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[Utah Code Table of Contents]
[TITLE 48. Table of Contents]
[CHAPTER 2c. Table of Contents]
48-2c-1201 Events of dissolution.
A company organized under this chapter shall be dissolved upon the occurrence of any of the following events:
(1) when the period fixed for the duration of the company, pursuant to Subsection 48-2c-403 (4)(c), expires;
(2) at such times as the company fails to have at least one member;
(3) by written agreement signed by all members;
(4) upon the occurrence of a dissolution event specified in the articles of organization or operating agreement;
(5) when the company is not the successor company in the merger or consolidation of two or more companies;
(6) upon administrative dissolution under Section 48-2c-1207 , subject to right of reinstatement under Section 48-2c-1208 ; or
(7) upon entry of a decree of judicial dissolution under
Section
48-2c-1213
.
2001
48-2c-1202 Voluntary cancellation of certificate.
Articles of organization may be canceled voluntarily at any time by consent of all members or their successors in interest by submitting to the division for filing a certificate of cancellation that sets forth:
(1) the name of the company;
(2) the date of filing of its articles of organization;
(3) the effective date of cancellation, which shall be a date certain, if the cancellation is not to be effective upon the filing of the certificate; and
(4) any other information the person filing the certificate
determines to be appropriate.
2001
48-2c-1203 Effect of dissolution.
(1) A dissolved company continues its existence but may not carry on any business or activities except as appropriate to wind up and liquidate its business and affairs, as provided in Part 13 of this chapter.
(2) Dissolution of a company does not:
(a) transfer title to the company's property;
(b) prevent transfer of an interest in the company;
(c) subject its members or managers to standards of conduct different from those prescribed in Part 8;
(d) change:
(i) limited liability provided under Part 6 of this chapter;
(ii) voting requirements for its members or managers;
(iii) provisions for selection, resignation, or removal of its managers; or
(iv) provisions for amending its articles of organization or operating agreement;
(e) prevent commencement of a proceeding by or against the company in its company name;
(f) abate or suspend a proceeding pending by or against the company on the effective date of dissolution; or
(g) terminate the authority of the registered agent of
the company.
2001
48-2c-1204 Articles of dissolution.
(1) After any event of dissolution, other than the events described in Subsection 48-2c-1201 (6) or (7), the company, or a person acting for the company, shall deliver to the division for filing articles of dissolution setting forth:
(a) the name of the company;
(b) the address of the company's designated office or, if none is to be maintained, a statement that the company will not maintain a designated office, and, if different from the address of the designated office or if no designated office is to be maintained, the address to which service of process may be mailed pursuant to Section 48-2c-308 ;
(c) the effective date of the dissolution;
(d) the event causing the dissolution;
(e) if dissolution occurred by written agreement of the members, a statement to that effect; and
(f) any additional information the division determines is necessary or appropriate.
(2) A company is dissolved upon the effective date of
dissolution set forth in its articles of dissolution.
2001
48-2c-1205 Revocation of voluntary dissolution.
(1) Where the event of dissolution is the written agreement of the members, a company may revoke its dissolution within 120 days after the effective date of the dissolution.
(2) Revocation of the voluntary dissolution must be approved by all of the members.
(3) After the revocation of voluntary dissolution is approved by all of the members, the company may revoke the dissolution by delivering to the division for filing articles of revocation of dissolution, together with a copy of its articles of dissolution, that set forth:
(a) the name of the company;
(b) the effective date of the dissolution that was revoked; and
(c) the date that the revocation of dissolution was authorized by the members.
(4) Revocation of the voluntary dissolution is effective when the articles of revocation of dissolution are filed with the division. A provision may not be made for a delayed effective date for revocation of voluntary dissolution.
(5) When the revocation of voluntary dissolution is effective,
it relates back to and takes effect as of the effective date
of the dissolution and the company may carry on its business
as if the dissolution had never occurred.
2001
48-2c-1206 Grounds for administrative dissolution.
The division may dissolve a company under Section 48-2c-1207 if:
(1) the company does not pay when due, any taxes, fees, or penalties imposed by this chapter or other applicable laws of this state;
(2) the company does not file its annual report with the division when it is due;
(3) the company is without a registered agent or registered office in this state; or
(4) the company fails to give notice to the division that:
(a) its registered agent or registered office has been changed;
(b) its registered agent has resigned;
(c) its registered office has been discontinued; or
(d) the company's period of duration has expired.
2001
48-2c-1207 Procedure for and effect of administrative dissolution.
