! The Capitol Complex is closed to the public due to COVID-19. All meetings will be held virtually online. View procedures and guidelines for remote public comment

Download Zipped Enrolled WP 8.0 SB0061.ZIP 193,104 Bytes
[Introduced][Amended][Status][Bill Documents][Fiscal Note][Bills Directory]

S.B. 61 Enrolled

                 

REVISED NONPROFIT CORPORATION ACT

                 
2000 GENERAL SESSION

                 
STATE OF UTAH

                 
Sponsor: Lyle W. Hillyard

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


                      17A-3-903, as renumbered and amended by Chapter 186, Laws of Utah 1990
                      21-1-2, as last amended by Chapter 313, Laws of Utah 1994
                      21-1-2.5, as last amended by Chapter 313, Laws of Utah 1994
                      31A-5-101, as last amended by Chapter 6, Laws of Utah 1992, Third Special Session
                      31A-5-102, as last amended by Chapter 131, Laws of Utah 1999
                      31A-5-104, as last amended by Chapter 277, Laws of Utah 1992
                      31A-5-203, as last amended by Chapter 344, Laws of Utah 1995
                      31A-5-219, as last amended by Chapter 277, Laws of Utah 1992
                      31A-5-404, as last amended by Chapter 277, Laws of Utah 1992
                      31A-5-405, as last amended by Chapter 95, Laws of Utah 1987
                      31A-5-407, as last amended by Chapter 277, Laws of Utah 1992
                      31A-5-409, as last amended by Chapter 22, Laws of Utah 1989
                      31A-5-410, as last amended by Chapter 277, Laws of Utah 1992
                      31A-5-415, as last amended by Chapter 9, Laws of Utah 1996, Second Special Session
                      31A-5-503, as enacted by Chapter 242, Laws of Utah 1985
                      31A-5-504, as last amended by Chapter 277, Laws of Utah 1992
                      31A-5-508, as last amended by Chapter 20, Laws of Utah 1995
                      31A-7-103, as last amended by Chapter 277, Laws of Utah 1992
                      31A-7-201, as last amended by Chapter 344, Laws of Utah 1995
                      31A-7-202, as last amended by Chapter 91, Laws of Utah 1987
                      31A-7-303, as last amended by Chapter 91, Laws of Utah 1987
                      31A-7-304, as enacted by Chapter 242, Laws of Utah 1985
                      31A-7-313, as enacted by Chapter 242, Laws of Utah 1985
                      31A-8-103, as last amended by Chapter 44, Laws of Utah 1997
                      31A-8-204, as last amended by Chapter 79, Laws of Utah 1996
                      31A-8-406, as enacted by Chapter 204, Laws of Utah 1986
                      31A-9-101, as last amended by Chapter 327, Laws of Utah 1990
                      31A-9-105, as last amended by Chapter 277, Laws of Utah 1992

- 2 -


                      31A-9-204, as last amended by Chapter 91, Laws of Utah 1987
                      31A-9-212, as last amended by Chapter 91, Laws of Utah 1987
                      31A-9-405, as enacted by Chapter 242, Laws of Utah 1985
                      31A-9-406, as enacted by Chapter 242, Laws of Utah 1985
                      31A-9-502, as enacted by Chapter 242, Laws of Utah 1985
                      31A-11-105, as last amended by Chapter 277, Laws of Utah 1992
                      31A-14-205, as last amended by Chapter 9, Laws of Utah 1996, Second Special Session
                      31A-14-210, as last amended by Chapter 9, Laws of Utah 1996, Second Special Session
                      31A-22-1305, as enacted by Chapter 204, Laws of Utah 1986
                      31A-27-335, as last amended by Chapter 131, Laws of Utah 1999
                      31A-34-105, Utah Code Annotated 1953
                      31A-34-108, Utah Code Annotated 1953
                      41-22-2, as last amended by Chapter 73, Laws of Utah 1999
                      48-2b-106, as last amended by Chapter 38, Laws of Utah 1999
                      53B-5-114, as enacted by Chapter 86, Laws of Utah 1998
                      59-8-103, as last amended by Chapter 278, Laws of Utah 1995
                      63-11-3.1, as enacted by Chapter 225, Laws of Utah 1998
                  ENACTS:
                      16-6a-101, Utah Code Annotated 1953
                      16-6a-102, Utah Code Annotated 1953
                      16-6a-103, Utah Code Annotated 1953
                      16-6a-104, Utah Code Annotated 1953
                      16-6a-105, Utah Code Annotated 1953
                      16-6a-106, Utah Code Annotated 1953
                      16-6a-107, Utah Code Annotated 1953
                      16-6a-108, Utah Code Annotated 1953
                      16-6a-109, Utah Code Annotated 1953
                      16-6a-110, Utah Code Annotated 1953

- 3 -


                      16-6a-111, Utah Code Annotated 1953
                      16-6a-112, Utah Code Annotated 1953
                      16-6a-113, Utah Code Annotated 1953
                      16-6a-114, Utah Code Annotated 1953
                      16-6a-115, Utah Code Annotated 1953
                      16-6a-116, Utah Code Annotated 1953
                      16-6a-117, Utah Code Annotated 1953
                      16-6a-118, Utah Code Annotated 1953
                      16-6a-201, Utah Code Annotated 1953
                      16-6a-202, Utah Code Annotated 1953
                      16-6a-203, Utah Code Annotated 1953
                      16-6a-204, Utah Code Annotated 1953
                      16-6a-205, Utah Code Annotated 1953
                      16-6a-206, Utah Code Annotated 1953
                      16-6a-207, Utah Code Annotated 1953
                      16-6a-301, Utah Code Annotated 1953
                      16-6a-302, Utah Code Annotated 1953
                      16-6a-303, Utah Code Annotated 1953
                      16-6a-304, Utah Code Annotated 1953
                      16-6a-401, Utah Code Annotated 1953
                      16-6a-402, Utah Code Annotated 1953
                      16-6a-403, Utah Code Annotated 1953
                      16-6a-501, Utah Code Annotated 1953
                      16-6a-502, Utah Code Annotated 1953
                      16-6a-503, Utah Code Annotated 1953
                      16-6a-504, Utah Code Annotated 1953
                      16-6a-601, Utah Code Annotated 1953
                      16-6a-602, Utah Code Annotated 1953

- 4 -


                      16-6a-603, Utah Code Annotated 1953
                      16-6a-604, Utah Code Annotated 1953
                      16-6a-605, Utah Code Annotated 1953
                      16-6a-606, Utah Code Annotated 1953
                      16-6a-607, Utah Code Annotated 1953
                      16-6a-608, Utah Code Annotated 1953
                      16-6a-609, Utah Code Annotated 1953
                      16-6a-610, Utah Code Annotated 1953
                      16-6a-611, Utah Code Annotated 1953
                      16-6a-612, Utah Code Annotated 1953
                      16-6a-613, Utah Code Annotated 1953
                      16-6a-701, Utah Code Annotated 1953
                      16-6a-702, Utah Code Annotated 1953
                      16-6a-703, Utah Code Annotated 1953
                      16-6a-704, Utah Code Annotated 1953
                      16-6a-705, Utah Code Annotated 1953
                      16-6a-706, Utah Code Annotated 1953
                      16-6a-707, Utah Code Annotated 1953
                      16-6a-708, Utah Code Annotated 1953
                      16-6a-709, Utah Code Annotated 1953
                      16-6a-710, Utah Code Annotated 1953
                      16-6a-711, Utah Code Annotated 1953
                      16-6a-712, Utah Code Annotated 1953
                      16-6a-713, Utah Code Annotated 1953
                      16-6a-714, Utah Code Annotated 1953
                      16-6a-715, Utah Code Annotated 1953
                      16-6a-716, Utah Code Annotated 1953
                      16-6a-717, Utah Code Annotated 1953

- 5 -


                      16-6a-718, Utah Code Annotated 1953
                      16-6a-801, Utah Code Annotated 1953
                      16-6a-802, Utah Code Annotated 1953
                      16-6a-803, Utah Code Annotated 1953
                      16-6a-804, Utah Code Annotated 1953
                      16-6a-805, Utah Code Annotated 1953
                      16-6a-806, Utah Code Annotated 1953
                      16-6a-807, Utah Code Annotated 1953
                      16-6a-808, Utah Code Annotated 1953
                      16-6a-809, Utah Code Annotated 1953
                      16-6a-810, Utah Code Annotated 1953
                      16-6a-811, Utah Code Annotated 1953
                      16-6a-812, Utah Code Annotated 1953
                      16-6a-813, Utah Code Annotated 1953
                      16-6a-814, Utah Code Annotated 1953
                      16-6a-815, Utah Code Annotated 1953
                      16-6a-816, Utah Code Annotated 1953
                      16-6a-817, Utah Code Annotated 1953
                      16-6a-818, Utah Code Annotated 1953
                      16-6a-819, Utah Code Annotated 1953
                      16-6a-820, Utah Code Annotated 1953
                      16-6a-821, Utah Code Annotated 1953
                      16-6a-822, Utah Code Annotated 1953
                      16-6a-823, Utah Code Annotated 1953
                      16-6a-824, Utah Code Annotated 1953
                      16-6a-825, Utah Code Annotated 1953
                      16-6a-826, Utah Code Annotated 1953
                      16-6a-901, Utah Code Annotated 1953

- 6 -


                      16-6a-902, Utah Code Annotated 1953
                      16-6a-903, Utah Code Annotated 1953
                      16-6a-904, Utah Code Annotated 1953
                      16-6a-905, Utah Code Annotated 1953
                      16-6a-906, Utah Code Annotated 1953
                      16-6a-907, Utah Code Annotated 1953
                      16-6a-908, Utah Code Annotated 1953
                      16-6a-909, Utah Code Annotated 1953
                      16-6a-910, Utah Code Annotated 1953
                      16-6a-1001, Utah Code Annotated 1953
                      16-6a-1002, Utah Code Annotated 1953
                      16-6a-1003, Utah Code Annotated 1953
                      16-6a-1004, Utah Code Annotated 1953
                      16-6a-1005, Utah Code Annotated 1953
                      16-6a-1006, Utah Code Annotated 1953
                      16-6a-1007, Utah Code Annotated 1953
                      16-6a-1008, Utah Code Annotated 1953
                      16-6a-1009, Utah Code Annotated 1953
                      16-6a-1010, Utah Code Annotated 1953
                      16-6a-1011, Utah Code Annotated 1953
                      16-6a-1012, Utah Code Annotated 1953
                      16-6a-1013, Utah Code Annotated 1953
                      16-6a-1014, Utah Code Annotated 1953
                      16-6a-1101, Utah Code Annotated 1953
                      16-6a-1102, Utah Code Annotated 1953
                      16-6a-1103, Utah Code Annotated 1953
                      16-6a-1104, Utah Code Annotated 1953
                      16-6a-1105, Utah Code Annotated 1953

- 7 -


                      16-6a-1201, Utah Code Annotated 1953
                      16-6a-1202, Utah Code Annotated 1953
                      16-6a-1301, Utah Code Annotated 1953
                      16-6a-1302, Utah Code Annotated 1953
                      16-6a-1401, Utah Code Annotated 1953
                      16-6a-1402, Utah Code Annotated 1953
                      16-6a-1403, Utah Code Annotated 1953
                      16-6a-1404, Utah Code Annotated 1953
                      16-6a-1405, Utah Code Annotated 1953
                      16-6a-1406, Utah Code Annotated 1953
                      16-6a-1407, Utah Code Annotated 1953
                      16-6a-1408, Utah Code Annotated 1953
                      16-6a-1409, Utah Code Annotated 1953
                      16-6a-1410, Utah Code Annotated 1953
                      16-6a-1411, Utah Code Annotated 1953
                      16-6a-1412, Utah Code Annotated 1953
                      16-6a-1413, Utah Code Annotated 1953
                      16-6a-1414, Utah Code Annotated 1953
                      16-6a-1415, Utah Code Annotated 1953
                      16-6a-1416, Utah Code Annotated 1953
                      16-6a-1417, Utah Code Annotated 1953
                      16-6a-1418, Utah Code Annotated 1953
                      16-6a-1419, Utah Code Annotated 1953
                      16-6a-1501, Utah Code Annotated 1953
                      16-6a-1502, Utah Code Annotated 1953
                      16-6a-1503, Utah Code Annotated 1953
                      16-6a-1504, Utah Code Annotated 1953
                      16-6a-1505, Utah Code Annotated 1953

- 8 -


                      16-6a-1506, Utah Code Annotated 1953
                      16-6a-1507, Utah Code Annotated 1953
                      16-6a-1508, Utah Code Annotated 1953
                      16-6a-1509, Utah Code Annotated 1953
                      16-6a-1510, Utah Code Annotated 1953
                      16-6a-1511, Utah Code Annotated 1953
                      16-6a-1512, Utah Code Annotated 1953
                      16-6a-1513, Utah Code Annotated 1953
                      16-6a-1514, Utah Code Annotated 1953
                      16-6a-1515, Utah Code Annotated 1953
                      16-6a-1516, Utah Code Annotated 1953
                      16-6a-1517, Utah Code Annotated 1953
                      16-6a-1518, Utah Code Annotated 1953
                      16-6a-1601, Utah Code Annotated 1953
                      16-6a-1602, Utah Code Annotated 1953
                      16-6a-1603, Utah Code Annotated 1953
                      16-6a-1604, Utah Code Annotated 1953
                      16-6a-1605, Utah Code Annotated 1953
                      16-6a-1606, Utah Code Annotated 1953
                      16-6a-1607, Utah Code Annotated 1953
                      16-6a-1608, Utah Code Annotated 1953
                      16-6a-1609, Utah Code Annotated 1953
                      16-6a-1701, Utah Code Annotated 1953
                      16-6a-1702, Utah Code Annotated 1953
                      16-6a-1703, Utah Code Annotated 1953
                      16-6a-1704, Utah Code Annotated 1953
                      16-10a-1008.3, Utah Code Annotated 1953
                      16-10a-1008.5, Utah Code Annotated 1953

- 9 -


                  REPEALS:
                      16-6-18, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-19, as last amended by Chapter 108, Laws of Utah 1990
                      16-6-20, as last amended by Chapter 48, Laws of Utah 1993
                      16-6-21, as last amended by Chapter 143, Laws of Utah 1996
                      16-6-22, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-23, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-24, as last amended by Chapter 86, Laws of Utah 1998
                      16-6-25, as last amended by Chapter 48, Laws of Utah 1990
                      16-6-25.1, as last amended by Chapter 108, Laws of Utah 1990
                      16-6-25.2, as last amended by Chapter 108, Laws of Utah 1990
                      16-6-25.3, as enacted by Chapter 178, Laws of Utah 1985
                      16-6-26, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-27, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-28, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-29, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-30, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-31, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-32, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-33, as last amended by Chapter 66, Laws of Utah 1984
                      16-6-34, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-35, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-36, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-37, as last amended by Chapter 79, Laws of Utah 1996
                      16-6-38, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-39, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-40, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-41, as enacted by Chapter 17, Laws of Utah 1963

- 10 -


                      16-6-42, as last amended by Chapter 222, Laws of Utah 1988
                      16-6-43, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-44, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-45, as last amended by Chapter 178, Laws of Utah 1985
                      16-6-46, as last amended by Chapter 178, Laws of Utah 1985
                      16-6-47, as last amended by Chapter 178, Laws of Utah 1985
                      16-6-48, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-49, as last amended by Chapter 277, Laws of Utah 1992
                      16-6-50, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-51, as last amended by Chapter 178, Laws of Utah 1985
                      16-6-52, as last amended by Chapter 178, Laws of Utah 1985
                      16-6-53, as last amended by Chapter 66, Laws of Utah 1984
                      16-6-53.5, as enacted by Chapter 97, Laws of Utah 1989
                      16-6-54, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-55, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-56, as last amended by Chapter 68, Laws of Utah 1987
                      16-6-57, as last amended by Chapter 178, Laws of Utah 1985
                      16-6-58, as last amended by Chapter 66, Laws of Utah 1984
                      16-6-59, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-60, as last amended by Chapter 277, Laws of Utah 1992
                      16-6-61, as last amended by Chapter 68, Laws of Utah 1987
                      16-6-62, as last amended by Chapter 68, Laws of Utah 1987
                      16-6-63, as last amended by Chapter 222, Laws of Utah 1988
                      16-6-64, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-65, as last amended by Chapter 66, Laws of Utah 1984
                      16-6-66, as last amended by Chapter 178, Laws of Utah 1985
                      16-6-67, as last amended by Chapter 178, Laws of Utah 1985
                      16-6-68, as last amended by Chapter 108, Laws of Utah 1990

- 11 -


                      16-6-69, as last amended by Chapter 30, Laws of Utah 1992
                      16-6-70, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-71, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-72, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-73, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-74, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-75, as last amended by Chapter 66, Laws of Utah 1984
                      16-6-76, as last amended by Chapter 10, Laws of Utah 1997
                      16-6-77, as last amended by Chapter 66, Laws of Utah 1984
                      16-6-78, as last amended by Chapter 66, Laws of Utah 1984
                      16-6-79, as last amended by Chapter 66, Laws of Utah 1984
                      16-6-80, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-82, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-83, as last amended by Chapter 178, Laws of Utah 1985
                      16-6-84, as last amended by Chapter 108, Laws of Utah 1990
                      16-6-85, as last amended by Chapter 66, Laws of Utah 1984
                      16-6-86, as last amended by Chapter 66, Laws of Utah 1987
                      16-6-87, as last amended by Chapter 108, Laws of Utah 1990
                      16-6-88, as last amended by Chapter 178, Laws of Utah 1985
                      16-6-89, as last amended by Chapter 66, Laws of Utah 1984
                      16-6-90, as last amended by Chapter 66, Laws of Utah 1984
                      16-6-91, as last amended by Chapter 178, Laws of Utah 1985
                      16-6-92, as last amended by Chapter 66, Laws of Utah 1984
                      16-6-93, as last amended by Chapter 178, Laws of Utah 1985
                      16-6-94, as last amended by Chapter 222, Laws of Utah 1988
                      16-6-95, as last amended by Chapter 66, Laws of Utah 1984
                      16-6-96, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-97, as last amended by Chapter 66, Laws of Utah 1987

