Except in a benefit enforcement proceeding, a person may not bring an action or assert a claim against a benefit corporation or its directors or officers with respect to:
Terms Used In Utah Code 16-10b-305
Benefit corporation: means a business corporation:
(a)
that elects to become subject to this chapter; and
(b)
the status of which as a benefit corporation has not been terminated. See Utah Code 16-10b-103
Benefit enforcement proceeding: means a proceeding in a court of competent jurisdiction for:
(a)
failure of a benefit corporation to pursue or create general public benefit or a specific public benefit purpose set forth in its articles of incorporation; or
(b)
a violation of an obligation, duty, or standard of conduct under this chapter. See Utah Code 16-10b-103
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.
General public benefit: means a material positive impact on society and the environment:
Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
providing low-income or underserved individuals or communities with beneficial products or services;
(b)
promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business;
(c)
protecting or restoring the environment;
(d)
improving human health;
(e)
promoting the arts, sciences, or advancement of knowledge;
(f)
increasing the flow of capital to entities with a purpose to benefit society or the environment; and
(g)
conferring any other particular benefit on society or the environment. See Utah Code 16-10b-103
Subsidiary: means , in relation to a person, an entity in which the person owns beneficially or of record 50% or more of the outstanding equity interests, calculated as if all outstanding rights to acquire equity interests in the entity had been exercised. See Utah Code 16-10b-103
(a)
failure to pursue or create general public benefit or a specific public benefit set forth in its articles of incorporation; or
(b)
violation of an obligation, duty, or standard of conduct under this chapter.
(2)
A benefit corporation may not be liable for monetary damages under this chapter for a failure of the benefit corporation to pursue or create general public benefit or a specific public benefit.
(3)
(a)
A benefit enforcement proceeding may be commenced or maintained only:
(i)
directly by the benefit corporation; or
(ii)
derivatively by:
(A)
a person or group of persons that owns beneficially or of record at least 2% of the total number of shares of a class or series outstanding at the time of the act or omission complained of;
(B)
a director;
(C)
a person or group of persons that own beneficially or of record 5% or more of the outstanding equity interests in an entity of which the benefit corporation is a subsidiary at the time of the act or omission complained of; or
(D)
other persons as specified in the articles of incorporation or bylaws of the benefit corporation.
(b)
A benefit corporation may provide in its articles of incorporation a greater degree of ownership by a person or group of persons than those listed under Subsection (3)(a) to bring a derivative action.
(4)
For purposes of this section, a person is the beneficial owner of shares or equity interests if the shares or equity interests are held in a voting trust or by a nominee on behalf of the beneficial owner.
