35-14-870. Business opportunities. (1) If a director or officer pursues or takes advantage of a business opportunity directly, or indirectly through or on behalf of another person, that action may not be the subject of equitable relief or give rise to an award of damages or other sanctions against the director, officer, or other person in a proceeding by or in the right of the corporation on the ground that the opportunity should have first been offered to the corporation if:
(a) before the director, officer, or other person becomes legally obligated respecting the opportunity, the director or officer brings it to the attention of the corporation and either:
(i) action by qualified directors disclaiming the corporation's interest in the opportunity is taken in compliance with the procedures set forth in 35-14-862; or
(ii) shareholders' action disclaiming the corporation's interest in the opportunity is taken in compliance with the procedures set forth in 35-14-863, in either case as if the decision being made concerned a director's conflicting interest transaction, except that rather than making required disclosure as defined in 35-14-860, the director or officer must have made prior disclosure to those acting on behalf of the corporation of all material facts concerning the business opportunity known to the director or officer; or
(b) the duty to offer the corporation the business opportunity has been limited or eliminated pursuant to a provision of the articles of incorporation adopted and, if required, made effective by action of qualified directors in accordance with 35-14-202(2)(f).
(2) In any proceeding seeking equitable relief or other remedies based on an alleged improper pursuit or taking advantage of a business opportunity by a director or officer directly, or indirectly through or on behalf of another person, the fact that the director or officer did not employ the procedure described in subsection (1)(a)(i) or (1)(a)(ii) before pursuing or taking advantage of the opportunity does not create an implication that the opportunity should have been first presented to the corporation or alter the burden of proof otherwise applicable to establish that the director or officer breached a duty to the corporation in the circumstances.
History: En. Sec. 133, Ch. 271, L. 2019.
Copyright ©2024 LegalFix. All rights reserved. LegalFix is not a law firm, is not licensed to practice law, and does not provide legal advice, services, or representation. The information on this website is an overview of the legal plans you can purchase—or that may be provided by your employer as an employee benefit or by your credit union or other membership group as a membership benefit.
LegalFix provides its members with easy access to affordable legal services through a network of independent law firms. LegalFix, its corporate entity, and its officers, directors, employees, agents, and contractors do not provide legal advice, services, or representation—directly or indirectly.
The articles and information on the site are not legal advice and should not be relied upon—they are for information purposes only. You should become a LegalFix member to get legal services from one of our network law firms.
You should not disclose confidential or potentially incriminating information to LegalFix—you should only communicate such information to your network law firm.
The benefits and legal services described in the LegalFix legal plans are not always available in all states or with all plans. See the legal plan Benefit Overview and the more comprehensive legal plan contract during checkout for coverage details in your state.
Use of this website, the purchase of legal plans, and access to the LegalFix networks of law firms are subject to the LegalFix Terms of Service and Privacy Policy.