Rep. Norm Thurston — Voting Record

Bill

Number

S.B. 218 (2015GS)

Sponsor

Sen. Hillyard, L.

Final action

Governor Signed 3/26/2015

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• modifies definition provisions;
• provides for use of electronic transmissions;
• addresses private foundations;
• addresses incorporation;
• provides for mutual benefit corporations to purchase memberships;
• modifies provision addressing no property rights;
• addresses action without meeting Ĥ→ [ and action by written ballot ] ←Ĥ ;
• modifies provision related to voting entitlement;
• modifies provisions related to board of directors;
• addresses authorized actions of a committee of the board;
• modifies provisions related to conflicting interest transactions;
• modifies provisions related to court-ordered indemnification of a director;
• addresses provisions related to articles of incorporation;

Every vote on this bill

Bill text

This document includes Senate 2nd Reading Floor Amendments incorporated into the bill on Tue, Mar 3, 2015 at 3:30 PM by bhansen.
This document includes House Committee Amendments incorporated into the bill on Tue, Mar 10, 2015 at 4:22 PM by lerror.
NONPROFIT CORPORATION ACT AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Lyle W. Hillyard
House Sponsor: 
 V. Lowry Snow
LONG TITLE
General Description:
This bill amends the Utah Revised Nonprofit Corporation Act.
Highlighted Provisions:
This bill:
▸ modifies definition provisions;
▸ provides for use of electronic transmissions;
▸ addresses private foundations;
▸ addresses incorporation;
▸ provides for mutual benefit corporations to purchase memberships;
▸ modifies provision addressing no property rights;
▸ addresses action without meeting 
Ĥ→ [
and action by written ballot
] ←Ĥ
 ;
▸ modifies provision related to voting entitlement;
▸ modifies provisions related to board of directors;
▸ addresses authorized actions of a committee of the board;
▸ modifies provisions related to conflicting interest transactions;
▸ modifies provisions related to court-ordered indemnification of a director;
▸ addresses provisions related to articles of incorporation;
▸ provides for voting members to vote on amendment to convert to a corporation;
▸ modifies effect of dissolution provision; and
▸ makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
16-6a-102
, as last amended by Laws of Utah 2009, Chapter 386
16-6a-103
, as last amended by Laws of Utah 2009, Chapter 388
16-6a-116
, as last amended by Laws of Utah 2002, Chapter 197
16-6a-203
, as enacted by Laws of Utah 2000, Chapter 300
16-6a-610
, as enacted by Laws of Utah 2000, Chapter 300
16-6a-611
, as last amended by Laws of Utah 2007, Chapter 315
16-6a-705
, as enacted by Laws of Utah 2000, Chapter 300
16-6a-707
, as last amended by Laws of Utah 2002, Chapter 197
Ĥ→ [
16-6a-709
, as last amended by Laws of Utah 2010, Chapter 378
] ←Ĥ
16-6a-711
, as last amended by Laws of Utah 2007, Chapter 315
16-6a-712
, as enacted by Laws of Utah 2000, Chapter 300
16-6a-801
, as enacted by Laws of Utah 2000, Chapter 300
16-6a-807
, as enacted by Laws of Utah 2000, Chapter 300
16-6a-808
, as last amended by Laws of Utah 2014, Chapter 160
16-6a-813
, as enacted by Laws of Utah 2000, Chapter 300
16-6a-814
, as last amended by Laws of Utah 2009, Chapter 388
16-6a-815
, as last amended by Laws of Utah 2006, Chapter 228
16-6a-817
, as last amended by Laws of Utah 2001, Chapter 127
16-6a-825
, as last amended by Laws of Utah 2007, Chapter 315
16-6a-905
, as last amended by Laws of Utah 2006, Chapter 228
16-6a-1002
, as last amended by Laws of Utah 2008, Chapter 364
16-6a-1003
, as enacted by Laws of Utah 2000, Chapter 300
16-6a-1006
, as enacted by Laws of Utah 2000, Chapter 300
16-6a-1008
, as last amended by Laws of Utah 2009, Chapter 386
16-6a-1302
, as last amended by Laws of Utah 2009, Chapter 386
16-6a-1405
, as last amended by Laws of Utah 2007, Chapter 315
42-2-6.6
, as last amended by Laws of Utah 2010, Chapter 218
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
16-6a-102
 is amended to read:
16-6a-102.
Definitions.
As used in this chapter:
(1) (a) "Address" means a location where mail can be delivered by the United States
Postal Service.
(b) "Address" includes:
(i) a post office box number;
(ii) a rural free delivery route number; and
(iii) a street name and number.
(2) "Affiliate" means a person that directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common control with, the person
specified.
(3) "Articles of incorporation" include:
(a) amended articles of incorporation;
(b) restated articles of incorporation;
(c) articles of merger; and
(d) a document of a similar import to the documents described in Subsections (3)(a)
through (c).
(4) "Assumed corporate name" means a name assumed for use in this state:
(a) by a:
(i) foreign corporation pursuant to Section 
16-10a-1506
; or
(ii) a foreign nonprofit corporation pursuant to Section 
16-6a-1506
; and
(b) because the corporate name of the foreign corporation described in Subsection
(4)(a) is not available for use in this state.
(5) (a) Except as provided in Subsection (5)(b), "board of directors" means the body
authorized to manage the affairs of a domestic or foreign nonprofit corporation.
(b) Notwithstanding Subsection (5)(a), a person may not be considered a member of
the board of directors because of a power delegated to that person pursuant to Subsection
16-6a-801
(2).
(6) (a) "Bylaws" means the one or more codes of rules, other than the articles of
incorporation, adopted pursuant to this chapter for the regulation or management of the affairs
of a domestic or foreign nonprofit corporation irrespective of the one or more names by which
the codes of rules are designated.
(b) "Bylaws" includes:
(i) amended bylaws; and
(ii) restated bylaws.
(7) (a) "Cash" or "money" means:
(i) legal tender;
(ii) a negotiable instrument; or
(iii) other cash equivalent readily convertible into legal tender.
(b) "Cash" and "money" are used interchangeably in this chapter.
(8) (a) "Class" means a group of memberships that has the same right with respect to
voting, dissolution, redemption, transfer, or other characteristics.
(b) For purposes of Subsection (8)(a), a right is considered the same if it is determined
by a formula applied uniformly to a group of memberships.
(9) (a) "Conspicuous" means so written that a reasonable person against whom the
writing is to operate should have noticed the writing.
(b) "Conspicuous" includes printing or typing in:
(i) italics;
(ii) boldface;
(iii) contrasting color;
(iv) capitals; or
(v) underlining.
(10) "Control" or a "controlling interest" means the direct or indirect possession of the
power to direct or cause the direction of the management and policies of an entity by:
(a) the ownership of voting shares;
(b) contract; or
(c) a means other than those specified in Subsection (10)(a) or (b).
(11) Subject to Section 
16-6a-207
, "cooperative nonprofit corporation" or
"cooperative" means a nonprofit corporation organized or existing under this chapter.
(12) "Corporate name" means:
(a) the name of a domestic corporation as stated in the domestic corporation's articles
of incorporation;
(b) the name of a domestic nonprofit corporation as stated in the domestic nonprofit
corporation's articles of incorporation;
(c) the name of a foreign corporation as stated in the foreign corporation's:
(i) articles of incorporation; or
(ii) document of similar import to articles of incorporation; or
(d) the name of a foreign nonprofit corporation as stated in the foreign nonprofit
corporation's:
(i) articles of incorporation; or
(ii) document of similar import to articles of incorporation.
(13) "Corporation" or "domestic corporation" means a corporation for profit that:
(a) is not a foreign corporation; and
(b) is incorporated under or subject to Chapter 10a, Utah Revised Business Corporation
Act.
(14) "Delegate" means a person elected or appointed to vote in a representative
assembly:
(a) for the election of a director; or
(b) on matters other than the election of a director.
(15) "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.
(16) "Director" means a member of the board of directors.
(17) (a) "Distribution" means the payment of a dividend or any part of the income or
profit of a nonprofit corporation to the nonprofit corporation's:
(i) members;
(ii) directors; or
(iii) officers.
(b) "Distribution" does not include a fair-value payment for:
(i) a good sold; or
(ii) a service received.
(18) "Division" means the Division of Corporations and Commercial Code.
(19) "Effective date," when referring to a document filed by the division, means the
time and date determined in accordance with Section 
16-6a-108
.
(20) "Effective date of notice" means the date notice is effective as provided in Section
16-6a-103
.
(21) "Electronic transmission" or "electronically transmitted" means a process of
communication not directly involving the physical transfer of paper that is suitable for the
receipt, retention, retrieval, and reproduction of information by the recipient, whether by email,
texting, facsimile, or otherwise.
[
(21)
] 
(22)
 (a) "Employee" includes an officer of a nonprofit corporation.
(b) (i) Except as provided in Subsection [
(21)
] 
(22)
(b)(ii), "employee" does not include
a director of a nonprofit corporation.
(ii) Notwithstanding Subsection [
(21)
] 
(22)
(b)(i), a director may accept one or more
duties that make that director an employee of a nonprofit corporation.
