35-14-749. Judicial determination -- corporate offices -- review of elections and shareholder votes. (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:
(a) the result or validity of the election, appointment, removal, or resignation of a director or officer of the corporation;
(b) the right of an individual to hold the office of director or officer of the corporation;
(c) the result or validity of any vote by the shareholders of the corporation;
(d) the right of a director to membership on a committee of the board of directors; and
(e) the right of a person to nominate or an individual to be nominated as a candidate for election or appointment as a director of the corporation and any right under a bylaw adopted pursuant to 35-14-206(3) or any comparable right under any provision of the articles of incorporation, contract, or applicable law.
(2) An application or proceeding pursuant to subsection (1) may be filed or commenced by any of the following persons:
(a) the corporation;
(b) any record shareholder, beneficial shareholder, or unrestricted voting trust beneficial owner of the corporation;
(c) a director of the corporation, an individual claiming the office of director, or a director whose membership on a committee of the board of directors is contested, in each case who is seeking a determination of the person's right to the office or membership;
(d) an officer of the corporation or an individual claiming to be an officer of the corporation, in each case who is seeking a determination of the person's right to the office; and
(e) a person claiming a right covered by subsection (1)(e) and seeking a determination of that right.
(3) In connection with any application or proceeding under subsection (1), the following must be named as defendants unless the person made the application or commenced the proceeding:
(a) the corporation;
(b) any individual whose right to office or membership on a committee of the board of directors is contested;
(c) any individual claiming the office or membership at issue; and
(d) any person claiming a right covered by subsection (1)(e) that is at issue.
(4) In connection with any application or proceeding under subsection (1), service of process may be made on each of the persons specified in subsection (3) by either:
(a) service of process on the corporation addressed to the person in any manner provided by statute of this state or by rule of the applicable court for service on the corporation; or
(b) service of process on the person in any manner provided by statute of this state or by rule of the applicable court.
(5) When service of process is made on a person other than the corporation by service on the corporation pursuant to subsection (4)(a), the plaintiff and the corporation or its registered agent shall promptly provide written notice of the service, together with copies of all process and the application or complaint, to the person at the person's last-known residence or business address or as permitted by statute of this state or by rule of the applicable court.
(6) In connection with any application or proceeding under subsection (1), the court shall dispose of the application or proceeding on an expedited basis and also may:
(a) order additional or further notice the court considers proper under the circumstances;
(b) order that additional persons be joined as parties to the proceeding if the court determines that joinder is necessary for a just adjudication of matters before the court;
(c) order that an election or meeting be held in accordance with the provisions of 35-14-703(2) or otherwise;
(d) appoint a master to conduct an election or meeting;
(e) enter temporary, preliminary, or permanent injunctive relief;
(f) resolve, solely for the purpose of this proceeding, any legal or factual issues necessary for the resolution of any of the matters specified in subsection (1), including the right and power of persons claiming to own shares to vote at any meeting of the shareholders; and
(g) order any other relief the court determines is equitable, just, and proper.
(7) It is not necessary to make a shareholder a party to a proceeding or application pursuant to this section unless the shareholder is a required defendant under subsection (3)(d), relief is sought against the shareholder individually, or the court orders joinder pursuant to subsection (6)(b).
(8) Nothing in this section limits, restricts, or abolishes the subject matter jurisdiction or powers of the court that existed before the enactment of this section, and an application or proceeding pursuant to this section is not the exclusive remedy or proceeding available with respect to the matters specified in subsection (1).
History: En. Sec. 92, Ch. 271, L. 2019.