(1) If the division determines that one or more grounds exist under Section 48-2c-1206 for dissolving a company, it shall mail to the company written notice of:
(a) the division's determination that one or more grounds exist for dissolving the company; and
(b) the grounds for dissolving the company.
(2) (a) If the company does not correct each ground for dissolution, or demonstrate to the reasonable satisfaction of the division that each ground does not exist, within 60 days after mailing the notice provided in Subsection (1), the division shall administratively dissolve the company.
(b) If a company is dissolved under Subsection (2)(a), the division shall mail written notice of the administrative dissolution to the dissolved company at its designated office, stating the date of dissolution specified in Subsection (2)(d).
(c) The division shall mail a copy of the notice of administrative dissolution including a statement of the grounds for the administrative dissolution, to:
(i) the registered agent of the dissolved company; or
(ii) if there is no registered agent of record, or if the mailing to the registered agent is returned as undeliverable, at least one member if the company is member-managed or one manager of the company if the company is manager-managed, at their addresses as reflected on the notice, annual report, or document most recently filed with the division.
(d) A company's effective date of administrative dissolution is five days after the date the division mails the written notice of dissolution under Subsection (2)(b).
(e) On the effective date of dissolution, any assumed names filed on behalf of the dissolved company under Title 42, Chapter 2, Conducting Business Under Assumed Name, are canceled.
(f) Notwithstanding Subsection (2)(e), the name of the company that is dissolved and any assumed names filed on its behalf are not available for two years from the effective date of dissolution for use by any other person:
(i) transacting business in this state; or
(ii) doing business under an assumed name under Title 42, Chapter 2, Conducting Business Under Assumed Name.
(g) Notwithstanding Subsection (2)(e), if the company that is dissolved is reinstated in accordance with Section 48-2c-1208 , the registration of the name of the company and any assumed names filed on its behalf are reinstated back to the effective date of dissolution.
(3) (a) Except as provided in Subsection (3)(b), a company administratively dissolved under this section continues its existence but may not carry on any business except:
(i) the business necessary to wind up and liquidate its business and affairs under Part 13 of this chapter; and
(ii) to give notice to claimants in the manner provided in Sections 48-2c-1305 and 48-2c-1306 .
(b) If the company is reinstated in accordance with Section 48-2c-1208 , business conducted by the company during a period of administrative dissolution is unaffected by the dissolution.
(4) The administrative dissolution of a company does not terminate the authority of its registered agent.
(5) (a) Upon the administrative dissolution of a company, the director of the division shall be an additional agent of the dissolved company for purposes of service of process.
(b) Service of process on the division under this Subsection (5) is service on the dissolved company.
(c) Upon receipt of process under this Subsection (5), the director of the division shall send a copy of the process to the dissolved company at its designated office and a copy of the process to the registered agent of the dissolved company.
(6) A notice mailed under this section shall be:
(a) mailed first-class, postage prepaid; and
(b) addressed to the most current mailing address appearing on the records of the division for:
(i) the designated office of the company, if the notice is required to be mailed to the company;
(ii) the registered agent of the company, if the notice is required to be mailed to the registered agent; or
(iii) any member if the company is member-managed, or
to any manager of the company if the company is manager-managed,
if the notice is required to be mailed to a member or manager
of the company.
2002
48-2c-1208 Reinstatement following administrative dissolution.
(1) A company dissolved under Section 48-2c-1207 may apply to the division for reinstatement within two years after the effective date of dissolution by delivering to the division for filing an application for reinstatement that states:
(a) the effective date of the company's dissolution;
(b) the company name as of the effective date of dissolution;
(c) that the ground for dissolution either did not exist or has been eliminated;
(d) the name under which the company is being reinstated, if different than the name stated in Subsection (1)(b);
(e) that the name stated in Subsection (1)(d) satisfies the requirements of Section 48-2c-106 ;
(f) that all fees or penalties imposed pursuant to this chapter or otherwise owed by the company to the state have been paid;
(g) the address of the designated office of the company;
(h) the address of its registered office in this state; and
(i) the name of its registered agent at the office stated in Subsection (1)(h) and any additional information the division determines to be necessary or appropriate.
(2) The company shall include in or with the application for reinstatement the written consent to appointment by the designated registered agent.
(3) If the division determines that the application for reinstatement contains the information required by Subsections (1) and (2) and that the information is correct, the division shall revoke the administrative dissolution. The division shall mail to the company in the manner provided in Subsection 48-2c-1207 (6) written notice of:
(a) the revocation; and
(b) the effective date of the revocation.
