A transaction effected or proposed to be effected by a corporation or by any entity controlled by the corporation that is not a director’s conflicting interest transaction may not be enjoined, be set aside, or give rise to an award of damages or other sanctions, in a proceeding by a shareholder or by or in the right of the corporation, solely because a director, or any person with whom or which the director has a personal, economic, or other association, has an interest in the transaction.
Terms Used In Utah Code 16-10a-851
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.
Entity: includes :
(a)
a domestic and foreign corporation;
(b)
a nonprofit corporation;
(c)
a limited liability company;
(d)
a profit or nonprofit unincorporated association;
(e)
a business trust;
(f)
an estate;
(g)
a partnership;
(h)
a trust;
(i)
two or more persons having a joint or common economic interest;
A director’s conflicting interest transaction may not be enjoined, be set aside, or give rise to an award of damages or other sanctions, in a proceeding by a shareholder or by or in the right of the corporation, solely because the director, or any person with whom or which the director has a personal, economic, or other association, has an interest in the transaction, if:
(a)
directors’ action respecting the transaction was at any time taken in compliance with Section 16-10a-852;
(b)
shareholders’ action respecting the transaction was at any time taken in compliance with Section 16-10a-853; or
(c)
the transaction, judged according to the circumstances at the time of commitment, is established to have been fair to the corporation.