[
(22)
] 
(23)
 "Executive director" means the executive director of the Department of
Commerce.
[
(23)
] 
(24)
 "Entity" includes:
(a) a domestic or foreign corporation;
(b) a domestic or foreign 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;
(j) a state;
(k) the United States; or
(l) a foreign government.
[
(24)
] 
(25)
 "Foreign corporation" means a corporation for profit incorporated under a
law other than the laws of this state.
[
(25)
] 
(26)
 "Foreign nonprofit corporation" means an entity:
(a) incorporated under a law other than the laws of this state; and
(b) that would be a nonprofit corporation if formed under the laws of this state.
[
(26)
] 
(27)
 "Governmental entity" means:
(a) (i) the executive branch of the state;
(ii) the judicial branch of the state;
(iii) the legislative branch of the state;
(iv) an independent entity, as defined in Section 
63E-1-102
;
(v) a political subdivision of the state;
(vi) a state institution of higher education, as defined in Section 
53B-3-102
;
(vii) an entity within the state system of public education; or
(viii) the National Guard; or
(b) any of the following that is established or controlled by a governmental entity listed
in Subsection [
(26)
] 
(27)
(a) to carry out the public's business:
(i) an office;
(ii) a division;
(iii) an agency;
(iv) a board;
(v) a bureau;
(vi) a committee;
(vii) a department;
(viii) an advisory board;
(ix) an administrative unit; or
(x) a commission.
[
(27)
] 
(28)
 "Governmental subdivision" means:
(a) a county;
(b) a city;
(c) a town; or
(d) another type of governmental subdivision authorized by the laws of this state.
[
(28)
] 
(29)
 "Individual" means:
(a) a natural person;
(b) the estate of an incompetent individual; or
(c) the estate of a deceased individual.
[
(29)
] 
(30)
 "Internal Revenue Code" means the federal "Internal Revenue Code of
1986," as amended from time to time, or to corresponding provisions of subsequent internal
revenue laws of the United States of America.
[
(30)
] 
(31)
 (a) "Mail," "mailed," or "mailing" means deposit, deposited, or depositing
in the United States mail, properly addressed, first-class postage prepaid.
(b) "Mail," "mailed," or "mailing" includes registered or certified mail for which the
proper fee is paid.
[
(31)
] 
(32)
 (a) "Member" means one or more persons identified or otherwise appointed
as a member of a domestic or foreign nonprofit corporation as provided:
(i) in the articles of incorporation;
(ii) in the bylaws;
(iii) by a resolution of the board of directors; or
(iv) by a resolution of the members of the nonprofit corporation.
(b) "Member" includes "voting member."
[
(32)
] 
(33)
 "Membership" refers to the rights and obligations of a member or members.
[
(33)
] 
(34)
 "Mutual benefit corporation" means a nonprofit corporation:
(a) that issues shares of stock to its members evidencing a right to receive distribution
of water or otherwise representing property rights; or
(b) all of whose assets are contributed or acquired by or for the members of the
nonprofit corporation or their predecessors in interest to serve the mutual purposes of the
members.
[
(34)
] 
(35)
 "Nonprofit corporation" or "domestic nonprofit corporation" means an
entity that:
(a) is not a foreign nonprofit corporation; and
(b) is incorporated under or subject to this chapter.
[
(35)
] 
(36)
 "Notice" [
is as provided
] 
means the same as that term is defined
 in Section
16-6a-103
.
[
(36)
] 
(37)
 "Party related to a director" means:
(a) the spouse of the director;
(b) a child of the director;
(c) a grandchild of the director;
(d) a sibling of the director;
(e) a parent of the director;
(f) the spouse of an individual described in Subsections [
(36)
] 
(37)
(b) through (e);
(g) an individual having the same home as the director;
(h) a trust or estate of which the director or another individual specified in this
Subsection [
(36)
] 
(37)
 is a substantial beneficiary; or
(i) any of the following of which the director is a fiduciary:
(i) a trust;
(ii) an estate;
(iii) an incompetent;
(iv) a conservatee; or
(v) a minor.
[
(37)
] 
(38)
 "Person" means an:
(a) individual; or
(b) entity.
[
(38)
] 
(39)
 "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.
[
(39)
] 
(40)
 "Proceeding" includes:
(a) a civil suit;
(b) arbitration;
(c) mediation;
(d) a criminal action;
(e) an administrative action; or
(f) an investigatory action.
[
(40)
] 
(41)
 "Receive," when used in reference to receipt of a writing or other document
by a domestic or foreign nonprofit corporation, means the writing or other document is actually
received:
(a) by the domestic or foreign nonprofit corporation at:
(i) its registered office in this state; or
(ii) its principal office;
(b) by the secretary of the domestic or foreign nonprofit corporation, wherever the
secretary is found; or
(c) by another person authorized by the bylaws or the board of directors to receive the
writing or other document, wherever that person is found.
[
(41)
] 
(42)
 (a) "Record date" means the date established under Part 6, Members, or Part
7, Member Meetings and Voting, on which a nonprofit corporation determines the identity of
the nonprofit corporation's members.
(b) The determination described in Subsection [
(41)
] 
(42)
(a) shall be made as of the
close of business on the record date unless another time for doing so is specified when the
record date is fixed.
[
(42)
] 
(43)
 "Registered agent" means the registered agent of:
(a) a domestic nonprofit corporation; or
(b) a foreign nonprofit corporation.
[
(43)
] 
(44)
 "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:
(a) articles of incorporation;
(b) an application for a certificate of authority; or
(c) a notice of change of registered office.
[
(44)
] 
(45)
 "Secretary" means the corporate officer to whom the bylaws or the board of
directors delegates responsibility under Subsection 
16-6a-818
(3) for:
(a) the preparation and maintenance of:
(i) minutes of the meetings of:
(A) the board of directors; or
(B) the members; and
(ii) the other records and information required to be kept by the nonprofit corporation
pursuant to Section 
16-6a-1601
; and
(b) authenticating records of the nonprofit corporation.
[
(46)
] 
(46)
 "Share" means a unit of interest in a nonprofit corporation.
[
(45)
] 
(47)
 "Shareholder" means a person in whose name a share is registered in the
records of a nonprofit corporation.
[
(47)
] 
(48)
 "State," when referring to a part of the United States, includes:
(a) a state;
(b) a commonwealth;
(c) the District of Columbia;
(d) an agency or governmental and political subdivision of a state, commonwealth, or
District of Columbia;
(e) territory or insular possession of the United States; or
(f) an agency or governmental and political subdivision of a territory or insular
possession of the United States.
[
(48)
] 
(49)
 "Street address" means:
(a) (i) street name and number;
(ii) city or town; and
(iii) United States post office zip code designation; or
(b) if, by reason of rural location or otherwise, a street name, number, city, or town
does not exist, an appropriate description other than that described in Subsection [
(48)
] 
(49)
(a)
fixing as nearly as possible the actual physical location, but only if the information includes:
(i) the rural free delivery route;
(ii) the county; and
(iii) the United States post office zip code designation.
[
(49)
] 
(50)
 "Tribe" means a tribe, band, nation, pueblo, or other organized group or
community of Indians, including an Alaska Native village, that is legally recognized as eligible
for and is consistent with a special program, service, or entitlement provided by the United
States to Indians because of their status as Indians.
[
(50)
] 
(51)
 "Tribal nonprofit corporation" means a nonprofit corporation:
(a) incorporated under the law of a tribe; and
(b) that is at least 51% owned or controlled by the tribe.
[
(51)
] 
(52)
 "United States" includes a district, authority, office, bureau, commission,
department, and another agency of the United States of America.
[
(52)
] 
(53)
 "Vote" includes authorization by:
(a) written ballot; and
(b) written consent.
[
(53)
] 
(54)
 (a) "Voting group" means all the members of one or more classes of
members or directors that, under this chapter, the articles of incorporation, or the bylaws, are
entitled to vote and be counted together collectively on a matter.
(b) All members or directors entitled by this chapter, the articles of incorporation, or
the bylaws to vote generally on a matter are for that purpose a single voting group.
[
(54)
] 
(55)
 (a) "Voting member" means a person entitled to vote for all matters
required or permitted under this chapter to be submitted to a vote of the members, except as
otherwise provided in the articles of incorporation or bylaws.
(b) A person is not a voting member solely because of:
(i) a right the person has as a delegate;
(ii) a right the person has to designate a director; or
(iii) a right the person has as a director.
(c) Except as the bylaws may otherwise provide, "voting member" includes a
"shareholder" if the nonprofit corporation has shareholders.
Section 2. Section 
16-6a-103
 is amended to read:
16-6a-103.
Notice.
(1) Notice given under this chapter shall be in writing unless oral notice is reasonable
under the circumstances.
(2) (a) Notice may be communicated:
(i) in person;
(ii) by telephone;
(iii) by [
any form of electronic communication
] 
electronic transmission
; or
(iv) by mail or private carrier.
