1     
CORPORATE ELECTRONIC RECORDS AMENDMENTS

2     
2020 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Jeffrey D. Stenquist

5     
Senate Sponsor: ____________

6     

7     LONG TITLE
8     General Description:
9               This bill amends provisions in Title 16, Chapter 10a, Utah Revised Business
10     Corporation Act, related to corporate records.
11     Highlighted Provisions:
12          This bill:
13          ▸     defines terms;
14          ▸     authorizes a corporation to:
15               •     use an electronic network to create and maintain corporate records;
16               •     use a data address to identify a corporation's shareholder; and
17               •     accept a shareholder vote if signed by a network signature that corresponds to a
18     data address;
19          ▸     provides requirements for the use of electronic networks; and
20          ▸     makes technical and conforming changes.
21     Money Appropriated in this Bill:
22          None
23     Other Special Clauses:
24          None
25     Utah Code Sections Affected:
26     AMENDS:
27          16-10a-102, as last amended by Laws of Utah 2008, Chapter 249

28          16-10a-720, as last amended by Laws of Utah 2010, Chapter 378
29          16-10a-724, as enacted by Laws of Utah 1992, Chapter 277
30          16-10a-730, as last amended by Laws of Utah 2010, Chapter 378
31          16-10a-1601, as enacted by Laws of Utah 1992, Chapter 277
32          16-10a-1602, as enacted by Laws of Utah 1992, Chapter 277
33          42-2-6.6, as last amended by Laws of Utah 2015, Chapter 240
34     

35     Be it enacted by the Legislature of the state of Utah:
36          Section 1. Section 16-10a-102 is amended to read:
37          16-10a-102. Definitions.
38          As used in this chapter:
39          (1) (a) "Address" means a location where mail can be delivered by the United States
40     Postal Service.
41          (b) "Address" includes:
42          (i) a post office box number;
43          (ii) a rural free delivery route number; and
44          (iii) a street name and number.
45          (2) "Affiliate" means a person that directly or indirectly through one or more
46     intermediaries controls, or is controlled by, or is under common control with, the person
47     specified.
48          (3) "Assumed corporate name" means a name assumed for use in this state by a foreign
49     corporation [pursuant to] under Section 16-10a-1506 because [its] the foreign corporation's
50     corporate name is not available for use in this state.
51          (4) "Articles of incorporation" include:
52          (a) amended and restated articles of incorporation;
53          (b) articles of merger; and
54          (c) a document of a similar import to those described in Subsections (4)(a) and (b).
55          (5) "Authorized shares" means the shares of all classes a domestic or foreign
56     corporation is authorized to issue.
57          (6) "Bylaws" includes amended bylaws and restated bylaws.
58          (7) "Cash" and "money" are used interchangeably in this chapter and mean:

59          (a) legal tender;
60          (b) a negotiable instrument; and
61          (c) a cash equivalent readily convertible into legal tender.
62          (8) "Conspicuous" means so written that a reasonable person against whom the writing
63     is to operate should have noticed [it] the writing, including printing or typing in:
64          (a) italics;
65          (b) boldface;
66          (c) contrasting color;
67          (d) capitals; or
68          (e) underlining.
69          (9) "Control" or a "controlling interest" means the direct or indirect possession of the
70     power to direct or cause the direction of the management and policies of an entity, whether
71     through the ownership of voting shares, by contract, or otherwise.
72          (10) "Corporate name" means:
73          (a) the name of a domestic corporation or a domestic nonprofit corporation as stated in
74     [its] the corporation's articles of incorporation; or
75          (b) the name of a foreign corporation or a foreign nonprofit corporation as stated in
76     [its] the corporation's articles of incorporation or document of similar import.
77          (11) "Corporation" or "domestic corporation" means a corporation for profit that:
78          (a) is not a foreign corporation; and
79          (b) is incorporated under or subject to this chapter.
80          (12) "Data address" means a string of alphanumeric characters on a distributed
81     electronic network or database that may be accessed to facilitate or record a transaction on the
82     distributed electronic network or database only by knowledge or possession of a private key.
83          [(12)] (13) "Deliver" includes delivery by mail or another means of transmission
84     authorized by Section 16-10a-103, except that delivery to the division means actual receipt by
85     the division.
86          [(13)] (14) (a) "Distribution" means the following by a corporation to or for the benefit
87     of [its] the corporation's shareholders in respect of any of the corporation's shares:
88          (i) a direct or indirect transfer of money or other property, other than a corporation's
89     own shares; or

