16-6a-809. Removal of directors by judicial proceeding.
(1)
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Terms Used In Utah Code 16-6a-809
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.
Defendant: In a civil suit, the person complained against; in a criminal case, the person accused of the crime.
Deliver: includes delivery by mail or another means of transmission authorized by Section 16-6a-103, except that delivery to the division means actual receipt by the division. See Utah Code 16-6a-102
Division: means the Division of Corporations and Commercial Code. See Utah Code 16-6a-102
Principal office: means :
(a)
the office, in or out of this state, designated by a domestic or foreign nonprofit corporation as its principal office in the most recent document on file with the division providing that information, including:
(i)
an annual report;
(ii)
an application for a certificate of authority; or
(iii)
a notice of change of principal office; or
(b)
if no principal office can be determined, a domestic or foreign nonprofit corporation's registered office. See Utah Code 16-6a-102
Registered office: means the office within this state designated by a domestic or foreign nonprofit corporation as its registered office in the most recent document on file with the division providing that information, including:
State: when applied to the different parts of the United States, includes a state, district, or territory of the United States. See Utah Code 68-3-12.5
(a)
The applicable court may remove a director in a proceeding commenced either by the nonprofit corporation or by voting members holding at least 10% of the votes entitled to be cast in the election of the director’s successor if the court finds that:
(i)
the director engaged in:
(A)
fraudulent or dishonest conduct; or
(B)
gross abuse of authority or discretion with respect to the nonprofit corporation; or
(ii)
(A)
a final judgment has been entered finding that the director has violated a duty set forth in Section 16-6a-822; and
(B)
removal is in the best interests of the nonprofit corporation.
(b)
For purposes of this Subsection (1), the applicable court is the:
(i)
district court of the county in this state where a nonprofit corporation’s principal office is located; or
(ii)
if the nonprofit corporation has no principal office in this state:
(A)
the district court of the county in which its registered office is located; or
(B)
if the nonprofit corporation has no registered office, the district court for Salt Lake County.
(2)
The court that removes a director may bar the director for a period prescribed by the court from:
(a)
reelection;
(b)
reappointment; or
(c)
designation.
(3)
If voting members commence a proceeding under Subsection (1), the voting members shall make the nonprofit corporation a party defendant.
(4)
A director who is removed pursuant to this section may deliver to the division for filing a statement to that effect pursuant to Section 16-6a-1608.
Amended by Chapter 9, 2001 General Session Amended by Chapter 127, 2001 General Session
