Montana Code 35-2-423. Removal of directors by judicial proceeding
35-2-423. Removal of directors by judicial proceeding. (1) The district court for the judicial district of the county where a corporation‘s principal office is located or, if the principal office is not located in the state, Lewis and Clark County may remove any director of the corporation from office in a proceeding commenced by the corporation, by its members holding at least 10% of the voting power of any class, or by the attorney general in the case of a public benefit corporation if the court finds that:
Terms Used In Montana Code 35-2-423
- articles: include amended and restated articles of incorporation and articles of merger. See Montana Code 35-2-114
- Bylaws: means the code, codes, or rules, other than the articles, adopted pursuant to this chapter for the regulation or management of the affairs of the corporation, regardless of the name or names by which the code, codes, or rules are designated. See Montana Code 35-2-114
- Class: refers to a group of memberships that have the same rights with respect to voting, dissolution, redemption, and transfer. See Montana Code 35-2-114
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Corporation: means a public benefit corporation, mutual benefit corporation, or religious corporation. See Montana Code 35-2-114
- Defendant: In a civil suit, the person complained against; in a criminal case, the person accused of the crime.
- Directors: means individuals:
(a)designated in the articles or bylaws or elected by the incorporators and their successors; and
(b)elected or appointed by any other name or title to act as members of the board. See Montana Code 35-2-114
- Notice: means that term as described in 35-2-115. See Montana Code 35-2-114
- Principal office: means the office, in the state or out of the state, that is designated in the annual report filed pursuant to 35-2-904 as the place where the principal office of a domestic or foreign corporation is located. See Montana Code 35-2-114
- Proceeding: includes a civil suit and a criminal, administrative, and investigatory action. See Montana Code 35-2-114
- Public benefit corporation: means a domestic corporation designated as a public benefit corporation. See Montana Code 35-2-114
- Religious corporation: means a domestic corporation designated as a religious corporation. See Montana Code 35-2-114
- State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See Montana Code 1-1-201
- voting: includes but is not limited to the giving of consent in the form of a record provided electronically or by written ballot and written consent. See Montana Code 35-2-114
(a)(i) the director engaged in fraudulent or dishonest conduct or in gross abuse of authority or discretion with respect to the corporation; or
(ii)a final judgment has been entered finding that the director has violated a duty set forth in 35-2-416, 35-2-418, 35-2-435, or 35-2-436; and
(b)removal is in the best interest of the corporation.
(2)The court that removes a director may bar the director from serving on the board for a period prescribed by the court.
(3)If members or the attorney general commence a proceeding under subsection (1), the corporation must be made a party defendant.
(4)If a public benefit corporation or its members commence a proceeding under subsection (1), they shall give the attorney general written notice of the proceeding.
(5)The articles or bylaws of a religious corporation may limit or prohibit the application of this section.