- 12 -


                      16-6-98, as last amended by Chapter 108, Laws of Utah 1990
                      16-6-99, as last amended by Chapter 28, Laws of Utah 1995
                      16-6-99.1, as last amended by Chapter 313, Laws of Utah 1994
                      16-6-100, as last amended by Chapter 313, Laws of Utah 1994
                      16-6-100.5, as last amended by Chapter 313, Laws of Utah 1994
                      16-6-101, as last amended by Chapter 313, Laws of Utah 1994
                      16-6-102, as last amended by Chapter 66, Laws of Utah 1984
                      16-6-103, as last amended by Chapter 161, Laws of Utah 1987
                      16-6-104, as last amended by Chapter 66, Laws of Utah 1984
                      16-6-105, as last amended by Chapter 66, Laws of Utah 1984
                      16-6-106, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-107, as last amended by Chapter 166, Laws of Utah 1987
                      16-6-108, as last amended by Chapter 10, Laws of Utah 1997
                      16-6-109, as last amended by Chapter 66, Laws of Utah 1984
                      16-6-110, as enacted by Chapter 17, Laws of Utah 1963
                      16-6-112, as enacted by Chapter 66, Laws of Utah 1987
                  Be it enacted by the Legislature of the state of Utah:
                      Section 1. Section 3-1-25 is amended to read:
                       3-1-25. Filing of annual reports.
                      Domestic associations and foreign associations admitted to do business in this state shall file
                  an annual report in accordance with [Sections 16-6-97 and 16-6-98 ] Section 16-6a-1607 .
                      Section 2. Section 3-1-30 is amended to read:
                       3-1-30. Authorization for merger or consolidation with other associations or
                  corporations -- Laws governing surviving or new corporation.
                      (1) Pursuant to a plan approved under this chapter, an agricultural cooperative association
                  may merge or consolidate with:
                      (a) one or more agricultural cooperative associations;
                      (b) one or more domestic corporations governed by:

- 13 -


                      (i) Title 16, Chapter 10a, Utah Revised Business Corporation Act; or
                      (ii) Title 16, Chapter [6] 6a, Utah Revised Nonprofit Corporation [and Cooperative
                  Association] Act; or
                      (c) any combination of associations or corporations referred to in Subsection (1)(a) or (b).
                      (2) The surviving or new corporation shall be governed by:
                      (a) the Uniform Agricultural Cooperative Association Act; or
                      (b) Title 16, Chapter [6] 6a, Utah Revised Nonprofit Corporation [and Cooperative
                  Association] Act.
                      Section 3. Section 3-1-31 is amended to read:
                       3-1-31. Contents and approval of plan of merger or consolidation.
                      (1) The board of directors, board of trustees, or other governing board of each party to the
                  merger or consolidation shall, by resolution adopted by each board, approve a plan of merger or
                  consolidation.
                      (2) The plan shall contain:
                      (a) the name of:
                      (i) each association or corporation proposing to merge or consolidate; and
                      (ii) (A) the association or corporation into which they propose to merge or consolidate, also
                  referred to as the surviving corporation; or
                      (B) the new corporation;
                      (b) the terms and conditions of the proposed merger or consolidation;
                      (c) the manner and basis of converting stock or shares of each party to the merger or
                  consolidation, into stock, shares, or other securities or obligations of the surviving or new
                  corporation;
                      (d) the manner and basis of converting membership interests of each party to the merger into
                  membership interests, stock, shares, or other securities or obligations of the surviving or new
                  corporation;
                      (e) the manner and basis of converting any certificates of interest, patronage refund
                  certificates, or other interests in any fund, capital investment, savings, or reserve of each party to the

- 14 -


                  merger or consolidation into stock, shares, or other securities or obligations of or certificates of
                  interest, patronage refund certificates, or other interests in any fund, capital investment, savings or
                  reserve of the surviving or new corporation, including any changes to be made in the time and manner
                  of payment of the certificates or interests;
                      (f) a statement electing whether the surviving or new corporation shall be governed by:
                      (i) the Uniform Agricultural Cooperative Association Act; or [by]
                      (ii) Title 16, Chapter [6] 6a, Utah Revised Nonprofit Corporation [and Cooperative
                  Association] Act;
                      (g) a statement of any changes in the articles of incorporation of the surviving or new
                  corporation effected by the merger or consolidation, including changes required by the law governing
                  the surviving or new corporation; and
                      (h) any other provision relating to the proposed merger or consolidation considered to be
                  necessary or desirable.
                      Section 4. Section 3-1-44 is amended to read:
                       3-1-44. Registered office and agent.
                      (1) An association shall continuously maintain a registered office in this state. The registered
                  office may be the principal place of business of the association.
                      (2) (a) An association shall designate a registered agent.
                      (b) The registered agent may be a person residing in this state, a domestic corporation, or a
                  foreign corporation authorized to transact business in this state.
                      (c) The registered agent's address shall be the same as that of the registered office.
                      (3) (a) An association shall file a statement with the Division of Corporations and
                  Commercial Code designating or changing its registered office, its registered agent, or both.
                      (b) The statement in Subsection (3)(a) shall set forth:
                      (i) the name of the association;
                      (ii) the address of the association's registered office;
                      (iii) the name of the association's registered agent and [his] the registered agent's address; and
                      (iv) a statement that the designation or change was authorized by a resolution of the board

- 15 -


                  of directors.
                      (4) (a) A registered agent of an association may resign by filing with the division a signed
                  written notice of resignation, including a statement that a signed copy of the notice has been given
                  to the association at its principal place of business.
                      (b) The appointment of the agent terminates 30 days after notice is filed with the division.
                      (5) Service of process, notice, or any demand upon an association shall be made as provided
                  in Section [ 16-6-25.3 ] 16-6a-504.
                      Section 5. Section 7-5-2 is amended to read:
                       7-5-2. Permit required to engage in trust business -- Exceptions.
                      (1) No trust company shall accept any appointment to act in any agency or fiduciary capacity,
                  such as but not limited to that of personal representative, executor, administrator, conservator,
                  guardian, assignee, receiver, depositary, or trustee under order or judgment of any court or by
                  authority of any law of this state or as trustee for any purpose permitted by law or otherwise engage
                  in the trust business in this state, unless and until it has obtained from the commissioner a permit to
                  act under this chapter. This provision shall not apply to any bank or other corporation authorized to
                  engage and lawfully engaged in the trust business in this state before July 1, 1981.
                      (2) Nothing in this chapter prohibits:
                      (a) any corporation organized under Title 16, Chapter [6] 6a or [10] 10a, from acting as
                  trustee of any employee benefit trust established for the employees of the corporation or the
                  employees of one or more other corporations affiliated with the corporation;
                      (b) any corporation organized under Title 16, Chapter [6] 6a, Utah Revised Nonprofit
                  Corporation Act, and owned or controlled by a charitable, benevolent, eleemosynary, or religious
                  organization from acting as a trustee for that organization or members of that organization but not
                  offering trust services to the general public;
                      (c) any corporation organized under Title 16, Chapter [6] 6a or [10] 10a, from holding in a
                  fiduciary capacity the controlling shares of another corporation but not offering trust services to the
                  general public; or
                      (d) any depository institution from holding in an agency or fiduciary capacity individual

- 16 -


                  retirement accounts or Keogh plan accounts established under Section 401 (a) or 408 (a) of Title 26
                  of the United States Code.
                      Section 6. Section 9-13-201 is amended to read:
                       9-13-201. Utah Technology Finance Corporation -- Independent public corporation.
                      (1) There is created an independent public corporation known as the "Utah Technology
                  Finance Corporation."
                      (2) (a) The corporation shall operate as a nonprofit corporation in accordance with Title 16,
                  Chapter [6] 6a, Utah Revised Nonprofit Corporation [and Cooperative Association] Act, to the
                  extent that Title 16, Chapter [6] 6a, does not conflict with this chapter.
                      (b) The corporation shall file with the Division of Corporations and Commercial Code:
                      (i) articles of incorporation; and
                      (ii) any amendment to its articles of incorporation.
                      (c) In addition to the articles of incorporation, the corporation may adopt bylaws and
                  operational policies that are consistent with this chapter.
                      (3) This chapter is a recodification of the repealed Title 9, Chapter 2, Part 7, Utah
                  Technology Finance Corporation Act, and does not create a new corporation. The corporation
                  referred to in this chapter is the ongoing enterprise of the Utah Technology Finance Corporation and
                  this recodification does not impair any existing contractual relationships of the corporation.
                      Section 7. Section 11-32-3 is amended to read:
                       11-32-3. Creation of county interlocal finance authority as nonprofit corporation --
                  Organization -- Acquisition of delinquent tax receivables -- Personnel -- Duties of elected
                  attorney and treasurer.
                      (1) The governing body of any county within the state may, by resolution, organize a
                  nonprofit corporation as the financing authority for the county on behalf of public bodies within the
                  county under this chapter, following the procedures set out in Title 16, Chapter [6] 6a, Utah Revised
                  Nonprofit Corporation [and Cooperative Association] Act, solely for the purpose of accomplishing
                  the public purposes for which the public bodies exist by financing the sale or assignment of the
                  delinquent tax receivables within the county to the financing authority. The authority shall be known

- 17 -


                  as the "Interlocal Finance Authority of (name of county)."
                      (2) If the governing body of any county creates an authority on behalf of any other public
                  body within the county, the resolution shall further state the name or names of the other public
                  bodies. A certified copy of the resolution creating the authority shall be delivered to the governing
                  body of the other public bodies. The governing bodies of each of the other public bodies shall either
                  approve or reject the creation of the authority, but if no action has been taken within 30 days of
                  delivery of the certified copy of the resolution to the governing body it shall be [deemed] considered
                  rejected.
                      (3) Following the approval, rejection, or [deemed] considered rejection of the resolution by
                  the governing bodies of each of the public bodies listed in the initial resolution, the county shall then
                  amend the resolution to delete the public bodies rejecting the resolution and shall list the participant
                  members of the authority.
                      (4) The governing bodies of the participant members shall approve the articles of
                  incorporation and bylaws of the authority. Members of governing bodies of each of the participant
                  members, or a paid employee of the governing body designated by the member, shall be selected to
                  form and shall act as the board of trustees of the authority. The powers of the board of trustees may
                  be vested in an executive committee to be selected from among the board of trustees by the members
                  of the board of trustees. The articles of incorporation and bylaws shall provide that the members of
                  the board of trustees of the authority may be removed and replaced by the governing body from
                  which such member was selected at any time in its discretion. A majority of the governing bodies of
                  the participant members, based upon a percentage of the property taxes levied for the year preceding
                  the then current year, within the county may, alter or change the structure, organization, programs,
                  or activities of the financing authority, subject to the rights of the holders of the authority's bonds and
                  parties to its other obligations.
                      (5) Each financing authority may acquire by assignment the delinquent tax receivables of the
                  participant members creating the financing authority, in accordance with the procedures and subject
                  to the limitations of this chapter, in order to accomplish the public purposes for which the participant
                  members exist.

- 18 -


                      (6) Except as limited by Subsection (7), a financing authority may contract for or employ all
                  staff and other personnel necessary for the purpose of performing its functions and activities,
                  including contracting with the participant members within the county that created it to utilize any of
                  the personnel, property, or facilities of any of the participant members for that purpose. The authority
                  may be reimbursed for such costs by the participant member as provided in its articles of
                  incorporation or bylaws.
                      (7) (a) With respect to any county that creates a financing authority and which has an elected
                  attorney or treasurer, or both, the elected attorney shall be the legal advisor to and provide all legal
                  services for the authority, and the elected treasurer shall provide all accounting services for the
                  authority. The authority shall reimburse the county for legal and accounting services so furnished by
                  the county, based upon the actual cost of the services, including reasonable amounts allocated by the
                  county for overhead, employee fringe benefits, and general and administrative expenses.
                      (b) The provisions of Subsection (7) may not prevent the financing authority from obtaining
                  the accounting or auditing services from outside accountants or auditors with the consent of the
                  elected treasurer and the governing bodies or from obtaining legal services from outside attorneys
                  with the consent of the elected attorney and the governing bodies. The provisions of this subsection
                  may not prevent the authority from obtaining the opinions of outside attorneys or accountants which
                  are necessary for the issuance of the bonds of the authority.
                      (c) If 50% or more of the governing bodies of the participant members, based upon property
                  taxes charged for the preceding year as a percentage of all of the property taxes charged within the
                  county for that year, find it advisable that the authority retain legal or accounting services other than
                  as described in Subsection (7)(a) they may direct the board of trustees to do so.
                      Section 8. Section 11-32-8 is amended to read:
                       11-32-8. Dissolution of financing authority.
                      (1) The governing body of a county may at any time dissolve a financing authority created
                  by the county in the manner then provided in Title 16, Chapter [6] 6a, [the] Utah Revised Nonprofit
                  Corporation [and Cooperative Association] Act, subject to the limitations of this chapter.
                      (2) A financing authority may not be dissolved unless all outstanding bonds and other

- 19 -


                  obligations of the authority are paid in full as to principal, interest, and redemption premiums, if any,
                  or unless provision for the payment of them when due has been made.
                      (3) Upon the dissolution of a financing authority all assets and moneys of the authority
                  remaining after a provision has been made for the payment of all outstanding bonds and obligations
                  of the authority shall be transferred to the participant members as described in Section 11-32-15 or
                  as agreed upon between the county and the other participant members.
                      Section 9. Section 16-6a-101 is enacted to read:
                 
CHAPTER 6a. UTAH REVISED NONPROFIT CORPORATION ACT

                 
Part 1. General Provisions

                      16-6a-101. Title.
                      This chapter is known as the "Utah Revised Nonprofit Corporation Act."
                      Section 10. Section 16-6a-102 is enacted to read:
                      16-6a-102. Definitions.
                      As used in this chapter:
                      (1) (a) "Address" means a location where mail can be delivered by the United States Postal
                  Service.
                      (b) "Address" includes:
                      (i) a post office box number;
                      (ii) a rural free delivery route number; and
                      (iii) a street name and number.
                      (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.
                      (3) "Assumed corporate name" means the name assumed for use in this state:
                      (a) by a:
                      (i) foreign corporation pursuant to Section 16-10a-1506 ; or
                      (ii) a foreign nonprofit corporation pursuant to Section 16-6a-1506 ; and
                      (b) because the corporate name of the foreign corporation described in Subsection (3)(a) is
                  not available for use in this state.