(b) If the forms of personal notice described in Subsection (2)(a) are impracticable,
notice may be communicated by:
(i) (A) a newspaper of general circulation in the county or similar governmental
subdivision in which the corporation's principal or registered office is located; and
(B) as required in Section 
45-1-101
; or
(ii) radio, television, or other form of public broadcast communication in the county or
similar governmental subdivision in which the corporation's principal or registered office is
located.
(3) Written notice to a domestic or foreign nonprofit corporation authorized to conduct
affairs in this state may be addressed to:
(a) its registered agent at its registered office; or
(b) the corporation's secretary at its principal office.
(4) (a) Written notice by a domestic or foreign nonprofit corporation to its members, is
effective as to each member when mailed, if:
(i) in a comprehensible form; and
(ii) addressed to the member's address shown in the domestic or foreign nonprofit
corporation's current record of members.
(b) If three successive notices given to a member pursuant to Subsection (5) have been
returned as undeliverable, further notices to that member are not necessary until another
address of the member is made known to the nonprofit corporation.
(5) Except as provided in Subsection (4), written notice, if in a comprehensible form, is
effective at the earliest of the following:
(a) when received;
(b) five days after it is mailed; or
(c) on the date shown on the return receipt if:
(i) sent by registered or certified mail;
(ii) sent return receipt requested; and
(iii) the receipt is signed by or on behalf of the addressee.
(6) Oral notice is effective when communicated if communicated in a comprehensible
manner.
(7) Notice by publication is effective on the date of first publication.
(8) A written notice or report delivered as part of a newsletter, magazine, or other
publication regularly sent to members shall constitute a written notice or report if:
(a) addressed or delivered to the member's address shown in the nonprofit corporation's
current list of members; or
(b) if two or more members are residents of the same household and have the same
address in the nonprofit corporation's current list of members, addressed or delivered to one of
the members at the address appearing on the current list of members.
(9) (a) If this chapter prescribes notice requirements for particular circumstances, the
notice requirements for the particular circumstances govern.
(b) If articles of incorporation or bylaws prescribe notice requirements not inconsistent
with this section or other provisions of this chapter, the notice requirements of the articles of
incorporation or bylaws govern.
Section 3. Section 
16-6a-116
 is amended to read:
16-6a-116.
Private foundations.
Except [
as otherwise specified in the articles of incorporation or as provided
] 
when
otherwise determined
 by a court of competent jurisdiction, a nonprofit corporation that is a
private foundation as defined in Section 509(a), Internal Revenue Code:
(1) shall make distributions for each taxable year at the time and in the manner as not
to subject the nonprofit corporation to tax under Section 4942, Internal Revenue Code;
(2) may not engage in any act of self-dealing as defined in Section 4941(d), Internal
Revenue Code;
(3) may not retain any excess business holdings as defined in Section 4943(c), Internal
Revenue Code;
(4) may not make any investments that would subject the nonprofit corporation to
taxation under Section 4944, Internal Revenue Code; and
(5) may not make any taxable expenditures as defined in Section 4945(d), Internal
Revenue Code.
Section 4. Section 
16-6a-203
 is amended to read:
16-6a-203.
Incorporation.
(1) A nonprofit corporation is incorporated, and its corporate existence begins:
(a) when the articles of incorporation are filed by the division; or
(b) if a delayed effective date is specified pursuant to Subsection 
16-6a-108
(2), on the
delayed effective date, unless a certificate of withdrawal is filed prior to the delayed effective
date.
(2) [
The
] 
Notwithstanding Subsection 
16-6a-110
(4), the
 filing of the articles of
incorporation by the division is conclusive proof that all conditions precedent to incorporation
have been satisfied, except in a proceeding by the state to:
(a) cancel or revoke the incorporation; or
(b) involuntarily dissolve the nonprofit corporation.
Section 5. Section 
16-6a-610
 is amended to read:
16-6a-610.
Purchase of memberships.
(1) Unless otherwise provided by the bylaws, a nonprofit corporation may not purchase
the membership of a member:
(a) who resigns; or
(b) whose membership is terminated.
(2) (a) If so authorized, a nonprofit corporation may purchase the membership of a
member who resigns or whose membership is terminated for the amount and pursuant to the
conditions set forth in or authorized by:
(i) its bylaws; or
(ii) agreement with the affected member.
(b) A payment permitted under Subsection (2)(a) may not violate:
(i) Section 
16-6a-1301
; or
(ii) any other provision of this chapter.
(3) A mutual benefit corporation may purchase a member's membership if, after the
purchase is completed:
(a) the mutual benefit corporation would be able to pay its debts as they become due in
the usual course of its activities; and
(b) the mutual benefit corporation's total assets would at least equal the sum of its total
liabilities.
Section 6. Section 
16-6a-611
 is amended to read:
16-6a-611.
No property right.
A member does not have any vested property right including any right relating to
management, control, purpose, or duration of the nonprofit corporation, except as provided by:
(1) the bylaws of a mutual benefit corporation; or
(2) other 
applicable
 law.
Section 7. Section 
16-6a-705
 is amended to read:
16-6a-705.
Waiver of notice.
(1) (a) A member may waive any notice required by this chapter or by the bylaws,
whether before or after the date or time stated in the notice as the date or time when any action
will occur or has occurred.
(b) A waiver described in Subsection (1) shall be:
(i) in writing;
(ii) signed by the member entitled to the notice; and
(iii) delivered to the nonprofit corporation for:
(A) inclusion in the minutes; or
(B) filing with the corporate records.
(c) A waiver satisfies the requirements of Subsection (1)(b) if communicated by
electronic transmission.
[
(c)
] 
(d)
 The delivery and filing required under Subsection (1)(b) may not be conditions
of the effectiveness of the waiver.
(2) A member's attendance at a meeting:
(a) waives objection to lack of notice or defective notice of the meeting, unless the
member at the beginning of the meeting objects to holding the meeting or transacting business
at the meeting because of lack of notice or defective notice; and
(b) waives objection to consideration of a particular matter at the meeting that is not
within the purpose or purposes described in the meeting notice, unless the member objects to
considering the matter when it is presented.
Section 8. Section 
16-6a-707
 is amended to read:
16-6a-707.
Action without meeting.
(1) Unless otherwise provided in the articles of incorporation and Subsection (5), and
subject to the limitations of Subsection 
16-6a-1704
(3), any action that may be taken at any
annual or special meeting of members may be taken without a meeting and without prior
notice, if one or more consents in writing, setting forth the action taken, are signed by the
members having not less than the minimum voting power that would be necessary to authorize
or take the action at a meeting at which all members entitled to vote on the action were present
and voted.
(2) (a) Unless the written consents of all members entitled to vote have been obtained,
notice of any member approval without a meeting shall be given at least 10 days before the
consummation of the transaction, action, or event authorized by the member action to:
(i) those members entitled to vote who have not consented in writing; and
(ii) those members:
(A) not entitled to vote; and
(B) to whom this chapter requires that notice of the proposed action be given.
(b) The notice required pursuant to Subsection (2)(a) shall contain or be accompanied
by the same material that under this chapter would have been required to be sent in a notice of
meeting at which the proposed action would have been submitted to the members for action.
(3) Any member giving a written consent, or the member's proxyholder or a personal
representative of the member or their respective proxyholder, may revoke the consent by a
signed writing:
(a) describing the action;
(b) stating that the member's prior consent is revoked; and
(c) that is received by the nonprofit corporation prior to the effectiveness of the action.
(4) (a) A member action taken pursuant to this section is not effective unless all written
consents on which the nonprofit corporation relies for the taking of an action pursuant to
Subsection (1) are:
(i) received by the nonprofit corporation within a 60-day period; and
(ii) not revoked pursuant to Subsection (3).
(b) Action taken by the members pursuant to this section is effective:
(i) as of the date the last written consent necessary to effect the action is received by
the nonprofit corporation; or
(ii) if all of the written consents necessary to effect the action specify a later date as the
effective date of the action, the later date specified in the consents.
(c) If the nonprofit corporation has received written consents in accordance with
Subsection (1) signed by all members entitled to vote with respect to the action, the effective
date of the member action may be any date that is specified in all the written consents as the
effective date of the member action.
[
(d) Unless otherwise provided by the bylaws, a written consent under this Subsection
(4) may be received by the nonprofit corporation by electronically transmitted facsimile or
other form of communication providing the nonprofit corporation with a complete copy of the
written consent, including a copy of the signature to the written consent.
]
(d) (i) Unless otherwise provided by the bylaws, a member may deliver a written
consent under this section by an electronic transmission that provides the nonprofit corporation
with a complete copy of the written consent.
(ii) An electronic transmission consenting to an action under this section is considered
to be written, signed, and dated for purposes of this section if the electronic transmission is
delivered with information from which the corporation can determine:
(A) that the electronic transmission is transmitted by the member; and
(B) the date on which the electronic transmission is transmitted.
(iii) The date on which an electronic transmission is transmitted is considered the date
on which a consent is signed.
(5) Notwithstanding Subsection (1), directors may not be elected by written consent
except by unanimous written consent of all members entitled to vote for the election of
directors.
