701(2)">A transferable interest is personal property.</subsection></section><section number="16-19-702"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Transfer of transferable interest.</catchline><subsection number="16-19-702(1)">A transfer, in whole or in part, of a transferable interest:<subsection number="16-19-702(1)(a)">is permissible;</subsection><subsection number="16-19-702(1)(b)">does not by itself cause the person's dissociation or a dissolution and winding up of the limited partnership's activities and affairs; and</subsection><subsection number="16-19-702(1)(c)">subject to Section <xref depth="3" refnumber="16-19-704">16-19-704</xref>, does not entitle the transferee to:<subsection number="16-19-702(1)(c)(i)">participate in the management or conduct of the limited partnership's activities or affairs; or</subsection><subsection number="16-19-702(1)(c)(ii)">except as otherwise provided in Subsection <xref depth="4" refnumber="48-2e-702(3)" start="0">(3)</xref>, have access to required information, records, or other information concerning the limited partnership's activities and affairs.</subsection></subsection></subsection><subsection number="16-19-702(2)">A transferee has the right to receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled.</subsection><subsection number="16-19-702(3)">In a dissolution and winding up of a limited partnership, a transferee is entitled to an account of the limited partnership's transactions only from the date of dissolution.</subsection><subsection number="16-19-702(4)">A transferable interest may be evidenced by a certificate of the interest issued by a limited partnership in a record, and, subject to this section, the interest represented by the certificate may be transferred by a transfer of the certificate.</subsection><subsection number="16-19-702(5)">A limited partnership need not give effect to a transferee's rights under this section until the limited partnership knows or has notice of the transfer.</subsection><subsection number="16-19-702(6)">A transfer of a transferable interest in violation of a restriction on transfer contained in the partnership agreement is ineffective as to a person having knowledge or notice of the restriction at the time of transfer.</subsection><subsection number="16-19-702(7)">Except as otherwise provided in Subsections <xref depth="4" refnumber="16-19-601(2)(d)(ii)">16-19-601(2)(d)(ii)</xref> and <xref depth="4" refnumber="16-19-603(4)(b)">16-19-603(4)(b)</xref>, if a general or limited partner transfers a transferable interest, the transferor retains the rights of a general or limited partner other than the transferable interest transferred and retains all the duties and obligations of a general or limited partner.</subsection><subsection number="16-19-702(8)">If a general or limited partner transfers a transferable interest to a person that becomes a general or limited partner with respect to the transferred interest, the transferee is liable for the transferor's obligations under Sections <xref depth="3" refnumber="16-19-502">16-19-502</xref> and <xref depth="3" refnumber="16-19-505">16-19-505</xref> known to the transferee when the transferee becomes a partner.</subsection></section><section number="16-19-703"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Charging order.</catchline><subsection number="16-19-703(1)"><subsection number="16-19-703(1)(a)">On application by a judgment creditor of a partner or transferee, a court may enter a charging order against the transferable interest of the judgment debtor for the unsatisfied amount of the judgment.</subsection><subsection number="16-19-703(1)(b)">A charging order constitutes a lien on a judgment debtor's transferable interest and, after the limited partnership has been served with the charging order, requires the limited partnership to pay over to the person to which the charging order was issued any distribution that otherwise would be paid to the judgment debtor.</subsection></subsection><subsection number="16-19-703(2)">To the extent necessary to effectuate the collection of distributions pursuant to a charging order in effect under Subsection <xref depth="4" refnumber="48-2e-703(1)" start="0">(1)</xref>, the court may:<subsection number="16-19-703(2)(a)">appoint a receiver of the distributions subject to the charging order, with the power to make all inquiries the judgment debtor might have made; and</subsection><subsection number="16-19-703(2)(b)">make all other orders necessary to give effect to the charging order.</subsection></subsection><subsection number="16-19-703(3)"><subsection number="16-19-703(3)(a)">Upon a showing that distributions under a charging order will not pay the judgment debt within a reasonable time, the court may foreclose the lien and order the sale of the transferable interest.</subsection><subsection number="16-19-703(3)(b)">The purchaser at the foreclosure sale obtains only the transferable interest, does not thereby become a partner, and is subject to Section <xref depth="3" refnumber="16-19-702">16-19-702</xref>.</subsection></subsection><subsection number="16-19-703(4)">At any time before foreclosure under Subsection <xref depth="4" refnumber="48-2e-703(3)" start="0">(3)</xref>, the partner or transferee whose transferable interest is subject to a charging order under Subsection <xref depth="4" refnumber="48-2e-703(1)" start="0">(1)</xref> may extinguish the charging order by satisfying the judgment and filing a certified copy of the satisfaction with the court that issued the charging order.</subsection><subsection number="16-19-703(5)">At any time before foreclosure under Subsection <xref depth="4" refnumber="48-2e-703(3)" start="0">(3)</xref>, a limited partnership or one or more partners whose transferable interests are not subject to the charging order may pay to the judgment creditor the full amount due under the judgment and thereby succeed to the rights of the judgment creditor, including the charging order.</subsection><subsection number="16-19-703(6)">This chapter does not deprive any partner or transferee of the benefit of any exemption law applicable to the transferable interest of the partner or transferee.</subsection><subsection number="16-19-703(7)">This section provides the exclusive remedy by which a person seeking to enforce a judgment against a partner or transferee may, in the capacity of judgment creditor, satisfy the judgment from the judgment debtor's transferable interest.</subsection></section><section number="16-19-704"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Power of legal representative of deceased partner.</catchline><tab/>If a partner dies, the deceased partner's legal representative may exercise:<subsection number="16-19-704(1)">the rights of a transferee provided in Subsection <xref depth="4" refnumber="16-19-702(3)">16-19-702(3)</xref>; and</subsection><subsection number="16-19-704(2)">for the purposes of settling the estate, the rights of a current limited partner under Section <xref depth="3" refnumber="16-19-304">16-19-304</xref>.</subsection></section></part><part number="16-19-8"><catchline>Dissolution And Winding Up</catchline><section number="16-19-801"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Events causing dissolution.</catchline><subsection number="16-19-801(1)">A limited partnership is dissolved, and the limited partnership's activities and affairs must be wound up, upon the occurrence of any of the following:<subsection number="16-19-801(1)(a)">an event or circumstance that the partnership agreement states causes dissolution;</subsection><subsection number="16-19-801(1)(b)">the affirmative vote or consent of all general partners and of limited partners owning a majority of the rights to receive distributions as limited partners at the time the vote or consent is to be effective;</subsection><subsection number="16-19-801(1)(c)">after the dissociation of a person as a general partner:<subsection number="16-19-801(1)(c)(i)">if the limited partnership has at least one remaining general partner, the vote or consent to dissolve the limited partnership not later than 90 days after the dissociation by partners owning a majority of the rights to receive distributions as partners at the time the vote or consent is to be effective; or</subsection><subsection number="16-19-801(1)(c)(ii)">if the limited partnership does not have a remaining general partner, the passage of 90 days after the dissociation, unless before the end of the period:<subsection number="16-19-801(1)(c)(ii)(A)">consent to continue the activities and affairs of the limited partnership and admit at least one general partner is given by limited partners owning a majority of the rights to receive distributions as limited partners at the time the consent is to be effective; and</subsection><subsection number="16-19-801(1)(c)(ii)(B)">at least one person is admitted as a general partner in accordance with the consent;</subsection></subsection></subsection><subsection number="16-19-801(1)(d)">the passage of 90 consecutive days after the dissociation of the limited partnership's last limited partner, unless before the end of the period the limited partnership admits at least one limited partner;</subsection><subsection number="16-19-801(1)(e)">the passage of 90 consecutive days during which the limited partnership has only one partner, unless before the end of the period:<subsection number="16-19-801(1)(e)(i)">the limited partnership admits at least one person as a partner;</subsection><subsection number="16-19-801(1)(e)(ii)">if the previously sole remaining partner is only a general partner, the limited partnership admits the person as a limited partner; and</subsection><subsection number="16-19-801(1)(e)(iii)">if the previously sole remaining partner is only a limited partner, the limited partnership admits a person as a general partner;</subsection></subsection><subsection number="16-19-801(1)(f)">upon a petition brought by a partner, the entry of a court order dissolving the limited partnership on the grounds that:<subsection number="16-19-801(1)(f)(i)">the conduct of all or substantially all the limited partnership's activities and affairs is unlawful; or</subsection><subsection number="16-19-801(1)(f)(ii)">it is not reasonably practicable to carry on the limited partnership's activities and affairs in conformity with the partnership agreement; or</subsection></subsection><subsection number="16-19-801(1)(g)">the signing and filing of a statement of administrative dissolution by the division under Section <xref depth="3" refnumber="16-1a-603">16-1a-603</xref>.</subsection></subsection><subsection number="16-19-801(2)">If an event occurs that imposes a deadline on a limited partnership under Subsection <xref depth="4" refnumber="48-2e-801(1)" start="0">(1)</xref> and before the limited partnership has met the requirements of the deadline, another event occurs that imposes a different deadline on the limited partnership under Subsection <xref depth="4" refnumber="48-2e-801(1)" start="0">(1)</xref>:<subsection number="16-19-801(2)(a)">the occurrence of the second event does not affect the deadline caused by the first event; and</subsection><subsection number="16-19-801(2)(b)">the limited partnership's meeting of the requirements of the first deadline does not extend the second deadline.</subsection></subsection></section><section number="16-19-802"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Winding up.</catchline><subsection number="16-19-802(1)"><subsection number="16-19-802(1)(a)">A dissolved limited partnership shall wind up the limited partnership's activities and affairs.</subsection><subsection number="16-19-802(1)(b)">Except as otherwise provided in Section <xref depth="3" refnumber="16-19-803">16-19-803</xref>, the limited partnership only continues after dissolution for the purpose of winding up.</subsection></subsection><subsection number="16-19-802(2)">In winding up the limited partnership's activities and affairs, the limited partnership:<subsection number="16-19-802(2)(a)">shall discharge the limited partnership's debts, obligations, and other liabilities, settle and close the limited partnership's activities and affairs, and marshal and distribute the assets of the limited partnership; and</subsection><subsection number="16-19-802(2)(b)">may:<subsection number="16-19-802(2)(b)(i)">amend the limited partnership's certificate of limited partnership to state that the limited partnership is dissolved;</subsection><subsection number="16-19-802(2)(b)(ii)">preserve the limited partnership activities, affairs, and property as a going concern for a reasonable time;</subsection><subsection number="16-19-802(2)(b)(iii)">prosecute and defend actions and proceedings, whether civil, criminal, or administrative;</subsection><subsection number="16-19-802(2)(b)(iv)">transfer the limited partnership's property;</subsection><subsection number="16-19-802(2)(b)(v)">settle disputes by mediation or arbitration;</subsection><subsection number="16-19-802(2)(b)(vi)">deliver to the division for filing a statement of termination stating the name of the limited partnership and that the limited partnership is terminated; and</subsection><subsection number="16-19-802(2)(b)(vii)">perform other acts necessary or appropriate to the winding up.</subsection></subsection></subsection><subsection number="16-19-802(3)"><subsection number="16-19-802(3)(a)">If a dissolved limited partnership does not have a general partner, a person to wind up the dissolved limited partnership's activities and affairs may be appointed by the affirmative vote or consent of limited partners owning a majority of the rights to receive distributions as limited partners at the time the vote or consent is to be effective.</subsection><subsection number="16-19-802(3)(b)">A person appointed under this Subsection <xref depth="4" refnumber="48-2e-802(3)" start="0">(3)</xref>:<subsection number="16-19-802(3)(b)(i)">has the powers of a general partner under Section <xref depth="3" refnumber="16-19-804">16-19-804</xref> but is not liable for the debts, obligations, and other liabilities of the limited partnership solely by reason of having or exercising those powers or otherwise acting to wind up the dissolved limited partnership's activities and affairs; and</subsection><subsection number="16-19-802(3)(b)(ii)">shall deliver promptly to the division for filing an amendment to the certificate of limited partnership stating:<subsection number="16-19-802(3)(b)(ii)(A)">that the limited partnership does not have a general partner;</subsection><subsection number="16-19-802(3)(b)(ii)(B)">the name and street and mailing addresses of the person; and</subsection><subsection number="16-19-802(3)(b)(ii)(C)">that the person has been appointed pursuant to this subsection to wind up the limited partnership.</subsection></subsection></subsection></subsection><subsection number="16-19-802(4)">Upon a petition brought by a partner, a court may order judicial supervision of the winding up of a dissolved limited partnership, including the appointment of a person to wind up the limited partnership's activities and affairs, if:<subsection number="16-19-802(4)(a)">the limited partnership does not have a general partner and within a reasonable time following the dissolution no person has been appointed in accordance with Subsection <xref depth="4" refnumber="48-2e-802(3)" start="0">(3)</xref>; or</subsection><subsection number="16-19-802(4)(b)">the applicant establishes other good cause.</subsection></subsection></section><section number="16-19-803"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Rescinding dissolution.</catchline><subsection number="16-19-803(1)">A limited partnership may rescind the limited partnership's dissolution, unless a statement of termination applicable to the limited partnership is effective, a court has entered an order under Subsection <xref depth="4" refnumber="16-19-801(1)(f)">16-19-801(1)(f)</xref> dissolving the limited partnership, or the division has dissolved the limited partnership under Section <xref depth="3" refnumber="16-1a-603">16-1a-603</xref>.</subsection><subsection number="16-19-803(2)">Rescinding dissolution under this section requires:<subsection number="16-19-803(2)(a)">the affirmative vote or consent of each partner; and</subsection><subsection number="16-19-803(2)(b)">if the limited partnership has delivered to the division for filing an amendment to the certificate of limited partnership stating that the partnership is dissolved and if:<subsection number="16-19-803(2)(b)(i)">the amendment is not effective, the filing by the limited partnership of a statement of withdrawal under Section <xref depth="3" refnumber="16-1a-205">16-1a-205</xref> applicable to the amendment; or</subsection><subsection number="16-19-803(2)(b)(ii)">the amendment is effective, the delivery by the limited partnership to the division for filing of an amendment to the certificate of limited partnership stating that the dissolution has been rescinded under this section.</subsection></subsection></subsection><subsection number="16-19-803(3)">If a limited partnership rescinds the limited partnership's dissolution:<subsection number="16-19-803(3)(a)">the limited partnership resumes carrying on the limited partnership's activities and affairs as if dissolution had never occurred;</subsection><subsection number="16-19-803(3)(b)">subject to Subsection <xref depth="4" refnumber="48-2e-803(3)(c)" start="0">(3)(c)</xref>, any liability incurred by the limited partnership after the dissolution and before the rescission is effective is determined as if dissolution had never occurred; and</subsection><subsection number="16-19-803(3)(c)">the rights of a third party arising out of conduct in reliance on the dissolution before the third party knew or had notice of the rescission may not be adversely affected.</subsection></subsection></section><section number="16-19-804"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Power to bind partnership after dissolution.</catchline><subsection number="16-19-804(1)">A limited partnership is bound by a general partner's act after dissolution which:<subsection number="16-19-804(1)(a)">is appropriate for winding up the limited partnership's activities and affairs; or</subsection><subsection number="16-19-804(1)(b)">would have bound the limited partnership under Section <xref depth="3" refnumber="16-19-402">16-19-402</xref> before dissolution, if, at the time the other party enters into the transaction, the other party does not know or have notice of the dissolution.</subsection></subsection><subsection number="16-19-804(2)">A person dissociated as a general partner binds a limited partnership through an act occurring after dissolution if:<subsection number="16-19-804(2)(a)">at the time the other party enters into the transaction:<subsection number="16-19-804(2)(a)(i)">less than two years has passed since the dissociation; and</subsection><subsection number="16-19-804(2)(a)(ii)">the other party does not have notice of the dissociation and reasonably believes that the person is a general partner; and</subsection></subsection><subsection number="16-19-804(2)(b)">the act:<subsection number="16-19-804(2)(b)(i)">is appropriate for winding up the limited partnership's activities and affairs; or</subsection><subsection number="16-19-804(2)(b)(ii)">would have bound the limited partnership under Section <xref depth="3" refnumber="16-19-402">16-19-402</xref> before dissolution and at the time the other party enters into the transaction the other party does not have notice of the dissolution.</subsection></subsection></subsection></section><section number="16-19-805"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Liability after dissolution of general partner and person dissociated as general partner to limited partnership, other general partners, and persons dissociated as general partner.</catchline><subsection number="16-19-805(1)">If a general partner having knowledge of the dissolution causes a limited partnership to incur an obligation under Subsection <xref refnumber="518-null-1">16-19-804(1)</xref> by an act that is not appropriate for winding up the limited partnership's activities and affairs, the general partner is liable:<subsection number="16-19-805(1)(a)">to the limited partnership for any damage caused to the limited partnership arising from the obligation; and</subsection><subsection number="16-19-805(1)(b)">if another general partner or a person dissociated as a general partner is liable for the obligation, to that other general partner or person for any damage caused to that other general partner or person arising from the liability.</subsection></subsection><subsection number="16-19-805(2)">If a person dissociated as a general partner causes a limited partnership to incur an obligation under Subsection <xref depth="4" refnumber="16-19-804(2)">16-19-804(2)</xref>, the person is liable:<subsection number="16-19-805(2)(a)">to the limited partnership for any damage caused to the limited partnership arising from the obligation; and</subsection><subsection number="16-19-805(2)(b)">if a general partner or another person dissociated as a general partner is liable for the obligation, to the general partner or other person for any damage caused to the general partner or other person arising from the obligation.</subsection></subsection></section><section number="16-19-806"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Known claims against dissolved limited partnership.</catchline><subsection number="16-19-806(1)">Except as otherwise provided in Subsection <xref depth="4" refnumber="48-2e-806(4)" start="0">(4)</xref>, a dissolved limited partnership may give notice of a known claim under Subsection <xref depth="4" refnumber="48-2e-806(2)" start="0">(2)</xref>, which has the effect provided in Subsection <xref depth="4" refnumber="48-2e-806(3)" start="0">(3)</xref>.</subsection><subsection number="16-19-806(2)"><subsection number="16-19-806(2)(a)">A dissolved limited partnership may in a record notify the dissolved limited partnership's known claimants of the dissolution.</subsection><subsection number="16-19-806(2)(b)">The notice must:<subsection number="16-19-806(2)(b)(i)">specify the information required to be included in a claim;</subsection><subsection number="16-19-806(2)(b)(ii)">state that a claim must be in writing and provide a mailing address to which the claim is to be sent;</subsection><subsection number="16-19-806(2)(b)(iii)">state the deadline for receipt of a claim, which may not be less than 120 days after the date the notice is received by the claimant;</subsection><subsection number="16-19-806(2)(b)(iv)">state that the claim will be barred if not received by the deadline; and</subsection><subsection number="16-19-806(2)(b)(v)">unless the limited partnership has been throughout the limited partnership's existence a limited liability limited partnership, state that the barring of a claim against the limited partnership will also bar any corresponding claim against any general partner or person dissociated as a general partner which is based on Section <xref depth="3" refnumber="16-19-404">16-19-404</xref>.</subsection></subsection></subsection><subsection number="16-19-806(3)">A claim against a dissolved limited partnership is barred if the requirements of Subsection <xref depth="4" refnumber="48-2e-806(2)" start="0">(2)</xref> are met, and:<subsection number="16-19-806(3)(a)">the claim is not received by the specified deadline; or</subsection><subsection number="16-19-806(3)(b)">if the claim is timely received but rejected by the limited partnership:<subsection number="16-19-806(3)(b)(i)">the limited partnership causes the claimant to receive a notice in a record stating that the claim is rejected and will be barred unless the claimant commences an action against the limited partnership to enforce the claim not later than 90 days after the claimant receives the notice; and</subsection><subsection number="16-19-806(3)(b)(ii)">the claimant does not commence the required action not later than 90 days after the claimant receives the notice.</subsection></subsection></subsection><subsection number="16-19-806(4)">This section does not apply to a claim based on an event occurring after the effective date of dissolution or a liability that on that date is contingent.</subsection></section><section number="16-19-807"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Other claims against dissolved limited partnership.</catchline><subsection number="16-19-807(1)">A dissolved limited partnership may publish notice of the dissolved limited partnership's dissolution and request persons having claims against the dissolved limited partnership to present the claims in accordance with the notice.</subsection><subsection number="16-19-807(2)">A notice under Subsection <xref depth="4" refnumber="48-2e-807(1)" start="0">(1)</xref> must:<subsection number="16-19-807(2)(a)">be published at least once in a newspaper of general circulation in the county in this state in which the dissolved limited partnership's principal office is located or, if the principal office is not located in this state, in the county in which the office of the dissolved limited partnership's registered agent is or was last located and in accordance with Section <xref depth="3" refnumber="45-1-101" start="0">45-1-101</xref>;</subsection><subsection number="16-19-807(2)(b)">describe the information required to be contained in a claim, state that the claim must be in writing, and provide a mailing address to which the claim is to be sent;</subsection><subsection number="16-19-807(2)(c)">state that a claim against the dissolved limited partnership is barred unless an action to enforce the claim is commenced not later than three years after publication of the notice; and</subsection><subsection number="16-19-807(2)(d)">unless the dissolved limited partnership has been throughout the dissolved limited partnership's existence a limited liability limited partnership, state that the barring of a claim against the dissolved limited partnership will also bar any corresponding claim against any general partner or person dissociated as a general partner which is based on Section <xref depth="3" refnumber="16-19-404">16-19-404</xref>.</subsection></subsection><subsection number="16-19-807(3)">If a dissolved limited partnership publishes a notice in accordance with Subsection <xref depth="4" refnumber="48-2e-807(2)" start="0">(2)</xref>, the claim of each of the following claimants is barred unless the claimant commences an action to enforce the claim against the dissolved limited partnership not later than three years after the publication date of the notice:<subsection number="16-19-807(3)(a)">a claimant that did not receive notice in a record under Section <xref depth="3" refnumber="16-19-806">16-19-806</xref>;</subsection><subsection number="16-19-807(3)(b)">a claimant whose claim was timely sent to the dissolved limited partnership but not acted on; and</subsection><subsection number="16-19-807(3)(c)">a claimant whose claim is contingent at, or based on an event occurring after, the effective date of dissolution.</subsection></subsection><subsection number="16-19-807(4)">A claim not barred under this section or Section <xref depth="3" refnumber="16-19-806">16-19-806</xref> may be enforced:<subsection number="16-19-807(4)(a)">against the dissolved limited partnership, to the extent of the dissolved limited partnership's undistributed assets;</subsection><subsection number="16-19-807(4)(b)">except as otherwise provided in Section <xref depth="3" refnumber="16-19-808">16-19-808</xref>, if the assets of the dissolved limited partnership have been distributed after dissolution, against a partner or transferee to the extent of that person's proportionate share of the claim or of the dissolved limited partnership's assets distributed to the partner or transferee after dissolution, whichever is less, but a person's total liability for all claims under this subsection may not exceed the total amount of assets distributed to the person after dissolution; and</subsection><subsection number="16-19-807(4)(c)">against any person liable on the claim under Sections <xref depth="3" refnumber="16-19-404">16-19-404</xref> and <xref depth="3" refnumber="16-19-607">16-19-607</xref>.</subsection></subsection></section><section number="16-19-808"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Court proceedings.</catchline><subsection number="16-19-808(1)"><subsection number="16-19-808(1)(a)">A dissolved limited partnership that has published a notice under Section <xref depth="3" refnumber="16-19-807">16-19-807</xref> may petition a court with jurisdiction under <xref depth="0" refnumber="78A" start="0">Title 78A, Judiciary and Judicial Administration</xref>, for a determination of the amount and form of security to be provided for payment of claims that are contingent, have not been made known to the dissolved limited partnership, or are based on an event occurring after the effective date of dissolution but which, based on the facts known to the dissolved limited partnership, are reasonably expected to arise after the effective date of dissolution.</subsection><subsection number="16-19-808(1)(b)">Security is not required for any claim that is or is reasonably anticipated to be barred under Subsection <xref refnumber="524-null-7">16-19-807(3)</xref>.</subsection></subsection><subsection number="16-19-808(2)">No later than 10 days after the filing of an application under Subsection <xref depth="4" refnumber="48-2e-808(1)" start="0">(1)</xref>, the dissolved limited partnership shall give notice of the proceeding to each claimant holding a contingent claim known to the dissolved limited partnership.</subsection><subsection number="16-19-808(3)"><subsection number="16-19-808(3)(a)">In a proceeding brought under this section, the court may appoint a guardian ad litem to represent all claimants whose identities are unknown.</subsection><subsection number="16-19-808(3)(b)">The reasonable fees and expenses of the guardian, including all reasonable expert witness fees, must be paid by the dissolved limited partnership.</subsection></subsection><subsection number="16-19-808(4)">A dissolved limited partnership that provides security in the amount and form ordered by the court under Subsection <xref depth="4" refnumber="48-2e-808(1)" start="0">(1)</xref> satisfies the dissolved limited partnership's obligations with respect to claims that are contingent, have not been made known to the dissolved limited partnership, or are based on an event occurring after the effective date of dissolution, and such claims may not be enforced against a partner or transferee that received assets in liquidation.</subsection></section><section number="16-19-809"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Liability of general partner and person dissociated as general partner when claim against limited partnership barred.</catchline><tab/>If a claim against a dissolved limited partnership is barred under Section <xref depth="3" refnumber="16-19-806">16-19-806</xref>, <xref depth="3" refnumber="16-19-807">16-19-807</xref>, or <xref depth="3" refnumber="16-19-808">16-19-808</xref>, any corresponding claim under Section <xref depth="3" refnumber="16-19-404">16-19-404</xref> or <xref depth="3" refnumber="16-19-607">16-19-607</xref> is also barred.</section><section number="16-19-810"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Disposition of assets in winding up -- When contributions required.</catchline><subsection number="16-19-810(1)">In winding up a limited partnership's activities and affairs, a limited partnership shall apply the limited partnership's assets, including the contributions required by this section, to discharge the limited partnership's obligations to creditors, including partners that are creditors.</subsection><subsection number="16-19-810(2)">After a limited partnership complies with Subsection <xref depth="4" refnumber="48-2e-813(1)" start="0">(1)</xref>, any surplus must be distributed in the following order, subject to any charging order in effect under Section <xref depth="3" refnumber="16-19-703">16-19-703</xref>:<subsection number="16-19-810(2)(a)">to each person owning a transferable interest that reflects contributions made and not previously returned, an amount equal to the value of the unreturned contributions; and</subsection><subsection number="16-19-810(2)(b)">among partners in proportion to the partners' respective rights to share in distributions immediately before the dissolution of the limited partnership, except to the extent necessary to comply with any transfer effective under Section <xref depth="3" refnumber="16-19-702">16-19-702</xref>.</subsection></subsection><subsection number="16-19-810(3)">If a limited partnership's assets are insufficient to satisfy all of the limited partnership's obligations under Subsection <xref depth="4" refnumber="48-2e-813(1)" start="0">(1)</xref>, with respect to each unsatisfied obligation incurred when the limited partnership was not a limited liability limited partnership, the following rules apply:<subsection number="16-19-810(3)(a)"><subsection number="16-19-810(3)(a)(i)">Each person that was a general partner when the obligation was incurred and that has not been released from the obligation under Section <xref depth="3" refnumber="16-19-607">16-19-607</xref> shall contribute to the limited partnership for the purpose of enabling the limited partnership to satisfy the obligation.</subsection><subsection number="16-19-810(3)(a)(ii)">The contribution due from each of those persons is in proportion to the right to receive distributions in the capacity of general partner in effect for each of those persons when the obligation was incurred.</subsection></subsection><subsection number="16-19-810(3)(b)"><subsection number="16-19-810(3)(b)(i)">If a person does not contribute the full amount required under Subsection <xref depth="4" refnumber="48-2e-813(3)(a)" start="0">(3)(a)</xref> with respect to an unsatisfied obligation of the limited partnership, the other persons required to contribute by Subsection <xref depth="4" refnumber="48-2e-813(3)(a)" start="0">(3)(a)</xref> on account of the obligation shall contribute the additional amount necessary to discharge the obligation.</subsection><subsection number="16-19-810(3)(b)(ii)">The additional contribution due from each of those other persons is in proportion to the right to receive distributions in the capacity of general partner in effect for each of those other persons when the obligation was incurred.</subsection></subsection><subsection number="16-19-810(3)(c)">If a person does not make the additional contribution required by Subsection <xref depth="4" refnumber="48-2e-813(3)(b)" start="0">(3)(b)</xref>, further additional contributions are determined and due in the same manner as provided in Subsection <xref depth="4" refnumber="48-2e-813(3)(b)">(3)(b)</xref>.</subsection><subsection number="16-19-810(3)(d)"><subsection number="16-19-810(3)(d)(i)">A person that makes an additional contribution under Subsection <xref depth="4" refnumber="48-2e-813(3)(b)" start="0">(3)(b)</xref> or <xref depth="4" refnumber="48-2e-813(3)(c)" start="0">(3)(c)</xref> may recover from any person whose failure to contribute under Subsection <xref depth="4" refnumber="48-2e-813(3)(a)" start="0">(3)(a)</xref> or <xref depth="4" refnumber="48-2e-813(3)(b)" start="0">(3)(b)</xref> necessitated the additional contribution.</subsection><subsection number="16-19-810(3)(d)(ii)">A person may not recover under this subsection more than the amount additionally contributed.</subsection><subsection number="16-19-810(3)(d)(iii)">A person's liability under this subsection may not exceed the amount the person failed to contribute.</subsection></subsection></subsection><subsection number="16-19-810(4)">If a limited partnership does not have sufficient surplus to comply with Subsection <xref depth="4" refnumber="48-2e-813(2)(a)" start="0">(2)(a)</xref>, any surplus must be distributed among the owners of transferable interests in proportion to the value of the respective unreturned contributions.</subsection><subsection number="16-19-810(5)">All distributions made under Subsections <xref depth="4" refnumber="48-2e-813(2)" start="0">(2)</xref> and <xref depth="4" refnumber="48-2e-813(4)" start="0">(4)</xref> must be paid in money.</subsection></section></part><part number="16-19-9"><catchline>Actions By Partners</catchline><section number="16-19-901"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Direct action by partner.</catchline><subsection number="16-19-901(1)">Subject to Subsection <xref depth="4" refnumber="48-2e-1001(2)" start="0">(2)</xref>, a partner may maintain a direct action against another partner or the limited partnership, with or without an accounting as to the limited partnership's activities and affairs, to enforce the partner's rights and otherwise protect the partner's interests, including rights and interests under the partnership agreement or this chapter or arising independently of the partnership relationship.</subsection><subsection number="16-19-901(2)">A partner maintaining a direct action under this section must plead and prove an actual or threatened injury that is not solely the result of an injury suffered or threatened to be suffered by the limited partnership.</subsection><subsection number="16-19-901(3)">A right to an accounting upon a dissolution and winding up does not revive a claim barred by law.</subsection></section><section number="16-19-902"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Derivative action.</catchline><tab/>A partner may maintain a derivative action to enforce a right of a limited partnership if:<subsection number="16-19-902(1)">the partner first makes a demand on the general partners, requesting that they cause the limited partnership to bring an action to enforce the right, and the general partners do not bring the action within a reasonable time; or</subsection><subsection number="16-19-902(2)">a demand under Subsection <xref depth="4" refnumber="48-2e-1002(1)" start="0">(1)</xref> would be futile.