- 20 -


                      (4) "Articles of incorporation" include:
                      (a) amended articles of incorporation;
                      (b) restated articles of incorporation;
                      (c) articles of merger; and
                      (d) a document of a similar import to the documents described in Subsection (4)(a) or (b).
                      (5) (a) Except as provided in Subsection (5)(b), "board of directors" means the body
                  authorized to manage the affairs of the domestic or foreign nonprofit corporation.
                      (b) Notwithstanding Subsection (5)(a), a person may not be considered the board of directors
                  because of powers delegated to that person pursuant to Subsection 16-6a-801 (2).
                      (6) (a) "Bylaws" means the one or more codes of rules, other than the articles of
                  incorporation, adopted pursuant to this chapter for the regulation or management of the affairs of the
                  domestic or foreign nonprofit corporation irrespective of the name or names by which the codes of
                  rules are designated.
                      (b) "Bylaws" includes:
                      (i) amended bylaws; and
                      (ii) restated bylaws.
                      (7) (a) "Cash" or "money" means:
                      (i) legal tender;
                      (ii) a negotiable instrument; or
                      (iii) other cash equivalent readily convertible into legal tender.
                      (b) "Cash" and "money" are used interchangeably in this chapter.
                      (8) (a) "Class" refers to a group of memberships that have the same rights with respect to
                  voting, dissolution, redemption, transfer, or other characteristics.
                      (b) For purposes of Subsection (8)(a), rights are considered the same if they are determined
                  by a formula applied uniformly to a group of memberships.
                      (9) (a) "Conspicuous" means so written that a reasonable person against whom the writing
                  is to operate should have noticed it.
                      (b) "Conspicuous" includes printing or typing in:

- 21 -


                      (i) italics;
                      (ii) boldface;
                      (iii) contrasting color;
                      (iv) capitals; or
                      (v) underlining.
                      (10) "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:
                      (a) the ownership of voting shares;
                      (b) contract; or
                      (c) means other than those specified in Subsection (10)(a) or (b).
                      (11) "Cooperative nonprofit corporation" or "cooperative" means a nonprofit corporation
                  organized or existing under this chapter subject to Section 16-6a-207 .
                      (12) "Corporate name" means:
                      (a) the name of a domestic corporation as stated in the domestic corporation's articles of
                  incorporation;
                      (b) the name of a domestic nonprofit corporation as stated in the domestic nonprofit
                  corporation's articles of incorporation;
                      (c) the name of a foreign corporation as stated in the foreign corporation's:
                      (i) articles of incorporation; or
                      (ii) document of similar import to articles of incorporation; or
                      (d) the name of a foreign nonprofit corporation as stated in the foreign nonprofit
                  corporation's:
                      (i) articles of incorporation; or
                      (ii) document of similar import to articles of incorporation.
                      (13) "Corporation" or "domestic corporation" means a corporation for profit, which is not
                  a foreign corporation, incorporated under or subject to Chapter 10a, Utah Revised Business
                  Corporation Act.
                      (14) "Delegate" means any person elected or appointed to vote in a representative assembly:

- 22 -


                      (a) for the election of a director; or
                      (b) on matters other than the election of a director.
                      (15) "Deliver" includes delivery by mail and any other means of transmission authorized by
                  Section 16-6a-103 , except that delivery to the division means actual receipt by the division.
                      (16) "Director" means a member of the board of directors.
                      (17) (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:
                      (i) members;
                      (ii) directors; or
                      (iii) officers.
                      (b) "Distribution" does not include fair-value payments for:
                      (i) goods sold; or
                      (ii) services received.
                      (18) "Division" means the Division of Corporations and Commercial Code.
                      (19) "Effective date," when referring to a document filed by the division, means the time and
                  date determined in accordance with Section 16-6a-108 .
                      (20) "Effective date of notice" means the date notice is effective as provided in Section
                  16-6a-103 .
                      (21) (a) "Employee" includes an officer but not a director of a nonprofit corporation.
                      (b) Notwithstanding Subsection (21)(a), a director may accept duties that make that director
                  an employee of a nonprofit corporation.
                      (22) "Executive director" means the executive director of the Department of Commerce.
                      (23) "Entity" includes:
                      (a) a domestic or foreign corporation;
                      (b) a domestic or foreign nonprofit corporation;
                      (c) a limited liability company;
                      (d) a profit or nonprofit unincorporated association;
                      (e) a business trust;

- 23 -


                      (f) an estate;
                      (g) a partnership;
                      (h) a trust;
                      (i) two or more persons having a joint or common economic interest;
                      (j) a state;
                      (k) the United States; or
                      (l) a foreign government.
                      (24) "Foreign corporation" means a corporation for profit incorporated under a law other
                  than the laws of this state.
                      (25) "Foreign nonprofit corporation" means an entity:
                      (a) incorporated under a law other than the laws of this state; and
                      (b) that would be a nonprofit corporation if formed under the laws of this state.
                      (26) "Governmental subdivision" means:
                      (a) a county;
                      (b) a city;
                      (c) a town; or
                      (d) any other type of governmental subdivision authorized by the laws of this state.
                      (27) "Individual" means:
                      (a) a natural person;
                      (b) the estate of an incompetent individual; or
                      (c) the estate of a deceased individual.
                      (28) "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.
                      (29) (a) "Mail," "mailed," or "mailing" means deposit, deposited, or depositing in the United
                  States mail, properly addressed, first-class postage prepaid.
                      (b) "Mail," "mailed," or "mailing" includes registered or certified mail for which the proper
                  fee has been paid.

- 24 -


                      (30) (a) "Member" means one or more persons identified as a member of a domestic or
                  foreign nonprofit corporation in the articles of incorporation or bylaws of the nonprofit corporation
                  pursuant to a procedure set forth:
                      (i) in the articles of incorporation;
                      (ii) in the bylaws; or
                      (iii) by a resolution of the board of directors.
                      (b) "Member" includes "voting member."
                      (31) "Membership" refers to the rights and obligations of a member or members.
                      (32) "Nonprofit corporation" or "domestic nonprofit corporation" means an entity, which is
                  not a foreign nonprofit corporation, incorporated under or subject to the provisions of this chapter.
                      (33) "Notice" is as provided in Section 16-6a-103 .
                      (34) "Person" means an:
                      (a) individual; or
                      (b) entity.
                      (35) "Principal office" means:
                      (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:
                      (i) an annual report;
                      (ii) an application for a certificate of authority; or
                      (iii) a notice of change of principal office; or
                      (b) if no principal office can be determined, a domestic or foreign nonprofit corporation's
                  registered office.
                      (36) "Proceeding" includes:
                      (a) a civil suit;
                      (b) arbitration;
                      (c) mediation;
                      (d) a criminal action;

- 25 -


                      (e) an administrative action; or
                      (f) an investigatory action.
                      (37) "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:
                      (a) by the domestic or foreign nonprofit corporation at:
                      (i) its registered office in this state; or
                      (ii) its principal office;
                      (b) by the secretary of the domestic or foreign nonprofit corporation, wherever the secretary
                  is found; or
                      (c) by any other person authorized by the bylaws or the board of directors to receive the
                  writing or other document, wherever that person is found.
                      (38) (a) "Record date" means the date established under Part 6 or 7 on which a nonprofit
                  corporation determines the identity of its members.
                      (b) The determination described in Subsection (38)(a) 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.
                      (39) "Registered agent" means the registered agent of:
                      (a) a domestic nonprofit corporation required to be maintained pursuant to Subsection
                  16-6a-501 (1)(b); or
                      (b) a foreign nonprofit corporation required to be maintained pursuant to Subsection
                  16-6a-1508 (1)(b).
                      (40) "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:
                      (a) articles of incorporation;
                      (b) an application for a certificate of authority; or
                      (c) a notice of change of registered office.
                      (41) "Related party to a director" means:
                      (a) the spouse of the director;

- 26 -


                      (b) a child of the director;
                      (c) a grandchild of the director;
                      (d) a sibling of the director;
                      (e) a parent of the director;
                      (f) the spouse of an individual described in Subsections (41)(b) through (e);
                      (g) an individual having the same home as the director;
                      (h) a trust or estate of which the director or any other individual specified in this Subsection
                  (41) is a substantial beneficiary; or
                      (i) any of the following of which the director is a fiduciary:
                      (i) a trust;
                      (ii) an estate;
                      (iii) an incompetent;
                      (iv) a conservatee; or
                      (v) a minor.
                      (42) "Secretary" means the corporate officer to whom the bylaws or the board of directors
                  has delegated responsibility under Subsection 16-6a-818 (3) for:
                      (a) the preparation and maintenance of:
                      (i) minutes of the meetings of:
                      (A) the board of directors; or
                      (B) the members; and
                      (ii) the other records and information required to be kept by the nonprofit corporation
                  pursuant to Section 16-6a-1601 ; and
                      (b) authenticating records of the nonprofit corporation.
                      (43) "State," when referring to a part of the United States, includes:
                      (a) a state;
                      (b) a commonwealth;
                      (c) the District of Columbia;
                      (d) an agency or governmental and political subdivision of a state, commonwealth, or District

- 27 -


                  of Columbia;
                      (e) territory or insular possession of the United States; or
                      (f) an agency or governmental and political subdivision of a territory or insular possession
                  of the United States.
                      (44) "Street address" means:
                      (a) (i) street name and number;
                      (ii) city or town; and
                      (iii) United States post office zip code designation; or
                      (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 (44)(a) fixing as nearly as
                  possible the actual physical location but only if the information includes:
                      (i) the rural free delivery route;
                      (ii) the county; and
                      (iii) the United States post office zip code designation.
                      (45) "United States" includes any district, authority, office, bureau, commission, department,
                  and any other agency of the United States of America.
                      (46) "Vote" includes authorization by:
                      (a) written ballot; and
                      (b) written consent.
                      (47) (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.
                      (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.
                      (48) (a) "Voting member" means one or more persons who are 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.
                      (b) A person is not a voting member solely because of:

- 28 -


                      (i) a right the person has as a delegate;
                      (ii) a right the person has to designate a director; or
                      (iii) a right the person has as a director.
                      Section 11. Section 16-6a-103 is enacted to read:
                      16-6a-103. Notice.
                      (1) Notice given under this chapter shall be in writing unless oral notice is reasonable under
                  the circumstances.
                      (2) (a) Notice may be communicated:
                      (i) in person;
                      (ii) by telephone;
                      (iii) by any form of electronic communication; or
                      (iv) by mail or private carrier.
                      (b) If the forms of personal notice described in Subsection (2)(a) are impracticable, notice
                  may be communicated by:
                      (i) a newspaper of general circulation in the county or similar governmental subdivision in
                  which the corporation's principal or registered office is located; or
                      (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.
                      (3) Written notice to a domestic or foreign nonprofit corporation authorized to conduct
                  affairs in this state may be addressed to:
                      (a) its registered agent at its registered office; or
                      (b) the corporation's secretary at its principal office.
                      (4) (a) Written notice by a domestic or foreign nonprofit corporation to its members, is
                  effective as to each member when mailed, if:
                      (i) in a comprehensible form; and
                      (ii) addressed to the member's address shown in the domestic or foreign nonprofit
                  corporation's current record of members.
                      (b) If three successive notices given to a member pursuant to Subsection (5) have been

- 29 -


                  returned as undeliverable, further notices to that member are not necessary until another address of
                  the member is made known to the nonprofit corporation.
                      (5) Except as provided in Subsection (4), written notice, if in a comprehensible form, is
                  effective at the earliest of the following:
                      (a) when received;
                      (b) five days after it is mailed; or
                      (c) on the date shown on the return receipt if:
                      (i) sent by registered or certified mail;
                      (ii) sent return receipt requested; and
                      (iii) the receipt is signed by or on behalf of the addressee.
                      (6) Oral notice is effective when communicated if communicated in a comprehensible manner.
                      (7) Notice by publication is effective on the date of first publication.
                      (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:
                      (a) addressed or delivered to the member's address shown in the nonprofit corporation's
                  current list of members; or
                      (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.
                      (9) (a) If this chapter prescribes notice requirements for particular circumstances, the notice
                  requirements for the particular circumstances govern.
                      (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.
                      Section 12. Section 16-6a-104 is enacted to read:
                      16-6a-104. Powers of the division.
                      The division has the power reasonably necessary to perform the duties required of the division
                  under this chapter.

- 30 -


                      Section 13. Section 16-6a-105 is enacted to read:
                      16-6a-105. Filing requirements.
                      (1) To be entitled to filing by the division, a document shall satisfy the requirements of:
                      (a) this section; and
                      (b) any other section of this chapter that adds to or varies the requirements of this section.
                      (2) This chapter shall require or permit filing the document with the division.
                      (3) (a) A document shall contain the information required by this chapter.
                      (b) In addition to the document information required by this chapter, it may contain other
                  information.
                      (4) A document shall be:
                      (a) typewritten; or
                      (b) machine printed.
                      (5) (a) A document shall be in the English language.
                      (b) A corporate name need not be in English if written in:
                      (i) English letters; or
                      (ii) Arabic or Roman numerals.
                      (c) Notwithstanding Subsection (5)(a), a certificate of existence required of a foreign
                  nonprofit corporation need not be in English if accompanied by a reasonably authenticated English
                  translation.
                      (6) (a) A document shall be:
                      (i) executed by a person in Subsection (6)(b); or
                      (ii) a true copy made by photographic, xerographic, electronic, or other process that provides
                  similar copy accuracy of a document that has been executed by a person listed in Subsection (6)(b).
                      (b) A document shall be executed by:
                      (i) the chair of the board of directors of a domestic or foreign nonprofit corporation;
                      (ii) all of the directors of a domestic or foreign nonprofit corporation;
                      (iii) an officer of the domestic or foreign nonprofit corporation;
                      (iv) if directors have not been selected or the domestic or foreign nonprofit corporation has

- 31 -


                  not been formed, an incorporator;
                      (v) if the domestic or foreign nonprofit corporation is in the hands of a receiver, trustee, or
                  other court-appointed fiduciary, that receiver, trustee, or court-appointed fiduciary; or
                      (vi) if the document is that of a registered agent:
                      (A) the registered agent, if the person is an individual; or
                      (B) a person authorized by the registered agent to execute the document, if the registered
                  agent is an entity.
                      (7) A document shall state beneath or opposite the signature of the person executing the
                  document:
                      (a) the signer's name; and
                      (b) the capacity in which the document is signed.
                      (8) A document may contain:
                      (a) the corporate seal;
                      (b) an attestation by the secretary or an assistant secretary; or
                      (c) an acknowledgment, verification, or proof.
                      (9) The signature of each person signing a document, whether or not the document contains
                  an acknowledgment, verification, or proof permitted by Subsection (8), shall constitute the
                  affirmation or acknowledgment of the person, under penalties of perjury, that:
                      (a) the document is:
                      (i) the person's act and deed; or
                      (ii) the act and deed of the entity on behalf of which the document is executed; and
                      (b) the facts stated in the document are true.
                      (10) If the division has prescribed a mandatory form or cover sheet for the document under
                  Section 16-6a-106 , a document shall be:
                      (a) in or on the prescribed form; or
                      (b) have the required cover sheet.
                      (11) A document shall be:
                      (a) delivered to the division for filing; and

- 32 -


                      (b) accompanied by:
                      (i) one exact or conformed copy, except as provided in Sections 16-6a-503 and 16-6a-1510 ;
                      (ii) the correct filing fee; and
                      (iii) any franchise tax, license fee, or penalty required by this chapter or other law.
                      (12) Except with respect to filings pursuant to Section 16-6a-503 or 16-6a-1510 , a document
                  shall state, or be accompanied by a writing stating, the address to which the division may send a copy
                  upon completion of the filing.
                      Section 14. Section 16-6a-106 is enacted to read:
                      16-6a-106. Forms.
                      (1) (a) The division may prescribe forms or cover sheets for documents required or permitted
                  to be filed by this chapter.
                      (b) If the division prescribes a form or cover sheet pursuant to Subsection (1)(a), the division
                  shall provide the form or cover sheet on request.
                      (2) Notwithstanding Subsection (1):
                      (a) the use of a form or cover sheet is not mandatory unless the division specifically requires
                  the use of the form or cover sheet; and
                      (b) a requirement that a form or cover sheet be used may not:
                      (i) preclude in any way the inclusion in any document of any item that is not prohibited to be
                  included by this chapter; or
                      (ii) require the inclusion with the filed document of any item that is not otherwise required
                  by this chapter.
                      Section 15. Section 16-6a-107 is enacted to read:
                      16-6a-107. Fees.
                      (1) Unless otherwise provided by statute, the division shall charge and collect a fee for
                  services established by the division in accordance with Section 63-38-3.2 including fees:
                      (a) for furnishing a certified copy of any document, instrument, or paper relating to a
                  domestic or foreign nonprofit corporation; and
                      (b) for the certificate and affixing the seal to a certified copy described in Subsection (1)(a).

- 33 -


                      (2) (a) The division shall provide expedited, 24-hour processing of any item under this section
                  upon request.
                      (b) The division shall charge and collect additional fees established by the division in
                  accordance with Section 63-38-3.2 for expedited service provided under Subsection (2)(a).
                      (3) (a) The division shall charge and collect a fee determined by the division in accordance
                  with Section 63-38-3.2 at the time of any service of process on the director of the division as resident
                  agent of a corporation.
                      (b) The fee paid under Subsection (3)(a) 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.
                      Section 16. Section 16-6a-108 is enacted to read:
                      16-6a-108. Effective time and date of filed documents.
                      (1) (a) Except as provided in Subsection (2) and Subsection 16-6a-109 (4), a document
                  submitted to the division for filing under this chapter is effective:
                      (i) at the time of filing; and
                      (ii) on the date it is filed.
                      (b) The division's endorsement on the document as described in Subsection 16-6a-110 (2) is
                  evidence of the time and date of filing.
                      (2) (a) Unless otherwise provided in this chapter, a document, other than an application for
                  a reserved or registered name, may specify conspicuously on its face:
                      (i) a delayed effective time;
                      (ii) a delayed effective date; or
                      (iii) both a delayed effective time and date.
                      (b) If in accordance with Subsection (2)(a), a delayed time, date, or both, is specified, the
                  document becomes effective as provided in this Subsection (2).
                      (c) If both a delayed effective time and date are specified, the document becomes effective
                  as specified.
                      (d) If a delayed effective time but no date is specified, the document is effective on the date
                  it is filed, as that date is specified in the division's time and date endorsement on the document, at the

- 34 -


                  later of:
                      (i) the time specified on the document as its effective time; or
                      (ii) the time specified in the time and date endorsement.
                      (e) If a delayed effective date but no time is specified, the document is effective at the close
                  of business on the date specified as the delayed effective date.
                      (f) Notwithstanding the other provisions of this Subsection (2), a delayed effective date for
                  a document may not be later than 90 days after the date the document is filed. If a document specifies
                  a delayed effective date that is more than 90 days after the date the document is filed, the document
                  is effective 90 days after the day the document is filed.
                      (3) If a document specifies a delayed effective date pursuant to Subsection (2), the document
                  may be prevented from becoming effective by the same domestic or foreign nonprofit corporation that
                  originally submitted the document for filing delivering to the division, prior to the specified effective
                  date of the document, a certificate of withdrawal:
                      (a) executed:
                      (i) on behalf of the same domestic or foreign nonprofit corporation that originally submitted
                  the document for filing; and
                      (ii) in the same manner as the document being withdrawn;
                      (b) stating that:
                      (i) the document has been revoked by:
                      (A) appropriate corporate action; or
                      (B) court order or decree pursuant to Section 16-6a-1007 ; and
                      (ii) the document is void; and
                      (c) if a court order or decree pursuant to Section 16-6a-1007 revokes the document, the
                  court order or decree was entered by a court having jurisdiction of the proceeding for the
                  reorganization of the nonprofit corporation under a specified statute of the United States.
                      Section 17. Section 16-6a-109 is enacted to read:
                      16-6a-109. Correcting filed documents.
                      (1) A domestic or foreign nonprofit corporation may correct a document filed with the