(6) If not otherwise determined under Section 
16-6a-703
 or 
16-6a-706
, the record date
for determining the members entitled to take action without a meeting or entitled to be given
notice under Subsection (2) of action taken without a meeting is the date the first member
delivers to the nonprofit corporation a writing upon which the action is taken pursuant to
Subsection (1).
(7) Action taken under this section has the same effect as action taken at a meeting of
members and may be so described in any document.
Ĥ→ [
Section 9. 
Section 
16-6a-709
 is amended to read:
16-6a-709. Action by written ballot.
(1) Unless otherwise provided by the bylaws, any action that may be taken at any 
 ☆ 
 ☆ 
annual, regular, or special meeting of members may be taken without a meeting if the nonprofit
corporation delivers a written ballot to every member entitled to vote on the matter.
(2) A written ballot described in Subsection (1) shall:
(a) set forth each proposed action; and
(b) provide an opportunity to vote for or against each proposed action.
(3) (a) Approval by written ballot pursuant to this section shall be valid only when:
(i) the time, as determined under Subsection [(8)] 
(7)
, by which all ballots must be
received by the nonprofit corporation has passed so that a quorum can be determined; and
(ii) the number of approvals equals or exceeds the number of votes that would be
required to approve the matter at a meeting at which the total number of votes cast was the
same as the number of votes cast by ballot.
(b) Unless otherwise provided in this chapter or in accordance with Section 
16-6a-716
,
for purposes of taking action by written ballot the number of votes cast by written ballot
pursuant to this section constitute a quorum for action on the matter.
(4) All solicitations for votes by written ballot shall:
(a) indicate the number of responses needed to meet the quorum requirements;
(b) state the percentage of approvals necessary to approve each matter other than
election of directors;
(c) specify the time by which a ballot must be received by the nonprofit corporation in
order to be counted; and
(d) be accompanied by written information sufficient to permit each person casting the
ballot to reach an informed decision on the matter.
(5) Unless otherwise provided by the bylaws, a written ballot may not be revoked.
(6) Action taken under this section has the same effect as action taken at a meeting of
members and may be described as such in any document.
[(7) Unless otherwise provided by the bylaws, a written ballot delivered to every
member entitled to vote on the matter or matters therein, as described in this section, may also
be used in connection with any annual, regular, or special meeting of members, thereby
allowing members the choice of either voting in person or by written ballot delivered by a
member to the nonprofit corporation in lieu of attendance at such meeting. Any written ballot
shall comply with the requirements of Subsection (2) and shall be counted equally with the 
 ☆ 
 ☆ 
 votes of members in attendance at any meeting for every purpose, including satisfaction of a
quorum requirement.]
[(8)] 
(7)
 (a) Members shall be provided a fair and reasonable amount of time before the
day on which the nonprofit corporation must receive ballots.
(b) An amount of time is considered to be fair and reasonable if:
(i) members are given at least 15 days from the day on which the notice is mailed, if
the notice is mailed by first-class or registered mail;
(ii) members are given at least 30 days from the day on which the notice is mailed, if
the notice is mailed by other than first-class or registered mail; or
(iii) considering all the circumstances, the amount of time is otherwise reasonable.
] ←Ĥ
Section 
Ĥ→ [
] 
 ←Ĥ
 . Section 
16-6a-711
 is amended to read:
16-6a-711.
Voting entitlement generally.
(1) Unless otherwise provided by the bylaws:
(a) only voting members may vote with respect to any matter required or permitted
under this chapter to be submitted to a vote of the members;
(b) all references in this chapter to votes of or voting by the members permit voting
only by the voting members; and
(c) voting members may vote with respect to all matters required or permitted under
this chapter to be submitted to a vote of the members.
(2) Unless otherwise provided by the [
articles of incorporation
] 
bylaws
, each member
entitled to vote may cast:
(a) one vote on each matter submitted to a vote of members for nonprofit corporations
other than those in Subsection (2)(b); and
(b) one vote for each share held by the member on each matter submitted for a vote of
members if the nonprofit corporation issues shares to its members.
(3) Unless otherwise provided by the bylaws, if a membership stands of record in the
names of two or more persons, the membership's acts with respect to voting have the following
effect:
(a) If only one votes, the act binds all of the persons whose membership is jointly held.
(b) If more than one votes, the vote is divided on a pro-rata basis.
Section 
Ĥ→ [
] 
 ←Ĥ
 . Section 
16-6a-712
 is amended to read:
16-6a-712.
Proxies.
(1) Unless otherwise provided by the bylaws, a member entitled to vote may vote or
otherwise act in person or by proxy.
(2) Without limiting the manner in which a member may appoint a proxy to vote or
otherwise act for the member, Subsections (2)(a) and (b) constitute valid means of appointing a
proxy.
(a) A member may appoint a proxy by signing an appointment form, either personally
or by the member's attorney-in-fact.
(b) (i) Subject to Subsection (2)(b)(ii) a member may appoint a proxy by transmitting
or authorizing the transmission of a telegram, teletype, facsimile, or other electronic
transmission providing a written statement of the appointment to:
(A) the proxy;
(B) a proxy solicitor;
(C) a proxy support service organization;
(D) another person duly authorized by the proxy to receive appointments as agent for
the proxy; or
(E) the nonprofit corporation.
(ii) An appointment transmitted under Subsection (2)(b)(i) shall set forth or be
transmitted with written evidence from which it can be determined that the member transmitted
or authorized the transmission of the appointment.
(3) (a) An appointment of a proxy is effective against the nonprofit corporation when
received by the nonprofit corporation, including receipt by the nonprofit corporation of an
appointment transmitted pursuant to Subsection (2)(b).
(b) An appointment is valid for 11 months unless a different period is expressly
provided in the appointment form.
(4) Any complete copy, including an [
electronically transmitted facsimile
] 
electronic
transmission
, of an appointment of a proxy may be substituted for or used in lieu of the original
appointment for any purpose for which the original appointment could be used.
(5) An appointment of a proxy is revocable by the member.
(6) An appointment of a proxy is revoked by the person appointing the proxy:
(a) attending any meeting and voting in person; or
(b) signing and delivering to the secretary or other officer or agent authorized to
tabulate proxy votes:
(i) a writing stating that the appointment of the proxy is revoked; or
(ii) a subsequent appointment form.
(7) The death or incapacity of the member appointing a proxy does not affect the right
of the nonprofit corporation to accept the proxy's authority unless notice of the death or
incapacity is received by the secretary or other officer or agent authorized to tabulate votes
before the proxy exercises the proxy's authority under the appointment.
(8) Subject to Section 
16-6a-713
 and to any express limitation on the proxy's authority
appearing on the appointment form, a nonprofit corporation is entitled to accept the proxy's
vote or other action as that of the member making the appointment.
Section 12. Section 
16-6a-801
 is amended to read:
16-6a-801.
Requirement for board of directors.
(1) A nonprofit corporation shall have a board of directors.
(2) (a) Except as 
may otherwise be
 provided in this chapter [
or
]
, including
 Subsection
(2)(b), all corporate powers shall be exercised by or under the authority of, and the business
and affairs of the nonprofit corporation managed under the direction of, the board of directors.
(b) (i) The articles of incorporation may authorize one or more persons to exercise
some or all of the powers that would otherwise be exercised by the board of directors.
(ii) To the extent the articles of incorporation authorize a person other than the board of
directors to have the authority and perform a duty of the board of directors, the directors shall
be relieved to that extent from such authority and duty.
(3) The board of directors may be divided into classes, each with such respective rights
and duties as the articles of incorporation or bylaws may provide.
(4) The board of directors and the directors may be known by any other name
designated in the bylaws.
Section 13. Section 
16-6a-807
 is amended to read:
16-6a-807.
Resignation of directors.
(1) A director may resign at any time by giving written notice of resignation to the
[
nonprofit corporation
] 
Ŝ→ [
board of directors, the
] ←Ŝ
board's chair,
Ŝ→ [
or
] ←Ŝ
the nonprofit
677a 
corporation's
secretary
Ŝ→ 
, or as otherwise provided in the bylaws
 ←Ŝ
 .
(2) A resignation of a director is effective when the notice is received by the nonprofit
corporation unless the notice specifies a later effective date.
(3) A director who resigns may deliver to the division for filing a statement that the
director resigns pursuant to Section 
16-6a-1608
.
(4) The failure to attend or meet obligations shall be effective as a resignation at the
time of the board of director's vote to confirm the failure if:
(a) at the beginning of a director's term on the board, the bylaws provide that a director
may be considered to have resigned for failing to:
(i) attend a specified number of board meetings; or
(ii) meet other specified obligations of directors; and
(b) the failure to attend or meet obligations is confirmed by an affirmative vote of the
board of directors.
Section 14. Section 
16-6a-808
 is amended to read:
16-6a-808.
Removal of directors.
(1) Directors elected by voting members or directors may be removed as provided in
Subsections (1)(a) through [
(g)
] 
(f)
.
(a) The voting members may remove one or more directors elected by them with or
without cause unless the bylaws provide that directors may be removed only for cause.
(b) If a director is elected by a voting group, only that voting group may participate in
the vote to remove that director.