</subsection></section><section number="16-19-903"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Proper plaintiff.</catchline><tab/>A derivative action to enforce a right of a limited partnership may be maintained only by a person that is a partner at the time the action is commenced and:<subsection number="16-19-903(1)">which was a partner when the conduct giving rise to the action occurred; or</subsection><subsection number="16-19-903(2)">whose status as a partner devolved on the person by operation of law or in accordance with the terms of the partnership agreement from a person that was a partner at the time of the conduct.</subsection></section><section number="16-19-904"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Pleading.</catchline><tab/>In a derivative action to enforce a right of a limited partnership, the complaint must state with particularity:<subsection number="16-19-904(1)">the date and content of the plaintiff's demand and the response to the demand by the general partner; or</subsection><subsection number="16-19-904(2)">why the demand should be excused as futile.</subsection></section><section number="16-19-905"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Special litigation committee.</catchline><subsection number="16-19-905(1)"><subsection number="16-19-905(1)(a)">If a limited partnership is named as or made a party in a derivative proceeding, the limited partnership may appoint a special litigation committee to investigate the claims asserted in the proceeding and determine whether pursuing the action is in the best interests of the limited partnership.</subsection><subsection number="16-19-905(1)(b)">If the limited partnership appoints a special litigation committee, on motion by the committee made in the name of the limited partnership, except for good cause shown, the court shall stay discovery for the time reasonably necessary to permit the committee to make its investigation.</subsection><subsection number="16-19-905(1)(c)">This subsection does not prevent the court from:<subsection number="16-19-905(1)(c)(i)">enforcing a person's right to information under Section <xref depth="3" refnumber="16-19-304">16-19-304</xref> or <xref depth="3" refnumber="16-19-407">16-19-407</xref>; or</subsection><subsection number="16-19-905(1)(c)(ii)">granting extraordinary relief in the form of a temporary restraining order or preliminary injunction.</subsection></subsection></subsection><subsection number="16-19-905(2)">A special litigation committee must be composed of one or more disinterested and independent individuals, who may be partners.</subsection><subsection number="16-19-905(3)">A special litigation committee may be appointed:<subsection number="16-19-905(3)(a)">by a majority of the general partners not named as parties in the proceeding; and</subsection><subsection number="16-19-905(3)(b)">if all general partners are named as parties in the proceeding, by a majority of the general partners named as defendants.</subsection></subsection><subsection number="16-19-905(4)">After appropriate investigation, a special litigation committee may determine that it is in the best interests of the limited partnership that the proceeding:<subsection number="16-19-905(4)(a)">continue under the control of the plaintiff;</subsection><subsection number="16-19-905(4)(b)">continue under the control of the committee;</subsection><subsection number="16-19-905(4)(c)">be settled on terms approved by the committee; or</subsection><subsection number="16-19-905(4)(d)">be dismissed.</subsection></subsection><subsection number="16-19-905(5)"><subsection number="16-19-905(5)(a)">After making a determination under Subsection <xref depth="4" refnumber="48-2e-1005(4)" start="0">(4)</xref>, a special litigation committee shall file with the court a statement of its determination and its report supporting its determination and shall serve each party with a copy of the determination and report.</subsection><subsection number="16-19-905(5)(b)">The court shall determine whether the members of the committee were disinterested and independent and whether the committee conducted its investigation and made its recommendation in good faith, independently, and with reasonable care, with the committee having the burden of proof.</subsection><subsection number="16-19-905(5)(c)">If the court finds that the members of the committee were disinterested and independent and that the committee acted in good faith, independently, and with reasonable care, the court shall enforce the determination of the committee.</subsection><subsection number="16-19-905(5)(d)">Otherwise, the court shall dissolve the stay of discovery entered under Subsection <xref depth="4" refnumber="48-2e-1005(1)" start="0">(1)</xref> and allow the action to continue under the control of the plaintiff.</subsection></subsection></section><section number="16-19-906"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Proceeds and expenses.</catchline><subsection number="16-19-906(1)">Except as otherwise provided in Subsection <xref depth="4" refnumber="48-2e-1006(2)" start="0">(2)</xref>:<subsection number="16-19-906(1)(a)">any proceeds or other benefits of a derivative action, whether by judgment, compromise, or settlement, belong to the limited partnership and not to the plaintiff; and</subsection><subsection number="16-19-906(1)(b)">if the plaintiff receives any proceeds, the plaintiff shall remit them immediately to the limited partnership.</subsection></subsection><subsection number="16-19-906(2)">If a derivative action is successful in whole or in part, the court may award the plaintiff reasonable expenses, including reasonable attorney's fees and costs, from the recovery of the limited partnership.</subsection><subsection number="16-19-906(3)">A derivative action on behalf of a limited partnership may not be voluntarily dismissed or settled without the court's approval.</subsection></section></part><part number="16-19-10"><catchline>Miscellaneous Provisions</catchline><section number="16-19-1001"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Uniformity of application and construction.</catchline><tab/>In applying and construing this chapter, consideration must be given to the need to promote uniformity of the law with respect to this chapter's subject matter among states that enact the uniform act upon which this chapter is based.</section><section number="16-19-1002"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Severability clause.</catchline><tab/>If any provision of this chapter or this chapter's application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.</section><section number="16-19-1003"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Relation to Electronic Signatures in Global and National Commerce Act.</catchline><tab/>This chapter modifies, limits, and supersedes the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. Sec. 7001 et seq., but this chapter does not modify, limit, or supersede Sec. 101(c) of that act, 15 U.S.C. Sec. 7001(c), or authorize electronic delivery of any of the notices described in Sec. 103(b) of that act, 15 U.S.C. Sec. 7003(b).</section><section number="16-19-1004"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Savings clause.</catchline><tab/>This chapter does not affect an action commenced, proceeding brought, or right accrued before this chapter takes effect.</section><section number="16-19-1005"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Application to existing relationships.</catchline><subsection number="16-19-1005(1)">Before January 1, 2016, this chapter governs only:<subsection number="16-19-1005(1)(a)">a limited partnership formed on or after January 1, 2014; and</subsection><subsection number="16-19-1005(1)(b)">except as otherwise provided in Subsections <xref depth="4" refnumber="48-2e-1205(3)" start="0">(3)</xref> and <xref depth="4" refnumber="48-2e-1205(4)" start="0">(4)</xref>, a limited partnership formed before January 1, 2014, which elects, in the manner provided in the limited partnership's partnership agreement or by law for amending the partnership agreement, to be subject to this chapter.</subsection></subsection><subsection number="16-19-1005(2)">Except as otherwise provided in Subsection <xref depth="4" refnumber="48-2e-1205(3)" start="0">(3)</xref>, on and after January 1, 2016, this chapter governs all limited partnerships.</subsection><subsection number="16-19-1005(3)">With respect to a limited partnership formed before January 1, 2014, the following rules apply except as the partners otherwise elect in the manner provided in the partnership agreement or by law for amending the partnership agreement:<subsection number="16-19-1005(3)(a)">Section <xref depth="3" refnumber="16-19-103">16-19-103</xref> does not apply and the limited partnership has whatever duration the limited partnership had under the law applicable immediately before January 1, 2014;</subsection><subsection number="16-19-1005(3)(b)">Sections <xref depth="3" refnumber="16-19-601">16-19-601</xref> and <xref depth="3" refnumber="16-19-602">16-19-602</xref> do not apply and a limited partner has the same right and power to dissociate from the limited partnership, with the same consequences, as existed immediately before January 1, 2014;</subsection><subsection number="16-19-1005(3)(c)">Subsection <xref refnumber="494-null-4">16-19-603(4)</xref> does not apply and the partners have the same right and power to expel a general partner as existed immediately before January 1, 2014;</subsection><subsection number="16-19-1005(3)(d)">Subsection <xref refnumber="494-null-13">16-19-603(5)</xref> does not apply and a court has the same power to expel a general partner as the court had immediately before January 1, 2014; and</subsection><subsection number="16-19-1005(3)(e)">Subsection <xref refnumber="512-null-4">16-19-801(1)(c)</xref> does not apply and the connection between a person's dissociation as a general partner and the dissolution of the limited partnership is the same as existed immediately before January 1, 2014.</subsection></subsection><subsection number="16-19-1005(4)">With respect to a limited partnership that elects in accordance with Subsection <xref depth="4" refnumber="48-2e-1205(1)(b)" start="0">(1)(b)</xref> to be subject to this chapter, after the election takes effect the provisions of this chapter relating to the liability of the limited partnership's general partners to third parties apply:<subsection number="16-19-1005(4)(a)">before January 1, 2016, to:<subsection number="16-19-1005(4)(a)(i)">a third party that had not done business with the limited partnership in the year before the election took effect; and</subsection><subsection number="16-19-1005(4)(a)(ii)">a third party that had done business with the limited partnership in the year before the election took effect only if the third party knows or has received a notification of the election; and</subsection></subsection><subsection number="16-19-1005(4)(b)">on and after January 1, 2016, to all third parties, but those provisions remain inapplicable to any obligation incurred while those provisions were inapplicable under Subsection <xref depth="4" refnumber="48-2e-1205(4)(a)(ii)" start="0">(4)(a)(ii)</xref>.</subsection></subsection></section></part></chapter><chapter number="16-20"><catchline>Utah Revised Uniform Limited Liability Company Act</catchline><part number="16-20-1"><catchline>General Provisions</catchline><section number="16-20-101"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Definitions.</catchline><tab/>As used in this chapter:<subsection number="16-20-101(1)"><subsection number="16-20-101(1)(a)">"Certificate of organization" means the certificate required by Section <xref depth="3" refnumber="16-20-201">16-20-201</xref>.</subsection><subsection number="16-20-101(1)(b)">"Certificate of organization" includes the certificate as amended or restated.</subsection></subsection><subsection number="16-20-101(2)">"Contribution," except in the phrase "right of contribution," means property or a benefit described in Section <xref depth="3" refnumber="16-20-402">16-20-402</xref>, which is provided by a person to a limited liability company to become a member or in the person's capacity as a member.</subsection><subsection number="16-20-101(3)">"Debtor in bankruptcy" means a person that is the subject of:<subsection number="16-20-101(3)(a)">an order for relief under Title 11 of the United States Code or a comparable order under a successor statute of general application; or</subsection><subsection number="16-20-101(3)(b)">a comparable order under federal, state, or foreign law governing insolvency.</subsection></subsection><subsection number="16-20-101(4)"><subsection number="16-20-101(4)(a)">"Distribution" means a transfer of money or other property from a limited liability company to a person on account of a transferable interest or in the person's capacity as a member.</subsection><subsection number="16-20-101(4)(b)">"Distribution" includes:<subsection number="16-20-101(4)(b)(i)">a redemption or other purchase by a limited liability company of a transferable interest; and</subsection><subsection number="16-20-101(4)(b)(ii)">a transfer to a member in return for the member's relinquishment of any right to participate as a member in the management or conduct of the company's activities and affairs or to have access to records or other information concerning the company's activities and affairs.</subsection></subsection><subsection number="16-20-101(4)(c)">"Distribution" does not include amounts constituting reasonable compensation for present or past service or payments made in the ordinary course of business under a bona fide retirement plan or other bona fide benefits program.</subsection></subsection><subsection number="16-20-101(5)">"Division" means the Division of Corporations and Commercial Code.</subsection><subsection number="16-20-101(6)">"Foreign limited liability company" means an unincorporated entity formed under the law of a jurisdiction other than this state, which would be a limited liability company, including a low-profit limited liability company, if formed under the law of this state.</subsection><subsection number="16-20-101(7)"><subsection number="16-20-101(7)(a)">"Governing person" means a person, alone or in concert with others, by or under whose authority the powers of the limited liability company are exercised and under whose direction the activities and affairs of the limited liability company are managed in accordance with this chapter and the limited liability company's operating agreement.</subsection><subsection number="16-20-101(7)(b)">"Governing person" includes:<subsection number="16-20-101(7)(b)(i)">a manager of a manager-managed limited liability company;</subsection><subsection number="16-20-101(7)(b)(ii)">a member of a member-managed limited liability company; and</subsection><subsection number="16-20-101(7)(b)(iii)">the chief executive officer of a limited liability company in which officers have been appointed, regardless of the actual designated title.</subsection></subsection></subsection><subsection number="16-20-101(8)">"Jurisdiction," used to refer to a political entity, means the United States, a state, a foreign country, or a political subdivision of a foreign country.</subsection><subsection number="16-20-101(9)">"Jurisdiction of formation" means, with respect to an entity, the jurisdiction:<subsection number="16-20-101(9)(a)">under whose law the entity is formed; or</subsection><subsection number="16-20-101(9)(b)">in the case of a limited liability partnership or foreign limited liability partnership, in which the partnership's statement of qualification is filed.</subsection></subsection><subsection number="16-20-101(10)">"Limited liability company," except in the phrase "foreign limited liability company," means an entity formed under this chapter or which becomes subject to this chapter under:<subsection number="16-20-101(10)(a)">Chapter 1a, Part 7, Merger;</subsection><subsection number="16-20-101(10)(b)">Chapter 1a, Part 8, Interest Exchange;</subsection><subsection number="16-20-101(10)(c)">Chapter 1a, Part 9, Conversion;</subsection><subsection number="16-20-101(10)(d)">Chapter 1a, Part 10, Domestication; or</subsection><subsection number="16-20-101(10)(e)">Section <xref depth="3" refnumber="16-20-1205">16-20-1205</xref>.</subsection></subsection><subsection number="16-20-101(11)">"Low-profit limited liability company" means a limited liability company meeting the requirements of Part 11, Low-Profit Limited Liability Companies.</subsection><subsection number="16-20-101(12)">"Manager" means a person that under the operating agreement of a manager-managed limited liability company is responsible, alone or in concert with others, for performing the management functions stated in Subsection <xref depth="4" refnumber="16-20-407(3)">16-20-407(3)</xref>.</subsection><subsection number="16-20-101(13)">"Manager-managed limited liability company" means a limited liability company that qualifies under Subsection <xref refnumber="724-null-1">16-20-407(1)</xref>.</subsection><subsection number="16-20-101(14)">"Member" means a person that:<subsection number="16-20-101(14)(a)">has become a member of a limited liability company under Section <xref depth="3" refnumber="16-20-401">16-20-401</xref> or was a member in a company when the company became subject to this chapter under Section <xref depth="3" refnumber="16-20-1205">16-20-1205</xref>; and</subsection><subsection number="16-20-101(14)(b)">has not dissociated under Section <xref depth="3" refnumber="16-20-602">16-20-602</xref>.</subsection></subsection><subsection number="16-20-101(15)">"Member-managed limited liability company" means a limited liability company that is not a manager-managed limited liability company.</subsection><subsection number="16-20-101(16)"><subsection number="16-20-101(16)(a)">"Operating agreement" means the agreement, whether or not referred to as an operating agreement and whether oral, implied, in a record, or in any combination thereof, of all the members of a limited liability company, including a sole member, concerning the matters described in Subsection <xref depth="4" refnumber="16-20-107(1)">16-20-107(1)</xref>.</subsection><subsection number="16-20-101(16)(b)">"Operating agreement" includes the agreement as amended or restated.</subsection></subsection><subsection number="16-20-101(17)">"Organizer" means a person that acts under Section <xref depth="3" refnumber="16-20-201">16-20-201</xref> to form a limited liability company.</subsection><subsection number="16-20-101(18)">"Person" means an individual, business corporation, nonprofit corporation, partnership, limited partnership, limited liability company, limited cooperative association, unincorporated nonprofit association, statutory trust, business trust, common-law business trust, estate, trust, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.</subsection><subsection number="16-20-101(19)">"Principal office" means the principal executive office of a limited liability company or foreign limited liability company, whether or not the office is located in this state.</subsection><subsection number="16-20-101(20)">"Professional services company" means a limited liability company organized in accordance with Part 9, Professional Services Companies.</subsection><subsection number="16-20-101(21)">"Property" means all property, whether real, personal, or mixed or tangible or intangible, or any right or interest therein.</subsection><subsection number="16-20-101(22)">"Record," used as a noun, means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.</subsection><subsection number="16-20-101(23)">"Registered agent" means an agent of a limited liability company or foreign limited liability company which is authorized to receive service of any process, notice, or demand required or permitted by law to be served on the company.</subsection><subsection number="16-20-101(24)">"Registered foreign limited liability company" means a foreign limited liability company that is registered to do business in this state in accordance with a statement of registration filed by the division.</subsection><subsection number="16-20-101(25)">"Series" means a series created in accordance with Part 10, Series Limited Liability Companies.</subsection><subsection number="16-20-101(26)">"Sign" means, with present intent to authenticate or adopt a record:<subsection number="16-20-101(26)(a)">to execute or adopt a tangible symbol; or</subsection><subsection number="16-20-101(26)(b)">to attach to or logically associate with the record an electronic symbol, sound, or process.</subsection></subsection><subsection number="16-20-101(27)">"State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.</subsection><subsection number="16-20-101(28)">"Transfer" includes:<subsection number="16-20-101(28)(a)">an assignment;</subsection><subsection number="16-20-101(28)(b)">a conveyance;</subsection><subsection number="16-20-101(28)(c)">a sale;</subsection><subsection number="16-20-101(28)(d)">a lease;</subsection><subsection number="16-20-101(28)(e)">an encumbrance, including a mortgage or security interest;</subsection><subsection number="16-20-101(28)(f)">a gift; and</subsection><subsection number="16-20-101(28)(g)">a transfer by operation of law.</subsection></subsection><subsection number="16-20-101(29)"><subsection number="16-20-101(29)(a)">"Transferable interest" means the right, as initially owned by a person in the person's capacity as a member, to receive distributions from a limited liability company in accordance with the operating agreement, whether or not the person remains a member or continues to own any part of the right.</subsection><subsection number="16-20-101(29)(b)">"Transferable interest" applies to any fraction of the interest by whomever owned.</subsection></subsection><subsection number="16-20-101(30)"><subsection number="16-20-101(30)(a)">"Transferee" means a person to which all or part of a transferable interest has been transferred, whether or not the transferor is a member.</subsection><subsection number="16-20-101(30)(b)">"Transferee" includes a person that owns a transferable interest under Subsection <xref depth="4" refnumber="16-20-603(1)(c)">16-20-603(1)(c)</xref>.</subsection></subsection><subsection number="16-20-101(31)">"Tribal limited liability company" means a limited liability company that is:<subsection number="16-20-101(31)(a)">formed under the law of a tribe; and</subsection><subsection number="16-20-101(31)(b)">at least 51% owned or controlled by the tribe under whose law the limited liability company is formed.</subsection></subsection><subsection number="16-20-101(32)">"Tribe" means a tribe, band, nation, pueblo, or other organized group or community of Indians, including an Alaska Native village that is legally recognized as eligible for and is consistent with a special program, service, or entitlement provided by the United States to Indians because of their status as Indians.</subsection></section><section number="16-20-102"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Knowledge -- Notice.</catchline><subsection number="16-20-102(1)">A person knows a fact if the person:<subsection number="16-20-102(1)(a)">has actual knowledge of the fact; or</subsection><subsection number="16-20-102(1)(b)">is deemed to know the fact under Subsection <xref depth="4" refnumber="48-3a-103(4)(a)" start="0">(4)(a)</xref> or law other than this chapter.</subsection></subsection><subsection number="16-20-102(2)">A person has notice of a fact if the person:<subsection number="16-20-102(2)(a)">has reason to know the fact from all the facts known to the person at the time in question; or</subsection><subsection number="16-20-102(2)(b)">is deemed to have notice of the fact under Subsection <xref depth="4" refnumber="48-3a-103(4)(b)" start="0">(4)(b)</xref>.</subsection></subsection><subsection number="16-20-102(3)">Subject to Sections <xref depth="3" refnumber="16-1a-207">16-1a-207</xref> and <xref depth="3" refnumber="16-1a-211">16-1a-211</xref>, a person notifies another person of a fact by taking steps reasonably required to inform the other person in ordinary course, whether or not those steps cause the other person to know the fact.</subsection><subsection number="16-20-102(4)">A person not a member is deemed:<subsection number="16-20-102(4)(a)">to know of a limitation on authority to transfer real property as provided in Subsection <xref depth="4" refnumber="16-20-302(7)">16-20-302(7)</xref>; and</subsection><subsection number="16-20-102(4)(b)">to have notice of a limited liability company's:<subsection number="16-20-102(4)(b)(i)">dissolution 90 days after a statement of dissolution under Subsection <xref tempid="817">16-20-703(2)(b)(i)</xref> becomes effective;</subsection><subsection number="16-20-102(4)(b)(ii)">termination 90 days after a statement of termination under Subsection <xref depth="4" refnumber="16-20-703(2)(b)(vi)">16-20-703(2)(b)(vi)</xref> becomes effective;</subsection><subsection number="16-20-102(4)(b)(iii)">participation in a merger, interest exchange, conversion, or domestication 90 days after a statement of merger, interest exchange, conversion, or domestication under Chapter 1a, Part 7, Merger, Chapter 1a, Part 8, Interest Exchange, Chapter 1a, Part 9, Conversion, or Chapter 1a, Part 10, Domestication, becomes effective; and</subsection><subsection number="16-20-102(4)(b)(iv)">abandonment of a merger, interest exchange, conversion, or domestication 90 days after a statement of abandonment of merger, interest exchange, conversion, or domestication under Chapter 1a, Part 7, Merger, Chapter 1a, Part 8, Interest Exchange, Chapter 1a, Part 9, Conversion, or Chapter 1a, Part 10, Domestication, becomes effective.</subsection></subsection></subsection></section><section number="16-20-103"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Nature, purpose, and duration of limited liability company.</catchline><subsection number="16-20-103(1)">A limited liability company is an entity distinct from the limited liability company's member or members.</subsection><subsection number="16-20-103(2)">A limited liability company may have any lawful purpose, regardless of whether for profit.</subsection><subsection number="16-20-103(3)">A limited liability company has perpetual duration.</subsection></section><section number="16-20-104"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Powers.</catchline><tab/>A limited liability company has the capacity to sue and be sued in the limited liability company's own name and the power to do all things necessary or convenient to carry on the limited liability company's activities and affairs.</section><section number="16-20-105"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Governing law.</catchline><tab/>The law of this state governs:<subsection number="16-20-105(1)">the internal affairs of a limited liability company; and</subsection><subsection number="16-20-105(2)">the liability of a member as member and a manager as manager for the debts, obligations, or other liabilities of a limited liability company.</subsection></section><section number="16-20-106"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Supplemental principles of law.</catchline><tab/>Unless displaced by particular provisions of this chapter, the principles of law and equity supplement this chapter.</section><section number="16-20-107"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Operating agreement -- Scope, functions, and limitations.</catchline><subsection number="16-20-107(1)">Except as otherwise provided in Subsections <xref depth="4" refnumber="48-3a-112(3)" start="0">(3)</xref> and <xref depth="4" refnumber="48-3a-112(4)" start="0">(4)</xref>, the operating agreement governs:<subsection number="16-20-107(1)(a)">relations among the members as members and between the members and the limited liability company;</subsection><subsection number="16-20-107(1)(b)">the rights and duties under this chapter of a person in the capacity of manager;</subsection><subsection number="16-20-107(1)(c)">the activities and affairs of the limited liability company and the conduct of those activities and affairs; and</subsection><subsection number="16-20-107(1)(d)">the means and conditions for amending the operating agreement.</subsection></subsection><subsection number="16-20-107(2)">To the extent the operating agreement does not provide for a matter described in Subsection <xref depth="4" refnumber="48-3a-112(1)" start="0">(1)</xref>, this chapter governs the matter.</subsection><subsection number="16-20-107(3)">An operating agreement may not:<subsection number="16-20-107(3)(a)">vary a limited liability company's capacity under Section <xref depth="3" refnumber="16-20-104">16-20-104</xref> to sue and be sued in the limited liability company's own name;</subsection><subsection number="16-20-107(3)(b)">vary the law applicable under Section <xref depth="3" refnumber="16-20-105">16-20-105</xref>;</subsection><subsection number="16-20-107(3)(c)">vary any requirement, procedure, or other provision of this chapter pertaining to:<subsection number="16-20-107(3)(c)(i)">registered agents; or</subsection><subsection number="16-20-107(3)(c)(ii)">the division, including provisions pertaining to records authorized or required to be delivered to the division for filing under this chapter;</subsection></subsection><subsection number="16-20-107(3)(d)">vary the provisions of Section <xref depth="3" refnumber="16-1a-209">16-1a-209</xref>;</subsection><subsection number="16-20-107(3)(e)">eliminate the duty of loyalty or the duty of care, except as otherwise provided in Subsection <xref depth="4" refnumber="48-3a-112(4)" start="0">(4)</xref>;</subsection><subsection number="16-20-107(3)(f)">eliminate the contractual obligation of good faith and fair dealing under Subsection <xref refnumber="728-null-10">16-20-409(4)</xref>, but the operating agreement may prescribe the standards, if not unconscionable or against public policy, by which the performance of the obligation is to be measured;</subsection><subsection number="16-20-107(3)(g)">relieve or exonerate a person from liability for conduct involving bad faith, willful misconduct, or recklessness;</subsection><subsection number="16-20-107(3)(h)">unreasonably restrict the duties and rights under Section <xref depth="3" refnumber="16-20-410">16-20-410</xref>, but the operating agreement may impose reasonable restrictions on the availability and use of information obtained under that section and may define appropriate remedies, including liquidated damages, for a breach of any reasonable restriction on use;</subsection><subsection number="16-20-107(3)(i)">vary the causes of dissolution specified in Subsections <xref depth="4" refnumber="16-20-701(4)(a)">16-20-701(4)(a)</xref> and <xref depth="4" refnumber="48-3a-701(5)" start="0">(5)</xref>;</subsection><subsection number="16-20-107(3)(j)">vary the requirement to wind up the limited liability company's activities and affairs as specified in Subsections <xref depth="4" refnumber="16-20-703(1)">16-20-703(1)</xref>, <xref depth="4" refnumber="48-3a-703(2)(a)" start="0">(2)(a)</xref>, and <xref depth="4" refnumber="48-3a-703(5)" start="0">(5)</xref>;</subsection><subsection number="16-20-107(3)(k)">unreasonably restrict the right of a member to maintain an action under <xref depth="2" refnumber="48-3a-8" start="2">Part 8, Action by Members</xref>;</subsection><subsection number="16-20-107(3)(l)">vary the provisions of Section <xref depth="3" refnumber="16-20-805">16-20-805</xref>, but the operating agreement may provide that the limited liability company may not have a special litigation committee;</subsection><subsection number="16-20-107(3)(m)">vary the right of a member to approve a merger, interest exchange, conversion, or domestication under Section <xref depth="3" refnumber="16-1a-704">16-1a-704</xref>, <xref depth="3" refnumber="16-1a-804">16-1a-804</xref>, <xref depth="3" refnumber="16-1a-904">16-1a-904</xref>, or <xref depth="3" refnumber="16-1a-1004">16-1a-1004</xref>; or</subsection><subsection number="16-20-107(3)(n)">except as otherwise provided in Section <xref depth="3" refnumber="16-20-108">16-20-108</xref> and Subsection <xref depth="4" refnumber="16-20-109(2)">16-20-109(2)</xref>, restrict the rights under this chapter of a person other than a member or manager.</subsection></subsection><subsection number="16-20-107(4)">Subject to Subsection <xref depth="4" refnumber="48-3a-112(3)(g)" start="0">(3)(g)</xref>, without limiting other terms that may be included in an operating agreement, the following rules apply:<subsection number="16-20-107(4)(a)">The operating agreement may specify the method by which a specific act or transaction that would otherwise violate the duty of loyalty may be authorized or ratified by one or more disinterested and independent persons after full disclosure of all material facts.</subsection><subsection number="16-20-107(4)(b)">To the extent the operating agreement of a member-managed limited liability company expressly relieves a member of a responsibility that the member would otherwise have under this chapter and imposes the responsibility on one or more other members, the operating agreement may, to the benefit of the member that the operating agreement relieves of the responsibility, also eliminate or limit any fiduciary duty that would have pertained to the responsibility.</subsection><subsection number="16-20-107(4)(c)">If not unconscionable or against public policy, the operating agreement may:<subsection number="16-20-107(4)(c)(i)">alter or eliminate the aspects of the duty of loyalty stated in Subsections <xref refnumber="728-null-2">16-20-409(2)</xref> and <xref depth="4" refnumber="48-3a-409(9)" start="0">(9)</xref>;</subsection><subsection number="16-20-107(4)(c)(ii)">identify specific types or categories of activities that do not violate the duty of loyalty;</subsection><subsection number="16-20-107(4)(c)(iii)">alter the duty of care, but may not authorize intentional misconduct or knowing violation of law; and</subsection><subsection number="16-20-107(4)(c)(iv)">alter or eliminate any other fiduciary duty.</subsection></subsection></subsection><subsection number="16-20-107(5)"><subsection number="16-20-107(5)(a)">The court shall decide as a matter of law whether a term of an operating agreement is unconscionable or against public policy under Subsection <xref depth="4" refnumber="48-3a-112(3)(f)" start="0">(3)(f)</xref> or <xref depth="4" refnumber="48-3a-112(4)(c)" start="0">(4)(c)</xref>.</subsection><subsection number="16-20-107(5)(b)">The court:<subsection number="16-20-107(5)(b)(i)">shall make the court's determination as of the time the challenged term became part of the operating agreement and by considering only circumstances existing at that time; and</subsection><subsection number="16-20-107(5)(b)(ii)">may invalidate the term only if, in light of the purposes, activities, and affairs of the limited liability company, it is readily apparent that:<subsection number="16-20-107(5)(b)(ii)(A)">the objective of the term is unconscionable or against public policy; or</subsection><subsection number="16-20-107(5)(b)(ii)(B)">the means to achieve the term's objective is unconscionable or against public policy.</subsection></subsection></subsection></subsection></section><section number="16-20-108"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Operating agreement -- Effect on limited liability company and person becoming member -- Preformation agreement.</catchline><subsection number="16-20-108(1)">A limited liability company is bound by and may enforce the operating agreement, whether or not the limited liability company has itself manifested assent to the operating agreement.</subsection><subsection number="16-20-108(2)">A person that becomes a member of a limited liability company is deemed to assent to the operating agreement.</subsection><subsection number="16-20-108(3)"><subsection number="16-20-108(3)(a)">Two or more persons intending to become the initial members of a limited liability company may make an agreement providing that upon the formation of the limited liability company the agreement will become the operating agreement.</subsection><subsection number="16-20-108(3)(b)">One person intending to become the initial member of a limited liability company may assent to terms providing that upon the formation of the limited liability company the terms will become the operating agreement.</subsection></subsection></section><section number="16-20-109"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Operating agreement -- Effect on third parties and relationship to records effective on behalf of limited liability company.</catchline><subsection number="16-20-109(1)"><subsection number="16-20-109(1)(a)">An operating agreement may specify that the operating agreement's amendment requires the approval of a person that is not a party to the operating agreement or the satisfaction of a condition.</subsection><subsection number="16-20-109(1)(b)">An amendment is ineffective if the amendment's adoption does not include the required approval or satisfy the specified condition.</subsection></subsection><subsection number="16-20-109(2)"><subsection number="16-20-109(2)(a)">The obligations of a limited liability company and the limited liability company's members to a person in the person's capacity as a transferee or a person dissociated as a member are governed by the operating agreement.</subsection><subsection number="16-20-109(2)(b)">Subject only to a court order issued under Subsection <xref depth="4" refnumber="16-20-503(2)(b)">16-20-503(2)(b)</xref> to effectuate a charging order, an amendment to the operating agreement made after a person becomes a transferee or is dissociated as a member:<subsection number="16-20-109(2)(b)(i)">is effective with regard to any debt, obligation, or other liability of the limited liability company or its members to the person in the person's capacity as a transferee or person dissociated as a member; and</subsection><subsection number="16-20-109(2)(b)(ii)">is not effective to the extent the amendment imposes a new debt, obligation, or other liability on the transferee or person dissociated as a member.