Effective 7/1/2024

16-10a-1604.  Court-ordered inspection.

(1) 

Terms Used In Utah Code 16-10a-1604 v2

  • 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.
  • Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
  • Distribution: means the following by a corporation to or for the benefit of its shareholders in respect of any of the corporation's shares:
(i) a direct or indirect transfer of money or other property, other than a corporation's own shares; or
(ii) incurrence of indebtedness by the corporation. See Utah Code 16-10a-102
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Shareholder: means :
    (i) the person in whose name a share is registered in the records of a corporation; or
    (ii) the beneficial owner of a share to the extent recognized pursuant to Section 16-10a-723. See Utah Code 16-10a-102
    (a)  If a corporation does not allow a shareholder or director, or the shareholder’s or director’s agent or attorney, who complies with Subsection 16-10a-1602(1) to inspect or copy any records required by that subsection to be available for inspection, the shareholder or director may petition a court with jurisdiction under Title 78A, Judiciary and Judicial Administration.

    (b)  If a petition is filed under Subsection (1)(a), a court may summarily order inspection and copying of the records demanded at the corporation’s expense.

    • (2) 

    (a)  If a corporation does not within a reasonable time allow a shareholder or director, or the shareholder’s or director’s agent or attorney, who complies with Subsections 16-10a-1602(2) and (3), to inspect and copy any records which the shareholder or director is entitled to inspect or copy by this part, the shareholder or director may petition a court with jurisdiction under Title 78A, Judiciary and Judicial Administration.

    (b)  If a petition is filed under Subsection (2)(a), the court may summarily order the inspection or copying of the records demanded.

    (c)  The court shall dispose of a petition under this subsection on an expedited basis.

    (3)  If a court orders inspection or copying of records demanded, the court shall also order the corporation to pay the shareholder’s or director’s costs incurred to obtain the order, including reasonable counsel fees, unless the corporation proves that it refused inspection in good faith because it had a reasonable basis for doubt about the right of the shareholder or director, or the shareholder’s or director’s agent or attorney, to inspect the records demanded.

    (4)  If a court orders inspection or copying of records demanded, the court may:

    (a)  impose reasonable restrictions on the use or distribution of the records by the demanding shareholder or director;

    (b)  order the corporation to pay the shareholder or director for any damages incurred as a result of the corporation’s denial if the court determines that the corporation did not act in good faith in refusing to allow the inspection or copying;

    (c)  if inspection or copying is ordered pursuant to Subsection (2), order the corporation to pay the expenses of inspection and copying if the court determines that the corporation did not act in good faith in refusing to allow the inspection or copying; and

    (d)  grant the shareholder or director any other available legal remedy.

    Amended by Chapter 401, 2023 General Session

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