90          (ii) incurrence of indebtedness by the corporation.
91          (b) A distribution may be in the form of:
92          (i) a declaration or payment of a dividend;
93          (ii) a purchase, redemption, or other acquisition of shares;
94          (iii) distribution of indebtedness; or
95          (iv) another form.
96          [(14)] (15) "Division" means the Division of Corporations and Commercial Code.
97          [(15)] (16) "Effective date," when referring to a document filed by the division, means
98     the time and date determined in accordance with Section 16-10a-123.
99          [(16)] (17) "Effective date of notice" means the date notice is effective as provided in
100     Section 16-10a-103.
101          [(17)] (18) "Electronic transmission" or "electronically transmitted" means a process of
102     communication not directly involving the physical transfer of paper, including a process of
103     communication that uses a distributed electronic network or database, that is suitable for the
104     receipt, retention, retrieval, and reproduction of information by the recipient, whether by
105     e-mail, facsimile, or otherwise.
106          [(18)] (19) "Employee" includes an officer but not a director, unless the director
107     accepts a duty that makes that director also an employee.
108          [(19)] (20) "Entity" includes:
109          (a) a domestic and foreign corporation;
110          (b) a nonprofit corporation;
111          (c) a limited liability company;
112          (d) a profit or nonprofit unincorporated association;
113          (e) a business trust;
114          (f) an estate;
115          (g) a partnership;
116          (h) a trust;
117          (i) two or more persons having a joint or common economic interest;
118          (j) a state;
119          (k) the United States; and
120          (l) a foreign government.

121          [(20)] (21) "Foreign corporation" means a corporation for profit incorporated under a
122     law other than the law of this state.
123          [(21)] (22) "Governmental subdivision" means:
124          (a) county;
125          (b) municipality; or
126          (c) another type of governmental subdivision authorized by the laws of this state.
127           (23) "Identity" means the name of a shareholder or the data address for which the
128     shareholder has knowledge or possession of the private key uniquely associated with the data
129     address.
130          [(22)] (24) "Individual" means:
131          (a) a natural person;
132          (b) the estate of an incompetent individual; or
133          (c) the estate of a deceased individual.
134          [(23)] (25) "Mail," "mailed," or "mailing" means deposit, deposited, or depositing in
135     the United States mail, properly addressed, first class postage prepaid, and includes registered
136     or certified mail for which the proper fee is paid.
137           (26) "Network signature" means a string of alphanumeric characters that, when
138     broadcast by a shareholder to the data address's corresponding distributed electronic network or
139     database, provides reasonable assurances to a corporation that the shareholder has knowledge
140     or possession of the private key uniquely associated with the data address.
141          [(24)] (27) "Notice" [is as provided] means the same as that term is defined in Section
142     16-10a-103.
143          [(25)] (28) "Principal office" means the office, in or out of this state, designated by a
144     domestic or foreign corporation as [its] the corporation's principal office in the most recent
145     document on file with the division providing the information, including:
146          (a) an annual report;
147          (b) an application for a certificate of authority; or
148          (c) a notice of change of principal office.
149          [(26)] (29) "Proceeding" includes:
150          (a) a civil suit;
151          (b) arbitration or mediation; and

152          (c) a criminal, administrative, or investigatory action.
153          [(27)] (30) "Qualified shares" means, with respect to a director's conflicting interest
154     transaction [pursuant to] under Section 16-10a-853, one or more shares entitled to vote on the
155     transaction, except a share:
156          (a) that, to the knowledge, before the vote, of the secretary, other officer, or agent of
157     the corporation authorized to tabulate votes, is beneficially owned; or
158          (b) the voting of which is controlled, by:
159          (i) a director who has a conflicting interest respecting the transaction; or
160          (ii) a related person of that director[; or].
161          [(iii) a person referred to in Subsections (27)(b)(i) and (ii).]
162          [(28)] (31) "Receive," when used in reference to receipt of a writing or other document
163     by a domestic or foreign corporation, means the writing or other document is actually received
164     by:
165          (a) the corporation at [its] the corporation's:
166          (i) registered office in this state; or
167          (ii) principal office;
168          (b) the secretary of the corporation, wherever the secretary is found; or
169          (c) another person authorized by the bylaws or the board of directors to receive the
170     writing or other document, wherever that person is found.
171          [(29)] (32) (a) "Record date" means the date established under Part 6, Shares and
172     Distributions, or Part 7, Shareholders, on which a corporation determines the identity of [its]
173     the corporation's shareholders.
174          (b) The determination under Subsection [(29)] (32)(a) shall be made as of the close of
175     business on the record date unless another time for doing so is specified when the record date is
176     fixed.
177          (33) "Record of shareholders" means a record administered by or on behalf of a
178     corporation that records the identity of:
179          (a) each of the corporation's shareholders; and
180          (b) the number and class of shares held by each shareholder in accordance with Section
181     16-10a-1601.
182          [(30)] (34) "Registered office" means the office within this state designated by a