(c) Unless otherwise provided in the bylaws, a director may be removed:
(i) when the director is elected by the voting members, only if a majority of the voting
members votes to remove the director; or
(ii) when the director is elected by a voting group, only if a majority of the voting
group votes to remove the director.
(d) A director elected by voting members may be removed by the voting members
only:
(i) at a meeting called for the purpose of removing that director; and
(ii) if the meeting notice states that the purpose, or one of the purposes, of the meeting
is removal of the director.
(e) An entire board of directors may be removed under Subsections (1)(a) through (d).
(f) (i) Except as provided in Subsection (1)(f)(ii), a director elected by the board of
directors may be removed with or without cause by the vote of a majority of the directors then
in office or such greater number as is set forth in the bylaws.
(ii) A director elected by the board of directors to fill the vacancy of a director elected
by the voting members may be removed without cause by the voting members but not the
board of directors.
[
(g) Notwithstanding Subsections (1)(a) through (f), if provided in the bylaws, any
director no longer qualified to serve, under standards set forth in the bylaws, may be removed
by a vote of a majority of the directors then in office or such greater number as set forth in the
bylaws.
]
[
(h)
] 
(g)
 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
.
(2) Unless otherwise provided in the bylaws:
(a) an appointed director may be removed without cause by the person appointing the
director;
(b) the person described in Subsection (2)(a) shall remove the director by giving
written notice of the removal to:
(i) the director; and
(ii) the nonprofit corporation; and
(c) unless the written notice described in Subsection (2)(b) specifies a future effective
date, a removal is effective when the notice is received by both:
(i) the director to be removed; and
(ii) the nonprofit corporation.
(3) A designated director, as provided in Subsection 
16-6a-804
(5), may be removed by
an amendment to the bylaws deleting or changing the designation.
(4) Removal of a director under this section is not affected by Subsection 
16-6a-805
(5).
Section 15. Section 
16-6a-813
 is amended to read:
16-6a-813.
Action without meeting.
(1) 
Ŝ→ 
(a)
 ←Ŝ
 Unless otherwise provided in the bylaws, any action required or permitted
738a by this
chapter to be taken at a board of directors' meeting may be taken without a meeting if 
Ŝ→ [
each and
every member
]
all members
←Ŝ
 of the board 
Ŝ→ 
consent to the action
 ←Ŝ
 in writing 
Ŝ→ [
740a 740a 740a 
either:
☆
☆ 
(a) votes for the action; or
(b) (i) (A) votes against the action; or
(B) abstains from voting; and
(ii) waives the right to demand that action not be taken without a meeting.
(2) Action is taken under this section only if the affirmative vote for the action equals
or exceeds the minimum number of votes that would be necessary to take the action at a
meeting at which all of the directors then in office were present and voted.
(3) (a) An action taken pursuant to this section may not be effective unless the
nonprofit corporation receives writings:
(i) describing the action taken;
(ii) otherwise satisfying the requirements of Subsection (1);
(iii) signed by all directors; and
(iv) not revoked pursuant to Subsection (4).
[(b) Unless otherwise provided by the bylaws, a writing described in Subsection (3)(a)
may be received by the nonprofit corporation by electronically transmitted facsimile or other
form of wire or wireless communication providing the nonprofit corporation with a complete
copy of the document, including a copy of the signature on the document.]
(b) (i) Unless otherwise provided by the bylaws, a director may deliver a written
consent under this section by an electronic transmission that provides the nonprofit corporation
with a complete copy of the written consent.
(ii) An electronic transmission consenting to an action under this section is considered
to be written, signed, and dated for purposes of this section if the electronic transmission is
delivered with information from which the corporation can determine:
(A) that the electronic transmission is transmitted by the director; and
(B) the date on which the electronic transmission is transmitted.
(iii) The date on which an electronic transmission is transmitted is considered the date
on which the consent is signed.
(c) A director's right to demand that action not be taken without a meeting shall be
considered to have been waived if the nonprofit corporation receives a writing satisfying the
requirements of Subsection (1) that has been signed by the director and not revoked pursuant to
Subsection (4).
 ☆ 
☆ 
(d) Action taken pursuant to this section shall be effective when the last writing
necessary to effect the action is received by the nonprofit corporation, unless the writings
describing the action taken set forth a different effective date.
(4) If the writing is received by the nonprofit corporation before the last writing
necessary to effect the action is received by the nonprofit corporation, any director who has
signed a writing pursuant to this section may revoke the writing by a writing signed and dated
by the director:
(a) describing the action; and
(b) stating that the director's prior vote with respect to the writing is revoked.
(5) Action taken pursuant to this section:
(a) has the same effect as action taken at a meeting of directors; and
(b) may be described as an action taken at a meeting of directors in any document.
]
783a 
(b) Action is taken under Subsection (1)(a) at the time the last director signs a writing
783b 
describing the action taken, unless, before that time, any director revokes a consent by a
783c 
writing signed by the director and received by the secretary or any other person authorized by
783d 
the bylaws or the board of directors to receive the revocation.
783e 
(c) Action under Subsection (1)(a) is effective at the time it is taken under Subsection (1)(a)
783f 
unless the board of directors establishes a different effective date.
783g 
(2)(a) If provided in the bylaws, any action required or permitted by this chapter to be taken
783h 
at a board of directors' meeting may be taken without a meeting if notice is transmitted in
783i 
writing to each member of the board and each member of the board by the time stated in the
783j 
notice:
783k 
(i)(A) signs a writing for such action; or
783l 
(B) signs a writing against such action, abstains in writing from voting, or fails to respond or
783m 
vote; and
783n 
(ii) fails to demand in writing that action not be taken without a meeting.
783o 
(b) The notice required by Subsection (1) shall state:
783p 
(i) the action to be taken;
783q 
(ii) the time by which a director must respond to the notice;
783r 
(iii) that failure to respond by the time stated in the notice will have the same effect as:
783s 
(A) abstaining in writing by the time stated in the notice; and
783t 
(B) failing to demand in writing by the time stated in the notice that action not be taken
783u 
without a meeting; and
783v 
(iv) any other matters the nonprofit corporation determines to include.
783w 
(c) Action is taken under this Subsection (2) only if at the end of the time stated in the
☆
783x ☆ 
notice transmitted pursuant to Subsection (2)(a):
783y 
(i) the affirmative votes in writing for the action received by the nonprofit corporation and not
783z 
revoked pursuant to Subsection (2)(e) equal or exceed the minimum number of votes that
783aa 
would be necessary to take such action at a meeting at which all of the directors then in office
783ab 
were present and voted; and
783ac 
(ii) the nonprofit corporation has not received a written demand by a director that the action
783ad 
not be taken without a meeting other than a demand that has been revoked pursuant to
783ae 
Subsection (2)(e).
783af 
(d) A director's right to demand that action not be taken without a meeting shall be
783ag 
considered to have been waived unless the nonprofit corporation receives such demand from
783ah 
the director in writing by the time stated in the notice transmitted pursuant to Subsection
783ai 
(2)(a) and the demand has not been revoked pursuant to Subsection (2)(e).
783aj 
(e) A director who in writing has voted, abstained, or demanded action not be taken without a
783ak 
meeting pursuant to this Subsection (2) may revoke the vote, abstention, or demand in writing
783al 
received by the nonprofit corporation by the time stated in the notice transmitted pursuant to
783am 
Subsection (2)(a).
783an 
(f) Unless the notice transmitted pursuant to Subsection (2)(a) states a different effective date,
783ao 
action taken pursuant to this Subsection (2) is effective at the end of the time stated in the
783ap 
notice transmitted pursuant to Subsection (2)(a).
783aq 
(3)(a) Unless otherwise provided by the bylaws, a communication under this section may be
783ar 
delivered by an electronic transmission.
783as 
(b) An electronic transmission communicating a vote, abstention, demand, or revocation under
783at 
Subsection (2) is considered to be written, signed, and dated for purposes of this section if the
783au 
electronic transmission is delivered with information from which the nonprofit corporation
783av 
can determine:
783aw 
(i) that the electronic transmission is transmitted by the director; and
783ax 
(ii) the date on which the electronic transmission is transmitted.
783ay 
(c) The date on which an electronic transmission is transmitted is considered the date on which
783az 
the vote, abstention, demand, or revocation is signed.
783ba 
(d) For purposes of this section, communications to the nonprofit corporation are not effective
783bb 
until received.
783bc 
(4) Action taken pursuant to this section:
783bd 
(a) has the same effect as action taken at a meeting of directors; and
783be 
(b) may be described as an action taken at a meeting of directors in any document.
 ←Ŝ
Section 16. Section 
16-6a-814
 is amended to read:
16-6a-814.
Notice of meeting.
(1) (a) A nonprofit corporation shall give to each director entitled to vote at an annual
meeting notice of the annual meeting consistent with the nonprofit corporation's bylaws in a
fair and reasonable manner.
(b) 
Any notice that conforms to the requirements of Subsection (1)(c) is fair and
reasonable, but other means of giving notice may also be fair and reasonable when all the
circumstances are considered.