</subsection></subsection></subsection><subsection number="16-20-109(3)">If a record delivered by a limited liability company to the division for filing becomes effective and contains a provision that would be ineffective under Section <xref depth="3" refnumber="16-20-107">16-20-107</xref> if contained in the operating agreement, the provision is ineffective in the record.</subsection><subsection number="16-20-109(4)">Subject to Subsection <xref depth="4" refnumber="48-3a-114(3)" start="0">(3)</xref>, if a record delivered by a limited liability company to the division for filing becomes effective and conflicts with a provision of the operating agreement:<subsection number="16-20-109(4)(a)">the operating agreement prevails as to members, persons dissociated as members, transferees, and managers; and</subsection><subsection number="16-20-109(4)(b)">the record prevails as to other persons to the extent the persons reasonably rely on the record.</subsection></subsection></section><section number="16-20-110"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Reservation of power to amend or repeal.</catchline><tab/>The Legislature of this state has power to amend or repeal all or part of this chapter at any time, and all domestic and foreign limited liability companies subject to this chapter are governed by the amendment or repeal.</section><section number="16-20-111"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Provisions Applicable to All Business Entities applicable.</catchline>Chapter 1a, Provisions Applicable to All Business Entities, applies to the provisions of this chapter.</section></part><part number="16-20-2"><catchline>Formation -- Certificate Of Organization And Other Filings</catchline><section number="16-20-201"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Formation of limited liability company -- Certificate of organization.</catchline><subsection number="16-20-201(1)">One or more persons may act as organizers to form a limited liability company by delivering to the division for filing a certificate of organization.</subsection><subsection number="16-20-201(2)">A certificate of organization must state:<subsection number="16-20-201(2)(a)">the name of the limited liability company, which must comply with Section <xref depth="3" refnumber="16-1a-302">16-1a-302</xref>;</subsection><subsection number="16-20-201(2)(b)">the street and mailing address of the limited liability company's principal office;</subsection><subsection number="16-20-201(2)(c)">the information required by Section <xref depth="3" refnumber="16-1a-404">16-1a-404</xref>;</subsection><subsection number="16-20-201(2)(d)">if the limited liability company is a low-profit limited liability company, a statement that the limited liability company is a low-profit limited liability company;</subsection><subsection number="16-20-201(2)(e)">if the limited liability company is a professional services company, the information required by Section <xref depth="3" refnumber="16-20-903">16-20-903</xref>; and</subsection><subsection number="16-20-201(2)(f)">if the limited liability company is to have one or more series in which the liabilities of the series are to be limited as contemplated by Subsection <xref depth="4" refnumber="16-20-1001(2)">16-20-1001(2)</xref>, notice of the limitation on liability in accordance with Section <xref depth="3" refnumber="16-20-1002">16-20-1002</xref>.</subsection></subsection><subsection number="16-20-201(3)"><subsection number="16-20-201(3)(a)">A certificate of organization may contain statements as to matters other than those required by Subsection <xref depth="4" refnumber="48-3a-201(2)" start="0">(2)</xref>, but may not vary or otherwise affect the provisions specified in Subsection <xref depth="4" refnumber="16-20-107(3)">16-20-107(3)</xref> in a manner inconsistent with that section.</subsection><subsection number="16-20-201(3)(b)">However, a statement in a certificate of organization is not effective as a statement of authority.</subsection></subsection><subsection number="16-20-201(4)">A limited liability company is formed when the limited liability company's certificate of organization becomes effective and at least one person becomes a member.</subsection></section><section number="16-20-202"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Amendment or restatement of certificate of organization.</catchline><subsection number="16-20-202(1)">A certificate of organization may be amended or restated at any time, except that in accordance with Section <xref depth="3" refnumber="16-20-1103">16-20-1103</xref>, a low-profit limited liability company shall amend the low-profit limited liability company's certificate of organization if the limited liability company ceases to be a low-profit limited liability company.</subsection><subsection number="16-20-202(2)">To amend a limited liability company's certificate of organization, a limited liability company must deliver to the division for filing an amendment stating:<subsection number="16-20-202(2)(a)">the name of the limited liability company;</subsection><subsection number="16-20-202(2)(b)">the date of filing of the limited liability company's initial certificate of organization; and</subsection><subsection number="16-20-202(2)(c)">the changes the amendment makes to the certificate as most recently amended or restated.</subsection></subsection><subsection number="16-20-202(3)">To restate a limited liability company's certificate of organization, a limited liability company must deliver to the division for filing a restatement designated as such in the restatement's heading.</subsection><subsection number="16-20-202(4)">If a member of a member-managed limited liability company, or a manager of a manager-managed limited liability company, knows that any information in a filed certificate of organization was inaccurate when the certificate was filed or has become inaccurate due to changed circumstances, the member or manager shall promptly:<subsection number="16-20-202(4)(a)">cause the certificate to be amended; or</subsection><subsection number="16-20-202(4)(b)">if appropriate, deliver to the division for filing a statement of change under Section <xref depth="3" refnumber="16-1a-407">16-1a-407</xref> or a statement of correction under Section <xref depth="3" refnumber="16-1a-206">16-1a-206</xref>.</subsection></subsection></section></part><part number="16-20-3"><catchline>Relations Of Members And Managers To Persons Dealing With A Limited Liability Company</catchline><section number="16-20-301"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>No agency powers of member as member.</catchline><subsection number="16-20-301(1)">A member is not an agent of a limited liability company solely by reason of being a member.</subsection><subsection number="16-20-301(2)">A person's status as a member does not prevent or restrict law other than this chapter from imposing liability on a limited liability company because of the person's conduct.</subsection></section><section number="16-20-302"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Statement of authority.</catchline><subsection number="16-20-302(1)"><subsection number="16-20-302(1)(a)">A limited liability company may deliver to the division for filing a statement of authority.</subsection><subsection number="16-20-302(1)(b)">The statement:<subsection number="16-20-302(1)(b)(i)">must include the name of the limited liability company and the street and mailing addresses of the limited liability company's registered agent;</subsection><subsection number="16-20-302(1)(b)(ii)">with respect to any position that exists in or with respect to the limited liability company, may state the authority, or limitations on the authority, of all persons holding the position to:<subsection number="16-20-302(1)(b)(ii)(A)">execute an instrument transferring real property held in the name of the limited liability company; or</subsection><subsection number="16-20-302(1)(b)(ii)(B)">enter into other transactions on behalf of, or otherwise act for or bind, the limited liability company; and</subsection></subsection><subsection number="16-20-302(1)(b)(iii)">may state the authority, or limitations on the authority, of a specific person to:<subsection number="16-20-302(1)(b)(iii)(A)">execute an instrument transferring real property held in the name of the limited liability company; or</subsection><subsection number="16-20-302(1)(b)(iii)(B)">enter into other transactions on behalf of, or otherwise act for or bind, the limited liability company.</subsection></subsection></subsection></subsection><subsection number="16-20-302(2)">To amend or cancel a statement of authority filed by the division, a limited liability company must deliver to the division for filing an amendment or cancellation stating:<subsection number="16-20-302(2)(a)">the name of the limited liability company;</subsection><subsection number="16-20-302(2)(b)">the street and mailing addresses of the limited liability company's registered agent;</subsection><subsection number="16-20-302(2)(c)">the date the statement being affected became effective; and</subsection><subsection number="16-20-302(2)(d)">the contents of the amendment or a declaration that the statement is canceled.</subsection></subsection><subsection number="16-20-302(3)">A statement of authority affects only the power of a person to bind a limited liability company to persons that are not members.</subsection><subsection number="16-20-302(4)">Subject to Subsection <xref depth="4" refnumber="48-3a-302(3)" start="0">(3)</xref> and Subsection <xref depth="4" refnumber="16-20-102(4)">16-20-102(4)</xref>, and except as otherwise provided in Subsections <xref depth="4" refnumber="48-3a-302(6)" start="0">(6)</xref>, <xref depth="4" refnumber="48-3a-302(7)" start="0">(7)</xref>, and <xref depth="4" refnumber="48-3a-302(8)" start="0">(8)</xref>, a limitation on the authority of a person or a position contained in an effective statement of authority is not by itself evidence of knowledge or notice of the limitation by any person.</subsection><subsection number="16-20-302(5)">Subject to Subsection <xref depth="4" refnumber="48-3a-302(3)" start="0">(3)</xref>, a grant of authority not pertaining to transfers of real property and contained in an effective statement of authority is conclusive in favor of a person that gives value in reliance on the grant, except to the extent that when the person gives value:<subsection number="16-20-302(5)(a)">the person has knowledge to the contrary;</subsection><subsection number="16-20-302(5)(b)">the statement of authority has been canceled or restrictively amended under Subsection <xref depth="4" refnumber="48-3a-302(2)" start="0">(2)</xref>; or</subsection><subsection number="16-20-302(5)(c)">a limitation on the grant is contained in another statement of authority that became effective after the statement of authority containing the grant became effective.</subsection></subsection><subsection number="16-20-302(6)">Subject to Subsection <xref depth="4" refnumber="48-3a-302(3)" start="0">(3)</xref>, an effective statement of authority that grants authority to transfer real property held in the name of the limited liability company and a certified copy of which is recorded in the office for recording transfers of the real property is conclusive in favor of a person that gives value in reliance on the grant without knowledge to the contrary, except to the extent that when the person gives value:<subsection number="16-20-302(6)(a)">the statement of authority has been canceled or restrictively amended under Subsection <xref depth="4" refnumber="48-3a-302(2)" start="0">(2)</xref>, and a certified copy of the cancellation or restrictive amendment has been recorded in the office for recording transfers of the real property; or</subsection><subsection number="16-20-302(6)(b)">a limitation on the grant is contained in another statement of authority that became effective after the statement of authority containing the grant became effective, and a certified copy of the later-effective statement of authority is recorded in the office for recording transfers of the real property.</subsection></subsection><subsection number="16-20-302(7)">Subject to Subsection <xref depth="4" refnumber="48-3a-302(3)" start="0">(3)</xref>, if a certified copy of an effective statement of authority containing a limitation on the authority to transfer real property held in the name of a limited liability company is recorded in the office for recording transfers of that real property, all persons are deemed to know of the limitation.</subsection><subsection number="16-20-302(8)">Subject to Subsection <xref depth="4" refnumber="48-3a-302(9)" start="0">(9)</xref>, an effective statement of dissolution or termination is a cancellation of any filed statement of authority for the purposes of Subsection <xref depth="4" refnumber="48-3a-302(6)" start="0">(6)</xref> and is a limitation on authority for the purposes of Subsection <xref depth="4" refnumber="48-3a-302(7)" start="0">(7)</xref>.</subsection><subsection number="16-20-302(9)"><subsection number="16-20-302(9)(a)">After a statement of dissolution becomes effective, a limited liability company may deliver to the division for filing and, if appropriate, may record a statement of authority that is designated as a postdissolution statement of authority.</subsection><subsection number="16-20-302(9)(b)">The postdissolution statement of authority operates as provided in Subsections <xref depth="4" refnumber="48-3a-302(6)" start="0">(6)</xref> and <xref depth="4" refnumber="48-3a-302(7)" start="0">(7)</xref>.</subsection></subsection><subsection number="16-20-302(10)"><subsection number="16-20-302(10)(a)">Unless earlier canceled, an effective statement of authority is canceled by operation of law five years after the date on which the statement of authority, or the most recent amendment to the statement of authority, becomes effective.</subsection><subsection number="16-20-302(10)(b)">This cancellation operates without need for any recording under Subsection <xref depth="4" refnumber="48-3a-302(6)" start="0">(6)</xref> or <xref depth="4" refnumber="48-3a-302(7)" start="0">(7)</xref>.</subsection></subsection><subsection number="16-20-302(11)">An effective statement of denial operates as a restrictive amendment under this section and may be recorded by certified copy for purposes of Subsection <xref depth="4" refnumber="48-3a-302(6)(a)" start="0">(6)(a)</xref>.</subsection></section><section number="16-20-303"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Statement of denial.</catchline><tab/>A person named in a filed statement of authority granting that person authority may deliver to the division for filing a statement of denial that:<subsection number="16-20-303(1)">provides the name of the limited liability company and the caption of the statement of authority to which the statement of denial pertains; and</subsection><subsection number="16-20-303(2)">denies the grant of authority.</subsection></section><section number="16-20-304"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Liability of members and managers.</catchline><subsection number="16-20-304(1)"><subsection number="16-20-304(1)(a)">A debt, obligation, or other liability of a limited liability company is solely the debt, obligation, or other liability of the limited liability company.</subsection><subsection number="16-20-304(1)(b)">A member or manager is not personally liable, directly or indirectly, by way of contribution or otherwise, for a debt, obligation, or other liability of the limited liability company solely by reason of being or acting as a member or manager.</subsection><subsection number="16-20-304(1)(c)">This Subsection <xref depth="4" refnumber="48-3a-304(1)" start="0">(1)</xref> applies regardless of the dissolution of the limited liability company.</subsection></subsection><subsection number="16-20-304(2)">The failure of a limited liability company to observe formalities relating to the exercise of the limited liability company's powers or management of the limited liability company's activities and affairs is not a ground for imposing liability on a member or manager of the limited liability company for a debt, obligation, or other liability of the limited liability company.</subsection></section></part><part number="16-20-4"><catchline>Relations Of Members To Each Other And To A Limited Liability Company</catchline><section number="16-20-401"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Becoming a member.</catchline><subsection number="16-20-401(1)"><subsection number="16-20-401(1)(a)">If a limited liability company is to have only one member upon formation, the person becomes a member as agreed by that person and the organizer of the limited liability company.</subsection><subsection number="16-20-401(1)(b)">That person and the organizer may be, but need not be, different persons.</subsection><subsection number="16-20-401(1)(c)">If different, the organizer acts on behalf of the initial member.</subsection></subsection><subsection number="16-20-401(2)"><subsection number="16-20-401(2)(a)">If a limited liability company is to have more than one member upon formation, those persons become members as agreed by the persons before the formation of the limited liability company.</subsection><subsection number="16-20-401(2)(b)">The organizer acts on behalf of the persons in forming the limited liability company and may be, but need not be, one of the persons.</subsection></subsection><subsection number="16-20-401(3)">After formation of a limited liability company, a person becomes a member:<subsection number="16-20-401(3)(a)">as provided in the operating agreement;</subsection><subsection number="16-20-401(3)(b)">as the result of a transaction effective under:<subsection number="16-20-401(3)(b)(i)">Chapter 1a, Part 7, Merger;</subsection><subsection number="16-20-401(3)(b)(ii)">Chapter 1a, Part 8, Interest Exchange;</subsection><subsection number="16-20-401(3)(b)(iii)">Chapter 1a, Part 9, Conversion; or</subsection><subsection number="16-20-401(3)(b)(iv)">Chapter 1a, Part 10, Domestication;</subsection></subsection><subsection number="16-20-401(3)(c)">with the consent of all the members; or</subsection><subsection number="16-20-401(3)(d)">as provided in Subsection <xref depth="4" refnumber="16-20-701(3)">16-20-701(3)</xref>.</subsection></subsection><subsection number="16-20-401(4)">A person may become a member without:<subsection number="16-20-401(4)(a)">acquiring a transferable interest; or</subsection><subsection number="16-20-401(4)(b)">making or being obligated to make a contribution to the limited liability company.</subsection></subsection></section><section number="16-20-402"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Form of contribution.</catchline><tab/>A contribution may consist of property transferred to, services performed for, or another benefit provided to the limited liability company or an agreement to transfer property to, perform services for, or provide another benefit to the company.</section><section number="16-20-403"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Liability for contributions.</catchline><subsection number="16-20-403(1)">A person's obligation to make a contribution to a limited liability company is not excused by the person's death, disability, or other inability to perform personally.</subsection><subsection number="16-20-403(2)">If a person does not fulfill an obligation to make a contribution other than money, the person is obligated at the option of the limited liability company to contribute money equal to the value of the part of the contribution which has not been made.</subsection><subsection number="16-20-403(3)"><subsection number="16-20-403(3)(a)">The obligation of a person to make a contribution may be compromised only by consent of all members.</subsection><subsection number="16-20-403(3)(b)">If a creditor of a limited liability company extends credit or otherwise acts in reliance on an obligation described in Subsection <xref depth="4" refnumber="48-3a-403(1)" start="0">(1)</xref> without notice of a compromise under this Subsection <xref depth="4" refnumber="48-3a-403(3)" start="0">(3)</xref>, the creditor may enforce the obligation.</subsection></subsection></section><section number="16-20-404"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Sharing of and right to distributions before dissolution.</catchline><subsection number="16-20-404(1)">Any distributions made by a limited liability company before the limited liability company's dissolution and winding up must be in equal shares among members and persons dissociated as members, except to the extent necessary to comply with a transfer effective under Section <xref depth="3" refnumber="16-20-502">16-20-502</xref> or charging order in effect under Section <xref depth="3" refnumber="16-20-503">16-20-503</xref>.</subsection><subsection number="16-20-404(2)"><subsection number="16-20-404(2)(a)">A person has a right to a distribution before the dissolution and winding up of a limited liability company only if the limited liability company decides to make an interim distribution.</subsection><subsection number="16-20-404(2)(b)">A person's dissociation does not entitle the person to a distribution.</subsection></subsection><subsection number="16-20-404(3)"><subsection number="16-20-404(3)(a)">A person does not have a right to demand or receive a distribution from a limited liability company in any form other than money.</subsection><subsection number="16-20-404(3)(b)">Except as otherwise provided in Subsection <xref depth="4" refnumber="16-20-708(4)">16-20-708(4)</xref>, a limited liability company may distribute an asset in kind only if each part of the asset is fungible with each other part and each person receives a percentage of the asset equal in value to the person's share of distributions.</subsection></subsection><subsection number="16-20-404(4)"><subsection number="16-20-404(4)(a)">If a member or transferee becomes entitled to receive a distribution, the member or transferee has the status of, and is entitled to all remedies available to, a creditor of the limited liability company with respect to the distribution.</subsection><subsection number="16-20-404(4)(b)">However, the limited liability company's obligation to make a distribution is subject to offset for any amount owed to the limited liability company by the member or a person dissociated as a member on whose account the distribution is made.</subsection></subsection></section><section number="16-20-405"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Limitation on distributions.</catchline><subsection number="16-20-405(1)">A limited liability company may not make a distribution, including a distribution under Section <xref depth="3" refnumber="16-20-708">16-20-708</xref>, if after the distribution:<subsection number="16-20-405(1)(a)">the limited liability company would not be able to pay the limited liability company's debts as the debts become due in the ordinary course of the limited liability company's activities and affairs; or</subsection><subsection number="16-20-405(1)(b)">the limited liability company's total assets would be less than the sum of the limited liability company's total liabilities plus, unless the operating agreement permits otherwise, the amount that would be needed, if the limited liability company were to be dissolved and wound up at the time of the distribution, to satisfy the preferential rights upon dissolution and winding up of members and transferees whose preferential rights are superior to those of persons receiving the distribution.</subsection></subsection><subsection number="16-20-405(2)">A limited liability company may base a determination that a distribution is not prohibited under Subsection <xref depth="4" refnumber="48-3a-405(1)" start="0">(1)</xref> on:<subsection number="16-20-405(2)(a)">financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances; or</subsection><subsection number="16-20-405(2)(b)">a fair valuation or other method that is reasonable under the circumstances.</subsection></subsection><subsection number="16-20-405(3)">Except as otherwise provided in Subsection <xref depth="4" refnumber="48-3a-405(5)" start="0">(5)</xref>, the effect of a distribution under Subsection <xref depth="4" refnumber="48-3a-405(1)" start="0">(1)</xref> is measured:<subsection number="16-20-405(3)(a)">in the case of a distribution as defined in Subsection <xref refnumber="648-null-7">16-20-101(4)(a)</xref>, as of the earlier of:<subsection number="16-20-405(3)(a)(i)">the date money or other property is transferred or debt is incurred by the limited liability company; or</subsection><subsection number="16-20-405(3)(a)(ii)">the date the person entitled to the distribution ceases to own the interest or right being acquired by the limited liability company in return for the distribution;</subsection></subsection><subsection number="16-20-405(3)(b)">in the case of any other distribution of indebtedness, as of the date the indebtedness is distributed; and</subsection><subsection number="16-20-405(3)(c)">in all other cases, as of the date:<subsection number="16-20-405(3)(c)(i)">the distribution is authorized, if the payment occurs not later than 120 days after that date; or</subsection><subsection number="16-20-405(3)(c)(ii)">the payment is made, if the payment occurs more than 120 days after the distribution is authorized.</subsection></subsection></subsection><subsection number="16-20-405(4)">A limited liability company's indebtedness to a member or transferee incurred by reason of a distribution made in accordance with this section is at parity with the limited liability company's indebtedness to its general, unsecured creditors, except to the extent subordinated by agreement.</subsection><subsection number="16-20-405(5)"><subsection number="16-20-405(5)(a)">A limited liability company's indebtedness, including indebtedness issued as a distribution, is not a liability for purposes of Subsection <xref depth="4" refnumber="48-3a-405(1)" start="0">(1)</xref> if the terms of the indebtedness provide that payment of principal and interest is made only if and to the extent that payment of a distribution could then be made under this section.</subsection><subsection number="16-20-405(5)(b)">If the indebtedness is issued as a distribution, each payment of principal or interest is treated as a distribution, the effect of which is measured on the date the payment is made.</subsection></subsection><subsection number="16-20-405(6)">In measuring the effect of a distribution under Section <xref depth="3" refnumber="16-20-708">16-20-708</xref>, the liabilities of a dissolved limited liability company do not include any claim that has been disposed of under Section <xref depth="3" refnumber="16-20-705">16-20-705</xref>, <xref depth="3" refnumber="16-20-706">16-20-706</xref>, or <xref depth="3" refnumber="16-20-707">16-20-707</xref>.</subsection></section><section number="16-20-406"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Liability for improper distributions.</catchline><subsection number="16-20-406(1)">Except as otherwise provided in Subsection <xref depth="4" refnumber="48-3a-406(2)" start="0">(2)</xref>, if a member of a member-managed limited liability company or manager of a manager-managed limited liability company consents to a distribution made in violation of Section <xref depth="3" refnumber="16-20-405">16-20-405</xref> and in consenting to the distribution fails to comply with Section <xref depth="3" refnumber="16-20-409">16-20-409</xref>, the member or manager is personally liable to the limited liability company for the amount of the distribution which exceeds the amount that could have been distributed without the violation of Section <xref depth="3" refnumber="16-20-405">16-20-405</xref>.</subsection><subsection number="16-20-406(2)">To the extent the operating agreement of a member-managed limited liability company expressly relieves a member of the authority and responsibility to consent to distributions and imposes that authority and responsibility on one or more other members, the liability stated in Subsection <xref depth="4" refnumber="48-3a-406(1)" start="0">(1)</xref> applies to the other members and not the member that the operating agreement relieves of authority and responsibility.</subsection><subsection number="16-20-406(3)">A person that receives a distribution knowing that the distribution violated Section <xref depth="3" refnumber="16-20-405">16-20-405</xref> is personally liable to the limited liability company but only to the extent that the distribution received by the person exceeded the amount that could have been properly paid under Section <xref depth="3" refnumber="16-20-405">16-20-405</xref>.</subsection><subsection number="16-20-406(4)">A person against which an action is commenced because the person is liable under Subsection <xref depth="4" refnumber="48-3a-406(1)" start="0">(1)</xref> may:<subsection number="16-20-406(4)(a)">implead any other person that is liable under Subsection <xref depth="4" refnumber="48-3a-406(1)" start="0">(1)</xref> and seek to enforce a right of contribution from the person; and</subsection><subsection number="16-20-406(4)(b)">implead any person that received a distribution in violation of Subsection <xref depth="4" refnumber="48-3a-406(3)" start="0">(3)</xref> and seek to enforce a right of contribution from the person in the amount the person received in violation of Subsection <xref depth="4" refnumber="48-3a-406(3)" start="0">(3)</xref>.</subsection></subsection><subsection number="16-20-406(5)">An action under this section is barred unless commenced not later than two years after the distribution.</subsection></section><section number="16-20-407"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Management of limited liability company.</catchline><subsection number="16-20-407(1)">A limited liability company is a member-managed limited liability company unless the operating agreement:<subsection number="16-20-407(1)(a)">expressly provides that:<subsection number="16-20-407(1)(a)(i)">the limited liability company is or will be "manager-managed";</subsection><subsection number="16-20-407(1)(a)(ii)">the limited liability company is or will be "managed by managers"; or</subsection><subsection number="16-20-407(1)(a)(iii)">management of the limited liability company is or will be "vested in managers"; or</subsection></subsection><subsection number="16-20-407(1)(b)">includes words of similar import.</subsection></subsection><subsection number="16-20-407(2)">In a member-managed limited liability company, the following rules apply:<subsection number="16-20-407(2)(a)">Except as otherwise provided in this chapter, the management and conduct of the limited liability company are vested in the members.</subsection><subsection number="16-20-407(2)(b)">Each member has equal rights in the management and conduct of the limited liability company's activities and affairs.</subsection><subsection number="16-20-407(2)(c)">A difference arising among members as to a matter in the ordinary course of the activities of the limited liability company shall be decided by a majority of the members.</subsection><subsection number="16-20-407(2)(d)">An act outside the ordinary course of the activities and affairs of the limited liability company may be undertaken only with the affirmative vote or consent of all members.</subsection><subsection number="16-20-407(2)(e)">The affirmative vote or consent of all members is required to approve a transaction under:<subsection number="16-20-407(2)(e)(i)">Chapter 1a, Part 7, Merger;</subsection><subsection number="16-20-407(2)(e)(ii)">Chapter 1a, Part 8, Interest Exchange;</subsection><subsection number="16-20-407(2)(e)(iii)">Chapter 1a, Part 9, Conversion; or</subsection><subsection number="16-20-407(2)(e)(iv)"> Chapter 1a, Part 10, Domestication.</subsection></subsection><subsection number="16-20-407(2)(f)">The operating agreement may be amended only with the affirmative vote or consent of all members.</subsection></subsection><subsection number="16-20-407(3)">In a manager-managed limited liability company, the following rules apply:<subsection number="16-20-407(3)(a)">Except as expressly provided in this chapter, any matter relating to the activities and affairs of the limited liability company is decided exclusively by the manager, or, if there is more than one manager, by a majority of the managers.</subsection><subsection number="16-20-407(3)(b)">Each manager has equal rights in the management and conduct of the limited liability company's activities and affairs.</subsection><subsection number="16-20-407(3)(c)">The affirmative vote or consent of all members is required to:<subsection number="16-20-407(3)(c)(i)">approve a transaction under:<subsection number="16-20-407(3)(c)(i)(A)">Chapter 1a, Part 7, Merger;</subsection><subsection number="16-20-407(3)(c)(i)(B)">Chapter 1a, Part 8, Interest Exchange;</subsection><subsection number="16-20-407(3)(c)(i)(C)">Chapter 1a, Part 9, Conversion; or</subsection><subsection number="16-20-407(3)(c)(i)(D)">Chapter 1a, Part 10, Domestication;</subsection></subsection><subsection number="16-20-407(3)(c)(ii)">undertake any act outside the ordinary course of the limited liability company's activities and affairs; or</subsection><subsection number="16-20-407(3)(c)(iii)">amend the operating agreement.</subsection></subsection><subsection number="16-20-407(3)(d)">A manager may be chosen at any time by the consent of a majority of the members and remains a manager until a successor has been chosen, unless the manager at an earlier time resigns, is removed, or dies, or, in the case of a manager that is not an individual, terminates. A manager may be removed at any time by the consent of a majority of the members without notice or cause.</subsection><subsection number="16-20-407(3)(e)"><subsection number="16-20-407(3)(e)(i)">A person need not be a member to be a manager, but the dissociation of a member that is also a manager removes the person as a manager.</subsection><subsection number="16-20-407(3)(e)(ii)">If a person that is both a manager and a member ceases to be a manager, that cessation does not by itself dissociate the person as a member.</subsection></subsection><subsection number="16-20-407(3)(f)">A person's ceasing to be a manager does not discharge any debt, obligation, or other liability to the limited liability company or members which the person incurred while a manager.</subsection></subsection><subsection number="16-20-407(4)">An action requiring the vote or consent of members under this chapter may be taken without a meeting, and a member may appoint a proxy or other agent to vote, consent, or otherwise act for the member by signing an appointing record, personally or by the member's agent.</subsection><subsection number="16-20-407(5)"><subsection number="16-20-407(5)(a)">The dissolution of a limited liability company does not affect the applicability of this section.</subsection><subsection number="16-20-407(5)(b)">However, a person that wrongfully causes dissolution of the limited liability company loses the right to participate in management as a member and a manager.</subsection></subsection><subsection number="16-20-407(6)">A limited liability company shall reimburse a member for an advance to the limited liability company beyond the amount of capital the member agreed to contribute.</subsection><subsection number="16-20-407(7)">A payment or advance made by a member which gives rise to an obligation of the limited liability company under Subsection <xref depth="4" refnumber="48-3a-407(6)" start="0">(6)</xref> or Subsection <xref depth="4" refnumber="16-20-408(1)">16-20-408(1)</xref> constitutes a loan to the limited liability company which accrues interest from the date of the payment or advance.</subsection><subsection number="16-20-407(8)">A member is not entitled to remuneration for services performed for a member-managed limited liability company, except for reasonable compensation for services rendered in winding up the activities of the limited liability company.</subsection></section><section number="16-20-408"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Reimbursement, indemnification, advancement, and insurance.</catchline><subsection number="16-20-408(1)">A limited liability company shall reimburse a member of a member-managed limited liability company or the manager of a manager-managed limited liability company for any payment made by the member or manager in the course of the member's or manager's activities on behalf of the limited liability company, if the member or manager complied with Sections <xref depth="3" refnumber="16-20-407">16-20-407</xref> and <xref depth="3" refnumber="16-20-409">16-20-409</xref> in making the payment.</subsection><subsection number="16-20-408(2)">A limited liability company shall indemnify and hold harmless a person with respect to any claim or demand against the person and any debt, obligation, or other liability incurred by the person by reason of the person's former or present capacity as a member or manager, if the claim, demand, debt, obligation, or other liability does not arise from the person's breach of Section <xref depth="3" refnumber="16-20-405">16-20-405</xref>, <xref depth="3" refnumber="16-20-407">16-20-407</xref>, or <xref depth="3" refnumber="16-20-409">16-20-409</xref>.</subsection><subsection number="16-20-408(3)">In the ordinary course of its activities and affairs, a limited liability company may advance reasonable expenses, including attorney's fees and costs, incurred by a person in connection with a claim or demand against the person by reason of the person's former or present capacity as a member or manager, if the person promises to repay the limited liability company if the person ultimately is determined not to be entitled to be indemnified under Subsection <xref depth="4" refnumber="48-3a-408(2)" start="0">(2)</xref>.