(4) When the reinstatement is effective, it relates back to the effective date of the administrative dissolution. Upon reinstatement:
(a) an act of the company during the period of dissolution is effective and enforceable as if the administrative dissolution had never occurred; and
(b) the company may carry on its business, under the name
stated pursuant to Subsection (1)(b) or (1)(d), as if the
administrative dissolution had never occurred.
2001
48-2c-1209 Appeal from denial of reinstatement.
If the division denies a company's application for reinstatement under Section 48-2c-1208 following administrative dissolution, the division shall mail to the company in the manner provided in Subsection 48-2c-1207 (6) written notice:
(1) setting forth the reasons for denying the application; and
(2) stating that the company has the right to appeal the
division's determination to the executive director of the
Department of Commerce in accordance with Title 63, Chapter
46b, Administrative Procedures Act.
2001
48-2c-1210 Grounds for judicial dissolution.
(1) A company may be dissolved in a proceeding filed by the attorney general or the director of the division if it is established that the company:
(a) obtained the filing of its articles of organization through fraud;
(b) continually exceeded or abused the authority conferred upon it by law;
(c) committed a violation of any provision of law whereby it has forfeited its charter;
(d) carried on, conducted, or transacted its business in a persistently fraudulent or illegal manner;
(e) abused its powers contrary to the public policy of this state; or
(f) failed to amend its articles of organization as required by Section 48-2c-405 .
(2) A company may be dissolved in a proceeding filed by any member if it is established that:
(a) the managers are deadlocked in management of company affairs and the members are unable to break the deadlock, irreparable injury to the company is threatened or being suffered, or the business and affairs of the company can no longer be conducted to the advantage of the members generally, because of the deadlock;
(b) the managers or those in control of the company 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 the deadlock has continued for a period of at least six months;
(d) the company assets are being misapplied or wasted; or
(e) it is not reasonably practical to carry on the business of the company in conformity with its articles of organization and operating agreement.
(3) A company may be dissolved in a proceeding filed by a creditor of the company if it is established that:
(a) the creditor's claim has been reduced to judgment, the execution on the judgment has been returned unsatisfied, and the company is insolvent; or
(b) the company is insolvent and the company has admitted in writing that the creditor's claim is due and owing.
(4) A company may commence a proceeding under this section
when the company seeks to have its voluntary dissolution
continued under court supervision.
2001
48-2c-1211 Procedure for judicial dissolution.
(1) A proceeding by the attorney general or director of the division to dissolve a company shall be brought in either the district court of the county in this state in which the designated office or, if it has no designated office in this state, its registered office is or was last located, or the district court of Salt Lake County. A proceeding brought by any other party named in Section 48-2c-1210 shall be brought in the district court of the county in this state where the company's designated office or, if it has no designated office in this state, its registered office is or was last located.
(2) It is not necessary to make any member or manager a party to a proceeding to dissolve a company unless relief is sought against them individually.
(3) A court in a proceeding brought to dissolve a company
may issue injunctions, appoint a receiver or custodian pendente
lite with all powers and duties the court directs, take other
action required to preserve the company's assets wherever
located, and carry on the business of the company until a
full hearing can be held.
2001
48-2c-1212 Receivership or custodianship.
(1) A court in a judicial proceeding brought to dissolve a company may, at any time before entering a decree of dissolution, appoint one or more custodians to manage the business and affairs of the company until further order of the court and may, upon or after entering a decree dissolving the company, appoint one or more receivers to wind up and liquidate the business and affairs of the company. The court shall hold a hearing, after giving notice to all parties to the proceeding and any interested persons designated by the court, before appointing a receiver or a custodian. The court appointing a receiver or custodian has exclusive jurisdiction over the company and all of its property wherever located.
(2) The court may appoint any person or the court may require the receiver or custodian to post bond, with or without sureties, in an amount the court directs.
(3) The court shall describe the powers and duties of the receiver or custodian in its appointing order, which may be amended from time to time. Among other powers:
(a) the receiver:
(i) may dispose of all or any part of the assets of the company wherever located, at a public or private sale, if authorized by the court; and
(ii) may sue and defend in its own name as receiver of the company in all courts of this state; or
(b) the custodian may exercise all of the powers of the company, through or in place of its members or managers, to the extent necessary to manage the affairs of the company in the best interests of its members and creditors.
(4) The court during a receivership may redesignate the receiver a custodian, and during a custodianship may redesignate the custodian a receiver, if doing so is in the best interests of the company, its members, and its creditors.
(5) The court from time to time during the receivership
or custodianship may order compensation paid and expense
disbursements or reimbursements made to the receiver or custodian
and the custodian's or receiver's counsel from the assets
of the company or proceeds from the sale of the assets.