(c)
 Notice under Subsection (1)(a) is fair and reasonable if the nonprofit corporation
notifies each director of the place, date, and time of the annual meeting:
(i) no fewer than 10 days before the meeting, unless otherwise provided by the bylaws;
(ii) if notice is mailed by other than first-class or registered mail, no fewer than 30
days, nor more than 60 days before the meeting date; and
(iii) if notice is given:
(A) by newspaper as provided in Subsection 
16-6a-103
(2)(b)(i)(A), by publication
three separate times with:
(I) the first of the publications no more than 60 days before the meeting date; and
(II) the last of the publications no fewer than 10 days before the meeting date; and
(B) (I) as provided in Subsection 
16-6a-103
(2)(b)(i)(B); and
(II) for 60 days before the meeting date.
(2) Unless otherwise provided in this chapter or in the bylaws, regular meetings of the
board of directors may be held without notice of the date, time, place, or purpose of the
meeting.
(3) (a) Unless the bylaws provide for a longer or shorter period, special meetings of the
board of directors shall be preceded by at least two days notice of the date, time, and place of
the meeting.
(b) The notice required by Subsection (3)(a) need not describe the purpose of the
special meeting unless otherwise required by this chapter or the bylaws.
Section 17. Section 
16-6a-815
 is amended to read:
16-6a-815.
Waiver of notice.
(1) (a) A director may waive any notice of a meeting before or after the time and date
of the meeting stated in the notice.
(b) Except as provided by Subsection (2), the waiver shall 
be
:
(i) [
be
] in writing;
(ii) signed by the director entitled to the notice; and
(iii) [
be
] delivered to the nonprofit corporation for filing with the corporate records.
(c) A waiver satisfies the requirements of Subsection (1)(b) if communicated by
electronic transmission.
[
(c)
] 
(d)
 The delivery and filing required by Subsection (1)(b) may not be conditions of
the effectiveness of the waiver.
(2) A director's attendance at or participation in a meeting waives any required notice
to that director of the meeting unless:
(a) (i) at the beginning of the meeting or promptly upon the director's later arrival, the
director objects to holding the meeting or transacting business at the meeting because of lack of
notice or defective notice; and
(ii) after objecting, the director does not vote for or assent to action taken at the
meeting; or
(b) if special notice was required of a particular purpose pursuant to Subsection
16-6a-814
(3):
(i) the director objects to transacting business with respect to the purpose for which the
special notice was required; and
(ii) after objecting, the director does not vote for or assent to action taken at the
meeting with respect to the purpose.
Section 18. Section 
16-6a-817
 is amended to read:
16-6a-817.
Committees of the board.
(1) Unless otherwise provided in the bylaws [
and subject to the provisions of Section
16-6a-906
], the board of directors may:
(a) create one or more committees of the board; and
(b) appoint two or more directors to serve on the committees created under Subsection
(1)(a).
(2) Unless otherwise provided in the bylaws, the creation of a committee of the board
and appointment of directors to it shall be approved by the greater of:
(a) a majority of all the directors in office when the action is taken; or
(b) the number of directors required by the bylaws to take action under Section
16-6a-816
.
(3) Unless otherwise provided in the bylaws, a committee of the board and the
members of the committee are subject to Sections 
16-6a-812
 through 
16-6a-816
, which govern:
(a) meetings;
(b) action without meeting;
(c) notice;
(d) waiver of notice; and
(e) quorum and voting requirements.
[
(4) To the extent specified in the bylaws or by the board of directors, and subject to
Subsection (6)(b), each committee of the board shall have the authority of the board of
directors under Section 
16-6a-801
.
]
(4) To the extent stated in the bylaws or by the board of directors, each committee of
the board shall have the authority of the board of directors as described in Section 
16-6a-801
,
except that a committee of the board may not:
(a) authorize distributions;
(b) approve or propose to members any action required by this chapter to be approved
by members;
(c) elect, appoint, or remove a director;
(d) amend articles of incorporation;
(e) adopt, amend, or repeal bylaws;
(f) approve a plan of conversion or a plan of merger not requiring member approval; or
(g) approve a sale, lease, exchange, or other disposition of all, or substantially all, of its
property, with or without goodwill, otherwise than in the usual and regular course of business.
(5) The creation of, delegation of authority to, or action by a committee does not alone
constitute compliance by a director with the standards of conduct described in Section
16-6a-822
.
(6) (a) Subject to Subsection (6)(b), nothing in this part shall prohibit or restrict a
nonprofit corporation from establishing in its bylaws or by action of the board of directors or
otherwise one or more committees, advisory boards, auxiliaries, or other bodies of any kind:
(i) having the members and rules of procedure as the bylaws or board of directors may
provide;
(ii) established to provide the advice, service, and assistance to the nonprofit
corporation as may be specified in the bylaws or by the board of directors; and
(iii) established to carry out the duties and responsibilities for the nonprofit
corporation, as may be specified in the bylaws or by the board of directors.
(b) Notwithstanding Subsection (6)(a), if any committee or other body established
under Subsection (6)(a) has one or more members who are entitled to vote on committee
matters and who are not then also directors, the committee or other body may not exercise any
power or authority reserved to the board of directors, in this chapter or in the bylaws.
Section 19. Section 
16-6a-825
 is amended to read:
16-6a-825.
Conflicting interest transaction.
(1) As used in this section 
Ŝ→ [
[
]
 , "conflicting 
[
]
] ←Ŝ
:
Ŝ→ [
(a) "Conflicting
] ←Ŝ
 interest transaction" means a contract, transaction, or other financial
relationship between a nonprofit corporation and:
Ŝ→ [
[
]
 (a) 
[
] 
(i)
] ←Ŝ
a director of the nonprofit corporation;
Ŝ→ [
[
]
 (b) 
[
] 
(ii)
] ←Ŝ
a party related to a director; or
Ŝ→ [
[
]
 (c) 
[
] 
(iii)
] ←Ŝ
an entity in which a director of the nonprofit corporation:
Ŝ→ [
[
]
 (i) 
[
] 
(A)
] ←Ŝ
is a director or officer; or
Ŝ→ [
[
]
 (ii) 
[
] 
(B)
] ←Ŝ
has a financial interest.
Ŝ→ [
(b) "Natural person related to a director or officer" means one of the following in
regards to a director or officer:
(i) a spouse;
(ii) a descendent;
(iii) an ancestor;
(iv) a sibling;
(v) the spouse or descendent of a sibling; or
(vi) the spouse of a descendent.
] ←Ŝ
(2) Except as otherwise provided in this section, upon the finding of a conflicting
interest transaction, in an action properly brought before it, a court may:
(a) rule that the conflicting interest transaction is void or voidable;
(b) enjoin or set aside the conflict of interest transaction; or
(c) determine that the conflicting interest transaction gives rise to an award of damages
or other sanctions.
(3) (a) A loan may not be made 
directly or indirectly
 by a nonprofit corporation to:
(i) a director or officer of the nonprofit corporation; [
or
]
(ii) a natural person related to a director or officer[
.
]
; or
(iii) an entity in which a director, officer, or natural person related to a director or
officer has any ownership, management right, or financial interest.
(b) A director or officer who assents to or participates in the making of a loan in
violation of Subsection (3)(a) shall be liable to the nonprofit corporation for the amount of the
loan until the repayment of the loan.
(4) (a) If the conditions of Subsection (4)(b) are met, a conflicting interest transaction
may not be void or voidable or be enjoined, set aside, or give rise to an award of damages or
other sanctions in a proceeding by a member or by or in the right of the nonprofit corporation,
solely because:
(i) the conflicting interest transaction involves:
(A) a director of the nonprofit corporation;
(B) a party related to a director; or
(C) an entity in which a director of the nonprofit corporation is a director or officer or
has a financial interest;
(ii) the director is present at or participates in the meeting of the nonprofit corporation's
board of directors or of the committee of the board of directors that authorizes, approves, or
ratifies the conflicting interest transaction; or
(iii) the director's vote is counted for the purpose described in Subsection (4)(a)(ii).
(b) Subsection (4)(a) applies if:
(i) (A) the material facts as to the director's relationship or interest and as to the
conflicting interest transaction are disclosed or are known to the board of directors or the
committee; and
(B) the board of directors or committee in good faith authorizes, approves, or ratifies
the conflicting interest transaction by the affirmative vote of a majority of the disinterested
directors, even though the disinterested directors are less than a quorum;
(ii) (A) the material facts as to the director's relationship or interest and as to the
conflicting interest transaction are disclosed or are known to the members entitled to vote on
the conflicting interest transaction; and
(B) the conflicting interest transaction is specifically authorized, approved, or ratified
in good faith by a vote of the members entitled to vote thereon;
(iii) the conflicting interest transaction is consistent with a provision in the articles of
incorporation or bylaws which:
(A) commits the nonprofit corporation to support one or more other nonprofit
corporations, charitable trusts, or charitable entities; or
(B) authorizes one or more directors to exercise discretion in making gifts or
contributions to one or more other nonprofit corporations, charitable trusts, or charitable
entities; or
(iv) the conflicting interest transaction is fair as to the nonprofit corporation.