</subsection><subsection number="16-20-408(4)">A limited liability company may purchase and maintain insurance on behalf of a member or manager of the limited liability company against liability asserted against or incurred by the member or manager in that capacity or arising from that status even if, under Subsection <xref depth="4" refnumber="16-20-107(3)(g)">16-20-107(3)(g)</xref>, the operating agreement could not eliminate or limit the person's liability to the limited liability company for the conduct giving rise to the liability.</subsection></section><section number="16-20-409"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Standards of conduct for members and managers.</catchline><subsection number="16-20-409(1)">A member of a member-managed limited liability company owes to the limited liability company and, subject to Subsection <xref depth="4" refnumber="16-20-801(1)">16-20-801(1)</xref>, the other members the duties of loyalty and care stated in Subsections <xref depth="4" refnumber="48-3a-409(2)" start="0">(2)</xref> and <xref depth="4" refnumber="48-3a-409(3)" start="0">(3)</xref>.</subsection><subsection number="16-20-409(2)">The duty of loyalty of a member in a member-managed limited liability company includes the duties:<subsection number="16-20-409(2)(a)">to account to the limited liability company and to hold as trustee for it any property, profit, or benefit derived by the member:<subsection number="16-20-409(2)(a)(i)">in the conduct or winding up of the limited liability company's activities and affairs;</subsection><subsection number="16-20-409(2)(a)(ii)">from a use by the member of the limited liability company's property; or</subsection><subsection number="16-20-409(2)(a)(iii)">from the appropriation of a limited liability company opportunity;</subsection></subsection><subsection number="16-20-409(2)(b)">to refrain from dealing with the limited liability company in the conduct or winding up of the limited liability company's activities and affairs as or on behalf of a person having an interest adverse to the limited liability company; and</subsection><subsection number="16-20-409(2)(c)">to refrain from competing with the limited liability company in the conduct of the company's activities and affairs before the dissolution of the limited liability company.</subsection></subsection><subsection number="16-20-409(3)">The duty of care of a member of a member-managed limited liability company in the conduct or winding up of the limited liability company's activities and affairs is to refrain from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law.</subsection><subsection number="16-20-409(4)">A member shall discharge the duties and obligations under this chapter or under the operating agreement and exercise any rights consistently with the contractual obligation of good faith and fair dealing.</subsection><subsection number="16-20-409(5)">A member does not violate a duty or obligation under this chapter or under the operating agreement solely because the member's conduct furthers the member's own interest.</subsection><subsection number="16-20-409(6)">All the members of a member-managed limited liability company or a manager-managed limited liability company may authorize or ratify, after full disclosure of all material facts, a specific act or transaction that otherwise would violate the duty of loyalty.</subsection><subsection number="16-20-409(7)">It is a defense to a claim under Subsection <xref depth="4" refnumber="48-3a-409(2)(b)" start="0">(2)(b)</xref> and any comparable claim in equity or at common law that the transaction was fair to the limited liability company.</subsection><subsection number="16-20-409(8)">If, as permitted by Subsection <xref depth="4" refnumber="48-3a-409(6)" start="0">(6)</xref> or <xref depth="4" refnumber="48-3a-409(9)(f)" start="0">(9)(f)</xref> or the operating agreement, a member enters into a transaction with the limited liability company which otherwise would be prohibited by Subsection <xref depth="4" refnumber="48-3a-409(2)(b)" start="0">(2)(b)</xref>, the member's rights and obligations arising from the transaction are the same as those of a person that is not a member.</subsection><subsection number="16-20-409(9)">In a manager-managed limited liability company, the following rules apply:<subsection number="16-20-409(9)(a)">Subsections <xref depth="4" refnumber="48-3a-409(1)" start="0">(1)</xref>, <xref depth="4" refnumber="48-3a-409(2)" start="0">(2)</xref>, <xref depth="4" refnumber="48-3a-409(3)" start="0">(3)</xref>, and <xref depth="4" refnumber="48-3a-409(7)" start="0">(7)</xref> apply to the manager or managers and not the members.</subsection><subsection number="16-20-409(9)(b)">The duty stated under Subsection <xref depth="4" refnumber="48-3a-409(2)(c)" start="0">(2)(c)</xref> continues until winding up is completed.</subsection><subsection number="16-20-409(9)(c)">Subsection <xref depth="4" refnumber="48-3a-409(4)" start="0">(4)</xref> applies to managers and members.</subsection><subsection number="16-20-409(9)(d)">Subsection <xref depth="4" refnumber="48-3a-409(5)" start="0">(5)</xref> applies only to members.</subsection><subsection number="16-20-409(9)(e)">The power to ratify under Subsection <xref depth="4" refnumber="48-3a-409(6)" start="0">(6)</xref> applies only to the members.</subsection><subsection number="16-20-409(9)(f)">Subject to Subsection <xref depth="4" refnumber="48-3a-409(4)" start="0">(4)</xref>, a member does not have any duty to the limited liability company or to any other member solely by reason of being a member.</subsection></subsection></section><section number="16-20-410"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Rights of member, manager, and person dissociated as member to information.</catchline><subsection number="16-20-410(1)">In a member-managed limited liability company, the following rules apply:<subsection number="16-20-410(1)(a)">On reasonable notice, a member may inspect and copy during regular business hours, at a reasonable location specified by the limited liability company, any record maintained by the limited liability company regarding the limited liability company's activities, affairs, financial condition, and other circumstances, to the extent the information is material to the member's rights and duties under the operating agreement or this chapter.</subsection><subsection number="16-20-410(1)(b)">The limited liability company shall furnish to each member:<subsection number="16-20-410(1)(b)(i)">without demand, any information concerning the limited liability company's activities, affairs, financial condition, and other circumstances which the limited liability company knows and is material to the proper exercise of the member's rights and duties under the operating agreement or this chapter, except to the extent the limited liability company can establish that it reasonably believes the member already knows the information; and</subsection><subsection number="16-20-410(1)(b)(ii)">on demand, any other information concerning the limited liability company's activities, affairs, financial condition, and other circumstances, except to the extent the demand or information demanded is unreasonable or otherwise improper under the circumstances.</subsection></subsection><subsection number="16-20-410(1)(c)">The duty to furnish information under Subsection <xref depth="4" refnumber="48-3a-410(1)(b)" start="0">(1)(b)</xref> also applies to each member to the extent the member knows any of the information described in Subsection <xref depth="4" refnumber="48-3a-410(1)(b)" start="0">(1)(b)</xref>.</subsection></subsection><subsection number="16-20-410(2)">In a manager-managed limited liability company, the following rules apply:<subsection number="16-20-410(2)(a)">The informational rights stated in Subsection <xref depth="4" refnumber="48-3a-410(1)" start="0">(1)</xref> and the duty stated in Subsection <xref depth="4" refnumber="48-3a-410(1)(c)" start="0">(1)(c)</xref> apply to the managers and not the members.</subsection><subsection number="16-20-410(2)(b)">During regular business hours and at a reasonable location specified by the limited liability company, a member may inspect and copy full information regarding the activities, affairs, financial condition, and other circumstances of the limited liability company as is just and reasonable if:<subsection number="16-20-410(2)(b)(i)">the member seeks the information for a purpose reasonably related to the member's interest as a member;</subsection><subsection number="16-20-410(2)(b)(ii)">the member makes a demand in a record received by the limited liability company, describing with reasonable particularity the information sought and the purpose for seeking the information; and</subsection><subsection number="16-20-410(2)(b)(iii)">the information sought is directly connected to the member's purpose.</subsection></subsection><subsection number="16-20-410(2)(c)">Not later than 10 days after receiving a demand in accordance with Subsection <xref depth="4" refnumber="48-3a-410(2)(b)(ii)" start="0">(2)(b)(ii)</xref>, the limited liability company shall in a record inform the member that made the demand of:<subsection number="16-20-410(2)(c)(i)">the information that the limited liability company will provide in response to the demand and when and where the limited liability company will provide the information; and</subsection><subsection number="16-20-410(2)(c)(ii)">the limited liability company's reasons for declining, if the limited liability company declines to provide any demanded information.</subsection></subsection><subsection number="16-20-410(2)(d)">Whenever this chapter or an operating agreement provides for a member to give or withhold consent to a matter, before the consent is given or withheld, the limited liability company shall, without demand, provide the member with all information that is known to the limited liability company and is material to the member's decision.</subsection></subsection><subsection number="16-20-410(3)">Subject to Subsection <xref depth="4" refnumber="48-3a-410(9)" start="0">(9)</xref>, on 10 days' demand made in a record received by a limited liability company, a person dissociated as a member may have access to information to which the person was entitled while a member if:<subsection number="16-20-410(3)(a)">the information pertains to the period during which the person was a member;</subsection><subsection number="16-20-410(3)(b)">the person seeks the information in good faith; and</subsection><subsection number="16-20-410(3)(c)">the person satisfies the requirements imposed on a member by Subsection <xref depth="4" refnumber="48-3a-410(2)(b)" start="0">(2)(b)</xref>.</subsection></subsection><subsection number="16-20-410(4)">A limited liability company shall respond to a demand made in accordance with Subsection <xref depth="4" refnumber="48-3a-410(3)" start="0">(3)</xref> in the manner provided in Subsection <xref depth="4" refnumber="48-3a-410(2)(c)" start="0">(2)(c)</xref>.</subsection><subsection number="16-20-410(5)">A limited liability company may charge a person that makes a demand under this section the reasonable costs of copying, limited to the costs of labor and material.</subsection><subsection number="16-20-410(6)">A member or person dissociated as a member may exercise rights under this section through an agent or, in the case of an individual under legal disability, a legal representative. Any restriction or condition imposed by the operating agreement or under Subsection <xref depth="4" refnumber="48-3a-410(9)" start="0">(9)</xref> applies both to the agent or legal representative and the member or person dissociated as a member.</subsection><subsection number="16-20-410(7)">Subject to Subsection <xref depth="4" refnumber="48-3a-410(9)" start="0">(9)</xref>, the rights under this section do not extend to a person as transferee.</subsection><subsection number="16-20-410(8)">If a member dies, Section <xref depth="3" refnumber="16-20-504">16-20-504</xref> applies.</subsection><subsection number="16-20-410(9)"><subsection number="16-20-410(9)(a)">In addition to any restriction or condition stated in the operating agreement, a limited liability company, as a matter within the ordinary course of its activities and affairs, may impose reasonable restrictions and conditions on access to and use of information to be furnished under this section, including designating information confidential and imposing nondisclosure and safeguarding obligations on the recipient.</subsection><subsection number="16-20-410(9)(b)">In a dispute concerning the reasonableness of a restriction under this Subsection <xref depth="4" refnumber="48-3a-410(9)" start="0">(9)</xref>, the limited liability company has the burden of proving reasonableness.</subsection></subsection></section></part><part number="16-20-5"><catchline>Transferable Interests And Rights Of Transferees And Creditors</catchline><section number="16-20-501"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Nature of transferable interest.</catchline><tab/>A transferable interest is personal property.</section><section number="16-20-502"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Transfer of transferable interest.</catchline><subsection number="16-20-502(1)">Subject to Subsection <xref depth="4" refnumber="16-20-503(6)">16-20-503(6)</xref>, a transfer, in whole or in part, of a transferable interest:<subsection number="16-20-502(1)(a)">is permissible;</subsection><subsection number="16-20-502(1)(b)">does not by itself cause a member's dissociation or a dissolution and winding up of the limited liability company's activities and affairs; and</subsection><subsection number="16-20-502(1)(c)">subject to Section <xref depth="3" refnumber="16-20-504">16-20-504</xref>, does not entitle the transferee to:<subsection number="16-20-502(1)(c)(i)">participate in the management or conduct of the limited liability company's activities and affairs; or</subsection><subsection number="16-20-502(1)(c)(ii)">except as otherwise provided in Subsection <xref depth="4" refnumber="48-3a-502(3)" start="0">(3)</xref>, have access to records or other information concerning the limited liability company's activities and affairs.</subsection></subsection></subsection><subsection number="16-20-502(2)">A transferee has the right to receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled.</subsection><subsection number="16-20-502(3)">In a dissolution and winding up of a limited liability company, a transferee is entitled to an account of the limited liability company's transactions only from the date of dissolution.</subsection><subsection number="16-20-502(4)">A transferable interest may be evidenced by a certificate of the interest issued by the limited liability company in a record, and, subject to this section, the interest represented by the certificate may be transferred by a transfer of the certificate.</subsection><subsection number="16-20-502(5)">A limited liability company need not give effect to a transferee's rights under this section until the limited liability company knows or has notice of the transfer.</subsection><subsection number="16-20-502(6)">A transfer of a transferable interest in violation of a restriction on transfer contained in the operating agreement is ineffective as to a person having knowledge or notice of the restriction at the time of transfer.</subsection><subsection number="16-20-502(7)">Except as otherwise provided in Subsection <xref depth="4" refnumber="16-20-602(5)(b)">16-20-602(5)(b)</xref>, if a member transfers a transferable interest, the transferor retains the rights of a member other than the transferable interest transferred and retains all the duties and obligations of a member.</subsection><subsection number="16-20-502(8)">If a member transfers a transferable interest to a person that becomes a member with respect to the transferred interest, the transferee is liable for the member's obligations under Section <xref depth="3" refnumber="16-20-403">16-20-403</xref> and Subsection <xref depth="4" refnumber="16-20-406(3)">16-20-406(3)</xref> known to the transferee when the transferee becomes a member.</subsection></section><section number="16-20-503"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Charging order.</catchline><subsection number="16-20-503(1)"><subsection number="16-20-503(1)(a)">On application by a judgment creditor of a member or transferee, a court may enter a charging order against the transferable interest of the judgment debtor for the unsatisfied amount of the judgment.</subsection><subsection number="16-20-503(1)(b)">Except as otherwise provided in Subsection <xref depth="4" refnumber="48-3a-503(6)" start="0">(6)</xref>, a charging order constitutes a lien on a judgment debtor's transferable interest and, after the limited liability company has been served with the charging order, requires the limited liability company to pay over to the person to which the charging order was issued any distribution that otherwise would be paid to the judgment debtor.</subsection></subsection><subsection number="16-20-503(2)">To the extent necessary to effectuate the collection of distributions in accordance with a charging order in effect under Subsection <xref depth="4" refnumber="48-3a-503(1)" start="0">(1)</xref>, the court may:<subsection number="16-20-503(2)(a)">appoint a receiver of the distributions subject to the charging order, with the power to make all inquiries the judgment debtor might have made; and</subsection><subsection number="16-20-503(2)(b)">make all other orders necessary to give effect to the charging order.</subsection></subsection><subsection number="16-20-503(3)"><subsection number="16-20-503(3)(a)">Upon a showing that distributions under a charging order will not pay the judgment debt within a reasonable time, the court may foreclose the lien and order the sale of the transferable interest.</subsection><subsection number="16-20-503(3)(b)">Except as otherwise provided in Subsection <xref depth="4" refnumber="48-3a-503(6)" start="0">(6)</xref>, the purchaser at the foreclosure sale only obtains the transferable interest, does not thereby become a member, and is subject to Section <xref depth="3" refnumber="16-20-502">16-20-502</xref>.</subsection></subsection><subsection number="16-20-503(4)">At any time before foreclosure under Subsection <xref depth="4" refnumber="48-3a-503(3)" start="0">(3)</xref>, the member or transferee whose transferable interest is subject to a charging order under Subsection <xref depth="4" refnumber="48-3a-503(1)" start="0">(1)</xref> may extinguish the charging order by satisfying the judgment and filing a certified copy of the satisfaction with the court that issued the charging order.</subsection><subsection number="16-20-503(5)">At any time before foreclosure under Subsection <xref depth="4" refnumber="48-3a-503(3)" start="0">(3)</xref>, a limited liability company or one or more members whose transferable interests are not subject to the charging order may pay to the judgment creditor the full amount due under the judgment and thereby succeed to the rights of the judgment creditor, including the charging order.</subsection><subsection number="16-20-503(6)">If a court orders foreclosure of a charging order lien against the sole member of a limited liability company:<subsection number="16-20-503(6)(a)">the court shall confirm the sale;</subsection><subsection number="16-20-503(6)(b)">the purchaser at the sale obtains the member's entire interest, not only the member's transferable interest;</subsection><subsection number="16-20-503(6)(c)">the purchaser thereby becomes a member; and</subsection><subsection number="16-20-503(6)(d)">the person whose interest was subject to the foreclosed charging order is dissociated as a member.</subsection></subsection><subsection number="16-20-503(7)">This chapter does not deprive any member or transferee of the benefit of any exemption laws applicable to the transferable interest of the member or transferee.</subsection><subsection number="16-20-503(8)">This section provides the exclusive remedy by which a person seeking to enforce a judgment against a member or transferee may, in the capacity of judgment creditor, satisfy the judgment from the judgment debtor's transferable interest.</subsection></section><section number="16-20-504"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Power of legal representative of deceased member.</catchline><tab/>If a member dies, the deceased member's legal representative may exercise:<subsection number="16-20-504(1)">the rights of a transferee provided in Subsection <xref depth="4" refnumber="16-20-502(3)">16-20-502(3)</xref>; and</subsection><subsection number="16-20-504(2)">for the purposes of settling the estate, the rights the deceased member had under Section <xref depth="3" refnumber="16-20-410">16-20-410</xref>.</subsection></section></part><part number="16-20-6"><catchline>Dissociation</catchline><section number="16-20-601"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Power to dissociate as member -- Wrongful dissociation.</catchline><subsection number="16-20-601(1)">A person has the power to dissociate as a member at any time, rightfully or wrongfully, by withdrawing as a member by express will under Subsection <xref refnumber="742-null-1">16-20-602(1)</xref>.</subsection><subsection number="16-20-601(2)">A person's dissociation as a member is wrongful only if the dissociation:<subsection number="16-20-601(2)(a)">is in breach of an express provision of the operating agreement; or</subsection><subsection number="16-20-601(2)(b)">occurs before the completion of the winding up of the limited liability company and:<subsection number="16-20-601(2)(b)(i)">the person withdraws as a member by express will;</subsection><subsection number="16-20-601(2)(b)(ii)">the person is expelled as a member by judicial order under Subsection <xref refnumber="742-null-14">16-20-602(6)</xref>;</subsection><subsection number="16-20-601(2)(b)(iii)">the person is dissociated under Subsection <xref depth="4" refnumber="16-20-602(8)">16-20-602(8)</xref>; or</subsection><subsection number="16-20-601(2)(b)(iv)">in the case of a person that is not a trust other than a business trust, an estate, or an individual, the person is expelled or otherwise dissociated as a member because it willfully dissolved or terminated.</subsection></subsection></subsection><subsection number="16-20-601(3)"><subsection number="16-20-601(3)(a)">A person that wrongfully dissociates as a member is liable to the limited liability company and, subject to Section <xref depth="3" refnumber="16-20-801">16-20-801</xref>, to the other members for damages caused by the dissociation.</subsection><subsection number="16-20-601(3)(b)">The liability is in addition to any debt, obligation, or other liability of the member to the limited liability company or the other members.</subsection></subsection></section><section number="16-20-602"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Events causing dissociation.</catchline><tab/>A person is dissociated as a member when:<subsection number="16-20-602(1)">the limited liability company has notice of the person's express will to withdraw as a member, but, if the person specified a withdrawal date later than the date the limited liability company had notice, on that later date;</subsection><subsection number="16-20-602(2)">an event stated in the operating agreement as causing the person's dissociation occurs;</subsection><subsection number="16-20-602(3)">the person's entire interest is transferred in a foreclosure sale under Subsection <xref depth="4" refnumber="16-20-503(6)">16-20-503(6)</xref>;</subsection><subsection number="16-20-602(4)">the person is expelled as a member in accordance with the operating agreement;</subsection><subsection number="16-20-602(5)">the person is expelled as a member by the unanimous consent of the other members if:<subsection number="16-20-602(5)(a)">it is unlawful to carry on the limited liability company's activities and affairs with the person as a member;</subsection><subsection number="16-20-602(5)(b)">there has been a transfer of all the person's transferable interest in the limited liability company, other than:<subsection number="16-20-602(5)(b)(i)">a transfer for security purposes; or</subsection><subsection number="16-20-602(5)(b)(ii)">a charging order in effect under Section <xref depth="3" refnumber="16-20-503">16-20-503</xref> which has not been foreclosed;</subsection></subsection><subsection number="16-20-602(5)(c)">the person is a corporation, and:<subsection number="16-20-602(5)(c)(i)">the limited liability company notifies the person that the person will be expelled as a member because the person has filed a statement of dissolution or the equivalent, the person's charter has been revoked, or the person's right to conduct business has been suspended by the jurisdiction of the person's incorporation; and</subsection><subsection number="16-20-602(5)(c)(ii)">not later than 90 days after the notification the statement of dissolution or the equivalent has not been revoked or the person's charter or right to conduct business has not been reinstated; or</subsection></subsection><subsection number="16-20-602(5)(d)">the person is an unincorporated entity that has been dissolved and whose business is being wound up;</subsection></subsection><subsection number="16-20-602(6)">on application by the limited liability company or a member in a direct action under Section <xref depth="3" refnumber="16-20-801">16-20-801</xref>, the person is expelled as a member by judicial order because the person:<subsection number="16-20-602(6)(a)">has engaged or is engaging in wrongful conduct that has affected adversely and materially, or will affect adversely and materially, the limited liability company's activities and affairs;</subsection><subsection number="16-20-602(6)(b)">has committed willfully or persistently, or is committing willfully or persistently, a material breach of the operating agreement or a duty or obligation under Section <xref depth="3" refnumber="16-20-409">16-20-409</xref>; or</subsection><subsection number="16-20-602(6)(c)">has engaged or is engaging in conduct relating to the limited liability company's activities and affairs which makes it not reasonably practicable to carry on the activities and affairs with the person as a member;</subsection></subsection><subsection number="16-20-602(7)">in the case of an individual:<subsection number="16-20-602(7)(a)">the individual dies; or</subsection><subsection number="16-20-602(7)(b)">in a member-managed limited liability company:<subsection number="16-20-602(7)(b)(i)">a guardian or general conservator for the individual is appointed; or</subsection><subsection number="16-20-602(7)(b)(ii)">a court orders that the individual has otherwise become incapable of performing the individual's duties as a member under this chapter or the operating agreement;</subsection></subsection></subsection><subsection number="16-20-602(8)">in a member-managed limited liability company, the person:<subsection number="16-20-602(8)(a)">becomes a debtor in bankruptcy;</subsection><subsection number="16-20-602(8)(b)">executes an assignment for the benefit of creditors; or</subsection><subsection number="16-20-602(8)(c)">seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator of the person or of all or substantially all the person's property;</subsection></subsection><subsection number="16-20-602(9)">in the case of a person that is a testamentary or inter vivos trust or is acting as a member by virtue of being a trustee of such a trust, the trust's entire transferable interest in the limited liability company is distributed;</subsection><subsection number="16-20-602(10)">in the case of a person that is an estate or is acting as a member by virtue of being a personal representative of an estate, the estate's entire transferable interest in the limited liability company is distributed, but not merely by reason of substitution of a successor personal representative;</subsection><subsection number="16-20-602(11)">in the case of a person that is not an individual, corporation, unincorporated entity, trust, or estate, the existence of the person terminates;</subsection><subsection number="16-20-602(12)">the limited liability company participates in a merger under Chapter 1a, Part 7, Merger, and:<subsection number="16-20-602(12)(a)">the limited liability company is not the surviving entity; or</subsection><subsection number="16-20-602(12)(b)">otherwise as a result of the merger, the person ceases to be a member;</subsection></subsection><subsection number="16-20-602(13)">the limited liability company participates in an interest exchange under Chapter 1a, Part 8, Interest Exchange, and, as a result of the interest exchange, the person ceases to be a member;</subsection><subsection number="16-20-602(14)">the limited liability company participates in a conversion under Chapter 1a, Part 9, Conversion;</subsection><subsection number="16-20-602(15)">the limited liability company participates in a domestication under Chapter 1a, Part 10, Domestication, and, as a result of the domestication, the person ceases to be a member; or</subsection><subsection number="16-20-602(16)">the limited liability company dissolves and completes winding up.</subsection></section><section number="16-20-603"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Effect of dissociation.</catchline><subsection number="16-20-603(1)">If a person is dissociated as a member:<subsection number="16-20-603(1)(a)">the person's right to participate as a member in the management and conduct of the company's activities and affairs terminates;</subsection><subsection number="16-20-603(1)(b)">if the limited liability company is member-managed, the person's duties and obligations under Section <xref depth="3" refnumber="16-20-409">16-20-409</xref> as a member end with regard to matters arising and events occurring after the person's dissociation; and</subsection><subsection number="16-20-603(1)(c)">subject to Section <xref depth="3" refnumber="16-20-504">16-20-504</xref> and Chapter 1a, Part 7, Merger, Chapter 1a, Part 8, Interest Exchange, Chapter 1a, Part 9, Conversion, or Chapter 1a, Part 10, Domestication, any transferable interest owned by the person in the person's capacity as a member immediately before dissociation as a member is owned by the person solely as a transferee.</subsection></subsection><subsection number="16-20-603(2)">A person's dissociation as a member does not of itself discharge the person from any debt, obligation, or other liability to the limited liability company or the other members which the person incurred while a member.</subsection></section></part><part number="16-20-7"><catchline>Dissolution And Winding Up</catchline><section number="16-20-701"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Events causing dissolution.</catchline><tab/>A limited liability company is dissolved, and the limited liability company's activities and affairs must be wound up, upon the occurrence of any of the following:<subsection number="16-20-701(1)">an event, circumstance, or date that the certificate of organization or operating agreement states causes dissolution;</subsection><subsection number="16-20-701(2)">the consent of all the members;</subsection><subsection number="16-20-701(3)">the passage of 90 consecutive days during which the limited liability company has no members unless:<subsection number="16-20-701(3)(a)">consent to admit at least one specified person as a member is given by transferees owning the rights to receive a majority of distributions as transferees at the time the consent is to be effective; and</subsection><subsection number="16-20-701(3)(b)">at least one person becomes a member in accordance with the consent;</subsection></subsection><subsection number="16-20-701(4)">upon a petition brought by a member, the entry of a court order dissolving the limited liability company on the grounds that:<subsection number="16-20-701(4)(a)">the conduct of all or substantially all of the limited liability company's activities and affairs is unlawful; or</subsection><subsection number="16-20-701(4)(b)">it is not reasonably practicable to carry on the limited liability company's activities and affairs in conformity with the certificate of organization and the operating agreement;</subsection></subsection><subsection number="16-20-701(5)">upon a petition brought by a member, the entry of a court order dissolving the limited liability company on the grounds that the managers or those members in control of the limited liability company:<subsection number="16-20-701(5)(a)">have acted, are acting, or will act in a manner that is illegal or fraudulent; or</subsection><subsection number="16-20-701(5)(b)">have acted, are acting, or will act in a manner that is oppressive and was, is, or will be directly harmful to the applicant; or</subsection></subsection><subsection number="16-20-701(6)">the signing and filing of a statement of administrative dissolution by the division under Section <xref depth="3" refnumber="16-1a-603">16-1a-603</xref>.</subsection></section><section number="16-20-702"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Election to purchase in lieu of dissolution.</catchline><subsection number="16-20-702(1)"><subsection number="16-20-702(1)(a)">In a proceeding under Subsection <xref refnumber="746-null-9">16-20-701(5)</xref> to dissolve a limited liability company, the limited liability company may elect or, if the limited liability company fails to elect, one or more members may elect to purchase the interest in the limited liability company owned by the applicant member at the fair market value of the interest, determined as provided in this section.</subsection><subsection number="16-20-702(1)(b)">An election in accordance with this Subsection <xref depth="4" refnumber="48-3a-702(1)" start="0">(1)</xref> is irrevocable unless a court determines that it is equitable to set aside or modify the election.</subsection></subsection><subsection number="16-20-702(2)"><subsection number="16-20-702(2)(a)">An election to purchase in accordance with this section may be filed with a court at any time within 90 days after the filing of the petition in a proceeding under Subsection <xref refnumber="746-null-9">16-20-701(5)</xref> or at any later time as the court in the court's discretion may allow.</subsection><subsection number="16-20-702(2)(b)">If the limited liability company files an election with a court within the 90-day period, or at any later time allowed by the court, to purchase the interest in the limited liability company owned by the applicant member, the limited liability company shall purchase the interest in the manner provided in this section.</subsection></subsection><subsection number="16-20-702(3)"><subsection number="16-20-702(3)(a)">If the limited liability company does not file an election with a court within the time period, but an election to purchase the interest in the limited liability company owned by the applicant member is filed by one or more members within the time period, the limited liability company shall, within 10 days after the later of the end of the time period allowed for the filing of elections to purchase under this section or notification from the court of an election by members to purchase the interest in the limited liability company owned by the applicant member as provided in this section, give written notice of the election to purchase to all members of the limited liability company, other than the applicant member.</subsection><subsection number="16-20-702(3)(b)">The notice shall state the name and the percentage interest in the limited liability company owned by the applicant member and the name and the percentage interest in the limited liability company owned by each electing member.</subsection><subsection number="16-20-702(3)(c)">The notice shall advise any recipients who have not participated in the election of their right to join in the election to purchase the interest in the limited liability company in accordance with this section and of the date by which any notice of intent to participate must be filed with the court.</subsection></subsection><subsection number="16-20-702(4)">Members who wish to participate in the purchase of the interest in the limited liability company of the applicant member must file notice of their intention to join in the purchase by electing members no later than 30 days after the effective date of the limited liability company's notice of their right to join in the election to purchase.</subsection><subsection number="16-20-702(5)">All members who have filed with the court an election or notice of their intention to participate in the election to purchase the interest in the limited liability company of the applicant member thereby become irrevocably obligated to participate in the purchase of the interest from the applicant member upon the terms and conditions of this section, unless the court otherwise directs.</subsection><subsection number="16-20-702(6)">After an election has been filed by the limited liability company or one or more members, the proceedings under Subsection <xref depth="4" refnumber="16-20-701(5)">16-20-701(5)</xref> may not be discontinued or settled, nor may the applicant member sell or otherwise dispose of the applicant member's interest in the limited liability company, unless the court determines that it would be equitable to the limited liability company and the members, other than the applicant member, to permit any discontinuance, settlement, sale, or other disposition.