183     domestic or foreign corporation as [its] the corporation's registered office in the most recent
184     document on file with the division providing that information, including:
185          (a) articles of incorporation;
186          (b) an application for a certificate of authority; or
187          (c) a notice of change of registered office.
188          [(31)] (35) "Related person" of a director means:
189          (a) the spouse of the director;
190          (b) a child, grandchild, sibling, or parent of the director;
191          (c) the spouse of a child, grandchild, sibling, or parent of the director;
192          (d) an individual having the same home as the director;
193          (e) a trust or estate of which the director or any other individual specified in this
194     Subsection [(31)] (35) is a substantial beneficiary; or
195          (f) a trust, estate, incompetent, conservatee, or minor of which the director is a
196     fiduciary.
197          [(32)] (36) "Secretary" means the corporate officer to whom the bylaws or the board of
198     directors delegates responsibility under Subsection 16-10a-830(3) for:
199          (a) the preparation and maintenance of:
200          (i) minutes of the meetings of the board of directors and of the shareholders; and
201          (ii) the other records and information required to be kept by the corporation by Section
202     16-10a-830; and
203          (b) authenticating records of the corporation.
204          [(33)] (37) " Share" means the unit into which the proprietary interests in a corporation
205     are divided.
206          [(34)] (38) (a) "Shareholder" means:
207          (i) the person in whose name a share is registered in the records of a corporation; [or]
208          (ii) the beneficial owner of a share to the extent recognized [pursuant to] under Section
209     16-10a-723[.]; or
210           (iii) the owner of a private key that is uniquely associated with a data address that
211     facilitates or records the sending and receiving of shares.
212          (b) For purposes of this chapter:
213          (i) the following, identified as a shareholder in a corporation's current record of

214     shareholders, constitute one shareholder:
215          (A) (I) three or fewer coowners; or
216          (II) in the case of more than three coowners, each coowner in excess of the first three is
217     counted as a separate shareholder;
218          (B) a corporation, limited liability company, partnership, trust, estate, or other entity;
219     and
220          (C) the trustees, guardians, custodians, or other fiduciaries of a single trust, estate, or
221     account;
222          (ii) shareholdings registered in substantially similar names constitute one shareholder if
223     it is reasonable to believe that the names represent the same person; and
224          (iii) if the record of a shareholder is not maintained in accordance with accepted
225     practice, an additional person who would be identified as an owner on that record if [it] the
226     record had been maintained in accordance with accepted practice shall be included as a holder
227     of record.
228          [(35)] (39) "Subscriber" means a person who subscribes for shares in a corporation,
229     whether before or after incorporation.
230          [(36)] (40) "Tribe" means a tribe, band, nation, pueblo, or other organized group or
231     community of Indians, including an Alaska Native village, that is legally recognized as eligible
232     for and is consistent with a special program, service, or entitlement provided by the United
233     States to Indians because of their status as Indians.
234          [(37)] (41) "Tribal corporation" means a corporation:
235          (a) incorporated under the law of a tribe; and
236          (b) that is at least 51% owned or controlled by the tribe.
237          [(38)] (42) (a) "Voting group" means all shares of one or more classes or series that
238     under the articles of incorporation or this chapter are entitled to vote and be counted together
239     collectively on a matter at a meeting of shareholders.
240          (b) All shares entitled by the articles of incorporation or this chapter to vote generally
241     on the matter are for that purpose a single voting group.
242          Section 2. Section 16-10a-720 is amended to read:
243          16-10a-720. Shareholders' list for meeting.
244          (1) (a) After fixing a record date for a shareholders' meeting, a corporation shall