(5) Common or interested directors may be counted in determining the presence of a
quorum at a meeting of the board of directors or of a committee that authorizes, approves, or
ratifies the conflicting interest transaction.
(6) For purposes of this section, "a natural person related to a director or officer" means
any natural person whose familial, financial, professional, or employment relationship with the
director or officer would, under the circumstances, reasonably be expected to exert an influence
on the director's or officer's judgment when voting on a transaction.
Section 20. Section 
16-6a-905
 is amended to read:
16-6a-905.
Court-ordered indemnification of directors.
(1) Unless a nonprofit corporation's [
bylaws
] 
articles of incorporation
 provide
otherwise, a director of the nonprofit corporation who is or was a party to a proceeding may
apply for indemnification to:
(a) the court conducting the proceeding; or
(b) another court of competent jurisdiction.
(2) On receipt of an application described in Subsection (1), the court, after giving any
notice the court considers necessary, may order indemnification in the following manner:
(a) if the court determines that the director is entitled to mandatory indemnification
under Section 
16-6a-903
, the court shall:
(i) order indemnification; and
(ii) order the nonprofit corporation to pay the director's reasonable expenses incurred to
obtain court-ordered indemnification; and
(b) if the court determines that the director is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances, whether or not the director met the
applicable standard of conduct set forth in Section 
16-6a-902
 or was adjudged liable as
described in Subsection 
16-6a-902
(4), the court may order indemnification as the court
determines to be proper, except that the indemnification with respect to any proceeding in
which liability has been adjudged in the circumstances described in Subsection 
16-6a-902
(4) is
limited to reasonable expenses incurred.
Section 21. Section 
16-6a-1002
 is amended to read:
16-6a-1002.
Amendment of articles of incorporation by board of directors or
incorporators.
(1) Unless otherwise provided in the articles of incorporation, the board of directors
may adopt, without member approval, one or more amendments to the articles of incorporation
to:
(a) delete the names and addresses of the initial directors;
(b) change the information required by Subsection 
16-17-203
(1), but an amendment is
not required to change the information;
(c) change the corporate name by:
(i) substituting the word "corporation," "incorporated," "company," "limited," or an
abbreviation of any such word for a similar word or abbreviation in the name; or
(ii) adding, deleting, or changing a geographical attribution; or
(d) make any other change expressly permitted by this chapter to be made without
member action.
(2) The board of directors may adopt, without member action, one or more
amendments to the articles of incorporation to change the corporate name, if necessary, in
connection with the reinstatement of a nonprofit corporation pursuant to Section 
16-6a-1412
.
(3) (a) Subject to any approval required pursuant to Section 
16-6a-1013
, if a nonprofit
corporation has no members, no members entitled to vote on amendments, or no members yet
admitted to membership, one or more amendments to the nonprofit corporation's articles of
incorporation may be adopted by:
(i) its incorporators until directors have been chosen; or
(ii) its directors after the directors have been chosen.
(b) A nonprofit corporation described in Subsection (3)(a) shall provide notice of any
meeting at which an amendment is to be voted upon.
(c) The notice required by Subsection (3)(b) shall:
(i) be in accordance with Section 
16-6a-814
;
(ii) state that the purpose, or one of the purposes, of the meeting is to consider a
proposed amendment to the articles of incorporation; and
(iii) (A) contain or be accompanied by a copy or summary of the amendment; or
(B) state the general nature of the amendment.
(d) An amendment described in Subsection (3)(a) shall be approved:
(i) by a majority of the incorporators, until directors have been chosen; or
(ii) after directors are chosen by a majority of the directors in office at the time the
amendment is adopted 
or such greater number as is set forth in the bylaws
.
Section 22. Section 
16-6a-1003
 is amended to read:
16-6a-1003.
Amendment of articles of incorporation by board of directors and
members.
(1) The board of directors or the members representing at least 10% of all of the votes
entitled to be cast on the amendment may propose an amendment to the articles of
incorporation for submission to the members unless a different vote or voting class is required
by:
(a) this chapter;
(b) the articles of incorporation;
(c) the bylaws; or
(d) the members or the board of directors acting pursuant to Subsection (5).
(2) For an amendment to the articles of incorporation to be adopted pursuant to
Subsection (1):
(a) the board of directors shall recommend the amendment to the members unless:
(i) the amendment is proposed by members; or
(ii) the board of directors:
(A) determines that because of conflict of interest or other special circumstances it
should make no recommendation; and
(B) communicates the basis for its determination to the members with the amendment;
and
(b) the members entitled to vote on the amendment shall approve the amendment as
provided in Subsection (5).
(3) The proposing board of directors or the proposing members may condition the
effectiveness of the amendment on any basis.
(4) (a) The nonprofit corporation shall give notice, in accordance with Section
16-6a-704
, to each member entitled to vote on the amendment of the members' meeting at
which the amendment will be voted upon.
(b) The notice required by Subsection (4)(a) shall:
(i) state that the purpose, or one of the purposes, of the meeting is to consider the
amendment; and
(ii) (A) contain or be accompanied by a copy or a summary of the amendment; or
(B) shall state the general nature of the amendment.
(5) The amendment shall be approved by the votes required by Sections 
16-6a-714
 and
16-6a-715
 by every voting group entitled to vote on the amendment unless a greater vote is
required by:
(a) this chapter;
(b) the articles of incorporation;
(c) bylaws adopted by the members; or
(d) the proposing board of directors or the proposing members acting pursuant to
Subsection (3).
(6) If the board of directors or the members seek to have the amendment approved by
the members by written consent 
or by written ballot
, the material soliciting the approval shall
contain or be accompanied by a copy or summary of the amendment.
Section 23. Section 
16-6a-1006
 is amended to read:
16-6a-1006.
Restated articles of incorporation.
(1) (a) The board of directors may restate the articles of incorporation at any time with
or without member action.
(b) The incorporators of a nonprofit corporation may restate the articles of incorporation
at any time if the nonprofit corporation:
(i) has no members; and
(ii) no directors have been chosen.
(2) (a) The restatement may include one or more amendments to the articles of
incorporation.
(b) Notwithstanding Subsection (1), if the restatement includes an amendment
requiring member approval, it shall be adopted as provided in Section 
16-6a-1003
.
(3) (a) If the board of directors submits a restatement for member action, the nonprofit
corporation shall give notice, in accordance with Section 
16-6a-704
, to each member entitled to
vote on the restatement of the members' meeting at which the restatement will be voted upon.
(b) The notice required by Subsection (3)(a) shall:
(i) state that the purpose, or one of the purposes, of the meeting is to consider the
restatement; and
(ii) contain or be accompanied by a copy of the restatement that identifies any
amendment or other change it would make in the articles of incorporation.
(4) A nonprofit corporation restating its articles of incorporation shall deliver to the
division for filing articles of restatement setting forth:
(a) the name of the nonprofit corporation;
(b) the text of the restated articles of incorporation;
(c) if the restatement contains an amendment to the articles of incorporation that was
adopted by the members, the information required by Subsection 
16-6a-1005
(5); [
and
]
(d) if the restatement was adopted by the board of directors or incorporators without
member action, a statement to that effect and that member action was not required[
.
]
; and
(e) the restatement does not need to contain the name or address of the incorporator or
incorporators that were included in the articles of incorporation when originally filed.
(5) Upon filing by the division or at any later effective date determined pursuant to
Section 
16-6a-108
, restated articles of incorporation supersede the original articles of
incorporation and all prior amendments to the original articles of incorporation.
Section 24. Section 
16-6a-1008
 is amended to read:
16-6a-1008.
Conversion to a business corporation.
(1) (a) A domestic nonprofit corporation may convert to a corporation subject to [
Title
16,
] Chapter 10a, Utah Revised Business Corporation Act, by filing an amendment of its
articles of incorporation with the division pursuant to this section.
(b) The day on which a nonprofit domestic corporation files an amendment under this
section, the domestic nonprofit corporation becomes a corporation subject to [
Title 16,
]
Chapter 10a, Utah Revised Business Corporation Act, except that, notwithstanding Section
16-10a-203
, the existence of the nonprofit corporation is considered to commence on the day
on which the converting corporation:
(i) commenced its existence under this chapter; or
(ii) otherwise was created, formed, incorporated, or came into being.
(2) The amendment of the articles of incorporation to convert to a corporation shall:
(a) revise the statement of purpose;
(b) delete:
(i) the authorization for members; and
(ii) any other provisions relating to memberships;
(c) authorize shares:
(i) stating the number of shares; and
(ii) including the information required by Section 
16-10a-601
 with respect to each class
of shares the corporation is to be authorized to issue;
(d) make such other changes as may be necessary or desired; and
(e) if the corporation has any members, provide for:
(i) the cancellation of the memberships; or
(ii) the conversion of the memberships to shares of the corporation.
(3) If the nonprofit corporation has any voting members, an amendment to convert to a 
corporation shall be approved by all of the 
voting
 members regardless of limitations or
restrictions on the voting rights of the members.
(4) If an amendment to the articles of incorporation filed pursuant to this section is
included in a merger agreement, this section applies, except that any provisions for cancellation
or conversion of memberships:
(a) shall be in the merger agreement; and
(b) may not be in the amendment of the articles of incorporation.