</subsection><subsection number="16-20-702(7)">If, within 60 days after the earlier of the limited liability company filing of an election to purchase the interest in the limited liability company of the applicant member or the limited liability company's mailing of a notice to the limited liability company's members of the filing of an election by the members to purchase the interest in the limited liability company of the applicant member, the applicant member and electing limited liability company or members reach agreement as to the fair market value and terms of the purchase of the applicant member's interest, the court shall enter an order directing the purchase of the applicant member's interest, upon the terms and conditions agreed to by the parties.</subsection><subsection number="16-20-702(8)">If the parties are unable to reach an agreement as provided for in Subsection <xref depth="4" refnumber="48-3a-702(7)" start="0">(7)</xref>, upon application of any party, the court shall stay the proceedings under Subsection <xref depth="4" refnumber="16-20-701(5)">16-20-701(5)</xref> and determine the fair market value of the applicant member's interest in the limited liability company as of the day before the date on which the petition under Subsection <xref depth="4" refnumber="16-20-701(5)">16-20-701(5)</xref> was filed or as of any other date the court determines to be appropriate under the circumstances and based on the factors the court determines to be appropriate.</subsection><subsection number="16-20-702(9)"><subsection number="16-20-702(9)(a)">Upon determining the fair market value of the interest in the limited liability company of the applicant member, the court shall enter an order directing the purchase of the interest in the limited liability company upon terms and conditions the court determines to be appropriate.</subsection><subsection number="16-20-702(9)(b)">The terms and conditions may include payment of the purchase price in installments, where necessary in the interest of equity, provision for security to assure payment of the purchase price and any additional costs, fees, and expenses awarded by the court, and an allocation of the interest in the limited liability company among members if the interest in the limited liability company is to be purchased by members.</subsection></subsection><subsection number="16-20-702(10)"><subsection number="16-20-702(10)(a)">In allocating the applicant member's interest in the limited liability company among holders of different classes of members, the court shall attempt to preserve the existing distribution of voting rights among member classes to the extent practicable.</subsection><subsection number="16-20-702(10)(b)">The court may direct that holders of a specific class or classes may not participate in the purchase.</subsection><subsection number="16-20-702(10)(c)">The court may not require any electing member to purchase more of the interest in the limited liability company owned by the applicant member than the percentage interest that the purchasing member may have set forth in the purchasing member's election or notice of intent to participate filed with the court.</subsection></subsection><subsection number="16-20-702(11)"><subsection number="16-20-702(11)(a)">Interest may be allowed at the rate and from the date determined by the court to be equitable.</subsection><subsection number="16-20-702(11)(b)">However, if the court finds that the refusal of the applicant member to accept an offer of payment was arbitrary or otherwise not in good faith, interest may not be allowed.</subsection></subsection><subsection number="16-20-702(12)">If the court finds that the applicant member had probable ground for relief under Subsection <xref depth="4" refnumber="16-20-701(5)">16-20-701(5)</xref>, the court may award to the applicant member reasonable fees and expenses of counsel and experts employed by the applicant member.</subsection><subsection number="16-20-702(13)"><subsection number="16-20-702(13)(a)">Upon entry of an order under Subsection <xref depth="4" refnumber="48-3a-702(7)" start="0">(7)</xref> or <xref depth="4" refnumber="48-3a-702(9)" start="0">(9)</xref>, the court shall dismiss the petition to dissolve the limited liability company under Subsection <xref depth="4" refnumber="16-20-701(5)">16-20-701(5)</xref> and the applicant member shall no longer have any rights or status as a member of the limited liability company, except the right to receive the amounts awarded to the applicant member by the court.</subsection><subsection number="16-20-702(13)(b)">The award is enforceable in the same manner as any other judgment.</subsection></subsection><subsection number="16-20-702(14)"><subsection number="16-20-702(14)(a)">The purchase ordered in accordance with Subsection <xref depth="4" refnumber="48-3a-702(9)" start="0">(9)</xref> shall be made within 10 days after the date the order becomes final, unless before that time the limited liability company files with the court a notice of the limited liability company's intention to file a statement of dissolution.</subsection><subsection number="16-20-702(14)(b)">The statement of dissolution must then be adopted and filed within 60 days after notice.</subsection></subsection><subsection number="16-20-702(15)"><subsection number="16-20-702(15)(a)">Upon filing of a statement of dissolution, the limited liability company is dissolved and shall be wound up in accordance with Section <xref depth="3" refnumber="48-20-703">48-20-703</xref>, and the order entered in accordance with Subsection <xref depth="4" refnumber="48-3a-702(9)" start="0">(9)</xref> is no longer of any force or effect.</subsection><subsection number="16-20-702(15)(b)">However, the court may award the applicant member reasonable fees and expenses in accordance with Subsection <xref depth="4" refnumber="48-3a-702(12)" start="0">(12)</xref>.</subsection><subsection number="16-20-702(15)(c)">The applicant member may continue to pursue any claims previously asserted on behalf of the limited liability company.</subsection></subsection><subsection number="16-20-702(16)">Any payment by the limited liability company in accordance with an order under Subsection <xref depth="4" refnumber="48-3a-702(7)" start="0">(7)</xref> or <xref depth="4" refnumber="48-3a-702(9)" start="0">(9)</xref>, other than an award of fees and expenses in accordance with Subsection <xref depth="4" refnumber="48-3a-702(12)" start="0">(12)</xref>, is subject to the provisions of Sections <xref depth="3" refnumber="16-20-405">16-20-405</xref> and <xref depth="3" refnumber="16-20-406">16-20-406</xref>.</subsection></section><section number="16-20-703"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Winding up.</catchline><subsection number="16-20-703(1)"><subsection number="16-20-703(1)(a)">A dissolved limited liability company shall wind up the limited liability company's activities and affairs.</subsection><subsection number="16-20-703(1)(b)">Except as otherwise provided in Section <xref depth="3" refnumber="16-20-704">16-20-704</xref>, the limited liability company only continues after dissolution for the purpose of winding up.</subsection></subsection><subsection number="16-20-703(2)">In winding up the limited liability company's activities and affairs, a limited liability company:<subsection number="16-20-703(2)(a)">shall discharge the limited liability company's debts, obligations, and other liabilities, settle and close the limited liability company's activities and affairs, and marshal and distribute the assets of the limited liability company; and</subsection><subsection number="16-20-703(2)(b)">may:<subsection number="16-20-703(2)(b)(i)">deliver to the division for filing a statement of dissolution stating the name of the limited liability company and that the limited liability company is dissolved;</subsection><subsection number="16-20-703(2)(b)(ii)">preserve the limited liability company activities, affairs, and property as a going concern for a reasonable time;</subsection><subsection number="16-20-703(2)(b)(iii)">prosecute and defend actions and proceedings, whether civil, criminal, or administrative;</subsection><subsection number="16-20-703(2)(b)(iv)">transfer the limited liability company's property;</subsection><subsection number="16-20-703(2)(b)(v)">settle disputes by mediation or arbitration;</subsection><subsection number="16-20-703(2)(b)(vi)">deliver to the division for filing a statement of termination stating the name of the limited liability company and that the limited liability company is terminated; and</subsection><subsection number="16-20-703(2)(b)(vii)">perform other acts necessary or appropriate to the winding up.</subsection></subsection></subsection><subsection number="16-20-703(3)"><subsection number="16-20-703(3)(a)">If a dissolved limited liability company has no members, the legal representative of the last person to have been a member may wind up the activities and affairs of the limited liability company.</subsection><subsection number="16-20-703(3)(b)">If the person does so, the person has the powers of a sole manager under Subsection <xref refnumber="724-null-14">16-20-407(3)</xref> and is deemed to be a manager for the purposes of Subsection <xref depth="4" refnumber="16-20-304(1)">16-20-304(1)</xref>.</subsection></subsection><subsection number="16-20-703(4)"><subsection number="16-20-703(4)(a)">If the legal representative under Subsection <xref depth="4" refnumber="48-3a-703(3)" start="0">(3)</xref> declines or fails to wind up the limited liability company's activities and affairs, a person may be appointed to do so by the consent of transferees owning a majority of the rights to receive distributions as transferees at the time the consent is to be effective.</subsection><subsection number="16-20-703(4)(b)">A person appointed under this Subsection <xref depth="4" refnumber="48-3a-703(4)" start="0">(4)</xref>:<subsection number="16-20-703(4)(b)(i)">has the powers of a sole manager under Subsection <xref depth="4" refnumber="16-20-407(3)">16-20-407(3)</xref> and is deemed to be a manager for the purposes of Subsection <xref depth="4" refnumber="16-20-304(1)">16-20-304(1)</xref>; and</subsection><subsection number="16-20-703(4)(b)(ii)">shall promptly deliver to the division for filing an amendment to the limited liability company's certificate of organization stating:<subsection number="16-20-703(4)(b)(ii)(A)">that the limited liability company has no members;</subsection><subsection number="16-20-703(4)(b)(ii)(B)">the name and street and mailing addresses of the person; and</subsection><subsection number="16-20-703(4)(b)(ii)(C)">that the person has been appointed in accordance with this subsection to wind up the limited liability company.</subsection></subsection></subsection></subsection><subsection number="16-20-703(5)">A court may order judicial supervision of the winding up of a dissolved limited liability company, including the appointment of a person to wind up the limited liability company's activities and affairs:<subsection number="16-20-703(5)(a)">upon a petition by a member if the member establishes good cause;</subsection><subsection number="16-20-703(5)(b)">upon a petition by a transferee if:<subsection number="16-20-703(5)(b)(i)">the company does not have any members;</subsection><subsection number="16-20-703(5)(b)(ii)">the legal representative of the last person to have been a member declines or fails to wind up the limited liability company's activities; and</subsection><subsection number="16-20-703(5)(b)(iii)">within a reasonable time following the dissolution a person has not been appointed in accordance with Subsection <xref depth="4" refnumber="48-3a-703(4)" start="0">(4)</xref>; or</subsection></subsection><subsection number="16-20-703(5)(c)">in connection with a proceeding under Subsection <xref depth="4" refnumber="16-20-701(4)">16-20-701(4)</xref> or <xref depth="4" refnumber="48-3a-701(5)" start="0">(5)</xref>.</subsection></subsection></section><section number="16-20-704"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Rescinding dissolution.</catchline><subsection number="16-20-704(1)">A limited liability company may rescind the limited liability company's dissolution, unless a statement of termination applicable to the limited liability company is effective, a court has entered an order under Subsection <xref depth="4" refnumber="16-20-701(4)">16-20-701(4)</xref> or <xref depth="4" refnumber="48-3a-701(5)" start="0">(5)</xref> dissolving the limited liability company, or the division has dissolved the limited liability company under Section <xref depth="3" refnumber="16-1a-603">16-1a-603</xref>.</subsection><subsection number="16-20-704(2)">Rescinding dissolution under this section requires:<subsection number="16-20-704(2)(a)">the consent of each member;</subsection><subsection number="16-20-704(2)(b)">if a statement of dissolution applicable to the limited liability company has been filed by the division but has not become effective, the delivery to the division for filing of a statement of withdrawal under Section <xref depth="3" refnumber="16-1a-205">16-1a-205</xref> applicable to the statement of dissolution; and</subsection><subsection number="16-20-704(2)(c)">if a statement of dissolution applicable to the limited liability company is effective, the delivery to the division for filing of a statement of correction under Section <xref depth="3" refnumber="16-1a-206">16-1a-206</xref> stating that dissolution has been rescinded under this section.</subsection></subsection><subsection number="16-20-704(3)">If a limited liability company rescinds the limited liability company's dissolution:<subsection number="16-20-704(3)(a)">the limited liability company resumes carrying on the limited liability company's activities and affairs as if dissolution had never occurred;</subsection><subsection number="16-20-704(3)(b)">subject to Subsection <xref depth="4" refnumber="48-3a-704(3)(c)" start="0">(3)(c)</xref>, any liability incurred by the limited liability company after the dissolution and before the rescission is effective is determined as if dissolution had never occurred; and</subsection><subsection number="16-20-704(3)(c)">the rights of a third party arising out of conduct in reliance on the dissolution before the third party knew or had notice of the rescission may not be adversely affected.</subsection></subsection></section><section number="16-20-705"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Known claims against dissolved limited liability company.</catchline><subsection number="16-20-705(1)">A dissolved limited liability company in winding up may dispose of the known claims against it by following the procedures described in this section.</subsection><subsection number="16-20-705(2)"><subsection number="16-20-705(2)(a)">A limited liability company in winding up, electing to dispose of known claims in accordance with this section, may give written notice of the limited liability company's dissolution to known claimants at any time after the effective date of the dissolution.</subsection><subsection number="16-20-705(2)(b)">The written notice must:<subsection number="16-20-705(2)(b)(i)">describe the information that must be included in a claim;</subsection><subsection number="16-20-705(2)(b)(ii)">provide an address to which written notice of any claim must be given to the limited liability company;</subsection><subsection number="16-20-705(2)(b)(iii)">state the deadline, which may not be fewer than 120 days after the effective date of the notice, by which the dissolved limited liability company must receive the claim; and</subsection><subsection number="16-20-705(2)(b)(iv)">state that, unless sooner barred by another state statute limiting actions, the claim will be barred if not received by the deadline.</subsection></subsection></subsection><subsection number="16-20-705(3)">Unless sooner barred by another state statute limiting actions, a claim against the dissolved limited liability company is barred if:<subsection number="16-20-705(3)(a)">a claimant was given notice under Subsection <xref depth="4" refnumber="48-3a-705(2)" start="0">(2)</xref> and the claim is not received by the dissolved limited liability company by the deadline; or</subsection><subsection number="16-20-705(3)(b)">the dissolved limited liability company delivers to the claimant written notice of rejection of the claim within 90 days after receipt of the claim and the claimant whose claim was rejected by the dissolved limited liability company does not commence a proceeding to enforce the claim within 90 days after the effective date of the rejection notice.</subsection></subsection><subsection number="16-20-705(4)">Claims which are not rejected by the dissolved limited liability company in writing within 90 days after receipt of the claim by the dissolved limited liability company shall be considered approved.</subsection><subsection number="16-20-705(5)">The failure of the dissolved limited liability company to give notice to any known claimant in accordance with Subsection <xref depth="4" refnumber="48-3a-705(2)" start="0">(2)</xref> does not affect the disposition under this section of any claim held by any other known claimant.</subsection><subsection number="16-20-705(6)">This section does not apply to a claim based on an event occurring after the effective date of dissolution or a liability that on that date is contingent.</subsection></section><section number="16-20-706"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Other claims against dissolved limited liability company.</catchline><subsection number="16-20-706(1)">A dissolved limited liability company may publish notice of the dissolved limited liability company dissolution and request persons having claims against the limited liability company to present them in accordance with the notice.</subsection><subsection number="16-20-706(2)">A notice under Subsection <xref depth="4" refnumber="48-3a-706(1)" start="0">(1)</xref> must:<subsection number="16-20-706(2)(a)">be published at least once in a newspaper of general circulation in the county in this state in which the dissolved limited liability company's principal office is located or, if the principal office is not located in this state, in the county in which the office of the limited liability company's registered agent is or was last located and in accordance with Section <xref depth="3" refnumber="45-1-101" start="0">45-1-101</xref>;</subsection><subsection number="16-20-706(2)(b)">describe the information required to be contained in a claim, state that the claim must be in writing, and provide a mailing address to which the claim is to be sent; and</subsection><subsection number="16-20-706(2)(c)">state that a claim against the limited liability company is barred unless an action to enforce the claim is commenced not later than three years after publication of the notice.</subsection></subsection><subsection number="16-20-706(3)">If a dissolved limited liability company publishes a notice in accordance with Subsection <xref depth="4" refnumber="48-3a-706(2)" start="0">(2)</xref>, the claim of each of the following claimants is barred unless the claimant commences an action to enforce the claim against the limited liability company not later than three years after the publication date of the notice:<subsection number="16-20-706(3)(a)">a claimant that did not receive notice in a record under Section <xref depth="3" refnumber="16-20-705">16-20-705</xref>;</subsection><subsection number="16-20-706(3)(b)">a claimant whose claim was timely sent to the limited liability company but not acted on; and</subsection><subsection number="16-20-706(3)(c)">a claimant whose claim is contingent at, or based on an event occurring after, the effective date of dissolution.</subsection></subsection><subsection number="16-20-706(4)">A claim not barred under this section or Section <xref depth="3" refnumber="16-20-705">16-20-705</xref> may be enforced:<subsection number="16-20-706(4)(a)">against a dissolved limited liability company, to the extent of the dissolved limited liability company's undistributed assets; and</subsection><subsection number="16-20-706(4)(b)">except as otherwise provided in Section <xref depth="3" refnumber="16-20-707">16-20-707</xref>, if assets of the limited liability company have been distributed after dissolution, against a member or transferee to the extent of that person's proportionate share of the claim or of the limited liability company's assets distributed to the member or transferee after dissolution, whichever is less, but a person's total liability for all claims under this subsection may not exceed the total amount of assets distributed to the person after dissolution.</subsection></subsection></section><section number="16-20-707"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Court proceedings.</catchline><subsection number="16-20-707(1)"><subsection number="16-20-707(1)(a)">A dissolved limited liability company that has published a notice under Section <xref depth="3" refnumber="16-20-706">16-20-706</xref> may petition a court with jurisdiction under <xref depth="0" refnumber="78A" start="0">Title 78A, Judiciary and Judicial Administration</xref>, for a determination of the amount and form of security to be provided for payment of claims that are contingent, have not been made known to the limited liability company, or are based on an event occurring after the effective date of dissolution but which, based on the facts known to the dissolved limited liability company, are reasonably expected to arise after the effective date of dissolution.</subsection><subsection number="16-20-707(1)(b)">Security is not required for any claim that is or is reasonably anticipated to be barred under Subsection <xref depth="4" refnumber="16-20-706(3)">16-20-706(3)</xref>.</subsection></subsection><subsection number="16-20-707(2)">No later than 10 days after the filing of an application under Subsection <xref depth="4" refnumber="48-3a-707(1)" start="0">(1)</xref>, the dissolved limited liability company shall give notice of the proceeding to each claimant holding a contingent claim known to the limited liability company.</subsection><subsection number="16-20-707(3)"><subsection number="16-20-707(3)(a)">In any proceeding under this section, the court may appoint a guardian ad litem to represent all claimants whose identities are unknown.</subsection><subsection number="16-20-707(3)(b)">The reasonable fees and expenses of the guardian, including all reasonable expert witness fees, must be paid by the dissolved limited liability company.</subsection></subsection><subsection number="16-20-707(4)">A dissolved limited liability company that provides security in the amount and form ordered by the court under Subsection <xref depth="4" refnumber="48-3a-707(1)" start="0">(1)</xref> satisfies the limited liability company's obligations with respect to claims that are contingent, have not been made known to the limited liability company, or are based on an event occurring after the effective date of dissolution, and such claims may not be enforced against a member or transferee that received assets in liquidation.</subsection></section><section number="16-20-708"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Disposition of assets in winding up.</catchline><subsection number="16-20-708(1)">In winding up its activities and affairs, a limited liability company shall apply the limited liability company's assets to discharge the limited liability company's obligations to creditors, including members that are creditors.</subsection><subsection number="16-20-708(2)">After a limited liability company complies with Subsection <xref depth="4" refnumber="48-3a-711(1)" start="0">(1)</xref>, any surplus must be distributed in the following order, subject to any charging order in effect under Section <xref depth="3" refnumber="16-20-503">16-20-503</xref>:<subsection number="16-20-708(2)(a)">to each person owning a transferable interest that reflects contributions made and not previously returned, an amount equal to the value of the unreturned contributions; and</subsection><subsection number="16-20-708(2)(b)">in equal shares among members and dissociated members, except to the extent necessary to comply with any transfer effective under Section <xref depth="3" refnumber="16-20-502">16-20-502</xref>.</subsection></subsection><subsection number="16-20-708(3)">If a limited liability company does not have sufficient surplus to comply with Subsection <xref depth="4" refnumber="48-3a-711(2)(a)" start="0">(2)(a)</xref>, any surplus must be distributed among the owners of transferable interests in proportion to the value of the respective unreturned contributions.</subsection><subsection number="16-20-708(4)">All distributions made under Subsections <xref depth="4" refnumber="48-3a-711(2)" start="0">(2)</xref> and <xref depth="4" refnumber="48-3a-711(3)" start="0">(3)</xref> must be paid in money.</subsection></section></part><part number="16-20-8"><catchline>Action By Members</catchline><section number="16-20-801"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Direct action by member.</catchline><subsection number="16-20-801(1)">Subject to Subsection <xref depth="4" refnumber="48-3a-801(2)" start="0">(2)</xref>, a member may maintain a direct action against another member, a manager, or the limited liability company to enforce the member's rights and otherwise protect the member's interests, including rights and interests under the operating agreement or this chapter or arising independently of the membership relationship.</subsection><subsection number="16-20-801(2)">A member maintaining a direct action under this section must plead and prove an actual or threatened injury that is not solely the result of an injury suffered or threatened to be suffered by the limited liability company.</subsection></section><section number="16-20-802"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Derivative action.</catchline><tab/>A member may maintain a derivative action to enforce a right of a limited liability company if:<subsection number="16-20-802(1)">the member first makes a demand on the other members in a member-managed limited liability company, or the managers of a manager-managed limited liability company, requesting that they cause the limited liability company to bring an action to enforce the right, and the managers or other members do not bring the action within a reasonable time; or</subsection><subsection number="16-20-802(2)">a demand under Subsection <xref depth="4" refnumber="48-3a-802(1)" start="0">(1)</xref> would be futile.</subsection></section><section number="16-20-803"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Proper plaintiff.</catchline><tab/>A derivative action to enforce a right of a limited liability company may be maintained only by a person that is a member at the time the action is commenced and:<subsection number="16-20-803(1)">was a member when the conduct giving rise to the action occurred; or</subsection><subsection number="16-20-803(2)">whose status as a member devolved on the person by operation of law or in accordance with the terms of the operating agreement from a person that was a member at the time of the conduct.</subsection></section><section number="16-20-804"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Pleading.</catchline><tab/>In a derivative action, the complaint must state with particularity:<subsection number="16-20-804(1)">the date and content of plaintiff's demand and the response by the managers or other members to the demand; or</subsection><subsection number="16-20-804(2)">why the demand should be excused as futile.</subsection></section><section number="16-20-805"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Special litigation committee.</catchline><subsection number="16-20-805(1)"><subsection number="16-20-805(1)(a)">If a limited liability company is named as or made a party in a derivative proceeding, the limited liability company may appoint a special litigation committee to investigate the claims asserted in the proceeding and determine whether pursuing the action is in the best interests of the limited liability company.</subsection><subsection number="16-20-805(1)(b)">If the limited liability company appoints a special litigation committee, on motion by the committee made in the name of the limited liability company, except for good cause shown, the court shall stay discovery for the time reasonably necessary to permit the committee to make its investigation.</subsection><subsection number="16-20-805(1)(c)">This Subsection <xref depth="4" refnumber="48-3a-805(1)" start="0">(1)</xref> does not prevent the court from:<subsection number="16-20-805(1)(c)(i)">enforcing a person's right to information under Section <xref depth="3" refnumber="16-20-410">16-20-410</xref>; or</subsection><subsection number="16-20-805(1)(c)(ii)">granting extraordinary relief in the form of a temporary restraining order or preliminary injunction upon a showing of good cause.</subsection></subsection></subsection><subsection number="16-20-805(2)">A special litigation committee must be composed of one or more disinterested and independent individuals, who may be members.</subsection><subsection number="16-20-805(3)">A special litigation committee may be appointed:<subsection number="16-20-805(3)(a)">in a member-managed limited liability company:<subsection number="16-20-805(3)(a)(i)">by the consent of a majority of the members not named as parties in the proceeding; and</subsection><subsection number="16-20-805(3)(a)(ii)">if all members are named as parties in the proceeding, by a majority of the members named as defendants; or</subsection></subsection><subsection number="16-20-805(3)(b)">in a manager-managed limited liability company:<subsection number="16-20-805(3)(b)(i)">by a majority of the managers not named as parties in the proceeding; and</subsection><subsection number="16-20-805(3)(b)(ii)">if all managers are named as parties in the proceeding, by a majority of the managers named as defendants.</subsection></subsection></subsection><subsection number="16-20-805(4)">After appropriate investigation, a special litigation committee may determine that it is in the best interests of the limited liability company that the proceeding:<subsection number="16-20-805(4)(a)">continue under the control of the plaintiff;</subsection><subsection number="16-20-805(4)(b)">continue under the control of the committee;</subsection><subsection number="16-20-805(4)(c)">be settled on terms approved by the committee; or</subsection><subsection number="16-20-805(4)(d)">be dismissed.</subsection></subsection><subsection number="16-20-805(5)"><subsection number="16-20-805(5)(a)">After making a determination under Subsection <xref depth="4" refnumber="48-3a-805(4)" start="0">(4)</xref>, a special litigation committee shall file with the court a statement of its determination and its report supporting its determination and shall serve each party with a copy of the determination and report.</subsection><subsection number="16-20-805(5)(b)">The court shall determine whether the members of the committee were disinterested and independent and whether the committee conducted the committee's investigation and made the committee's recommendation in good faith, independently, and with reasonable care, with the committee having the burden of proof.</subsection><subsection number="16-20-805(5)(c)">If the court finds that the members of the committee were disinterested and independent and that the committee acted in good faith, independently, and with reasonable care, the court shall enforce the determination of the committee.</subsection><subsection number="16-20-805(5)(d)">Otherwise, the court shall dissolve the stay of discovery entered under Subsection <xref depth="4" refnumber="48-3a-805(1)" start="0">(1)</xref> and allow the action to continue under the control of the plaintiff.</subsection></subsection></section><section number="16-20-806"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Proceeds and expenses.</catchline><subsection number="16-20-806(1)">Except as otherwise provided in Subsection <xref depth="4" refnumber="48-3a-806(2)" start="0">(2)</xref>:<subsection number="16-20-806(1)(a)">any proceeds or other benefits of a derivative action, whether by judgment, compromise, or settlement, belong to the limited liability company and not to the plaintiff; and</subsection><subsection number="16-20-806(1)(b)">if the plaintiff receives any proceeds, the plaintiff shall remit them immediately to the limited liability company.</subsection></subsection><subsection number="16-20-806(2)">If a derivative action is successful in whole or in part, the court may award the plaintiff reasonable expenses, including reasonable attorney's fees and costs, from the recovery of the limited liability company.</subsection><subsection number="16-20-806(3)">A derivative action on behalf of a limited liability company may not be voluntarily dismissed or settled without the court's approval.</subsection></section></part><part number="16-20-9"><catchline>Professional Services Companies</catchline><section number="16-20-901"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Definitions.</catchline><tab/>As used in this part:<subsection number="16-20-901(1)">"Professional services" means a personal service provided by:<subsection number="16-20-901(1)(a)">a public accountant holding a license under <xref depth="1" refnumber="58-26a" start="0">Title 58, Chapter 26a, Certified Public Accountant Licensing Act</xref>, or a subsequent law regulating the practice of public accounting;</subsection><subsection number="16-20-901(1)(b)">an architect holding a license under <xref depth="1" refnumber="58-3a" start="0">Title 58, Chapter 3a, Architects Licensing Act</xref>, or a subsequent law regulating the practice of architecture;</subsection><subsection number="16-20-901(1)(c)">an attorney granted the authority to practice law by the:<subsection number="16-20-901(1)(c)(i)">Utah Supreme Court; or</subsection><subsection number="16-20-901(1)(c)(ii)">one or more of the following that licenses or regulates the authority to practice law in a state or territory of the United States other than Utah:<subsection number="16-20-901(1)(c)(ii)(A)">a supreme court;</subsection><subsection number="16-20-901(1)(c)(ii)(B)">a court other than a supreme court;</subsection><subsection number="16-20-901(1)(c)(ii)(C)">an agency;</subsection><subsection number="16-20-901(1)(c)(ii)(D)">an instrumentality; or</subsection><subsection number="16-20-901(1)(c)(ii)(E)">a regulating board;</subsection></subsection></subsection><subsection number="16-20-901(1)(d)">a chiropractor holding a license under <xref depth="1" refnumber="58-73" start="0">Title 58, Chapter 73, Chiropractic Physician Practice Act</xref>, or any subsequent law regulating the practice of chiropractics;</subsection><subsection number="16-20-901(1)(e)">a doctor of dentistry holding a license under <xref depth="1" refnumber="58-69" start="0">Title 58, Chapter 69, Dentist and Dental Hygienist Practice Act</xref>, or a subsequent law regulating the practice of dentistry;</subsection><subsection number="16-20-901(1)(f)">a professional engineer registered under <xref depth="1" refnumber="58-22" start="0">Title 58, Chapter 22, Professional Engineers and Professional Land Surveyors Licensing Act</xref>, or a subsequent law regulating the practice of engineers and land surveyors;</subsection><subsection number="16-20-901(1)(g)">a naturopath holding a license under <xref depth="1" refnumber="58-71" start="0">Title 58, Chapter 71, Naturopathic Physician Practice Act</xref>, or a subsequent law regulating the practice of naturopathy;</subsection><subsection number="16-20-901(1)(h)">a nurse licensed under <xref depth="1" refnumber="58-31b" start="0">Title 58, Chapter 31b, Nurse Practice Act</xref>, or <xref depth="1" refnumber="58-44a" start="0">Title 58, Chapter 44a, Nurse Midwife Practice Act</xref>, or a subsequent law regulating the practice of nursing;</subsection><subsection number="16-20-901(1)(i)">an optometrist holding a license under <xref depth="1" refnumber="58-16a" start="0">Title 58, Chapter 16a, Utah Optometry Practice Act</xref>, or a subsequent law regulating the practice of optometry;</subsection><subsection number="16-20-901(1)(j)">an osteopathic physician or surgeon holding a license under <xref depth="1" refnumber="58-68" start="0">Title 58, Chapter 68, Utah Osteopathic Medical Practice Act</xref>, or a subsequent law regulating the practice of osteopathy;</subsection><subsection number="16-20-901(1)(k)">a pharmacist holding a license under <xref depth="1" refnumber="58-17b" start="0">Title 58, Chapter 17b, Pharmacy Practice Act</xref>, or a subsequent law regulating the practice of pharmacy;</subsection><subsection number="16-20-901(1)(l)">a physician, surgeon, or doctor of medicine holding a license under <xref depth="1" refnumber="58-67" start="0">Title 58, Chapter 67, Utah Medical Practice Act</xref>, or a subsequent law regulating the practice of medicine;</subsection><subsection number="16-20-901(1)(m)">a physician assistant holding a license under <xref depth="1" refnumber="58-70a" start="0">Title 58, Chapter 70a, Utah Physician Assistant Act</xref>, or a subsequent law regulating the practice as a physician assistant;</subsection><subsection number="16-20-901(1)(n)">a physical therapist holding a license under <xref depth="1" refnumber="58-24b" start="0">Title 58, Chapter 24b, Physical Therapy Practice Act</xref>, or a subsequent law regulating the practice of physical therapy;</subsection><subsection number="16-20-901(1)(o)">a podiatric physician holding a license under <xref depth="1" refnumber="58-5a" start="0">Title 58, Chapter 5a, Podiatric Physician Licensing Act</xref>, or a subsequent law regulating the practice of podiatry;</subsection><subsection number="16-20-901(1)(p)">a psychologist holding a license under <xref depth="1" refnumber="58-61" start="0">Title 58, Chapter 61, Psychologist Licensing Act</xref>, or any subsequent law regulating the practice of psychology;</subsection><subsection number="16-20-901(1)(q)">a principal broker, associate broker, or sales agent holding a license under <xref depth="1" refnumber="61-2f" start="0">Title 61, Chapter 2f, Real Estate Licensing and Practices Act</xref>, or a subsequent law regulating the sale, exchange, purchase, rental, or leasing of real estate;</subsection><subsection number="16-20-901(1)(r)">a clinical or certified social worker holding a license under <xref depth="2" refnumber="58-60-2" start="0">Title 58, Chapter 60, Part 2, Social Worker Licensing Act</xref>, or a subsequent law regulating the practice of social work;</subsection><subsection number="16-20-901(1)(s)">a mental health therapist holding a license under <xref depth="1" refnumber="58-60" start="0">Title 58, Chapter 60, Mental Health Professional Practice Act</xref>, or a subsequent law regulating the practice of mental health therapy;</subsection><subsection number="16-20-901(1)(t)">a veterinarian holding a license under <xref depth="1" refnumber="58-28" start="0">Title 58, Chapter 28, Veterinary Practice Act</xref>, or a subsequent law regulating the practice of veterinary medicine; or</subsection><subsection number="16-20-901(1)(u)">an individual licensed, certified, or registered under <xref depth="1" refnumber="61-2g" start="0">Title 61, Chapter 2g, Real Estate Appraiser Licensing and Certification Act</xref>, or a subsequent law regulating the practice of appraising real estate.