Title 35, Title 35

(1) An agreement among the shareholders of a corporation that complies with this section is effective among the shareholders and the corporation even though it is inconsistent with one or more other provisions of this chapter in that it: (a) eliminates the board of directors or r…

In 35-14-740 through 35-14-747, the following definitions apply: (1) "Derivative proceeding" means a civil suit in the right of a domestic corporation or, to the extent provided in 35-14-747, in the right of a foreign corporation. (2) "Shareholder" means a record shareholder, a b…

A shareholder may not commence or maintain a derivative proceeding unless the shareholder: (1) was a shareholder of the corporation at the time of the act or omission complained of or became a shareholder through transfer by operation of law from one who was a shareholder at that…

A shareholder may not commence a derivative proceeding until: (1) a written demand has been made on the corporation to take suitable action; and (2) 90 days have expired from the date delivery of the demand was made unless the shareholder has earlier been notified that the demand…

If the corporation commences an inquiry into the allegations made in the demand or complaint, the court may stay any derivative proceeding for any period the court considers appropriate.

(1) A derivative proceeding must be dismissed by the court on motion by the corporation if one of the groups specified in subsection (2) or (5) has determined in good faith, after conducting a reasonable inquiry on which its conclusions are based, that the maintenance of the deri…

A derivative proceeding may not be discontinued or settled without the court's approval. If the court determines that a proposed discontinuance or settlement will substantially affect the interests of the corporation's shareholders or a class or series of shareholders, the court …

On termination of the derivative proceeding, the court may: (1) order the corporation to pay the plaintiff's expenses incurred in the proceeding if it finds that the proceeding has resulted in a substantial benefit to the corporation; (2) order the plaintiff to pay any defendant'…

In any derivative proceeding in the right of a foreign corporation, the matters covered by 35-14-740 through 35-14-747 are governed by the laws of the jurisdiction of incorporation of the foreign corporation except 35-14-743, 35-14-745, and 35-14-746.

(1) The district court of the county where a corporation's principal office is located or, if its principal office is not located in this state, of the first judicial district may appoint one or more persons to be custodians, or, if the corporation is insolvent, to be receivers o…

(1) Upon application of or in a proceeding commenced by a person specified in subsection (2), the district court of the county where a corporation's principal office is located or, if its principal office is not located in this state, of the first judicial district may determine:…

(1) Except as may be provided in an agreement authorized under 35-14-732, each corporation must have a board of directors. (2) Except as may be provided in an agreement authorized under 35-14-732 and subject to any limitation in the articles of incorporation permitted by 35-14-20…

(1) The articles of incorporation or bylaws may prescribe qualifications for directors or for nominees for directors. Qualifications must be reasonable as applied to the corporation and must be lawful. (2) A requirement that is based on a past, prospective, or current action or e…

(1) A board of directors must consist of one or more individuals, with the number specified in or fixed in accordance with the articles of incorporation or bylaws. (2) The number of directors may be increased or decreased from time to time by amendment to or in the manner provide…

If the articles of incorporation or action by the board of directors pursuant to 35-14-602 authorizes dividing the shares into classes or series, the articles of incorporation may also authorize the election of all or a specified number of directors by the holders of one or more …

(1) The terms of the initial directors of a corporation expire at the first shareholders' meeting at which directors are elected. (2) The terms of all other directors expire at the next or, if their terms are staggered in accordance with 35-14-806, at the applicable second or thi…

The articles of incorporation may provide for staggering the terms of directors by dividing the total number of directors into two or three groups, with each group containing half or one-third of the total, as near as may be practicable. In that event, the terms of directors in t…

(1) A director may resign at any time by delivering a written notice of resignation to the board of directors or its chair or to the secretary. (2) A resignation is effective as provided in 35-14-141(9) unless the resignation provides for a delayed effectiveness, including effect…

(1) The shareholders may remove one or more directors with or without cause unless the articles of incorporation provide that directors may be removed only for cause. (2) If a director is elected by a voting group of shareholders, only the shareholders of that voting group may pa…

(1) The district court of the county where a corporation's principal office is located or, if its principal office is not located in this state, of the first judicial district may remove a director from office or may order other relief, including barring the director from reelect…

(1) Unless the articles of incorporation provide otherwise, if a vacancy occurs on a board of directors, including a vacancy resulting from an increase in the number of directors: (a) the shareholders may fill the vacancy; (b) the board of directors may fill the vacancy; or (c) i…

Unless the articles of incorporation or bylaws provide otherwise, the board of directors may fix the compensation of directors.