- 35 -


                  division if the document:
                      (a) contains an incorrect statement; or
                      (b) was defectively executed, attested, sealed, verified, or acknowledged.
                      (2) A document is corrected by delivering to the division for filing articles of correction that:
                      (a) (i) describe the document, including its filing date; or
                      (ii) have attached a copy of the document;
                      (b) specify:
                      (i) (A) the incorrect statement; and
                      (B) the reason it is incorrect; or
                      (ii) the manner in which the execution, attestation, sealing, verification, or acknowledgment
                  was defective; and
                      (c) correct:
                      (i) the incorrect statement; or
                      (ii) defective execution, attestation, sealing, verification, or acknowledgment.
                      (3) Articles of correction may be executed by any person:
                      (a) designated in Subsection 16-6a-105 (6); or
                      (b) who executed the document that is corrected.
                      (4) (a) Articles of correction are effective on the effective date of the document they correct
                  except as to a person:
                      (i) relying on the uncorrected document; and
                      (ii) adversely affected by the correction.
                      (b) As to a person described in Subsection (4)(a), the articles of correction are effective when
                  filed.
                      Section 18. Section 16-6a-110 is enacted to read:
                      16-6a-110. Filing duty of division.
                      (1) If a document delivered to the division for filing satisfies the requirements of Section
                  16-6a-105 , the division shall file the document.
                      (2) (a) The division files a document by stamping or otherwise endorsing "Filed" together

- 36 -


                  with the name of the division and the date and time of acceptance for filing on both the document and
                  the accompanying copy.
                      (b) After filing a document, except as provided in Sections 16-6a-503 , 16-6a-1510 , and
                  16-6a-1608 , the division shall deliver the accompanying copy, with the receipt for any filing fees:
                      (i) (A) to the domestic or foreign nonprofit corporation for which the filing is made; or
                      (B) to the representative of the domestic or foreign nonprofit corporation for which the filing
                  is made; and
                      (ii) at the address:
                      (A) indicated on the filing; or
                      (B) that the division determines to be appropriate.
                      (3) If the division refuses to file a document, the division within ten days after the day the
                  document is delivered to the division shall return to the person requesting the filing:
                      (a) the document; and
                      (b) a written notice providing a brief explanation of the reason for the refusal to file.
                      (4) (a) The division's duty to file a document under this section is ministerial.
                      (b) Except as otherwise specifically provided in this chapter, the division's filing or refusal
                  to file a document does not:
                      (i) affect the validity or invalidity of the document in whole or in part;
                      (ii) relate to the correctness or incorrectness of information contained in the document; or
                      (iii) create a presumption that:
                      (A) the document is valid or invalid; or
                      (B) information contained in the document is correct or incorrect.
                      Section 19. Section 16-6a-111 is enacted to read:
                      16-6a-111. Appeal from division's refusal to file document.
                      If the division refuses to file a document delivered to it for filing, in accordance with Title 63,
                  Chapter 46b, Administrative Procedures Act, the following may appeal the refusal to the executive
                  director:
                      (1) the domestic or foreign nonprofit corporation for which the filing was requested; or

- 37 -


                      (2) the representative of the domestic or foreign nonprofit corporation for which filing was
                  requested.
                      Section 20. Section 16-6a-112 is enacted to read:
                      16-6a-112. Evidentiary effect of copy of filed document.
                      One or more of the following is conclusive evidence that the original document has been filed
                  with the division:
                      (1) a certificate attached to a copy of a document filed by the division; or
                      (2) an endorsement, seal, or stamp placed on the copy by the division.
                      Section 21. Section 16-6a-113 is enacted to read:
                      16-6a-113. Certificates issued by the division.
                      (1) Any person may apply to the division for:
                      (a) a certificate of existence for a domestic nonprofit corporation;
                      (b) a certificate of authorization for a foreign nonprofit corporation; or
                      (c) a certificate that sets forth any facts of record in the division.
                      (2) A certificate of existence or certificate of authorization sets forth:
                      (a) (i) the domestic nonprofit corporation's corporate name; or
                      (ii) the foreign nonprofit corporation's corporate name registered in this state;
                      (b) that:
                      (i) (A) (I) the domestic nonprofit corporation is incorporated under the law of this state; and
                      (II) the date of its incorporation; or
                      (B) the foreign nonprofit corporation is authorized to conduct affairs in this state;
                      (c) that all fees, taxes, and penalties owed to this state have been paid, if:
                      (i) payment is reflected in the records of the division; and
                      (ii) nonpayment affects the existence or authorization of the domestic or foreign nonprofit
                  corporation;
                      (d) that the domestic or foreign nonprofit corporation's most recent annual report required
                  by Section 16-6a-1607 has been filed by the division;
                      (e) that articles of dissolution have not been filed by the division; and

- 38 -


                      (f) other facts of record in the division that may be requested by the applicant.
                      (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.
                      Section 22. Section 16-6a-114 is enacted to read:
                      16-6a-114. Penalty for signing false documents.
                      (1) It is unlawful for a person to sign a document:
                      (a) knowing it to be false in any material respect; and
                      (b) with intent that the document be delivered to the division for filing.
                      (2) An offense under this section is a class A misdemeanor punishable by a fine not to exceed
                  the fine specified in Section 76-3-301 .
                      Section 23. Section 16-6a-115 is enacted to read:
                      16-6a-115. Liability to third parties.
                      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 24. Section 16-6a-116 is enacted to read:
                      16-6a-116. Private foundations.
                      Except as otherwise specified in the articles of incorporation, a nonprofit corporation that is
                  a private foundation as defined in Section 509(a), Internal Revenue Code:
                      (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;
                      (2) may not engage in any act of self-dealing as defined in Section 4941(d), Internal Revenue
                  Code;
                      (3) may not retain any excess business holdings as defined in Section 4943(c), Internal
                  Revenue Code;
                      (4) may not make any investments that would subject the nonprofit corporation to taxation
                  under Section 4944, Internal Revenue Code; and
                      (5) may not make any taxable expenditures as defined in Section 4945(d), Internal Revenue

- 39 -


                  Code.
                      Section 25. Section 16-6a-117 is enacted to read:
                      16-6a-117. Judicial relief.
                      (1) (a) A director, officer, delegate, or member may petition the applicable district court to
                  take an action provided in Subsection (1)(b) if for any reason it is impractical or impossible for a
                  nonprofit corporation in the manner prescribed by this chapter, its articles of incorporation, or bylaws
                  to:
                      (i) call or conduct a meeting of its members, delegates, or directors; or
                      (ii) otherwise obtain the consent of its members, delegates, or directors.
                      (b) If a petition is filed under Subsection (1)(a), the applicable district court, in the manner
                  it finds fair and equitable under the circumstances, may order that:
                      (i) a meeting be called; or
                      (ii) a written consent or other form of obtaining the vote of members, delegates, or directors
                  be authorized.
                      (c) For purposes of this section, the applicable district court is:
                      (i) the district court of the county in this state where the nonprofit corporation's principal
                  office is located; or
                      (ii) if the nonprofit corporation has no principal office in this state:
                      (A) the district court of the county in which the registered office is located; or
                      (B) if the nonprofit corporation has no registered office in this state, the district court in and
                  for Salt Lake County.
                      (2) (a) A court specified in Subsection (1) 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.
                      (b) The method of notice described in Subsection (1) complies with this section whether or
                  not the method of notice:
                      (i) results in actual notice to all persons described in Subsection (2)(a); or

- 40 -


                      (ii) conforms to the notice requirements that would otherwise apply.
                      (c) In a proceeding under this section, the court may determine who are the members or
                  directors of a nonprofit corporation.
                      (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, the articles of incorporation, or bylaws, including any requirement as to:
                      (a) quorums; or
                      (b) the number or percentage of votes needed for approval.
                      (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 its affairs without further resort to this section,
                  including amendments to the articles of incorporation or bylaws.
                      (b) Notwithstanding Subsection (4)(a), 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.
                      (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:
                      (a) is for all purposes a valid meeting or vote, as the case may be; and
                      (b) shall have the same force and effect as if it complied with every requirement imposed by
                  this chapter, the articles of incorporation, or bylaws.
                      (6) In addition to a meeting held under this section, a court-ordered meeting may be held
                  pursuant to Section 16-6a-703 .
                      Section 26. Section 16-6a-118 is enacted to read:
                      16-6a-118. Electronic documents.
                      (1) Notwithstanding the other requirements of this chapter except subject to Section
                  16-6a-106 , the division may by rule permit a writing required or permitted to be filed with the division
                  under this chapter:
                      (a) to be delivered, mailed, or filed:

- 41 -


                      (i) in an electronic medium; or
                      (ii) by electronic transmission; or
                      (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 digital signature in accordance with Title
                  46, Chapter 3, Utah Digital Signature Act.
                      (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:
                      (a) in an electronic medium; or
                      (b) by electronic transmission.
                      Section 27. Section 16-6a-201 is enacted to read:
                 
Part 2. Incorporation

                      16-6a-201. Incorporators.
                      (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 16-6a-202 .
                      (2) An incorporator who is a natural person shall be 18 years of age or older.
                      Section 28. Section 16-6a-202 is enacted to read:
                      16-6a-202. Articles of incorporation.
                      (1) The articles of incorporation shall set forth:
                      (a) one or more purposes for which the nonprofit corporation is organized;
                      (b) a corporate name for the nonprofit corporation that satisfies the requirements of Section
                  16-6a-401 ;
                      (c) the street address of the nonprofit corporation's initial registered office;
                      (d) the name and signature of its initial registered agent at the office listed in Subsection
                  (1)(c), which registered agent shall meet the requirements of Section 16-6a-501 ;
                      (e) the name and address of each incorporator;
                      (f) whether or not the nonprofit corporation will have voting members;
                      (g) if the nonprofit corporation is to issue shares of stock evidencing membership in the
                  nonprofit corporation or interests in water or other property rights:

- 42 -


                      (i) the aggregate number of shares that the nonprofit corporation has authority to issue; and
                      (ii) if the shares are to be divided into classes:
                      (A) the number of shares of each class;
                      (B) the designation of each class; and
                      (C) a statement of the preferences, limitations, and relative rights of the shares of each class;
                  and
                      (h) provisions not inconsistent with law regarding the distribution of assets on dissolution.
                      (2) The articles of incorporation may but need not set forth:
                      (a) the names and addresses of the one or more individuals who are to serve as the initial
                  directors;
                      (b) provisions not inconsistent with law regarding:
                      (i) managing the business and regulating the affairs of the nonprofit corporation;
                      (ii) defining, limiting, and regulating the powers of:
                      (A) the nonprofit corporation;
                      (B) the board of directors of the nonprofit corporation; and
                      (C) the members of the nonprofit corporation or any class of members;
                      (iii) whether cumulative voting will be permitted; and
                      (iv) the characteristics, qualifications, rights, limitations, and obligations attaching to each
                  or any class of members; and

                      (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.

                      (3) (a) It is sufficient under Subsection (1)(a) to state, either alone or with other purposes,
                  that the purpose of the corporation is to engage in any lawful act for which a nonprofit corporation
                  may be organized under this chapter.

                      (b) If the articles of incorporation include the statement described in Subsection (3)(a), all
                  lawful acts and activities shall be within the purposes of the nonprofit corporation, except for express
                  limitations, if any.

- 43 -


                      (4) The articles of incorporation need not set forth any corporate power enumerated in this
                  chapter.

                      (5) The articles of incorporation shall:
                      (a) be signed by each incorporator; and
                      (b) meet the filing requirements of Section 16-6a-105 .
                      (6) The appointment of the registered agent shall be signed by the registered agent on:
                      (a) the articles of incorporation; or
                      (b) an acknowledgment attached to the articles of incorporation.
                      (7) (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:
                      (i) the articles of incorporation; or
                      (ii) the bylaws.
                      (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:
                      (i) the articles of incorporation; and
                      (ii) the bylaws.
                      Section 29. Section 16-6a-203 is enacted to read:
                      16-6a-203. Incorporation.
                      (1) A nonprofit corporation is incorporated, and its corporate existence begins:
                      (a) when the articles of incorporation are filed by the division; or
                      (b) if a delayed effective date is specified pursuant to Subsection 16-6a-108 (2), on the
                  delayed effective date, unless a certificate of withdrawal is filed prior to the delayed effective date.
                      (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:
                      (a) cancel or revoke the incorporation; or
                      (b) involuntarily dissolve the nonprofit corporation.
                      Section 30. Section 16-6a-204 is enacted to read:
                      16-6a-204. Liability for preincorporation transactions.

- 44 -


                      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 31. Section 16-6a-205 is enacted to read:
                      16-6a-205. Organization of the corporation.
                      (1) After incorporation:
                      (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:
                      (i) appointing officers;
                      (ii) adopting bylaws, if desired; and
                      (iii) carrying on any other business brought before the meeting; or
                      (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:
                      (i) the election of directors and officers;
                      (ii) the appointment of members; and
                      (iii) the adoption and amendment of bylaws.
                      (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:
                      (a) describe the action taken; and
                      (b) are signed by each incorporator.
                      (3) An organizational meeting may be held in or out of this state.
                      Section 32. Section 16-6a-206 is enacted to read:
                      16-6a-206. Bylaws.
                      (1) (a) The board of directors of a nonprofit corporation may adopt initial bylaws for the

- 45 -


                  nonprofit corporation.
                      (b) If no directors of the nonprofit corporation have been elected, the incorporators may
                  adopt initial bylaws for the nonprofit corporation.
                      (c) If neither the incorporators nor the board of directors have adopted initial bylaws, the
                  members, if any, may adopt initial bylaws.
                      (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.
                      Section 33. Section 16-6a-207 is enacted to read:
                      16-6a-207. Incorporation of cooperative association.
                      (1) (a) If a cooperative association meets the requirements of Subsection (1)(b), it may:
                      (i) be incorporated under this chapter; and
                      (ii) use the word "cooperative" as part of its corporate or business name.
                      (b) A cooperative association described in Subsection (1)(a):
                      (i) may not be:
                      (A) an association subject to the insurance or credit union laws of this state;
                      (B) a health insurance purchasing association as defined in Section 31A-34-103 ; or
                      (C) a health insurance purchasing alliance licensed under Title 31A, Chapter 34, Voluntary
                  Health Insurance Purchasing Alliance Act; and
                      (ii) shall state in its articles of incorporation that:
                      (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
                      (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.
                      (2) (a) Any cooperative association incorporated in accordance with Subsection (1):
                      (i) shall have all the rights and be subject to the limitations provided in Section 3-1-11 ; and

- 46 -


                      (ii) may pay dividends on its stock, if it has stock, subject to the limitations of Section 3-1-11 .
                      (b) The articles of incorporation or the bylaws of a cooperative association incorporated in
                  accordance with Subsection (1) may provide for:
                      (i) the establishment and alteration of voting districts;
                      (ii) the election of delegates to represent:
                      (A) the districts described in Subsection (2)(b)(i); and
                      (B) the members of the districts described in Subsection (2)(b)(i);
                      (iii) the establishment and alteration of director districts; and
                      (iv) the election of directors to represent the districts described in Subsection (2)(b)(ii) by:
                      (A) the members of the districts; or
                      (B) delegates elected by the members.
                      (3) (a) A corporation organized under Title 3, Chapter 1, Uniform Agricultural Cooperative
                  Association Act, may convert itself into a cooperative association subject to this chapter by adopting
                  appropriate amendments to its articles of incorporation by which:
                      (i) it elects to become subject to this chapter; and
                      (ii) makes changes in its articles of incorporation that are:
                      (A) required by this chapter; and
                      (B) any other changes permitted by this chapter.
                      (b) The amendments described in Subsection (3)(a) shall be adopted and filed in the manner
                  provided by the law then applicable to the cooperative nonprofit corporation.
                      (4) Notwithstanding Subsection (1), a health insurance purchasing association may not use
                  the word "cooperative" or "alliance" but may use the word "association."
                      (5) Except as otherwise provided in this Section 16-6a-207 , a cooperative nonprofit
                  corporation shall be subject to this chapter.
                      Section 34. Section 16-6a-301 is enacted to read:
                 
Part 3. Purposes And Powers

                      16-6a-301. Purposes.
                      (1) Every nonprofit corporation incorporated under this chapter that in its articles of

- 47 -


                  incorporation has a statement meeting the requirements of Subsection 16-6a-202 (3)(a) may engage
                  in any lawful activity except for express limitations set forth in the articles of incorporation.
                      (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.
                      (b) Without limiting Subsection (2)(a) and subject to Subsection (2)(c), an organization may
                  not be organized under this chapter if the organization is subject to the:
                      (i) insurance laws of this state; or
                      (ii) laws governing depository institutions as defined in Section 7-1-103 .
                      (c) Notwithstanding Subsection (2)(b), the following may be organized under this chapter:
                      (i) a health insurance purchasing association as defined in Section 31A-34-103 ; and
                      (ii) a health insurance purchasing alliance licensed under Title 31A, Chapter 34, Voluntary
                  Health Insurance Purchasing Alliance Act.
                      Section 35. Section 16-6a-302 is enacted to read:
                      16-6a-302. General powers.
                      Unless its articles of incorporation provide otherwise, and except as restricted by the Utah
                  Constitution, every nonprofit corporation has:
                      (1) perpetual duration and succession in its corporate name; and
                      (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:
                      (a) sue and be sued, complain and defend in its corporate name;
                      (b) (i) have a corporate seal, that may be altered at will; and
                      (ii) use the corporate seal, or a facsimile of the corporate seal, by impressing or affixing it or
                  in any other manner reproducing it;
                      (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;
                      (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