</subsection></subsection><subsection number="16-20-901(2)">"Regulating board" means the entity organized pursuant to state law that licenses and regulates the practice of the profession that a limited liability company is organized to provide.</subsection></section><section number="16-20-902"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Application of this part.</catchline><subsection number="16-20-902(1)">If a conflict arises between this part and another provision of this chapter, this part controls.</subsection><subsection number="16-20-902(2)">Notwithstanding the other provisions of this part, on and after January 1, 2016:<subsection number="16-20-902(2)(a)">a professional services company may not designate series of transferable interests; and</subsection><subsection number="16-20-902(2)(b)">a limited liability company may not form a professional services company as a series of the limited liability company.</subsection></subsection></section><section number="16-20-903"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Additional requirements for certificate of organization.</catchline><tab/>The certificate of organization of a professional services company shall:<subsection number="16-20-903(1)">comply with Section <xref depth="3" refnumber="16-20-201">16-20-201</xref>; and</subsection><subsection number="16-20-903(2)">contain the following:<subsection number="16-20-903(2)(a)">a name consistent with Section <xref depth="3" refnumber="16-20-904">16-20-904</xref>;</subsection><subsection number="16-20-903(2)(b)">a description of the profession to be practiced through the professional services company; and</subsection><subsection number="16-20-903(2)(c)">notwithstanding Section <xref depth="3" refnumber="16-20-201">16-20-201</xref>, the name and street address of each member or manager of the professional services company.</subsection></subsection></section><section number="16-20-904"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Name limitations.</catchline><subsection number="16-20-904(1)">The name of a domestic professional services company and of a foreign professional services company authorized to transact business in this state, in addition to complying with Sections <xref depth="3" refnumber="16-1a-302">16-1a-302</xref> and <xref depth="3" refnumber="16-1a-507">16-1a-507</xref>:<subsection number="16-20-904(1)(a)">may not contain language stating or implying that the domestic professional services company or foreign professional services company is formed for a purpose other than that authorized by:<subsection number="16-20-904(1)(a)(i)">the domestic professional services company's or foreign professional services company's certificate of organization; or</subsection><subsection number="16-20-904(1)(a)(ii)">Section <xref depth="3" refnumber="16-20-906">16-20-906</xref>;</subsection></subsection><subsection number="16-20-904(1)(b)">must conform with any rule made by the regulating board having jurisdiction over a professional service described in the professional services company's certificate of organization; and</subsection><subsection number="16-20-904(1)(c)">in lieu of the requirement of Subsection <xref depth="4" refnumber="16-1a-303(5)">16-1a-303(5)</xref>, must contain the words "professional limited liability company" or the abbreviations "P.L.L.C." or "PLLC" in:<subsection number="16-20-904(1)(c)(i)">its certificate of organization; and</subsection><subsection number="16-20-904(1)(c)(ii)">a report or document filed with the division.</subsection></subsection></subsection><subsection number="16-20-904(2)">Notwithstanding Subsection <xref depth="4" refnumber="48-3a-1104(1)(c)" start="0">(1)(c)</xref>, a professional services company may hold the professional service company out to the public under a name that does not contain the words "professional limited liability company" or the abbreviations "P.L.L.C." or "PLLC" if that name complies with Subsection <xref depth="4" refnumber="16-1a-303(5)">16-1a-303(5)</xref>.</subsection><subsection number="16-20-904(3)">Sections <xref depth="3" refnumber="16-1a-302">16-1a-302</xref> and <xref depth="3" refnumber="16-1a-507">16-1a-507</xref> do not prevent the use of a name otherwise prohibited by those sections if the name is:<subsection number="16-20-904(3)(a)">the personal name of an individual member or individual former member of the professional services company; or</subsection><subsection number="16-20-904(3)(b)">the name of an individual who was associated with a predecessor of the professional services company.</subsection></subsection></section><section number="16-20-905"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Providing a professional service.</catchline><subsection number="16-20-905(1)">Subject to Section <xref depth="3" refnumber="16-20-906">16-20-906</xref>, a professional services company may provide a professional service in this state only through an individual licensed or otherwise authorized in this state to provide the professional service.</subsection><subsection number="16-20-905(2)">Subsection <xref depth="4" refnumber="48-3a-1105(1)" start="0">(1)</xref> does not:<subsection number="16-20-905(2)(a)">require an individual employed by a professional services company to be licensed to perform a service for the professional services company if a license is not otherwise required;</subsection><subsection number="16-20-905(2)(b)">prohibit a licensed individual from providing a professional service in the individual's professional capacity although the individual is a member, manager, employee, or agent of a professional services company; or</subsection><subsection number="16-20-905(2)(c)">prohibit an individual licensed in another state from providing a professional service for a professional services company in this state if not prohibited by the regulating board.</subsection></subsection></section><section number="16-20-906"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Limit of one profession.</catchline><subsection number="16-20-906(1)">A professional services company organized to provide a professional service under this part may provide only:<subsection number="16-20-906(1)(a)">one specific type of professional service; and</subsection><subsection number="16-20-906(1)(b)">services ancillary to the professional service described in Subsection <xref depth="4" refnumber="48-3a-1106(1)(a)" start="0">(1)(a)</xref>.</subsection></subsection><subsection number="16-20-906(2)">A professional services company organized to provide a professional service under this part may not engage in a business other than to provide:<subsection number="16-20-906(2)(a)">the professional service that the professional services company was organized to provide; and</subsection><subsection number="16-20-906(2)(b)">services ancillary to the professional service described in Subsection <xref depth="4" refnumber="48-3a-1106(2)(a)" start="0">(2)(a)</xref>.</subsection></subsection><subsection number="16-20-906(3)">Notwithstanding Subsections <xref depth="4" refnumber="48-3a-1106(1)" start="0">(1)</xref> and <xref depth="4" refnumber="48-3a-1106(2)" start="0">(2)</xref>, a professional services company may:<subsection number="16-20-906(3)(a)">own real and personal property necessary or appropriate for providing the type of professional service the professional services company was organized to provide; and</subsection><subsection number="16-20-906(3)(b)">invest the professional services company's money in one or more of the following:<subsection number="16-20-906(3)(b)(i)">real estate;</subsection><subsection number="16-20-906(3)(b)(ii)">mortgages;</subsection><subsection number="16-20-906(3)(b)(iii)">stocks;</subsection><subsection number="16-20-906(3)(b)(iv)">bonds; or</subsection><subsection number="16-20-906(3)(b)(v)">another type of investment.</subsection></subsection></subsection></section><section number="16-20-907"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Activity limitations.</catchline><tab/>A professional services company may not do anything that an individual licensed to practice the profession that the professional services company is organized to provide is prohibited from doing.</section><section number="16-20-908"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>This part does not limit regulating board.</catchline><tab/>This part does not restrict the authority or duty of a regulating board to license an individual providing a professional service or the practice of the profession that is within the jurisdiction of the regulating board, notwithstanding that the individual:<subsection number="16-20-908(1)">is a member, manager, or employee of a professional services company; or</subsection><subsection number="16-20-908(2)">provides the professional service or engages in the practice of the profession through a professional services company.</subsection></section><section number="16-20-909"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Member or manager of a professional services company.</catchline><tab/>A professional services company organized to provide a professional service:<subsection number="16-20-909(1)">may include a member, manager, or employee who is authorized under the laws of the jurisdiction where the member, manager, or employee resides to provide a similar professional service;</subsection><subsection number="16-20-909(2)">may include a member who is not licensed or registered by the state to provide the professional service to the extent allowed by the applicable licensing or registration act relating to the professional service; and</subsection><subsection number="16-20-909(3)">may render a professional service in this state only through a member, manager, or employee who is licensed or registered by this state to render the professional service.</subsection></section><section number="16-20-910"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Restriction on transfer by member.</catchline><subsection number="16-20-910(1)">Except as provided in Subsections <xref depth="4" refnumber="48-3a-1110(2)" start="0">(2)</xref> and <xref depth="4" refnumber="48-3a-1110(3)" start="0">(3)</xref>, a member of a professional services company may sell or transfer the member's interest in the professional services company only to:<subsection number="16-20-910(1)(a)">the professional services company; or</subsection><subsection number="16-20-910(1)(b)">an individual who is licensed or registered by this state to provide the same type of professional service as the professional service for which the professional services company is organized, or who otherwise satisfies the requirements of Subsection <xref depth="4" refnumber="16-20-909(1)">16-20-909(1)</xref> or <xref depth="4" refnumber="48-3a-1110(2)">(2)</xref>.</subsection></subsection><subsection number="16-20-910(2)">Upon the death or incapacity of a member of a professional services company, the member's interest in the professional services company may be transferred to the personal representative or estate of the deceased or incapacitated member.</subsection><subsection number="16-20-910(3)">The person to whom an interest is transferred under Subsection <xref depth="4" refnumber="48-3a-1110(2)" start="0">(2)</xref> may continue to hold the interest for a reasonable period, but may not participate in a decision concerning the providing of a professional service.</subsection></section><section number="16-20-911"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Purchase of interest upon death, incapacity, or disqualification of member.</catchline><subsection number="16-20-911(1)">Subject to this part, one or more of the following may provide for the purchase of a member's interest in a professional services company upon the death, incapacity, or disqualification of the member:<subsection number="16-20-911(1)(a)">the certificate of organization;</subsection><subsection number="16-20-911(1)(b)">the operating agreement; or</subsection><subsection number="16-20-911(1)(c)">a private agreement.</subsection></subsection><subsection number="16-20-911(2)">In the absence of a provision described in Subsection <xref depth="4" refnumber="48-3a-1111(1)" start="0">(1)</xref>, a professional services company shall purchase the interest of a member who is deceased, incapacitated, or no longer qualified to own an interest in the professional services company within 90 days after the day on which the professional services company is notified of the death, incapacity, or disqualification.</subsection><subsection number="16-20-911(3)">If a professional services company purchases a member's interest under Subsection <xref depth="4" refnumber="48-3a-1111(2)" start="0">(2)</xref>, the professional services company shall purchase the interest at a price that is the reasonable fair market value as of the date of death, incapacity, or disqualification.</subsection><subsection number="16-20-911(4)">If a professional services company fails to purchase a member's interest as required by Subsection <xref depth="4" refnumber="48-3a-1111(2)" start="0">(2)</xref> at the end of the 90-day period described in Subsection <xref depth="4" refnumber="48-3a-1111(2)" start="0">(2)</xref>, the following persons may bring an action in a court with jurisdiction under <xref depth="0" refnumber="78A" start="0">Title 78A, Judiciary and Judicial Administration</xref>, to enforce Subsection <xref depth="4" refnumber="48-3a-1111(2)" start="0">(2)</xref>:<subsection number="16-20-911(4)(a)">the personal representative of a deceased member;</subsection><subsection number="16-20-911(4)(b)">the guardian or conservator of an incapacitated member; or</subsection><subsection number="16-20-911(4)(c)">the disqualified member.</subsection></subsection><subsection number="16-20-911(5)">A court in which an action is brought under Subsection <xref depth="4" refnumber="48-3a-1111(4)" start="0">(4)</xref> may:<subsection number="16-20-911(5)(a)">award the person bringing the action the reasonable fair market value of the interest; or</subsection><subsection number="16-20-911(5)(b)">within the court's jurisdiction, order the liquidation of the professional services company.</subsection></subsection><subsection number="16-20-911(6)">If a person described in Subsections <xref depth="4" refnumber="48-3a-1111(4)(a)" start="0">(4)(a)</xref> through <xref depth="4" refnumber="48-3a-1111(4)(c)" start="0">(c)</xref> is successful in an action under Subsection <xref depth="4" refnumber="48-3a-1111(4)" start="0">(4)</xref>, the court shall award the person reasonable attorney's fees and costs.</subsection></section><section number="16-20-912"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Conversion to nonprofessional company.</catchline><subsection number="16-20-912(1)">A professional services company subject to this part converts into a limited liability company subject to this chapter, but not subject to this part on the day on which:<subsection number="16-20-912(1)(a)">no member of the professional services company is licensed or registered for the professional service for which the professional services company is organized; or</subsection><subsection number="16-20-912(1)(b)">all members entitled to vote on or consent to any matter consent not to be a professional services company subject to this part.</subsection></subsection><subsection number="16-20-912(2)">A professional services company converted as provided in Subsection <xref depth="4" refnumber="48-3a-1112(1)" start="0">(1)</xref> shall upon the event described in Subsection <xref depth="4" refnumber="48-3a-1112(1)" start="0">(1)</xref> operate as and be treated as a limited liability company subject to this chapter, but not subject to this part.</subsection><subsection number="16-20-912(3)">A limited liability company resulting from a conversion under this section may reconvert to a professional services company:<subsection number="16-20-912(3)(a)">upon at least one member of the limited liability company being licensed or registered for the professional service for which the limited liability company is organized; and</subsection><subsection number="16-20-912(3)(b)">each member of the limited liability company entitled to vote on or consent to any matter consents to reconvert the limited liability company to a professional services company subject to this part.</subsection></subsection><subsection number="16-20-912(4)">If a professional services company is converted or reconverted under this section, the professional services company shall file a certificate of amendment to the certificate of organization with the division within a reasonable time after the conversion or reconversion to reflect the changes.</subsection></section></part><part number="16-20-10"><catchline>Series Limited Liability Companies</catchline><section number="16-20-1001"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Series of transferable interests.</catchline><subsection number="16-20-1001(1)"><subsection number="16-20-1001(1)(a)">An operating agreement may establish or provide for the establishment of a designated series of transferable interests having separate rights, powers, or duties with respect to specified property or obligations of the limited liability company or profits and losses associated with specified property or obligations, and, to the extent provided in the operating agreement, any such series may have a separate business purpose or investment objective.</subsection><subsection number="16-20-1001(1)(b)">The name of each series must contain the name of the limited liability company and be distinguishable from the name of any other series.</subsection></subsection><subsection number="16-20-1001(2)">Notwithstanding contrary provisions of this chapter, the debts, liabilities, and obligations incurred, contracted for, or otherwise existing with respect to a particular series shall be enforceable against the assets of that series only, and not against the assets of the limited liability company generally or any other series, if all of the following apply:<subsection number="16-20-1001(2)(a)">the series is established by or in accordance with the operating agreement;</subsection><subsection number="16-20-1001(2)(b)">separate and distinct records are maintained for the series;</subsection><subsection number="16-20-1001(2)(c)">the assets associated with the series are held and accounted for separately from the other assets of the limited liability company, including another series;</subsection><subsection number="16-20-1001(2)(d)">the operating agreement or the agreement establishing the series provides for the limitation on liabilities of the series; and</subsection><subsection number="16-20-1001(2)(e)">notice of the limitation on liability of the series is set forth in the limited liability company's certificate of organization in accordance with Section <xref depth="3" refnumber="16-20-1002">16-20-1002</xref>.</subsection></subsection><subsection number="16-20-1001(3)">A series meeting all of the conditions of Subsection <xref depth="4" refnumber="48-3a-1201(2)" start="0">(2)</xref> shall:<subsection number="16-20-1001(3)(a)">be treated as a separate entity to the extent set forth in the certificate of organization; and</subsection><subsection number="16-20-1001(3)(b)">have the power and capacity to, in its own name, contract, hold title to property, grant liens and security interests, and sue and be sued.</subsection></subsection><subsection number="16-20-1001(4)">Notwithstanding the other provisions of this section:<subsection number="16-20-1001(4)(a)">property and assets of a series may not be transferred to the limited liability company generally or another series if the transfer impairs the ability of the series releasing the property or assets to pay its debts existing at the time of the transfer unless fair value is given to the transferring series for the property or assets transferred; and</subsection><subsection number="16-20-1001(4)(b)">a tax or other liability of the limited liability company generally or of a series may not be assigned by the series against which the tax or other liability is imposed to the limited liability company generally or to another series within the limited liability company if the assignment impairs a creditor's right and ability to fully collect an amount due when owed.</subsection></subsection><subsection number="16-20-1001(5)">Notwithstanding the other provisions of this part:<subsection number="16-20-1001(5)(a)">a professional services company may not designate a series of transferable interests; and</subsection><subsection number="16-20-1001(5)(b)">a limited liability company may not form a professional services company as a series of the limited liability company.</subsection></subsection><subsection number="16-20-1001(6)">Except to the extent modified by this part, the provisions of this chapter which are generally applicable to a limited liability company, and the limited liability company's managers, members, and transferees, shall be applicable to each series with respect to the operations of such a series.</subsection></section><section number="16-20-1002"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Notice of limitation on liability of a series.</catchline><subsection number="16-20-1002(1)"><subsection number="16-20-1002(1)(a)">Notice in a limited liability company's certificate of organization of the limitation on liabilities of a series as referenced in Subsection <xref depth="4" refnumber="16-20-1001(2)(e)">16-20-1001(2)(e)</xref> is sufficient for all purposes of this part whether or not the limited liability company has established a series at the time the notice is included in the certificate of organization.</subsection><subsection number="16-20-1002(1)(b)">For a certificate of organization or an amendment to a certificate of organization made to include notice of series that is filed on or after May 12, 2015, notice in a company's certificate of organization is sufficient for purposes of Subsection <xref depth="4" refnumber="48-3a-1202(1)" start="0">(1)</xref> only if the notice of series appears immediately following the provision stating the name of the company.</subsection></subsection><subsection number="16-20-1002(2)">The notice of a limitation on liability of a series as referenced in Subsection <xref depth="4" refnumber="16-20-1001(2)(e)">16-20-1001(2)(e)</xref> is not required to reference a specific series.</subsection><subsection number="16-20-1002(3)">The filing by the division of the certificate of organization containing a notice of the limitation on liabilities of a series constitutes notice of the limitation on liabilities of the series.</subsection></section><section number="16-20-1003"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Agreement to be liable.</catchline><tab/>Notwithstanding Section <xref depth="3" refnumber="16-20-304">16-20-304</xref>, or a contrary provision in an operating agreement, a member or manager may agree to be obligated personally for any or all of the debts, obligations, or liabilities of one or more series.</section><section number="16-20-1004"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Series related provisions in operating agreement.</catchline><subsection number="16-20-1004(1)">An operating agreement may provide for classes or groups of members or managers associated with a series having such relative rights, powers, and duties as the operating agreement may provide.</subsection><subsection number="16-20-1004(2)">The operating agreement may provide for the future creation of additional classes or groups of members or managers associated with the series having such relative rights, powers, and duties as may from time to time be established, including rights, powers, and duties senior to existing classes and groups of members or managers associated with the series.</subsection><subsection number="16-20-1004(3)">An operating agreement may provide for the taking of an action, including the amendment of the operating agreement, without the vote or approval of any member or manager or class or group of members or managers, including all action to create under the provisions of the operating agreement a class or group of the series of membership interests that was not previously outstanding.</subsection><subsection number="16-20-1004(4)">An operating agreement may provide that any member or class or group of members associated with a series does not have voting rights.</subsection><subsection number="16-20-1004(5)"><subsection number="16-20-1004(5)(a)">An operating agreement may grant to all or certain identified members or managers or a specified class or group of the members or managers associated with a series the right to vote on any matter separately or with all or any class or group of the members or managers associated with the series.</subsection><subsection number="16-20-1004(5)(b)">Voting by members or managers associated with a series may be on any basis including:<subsection number="16-20-1004(5)(b)(i)">a per capita basis;</subsection><subsection number="16-20-1004(5)(b)(ii)">a number basis;</subsection><subsection number="16-20-1004(5)(b)(iii)">on the basis of a financial interest; or</subsection><subsection number="16-20-1004(5)(b)(iv)">by class or group.</subsection></subsection></subsection></section><section number="16-20-1005"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Management of a series.</catchline><subsection number="16-20-1005(1)">A series is member-managed unless the operating agreement:<subsection number="16-20-1005(1)(a)">expressly provides that:<subsection number="16-20-1005(1)(a)(i)">the series is or will be "manager-managed";</subsection><subsection number="16-20-1005(1)(a)(ii)">the series is or will be "managed by managers"; or</subsection><subsection number="16-20-1005(1)(a)(iii)">management of the series is or will be "vested in managers"; or</subsection></subsection><subsection number="16-20-1005(1)(b)">includes words of similar import.</subsection></subsection><subsection number="16-20-1005(2)">In a member-managed series, unless modified pursuant to Section <xref depth="3" refnumber="16-20-1004">16-20-1004</xref>, the following rules apply:<subsection number="16-20-1005(2)(a)">The management and conduct of the series are vested in the members of the series.</subsection><subsection number="16-20-1005(2)(b)">Each series member has equal rights in the management and conduct of the series' activities.</subsection><subsection number="16-20-1005(2)(c)">A difference arising among series members as to a matter in the ordinary course of the activities of the series shall be decided by a majority of the series members.</subsection><subsection number="16-20-1005(2)(d)">An act outside the ordinary course of the activities of the series may be undertaken only with the consent of all members of the series.</subsection><subsection number="16-20-1005(2)(e)">The operating agreement may be amended only with the consent of all members of the series.</subsection></subsection><subsection number="16-20-1005(3)">In a manager-managed series, the following rules apply:<subsection number="16-20-1005(3)(a)">Except as otherwise expressly provided in this chapter, any matter relating to the activities of the series is decided exclusively by the managers of the series.</subsection><subsection number="16-20-1005(3)(b)">Each series manager has equal rights in the management and conduct of the activities of the series.</subsection><subsection number="16-20-1005(3)(c)">A difference arising among managers of a series as to a matter in the ordinary course of the activities of the series shall be decided by a majority of the managers of the series.</subsection><subsection number="16-20-1005(3)(d)">Unless modified pursuant to Section <xref depth="3" refnumber="16-20-1004">16-20-1004</xref>, the consent of all members of the series is required to:<subsection number="16-20-1005(3)(d)(i)">sell, lease, exchange, or otherwise dispose of all, or substantially all, of the series' property, with or without the goodwill, outside the ordinary course of the series' activities;</subsection><subsection number="16-20-1005(3)(d)(ii)">approve a transaction under:<subsection number="16-20-1005(3)(d)(ii)(A)">Chapter 1a, Part 7, Merger;</subsection><subsection number="16-20-1005(3)(d)(ii)(B)">Chapter 1a, Part 8, Interest Exchange;</subsection><subsection number="16-20-1005(3)(d)(ii)(C)">Chapter 1a, Part 9, Conversion; or</subsection><subsection number="16-20-1005(3)(d)(ii)(D)">Chapter 1a, Part 10, Domestication;</subsection></subsection><subsection number="16-20-1005(3)(d)(iii)">undertake any other act outside the ordinary course of the series' activities; and</subsection><subsection number="16-20-1005(3)(d)(iv)">amend the operating agreement as it pertains to the series.</subsection></subsection><subsection number="16-20-1005(3)(e)"><subsection number="16-20-1005(3)(e)(i)">A manager of the series may be chosen at any time by the consent of a majority of the members of the series and remains a manager of the series until a successor has been chosen, unless the series manager at an earlier time resigns, is removed, dies, or, in the case of a series manager that is not an individual, terminates.</subsection><subsection number="16-20-1005(3)(e)(ii)">A series manager may be removed at any time by the consent of a majority of the members without notice or cause.</subsection></subsection><subsection number="16-20-1005(3)(f)"><subsection number="16-20-1005(3)(f)(i)">A person need not be a series member to be a manager of a series, but the dissociation of a series member that is also a series manager removes the person as a manager of the series.</subsection><subsection number="16-20-1005(3)(f)(ii)">If a person that is both a series manager and a series member ceases to be a manager of the series, that cessation does not by itself dissociate the person as a member of the series.</subsection></subsection><subsection number="16-20-1005(3)(g)">A person's ceasing to be a series manager does not discharge any debt, obligation, or other liability to the series or members of the series which the person incurred while a manager of the series.</subsection></subsection><subsection number="16-20-1005(4)">An action requiring the consent of members of a series under this chapter may be taken without a meeting, and a member of a series may appoint a proxy or other agent to consent or otherwise act for the series member by signing an appointing record, personally or by the series member's agent.</subsection><subsection number="16-20-1005(5)">The dissolution of a series does not affect the applicability of this section. However, a person that wrongfully causes dissolution of the series loses the right to participate in management as a series member and a series manager.</subsection><subsection number="16-20-1005(6)">This chapter does not entitle a member of a series to remuneration for services performed for a member-managed series, except for reasonable compensation for services rendered in winding up the activities of the series.</subsection></section><section number="16-20-1006"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Series distributions.</catchline><subsection number="16-20-1006(1)">Any distribution made by a series before its dissolution and winding up must be in equal shares among the series members and dissociated series members, except to the extent necessary to comply with any transfer effective under Section <xref depth="3" refnumber="16-20-502">16-20-502</xref> and any charging order in effect under Section <xref depth="3" refnumber="16-20-503">16-20-503</xref>.</subsection><subsection number="16-20-1006(2)"><subsection number="16-20-1006(2)(a)">A person has a right to a distribution before the dissolution and winding up of a series only if the series decides to make an interim distribution.</subsection><subsection number="16-20-1006(2)(b)">A person's dissociation with respect to a series does not entitle the person to a distribution.</subsection></subsection><subsection number="16-20-1006(3)"><subsection number="16-20-1006(3)(a)">A person does not have a right to demand or receive a distribution from a series in any form other than money.</subsection><subsection number="16-20-1006(3)(b)">Except as otherwise provided in Subsection <xref depth="4" refnumber="16-20-708(3)">16-20-708(3)</xref>, a series may distribute an asset in kind if each part of the asset is fungible with each other part and each person receives a percentage of the asset equal in value to the person's share of distributions.</subsection></subsection><subsection number="16-20-1006(4)"><subsection number="16-20-1006(4)(a)">If a series member or transferee becomes entitled to receive a distribution, the series member or transferee has the status of, and is entitled to all remedies available to, a creditor of the series with respect to the distribution.</subsection><subsection number="16-20-1006(4)(b)">However, the series' obligation to make a distribution is subject to offset for any amounts owed to the series by the member or a person dissociated as a member on whose account the distribution is made.</subsection></subsection><subsection number="16-20-1006(5)">A series may not make a distribution if after the distribution:<subsection number="16-20-1006(5)(a)">the series would not be able to pay its debts as they become due in the ordinary course of the series' activities; or</subsection><subsection number="16-20-1006(5)(b)">the series' total assets would be less than the sum of its total liabilities plus the amount that would be needed, if the series were to be dissolved, wound up, and terminated at the time of the distribution, to satisfy the preferential rights upon dissolution, winding up, and termination of members whose preferential rights are superior to those of persons receiving the distribution.</subsection></subsection><subsection number="16-20-1006(6)">A series may base a determination that a distribution is not prohibited under Subsection <xref depth="4" refnumber="48-3a-1206(5)" start="0">(5)</xref> on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable under the circumstances.</subsection><subsection number="16-20-1006(7)">Except as otherwise provided in Subsection <xref depth="4" refnumber="48-3a-1206(9)" start="0">(9)</xref>, the effect of a distribution under Subsection <xref depth="4" refnumber="48-3a-1206(5)" start="0">(5)</xref> is measured:<subsection number="16-20-1006(7)(a)">in the case of a distribution by purchase, redemption, or other acquisition of a transferable interest in the series, as of the date money or other property is transferred or debt incurred by the series; or</subsection><subsection number="16-20-1006(7)(b)">in all other cases, as of the date:<subsection number="16-20-1006(7)(b)(i)">the distribution is authorized, if the payment occurs within 120 days after that date; or</subsection><subsection number="16-20-1006(7)(b)(ii)">the payment is made, if the payment occurs more than 120 days after the distribution is authorized.</subsection></subsection></subsection><subsection number="16-20-1006(8)">A series' indebtedness to a series member incurred by reason of a distribution made in accordance with this section is at parity with the series' indebtedness to its general, unsecured creditors.</subsection><subsection number="16-20-1006(9)"><subsection number="16-20-1006(9)(a)">A series' indebtedness, including indebtedness issued in connection with or as part of a distribution, is not a liability for purposes of Subsection <xref depth="4" refnumber="48-3a-1206(5)" start="0">(5)</xref> if the terms of the indebtedness provide that payment of principal and interest are made only to the extent that a distribution could be made to members of the series under this section.</subsection><subsection number="16-20-1006(9)(b)">If such indebtedness is issued as a distribution, each payment of principal or interest on the indebtedness is treated as a distribution, the effect of which is measured on the date the payment is made.</subsection></subsection><subsection number="16-20-1006(10)">Except as otherwise provided in Subsection <xref depth="4" refnumber="48-3a-1206(11)" start="0">(11)</xref>, if a member of a member-managed series or manager of a manager-managed series consents to a distribution made in violation of this section and in consenting to the distribution fails to comply with Section <xref depth="3" refnumber="16-20-409">16-20-409</xref>, the member or manager is personally liable to the series for the amount of the distribution that exceeds the amount that could have been distributed without the violation of this section.</subsection><subsection number="16-20-1006(11)">To the extent the operating agreement of a member-managed series expressly relieves a series member of the authority and responsibility to consent to distributions and imposes that authority and responsibility on one or more other members of the series, the liability stated in Subsection <xref depth="4" refnumber="48-3a-1206(10)" start="0">(10)</xref> applies to the other members of the series and not the member of the series that the operating agreement relieves of authority and responsibility.