(1) The board of directors may hold regular or special meetings in or out of this state. (2) Unless restricted by the articles of incorporation or bylaws, any or all directors may participate in any meeting of the board of directors through the use of any means of communication b…

(1) Except to the extent that the articles of incorporation or bylaws require that action by the board of directors be taken at a meeting, action required or permitted by this chapter to be taken by the board of directors may be taken without a meeting if each director signs a co…

(1) Unless the articles of incorporation or bylaws provide otherwise, regular meetings of the board of directors may be held without notice of the date, time, place, or purpose of the meeting. (2) Unless the articles of incorporation or bylaws provide for a longer or shorter peri…

(1) A director may waive any notice required by this chapter, the articles of incorporation, or the bylaws before or after the date and time stated in the notice. Except as provided by subsection (2), the waiver must be in writing, be signed by the director entitled to the notice…

(1) Unless the articles of incorporation or bylaws provide for a greater or lesser number or unless otherwise expressly provided in this chapter, a quorum of a board of directors consists of a majority of the number of directors specified in or fixed in accordance with the articl…

(1) Unless this chapter, the articles of incorporation, or the bylaws provide otherwise, a board of directors may establish one or more board committees composed exclusively of one or more directors to perform functions of the board of directors. (2) The establishment of a board …

A corporation may agree to submit a matter to a vote of its shareholders even if, after approving the matter, the board of directors determines it no longer recommends the matter.

(1) Each member of the board of directors, when discharging the duties of a director, shall act: (a) in good faith; and (b) in a manner the director reasonably believes to be in the best interests of the corporation. (2) The members of the board of directors or a board committee,…

(1) A director may not be liable to the corporation or its shareholders for any decision to take or not to take action, or any failure to take any action, as a director unless the party asserting liability in a proceeding establishes that: (a) no defense interposed by the directo…

(1) A director who votes for or assents to a distribution in excess of what may be authorized and made pursuant to 35-14-640(1) or 35-14-1409(1) is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violat…

(1) A corporation has the officers described in its bylaws or appointed by the board of directors in accordance with the bylaws. (2) The board of directors may elect individuals to fill one or more offices of the corporation. An officer may appoint one or more officers if authori…

Each officer has the authority and shall perform the functions set forth in the bylaws or, to the extent consistent with the bylaws, the functions prescribed by the board of directors or by direction of an officer authorized by the board of directors to prescribe the functions of…

(1) An officer, when performing in an official capacity, has the duty to act: (a) in good faith; (b) with the care that a person in a like position would reasonably exercise under similar circumstances; and (c) in a manner the officer reasonably believes to be in the best interes…

(1) An officer may resign at any time by delivering a written notice to the corporation. A resignation is effective as provided in 35-14-141(9) unless the notice provides for delayed effectiveness, including effectiveness determined on a future event or events. If effectiveness o…

(1) The election or appointment of an officer does not itself create contract rights. (2) An officer's removal does not affect the officer's contract rights, if any, with the corporation. An officer's resignation does not affect the corporation's contract rights, if any, with the…

For the purposes of 35-14-850 through 35-14-859, unless the context clearly requires otherwise, the following definitions apply: (1) "Corporation" includes any domestic or foreign predecessor entity of a corporation in a merger or other transaction in which the predecessor's exis…

(1) Except as otherwise provided in this section, a corporation may indemnify an individual who is a party to a proceeding because the individual is a director against liability incurred in the proceeding if: (a) (i) the director acted in good faith; and (ii) the director reasona…

A corporation shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which the director was a party because the director was a director of the corporation against expenses incurred by the director in connection with t…

(1) A corporation may, before final disposition of a proceeding, advance funds to pay for or reimburse expenses incurred in connection with the proceeding by an individual who is a party to the proceeding because that individual is a director if the director delivers to the corpo…

(1) A director who is a party to a proceeding because the person is a director may apply for indemnification or an advance for expenses to the court conducting the proceeding or to another court of competent jurisdiction. After receipt of an application and after giving any notic…

(1) A corporation may not indemnify a director under 35-14-851 unless authorized for a specific proceeding after a determination has been made that indemnification is permissible because the director has met the relevant standard of conduct set forth in 35-14-851. (2) The determi…

(1) A corporation may indemnify and advance expenses under 35-14-850 through 35-14-859 to an officer who is a party to a proceeding because the person is an officer: (a) to the same extent as a director; and (b) if the person is an officer but not a director, to any further exten…

A corporation may purchase and maintain insurance on behalf of an individual who is a director or officer of the corporation or who, while a director or officer of the corporation, serves at the corporation's request as a director, officer, partner, trustee, employee, or agent of…

(1) A corporation may, by a provision in its articles of incorporation or bylaws or in a resolution adopted or a contract approved by the board of directors or shareholders, obligate itself in advance of the act or omission giving rise to a proceeding to provide indemnification i…