- 48 -


                  located;
                      (e) sell, convey, mortgage, pledge, lease, exchange, and otherwise dispose of all or any part
                  of its property and assets;
                      (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;
                      (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;
                      (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;
                      (i) be an agent, associate, fiduciary, manager, member, partner, promoter, or trustee of, or
                  to hold any similar position with, any entity;
                      (j) conduct its business, locate offices, and exercise the powers granted by this chapter within
                  or without this state;
                      (k) (i) elect directors and appoint officers, employees, and agents of the nonprofit
                  corporation;
                      (ii) define the duties of the directors, officers, employees, and agents; and
                      (iii) fix the compensation of the directors, officers, employees, and agents;
                      (l) pay compensation in a reasonable amount to its directors, officers, or members for services
                  rendered, including:
                      (i) payment of advances for expenses reasonably expected to be incurred; and
                      (ii) expenses relating to relocation of directors, officers, or employees of a nonprofit
                  corporation;
                      (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;

- 49 -


                      (n) make contributions to or for any person for:
                      (i) the public welfare;
                      (ii) charitable, religious, scientific, or educational purposes; or
                      (iii) for other purposes that further the corporate interest;
                      (o) pursue any lawful activity that will aid governmental policy;
                      (p) make payments or do any other act, not inconsistent with law, that furthers the business
                  and affairs of the nonprofit corporation;
                      (q) establish rules governing the conduct of the business and affairs of the nonprofit
                  corporation in the event of an emergency;
                      (r) impose dues, assessments, admission fees, and transfer fees upon its members;
                      (s) (i) establish conditions for admission of members;
                      (ii) admit members; and
                      (iii) issue or transfer membership;
                      (t) carry on a business;
                      (u) indemnify current or former directors, officers, employees, fiduciaries, or agents as
                  provided in this chapter;
                      (v) limit the liability of its directors as provided in Subsection 16-6a-823 (1);
                      (w) cease its corporate activities and dissolve; and
                      (x) issue certificates or stock evidencing:
                      (i) membership in the nonprofit corporation; or
                      (ii) interests in water or other property rights.
                      Section 36. Section 16-6a-303 is enacted to read:
                      16-6a-303. Emergency powers.
                      (1) In anticipation of or during an emergency defined in Subsection (4), the board of directors
                  may:
                      (a) modify lines of succession to accommodate the incapacity of any director, officer,
                  employee, or agent;
                      (b) adopt bylaws to be effective only in an emergency; and

- 50 -


                      (c) (i) relocate the principal office;
                      (ii) designate an alternative principal office or regional office; or
                      (iii) authorize officers to relocate or designate an alternative principal office or regional
                  office.
                      (2) During an emergency as defined in Subsection (4), unless emergency bylaws provide
                  otherwise:
                      (a) notice of a meeting of the board of directors:
                      (i) need be given only to those directors whom it is practicable to reach; and
                      (ii) may be given in any practicable manner, including by publication or radio; and
                      (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.
                      (3) Corporate action taken in good faith during an emergency under this section to further
                  the ordinary business affairs of the nonprofit corporation:
                      (a) binds the nonprofit corporation; and
                      (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.
                      (4) An emergency exists for purposes of this section if a quorum of the directors cannot
                  readily be obtained because of a catastrophic event.
                      Section 37. Section 16-6a-304 is enacted to read:
                      16-6a-304. Ultra vires.
                      (1) Except as provided in Subsection (2), the validity of corporate action may not be
                  challenged on the ground that the nonprofit corporation lacks or lacked power to act.
                      (2) A nonprofit corporation's power to act may be challenged:
                      (a) in a proceeding against the nonprofit corporation to enjoin the act brought by:
                      (i) a director; or
                      (ii) one or more voting members in a derivative proceeding;

- 51 -


                      (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
                      (c) in a proceeding by the attorney general under Section 16-6a-1414 .
                      (3) In a proceeding under Subsection (2)(a) to enjoin an unauthorized corporate act, the
                  court may:
                      (a) enjoin or set aside the act, if:
                      (i) it would be equitable to do so; and
                      (ii) all affected persons are parties to the proceeding; and
                      (b) award damages for loss, including anticipated profits, suffered by the nonprofit
                  corporation or another party because of an injunction issued under this section.
                      Section 38. Section 16-6a-401 is enacted to read:
                 
Part 4. Name

                      16-6a-401. Corporate name.
                      (1) The corporate name of a nonprofit corporation:
                      (a) may, but need not contain:
                      (i) the word "corporation," "incorporated," or "company"; or
                      (ii) an abbreviation of "corporation," "incorporated," or "company";
                      (b) may not contain any word or phrase that indicates or implies that it is organized for any
                  purpose other than one or more of the purposes contained in Section 16-6a-301 and its articles of
                  incorporation;
                      (c) except as authorized by the division under Subsection (2), shall be distinguishable, as
                  defined in Section 16-10a-401 , from:
                      (i) the name of any domestic corporation incorporated in this state;
                      (ii) the name of any foreign corporation authorized to conduct affairs in this state;
                      (iii) the name of any domestic nonprofit corporation incorporated in this state;
                      (iv) the name of any foreign nonprofit corporation authorized to conduct affairs in this state;
                      (v) the name of any domestic limited liability company formed in this state;

- 52 -


                      (vi) the name of any foreign limited liability company authorized to conduct affairs in this
                  state;
                      (vii) the name of any limited partnership formed or authorized to conduct affairs in this state;
                      (viii) any name that is reserved under Section 16-6a-402 or 16-10a-402 ;
                      (ix) the name of any entity that has registered its name under Section 42-2-5 ;
                      (x) the name of any trademark or service mark registered by the division; or
                      (xi) any assumed name filed under Section 42-2-5 ;
                      (d) shall be, for purposes of recordation, either translated into English or transliterated into
                  letters of the English alphabet if it is not in English;
                      (e) without the written consent of the United States Olympic Committee, may not contain
                  the words:
                      (i) "Olympic";
                      (ii) "Olympiad"; or
                      (iii) "Citius Altius Fortius"; and
                      (f) without the written consent of the State Board of Regents issued in accordance with
                  Section 53B-5-114 , may not contain the words:
                      (i) "university";
                      (ii) "college"; or
                      (iii) "institute."
                      (2) The division may authorize the use of the name applied for if:
                      (a) the name is distinguishable from one or more of the names and trademarks described in
                  Subsection (1)(c) that are on the division's records; or
                      (b) if the applicant delivers to the division a certified copy of the final judgment of a court
                  of competent jurisdiction establishing the applicant's right to use the name applied for in this state
                  registered or reserved with the division pursuant to the laws of this state.
                      (3) A corporation may use the name of another domestic or foreign corporation that is used
                  in this state if:
                      (a) the other corporation is incorporated or authorized to conduct affairs in this state; and

- 53 -


                      (b) the proposed user corporation:
                      (i) has merged with the other corporation;
                      (ii) has been formed by reorganization of the other corporation; or
                      (iii) has acquired all or substantially all of the assets, including the corporate name, of the
                  other corporation.
                      (4) (a) A nonprofit corporation may apply to the division for authorization to file its articles
                  of incorporation under, or to register or reserve, a name that is not distinguishable upon the division's
                  records from one or more of the names described in Subsection (1).
                      (b) The division shall approve the application filed under Subsection (4)(a) if:
                      (i) the other person whose name is not distinguishable from the name under which the
                  applicant desires to file, or which the applicant desires to register or reserve:
                      (A) consents to the filing, registration, or reservation in writing; and
                      (B) submits an undertaking in a form satisfactory to the division to change its name to a name
                  that is distinguishable from the name of the applicant; or
                      (ii) the applicant delivers to the division a certified copy of the final judgment of a court of
                  competent jurisdiction establishing the applicant's right to make the requested filing in this state under
                  the name applied for.
                      (5) Only names of corporations may contain the:
                      (a) words "corporation," or "incorporated"; or
                      (b) abbreviation "corp." or "inc."
                      (6) The division may not issue a certificate of incorporation to any association violating the
                  provisions of this section.
                      Section 39. Section 16-6a-402 is enacted to read:
                      16-6a-402. Reserved name.
                      (1) (a) Any person may apply for the reservation of the exclusive use of a corporate name
                  by delivering an application for reservation of name to the division for filing, setting forth:
                      (i) the name and address of the applicant; and
                      (ii) the name proposed to be reserved.

- 54 -


                      (b) (i) If the division finds that the name applied for would be available for corporate use, the
                  division shall reserve the name for the applicant's exclusive use for 120 days from the day the division
                  receives the application under Subsection (1)(a).
                      (ii) A reservation may be renewed.
                      (2) The owner of a reserved corporate name may transfer the reservation to any other person
                  by delivery to the division for filing of a notice of the transfer that has been executed by the owner
                  and states:
                      (a) the reserved name;
                      (b) the name of the owner; and
                      (c) the name and address of the transferee.
                      (3) (a) The corporate name set forth in a document described in Subsection (3)(b) is reserved
                  until the document:
                      (i) becomes effective pursuant to Subsection 16-6a-108 (2); or
                      (ii) is withdrawn under Subsection 16-6a-108 (3).
                      (b) Subsection (3)(a) applies to a document that:
                      (i) is one of the following:
                      (A) articles of incorporation;
                      (B) articles of amendment to articles of incorporation;
                      (C) restated articles of incorporation; or
                      (D) articles of merger;
                      (ii) specifies a delayed effective date pursuant to Subsection 16-6a-108 (2);
                      (iii) sets forth a new corporate name; and
                      (iv) is filed by the division.
                      Section 40. Section 16-6a-403 is enacted to read:
                      16-6a-403. Corporate name -- Limited rights.
                      The authorization granted by the division to file articles of incorporation under a corporate
                  name or to reserve a name does not:
                      (1) abrogate or limit the law governing unfair competition or unfair trade practices;

- 55 -


                      (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
                      (3) create an exclusive right in geographic or generic terms contained within a name.
                      Section 41. Section 16-6a-501 is enacted to read:
                 
Part 5. Office and Agent

                      16-6a-501. Registered office and registered agent.
                      (1) A nonprofit corporation shall continuously maintain in this state:
                      (a) a registered office; and
                      (b) a registered agent.
                      (2) The registered agent required under Subsection (1) shall be:
                      (a) an individual:
                      (i) who resides in this state; and
                      (ii) whose business office is identical with the registered office;
                      (b) a domestic corporation or domestic nonprofit corporation whose business office is
                  identical with the registered office;
                      (c) a foreign corporation or foreign nonprofit corporation:
                      (i) authorized to conduct affairs in this state; and
                      (ii) whose business office is identical with the registered office; or
                      (iii) a domestic limited liability company or foreign limited liability company:
                      (A) authorized to conduct affairs in this state; and
                      (B) whose business office is identical with the registered office.
                      (3) A corporation may not serve as its own registered agent.
                      Section 42. Section 16-6a-502 is enacted to read:
                      16-6a-502. Change of registered office or registered agent.
                      (1) (a) A nonprofit corporation may change its registered office or registered agent by
                  delivering to the division for filing a statement of change that sets forth:
                      (i) the name of the nonprofit corporation;
                      (ii) the street address of its current registered office;

- 56 -


                      (iii) if the registered office is to be changed, the street address of the new registered office;
                      (iv) the name of its current registered agent;
                      (v) if the registered agent is to be changed:
                      (A) the name of the new registered agent; and
                      (B) the new registered agent's signed written consent to the appointment; and
                      (vi) that, after the change or changes are made, the street addresses of its registered office
                  and the business office of its registered agent will be identical.
                      (b) Notwithstanding Subsection (1)(a)(v), the new registered agent's signed written consent
                  to the appointment may be:
                      (i) on the statement of change; or
                      (ii) in a document accompanying the statement of change.
                      (2) If the street address of a registered agent's business office is changed, the street address
                  of the registered office of any nonprofit corporation for which the person is the registered agent may
                  be changed by:
                      (a) giving written notice to the nonprofit corporation of the change; and
                      (b) delivering to the division for filing a statement of change that:
                      (i) complies with the requirements of Subsection (1);
                      (ii) recites that the nonprofit corporation has been notified of the change, as provided in
                  Section 16-6a-103 ; and
                      (iii) is signed by the registered agent.
                      Section 43. Section 16-6a-503 is enacted to read:
                      16-6a-503. Resignation of registered agent.
                      (1) (a) A registered agent of a nonprofit corporation may resign the agency appointment by
                  delivering to the division for filing a statement of resignation pursuant to this section.
                      (b) The statement of resignation required by Subsection (1)(a) shall be:
                      (i) signed by the resigning registered agent; and
                      (ii) accompanied by two exact or conformed copies of the statement of resignation.
                      (c) The statement of resignation may include a statement that the registered office is also

- 57 -


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

                      16-6a-601. No requirement of members.

- 58 -


                      A nonprofit corporation is not required to have members.
                      Section 46. Section 16-6a-602 is enacted to read:
                      16-6a-602. Number and classes.
                      (1) A nonprofit corporation may have:
                      (a) one or more classes of voting or nonvoting members; and
                      (b) one or more members in each class described in Subsection (1)(a).
                      (2) The bylaws may designate:
                      (a) the class or classes of members; and
                      (b) the qualifications and rights of the members of each class of members including the
                  matters or items for which voting members may vote.
                      Section 47. Section 16-6a-603 is enacted to read:
                      16-6a-603. Admission.
                      (1) The bylaws may establish criteria or procedures for admission of members.
                      (2) A person may not be admitted as a member without the person's consent.
                      (3) A nonprofit corporation may issue certificates evidencing membership in the nonprofit
                  corporation.
                      Section 48. Section 16-6a-604 is enacted to read:
                      16-6a-604. Consideration.
                      Unless otherwise provided by the bylaws, a nonprofit corporation may admit members:
                      (1) for no consideration; or
                      (2) for such consideration as is determined by the board of directors.
                      Section 49. Section 16-6a-605 is enacted to read:
                      16-6a-605. Differences in rights and obligations of members.
                      Unless otherwise provided by this chapter or the bylaws:
                      (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
                      (2) with respect to matters not reserved under Subsection (1), all members, including voting
                  members, shall have the same rights and obligations.

- 59 -


                      Section 50. Section 16-6a-606 is enacted to read:
                      16-6a-606. Transfers.
                      (1) Unless otherwise provided by the bylaws, a member of a nonprofit corporation may not
                  transfer:
                      (a) a membership; or
                      (b) any right arising from a membership.
                      (2) Where transfer rights have been provided, a restriction on transfer rights may not be
                  binding with respect to a member holding a membership issued prior to the adoption of the                   restriction,
                  unless the restriction is approved by the affected member.
                      Section 51. Section 16-6a-607 is enacted to read:
                      16-6a-607. Creditor's action against member.
                      A proceeding may not be brought by a creditor to reach the liability, if any, of a member to
                  the nonprofit corporation unless:
                      (1) (a) final judgment has been rendered in favor of the creditor against the nonprofit
                  corporation; and
                      (b) execution has been returned unsatisfied in whole or in part; or
                      (2) a proceeding described in Subsection (1) would be useless.
                      Section 52. Section 16-6a-608 is enacted to read:
                      16-6a-608. Resignation.
                      (1) Unless otherwise provided by the bylaws, a member may resign at any time.
                      (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.
                      Section 53. Section 16-6a-609 is enacted to read:
                      16-6a-609. Termination, expulsion, or suspension.
                      (1) Unless otherwise provided by the bylaws, except pursuant to a procedure that is fair and
                  reasonable:
                      (a) a member of a nonprofit corporation may not be expelled or suspended; and
                      (b) membership in a nonprofit corporation may not be terminated or suspended.

- 60 -


                      (2) For purposes of this section, a procedure is fair and reasonable when either:
                      (a) the bylaws or a written policy of the board of directors set forth a procedure that
                  provides:
                      (i) not less than 15 days prior written notice of:
                      (A) the expulsion, suspension, or termination; and
                      (B) the reasons for the expulsion, suspension, or termination; and
                      (ii) an opportunity for the member to be heard:
                      (A) orally or in writing;
                      (B) not less than five days before the effective date of the expulsion, suspension, or
                  termination; and
                      (C) by one or more persons authorized to decide that the proposed expulsion, termination,
                  or suspension not take place; or
                      (b) it is fair and reasonable taking into consideration all of the relevant facts and
                  circumstances.
                      (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.
                      (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.
                      (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.
                      Section 54. Section 16-6a-610 is enacted to read:
                      16-6a-610. Purchase of memberships.
                      (1) Unless otherwise provided by the bylaws, a nonprofit corporation may not purchase the
                  membership of a member:
                      (a) who resigns; or
                      (b) whose membership is terminated.

