Utah Code 48-4-303. Right of action

48-4-303. Right of action.

(1)

Except in a benefit enforcement proceeding, a person may not bring an action or assert a claim against a benefit company or a benefit company’s member, manager, or officer with respect to:

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Terms Used In Utah Code 48-4-303

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

Benefit enforcement proceeding: means a proceeding in a court of competent jurisdiction for:

(a)	failure of a benefit company to pursue or create general public benefit or a specific public benefit described in the benefit company's certificate of organization; or

(b)

a violation of an obligation, duty, or standard of conduct under this chapter. See Utah Code 48-4-103

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:

(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 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 have been exercised. See Utah Code 48-4-103
(a)	failure to pursue or create general public benefit or a specific public benefit set forth in the benefit company’s certificate of organization; or

(b)	violation of a duty or standard of conduct under this chapter.

(2)	A benefit company is not liable for monetary damages under this chapter for a failure of the benefit company to pursue or create general public benefit or a specific public benefit.

(3)

Only the following may commence or maintain a benefit enforcement proceeding:

(a)	the benefit company, directly; or

(b)

one or more of the following, derivatively:

(i)	a member that owned at least 2% of the total number of interests of a class or series outstanding at the time of the act or omission complained of;

(ii)	a manager of a manager-managed benefit company;

(iii)

a person or group of persons who own beneficially or of record at least 5% of the interests in an association of which the benefit company is a subsidiary at the time of the act or omission complained of; or

(iv)	any person or group of persons specified in the benefit company’s certificate of organization or operating agreement.

Enacted by Chapter 201, 2018 General Session

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