16-6a-606. Transfers.

245 words·~1 min read·/ut/title-16/chapter-6a/16-6a-606

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

Effective 5/9/2017

(1)Except as provided in Subsection

(3), and unless otherwise provided in the articles of incorporation or the bylaws, a member of a nonprofit corporation may not transfer:

(a)a membership; or

(b)any right arising from a membership.

(2)Except as provided in Subsection

(3), where transfer rights have been provided in the articles of incorporation or the bylaws of a nonprofit corporation, a restriction on transfer rights may not be binding with respect to a member holding a membership issued before the adoption of the restriction, unless the restriction is approved by the affected member.

(a)For a water company, unless otherwise provided by the articles of incorporation or bylaws, ownership of shares is transferrable.

(b)Any restriction on the transfer of ownership under Subsection (3)(a) :

(i)shall be reasonable;

(ii)shall be adopted in good faith and for a legitimate purpose;

(iii)shall be adopted in the best interest of the water company and its shareholders; and

(iv)may not discriminate against any individual shareholder or class of shareholders, but in a company where there are classes or divisions of stock, restrictions may differ between the classes or divisions.

(c)Nothing in this section is intended to alter any right or remedy a shareholder may have under Sections 16-6a-612 , 16-6a-808 , 16-6a-809 , 16-6a-822 , 16-6a-824 , and 16-6a-825 , or any other applicable law.

Amended by Chapter 358 , 2017 General Session