(5) A conversion under this section may not result in a violation, directly or indirectly,
of:
(a) Section 
16-6a-1301
; or
(b) any other provision of this chapter.
(6) The conversion of a nonprofit corporation into a corporation does not affect:
(a) an obligation or liability of the converting nonprofit corporation incurred before its
conversion to a corporation; or
(b) the personal liability of any person incurred before the conversion.
(7) (a) (i) When a conversion is effective under this section, for purposes of the laws of
this state, the things listed in Subsection (7)(a)(ii):
(A) vest in the corporation to which the nonprofit corporation converts;
(B) are the property of the corporation; and
(C) are not considered transferred by the converting nonprofit corporation to the
corporation by operation of this Subsection (7)(a).
(ii) This Subsection (7)(a) applies to the following of the converting nonprofit
corporation:
(A) its rights, privileges, and powers;
(B) its interests in property, whether real, personal, or mixed;
(C) debts due to the converting nonprofit corporation;
(D) the debts, liabilities, and duties of the converting nonprofit corporation;
(E) the rights and obligations under contract of the converting nonprofit corporation;
and
(F) other things and causes of action belonging to the converting nonprofit corporation.
(b) The title to any real property vested by deed or otherwise in a nonprofit corporation
converting to a corporation does not revert and is not in any way impaired by reason of this
chapter or of the conversion.
(c) A right of a creditor or a lien on property of a converting nonprofit corporation that
is described in Subsection (6)(a) or (b) is preserved unimpaired.
(d) A debt, liability, or duty of a converting nonprofit corporation:
(i) remains attached to the corporation to which the nonprofit corporation converts; and
(ii) may be enforced against the corporation to the same extent as if the debts,
liabilities, and duties had been incurred or contracted by the corporation in its capacity as a
corporation.
(e) A converted nonprofit corporation upon conversion to a corporation pursuant to this
section is considered the same entity as the corporation.
(f) In connection with a conversion of a nonprofit corporation to a corporation under
this section, the interests or rights in the nonprofit corporation which is to be converted may be
exchanged or converted into one or more of the following:
(i) cash, property, interests, or rights in the corporation to which it is converted; or
(ii) cash, property or interests in, or rights in another entity.
(g) Unless otherwise agreed:
(i) a converting nonprofit corporation is not required solely as a result of the
conversion to:
(A) wind up its affairs;
(B) pay its liabilities; or
(C) distribute its assets; and
(ii) a conversion is not considered to constitute a dissolution of the nonprofit
corporation, but constitutes a continuation of the existence of the nonprofit corporation in the
form of a corporation.
Section 25. Section 
16-6a-1302
 is amended to read:
16-6a-1302.
Authorized distributions.
(1) A nonprofit corporation may:
(a) make distributions or distribute the nonprofit corporation's assets to a member:
(i) that is a domestic or foreign nonprofit corporation;
(ii) of a mutual benefit corporation, not inconsistent with its bylaws; or
(iii) that is a governmental entity;
(b) pay compensation in a reasonable amount to its members, directors, or officers for
services rendered;
(c) if a cooperative nonprofit corporation, make distributions consistent with its
purposes; and
(d) confer benefits upon its members in conformity with its purposes.
(2) A nonprofit corporation may make distributions upon dissolution as follows:
(a) to a member that is a domestic or foreign nonprofit corporation;
(b) to its members if it is a mutual benefit corporation;
(c) to another nonprofit corporation, including a nonprofit corporation organized to
receive the assets of and function in place of the dissolved nonprofit corporation; and
(d) otherwise in conformity [
to this chapter
] 
with Part 14, Dissolution
.
[
(3) A mutual benefit corporation may purchase a member's membership in conformity
with Section 
16-6a-610
 if, after the purchase is completed:
]
[
(a) the mutual benefit corporation would be able to pay its debts as they become due
in the usual course of its activities; and
]
[
(b) the mutual benefit corporation's total assets would at least equal the sum of its total
liabilities.
]
[
(4)
] 
(3)
 Authorized distributions by a dissolved nonprofit corporation may be made by
authorized officers or directors, including those elected, hired, or otherwise selected after
dissolution if the election, hiring, or other selection after dissolution is not inconsistent with the
articles of incorporation and bylaws existing at the time of dissolution.
Section 26. Section 
16-6a-1405
 is amended to read:
16-6a-1405.
Effect of dissolution.
(1) A dissolved nonprofit corporation continues its corporate existence but may not
carry on any activities except as is appropriate to wind up and liquidate its affairs, including:
(a) collecting its assets;
(b) returning, transferring, or conveying assets held by the nonprofit corporation upon a
condition requiring return, transfer, or conveyance, which condition occurs by reason of the
dissolution, in accordance with the condition;
(c) transferring, subject to any contractual or legal requirements, its assets as provided
in or authorized by its articles of incorporation or bylaws;
(d) discharging or making provision for discharging its liabilities; and
(e) doing every other act necessary to wind up and liquidate its assets and affairs.
[
(2) Notwithstanding any other provision of this chapter, the distribution of assets of a
nonprofit corporation upon its dissolution shall be consistent with all applicable requirements
and limitations set forth in the Internal Revenue Code.
]
[
(3)
] 
(2)
 Dissolution of a nonprofit corporation does not:
(a) transfer title to the nonprofit corporation's property including title to water rights,
water conveyance facilities, or other assets of a nonprofit corporation organized to divert or
distribute water to its members;
(b) subject its directors or officers to standards of conduct different from those
prescribed in this chapter;
(c) change quorum or voting requirements for its board of directors or members;
(d) change provisions for selection, resignation, or removal of its directors or officers,
or both;
(e) change provisions for amending its bylaws or its articles of incorporation;
(f) prevent commencement of a proceeding by or against the nonprofit corporation in
its corporate name; or
(g) abate or suspend a proceeding pending by or against the nonprofit corporation on
the effective date of dissolution.
[
(4)
] 
(3)
 Nothing in this section may be applied in a manner inconsistent with a court's
power of judicial dissolution exercised in accordance with Section 
16-6a-1414
 or 
16-6a-1415
.
Section 27. Section 
42-2-6.6
 is amended to read:
42-2-6.6.
Assumed name.
(1) The assumed name:
(a) may not contain any word or phrase that indicates or implies that the business is
organized for any purpose other than one or more of the purposes contained in its application;
(b) shall be distinguishable from any registered name or trademark of record in the
offices of the Division of Corporations and Commercial Code, as defined in Subsection
16-10a-401
(5), except as authorized by the Division of Corporations and Commercial Code
pursuant to Subsection (2);
(c) without the written consent of the United States Olympic Committee, may not
contain the words:
(i) "Olympic";
(ii) "Olympiad"; or
(iii) "Citius Altius Fortius";
(d) without the written consent of the Division of Consumer Protection issued in
accordance with Section 
13-34-114
, may not contain the words:
(i) "university";
(ii) "college"; or
(iii) "institute" or "institution"; and
(e) an assumed name authorized for use in this state on or after May 1, 2000, may not
contain the words:
(i) "incorporated";
(ii) "inc."; or
(iii) a variation of "incorporated" or "inc."
(2) Notwithstanding Subsection (1)(e), an assumed name may contain a word listed in
Subsection (1)(e) if the Division of Corporations and Commercial Code authorizes the use of
the name by a corporation as defined in:
(a) Subsection 
16-6a-102
[
(25)
]
(26)
;
(b) Subsection 
16-6a-102
[
(34)
]
(35)
;
(c) Subsection 
16-10a-102
(11); or
(d) Subsection 
16-10a-102
(20).
(3) The Division of Corporations and Commercial Code shall authorize the use of the
name applied for if:
(a) the name is distinguishable from one or more of the names and trademarks that are
on the division's records; or
(b) the applicant delivers to the division a certified copy of the final judgment of a
court of competent jurisdiction establishing the applicant's right to use the name applied for in
this state.
(4) The assumed name, for purposes of recordation, shall be either translated into
English or transliterated into letters of the English alphabet if it is not in English.
(5) The Division of Corporations and Commercial Code may not approve an
application for an assumed name to any person violating this section.
(6) The director of the Division of Corporations and Commercial Code shall have the
power and authority reasonably necessary to interpret and efficiently administer this section
and to perform the duties imposed on the division by this section.
(7) A name that implies by any word in the name that it is an agency of the state or of
any of its political subdivisions, if it is not actually such a legally established agency, may not
be approved for filing by the Division of Corporations and Commercial Code.
(8) Section 
16-10a-403
 applies to this chapter.
(9) (a) The requirements of Subsection (1)(d) do not apply to a person who filed a
certificate of assumed and of true name with the Division of Corporations and Commercial
Code on or before May 4, 1998, until December 31, 1998.
(b) On or after January 1, 1999, any person who carries on, conducts, or transacts
business in this state under an assumed name shall comply with the requirements of Subsection
(1)(d).
Legislative Review Note
 as of 2-17-15 11:01 AM
Office of Legislative Research and General Counsel