Utah Code 48-4-301. Standard of conduct for members

48-4-301. Standard of conduct for members.

(1)

When discharging a duty under this chapter, each member of a member-managed benefit company:

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Terms Used In Utah Code 48-4-301

Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. ^{Source: OCC}
Benefit company: means a limited liability company:

(a)	that elects to become subject to this chapter; and

(b)

the status of which as a benefit company has not been terminated. See Utah Code 48-4-103

General public benefit: means a material positive impact on society and the environment:

(a)	taken as a whole;

(b)	assessed against a third-party standard; and

(c)

from the business of a benefit company. See Utah Code 48-4-103

Person: means :Utah Code 68-3-12.5

Specific public benefit: includes :

(a)	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 48-4-103

(a)

shall consider the effect of any action or inaction on:

(i)	the members of the benefit company;

(ii)	the employees and workforce of the benefit company;

(iii)

the interests of customers as beneficiaries of the benefit company’s general public benefit purpose or specific public benefit purpose;

(iv)	community and societal considerations, including those of each community in which offices or facilities of the benefit company or the benefit company’s subsidiaries or suppliers are located;

(v)	the local and global environment;

(vi)	the short-term and long-term interests of the benefit company, including benefits that may accrue to the benefit company from the benefit company’s long-term plans and the possibility that the interests may be best served by the continued independence of the benefit company; and

(vii)

the ability of the benefit company to accomplish the benefit company’s general public benefit purpose and any specific public benefit purpose; and

(b)	may consider other pertinent factors or the interests of any other group that the member considers appropriate.

(2)

A member is not required to prioritize the interests of a person or factor described in Subsection (1)(a) or (b) over the interests of any other person or factor, unless the benefit company’s certificate of organization states an intention to give priority to certain interests related to the benefit company’s accomplishment of the benefit company’s general public benefit purpose or a specific public benefit purpose identified in the benefit company’s certificate of organization.

(3)	A member’s consideration of interests and factors in accordance with Subsections (1) and (2) does not constitute a violation of Section 48-3a-409.

(4)	A member of a member-managed limited liability company that is a benefit company does not have a duty to a person who is a beneficiary of the benefit company’s general public benefit purpose or a specific public benefit purpose arising from the person’s status as a beneficiary.

Amended by Chapter 136, 2019 General Session

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