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Current as of May 05, 2022 | Updated by FindLaw Staff
(1) A nonprofit corporation may be dissolved in a proceeding by the attorney general or the division director if it is established that:
(a) the nonprofit corporation obtained its articles of incorporation through fraud; or
(b) the nonprofit corporation has continued to exceed or abuse the authority conferred upon it by law.
(2) A nonprofit corporation may be dissolved in a proceeding by a member or director if it is established that:
(a)(i) the directors are deadlocked in the management of the corporate affairs;
(ii) the members, if any, are unable to break the deadlock; and
(iii) irreparable injury to the nonprofit corporation is threatened or being suffered;
(b) the directors or those in control of the nonprofit corporation have acted, are acting, or will act in a manner that is illegal, oppressive, or fraudulent;
(c) the members are deadlocked in voting power and have failed, for a period that includes at least two consecutive annual meeting dates, to elect successors to directors whose terms have expired or would have expired upon the election of their successors; or
(d) the corporate assets are being misapplied or wasted.
(3) A nonprofit corporation may be dissolved in a proceeding by a creditor if it is established that:
(a)(i) the creditor's claim has been reduced to judgment;
(ii) the execution on the judgment has been returned unsatisfied; and
(iii) the nonprofit corporation is insolvent; or
(b)(i) the nonprofit corporation is insolvent; and
(ii) the nonprofit corporation has admitted in writing that the creditor's claim is due and owing.
(4)(a) If a nonprofit corporation has been dissolved by voluntary or administrative action taken under this part:
(i) the nonprofit corporation may bring a proceeding to wind up and liquidate its business and affairs under judicial supervision in accordance with Section 16-6a-1405; and
(ii) the attorney general, a director, a member, or a creditor may bring a proceeding to wind up and liquidate the affairs of the nonprofit corporation under judicial supervision in accordance with Section 16-6a-1405, upon establishing the grounds set forth in Subsections (1) through (3).
(b) As used in Sections 16-6a-1415 through 16-6a-1417:
(i) a “judicial proceeding to dissolve the nonprofit corporation” includes a proceeding brought under this Subsection (4); and
(ii) a “decree of dissolution” includes an order of a court entered in a proceeding under this Subsection (4) that directs that the affairs of a nonprofit corporation shall be wound up and liquidated under judicial supervision.
Cite this article: FindLaw.com - Utah Code Title 16. Corporations § 16-6a-1414. Grounds for judicial dissolution - last updated May 05, 2022 | https://codes.findlaw.com/ut/title-16-corporations/ut-code-sect-16-6a-1414/
FindLaw Codes may not reflect the most recent version of the law in your jurisdiction. Please verify the status of the code you are researching with the state legislature or via Westlaw before relying on it for your legal needs.
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