- 61 -


                      (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:
                      (i) its bylaws; or
                      (ii) agreement with the affected member.
                      (b) A payment permitted under Subsection (2)(a) may not violate:
                      (i) Section 16-6a-1301 ; or
                      (ii) any other provision of this chapter.
                      Section 55. Section 16-6a-611 is enacted to read:
                      16-6a-611. No property right.
                      A member does not have a vested property right resulting from any provision in the articles
                  of incorporation or the bylaws, including any provision relating to management, control, purpose, or
                  duration of the nonprofit corporation.    
                      Section 56. Section 16-6a-612 is enacted to read:
                      16-6a-612. Derivative suits.
                      (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) a voting member; or
                      (b) a director.
                      (2) In a proceeding described in Subsection (1), each complainant shall be a voting member
                  or director at the time of bringing the proceeding.
                      (3) (a) A complaint in a proceeding brought in the right of a nonprofit corporation shall be
                  verified and allege with particularity:
                      (i) the demand made, if any, to obtain action by the directors; and
                      (ii) (A) why the complainant could not obtain the action; or
                      (B) why the complainant did not make the demand.
                      (b) If a demand for action was made and the nonprofit corporation's investigation of the

- 62 -


                  demand is in progress when the proceeding is filed, the court may stay the suit until the investigation
                  is completed.
                      (4) (a) (i) In any action instituted in the right of a nonprofit corporation by one or more
                  voting members, the court having jurisdiction over the matter may, at any time before final judgment,
                  require the plaintiff to give security for the costs and reasonable expenses that may be:
                      (A) directly attributable to and incurred by the nonprofit corporation in the defense of the
                  action; or
                      (B) incurred by other parties named as defendant for which the nonprofit corporation may
                  become legally liable.
                      (ii) Notwithstanding Subsection (4)(a)(i), the security for the costs and reasonable expenses
                  may not include fees of attorneys.
                      (b) The amount of the security permitted under this Subsection (4) may from time to time
                  be increased or decreased, in the discretion of the court, upon showing that the security provided has
                  or may become inadequate or excessive.
                      (c) If the court finds that the action was commenced without reasonable cause, the nonprofit
                  corporation shall have recourse to the security permitted under this Subsection (4) in the amount the
                  court shall determine upon the termination of the action.
                      (5) A procedure pursuant to this section shall comply with the applicable rules set forth in
                  the Utah Rules of Civil Procedure, as amended from time to time.
                      (6) An action may not be commenced in this state by a member of a foreign nonprofit
                  corporation in the right of a foreign nonprofit corporation unless the action is permitted by the laws
                  of the state under which the foreign nonprofit corporation is incorporated.
                      Section 57. Section 16-6a-613 is enacted to read:
                      16-6a-613. Delegates.
                      (1) A nonprofit corporation may provide in its bylaws for delegates having some or all of the
                  authority of members.
                      (2) The bylaws may set forth provisions relating to:
                      (a) the characteristics, qualifications, rights, limitations, and obligations of delegates,

- 63 -


                  including their selection and removal;
                      (b) calling, noticing, holding, and conducting meetings of delegates; and
                      (c) carrying on corporate activities during and between meetings of delegates.
                      Section 58. Section 16-6a-701 is enacted to read:
                 
Part 7. Member Meetings and Voting

                      16-6a-701. Annual and regular meetings.
                      (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:
                      (a) at a time and date stated in or fixed in accordance with the bylaws; or
                      (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.
                      (2) A nonprofit corporation with members may hold regular membership meetings at:
                      (a) a time and date stated in or fixed in accordance with the bylaws; or
                      (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.
                      (3) (a) Annual and regular membership meetings may be held in or out of this state:
                      (i) at the place stated in or fixed in accordance with the bylaws; or
                      (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.
                      (b) If no place is stated or fixed in accordance with Subsection (3)(a), annual and regular
                  meetings shall be held at the nonprofit corporation's principal office.
                      (4) The failure to hold an annual or regular meeting at the time and date determined pursuant
                  to Subsection (1) does not:
                      (a) affect the validity of any corporate action; or
                      (b) work a forfeiture or dissolution of the nonprofit corporation.
                      Section 59. Section 16-6a-702 is enacted to read:
                      16-6a-702. Special meetings.
                      (1) A nonprofit corporation shall hold a special meeting of its members:

- 64 -


                      (a) on call of:
                      (i) its board of directors; or
                      (ii) the person or persons authorized by the bylaws or resolution of the board of directors to
                  call a special meeting; or
                      (b) unless otherwise provided by the bylaws, if the nonprofit corporation receives one or
                  more written demands for the meeting, that:
                      (i) state the purpose or purposes for which the meeting is to be held; and
                      (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.
                      (2) If not otherwise fixed under Section 16-6a-703 or 16-6a-706 , the record date for
                  determining the members entitled to demand a special meeting pursuant to Subsection (1)(b) is the
                  later of the date of:
                      (a) the earliest of any of the demands pursuant to which the meeting is called; or
                      (b) the date that is 60 days before the date the first of the demands is received by the
                  nonprofit corporation.
                      (3) If a notice for a special meeting demanded pursuant to Subsection (1)(b) is not given
                  pursuant to Section 16-6a-704 within 30 days after the date the written demand is delivered to a
                  corporate officer, regardless of the requirements of Subsection (4), a person signing the demand may:
                      (a) set the time and place of the meeting; and
                      (b) give notice pursuant to Section 16-6a-704 .
                      (4) (a) A special meeting of the members may be held in or out of this state:
                      (i) at the place stated in or fixed in accordance with the bylaws; or
                      (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.
                      (b) If no place is stated or fixed in accordance with Subsection (3)(a) or (4)(a), a special
                  meeting of the members shall be held at the nonprofit corporation's principal office.
                      (5) Unless otherwise provided by the bylaws, only business within the purposes described in
                  the notice of the meeting required by Subsection 16-6a-704 (3) may be conducted at a special meeting

- 65 -


                  of the members.
                      Section 60. Section 16-6a-703 is enacted to read:
                      16-6a-703. Court-ordered meeting.
                      (1) (a) Upon an application described in Subsection (1)(b) the holding of a meeting of the
                  members may be summarily ordered by:
                      (i) the district court of the county in this state where the nonprofit corporation's principal
                  office is located; or
                      (ii) if the nonprofit corporation has no principal office in this state:
                      (A) by the district court of the county in which its registered office is located; or
                      (B) if the nonprofit corporation has no registered office, by the district court in and for Salt
                  Lake County.
                      (b) Subsection (1)(a) applies to an application by:
                      (i) any voting member entitled to participate in an annual meeting if an annual meeting was
                  required to be held and was not held within 15 months after:
                      (A) the corporation's last annual meeting; or
                      (B) if there has been no annual meeting, the date of incorporation; or
                      (ii) any person who participated in a call of or demand for a special meeting effective under
                  Subsection 16-6a-702 (1), if:
                      (A) notice of the special meeting was not given within 30 days after:
                      (I) the date of the call; or
                      (II) the date the last of the demands necessary to require the calling of the meeting was
                  received by the nonprofit corporation pursuant to Subsection 16-6a-702 (1)(b); or
                      (B) the special meeting was not held in accordance with the notice.
                      (2) A court that orders a meeting under Subsection (1) may:
                      (a) fix the time and place of the meeting;
                      (b) determine the members entitled to participate in the meeting;
                      (c) specify a record date for determining members entitled to notice of and to vote at the
                  meeting;

- 66 -


                      (d) prescribe the form and content of the notice of the meeting;
                      (e) (i) fix the quorum required for specific matters to be considered at the meeting; or
                      (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
                      (f) enter other orders necessary or appropriate to accomplish the holding of the meeting.
                      Section 61. Section 16-6a-704 is enacted to read:
                      16-6a-704. Notice of meeting.
                      (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.
                      (2) Any notice that conforms to the requirements of Subsection (3) is fair and reasonable, but
                  other means of giving notice may also be fair and reasonable when all the circumstances are
                  considered.
                      (3) Notice is fair and reasonable if:
                      (a) the nonprofit corporation notifies its members of the place, date, and time of each annual,
                  regular, and special meeting of members:
                      (i) no fewer than ten days before the meeting;
                      (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
                      (iii) if notice is given by newspaper as provided in Subsection 16-6a-103 (2), by publication
                  three separate times with:
                      (A) the first of the publications no more than 60 days before the meeting date; and
                      (B) the last of the publications no fewer than ten days before the meeting date;
                      (b) the notice of an annual or regular meeting includes a description of any matter or matters
                  that:
                      (i) must be approved by the members; or
                      (ii) for which the members' approval is sought under Sections 16-6a-825 , 16-6a-910 ,
                  16-6a-1003 , 16-6a-1010 , 16-6a-1102 , 16-6a-1202 , and 16-6a-1402 ; and
                      (c) unless otherwise provided by this chapter or the bylaws, the notice of a special meeting

- 67 -


                  includes a description of the purpose or purposes for which the meeting is called.
                      (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.
                      (b) Notwithstanding Subsection (4)(a), if a new record date for the adjourned meeting is or
                  shall be fixed under Section 16-6a-706 , notice of the adjourned meeting shall be given under this
                  section to the members of record as of the new record date.
                      (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:
                      (a) requested in writing to do so by a person entitled to call a special meeting; and
                      (b) the request is received by the secretary or president of the nonprofit corporation at least
                  ten days before the nonprofit corporation gives notice of the meeting.
                      Section 62. Section 16-6a-705 is enacted to read:
                      16-6a-705. Waiver of notice.
                      (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.
                      (b) A waiver described in Subsection (1) shall be:
                      (i) in writing;
                      (ii) signed by the member entitled to the notice; and
                      (iii) delivered to the nonprofit corporation for:
                      (A) inclusion in the minutes; or
                      (B) filing with the corporate records.
                      (c) The delivery and filing required under Subsection (1)(b) may not be conditions of the
                  effectiveness of the waiver.
                      (2) A member's attendance at a meeting:
                      (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

- 68 -


                  because of lack of notice or defective notice; and
                      (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.
                      Section 63. Section 16-6a-706 is enacted to read:
                      16-6a-706. Record date -- Determining members entitled to notice and vote.
                      (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.
                      (b) If the bylaws do not fix or provide for fixing a record date described in Subsection (1)(a),
                  the board of directors may fix a future date as the record date.
                      (c) If a record date is not fixed in accordance with Subsection (1)(a) or (b), members entitled
                  to notice of the meeting are the members of the nonprofit corporation:
                      (i) at the close of business on the business day preceding the day on which notice is given;
                  or
                      (ii) if notice is waived, at the close of business on the business day preceding the day on
                  which the meeting is held.
                      (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.
                      (b) If the bylaws do not fix or provide for fixing a record date described in Subsection (2)(a),
                  the board may fix a future date as the record date.
                      (c) If a record date is not fixed in accordance with Subsection (2)(a) or (b), members entitled
                  to vote at the meeting are the members of the nonprofit corporation:
                      (i) on the date of the meeting; and
                      (ii) who are otherwise eligible to vote.
                      (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.
                      (b) If the bylaws do not fix or provide for fixing a record date described in Subsection (3)(a),

- 69 -


                  the board of directors may fix a future date as the record date.
                      (c) If a record date is not fixed in accordance with Subsection (3)(a) or (b), members entitled
                  to exercise the right are members of the corporation at the later of:
                      (i) the close of business on the day on which the board adopts the resolution relating to the
                  exercise of the right; or
                      (ii) the close of business on the 60th day before the date of the exercise of the right.
                      (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.
                      (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.
                      (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.
                      (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:
                      (a) provide that the original record date for notice or voting continues in effect; or
                      (b) fix a new record date for notice or voting.
                      Section 64. Section 16-6a-707 is enacted to read:
                      16-6a-707. Action without meeting.
                      (1) Unless otherwise provided in the articles of incorporation and Subsection (5), and subject
                  to the limitations of Subsection 16-6a-1704 (3), 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.
                      (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 ten days before the consummation

- 70 -


                  of the transaction, action, or event authorized by the member action to:
                      (i) those members entitled to vote who have not consented in writing; and
                      (ii) those members:
                      (A) not entitled to vote; and
                      (B) to whom this chapter requires that notice of the proposed action be given.
                      (b) The notice required pursuant to Subsection (2)(a) 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.
                      (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:
                      (a) describing the action;
                      (b) stating that the member's prior consent is revoked; and
                      (c) that is received by the nonprofit corporation prior to the effectiveness of the action.
                      (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
                  (1) are:
                      (i) received by the nonprofit corporation within a 60-day period; and
                      (ii) not revoked pursuant to Subsection (3).
                      (b) Action taken by the members pursuant to this section is effective:
                      (i) as of the date the last written consent necessary to effect the action is received by the
                  nonprofit corporation; or
                      (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.
                      (c) If the nonprofit corporation has received written consents in accordance with Subsection
                  (1) 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.

- 71 -


                      (d) Unless otherwise provided by the bylaws, a written consent under this Subsection (4) may
                  be received by the nonprofit corporation by electronically transmitted facsimile or other form of
                  communication providing the corporation with a complete copy of the written consent, including a
                  copy of the signature to the written consent.
                      (5) Notwithstanding Subsection (1), directors may not be elected by written consent except
                  by unanimous written consent of all shares entitled to vote for the election of directors.
                      (6) If not otherwise determined under Section 16-6a-703 or 16-6a-706 , the record date for
                  determining the members entitled to take action without a meeting or entitled to be given notice under
                  Subsection (2) 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 (1).
                      (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.
                      Section 65. Section 16-6a-708 is enacted to read:
                      16-6a-708. Meetings by telecommunication.
                      (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.
                      (2) A member participating in a meeting by a means permitted under Subsection (1) is
                  considered to be present in person at the meeting.
                      Section 66. Section 16-6a-709 is enacted to read:
                      16-6a-709. Action by written ballot.
                      (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.
                      (2) A written ballot described in Subsection (1) shall:
                      (a) set forth each proposed action; and
                      (b) provide an opportunity to vote for or against each proposed action.

- 72 -


                      (3) Approval by written ballot pursuant to this section shall be valid only when:
                      (a) the number of votes cast by ballot equals or exceeds the quorum required to be present
                  at a meeting authorizing the action; and
                      (b) 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.
                      (4) All solicitations for votes by written ballot shall:
                      (a) indicate the number of responses needed to meet the quorum requirements;
                      (b) state the percentage of approvals necessary to approve each matter other than election
                  of directors;
                      (c) specify the time by which a ballot must be received by the nonprofit corporation in order
                  to be counted; and
                      (d) be accompanied by written information sufficient to permit each person casting the ballot
                  to reach an informed decision on the matter.
                      (5) Unless otherwise provided by the bylaws, a written ballot may not be revoked.
                      (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.
                      Section 67. Section 16-6a-710 is enacted to read:
                      16-6a-710. Members' list for meeting and action by written ballot.
                      (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 its members who are:
                      (i) (A) entitled to notice of the meeting; and
                      (B) to vote at the meeting; or
                      (ii) to take the action by written ballot.
                      (b) The list required by Subsection (1) shall:
                      (i) be arranged by voting group;
                      (ii) be alphabetical within each voting group;

- 73 -


                      (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
                      (iv) show the number of votes each member is entitled to vote at the meeting or by written
                  ballot.
                      (2) (a) If prepared in connection with a meeting of the members, the members' list required
                  by Subsection (1) shall be available for inspection by any member entitled to vote at the meeting:
                      (i) (A) beginning the earlier of:
                      (I) ten days before the meeting for which the list was prepared; or
                      (II) two business days after notice of the meeting is given; and
                      (B) continuing through the meeting, and any adjournment of the meeting; and
                      (ii) (A) at the nonprofit corporation's principal office; or
                      (B) at a place identified in the notice of the meeting in the city where the meeting will be held.
                      (b) (i) The nonprofit corporation shall make the members' list required by Subsection (1)
                  available at the meeting.
                      (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.
                      (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
                  16-6a-1602 (3) and Subsections 16-6a-1603 (2) and (3), to copy a members' list required by
                  Subsection (1):
                      (i) during:
                      (A) regular business hours; and
                      (B) the period it is available for inspection; and
                      (ii) at the member's expense.
                      (3) (a) On application of a member of a nonprofit corporation, the applicable district court
                  may take an action described in Subsection (3)(b) 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

- 74 -


                  entitled to vote at the meeting or by the written ballot, to inspect or copy the members' list during the
                  period it is required to be available for inspection under Subsection (2).
                      (b) Under Subsection (3)(a), the applicable court may:
                      (i) summarily order the inspection or copying of the members' list at the nonprofit
                  corporation's expense; and
                      (ii) until the inspection or copying is complete:
                      (A) postpone or adjourn the meeting for which the members' list was prepared; or
                      (B) postpone the time when the nonprofit corporation must receive written ballots in
                  connection with which the members' list was prepared.
                      (c) For purposes of this Subsection (3), the applicable court is:
                      (i) the district court of the county in this state where the nonprofit corporation's principal
                  office is located; or
                      (ii) if the nonprofit corporation has no principal office in this state:
                      (A) the district court of the county where its registered office is located; or
                      (B) if the nonprofit corporation has no registered office in this state, the district court in and
                  for Salt Lake County.
                      (4) If a court orders inspection or copying of a members' list pursuant to Subsection (3),
                  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:
                      (a) the court shall order the nonprofit corporation to pay the member's costs, including
                  reasonable counsel fees, incurred in obtaining the order;
                      (b) the court may order the nonprofit corporation to pay the member for any damages the
                  member incurred; and
                      (c) the court may grant the member any other remedy afforded the member by law.
                      (5) If a court orders inspection or copying of a members' list pursuant to Subsection (3), the
                  court may impose reasonable restrictions on the use or distribution of the list by the member.
                      (6) Failure to prepare or make available the members' list does not affect the validity of action