245     prepare [a] an alphabetical or numerical list of the [names] identities of all [its] the
246     corporation's shareholders who are entitled to be given notice of the meeting. [The list shall be]
247           (b) The corporation shall ensure that the list:
248          (i) is arranged by voting group, and within each voting group by class or series of
249     shares[. The list shall be alphabetical within each class or series and shall show the address of,
250     and the number of shares held by, each shareholder.]; and
251           (ii) shows the number of shares held by each shareholder .
252          (2) (a) The shareholders' list shall be available for inspection by any shareholder,
253     beginning on the earlier of 10 days before the meeting for which the list was prepared or two
254     business days after notice of the meeting is given and continuing through the meeting and any
255     meeting adjournments, at the corporation's principal office or at a place identified in the
256     meeting notice in the city where the meeting will be held.
257          (b) A shareholder or a shareholder's agent or attorney is entitled on written demand to
258     the corporation and, subject to the requirements of Subsections 16-10a-1602(3) and (7), and the
259     provisions of Subsections 16-10a-1603(2) and (3), to inspect and copy the list, during regular
260     business hours and during the period [it] the list is available for inspection.
261          (3) The corporation shall make the shareholders' list available at the meeting, and any
262     shareholder, or any shareholder's agent or attorney is entitled to inspect the list at any time
263     during the meeting or any adjournment, for any purposes germane to the meeting.
264          (4) If the corporation refuses to allow a shareholder, or the shareholder's agent or
265     attorney, to inspect the shareholders' list before or at the meeting, or to copy the list as
266     permitted by Subsection (2), the district court of the county where a corporation's principal
267     office is located, or, if [it] the corporation has none in this state, the district court for Salt Lake
268     County, on application of the shareholder, may summarily order the inspection or copying at
269     the corporation's expense and may postpone the meeting for which the list was prepared until
270     the inspection or copying is complete.
271          (5) If a court orders inspection or copying of the shareholders' list [pursuant to] under
272     Subsection (4), unless the corporation proves that [it] the corporation refused inspection or
273     copying of the list in good faith because [it] the corporation had a reasonable basis for doubt
274     about the right of the shareholder or the shareholder's agent or attorney to inspect or copy the
275     shareholders' list:

276          (a) the court shall also order the corporation to pay the shareholder's costs, including
277     reasonable counsel fees, incurred to obtain the order;
278          (b) the court may order the corporation to pay the shareholder for any damages
279     incurred; and
280          (c) the court may grant the shareholder any other remedy afforded by law.
281          (6) If a court orders inspection or copying of the shareholders' list [pursuant to] under
282     Subsection (4), the court may impose reasonable restrictions on the use or distribution of the
283     list by the shareholder.
284          (7) Refusal or failure to prepare or make available the shareholders' list does not affect
285     the validity of action taken at the meeting.
286          Section 3. Section 16-10a-724 is amended to read:
287          16-10a-724. Corporation's acceptance of votes.
288          (1) If the name or network signature signed on a vote, consent, waiver, proxy
289     appointment, or proxy appointment revocation corresponds to the name or data address of a
290     shareholder, the corporation, if acting in good faith, is entitled to accept the vote, consent,
291     waiver, proxy appointment, or proxy appointment revocation and give it effect as the act of the
292     shareholder.
293          (2) If the name or network signature signed on a vote, consent, waiver, proxy
294     appointment, or proxy appointment revocation does not correspond to the name or data address
295     of a shareholder, the corporation, if acting in good faith, is nevertheless entitled to accept the
296     vote, consent, waiver, proxy appointment, or proxy appointment revocation and give it effect as
297     the act of the shareholder if:
298          (a) the shareholder is an entity and the name or network signature signed purports to be
299     that of an officer or agent of the entity;
300          (b) the name signed or network signature purports to be that of an administrator,
301     executor, guardian, or conservator representing the shareholder and, if the corporation requests,
302     evidence of fiduciary status acceptable to the corporation has been presented with respect to the
303     vote, consent, waiver, proxy appointment, or proxy appointment revocation;
304          (c) the name or network signature signed purports to be that of a receiver or trustee in
305     bankruptcy of the shareholder and, if the corporation requests, evidence of this status
306     acceptable to the corporation has been presented with respect to the vote, consent, waiver,

