16-11-13. Purchase or redemption of shares of disqualified shareholder.
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Effective 7/1/2024
16-11-13. Purchase or redemption of shares of disqualified shareholder.
(a)The articles of incorporation may provide for the purchase or redemption of the shares of any shareholder upon the failure to qualify or disqualification of that shareholder, or the same may be provided in the bylaws or by private agreement.
(b)In the absence of such a provision in the articles of incorporation, the bylaws, or by private agreement, the professional corporation shall purchase the shares of a shareholder who is not qualified to own shares in the corporation within 90 days after the failure to qualify or disqualification of the shareholder.
(2)The price for shares purchased under this section shall be their reasonable fair value as of the date of failure to qualify or disqualification of the shareholder.
(a)If the professional corporation fails to purchase shares as required by Subsection
(1), any disqualified shareholder or personal representative of a disqualified shareholder may bring an action in a court with jurisdiction under Title 78A, Judiciary and Judicial Administration , for the enforcement of this section.
(b)In an action under Subsection (3)(a) , the court may:
(i)award the plaintiff the reasonable fair value of the plaintiff's shares; or
(ii)within the court's jurisdiction, order the liquidation of the professional corporation.
(c)If the plaintiff is successful in the action, the plaintiff is entitled to recover a reasonable attorney's fee and costs.
(4)The professional corporation shall repurchase shares as required by this section without regard to restrictions upon the repurchase of shares provided by Title 16, Chapter 10a, Utah Revised Business Corporation Act .
Amended by Chapter 401 , 2023 General Session