- 75 -


                  taken at the meeting or by means of the written ballot.
                      Section 68. Section 16-6a-711 is enacted to read:
                      16-6a-711. Voting entitlement generally.
                      (1) Unless otherwise provided by the bylaws:
                      (a) only voting members shall be entitled to vote with respect to any matter required or
                  permitted under this chapter to be submitted to a vote of the members;
                      (b) all references in this chapter to votes of or voting by the members shall be considered to
                  permit voting only by the voting members; and
                      (c) voting members shall be entitled to vote with respect to all matters required or permitted
                  under this chapter to be submitted to a vote of the members.
                      (2) Unless otherwise provided by the bylaws, each member entitled to vote shall be entitled
                  to one vote on each matter submitted to a vote of members.
                      (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 shall have the following effect:
                      (a) if only one votes, the act binds all; and
                      (b) if more than one votes, the vote shall be divided on a pro-rata basis.
                      Section 69. Section 16-6a-712 is enacted to read:
                      16-6a-712. Proxies.
                      (1) Unless otherwise provided by the bylaws, a member entitled to vote may vote or
                  otherwise act in person or by proxy.
                      (2) Without limiting the manner in which a member may appoint a proxy to vote or otherwise
                  act for the member, Subsections (2)(a) and (b) constitute valid means of appointing a proxy.
                      (a) A member may appoint a proxy by signing an appointment form, either personally or by
                  the member's attorney-in-fact.
                      (b) (i) Subject to Subsection (2)(b)(ii) 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:
                      (A) the proxy;

- 76 -


                      (B) a proxy solicitor;
                      (C) a proxy support service organization;
                      (D) another person duly authorized by the proxy to receive appointments as agent for the
                  proxy; or
                      (E) the nonprofit corporation.
                      (ii) An appointment transmitted under Subsection (2)(b)(i) 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.
                      (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 (2)(b).
                      (b) An appointment is valid for 11 months unless a different period is expressly provided in
                  the appointment form.
                      (4) Any complete copy, including an electronically transmitted facsimile, 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.
                      (5) An appointment of a proxy is revocable by the member.
                      (6) An appointment of a proxy is revoked by the person appointing the proxy:
                      (a) attending any meeting and voting in person; or
                      (b) signing and delivering to the secretary or other officer or agent authorized to tabulate
                  proxy votes:
                      (i) a writing stating that the appointment of the proxy is revoked; or
                      (ii) a subsequent appointment form.
                      (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.
                      (8) Subject to Section 16-6a-713 and to any express limitation on the proxy's authority

- 77 -


                  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.
                      Section 70. Section 16-6a-713 is enacted to read:
                      16-6a-713. Nonprofit corporation's acceptance of votes.
                      (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:
                      (a) a vote;
                      (b) a consent;
                      (c) a written ballot;
                      (d) a waiver;
                      (e) a proxy appointment; or
                      (f) a proxy appointment revocation.
                      (2) If the name signed on any writing listed in Subsection (1) 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:
                      (a) (i) the member is an entity; and
                      (ii) the name signed purports to be that of an officer or agent of the entity;
                      (b) (i) the name signed purports to be that of an administrator, executor, guardian, or
                  conservator representing the member; and
                      (ii) evidence of fiduciary status acceptable to the nonprofit corporation with respect to the
                  writing listed in Subsection (1) that:
                      (A) has been requested by the nonprofit corporation; and
                      (B) is presented to the nonprofit corporation;
                      (c) (i) the name signed purports to be that of a receiver or trustee in bankruptcy of the
                  member; and
                      (ii) evidence of this status acceptable to the nonprofit corporation with respect to the writing
                  listed in Subsection (1) that:

- 78 -


                      (A) has been requested by the nonprofit corporation; and
                      (B) is presented to the nonprofit corporation;
                      (d) (i) the name signed purports to be that of a pledgee, beneficial owner, or attorney-in-fact
                  of the member; and
                      (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 (1) that:
                      (A) has been requested by the nonprofit corporation; and
                      (B) is presented to the nonprofit corporation;
                      (e) (i) two or more persons are the member as cotenants or fiduciaries;
                      (ii) the name signed purports to be the name of at least one of the cotenants or fiduciaries;
                  and
                      (iii) the person signing appears to be acting on behalf of all the cotenants or fiduciaries; or
                      (f) the acceptance of the writing listed in Subsection (1) is otherwise proper under rules
                  established by the nonprofit corporation that are not inconsistent with this Subsection (2).
                      (3) The nonprofit corporation is entitled to reject a writing listed in Subsection (1) if the
                  secretary or other officer or agent authorized to tabulate votes, acting in good faith, has reasonable
                  basis for doubt about:
                      (a) the validity of the signature on it; or
                      (b) the signatory's authority to sign for the member.
                      (4) The nonprofit corporation and its officer or agent who accepts or rejects a writing listed
                  in Subsection (1) 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.
                      (5) Corporate action based on the acceptance or rejection of a writing listed in Subsection
                  (1) under this section is valid unless a court of competent jurisdiction determines otherwise.
                      Section 71. Section 16-6a-714 is enacted to read:
                      16-6a-714. Quorum and voting requirements for voting groups.
                      (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.

- 79 -


                      (b) Unless otherwise provided in this chapter or the bylaws, 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.
                      (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:
                      (a) for the remainder of the meeting; and
                      (b) for any adjournment of that meeting, unless:
                      (i) otherwise provided in the bylaws; or
                      (ii) a new record date is or shall be set for that adjourned meeting.
                      (3) Action on a matter other than the election of directors by a voting group is approved if:
                      (a) a quorum exists;
                      (b) the votes cast within the voting group favoring the action exceed the votes cast within
                  the voting group opposing the action; and
                      (c) a greater number of affirmative votes is not required by this chapter or the bylaws.
                      (4) The election of directors is governed by Section 16-6a-717 .
                      Section 72. Section 16-6a-715 is enacted to read:
                      16-6a-715. Action by single and multiple voting groups.
                      (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
                  16-6a-714 .
                      (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 16-6a-714 .
                      (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.
                      Section 73. Section 16-6a-716 is enacted to read:
                      16-6a-716. Greater quorum or voting requirements.
                      (1) The articles of incorporation or bylaws may provide for a greater:

- 80 -


                      (a) quorum requirement for members or voting groups than is provided for by this chapter;
                  or
                      (b) voting requirement for members or voting groups than is provided by this chapter.
                      (2) 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:
                      (a) then in effect; or
                      (b) proposed to be adopted.
                      Section 74. Section 16-6a-717 is enacted to read:
                      16-6a-717. Voting for directors -- Cumulative voting.
                      (1) If the bylaws provide for cumulative voting for directors by the voting members, voting
                  members may cumulatively vote, by:
                      (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
                      (b) (i) casting the product for a single candidate; or
                      (ii) distributing the product among two or more candidates.
                      (2) Cumulative voting is not authorized at a particular meeting unless:
                      (a) the meeting notice or statement accompanying the notice states that cumulative voting
                  will take place; or
                      (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
                      (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.
                      (3) (a) 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.
                      (b) When only one director is being voted upon, the affirmative vote of a majority of the

- 81 -


                  members constituting a quorum at the meeting at which the election occurs shall be required for
                  election to the board of directors.
                      Section 75. Section 16-6a-718 is enacted to read:
                      16-6a-718. Voting agreements.
                      (1) Two or more members may provide for the manner in which they will vote by signing an
                  agreement for that purpose.
                      (2) A voting agreement created under this section is specifically enforceable.
                      Section 76. Section 16-6a-801 is enacted to read:
                 
Part 8. Directors and Officers

                      16-6a-801. Requirement for board of directors.
                      (1) A nonprofit corporation shall have a board of directors.
                      (2) (a) Except as provided in this chapter or Subsection (2)(b), 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.
                      (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.
                      (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.
                      (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.
                      (4) The board of directors and the directors may be known by any other name designated in
                  the bylaws.
                      Section 77. Section 16-6a-802 is enacted to read:
                      16-6a-802. Qualifications of directors.
                      (1) A director shall be:
                      (a) a natural person; and
                      (b) 18 years of age or older.

- 82 -


                      (2) The bylaws may prescribe other qualifications for directors in addition to the requirements
                  under Subsection (1).
                      (3) A director need not be a resident of this state or a member of the nonprofit corporation
                  unless required by the bylaws.
                      Section 78. Section 16-6a-803 is enacted to read:
                      16-6a-803. Number of directors.
                      (1) A board of directors shall consist of three or more directors, with the number specified
                  in, or fixed in accordance with, the bylaws.
                      (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.
                      (b) If a range for the size of the board of directors is established in accordance with
                  Subsection (2)(a), the number of directors may be fixed or changed from time to time within the
                  range by:
                      (i) the voting members; or
                      (ii) the board of directors.
                      Section 79. Section 16-6a-804 is enacted to read:
                      16-6a-804. Election, appointment, and designation of directors.
                      (1) (a) All directors except the initial directors shall be elected, appointed, or designated as
                  provided in the bylaws.
                      (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:
                      (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
                      (ii) if the nonprofit corporation does not have voting members, all directors except the initial
                  directors shall be elected by the board of directors.
                      (2) (a) The bylaws may authorize the election of all or a specified number or portion of
                  directors, except the initial directors, by:

- 83 -


                      (i) the members of one or more voting groups of voting members; or
                      (ii) the directors of one or more authorized classes of directors.
                      (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.
                      (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.
                      (4) The bylaws may provide for election of directors by voting members or delegates:
                      (a) on the basis of chapter or other organizational unit;
                      (b) by region or other geographic unit;
                      (c) by preferential voting; or
                      (d) by any other reasonable method.
                      (5) For purposes of this chapter, designation occurs when the bylaws:
                      (a) name an individual as a director; or
                      (b) designate the holder of some office or position as a director.
                      Section 80. Section 16-6a-805 is enacted to read:
                      16-6a-805. Terms of directors generally.
                      (1) (a) The bylaws may specify the terms of directors.
                      (b) In the absence of any term specified in the bylaws, the term of each director shall be one
                  year.
                      (c) Unless otherwise provided in the bylaws, directors may be elected for successive terms.
                      (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.
                      (3) A decrease in the number of directors or in the term of office does not shorten an
                  incumbent director's term.
                      (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:

- 84 -


                      (a) the next meeting at which directors are elected; or
                      (b) the term, if any, designated for the director at the time of the creation of the position
                  being filled.
                      (5) Despite the expiration of a director's term, a director continues to serve until:
                      (a) the director's successor is elected, appointed, or designated and qualifies; or
                      (b) there is a decrease in the number of directors.
                      (6) A director whose term has expired may deliver to the division for filing a statement to that
                  effect pursuant to Section 16-6a-1608 .
                      Section 81. Section 16-6a-806 is enacted to read:
                      16-6a-806. Staggered terms for directors.
                      (1) The bylaws may provide for staggering the terms of directors by dividing the total number
                  of directors into any number of groups.
                      (2) The terms of office of the several groups permitted under Subsection (1) need not be
                  uniform.
                      Section 82. Section 16-6a-807 is enacted to read:
                      16-6a-807. Resignation of directors.
                      (1) A director may resign at any time by giving written notice of resignation to the nonprofit
                  corporation.
                      (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.
                      (3) A director who resigns may deliver to the division for filing a statement that the director
                  resigns pursuant to Section 16-6a-1608 .
                      (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:
                      (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:
                      (i) attend a specified number of board meetings; or
                      (ii) meet other specified obligations of directors; and

- 85 -


                      (b) the failure to attend or meet obligations is confirmed by an affirmative vote of the board
                  of directors.
                      Section 83. Section 16-6a-808 is enacted to read:
                      16-6a-808. Removal of directors.
                      (1) Directors elected by voting members or directors may be removed as provided in
                  Subsections (1)(a) through (g).
                      (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.
                      (b) If a director is elected by a voting group, only that voting group may participate in the
                  vote to remove that director.
                      (c) A director may be removed only if the number of votes cast to remove the director would
                  be sufficient to elect the director at a meeting to elect directors.
                      (d) A director elected by voting members may be removed by the voting members only:
                      (i) at a meeting called for the purpose of removing that director; and
                      (ii) if the meeting notice states that the purpose, or one of the purposes, of the meeting is
                  removal of the director.
                      (e) An entire board of directors may be removed under Subsections (1)(a) through (d).
                      (f) (i) Except as provided in Subsection (1)(f)(ii), 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.
                      (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.
                      (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 16-6a-1608 .
                      (2) Unless otherwise provided in the bylaws:
                      (a) an appointed director may be removed without cause by the person appointing the
                  director;
                      (b) the person described in Subsection (2)(a) shall remove the director by giving written

- 86 -


                  notice of the removal to:
                      (i) the director; and
                      (ii) the nonprofit corporation; and
                      (c) unless the written notice described in Subsection (2)(b) specifies a future effective date,
                  a removal is effective when the notice is received by both:
                      (i) the director to be removed; and
                      (ii) the nonprofit corporation.
                      (3) A designated director, as provided in Subsection 16-6a-804 (5), may be removed by an
                  amendment to the bylaws deleting or changing the designation.
                      Section 84. Section 16-6a-809 is enacted to read:
                      16-6a-809. Removal of directors by judicial proceeding.
                      (1) (a) The applicable court may remove a director in a proceeding commenced either 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:
                      (i) the director engaged in:
                      (A) fraudulent or dishonest conduct; or
                      (B) gross abuse of authority or discretion with respect to the nonprofit corporation; or
                      (ii) (A) a final judgment has been entered finding that the director has violated a duty set forth
                  in Part 4; and
                      (B) removal is in the best interests of the nonprofit corporation.
                      (b) For purposes of this Subsection (1), the applicable court is the:
                      (i) district court of the county in this state where a nonprofit corporation's principal office
                  is located; or
                      (ii) if the nonprofit corporation has no principal office in this state:
                      (A) the district court of the county in which its registered office is located; or
                      (B) if the nonprofit corporation has no registered office, the district court for Salt Lake
                  County.
                      (2) The court that removes a director may bar the director for a period prescribed by the

- 87 -


                  court from:
                      (a) reelection;
                      (b) reappointment; or
                      (c) designation.
                      (3) If voting members commence a proceeding under Subsection (1), the voting members
                  shall make the nonprofit corporation a party defendant.
                      (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 16-6a-1608 .
                      Section 85. Section 16-6a-810 is enacted to read:
                      16-6a-810. Vacancy on board.
                      (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:
                      (a) the voting members, if any, may fill the vacancy;
                      (b) the board of directors may fill the vacancy; or
                      (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.
                      (2) Notwithstanding Subsection (1), unless otherwise provided in the bylaws, if the vacant
                  office was held by a director elected by a voting group of voting members:
                      (a) if one or more of the remaining directors were elected by the same voting group of voting
                  members:
                      (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
                      (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
                      (b) only that voting group is entitled to vote to fill the vacancy if it is filled by the voting
                  members.
                      (3) Notwithstanding Subsection (1) and unless otherwise provided in the bylaws, only the

- 88 -


                  directors elected by the same voting group of directors are entitled to vote to fill the vacancy if:
                      (a) the vacant office was held by a director elected by a voting group of directors; and
                      (b) any persons in that voting group remain as directors.
                      (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.
                      (5) (a) If a vacant office was held by a designated director, as provided in Subsection
                  16-6a-804 (5), the vacancy shall be filled as provided in the bylaws.
                      (b) In the absence of an applicable bylaw provision, the vacancy may not be filled by the
                  board.
                      (6) A vacancy that will occur at a specific later date by reason of a resignation effective at
                  a later date under Subsection 16-6a-807 (2) or otherwise, may be filled before the vacancy occurs, but
                  the new director may not take office until the vacancy occurs.
                      Section 86. Section 16-6a-811 is enacted to read:
                      16-6a-811. Compensation of directors.
                      Unless otherwise provided in the bylaws, the board of directors may authorize and fix the
                  compensation of directors.
                      Section 87. Section 16-6a-812 is enacted to read:
                      16-6a-812. Meetings.
                      (1) The board of directors may hold regular or special meetings in or out of this state.
                      (2) (a) Unless otherwise provided in the bylaws, the board of directors may permit any
                  director 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.
                      (b) A director participating in a meeting by a means permitted under Subsection (1) is
                  considered to be present in person at the meeting.
                      Section 88. Section 16-6a-813 is enacted to read:
                      16-6a-813. Action without meeting.
                      (1) Unless otherwise provided in the bylaws, any action required or permitted by this chapter

- 89 -


                  to be taken at a board of directors' meeting may be taken without a meeting if each and every member
                  of the board in writing either:
                      (a) votes for the action; or
                      (b) (i) (A) votes against the action; or
                      (B) abstains from voting; and
                      (ii) waives the right to demand that action not be taken without a meeting.
                      (2) Action is taken under this section only if the affirmative vote for the action equals or
                  exceeds the minimum number of votes that would be necessary to take the action at a meeting at
                  which all of the directors then in office were present and voted.
                      (3) (a) An action taken pursuant to this section may not be effective unless the nonprofit
                  corporation receives writings:
                      (i) describing the action taken;
                      (ii) otherwise satisfying the requirements of Subsection (1);
                      (iii) signed by all directors; and
                      (iv) not revoked pursuant to Subsection (4).
                      (b) Unless otherwise provided by the bylaws, a writing described in Subsection (3)(a) may
                  be received by the nonprofit corporation by electronically transmitted facsimile or other form of wire
                  or wireless communication providing the nonprofit corporation with a complete copy of the
                  document, including a copy of the signature on the document.
                      (c) A director's right to demand that action not be taken without a meeting shall be
                  considered to have been waived if the nonprofit corporation receives a writing satisfying the
                  requirements of Subsection (1) that has been signed by the director and not revoked pursuant to
                  Subsection (4).
                      (d) Action taken pursuant to this section shall be effective when the last writing necessary
                  to effect the action is received by the nonprofit corporation, unless the writings describing the action
                  taken set forth a different effective date.
                      (4) If the writing is received by the nonprofit corporation before the last writing necessary
                  to effect the action is received by the nonprofit corporation, any director who has signed a writing