307     proxy appointment, or proxy appointment revocation;
308          (d) the name or network signature signed purports to be that of a pledgee, beneficial
309     owner, or attorney-in-fact of the shareholder and, if the corporation requests, evidence
310     acceptable to the corporation of the signatory's authority to sign for the shareholder has been
311     presented with respect to the vote, consent, waiver, proxy appointment, or proxy appointment
312     revocation;
313          (e) two or more persons are the shareholder as cotenants or fiduciaries and the name or
314     network signature signed purports to be the name or network signature of at least one of the
315     cotenants or fiduciaries and the person signing appears to be acting on behalf of all cotenants or
316     fiduciaries; or
317          (f) the acceptance of the vote, consent, waiver, proxy appointment, or proxy
318     appointment revocation is otherwise proper under rules established by the corporation that are
319     not inconsistent with the provisions of this section.
320          (3) If shares are registered in the names or network signature of two or more persons,
321     whether fiduciaries, members of a partnership, cotenants, husband and wife as community
322     property, voting trustees, persons entitled to vote under a shareholder voting agreement or
323     otherwise, or if two or more persons, including proxyholders, have the same fiduciary
324     relationship respecting the same shares, unless the secretary of the corporation or other officer
325     or agent entitled to tabulate votes is given written notice to the contrary and is furnished with a
326     copy of the instrument or order appointing them or creating the relationship wherein it is so
327     provided, their acts with respect to voting shall have the following effect:
328          (a) if only one votes, the act binds all;
329          (b) if more than one vote, the act of the majority so voting binds all;
330          (c) if more than one vote, but the vote is evenly split on any particular matter, each
331     faction may vote the securities in question proportionately; or
332          (d) if the instrument so filed or the registration of the shares shows that any tenancy is
333     held in unequal interests, a majority or even split for the purpose of this section shall be a
334     majority or even split in interest.
335          (4) The corporation is entitled to reject a vote, consent, waiver, proxy appointment, or
336     proxy appointment revocation if the secretary or other officer or agent authorized to tabulate
337     votes, acting in good faith, has reasonable basis for doubt about the validity of the signature on

338     it or about the signatory's authority to sign for the shareholder.
339          (5) The corporation and [its] the corporation's officer or agent who accepts or rejects a
340     vote, consent, waiver, proxy appointment, or proxy appointment revocation in good faith and in
341     accordance with the standards of this section are not liable in damages to the shareholder for
342     the consequences of the acceptance or rejection.
343          (6) Corporate action based on the acceptance or rejection of a vote, consent, waiver,
344     proxy appointment, or proxy appointment revocation under this section is valid unless a court
345     of competent jurisdiction determines otherwise.
346          Section 4. Section 16-10a-730 is amended to read:
347          16-10a-730. Voting trusts.
348          (1) (a) One or more shareholders may create a voting trust, conferring on a trustee the
349     right to vote or otherwise act for [them] the shareholders, by:
350          (i) signing an agreement setting out the provisions of the trust[,]; and
351          (ii) transferring to the trustee the shares with respect to which the trustee is to act.
352          (b) When a voting trust agreement is signed, the trustee shall prepare a list , subject to
353     Subsection (1)(d), of the [names and addresses] identities of all owners of beneficial interests
354     in the trust, together with the number and class of shares each transferred to the trust, and
355     promptly [cause] deliver to the corporation [to receive] copies of the list and agreement.
356     [Thereafter]
357          (c) Upon creation of a voting trust, the trustee shall [cause] deliver to the corporation
358     [to receive] changes to the list described in Subsection (1)(b) promptly as they occur and
359     amendments to the agreement promptly as they are made.
360          (d) The corporation shall ensure that the list described in Subsection (1)(b) shows:
361          (i) each shareholder's physical mailing address, if the identity of a shareholder on the
362     list consists of the shareholder's name; and
363          (ii) each shareholder's authorized means of receipt of electronic transmissions, if the
364     identity of a shareholder on the list consists of the shareholder's data address.
365          (2) (a) A voting trust becomes effective [on the date] the day on which the first shares
366     subject to the trust are registered in the trustee's name.
367          (b) A voting trust is valid for the period provided in the agreement, but not more than
368     10 years after [its effective date] the day on which the trust becomes effective under Subsection

