16-10b-305. Right of action.
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/ut/title-16/chapter-10b/16-10b-305A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Effective 5/13/2014
16-10b-305. Right of action.
(1)Except in a benefit enforcement proceeding, a person may not bring an action or assert a claim against a benefit corporation or its directors or officers with respect to:
(a)failure to pursue or create general public benefit or a specific public benefit set forth in its articles of incorporation; or
(b)violation of an obligation, duty, or standard of conduct under this chapter.
(2)A benefit corporation may not be liable for monetary damages under this chapter for a failure of the benefit corporation to pursue or create general public benefit or a specific public benefit.
(a)A benefit enforcement proceeding may be commenced or maintained only:
(i)directly by the benefit corporation; or
(ii)derivatively by:
(A)a person or group of persons that owns beneficially or of record at least 2% of the total number of shares of a class or series outstanding at the time of the act or omission complained of;
(B)a director;
(C)a person or group of persons that own beneficially or of record 5% or more of the outstanding equity interests in an entity of which the benefit corporation is a subsidiary at the time of the act or omission complained of; or
(D)other persons as specified in the articles of incorporation or bylaws of the benefit corporation.
(b)A benefit corporation may provide in its articles of incorporation a greater degree of ownership by a person or group of persons than those listed under Subsection (3)(a) to bring a derivative action.
(4)For purposes of this section, a person is the beneficial owner of shares or equity interests if the shares or equity interests are held in a voting trust or by a nominee on behalf of the beneficial owner.
Enacted by Chapter 394 , 2014 General Session