Utah § 16-10b-305 Right of action.

Utah Statutes

§ 16-10b-305 — Right of action.

Utah § 16-10b-305

Title 16Corporations

Ch. 16-10bBenefit Corporation Act

Part 16-10b-3Accountability

This text of Utah § 16-10b-305 (Right of action.) is published on Counsel Stack Legal Research, covering Utah primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Utah Code Ann. § 16-10b-305 (2026).

Text

(1)Except in a benefit enforcement proceeding, a person may not bring an action or assert a claim against a benefit corporation or its directors or officers with respect to:

(1)(a) failure to pursue or create general public benefit or a specific public benefit set forth in its articles of incorporation; or

(1)(b) violation of an obligation, duty, or standard of conduct under this chapter.

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

(3)(3)(a) A benefit enforcement proceeding may be commenced or maintained only:

(3)(a)(i) directly by the benefit corporation; or

(3)(a)(ii) derivatively by:

(3)(a)(ii)(A) a person or group of persons that

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(1) Except in a benefit enforcement proceeding, a person may not bring an action or assert a claim against a benefit corporation or its directors or officers with respect to:

(1)(a) failure to pursue or create general public benefit or a specific public benefit set forth in its articles of incorporation; or
(1)(b) violation of an obligation, duty, or standard of conduct under this chapter.
(2) A benefit corporation may not be liable for monetary damages under this chapter for a failure of the benefit corporation to pursue or create general public benefit or a specific public benefit.
(3) (3)(a) A benefit enforcement proceeding may be commenced or maintained only:
(3)(a)(i) directly by the benefit corporation; or
(3)(a)(ii) derivatively by:

(3)(a)(ii)(A) a person or group of persons that owns beneficially or of record at least 2% of the total number of shares of a class or series outstanding at the time of the act or omission complained of;
(3)(a)(ii)(B) a director;
(3)(a)(ii)(C) a person or group of persons that own beneficially or of record 5% or more of the outstanding equity interests in an entity of which the benefit corporation is a subsidiary at the time of the act or omission complained of; or
(3)(a)(ii)(D) other persons as specified in the articles of incorporation or bylaws of the benefit corporation.
(3)(b) A benefit corporation may provide in its articles of incorporation a greater degree of ownership by a person or group of persons than those listed under Subsection (3)(a) to bring a derivative action.
(4) For purposes of this section, a person is the beneficial owner of shares or equity interests if the shares or equity interests are held in a voting trust or by a nominee on behalf of the beneficial owner.