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S.B. 179 Enrolled

             1     

UTAH REVISED BUSINESS CORPORATION
             2      ACT AMENDMENTS
             3      2010 GENERAL SESSION
             4      STATE OF UTAH
             5      Chief Sponsor: Daniel R. Liljenquist
             6      House Sponsor: Wayne A. Harper
             7     
             8      LONG TITLE
             9      General Description:
             10          This bill modifies the Utah Revised Business Corporation Act to address the liability of
             11      shareholders of a corporation.
             12      Highlighted Provisions:
             13          This bill:
             14          .    addresses the liability of shareholders; and
             15          .    makes technical amendments.
             16      Monies Appropriated in this Bill:
             17          None
             18      Other Special Clauses:
             19          None
             20      Utah Code Sections Affected:
             21      AMENDS:
             22          16-10a-622, as enacted by Laws of Utah 1992, Chapter 277
             23     
             24      Be it enacted by the Legislature of the state of Utah:
             25          Section 1. Section 16-10a-622 is amended to read:
             26           16-10a-622. Liability of shareholders.
             27          (1) A purchaser from a corporation of shares issued by the corporation is not liable to
             28      the corporation or its creditors with respect to the shares except to pay or provide the
             29      consideration for which the issuance of the shares was authorized under Section 16-10a-621 or

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             30      specified in the subscription agreement under Section 16-10a-620 .
             31          (2) Unless otherwise provided in the articles of incorporation, a shareholder or
             32      subscriber for shares of a corporation is not personally liable for the acts or debts of the
             33      corporation solely by reason of the ownership of the corporation's shares.
             34          (3) (a) A shareholder of a corporation, when acting solely in the capacity of a
             35      shareholder, has no fiduciary duty or other similar duty to any other shareholder of the
             36      corporation, including not having a duty of care, loyalty, or utmost good faith.
             37          (b) This Subsection (3) applies to a corporation governed by this chapter, including a
             38      public corporation or a closely-held corporation.
             39          (c) This Subsection (3) does not affect any of the following:
             40          (i) liability of a shareholder who receives an improper dividend or distribution, as set
             41      forth in Section 16-10a-842 ;
             42          (ii) liability for an act before incorporation, as set forth in Section 16-10a-204 ;
             43          (iii) liability of a director or officer of a corporation for breach of a fiduciary duty or
             44      other similar duty to shareholders solely in the capacity as a director or officer, regardless of
             45      whether the director or officer is a shareholder of the corporation; or
             46          (iv) liability of a director or officer of a corporation for an act, breach, or failure for
             47      which liability is set forth in:
             48          (A) Section 16-10a-840 ;
             49          (B) Section 16-10a-841 ; or
             50          (C) Section 16-10a-842 .

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