- 90 -


                  pursuant to this section may revoke the writing by a writing signed and dated by the director:
                      (a) describing the action; and
                      (b) stating that the director's prior vote with respect to the writing is revoked.
                      (5) Action taken pursuant to this section:
                      (a) has the same effect as action taken at a meeting of directors; and
                      (b) may be described as an action taken at a meeting of directors in any document.
                      Section 89. Section 16-6a-814 is enacted to read:
                      16-6a-814. Notice of meeting.
                      (1) 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.
                      (2) (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.
                      (b) The notice required by Subsection (2)(a) need not describe the purpose of the special
                  meeting unless otherwise required by this chapter or the bylaws.
                      Section 90. Section 16-6a-815 is enacted to read:
                      16-6a-815. Waiver of notice.
                      (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.
                      (b) Except as provided by Subsection (2), the waiver shall:
                      (i) be in writing;
                      (ii) signed by the director entitled to the notice; and
                      (iii) be delivered to the nonprofit corporation for filing with the corporate records.
                      (c) The delivery and filing required by Subsection (1)(b) may not be conditions of the
                  effectiveness of the waiver.
                      (2) A director's attendance at or participation in a meeting waives any required notice to that
                  director of the meeting unless:
                      (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

- 91 -


                  notice or defective notice; and
                      (ii) after objecting, the director does not vote for or assent to action taken at the meeting; or
                      (b) if special notice was required of a particular purpose pursuant to Subsection
                  16-6a-814 (2):
                      (i) the director objects to transacting business with respect to the purpose for which the
                  special notice was required; and
                      (ii) after objecting, the director does not vote for or assent to action taken at the meeting with
                  respect to the purpose.
                      Section 91. Section 16-6a-816 is enacted to read:
                      16-6a-816. Quorum and voting.
                      (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.
                      (2) The bylaws may authorize a quorum of a board of directors to consist of:
                      (a) no fewer than 1/3 of the number of directors fixed if the corporation has a fixed board
                  size; or
                      (b) if a range for the size of the board is established pursuant to Subsection 16-6a-803 (2),
                  no fewer than 1/3 of the number of directors:
                      (i) fixed in accordance with Subsection 16-6a-803 (2); or
                      (ii) in office immediately before the meeting begins, if no number is fixed in accordance with
                  Subsection 16-6a-803 (2).
                      (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.
                      (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:

- 92 -


                      (i) to another director who is present at the meeting; and
                      (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.
                      (b) Except as provided in this Subsection (4) and as permitted by Section 16-6a-813 ,
                  directors may not vote or otherwise act by proxy.
                      (c) Notwithstanding Subsection (4)(a), a director may grant a proxy to a person who is not
                  a director if permitted by the bylaws.
                      (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:
                      (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
                      (ii) after objecting, the director does not vote for or assent to any action taken at the meeting;
                      (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
                      (c) the director causes written notice of the director's dissent or abstention as to any specific
                  action to be received by:
                      (i) the presiding officer of the meeting before adjournment of the meeting; or
                      (ii) the nonprofit corporation promptly after adjournment of the meeting.
                      (6) The right of dissent or abstention pursuant to Subsection (5) as to a specific action is not
                  available to a director who votes in favor of the action taken.
                      Section 92. Section 16-6a-817 is enacted to read:
                      16-6a-817. Committees of the board.
                      (1) Unless otherwise provided in the bylaws and subject to the provisions of Section
                  16-6a-906 , the board of directors may:
                      (a) create one or more committees of the board; and
                      (b) appoint one or more directors to serve on the committees created under Subsection
                  (1)(a).
                      (2) Unless otherwise provided in the bylaws, the creation of a committee of the board and

- 93 -


                  appointment of directors to it shall be approved by the greater of:
                      (a) a majority of all the directors in office when the action is taken; or
                      (b) the number of directors required by the bylaws to take action under Section 16-6a-816 .
                      (3) Unless otherwise provided in the bylaws, a committee of the board and the members of
                  the committee are subject to Sections 16-6a-812 through 16-6a-816 , which govern:
                      (a) meetings;
                      (b) action without meeting;
                      (c) notice;
                      (d) waiver of notice; and
                      (e) quorum and voting requirements.
                      (4) To the extent specified in the bylaws or by the board of directors, each committee of the
                  board shall have the authority of the board of directors under Section 16-6a-801 .
                      (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 16-6a-822 .
                      (6) (a) Subject to Subsection (6)(b), 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:
                      (i) having the members and rules of procedure as the bylaws or board of directors may
                  provide;
                      (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
                      (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.
                      (b) Notwithstanding Subsection (6)(a), if any committee or other body established under
                  Subsection (6)(a) 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.
                      Section 93. Section 16-6a-818 is enacted to read:

- 94 -


                      16-6a-818. Officers.
                      (1) (a) A nonprofit corporation shall have the officers designated:
                      (i) in its bylaws; or
                      (ii) by the board of directors in a manner not inconsistent with the bylaws.
                      (b) An officer shall be:
                      (i) a natural person; and
                      (ii) 18 years of age or older.
                      (c) An officer need not be a director or a member of the nonprofit corporation, unless the
                  bylaws so prescribe.
                      (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.
                      (b) An appointed officer may appoint one or more officers or assistant officers if authorized
                  by:
                      (i) the bylaws; or
                      (ii) the board of directors.
                      (3) The bylaws or the board of directors shall delegate to the secretary or to one or more
                  other persons responsibility for:
                      (a) the preparation and maintenance of:
                      (i) minutes of the directors' and members' meetings; and
                      (ii) other records and information required to be kept by the nonprofit corporation under
                  Section 16-6a-1601 ; and
                      (b) authenticating records of the nonprofit corporation.
                      (4) The same individual may simultaneously hold more than one office in a nonprofit
                  corporation.
                      Section 94. Section 16-6a-819 is enacted to read:
                      16-6a-819. Duties of officers.
                      Each officer shall have the authority and shall perform the duties set forth with respect to the
                  office:

- 95 -


                      (1) in the bylaws; or
                      (2) to the extent not inconsistent with the bylaws, prescribed with respect to the office by:
                      (a) the board of directors; or
                      (b) an officer authorized by the board of directors.
                      Section 95. Section 16-6a-820 is enacted to read:
                      16-6a-820. Resignation and removal of officers.
                      (1) An officer may resign at any time by giving written notice of resignation to the nonprofit
                  corporation.
                      (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.
                      (3) If a resignation is made effective at a later date, the board of directors may:
                      (a) (i) permit the officer to remain in office until the effective date; and
                      (ii) fill the pending vacancy before the effective date if the successor does not take office until
                  the effective date; or
                      (b) (i) remove the officer at any time before the effective date; and
                      (ii) fill the vacancy created by the removal.
                      (4) (a) Unless otherwise provided in the bylaws, the board of directors may remove any
                  officer at any time with or without cause.
                      (b) The bylaws or the board of directors may make provisions for the removal of officers by:
                      (i) other officers; or
                      (ii) the voting members.
                      (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 16-6a-1608 .
                      Section 96. Section 16-6a-821 is enacted to read:
                      16-6a-821. Contract rights with respect to officers.
                      (1) The appointment of an officer does not itself create contract rights.
                      (2) (a) An officer's removal does not affect the officer's contract rights, if any, with the
                  nonprofit corporation.

- 96 -


                      (b) An officer's resignation does not affect the nonprofit corporation's contract rights, if any,
                  with the officer.
                      Section 97. Section 16-6a-822 is enacted to read:
                      16-6a-822. General standards of conduct for directors and officers.
                      (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 (2).
                      (b) An officer with discretionary authority shall discharge the officer's duties under that
                  authority in accordance with Subsection (2).
                      (2) A director or an officer described in Subsection (1) shall discharge the director or officer's
                  duties:
                      (a) in good faith;
                      (b) with the care an ordinarily prudent person in a like position would exercise under similar
                  circumstances; and
                      (c) in a manner the director or officer reasonably believes to be in the best interests of the
                  nonprofit corporation.
                      (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:
                      (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;
                      (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;
                      (c) religious authorities or ministers, priests, rabbis, or other persons:
                      (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
                      (ii) who the director or officer believes to be reliable and competent in the matters presented;
                  or

- 97 -


                      (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.
                      (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 (3)
                  unwarranted.
                      (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.
                      (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:
                      (a) the director or officer has breached or failed to perform the duties of the office as set forth
                  in this section; and
                      (b) the breach or failure to perform constitutes:
                      (i) willful misconduct; or
                      (ii) intentional infliction of harm on:
                      (A) the nonprofit corporation; or
                      (B) the members of the nonprofit corporation.
                      Section 98. Section 16-6a-823 is enacted to read:
                      16-6a-823. Limitation of liability of directors.
                      (1) (a) Except as provided in Subsection (1)(b) and without limiting the generality of
                  Subsection 16-6a-822 (6), 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:
                      (i) so provided in:
                      (A) the articles of incorporation;
                      (B) the bylaws; or

- 98 -


                      (C) a resolution; and
                      (ii) to the extent permitted in Subsection (3).
                      (b) Subsection (1)(a) does not permit a nonprofit corporation from eliminating or limiting the
                  liability of a director for:
                      (i) the amount of a financial benefit received by a director to which the director is not entitled;
                      (ii) an intentional infliction of harm on:
                      (A) the nonprofit corporation; or
                      (B) the members of a nonprofit corporation;
                      (iii) an intentional violation of criminal law; or
                      (iv) a violation of Section 16-6a-824 .
                      (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.
                      (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.
                      (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.
                      Section 99. Section 16-6a-824 is enacted to read:
                      16-6a-824. Liability of directors for unlawful distributions.
                      (1) (a) A director who votes for or assents to a distribution made in violation of Section
                  16-6a-1301 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 16-6a-1301
                  or the articles of incorporation, if it is established that the director's duties were not performed in
                  compliance with Section 16-6a-822 .
                      (b) In any proceeding commenced under this section, a director has all of the defenses
                  ordinarily available to a director.
                      (2) A director held liable under Subsection (1) for an unlawful distribution is entitled to

- 99 -


                  contribution:
                      (a) from every other director who could be held liable under Subsection (1) for the unlawful
                  distribution; and
                      (b) from each member who accepted the distribution knowing the distribution was made in
                  violation of Section 16-6a-1301 or the articles of incorporation.
                      (3) The amount of the contribution from each member under Subsection (2)(b) 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
                  16-6a-1301 or the articles of incorporation.
                      Section 100. Section 16-6a-825 is enacted to read:
                      16-6a-825. Conflicting interest transaction.
                      (1) As used in this section, "conflicting interest transaction" means a contract, transaction,
                  or other financial relationship between a nonprofit corporation and:
                      (a) a director of the nonprofit corporation;
                      (b) a party related to a director; or
                      (c) an entity in which a director of the nonprofit corporation:
                      (i) is a director or officer; or
                      (ii) has a financial interest.
                      (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:
                      (a) rule that the conflicting interest transaction is void or voidable;
                      (b) enjoin or set aside the conflict of interest transaction; or
                      (c) determine that the conflicting interest transaction gives rise to an award of damages or
                  other sanctions.
                      (3) (a) A loan may not be made by a corporation to its directors or officers.
                      (b) A director or officer who assents to or participates in the making of a loan in violation
                  of Subsection (3)(a) shall be liable to the corporation for the amount of the loan until the repayment
                  of the loan.

- 100 -


                      (4) (a) If the conditions of Subsection (4)(b) 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:
                      (i) the conflicting interest transaction involves:
                      (A) a director of the nonprofit corporation;
                      (B) a party related to a director; or
                      (C) an entity in which a director of the nonprofit corporation is a director or officer or has
                  a financial interest;
                      (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
                      (iii) the director's vote is counted for the purpose described in Subsection (4)(a)(ii).
                      (b) Subsection (4)(a) applies if:
                      (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
                      (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;
                      (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
                      (B) the conflicting interest transaction is specifically authorized, approved, or ratified in good
                  faith by a vote of the members entitled to vote thereon; or
                      (iii) the conflicting interest transaction is fair as to the nonprofit corporation.
                      (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.

- 101 -


                      Section 101. Section 16-6a-826 is enacted to read:
                      16-6a-826. Common members, directors, or officers.
                      (1) Two or more nonprofit corporations may have members, directors, or officers that are
                  common to each nonprofit corporation.
                      (2) The fact of common members, directors, or officers in one or more nonprofit                   corporations
                  may not, by itself, create an inference that the nonprofit corporations individually or collectively:
                      (a) are agents or alter egos of one another; or
                      (b) have been formed or availed of, for an improper purpose.
                      (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.
                      Section 102. Section 16-6a-901 is enacted to read:
                 
Part 9. Indemnification

                      16-6a-901. Indemnification definitions.
                      As used in this part:
                      (1) (a) "Director" means an individual who:
                      (i) is or was a director of a nonprofit corporation; or
                      (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:
                      (A) another domestic or foreign corporation;
                      (B) another nonprofit corporation;
                      (C) another person; or
                      (D) an employee benefit plan.
                      (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.
                      (c) "Director" includes, unless the context requires otherwise, the estate or personal

- 102 -


                  representative of a director.
                      (2) "Expenses" includes attorneys' fees.
                      (3) "Liability" means the obligation incurred with respect to a proceeding to pay a judgment,
                  settlement, penalty, or fine, including:
                      (a) an excise tax assessed with respect to an employee benefit plan; or
                      (b) reasonable expenses.
                      (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.
                      (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:
                      (i) another domestic or foreign corporation;
                      (ii) another person; or
                      (iii) an employee benefit plan.
                      (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.
                      (c) Unless the context requires otherwise, "officer," "employee," "fiduciary," and "agent"
                  include the estates or personal representatives of the officer, employee, fiduciary, or agent.
                      (6) (a) "Official capacity" means:
                      (i) when used with respect to a director, the office of director in a corporation; and
                      (ii) when used with respect to a person other than a director, as contemplated in Section
                  16-6a-907 , 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.
                      (b) "Official capacity" does not include service for any:
                      (i) other foreign or domestic corporation;

- 103 -


                      (ii) other person; or
                      (iii) employee benefit plan.
                      (7) "Party" includes an individual who was, is, or is threatened to be made a named defendant
                  or respondent in a proceeding.
                      (8) "Proceeding" means any threatened, pending, or completed action, suit, or proceeding,
                  whether civil, criminal, administrative, or investigative and whether formal or informal.
                      Section 103. Section 16-6a-902 is enacted to read:
                      16-6a-902. Authority to indemnify directors.
                      (1) Except as provided in Subsection (4), 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:
                      (a) the individual's conduct was in good faith;
                      (b) the individual reasonably believed that the individual's conduct was in, or not opposed to,
                  the corporation's best interests; and
                      (c) in the case of any criminal proceeding, the individual had no reasonable cause to believe
                  the individual's conduct was unlawful.
                      (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 (1)(b).
                      (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.
                      (4) A nonprofit corporation may not indemnify a director under this section:
                      (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
                      (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

- 104 -


                  personal benefit.
                      (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.
                      Section 104. Section 16-6a-903 is enacted to read:
                      16-6a-903. Mandatory indemnification of directors.
                      (1) Unless limited by its articles of incorporation, a nonprofit corporation shall indemnify a
                  director described in Subsection (2) against reasonable expenses incurred by the director in
                  connection with the proceeding or claim with respect to which the director has been successful.
                      (2) Subsection (1) applies to a director who was successful, on the merits or otherwise, in
                  the defense of:
                      (a) any proceeding to which the director was a party because the director is or was a director
                  of the nonprofit corporation; or
                      (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.
                      Section 105. Section 16-6a-904 is enacted to read:
                      16-6a-904. Advance of expenses for directors.
                      (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:
                      (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
                  16-6a-902 ;
                      (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
                      (c) a determination is made that the facts then known to those making the determination
                  would not preclude indemnification under this part.
                      (2) The undertaking required by Subsection (1)(b):

- 105 -


                      (a) shall be an unlimited general obligation of the director;
                      (b) need not be secured; and
                      (c) may be accepted without reference to financial ability to make repayment.
                      (3) Determinations and authorizations of payments under this section shall be made in the
                  manner specified in Section 16-6a-906 .
                      Section 106. Section 16-6a-905 is enacted to read:
                      16-6a-905. Court-ordered indemnification of directors.
                      (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:
                      (a) the court conducting the proceeding; or
                      (b) another court of competent jurisdiction.
                      (2) On receipt of an application described in Subsection (1), the court, after giving any notice
                  the court considers necessary, may order indemnification in the following manner:
                      (a) if the court determines that the director is entitled to mandatory indemnification under
                  Section 16-6a-903 , the court shall:
                      (i) order indemnification; and
                      (ii) order the nonprofit corporation to pay the director's reasonable expenses incurred to
                  obtain court-ordered indemnification; and
                      (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 16-6a-902 or was adjudged liable as described in Subsection
                  16-6a-902 (4), 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 16-6a-902 (4) is limited to reasonable expenses incurred.
                      Section 107. Section 16-6a-906 is enacted to read:
                      16-6a-906. Determination and authorization of indemnification of directors.
                      (1) (a) A nonprofit corporation may not indemnify a director under Section 16-6a-902 unless
                  authorized in the specific case after a determination has been made that indemnification of the director

- 106 -


                  is permissible in the circumstances because the director has met the standard of conduct set forth in
                  Section 16-6a-902 .
                      (b) A nonprofit corporation may not advance expenses to a director under Section 16-6a-904
                  unless:
                      (i) authorized in the specific case after the written affirmation and undertaking required by