369     (2)(a), unless extended under Subsection (3).
370          (3) (a) All or some of the parties to a voting trust may extend the voting trust for
371     additional terms of not more than 10 years each by signing an extension agreement and
372     obtaining the trustee's written consent to the extension.
373          (b) An extension is valid for not more than 10 years from the [date] day on which the
374     first shareholder signs the extension agreement.
375          (c) The trustee shall deliver copies of the extension agreement and list of beneficial
376     owners to the corporation's principal office.
377          (d) An extension agreement binds only those parties signing [it] the extension
378     agreement.
379          Section 5. Section 16-10a-1601 is amended to read:
380          16-10a-1601. Corporate records.
381          (1) A corporation shall keep as permanent records:
382          (a) minutes of all meetings of [its] the corporation's shareholders and board of
383     directors[,];
384          (b) a record of all actions taken by the shareholders or board of directors without a
385     meeting[, and];
386          (c) a record of all actions taken on behalf of the corporation by a committee of the
387     board of directors in place of the board of directors[,]; and
388          (d) a record of all waivers of notices of:
389          (i) meetings of shareholders[,];
390          (ii) meetings of the board of directors[,]; or
391          (iii) or any meetings of committees of the board of directors.
392          (2) A corporation shall maintain appropriate accounting records.
393          (3) A corporation or [its] the corporation's agent shall maintain a record of the [names
394     and addresses of its] identities of the corporation's shareholders, in a form that permits
395     preparation of a list of shareholders:
396          (a) that is arranged by voting group and within each voting group by class or series of
397     shares;
398          (b) that is in alphabetical or numerical order within each class or series; and
399          (c) that shows the address of and the number of shares of each class and series held by

400     each shareholder.
401          (4) A corporation shall ensure that the list described in Subsection (3) shows:
402          (a) each shareholder's physical mailing address, if the identity of the shareholder on the
403     list consists of the shareholder's name; and
404          (b) each shareholder's authorized means of receipt for electronic transmissions, if the
405     identity of a shareholder on the list consists of the shareholder's data address.
406          [(4)] (5) A corporation shall maintain [its] the corporation's records in the form of any
407     information storage device or any distributed electronic networks or databases, provided that
408     the corporation keeps the records in written form or in any form capable of conversion into
409     written form within a reasonable time.
410          [(5)] (6) A corporation shall keep a copy of the following records at [its] the
411     corporation's principal office:
412          (a) [its] the corporation's articles of incorporation currently in effect;
413          (b) [its] the corporation's bylaws currently in effect;
414          (c) the minutes of all shareholders' meetings, and records of all action taken by
415     shareholders without a meeting, for the past three years;
416          (d) all written communications within the past three years to shareholders as a group or
417     to the holders of any class or series of shares as a group;
418          (e) a list of the names and business addresses of [its] the corporation's current officers
419     and directors;
420          (f) [its] the corporation's most recent annual report delivered to the division under
421     Section 16-10a-1607; and
422          (g) all financial statements prepared for periods ending during the last three years that a
423     shareholder could request under Section 16-10a-1605.
424          Section 6. Section 16-10a-1602 is amended to read:
425          16-10a-1602. Inspection of records by shareholders and directors.
426          (1) A shareholder or director of a corporation is entitled to inspect and copy, during
427     regular business hours at the corporation's principal office, any of the records of the corporation
428     described in Subsection 16-10a-1601[(5)](6) if [he] the shareholder or director gives the
429     corporation written notice of the demand at least five business days before the date on which
430     [he] the shareholder or director wishes to inspect and copy.

431          (2) In addition to the rights set forth in Subsection (1), a shareholder or director of a
432     corporation is entitled to inspect and copy, during regular business hours at a reasonable
433     location specified by the corporation, any of the following records of the corporation if the
434     shareholder or director meets the requirements of Subsection (3) and gives the corporation
435     written notice of the demand at least five business days before the date on which [he] the
436     shareholder or director wishes to inspect and copy:
437          (a) excerpts from:
438          (i) minutes of any meeting, records of any action taken by the board of directors, or by
439     a committee of the board of directors while acting on behalf of the corporation in place of the
440     board of directors;
441          (ii) minutes of any meeting of the shareholders;
442          (iii) records of any action taken by the shareholders without a meeting; and
443          (iv) waivers of notices of any meeting of the shareholders, of any meeting of the board
444     of directors, or of any meeting of a committee of the board of directors;
445          (b) accounting records of the corporation; and
446          (c) the record of shareholders described in Subsection 16-10a-1601(3).
447          (3) A shareholder or director is entitled to inspect and copy records as described in
448     Subsection (2) only if:
449          (a) the demand is made in good faith and for a proper purpose;
450          (b) the shareholder or director describes with reasonable particularity [his] the
451     shareholder's or director's purpose and the records [he] the shareholder or director desires to
452     inspect; and
453          (c) the records are directly connected with [his] the shareholder's or director's purpose.
454          (4) For purposes of this section:
455          (a) "proper purpose" means a purpose reasonably related to the demanding
456     shareholder's or director's interest as a shareholder or director; and
457          (b) "shareholder" includes a beneficial owner whose shares are held in a voting trust
458     and any other beneficial owner who establishes beneficial ownership.
459          (5) The right of inspection granted by this section may not be abolished by a
460     corporation's articles of incorporation or bylaws.
461          (6) This section does not affect:

462          (a) the right of a shareholder or director to inspect records under Section 16-10a-720
463     or, if the shareholder or director is in litigation with the corporation, to the same extent as any
464     other litigant; or
465          (b) the power of a court, independent of this chapter, to compel the production of
466     corporate records for examination.
467          (7) A shareholder or director may not use any information obtained through the
468     inspection or copying of records permitted by Subsection (2) for any purposes other than those
469     set forth in a demand made under Subsection (3).
470          Section 7. Section 42-2-6.6 is amended to read:
471          42-2-6.6. Assumed name.
472          (1) The assumed name:
473          (a) may not contain any word or phrase that indicates or implies that the business is
474     organized for any purpose other than one or more of the purposes contained in its application;
475          (b) shall be distinguishable from any registered name or trademark of record in the
476     offices of the Division of Corporations and Commercial Code, as defined in Subsection
477     16-10a-401(5), except as authorized by the Division of Corporations and Commercial Code
478     pursuant to Subsection (2);
479          (c) without the written consent of the United States Olympic Committee, may not
480     contain the words:
481          (i) "Olympic";
482          (ii) "Olympiad"; or
483          (iii) "Citius Altius Fortius";
484          (d) without the written consent of the Division of Consumer Protection issued in
485     accordance with Section 13-34-114, may not contain the words:
486          (i) "university";
487          (ii) "college"; or
488          (iii) "institute" or "institution"; and
489          (e) an assumed name authorized for use in this state on or after May 1, 2000, may not
490     contain the words:
491          (i) "incorporated";
492          (ii) "inc."; or

493          (iii) a variation of "incorporated" or "inc."
494          (2) Notwithstanding Subsection (1)(e), an assumed name may contain a word listed in
495     Subsection (1)(e) if the Division of Corporations and Commercial Code authorizes the use of
496     the name by a corporation as defined in:
497          (a) Subsection 16-6a-102(26);
498          (b) Subsection 16-6a-102(35);
499          (c) Subsection 16-10a-102(11); or
500          (d) Subsection 16-10a-102[(20)](21).
501          (3) The Division of Corporations and Commercial Code shall authorize the use of the
502     name applied for if:
503          (a) the name is distinguishable from one or more of the names and trademarks that are
504     on the division's records; or
505          (b) the applicant delivers to the division a certified copy of the final judgment of a
506     court of competent jurisdiction establishing the applicant's right to use the name applied for in
507     this state.
508          (4) The assumed name, for purposes of recordation, shall be either translated into
509     English or transliterated into letters of the English alphabet if it is not in English.
510          (5) The Division of Corporations and Commercial Code may not approve an
511     application for an assumed name to any person violating this section.
512          (6) The director of the Division of Corporations and Commercial Code shall have the
513     power and authority reasonably necessary to interpret and efficiently administer this section
514     and to perform the duties imposed on the division by this section.
515          (7) A name that implies by any word in the name that it is an agency of the state or of
516     any of its political subdivisions, if it is not actually such a legally established agency, may not
517     be approved for filing by the Division of Corporations and Commercial Code.
518          (8) Section 16-10a-403 applies to this chapter.
519          (9) (a) The requirements of Subsection (1)(d) do not apply to a person who filed a
520     certificate of assumed and of true name with the Division of Corporations and Commercial
521     Code on or before May 4, 1998, until December 31, 1998.
522          (b) On or after January 1, 1999, any person who carries on, conducts, or transacts
523     business in this state under an assumed name shall comply with the requirements of Subsection

524     (1)(d).