</subsection><subsection number="16-20-1006(12)">A person that receives a distribution from a series knowing that the distribution to that person was made in violation of this section is personally liable to the limited liability company but only to the extent that the distribution received by the person exceeded the amount that could have been properly paid under this section.</subsection><subsection number="16-20-1006(13)">A person against which an action is commenced because the person is liable under Subsection <xref depth="4" refnumber="48-3a-1206(10)" start="0">(10)</xref> may:<subsection number="16-20-1006(13)(a)">implead any other person that is liable under Subsection <xref depth="4" refnumber="48-3a-1206(10)" start="0">(10)</xref> and seek to compel contribution from the person; and</subsection><subsection number="16-20-1006(13)(b)">implead any person that received a distribution in violation of Subsection <xref depth="4" refnumber="48-3a-1206(12)" start="0">(12)</xref> and seek to compel contribution from the person in the amount the person received in violation of Subsection <xref depth="4" refnumber="48-3a-1206(12)" start="0">(12)</xref>.</subsection></subsection><subsection number="16-20-1006(14)">An action under this section is barred if not commenced within two years after the distribution.</subsection></section><section number="16-20-1007"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Events causing dissociation from a series.</catchline><subsection number="16-20-1007(1)">Unless otherwise provided in the operating agreement, a member ceases to be associated with a series and to have the power to exercise a right or power of a member with respect to the series upon the assignment of all of the member's transferable interest in the limited liability company with respect to the series.</subsection><subsection number="16-20-1007(2)">Unless otherwise provided in an operating agreement, an event under this chapter or the operating agreement that causes a member to cease to be associated with a series does not, by itself:<subsection number="16-20-1007(2)(a)">cause the member to cease to be associated with another series;</subsection><subsection number="16-20-1007(2)(b)">terminate the continued membership of a member in the limited liability company; or</subsection><subsection number="16-20-1007(2)(c)">cause the termination of the series, regardless of whether the member is the last remaining member associated with the series.</subsection></subsection></section><section number="16-20-1008"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Dissolution of a series.</catchline><subsection number="16-20-1008(1)">Except to the extent otherwise provided in the operating agreement, a series may be dissolved and its affairs wound up without causing the dissolution of the limited liability company.</subsection><subsection number="16-20-1008(2)">The dissolution of a series does not affect the limitation on liabilities of the series under Section <xref depth="3" refnumber="16-20-1001">16-20-1001</xref>.</subsection><subsection number="16-20-1008(3)">A series is dissolved and its affairs shall be wound up upon the dissolution of the limited liability company under Section <xref depth="3" refnumber="16-20-701">16-20-701</xref> or upon the occurrence of any of the events described in Section <xref depth="3" refnumber="16-20-701">16-20-701</xref>, as applied to the series.</subsection><subsection number="16-20-1008(4)">Notwithstanding Section <xref depth="3" refnumber="16-20-703">16-20-703</xref>, unless otherwise provided in the operating agreement, any of the following persons may wind up the affairs of a dissolved series:<subsection number="16-20-1008(4)(a)">a manager associated with a series who has not wrongfully caused the dissolution of the series;</subsection><subsection number="16-20-1008(4)(b)">if there is no manager that satisfies the requirements of Subsection <xref depth="4" refnumber="48-3a-1208(4)(a)" start="0">(4)(a)</xref>, the members associated with the series who have not wrongfully caused the dissolution of the series or a person approved by the members associated with the series who have not wrongfully caused the dissolution of the series; or</subsection><subsection number="16-20-1008(4)(c)">if there is more than one class or group of members associated with the series, then by each class or group of members associated with the series, in either case, by members who have not wrongfully caused the dissolution of the series, and either:<subsection number="16-20-1008(4)(c)(i)">own more than 50% of the transferable interests of the series owned by members associated with the series who have not wrongfully caused the dissolution of the series; or</subsection><subsection number="16-20-1008(4)(c)(ii)">own more than 50% of the transferable interests of each class or group associated with the series owned by members associated with the series who have not wrongfully caused the dissolution of the series.</subsection></subsection></subsection><subsection number="16-20-1008(5)"><subsection number="16-20-1008(5)(a)">The persons winding up the affairs of a series, in the name of the series and for and on behalf of the series, may take all actions with respect to the series as are permitted under Section <xref depth="3" refnumber="12-20-703">12-20-703</xref> for a limited liability company.</subsection><subsection number="16-20-1008(5)(b)">The persons winding up the affairs of a series shall provide for the claims and obligations of the series as provided in Section <xref depth="3" refnumber="16-20-708">16-20-708</xref> for a limited liability company and distribute the assets of the series as provided in Section <xref depth="3" refnumber="16-20-708">16-20-708</xref> for a limited liability company.</subsection><subsection number="16-20-1008(5)(c)">An action taken pursuant to this Subsection <xref depth="4" refnumber="48-3a-1208(5)" start="0">(5)</xref> may not affect the liability of a member and may not impose liability on a liquidating trustee.</subsection></subsection></section><section number="16-20-1009"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Foreign limited liability company -- Series.</catchline><subsection number="16-20-1009(1)">A foreign limited liability company that is registered to do business in this state that is governed by an operating agreement that establishes or provides for the establishment of a series of transferable interests having separate rights, powers, or duties with respect to specified property or obligations of the foreign limited liability company, or profits and losses associated with the specified property or obligations, shall indicate that fact on the foreign registration statement filed by the division.</subsection><subsection number="16-20-1009(2)">The foreign limited liability company shall state on the foreign registration statement whether the debts, liabilities, and obligations incurred, contracted for, or otherwise existing with respect to a particular series, if any, are enforceable against the assets of such series only, and not against the assets of the foreign limited liability company generally or any other series.</subsection><subsection number="16-20-1009(3)">Notice in a foreign limited liability company's foreign registration statement of the limitation on liability of a series as referenced in this section shall have the same effect found in Section <xref depth="3" refnumber="16-20-1002">16-20-1002</xref> as a notice of limitation on liability of a series set forth in a limited liability company's certificate of organization.</subsection></section></part><part number="16-20-11"><catchline>Low-Profit Limited Liability Companies</catchline><section number="16-20-1101"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Application of this part.</catchline><tab/>If a conflict arises between this part and another provision of this chapter, this part controls.</section><section number="16-20-1102"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Requirements.</catchline><subsection number="16-20-1102(1)">To be a low-profit limited liability company, a limited liability company shall:<subsection number="16-20-1102(1)(a)">contain in its name the abbreviation "L3C" or "l3c";</subsection><subsection number="16-20-1102(1)(b)">state in its certificate of organization that it is a low-profit limited liability company;</subsection><subsection number="16-20-1102(1)(c)">organize under this chapter; and</subsection><subsection number="16-20-1102(1)(d)">be organized for a business purpose that satisfies, and at all times operates to satisfy each of the requirements under Subsection <xref depth="4" refnumber="48-3a-1302(2)" start="0">(2)</xref>.</subsection></subsection><subsection number="16-20-1102(2)">A low-profit limited liability company:<subsection number="16-20-1102(2)(a)">shall significantly further the accomplishment of one or more charitable or educational purposes within the meaning of Section 170(c)(2)(B), Internal Revenue Code;</subsection><subsection number="16-20-1102(2)(b)">shall demonstrate that it would not be formed but for the limited liability company's relationship to the accomplishment of a charitable or educational purpose;</subsection><subsection number="16-20-1102(2)(c)">subject to Subsection <xref depth="4" refnumber="48-3a-1302(3)" start="0">(3)</xref>, may not have as a significant purpose the production of income or the appreciation of property; and</subsection><subsection number="16-20-1102(2)(d)">may not have as a purpose to accomplish one or more political or legislative purposes within the meaning of Section 170(c)(2)(D), Internal Revenue Code.</subsection></subsection><subsection number="16-20-1102(3)">Notwithstanding Subsection <xref depth="4" refnumber="48-3a-1302(2)" start="0">(2)</xref>, if a low-profit limited liability company produces significant income or capital appreciation, in the absence of other factors, the fact that the low-profit limited liability company produces significant income or capital appreciation is not conclusive evidence of a significant purpose involving the production of income or the appreciation of property.</subsection></section><section number="16-20-1103"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Ceasing to be a low-profit limited liability company.</catchline><subsection number="16-20-1103(1)">If a limited liability company that is a low-profit limited liability company at its formation at any time ceases to meet a requirement to be a low-profit limited liability company under Section <xref depth="3" refnumber="16-20-1102">16-20-1102</xref>, the limited liability company:<subsection number="16-20-1103(1)(a)">ceases to be a low-profit limited liability company on the day on which the limited liability company no longer meets the requirement; and</subsection><subsection number="16-20-1103(1)(b)">if it continues to meet the requirements of this chapter to be a limited liability company, continues to exist as a limited liability company that is not a low-profit limited liability company.</subsection></subsection><subsection number="16-20-1103(2)">A low-profit limited liability company's failure to meet a requirement of Section <xref depth="3" refnumber="16-20-1102">16-20-1102</xref> may be:<subsection number="16-20-1103(2)(a)">voluntary, in order to convert to a limited liability company that is not a low-profit limited liability company; or</subsection><subsection number="16-20-1103(2)(b)">involuntary.</subsection></subsection><subsection number="16-20-1103(3)">If a low-profit limited liability company ceases to be a low-profit limited liability company in accordance with this section, the limited liability company shall:<subsection number="16-20-1103(3)(a)">change the limited liability company's name to conform with Section <xref depth="3" refnumber="16-1a-302">16-1a-302</xref>; and</subsection><subsection number="16-20-1103(3)(b)">amend the limited liability company's certificate of organization in accordance with Section <xref depth="3" refnumber="16-20-202">16-20-202</xref>.</subsection></subsection></section><section number="16-20-1104"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Merger, interest exchange, conversion, or domestication of a low-profit limited liability company.</catchline><tab/>A low-profit limited liability company may engage in a merger, interest exchange, conversion, or domestication under Chapter 1a, Part 7, Merger, Chapter 1a, Part 8, Interest Exchange, Chapter 1a, Part 9, Conversion, or Chapter 1a, Part 10, Domestication, to the same extent as a limited liability company that is not a low-profit limited liability company.</section></part><part number="16-20-12"><catchline>Miscellaneous Provisions</catchline><section number="16-20-1201"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Uniformity of application and construction.</catchline><tab/>In applying and construing this chapter, consideration must be given to the need to promote uniformity of the law with respect to this chapter's subject matter among states that enact the uniform act upon which this chapter is based.</section><section number="16-20-1202"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Severability clause.</catchline><tab/>If any provision of this chapter or this chapter's application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.</section><section number="16-20-1203"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Relation to Electronic Signatures in Global and National Commerce Act.</catchline><tab/>This chapter modifies, limits, and supersedes the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. Sec. 7001 et seq., but does not modify, limit, or supersede Section 101(c) of that act, 15 U.S.C. Sec. 7001(c), or authorize electronic delivery of any of the notices described in Section 103(b) of that act, 15 U.S.C. Sec. 7003(b).</section><section number="16-20-1204"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Savings clause.</catchline><tab/>This chapter does not affect an action commenced, proceeding brought, or right accrued before this chapter takes effect.</section><section number="16-20-1205"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Application to existing relationships.</catchline><subsection number="16-20-1205(1)">Before January 1, 2016, this chapter governs only:<subsection number="16-20-1205(1)(a)">a limited liability company formed on or after January 1, 2014; and</subsection><subsection number="16-20-1205(1)(b)">except as otherwise provided in Subsection <xref depth="4" refnumber="48-3a-1405(3)">(3)</xref>, a limited liability company formed before January 1, 2014, which elects, in the manner provided in its operating agreement or by law for amending the operating agreement, to be subject to this chapter.</subsection></subsection><subsection number="16-20-1205(2)">Except as otherwise provided in Subsection <xref depth="4" refnumber="48-3a-1405(3)">(3)</xref>, on and after January 1, 2016, this chapter governs all limited liability companies.</subsection><subsection number="16-20-1205(3)">For the purposes of applying this chapter to a limited liability company formed before January 1, 2014:<subsection number="16-20-1205(3)(a)">the limited liability company's articles of organization are deemed to be the limited liability company's certificate of organization;</subsection><subsection number="16-20-1205(3)(b)">for the purposes of applying Subsection <xref depth="4" refnumber="16-20-101(15)">16-20-101(15)</xref> and subject to Subsection <xref depth="4" refnumber="16-20-109(4)">16-20-109(4)</xref>, language in the limited liability company's articles of organization designating the limited liability company's management structure operates as if that language were in the operating agreement; and</subsection><subsection number="16-20-1205(3)(c)"><subsection number="16-20-1205(3)(c)(i)">the limited liability company has perpetual duration unless otherwise stated in the limited liability company's articles of organization; and</subsection><subsection number="16-20-1205(3)(c)(ii)">after the limited liability company's duration ends in accordance with the articles of organization, the limited liability company is dissolved, and its activities and affairs must be wound up.</subsection></subsection></subsection></section></part></chapter><chapter number="16-21"><catchline>Benefit Limited Liability Company Act</catchline><part number="16-21-1"><catchline>General Provisions</catchline><section number="16-21-101"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Application and effect of chapter.</catchline><subsection number="16-21-101(1)">This chapter applies to a benefit company organized under this chapter.</subsection><subsection number="16-21-101(2)"><subsection number="16-21-101(2)(a)">The existence of a provision in this chapter does not itself create an implication that a contrary or different rule of law is applicable to a limited liability company that is not a benefit company.</subsection><subsection number="16-21-101(2)(b)">This chapter does not affect a statute or rule of law that is applicable to a limited liability company that is not a benefit company.</subsection></subsection><subsection number="16-21-101(3)"><subsection number="16-21-101(3)(a)">Except as otherwise provided in this chapter, Chapter 20, Utah Revised Uniform Limited Liability Company Act, applies to a benefit company.</subsection><subsection number="16-21-101(3)(b)">The provisions of this chapter control over any inconsistent provision of Chapter 20, Utah Revised Uniform Limited Liability Company Act.</subsection></subsection><subsection number="16-21-101(4)">The operating agreement of a benefit company may not limit, be inconsistent with, or supersede a provision of this chapter.</subsection></section><section number="16-21-102"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Definitions.</catchline><tab/>As used in this chapter:<subsection number="16-21-102(1)">"Benefit company" means a limited liability company:<subsection number="16-21-102(1)(a)">that elects to become subject to this chapter; and</subsection><subsection number="16-21-102(1)(b)">the status of which as a benefit company has not been terminated.</subsection></subsection><subsection number="16-21-102(2)">"Benefit enforcement proceeding" means a proceeding in a court of competent jurisdiction for:<subsection number="16-21-102(2)(a)">failure of a benefit company to pursue or create general public benefit or a specific public benefit described in the benefit company's certificate of organization; or</subsection><subsection number="16-21-102(2)(b)">a violation of an obligation, duty, or standard of conduct under this chapter.</subsection></subsection><subsection number="16-21-102(3)">"General public benefit" means a material positive impact on society and the environment:<subsection number="16-21-102(3)(a)">taken as a whole;</subsection><subsection number="16-21-102(3)(b)">assessed against a third-party standard; and</subsection><subsection number="16-21-102(3)(c)">from the business of a benefit company.</subsection></subsection><subsection number="16-21-102(4)">"Immediate family member" means a parent, spouse, surviving spouse, child, or sibling.</subsection><subsection number="16-21-102(5)"><subsection number="16-21-102(5)(a)">"Independent person" means a person who has no material relationship with a benefit company or a subsidiary of the benefit company.</subsection><subsection number="16-21-102(5)(b)">"Independent person" does not include a person:<subsection number="16-21-102(5)(b)(i)">who is, or has been within the last three years, an employee of the benefit company or a subsidiary of the benefit company;</subsection><subsection number="16-21-102(5)(b)(ii)">whose immediate family member is, or has been within the last three years, an executive officer of the benefit company or a subsidiary of the benefit company;</subsection><subsection number="16-21-102(5)(b)(iii)">who owns 5% or more of the outstanding interests of the benefit company, calculated as if all outstanding rights to acquire interests in the benefit company have been exercised; or</subsection><subsection number="16-21-102(5)(b)(iv)">who owns 5% or more of the outstanding interests in an entity, calculated as if all outstanding rights to acquire interests in the entity have been exercised, that owns 5% or more of the outstanding interests of the benefit company, calculated as if all outstanding rights to acquire interests in the benefit company have been exercised.</subsection></subsection></subsection><subsection number="16-21-102(6)">"Minimum status vote" means:<subsection number="16-21-102(6)(a)">in the case of a limited liability company, in addition to any other required approval or vote, the satisfaction of the following conditions:<subsection number="16-21-102(6)(a)(i)">the members of every class or series may vote as a separate voting group on an action of the limited liability company regardless of a limitation state in the certificate of organization or operating agreement on the voting rights of any class or series; and</subsection><subsection number="16-21-102(6)(a)(ii)">the action of the limited liability company is required to be approved by vote of the members of each class or series entitled to cast at least two-thirds of the votes that all members of the class or series are entitled to cast on the action; or</subsection></subsection><subsection number="16-21-102(6)(b)">in the case of a domestic entity other than a limited liability company, in addition to any other required approval, vote, or consent, the satisfaction of the following conditions:<subsection number="16-21-102(6)(b)(i)">the holders of every class or series of interest in the entity that are entitled to receive a distribution of any kind from the entity may vote on or consent to the action regardless of any otherwise applicable limitation on voting or consent rights of the class or series; and</subsection><subsection number="16-21-102(6)(b)(ii)">the action of the limited liability company is required to be approved by vote or consent of the holders described in Subsection <xref depth="4" refnumber="48-4-103(6)(b)(i)" start="0">(6)(b)(i)</xref> entitled to cast at least two-thirds of the votes or consents that all of those holders are entitled to cast on the action.</subsection></subsection></subsection><subsection number="16-21-102(7)">"Owns" includes ownership as the owner of record or as a beneficial owner.</subsection><subsection number="16-21-102(8)">"Specific public benefit" includes:<subsection number="16-21-102(8)(a)">providing low-income or underserved individuals or communities with beneficial products or services;</subsection><subsection number="16-21-102(8)(b)">promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business;</subsection><subsection number="16-21-102(8)(c)">protecting or restoring the environment;</subsection><subsection number="16-21-102(8)(d)">improving human health;</subsection><subsection number="16-21-102(8)(e)">promoting the arts, sciences, or advancement of knowledge;</subsection><subsection number="16-21-102(8)(f)">increasing the flow of capital to entities with a purpose to benefit society or the environment; and</subsection><subsection number="16-21-102(8)(g)">conferring any other particular benefit on society or the environment.</subsection></subsection><subsection number="16-21-102(9)">"Subsidiary" means, in relation to a person, an entity in which the person owns beneficially or of record, 50% or more of the outstanding equity interests, calculated as if all outstanding rights to acquire equity interests in the entity have been exercised.</subsection><subsection number="16-21-102(10)">"Third-party standard" means a standard for defining, reporting, and assessing overall social and environmental performance that:<subsection number="16-21-102(10)(a)">assesses the effect of a business and a business's operations on the interests described in Subsections <xref depth="4" refnumber="16-21-301(1)(a)(ii)">16-21-301(1)(a)(ii)</xref> through <xref depth="4" refnumber="48-4-301(1)(a)(v)" start="0">(v)</xref>;</subsection><subsection number="16-21-102(10)(b)">is developed by an entity:<subsection number="16-21-102(10)(b)(i)">that is independent of the benefit company;</subsection><subsection number="16-21-102(10)(b)(ii)">whose governing body is comprised of no more than one-third of members who are representatives of any of the following:<subsection number="16-21-102(10)(b)(ii)(A)">an association of businesses that operate in a specific industry whose members are measured by the standard;</subsection><subsection number="16-21-102(10)(b)(ii)(B)">businesses from a specific industry or an association of businesses in that industry; or</subsection><subsection number="16-21-102(10)(b)(ii)(C)">businesses whose performance is assessed against the standard;</subsection></subsection><subsection number="16-21-102(10)(b)(iii)">that is not materially financed by an association or business described in Subsection <xref depth="4" refnumber="48-4-103(10)(b)(ii)" start="0">(10)(b)(ii)</xref>;</subsection><subsection number="16-21-102(10)(b)(iv)">that has access to necessary expertise to assess overall social and environmental performance;</subsection><subsection number="16-21-102(10)(b)(v)">uses a balanced multistakeholder approach to develop the standard, including a public comment period of at least 30 days; and</subsection><subsection number="16-21-102(10)(b)(vi)">makes the following information publically available:<subsection number="16-21-102(10)(b)(vi)(A)">the criteria considered when measuring the overall social and environmental performance of a business;</subsection><subsection number="16-21-102(10)(b)(vi)(B)">the relative weightings, if any, of the criteria described in Subsection <xref depth="4" refnumber="48-4-103(10)(b)(vi)(A)" start="0">(10)(b)(vi)(A)</xref>;</subsection><subsection number="16-21-102(10)(b)(vi)(C)">the identity of each director, officer, material owner, and governing body of the entity that developed and controls revisions to the standard;</subsection><subsection number="16-21-102(10)(b)(vi)(D)">the process by which revisions to the standard and changes to the membership of the governing body are made; and</subsection><subsection number="16-21-102(10)(b)(vi)(E)">an accounting of the revenue and sources of financial support for the entity, with sufficient detail to disclose a relationship that could reasonably be considered to present a potential conflict of interest.</subsection></subsection></subsection></subsection></section><section number="16-21-103"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Benefit company status.</catchline><subsection number="16-21-103(1)">A person may form a benefit company in accordance with Chapter 20, Utah Revised Uniform Limited Liability Company Act, except the certificate of organization shall state that the limited liability company is a benefit company.</subsection><subsection number="16-21-103(2)"><subsection number="16-21-103(2)(a)">A limited liability company may elect to become a benefit company by amending, in accordance with Section <xref depth="3" refnumber="16-20-202">16-20-202</xref>, the limited liability company's certificate of organization to contain a statement that the limited liability company is a benefit company.</subsection><subsection number="16-21-103(2)(b)">An amendment described in Subsection <xref depth="4" refnumber="48-4-104(2)(a)" start="0">(2)(a)</xref> is not effective unless the amendment is adopted by at least the minimum status vote.</subsection></subsection><subsection number="16-21-103(3)">If an entity that is not a benefit company is a party to a merger or is the exchanging entity in an interest exchange, and the surviving entity in the merger or interest exchange is a benefit company, the merger or interest exchange is not effective unless the merger or interest exchange is adopted by the entity by at least the minimum status vote.</subsection><subsection number="16-21-103(4)"><subsection number="16-21-103(4)(a)">A benefit company may terminate the benefit company's status as a benefit company and cease to be subject to this chapter by amending the benefit company's certificate of organization in accordance with Section <xref depth="3" refnumber="16-20-202">16-20-202</xref> to delete the provision described in Subsection <xref depth="4" refnumber="48-4-104(1)" start="0">(1)</xref> or <xref depth="4" refnumber="48-4-104(2)" start="0">(2)</xref> that states that the limited liability company is a benefit company.</subsection><subsection number="16-21-103(4)(b)">An amendment described in Subsection <xref depth="4" refnumber="48-4-104(4)(a)" start="0">(4)(a)</xref> is not effective unless the amendment is adopted by at least the minimum status vote.</subsection></subsection><subsection number="16-21-103(5)"><subsection number="16-21-103(5)(a)">If a proposed merger or interest exchange would have the effect of terminating a benefit company's status as a benefit company, the merger or interest exchange is not effective unless the merger or interest exchange is adopted by at least the minimum status vote.</subsection><subsection number="16-21-103(5)(b)">Unless the transaction is in the usual and regular course of the benefit company's business, a sale, lease, exchange, or other disposition of all or substantially all of the assets of a benefit company is not effective unless the transaction is approved by at least the minimum status vote.</subsection></subsection></section><section number="16-21-104"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Provisions Applicable to All Business Entities applicable.</catchline>Chapter 1a, Provisions Applicable to All Business Entities, applies to the provisions of this chapter.</section></part><part number="16-21-2"><catchline>Company Purpose</catchline><section number="16-21-201"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Company purpose.</catchline><subsection number="16-21-201(1)">In addition to the benefit company's purpose under Section <xref depth="3" refnumber="16-20-103">16-20-103</xref>, a benefit company shall have a purpose of creating general public benefit.</subsection><subsection number="16-21-201(2)"><subsection number="16-21-201(2)(a)">A benefit company's certificate of organization may identify one or more specific public benefits that are the purposes of the benefit company to create.</subsection><subsection number="16-21-201(2)(b)">Identifying a specific public benefit in accordance with Subsection <xref depth="4" refnumber="48-4-201(2)(a)" start="0">(2)(a)</xref> does not affect a benefit company's obligation to create general public benefit in accordance with Subsection <xref depth="4" refnumber="48-4-201(1)" start="0">(1)</xref>.</subsection></subsection><subsection number="16-21-201(3)">The creation of general public benefit and one or more specific public benefits is in the best interests of the benefit company.</subsection><subsection number="16-21-201(4)"><subsection number="16-21-201(4)(a)">A benefit company may amend the benefit company's certificate or organization to add, amend, or delete a specific public benefit.</subsection><subsection number="16-21-201(4)(b)">An amendment described in Subsection <xref depth="4" refnumber="48-4-201(4)(a)" start="0">(4)(a)</xref> is not effective unless adopted by at least the minimum status vote.</subsection></subsection></section></part><part number="16-21-3"><catchline>Accountability</catchline><section number="16-21-301"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Standard of conduct for members.</catchline><subsection number="16-21-301(1)">When discharging a duty under this chapter, each member of a member-managed benefit company:<subsection number="16-21-301(1)(a)">shall consider the effect of any action or inaction on:<subsection number="16-21-301(1)(a)(i)">the members of the benefit company;</subsection><subsection number="16-21-301(1)(a)(ii)">the employees and workforce of the benefit company;</subsection><subsection number="16-21-301(1)(a)(iii)">the interests of customers as beneficiaries of the benefit company's general public benefit purpose or specific public benefit purpose;</subsection><subsection number="16-21-301(1)(a)(iv)">community and societal considerations, including those of each community in which offices or facilities of the benefit company or the benefit company's subsidiaries or suppliers are located;</subsection><subsection number="16-21-301(1)(a)(v)">the local and global environment;</subsection><subsection number="16-21-301(1)(a)(vi)">the short-term and long-term interests of the benefit company, including benefits that may accrue to the benefit company from the benefit company's long-term plans and the possibility that the interests may be best served by the continued independence of the benefit company; and</subsection><subsection number="16-21-301(1)(a)(vii)">the ability of the benefit company to accomplish the benefit company's general public benefit purpose and any specific public benefit purpose; and</subsection></subsection><subsection number="16-21-301(1)(b)">may consider other pertinent factors or the interests of any other group that the member considers appropriate.</subsection></subsection><subsection number="16-21-301(2)">A member is not required to prioritize the interests of a person or factor described in Subsection <xref depth="4" refnumber="48-4-301(1)(a)" start="0">(1)(a)</xref> or <xref depth="4" refnumber="48-4-301(1)(b)" start="0">(b)</xref> over the interests of any other person or factor, unless the benefit company's certificate of organization states an intention to give priority to certain interests related to the benefit company's accomplishment of the benefit company's general public benefit purpose or a specific public benefit purpose identified in the benefit company's certificate of organization.</subsection><subsection number="16-21-301(3)">A member's consideration of interests and factors in accordance with Subsections <xref depth="4" refnumber="48-4-301(1)" start="0">(1)</xref> and <xref depth="4" refnumber="48-4-301(2)" start="0">(2)</xref> does not constitute a violation of Section <xref depth="3" refnumber="16-20-409">16-20-409</xref>.</subsection><subsection number="16-21-301(4)">A member of a member-managed limited liability company that is a benefit company does not have a duty to a person who is a beneficiary of the benefit company's general public benefit purpose or a specific public benefit purpose arising from the person's status as a beneficiary.</subsection></section><section number="16-21-302"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Standard of conduct for managers and officers.</catchline><subsection number="16-21-302(1)">Each manager of a manager-managed benefit company shall consider the interests and factors described in Subsections <xref refnumber="127-null-1">16-21-301(1)</xref> and <xref depth="4" refnumber="48-4-301(2)" start="0">(2)</xref> when discharging the manager's duties under this chapter and the operating agreement.</subsection><subsection number="16-21-302(2)">If a benefit company has a person serving as an officer, the person shall consider the interests and factors described in Subsections <xref depth="4" refnumber="16-21-301(1)">16-21-301(1)</xref> and <xref depth="4" refnumber="48-4-301(2)" start="0">(2)</xref> when discharging the person's duties under this chapter and the operating agreement if:<subsection number="16-21-302(2)(a)">the officer has discretion to act with respect to the matter; and</subsection><subsection number="16-21-302(2)(b)">it reasonably appears to the officer that the matter may have a material effect on the benefit company's creation of a general public benefit or a specific public benefit identified in the benefit company's certificate of organization.</subsection></subsection><subsection number="16-21-302(3)">A manager's consideration of the interests and factors described in Subsections <xref depth="4" refnumber="16-21-301(1)">16-21-301(1)</xref> and <xref depth="4" refnumber="48-4-301(2)" start="0">(2)</xref> does not constitute a violation of Section <xref depth="3" refnumber="16-20-409">16-20-409</xref>.</subsection><subsection number="16-21-302(4)">A manager or officer does not have a duty to a person who is a beneficiary of the benefit company's general public benefit purpose or a specific public benefit purpose arising from the person's status as a beneficiary.</subsection></section><section number="16-21-303"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Right of action.</catchline><subsection number="16-21-303(1)">Except in a benefit enforcement proceeding, a person may not bring an action or assert a claim against a benefit company or a benefit company's member, manager, or officer with respect to:<subsection number="16-21-303(1)(a)">failure to pursue or create general public benefit or a specific public benefit set forth in the benefit company's certificate of organization; or</subsection><subsection number="16-21-303(1)(b)">violation of a duty or standard of conduct under this chapter.</subsection></subsection><subsection number="16-21-303(2)">A benefit company is not liable for monetary damages under this chapter for a failure of the benefit company to pursue or create general public benefit or a specific public benefit.</subsection><subsection number="16-21-303(3)">Only the following may commence or maintain a benefit enforcement proceeding:<subsection number="16-21-303(3)(a)">the benefit company, directly; or</subsection><subsection number="16-21-303(3)(b)">one or more of the following, derivatively:<subsection number="16-21-303(3)(b)(i)">a member that owned at least 2% of the total number of interests of a class or series outstanding at the time of the act or omission complained of;</subsection><subsection number="16-21-303(3)(b)(ii)">a manager of a manager-managed benefit company;</subsection><subsection number="16-21-303(3)(b)(iii)">a person or group of persons who own beneficially or of record at least 5% of the interests in an association of which the benefit company is a subsidiary at the time of the act or omission complained of; or</subsection><subsection number="16-21-303(3)(b)(iv)">any person or group of persons specified in the benefit company's certificate of organization or operating agreement.