10-846. Enforcement proceedings; liability for monetary damages; definitions

293 words·~1 min read·/az/title-10/10-846

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

A. Except as provided in subsection B of this section, a person may not bring an action or assert a claim against a corporation or its directors or officers with respect to either of the following:

1. The decision or failure of the corporation to pursue or create a nonmonetary purpose, whether or not the purpose is set forth in its articles of incorporation.

2. A director's or officer's violation of an obligation, duty or standard of conduct to consider, or the failure to consider, the effect of an act, omission or decision by a corporation on a nonmonetary purpose, whether or not the purpose is set forth in its articles of incorporation.

B. An enforcement proceeding against a corporation or its directors or officers with respect to subsection A of this section may be commenced or maintained only as follows:

1. Directly by the corporation.

2. Derivatively pursuant to chapter 7, article 4 of this title by a shareholder of the corporation.

3. By other persons as specified in the articles of incorporation or bylaws of the corporation.

C. A corporation and its directors and officers are not liable for monetary damages resulting from any decision or failure of the corporation to pursue or create any nonmonetary purpose, whether or not the purpose is set forth in its articles of incorporation.

D. For the purposes of this section:

1. "Enforcement proceeding" means any claim or action for a violation of any obligation, duty or standard of conduct under this chapter.

2. "Nonmonetary purpose" means any purpose other than to benefit the economic or financial interests of the shareholders of the corporation, including any purpose to benefit any interest or factor that is included in section 10-830, subsection D, paragraph 2, as applicable.