</subsection></subsection></subsection></section></part><part number="16-21-4"><catchline>Transparency</catchline><section number="16-21-401"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Annual benefit report.</catchline><subsection number="16-21-401(1)">A benefit company shall prepare an annual benefit report that includes:<subsection number="16-21-401(1)(a)">a narrative description of:<subsection number="16-21-401(1)(a)(i)">the ways in which the benefit company pursued the benefit company's general public benefit purpose during the year and the extent to which general public benefit was created;</subsection><subsection number="16-21-401(1)(a)(ii)">the ways in which the benefit company pursued any specific public benefit that the benefit company's certificate of organization states is the purpose of the benefit company to create and the extent to which the specific public benefit was created;</subsection><subsection number="16-21-401(1)(a)(iii)">any circumstances that have hindered the benefit company's creation of general public benefit or any specific public benefit; and</subsection><subsection number="16-21-401(1)(a)(iv)">the process and rationale for selecting or changing the third-party standard used to prepare the benefit report;</subsection></subsection><subsection number="16-21-401(1)(b)">an assessment of the overall social and environmental performance of the benefit company against a third-party standard:<subsection number="16-21-401(1)(b)(i)">applied consistently with any application of the standard in prior benefit reports; or</subsection><subsection number="16-21-401(1)(b)(ii)">accompanied by an explanation of the reasons for any inconsistent application; and</subsection></subsection><subsection number="16-21-401(1)(c)">any connection between the organization that established the third-party standard, or the organization's directors or officers, or a holder of 5% or more of the governance interests in the organization, and the benefit company or the benefit company's members, managers, or officers or any holder of 5% or more of the outstanding interests in the benefit company, including any financial or governance relationship that might materially affect the credibility of the use of the third-party standard.</subsection></subsection><subsection number="16-21-401(2)">The assessment described in Subsection <xref depth="4" refnumber="48-4-401(1)(b)" start="0">(1)(b)</xref> does not need to be audited or certified by a third party.</subsection></section><section number="16-21-402"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Availability of annual benefit report.</catchline><subsection number="16-21-402(1)">Each year, a benefit company shall send the benefit report described in Section <xref depth="3" refnumber="16-21-401">16-21-401</xref> to each member:<subsection number="16-21-402(1)(a)">within 120 days after the day on which the benefit company's fiscal year ends; or</subsection><subsection number="16-21-402(1)(b)">the day on which the benefit company delivers any other annual report to the benefit company's members.</subsection></subsection><subsection number="16-21-402(2)"><subsection number="16-21-402(2)(a)">Within five days after the day on which a benefit company sends a benefit report to each member in accordance with Subsection <xref depth="4" refnumber="48-4-402(1)" start="0">(1)</xref>, the benefit company shall:<subsection number="16-21-402(2)(a)(i)">subject to Subsection <xref depth="4" refnumber="48-4-402(2)(b)" start="0">(2)(b)</xref>, post a copy of the benefit report on a public portion of the benefit company's website; and</subsection><subsection number="16-21-402(2)(a)(ii)">deliver a copy of the benefit report to the division for filing.</subsection></subsection><subsection number="16-21-402(2)(b)">If a benefit company does not have a website, the benefit company shall provide a copy of the benefit report, without charge, to any person who requests a copy.</subsection><subsection number="16-21-402(2)(c)">The benefit company may omit any financial or proprietary information from a copy of a benefit report described in Subsection <xref depth="4" refnumber="48-4-402(2)(a)" start="0">(2)(a)</xref> or <xref depth="4" refnumber="48-4-402(2)(b)" start="0">(b)</xref>.</subsection><subsection number="16-21-402(2)(d)">The division may charge a fee established by the division in accordance with Section <xref depth="3" refnumber="63J-1-504" start="0">63J-1-504</xref> for filing an annual benefit report in accordance with this section.</subsection></subsection></section></part></chapter><chapter number="16-22"><catchline>Decentralized Autonomous Organization Act</catchline><part number="16-22-1"><catchline>General Provisions</catchline><section number="16-22-101"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Definitions.</catchline><tab/>As used in this chapter:<subsection number="16-22-101(1)">"Administrator" means a person that is appointed in a manner specified in the by-laws to make decisions for specific, predefined operations of the decentralized autonomous organization.</subsection><subsection number="16-22-101(2)">"Asset" means an item of value, whether on-chain or off-chain.</subsection><subsection number="16-22-101(3)">"By-laws" means the procedural rules and regulations that govern a decentralized autonomous organization and the interaction of the decentralized autonomous organization's members and participants.</subsection><subsection number="16-22-101(4)">"Cryptographic proof" means a mathematical proof that verifies that a message has not been tampered with or altered in any way and can be verified by a person that has access to the original message and the proof.</subsection><subsection number="16-22-101(5)">"Decentralized" means that decision-making is distributed among multiple persons.</subsection><subsection number="16-22-101(6)">"Decentralized autonomous organization" means an organization:<subsection number="16-22-101(6)(a)">created by one or more smart contracts;</subsection><subsection number="16-22-101(6)(b)">that implements rules enabling individuals to coordinate for decentralized governance of an organization; and</subsection><subsection number="16-22-101(6)(c)">that is an entity formed under this chapter.</subsection></subsection><subsection number="16-22-101(7)"><subsection number="16-22-101(7)(a)">"Developer" means a person involved in the development or maintenance of a decentralized autonomous organization.</subsection><subsection number="16-22-101(7)(b)">"Developer" includes a person that provides:<subsection number="16-22-101(7)(b)(i)">software code; or</subsection><subsection number="16-22-101(7)(b)(ii)">design, business, legal, or ancillary support.</subsection></subsection></subsection><subsection number="16-22-101(8)"><subsection number="16-22-101(8)(a)">"Dispute resolution mechanism" means an on-chain alternative dispute resolution system that enables persons to resolve disputes arising out of a decentralized autonomous organization.</subsection><subsection number="16-22-101(8)(b)">"Dispute resolution mechanism" includes:<subsection number="16-22-101(8)(b)(i)">arbitration;</subsection><subsection number="16-22-101(8)(b)(ii)">expert determination; or</subsection><subsection number="16-22-101(8)(b)(iii)">an on-chain alternative court system.</subsection></subsection></subsection><subsection number="16-22-101(9)">"Division" means the Division of Corporations and Commercial Code.</subsection><subsection number="16-22-101(10)">"Failure event" means an error in the decentralized autonomous organization's software code or an exploit that:<subsection number="16-22-101(10)(a)">renders the decentralized autonomous organization inoperative; or</subsection><subsection number="16-22-101(10)(b)">fundamentally changes the expected operation of the decentralized autonomous organization.</subsection></subsection><subsection number="16-22-101(11)">"Graphical user interface" means a publicly accessible interface through which a person interacts with computer software through visual indicator representations.</subsection><subsection number="16-22-101(12)">"Hard fork" means a blockchain software upgrade that is not compatible with previous versions of the blockchain software and requires all users to upgrade to the latest version of the blockchain software.</subsection><subsection number="16-22-101(13)">"Legal representative" means an individual appointed in the manner specified in the by-laws of a decentralized autonomous organization to perform procedural functions off-chain on behalf of a decentralized autonomous organization.</subsection><subsection number="16-22-101(14)">"Majority chain" means the version of the blockchain accepted by more than half of the blockchain's validators following a hard fork.</subsection><subsection number="16-22-101(15)">"Meeting" means a synchronous or asynchronous event for the purpose of discussing and acting upon decentralized autonomous organization related matters by members or participants.</subsection><subsection number="16-22-101(16)"><subsection number="16-22-101(16)(a)">"Member" means a person who has governance rights in a decentralized autonomous organization.</subsection><subsection number="16-22-101(16)(b)">"Member" does not include an individual that has involuntarily received a token with governance rights, unless that person has chosen to participate in governance by undertaking a governance behavior, on-chain or off-chain, for the decentralized autonomous organization.</subsection></subsection><subsection number="16-22-101(17)">"Minority chain" means the version of the chain that is not the majority chain following a hard fork.</subsection><subsection number="16-22-101(18)">"Off-chain" means any action that is not on-chain.</subsection><subsection number="16-22-101(19)">"On-chain" means any action that is recorded and verified on a blockchain.</subsection><subsection number="16-22-101(20)">"On-chain contribution" refers to any token segregated and locked in one of the decentralized autonomous organization's smart contracts for the purpose of member buy-in to the decentralized autonomous organization and the provision of withdrawable capital.</subsection><subsection number="16-22-101(21)">"Organizer" means a person that submits the certificate of filing as required in Section <xref depth="3" refnumber="16-22-201">16-22-201</xref>.</subsection><subsection number="16-22-101(22)">"Participant" means a person that:<subsection number="16-22-101(22)(a)">is not a member of a decentralized autonomous organization; and</subsection><subsection number="16-22-101(22)(b)">holds or interacts with a token of a decentralized autonomous organization.</subsection></subsection><subsection number="16-22-101(23)">"Permissionless blockchain" means a publicly distributed ledger that allows a person to transact and produce blocks in accordance with the blockchain protocol, in which the validity of the block is independent of the identity of the user.</subsection><subsection number="16-22-101(24)">"Public address" means a unique, durable identifier that an individual can transact with on a permissionless blockchain.</subsection><subsection number="16-22-101(25)">"Public forum" means a freely accessible online environment that is commonly used for the exercise of speech and public debate.</subsection><subsection number="16-22-101(26)">"Public signal" means a declaration authorized by the decentralized autonomous organization in a public forum.</subsection><subsection number="16-22-101(27)">"Quality assurance" means a security review of the software code of the decentralized autonomous organization in accordance with industry standards.</subsection><subsection number="16-22-101(28)">"Redeem" means to exchange a token for the value that the token represents.</subsection><subsection number="16-22-101(29)">"Smart contract" means software code that:<subsection number="16-22-101(29)(a)">is deployed on a permissionless blockchain;</subsection><subsection number="16-22-101(29)(b)">consists of a set of predefined instructions executed in a distributed manner by the nodes of an underlying blockchain network; and</subsection><subsection number="16-22-101(29)(c)">produces a change on the blockchain network.</subsection></subsection><subsection number="16-22-101(30)">"Token" means a record on a permissionless blockchain that represents an asset, participation right, or other entitlement.</subsection><subsection number="16-22-101(31)">"Transaction" means a new entry in a permissionless blockchain, including the recording of a change in ownership of an asset or participation in a decentralized autonomous organization.</subsection></section><section number="16-22-102"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Governing document hierarchy -- Governing law.</catchline><tab/>A decentralized autonomous organization shall be governed by the following, listed in order of primacy:<subsection number="16-22-102(1)">this act;</subsection><subsection number="16-22-102(2)">the by-laws of the decentralized autonomous organization;</subsection><subsection number="16-22-102(3)">if this act and a decentralized autonomous organization's by-laws are silent, the provisions of Chapter 20, Utah Revised Uniform Limited Liability Company Act; and</subsection><subsection number="16-22-102(4)">principles of law and equity.</subsection></section><section number="16-22-103"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Powers of the division.</catchline><subsection number="16-22-103(1)"><subsection number="16-22-103(1)(a)">The division may make, amend, or rescind a rule, form, or order when necessary to carry out this chapter.</subsection><subsection number="16-22-103(1)(b)">The division shall make rules in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.</subsection></subsection><subsection number="16-22-103(2)">The division may by rule:<subsection number="16-22-103(2)(a)">provide the form and content of a registration requirement required under this chapter;</subsection><subsection number="16-22-103(2)(b)">provide the method of determining whether formation requirements described in Section <xref depth="3" refnumber="16-22-201">16-22-201</xref> have been met and when to file a certificate of organization; and</subsection><subsection number="16-22-103(2)(c)">identify industry standards for determining whether the decentralized autonomous organization has undergone security review for quality assurance.</subsection></subsection></section><section number="16-22-104"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Legal personality.</catchline><tab/>A decentralized autonomous organization that meets the requirements of this act:<subsection number="16-22-104(1)">shall be deemed a legal entity separate and distinct from the decentralized autonomous organization's members;</subsection><subsection number="16-22-104(2)">has the capacity to sue and be sued in the decentralized autonomous organization's own name and the power to do all things necessary or convenient to carry on the decentralized autonomous organization's activities and affairs;</subsection><subsection number="16-22-104(3)">shall meet the decentralized autonomous organization's liabilities through the decentralized autonomous organization's assets;</subsection><subsection number="16-22-104(4)">may have any lawful purpose; and</subsection><subsection number="16-22-104(5)">has perpetual duration.</subsection></section><section number="16-22-105"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Registered agent.</catchline><tab/>Each decentralized autonomous organization shall designate a registered agent in this state in accordance with Section <xref depth="3" refnumber="16-1a-404">16-1a-404</xref> and maintain a registered agent in the state.</section><section number="16-22-106"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Electronic documents.</catchline><subsection number="16-22-106(1)">Subject to Section <xref depth="3" refnumber="13-1a-110">13-1a-110</xref>, the division shall by rule permit a writing required or permitted to be filed with the division under this chapter:<subsection number="16-22-106(1)(a)">to be delivered, mailed, or filed:<subsection number="16-22-106(1)(a)(i)">in an electronic medium; or</subsection><subsection number="16-22-106(1)(a)(ii)">by electronic transmission; or</subsection></subsection><subsection number="16-22-106(1)(b)">to be signed by photographic, electronic, or other means prescribed by rule, except that a writing signed in an electronic medium shall be signed by electronic signature in accordance with <xref depth="1" refnumber="46-4" start="0">Title 46, Chapter 4, Uniform Electronic Transactions Act</xref>.</subsection></subsection><subsection number="16-22-106(2)">The division may by rule provide for any writing required or permitted to be prepared, delivered, or mailed by the division under this chapter to be prepared, delivered, or mailed:<subsection number="16-22-106(2)(a)">in an electronic medium; or</subsection><subsection number="16-22-106(2)(b)">by electronic transmission.</subsection></subsection></section><section number="16-22-110"><histories><history>Enacted by Chapter <modchap sess="2026GS">93</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Provisions Applicable to All Business Entities applicable.</catchline>Chapter 1a, Provisions Applicable to All Business Entities, applies to the provisions of this chapter.</section></part><part number="16-22-2"><catchline>Formation</catchline><section number="16-22-201"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Formation requirements.</catchline><subsection number="16-22-201(1)"><subsection number="16-22-201(1)(a)">One or more persons may act as organizers to form a decentralized autonomous organization by delivering to the division for filing a certificate of organization.</subsection><subsection number="16-22-201(1)(b)">At least one of the organizers of a decentralized autonomous organization shall be an individual.</subsection></subsection><subsection number="16-22-201(2)"><subsection number="16-22-201(2)(a)">A certificate of organization shall provide:<subsection number="16-22-201(2)(a)(i)">the name of the decentralized autonomous organization, which shall comply with Sections <xref depth="3" refnumber="16-1a-302">16-1a-302</xref> and <xref depth="3" refnumber="16-1a-303">16-1a-303</xref>;</subsection><subsection number="16-22-201(2)(a)(ii)">the name of an organizer that is an individual;</subsection><subsection number="16-22-201(2)(a)(iii)">the street and mailing address of the organizer described in Subsection <xref depth="4" refnumber="48-5-201(2)(a)(ii)">(2)(a)(ii)</xref>;</subsection><subsection number="16-22-201(2)(a)(iv)">the name and address of the legal representative; and</subsection><subsection number="16-22-201(2)(a)(v)">the information required by Section <xref depth="3" refnumber="16-1a-404">16-1a-404</xref>.</subsection></subsection><subsection number="16-22-201(2)(b)">An organizer may request that the information provided in Subsections <xref depth="4" refnumber="48-5-201(2)(a)(ii)">(2)(a)(ii)</xref> and <xref depth="4" refnumber="48-5-201(iii)">(iii)</xref> is redacted by the division before any public disclosure of the filing.</subsection></subsection><subsection number="16-22-201(3)">A decentralized autonomous organization shall submit evidence to the division in a form required by the division that the decentralized autonomous organization has complied with the following requirements:<subsection number="16-22-201(3)(a)">the decentralized autonomous organization is deployed on a permissionless blockchain;</subsection><subsection number="16-22-201(3)(b)">the decentralized autonomous organization has a unique public address through which an individual can review and monitor the decentralized autonomous organization's transactions;</subsection><subsection number="16-22-201(3)(c)">the software code of the decentralized autonomous organization is available in a public forum for any person to review;</subsection><subsection number="16-22-201(3)(d)">the software code of the decentralized autonomous organization has undergone quality assurance;</subsection><subsection number="16-22-201(3)(e)">the decentralized autonomous organization has a graphical user interface that:<subsection number="16-22-201(3)(e)(i)">allows a person to read the value of the key variables of the decentralized autonomous organization's smart contracts;</subsection><subsection number="16-22-201(3)(e)(ii)">allows a person to monitor all transactions originating from, or addressed to, the decentralized autonomous organization's smart contracts;</subsection><subsection number="16-22-201(3)(e)(iii)">specifies the restrictions on a member's ability to redeem tokens;</subsection><subsection number="16-22-201(3)(e)(iv)">makes available the decentralized autonomous organization's by-laws; and</subsection><subsection number="16-22-201(3)(e)(v)">displays the mechanism to contact the administrator of the decentralized autonomous organization;</subsection></subsection><subsection number="16-22-201(3)(f)">the governance system of the decentralized autonomous organization is decentralized;</subsection><subsection number="16-22-201(3)(g)">the decentralized autonomous organization has at least one member;</subsection><subsection number="16-22-201(3)(h)"><subsection number="16-22-201(3)(h)(i)">there is a publicly specified communication mechanism that allows a person to contact the registered agent of the decentralized autonomous organization and provide legally recognized service; and</subsection><subsection number="16-22-201(3)(h)(ii)">a member or administrator of the decentralized autonomous organization is able to access the contents of this communication mechanism; and</subsection></subsection><subsection number="16-22-201(3)(i)">the decentralized autonomous organization describes or provides a dispute resolution mechanism that is:<subsection number="16-22-201(3)(i)(i)">binding on the decentralized autonomous organization, the members, and participants of the decentralized autonomous organization; and</subsection><subsection number="16-22-201(3)(i)(ii)">able to resolve disputes with third parties capable of settlement by alternative dispute resolution.</subsection></subsection></subsection><subsection number="16-22-201(4)">Notwithstanding the requirements of Subsection <xref depth="4" refnumber="48-5-201(3)(e)(iv)">(3)(e)(iv)</xref>, a decentralized autonomous organization may redact sensitive information from the by-laws before making the by-laws available, if those redactions are necessary to protect the privacy of individual members or participants in the decentralized autonomous organization.</subsection><subsection number="16-22-201(5)">A decentralized autonomous organization is formed when the decentralized autonomous organization's certificate of organization becomes effective and the decentralized autonomous organization submits the evidence required in Subsection <xref depth="4" refnumber="48-5-201(3)">(3)</xref>.</subsection><subsection number="16-22-201(6)">Upon formation, the decentralized autonomous organization shall have limited liability, subject to the provisions of Section <xref depth="3" refnumber="16-22-202">16-22-202</xref>.</subsection></section><section number="16-22-202"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Limited liability.</catchline><subsection number="16-22-202(1)">Except as set forth in Subsections <xref depth="4" refnumber="48-5-202(2)" start="0">(2)</xref> and <xref depth="4" refnumber="48-5-202(3)" start="0">(3)</xref>, a member:<subsection number="16-22-202(1)(a)">may only be liable for the on-chain contributions that the member has committed to the decentralized autonomous organization;</subsection><subsection number="16-22-202(1)(b)">may not be held personally liable for any excess liability after the decentralized autonomous organization's assets have been exhausted;</subsection><subsection number="16-22-202(1)(c)">may not be held personally liable for any obligation incurred by the decentralized autonomous organization; and</subsection><subsection number="16-22-202(1)(d)">may not be held personally liable, in the member's capacity as a member, for the wrongful act or omission of any other member of the decentralized autonomous organization.</subsection></subsection><subsection number="16-22-202(2)">If a decentralized autonomous organization refuses to comply with an enforceable judgment, order, or award entered against the decentralized autonomous organization, the members who voted against compliance may be liable for any monetary payments ordered in the judgment, order, or award in proportion to the member's share of governance rights in the decentralized autonomous organization.</subsection><subsection number="16-22-202(3)">Subsections <xref depth="4" refnumber="48-5-202(1)" start="0">(1)</xref> and <xref depth="4" refnumber="48-5-202(2)" start="0">(2)</xref> do not affect the personal liability of a member in tort for a member's own wrongful act or omission.</subsection></section><section number="16-22-203"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>By-laws.</catchline><subsection number="16-22-203(1)">A decentralized autonomous organization shall adopt by-laws that establish internal organization and procedures for the decentralized autonomous organization.</subsection><subsection number="16-22-203(2)">The by-laws shall be set out in plain terms.</subsection><subsection number="16-22-203(3)">The by-laws of a decentralized autonomous organization may contain any provision for managing the entity and regulating the affairs of the decentralized autonomous organization that is not inconsistent with law.</subsection></section></part><part number="16-22-3"><catchline>Members</catchline><section number="16-22-301"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Classes of participation rights -- Membership.</catchline><subsection number="16-22-301(1)">A decentralized autonomous organization's by-laws may create multiple classes of member participation rights.</subsection><subsection number="16-22-301(2)">Where the decentralized autonomous organization has tokens providing governance powers to the token holder, the token holder shall be considered a member of the decentralized autonomous organization:<subsection number="16-22-301(2)(a)">from the time the ownership of the tokens is established to be in the possession of an address; or</subsection><subsection number="16-22-301(2)(b)">from the time when ownership is first acknowledged by the token holder through an on-chain interaction with the decentralized autonomous organization.</subsection></subsection><subsection number="16-22-301(3)">This section does not apply in the event of a hard fork.</subsection></section><section number="16-22-302"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Voting rights.</catchline><subsection number="16-22-302(1)">The by-laws shall set out the distribution of voting rights for the classes of member participation rights in a decentralized autonomous organization.</subsection><subsection number="16-22-302(2)">The method by which these voting rights are computed and distributed shall be set out in the by-laws.</subsection></section><section number="16-22-303"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Proxies.</catchline><subsection number="16-22-303(1)">A member may be represented by a proxy.</subsection><subsection number="16-22-303(2)">The by-laws of a decentralized autonomous organization may establish the requirements for representation by proxy.</subsection><subsection number="16-22-303(3)">A proxy may exercise all rights of a member.</subsection></section><section number="16-22-304"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Minority rights protection.</catchline><tab/>The decentralized autonomous organization shall state in the by-laws whether the decentralized autonomous organization provides minority rights protection.</section><section number="16-22-305"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Administrators.</catchline><subsection number="16-22-305(1)">Unless mandated in the decentralized autonomous organization's by-laws, a decentralized autonomous organization is not required to have an administrator, including a board of directors or a trustee.</subsection><subsection number="16-22-305(2)">In the absence of a provision requiring administrators, all the powers and tasks of an administrator shall be vested in the decentralized autonomous organization members as a class.</subsection><subsection number="16-22-305(3)">The voting mechanism for nominating and appointing an administrator shall be set out in the decentralized autonomous organization's by-laws.</subsection></section><section number="16-22-306"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Legal representation.</catchline><subsection number="16-22-306(1)">A decentralized autonomous organization shall retain a legal representative to undertake tasks that cannot be achieved on-chain.</subsection><subsection number="16-22-306(2)">Legal representation of the decentralized autonomous organization shall be carried out by the legal representative in the manner provided in the by-laws, as evidenced by an authorization displayed on a public forum, and verifiable by cryptographic proof.</subsection><subsection number="16-22-306(3)">The legal representative may undertake and execute any and all acts and contracts included within the scope of such authorization.</subsection><subsection number="16-22-306(4)">The legal representative may not be required to reside in Utah.</subsection><subsection number="16-22-306(5)">A legal representative may not be personally liable for acts performed on behalf of the decentralized autonomous organization.</subsection></section><section number="16-22-307"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>No implicit fiduciary status.</catchline><tab/>A developer, member, participant, or legal representative of a decentralized autonomous organization may not be imputed to have fiduciary duties towards each other or third parties solely on account of their role, unless the developer, member, participant, or legal representative:<subsection number="16-22-307(1)">explicitly holds themselves out as a fiduciary; or</subsection><subsection number="16-22-307(2)">stipulates to assume a fiduciary status as provided in the decentralized autonomous organization's by-laws.</subsection></section></part><part number="16-22-4"><catchline>Miscellaneous Provisions</catchline><section number="16-22-401"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Asset subscription and payment.</catchline><subsection number="16-22-401(1)">No minimum capital requirements may apply to a decentralized autonomous organization recognized by this act.</subsection><subsection number="16-22-401(2)">If the decentralized autonomous organization wishes to maintain a minimum amount of capital, the by-laws of the decentralized autonomous organization shall specify the rules for subscription and payment.</subsection><subsection number="16-22-401(3)">The by-laws shall provide the rules for exiting the decentralized autonomous organization that address the consequences of voluntary and involuntary member and participant exit on subscriptions and payments made by the member or participant.</subsection><subsection number="16-22-401(4)">No member may compel the dissolution of the decentralized autonomous organization for failure to return the member's on-chain contribution.</subsection></section><section number="16-22-402"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Meetings.</catchline><subsection number="16-22-402(1)">A decentralized autonomous organization may hold meetings as provided in the decentralized autonomous organization's by-laws.</subsection><subsection number="16-22-402(2)">Unless explicitly specified in the by-laws, meetings are not required to be in person.</subsection><subsection number="16-22-402(3)">If the by-laws include a meeting requirement, the by-laws shall include an explicit and transparent mechanism of giving notice of meetings to administrators, members, or participants, and a defined time period for deliberating upon proposals submitted by an administrator, member, or participant.</subsection><subsection number="16-22-402(4)">Notice of any required meeting shall be communicated through a graphical user interface.</subsection><subsection number="16-22-402(5)">The quorum and majority requirements for meetings of a decentralized autonomous organization's administrators, members, or participants shall be specified in the by-laws.</subsection></section><section number="16-22-403"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Contentious forks in the underlying blockchain.</catchline><subsection number="16-22-403(1)">Except as provided in this section, in the event of a hard fork in the underlying permissionless blockchain:<subsection number="16-22-403(1)(a)">the legal representation of the decentralized autonomous organization remains on the majority chain; and</subsection><subsection number="16-22-403(1)(b)">any off-chain assets shall belong to the decentralized autonomous organization on the majority chain.</subsection></subsection><subsection number="16-22-403(2)"><subsection number="16-22-403(2)(a)">A decentralized autonomous organization may choose to maintain legal presence on a minority chain if the decentralized autonomous organization expresses an intent to do so by public signal.</subsection><subsection number="16-22-403(2)(b)">If the decentralized autonomous organization expresses an intent by public signal to maintain legal presence on a minority chain, any off-chain assets shall belong to the decentralized autonomous organization on the selected minority chain.</subsection></subsection><subsection number="16-22-403(3)">The decentralized autonomous organization may liquidate the decentralized autonomous organization's on-chain assets after a hard fork to move those assets to the chosen chain.</subsection><subsection number="16-22-403(4)">The decentralized autonomous organization may split into multiple legal entities after a hard fork, each on a separate chain, after public signal of an intent to do so, provided there is a definitive distribution of off-chain assets between the majority and minority chain.</subsection></section><section number="16-22-404"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Restructuring.</catchline><subsection number="16-22-404(1)">When a decentralized autonomous organization is restructured, whether through modification, upgrade, or migration, the decentralized autonomous organization's legal personality and limited liability is retained only to the extent that:<subsection number="16-22-404(1)(a)">the new software code of the decentralized autonomous organization fulfills all the formation requirements of Section <xref depth="3" refnumber="16-22-201">16-22-201</xref>; and</subsection><subsection number="16-22-404(1)(b)">where the decentralized autonomous organization has to be associated with a new unique public address, proper notice is provided by way of public signal.</subsection></subsection><subsection number="16-22-404(2)">A decentralized autonomous organization that is restructured in compliance with Subsection <xref depth="4" refnumber="48-5-404(1)" start="0">(1)</xref> inherits the rights and obligations of the original decentralized autonomous organization as a successor.</subsection></section><section number="16-22-405"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Failure event.</catchline><subsection number="16-22-405(1)">In the case of a failure event, legal personality and limited liability are maintained to the extent necessary to protect decentralized autonomous organization members and participants from personal liability.</subsection><subsection number="16-22-405(2)">A failure event may trigger liability on the person deploying or upgrading the decentralized autonomous organization if that person:<subsection number="16-22-405(2)(a)">acted in bad faith; or</subsection><subsection number="16-22-405(2)(b)">engaged in gross negligence.</subsection></subsection></section><section number="16-22-406"><histories><history>Renumbered and Amended by Chapter <modchap sess="2026GS">92</modchap>, 2026 General Session</history><modyear>2026</modyear></histories><catchline>Taxation.</catchline><subsection number="16-22-406(1)">If a decentralized autonomous organization recognized by this act is eligible to elect to be classified as a corporation for federal tax purposes, and the decentralized autonomous organization makes that election, the decentralized autonomous organization shall be subject to the provisions of <xref depth="1" refnumber="59-7" start="0">Title 59, Chapter 7, Corporate Franchise and Income Taxes</xref>.</subsection><subsection number="16-22-406(2)"><subsection number="16-22-406(2)(a)">Unless the decentralized autonomous organization makes the election described in Subsection <xref depth="4" refnumber="48-5-406(1)" start="0">(1)</xref>, a decentralized autonomous organization recognized by this act shall be classified as a partnership for tax purposes and subject to the provisions of <xref depth="2" refnumber="59-10-14" start="0">Title 59, Chapter 10, Part 14, Pass-Through Entities and Pass-Through Entity Taxpayers Act</xref>.</subsection><subsection number="16-22-406(2)(b)">For purposes of taxation, a decentralized autonomous organization shall allocate the distributive share of income, gain, loss, deduction, and credit derived from the decentralized autonomous organization's activities, to each member of the decentralized autonomous organization in proportion to the member's membership interest in the entity.</subsection></subsection></section></part></chapter>