2001
48-2c-1213 Decree of dissolution.
(1) If after a hearing the court determines that one or more grounds for judicial dissolution described in Section 48-2c-1210 exist, it may enter a decree dissolving the company and specifying the effective date of the dissolution. The clerk of the court shall deliver a certified copy of the decree to the division for filing and shall mail a copy of the decree to the registered agent of the company or to the division if it has no registered agent of record.
(2) After entering the decree of dissolution, the court shall direct the winding up and liquidation of the company's business and affairs in accordance with Part 13.
(3) The court's order may be appealed as in other civil
proceedings.
2001
48-2c-1214 Election to purchase in lieu of dissolution.
(1) In a proceeding under Subsection 48-2c-1210 (2) to dissolve a company, the company may elect, or if it fails to elect, one of more members may elect to purchase the interest in the company owned by the petitioning member at the fair market value of the interest, determined as provided in this section. An election pursuant to this section is irrevocable unless the court determines that it is equitable to set aside or modify the election.
(2) (a) An election to purchase pursuant to this section may be filed with the court at any time within 90 days after the filing of the petition in a proceeding under Subsection 48-2c-1210 (2) or at any later time as the court in its discretion may allow. If the company files an election with the court within the 90-day period, or at any later time allowed by the court, to purchase the interest in the company owned by the petitioning member, the company shall purchase the interest in the manner provided in this section.
(b) If the company does not file an election with the court within the time period, but an election to purchase the interest in the company owned by the petitioning member is filed by one or more members within the time period, the company shall, within ten days after the later of the end of the time period allowed for the filing of elections to purchase under this section or notification from the court of an election by members to purchase the interest in the company owned by the petitioning member as provided in this section, give written notice of the election to purchase to all members of the company, other than the petitioning member. The notice shall state the name and the percentage interest in the company owned by the petitioning member and the name and the percentage interest in the company owned by each electing member. The notice shall advise any recipients who have not participated in the election of their right to join in the election to purchase the interest in the company in accordance with this section, and of the date by which any notice of intent to participate must be filed with the court.
(c) Members who wish to participate in the purchase of the interest in the company of the petitioning member must file notice of their intention to join in the purchase by electing members, no later than 30 days after the effective date of the company's notice of their right to join in the election to purchase.
(d) All members who have filed with the court an election or notice of their intention to participate in the election to purchase the interest in the company of the petitioning member thereby become irrevocably obligated to participate in the purchase of the interest from the petitioning member upon the terms and conditions of this section, unless the court otherwise directs.
(e) After an election has been filed by the company or one or more members, the proceedings under Subsection 48-2c-1210 (2) may not be discontinued or settled, nor may the petitioning member sell or otherwise dispose of his interest in the company, unless the court determines that it would be equitable to the company and the members, other than the petitioning member, to permit any discontinuance, settlement, sale, or other disposition.
(3) If, within 60 days after the earlier of the company filing of an election to purchase the interest in the company of the petitioning member or the company's mailing of a notice to its members of the filing of an election by the members to purchase the interest in the company of the petitioning member, the petitioning member and electing company or members reach agreement as to the fair market value and terms of the purchase of the petitioning member's interest, the court shall enter an order directing the purchase of the petitioning member's interest, upon the terms and conditions agreed to by the parties.
(4) If the parties are unable to reach an agreement as provided for in Subsection (3), upon application of any party, the court shall stay the proceedings under Subsection 48-2c-1210 (2) and determine the fair market value of the petitioning member's interest in the company as of the day before the date on which the petition under Subsection 48-2c-1210 (2) was filed or as of any other date the court determines to be appropriate under the circumstances and based on the factors the court determines to be appropriate.
(5) (a) Upon determining the fair market value of the interest in the company of the petitioning member, the court shall enter an order directing the purchase of the interest in the company upon terms and conditions the court determines to be appropriate. The terms and conditions may include payment of the purchase price in installments, where necessary in the interest of equity, provision for security to assure payment of the purchase price and any additional costs, fees, and expenses awarded by the court, and an allocation of the interest in the company among members if the interest in the company is to be purchased by members.
(b) In allocating the petitioning member's interest in the company among holders of different classes of members, the court shall attempt to preserve the existing distribution of voting rights among member classes to the extent practicable. The court may direct that holders of a specific class or classes shall not participate in the purchase. The court may not require any electing member to purchase more of the interest in the company owned by the petitioning member than the percentage interest that the purchasing member may have set forth in his election or notice of intent to participate filed with the court.
(c) Interest may be allowed at the rate and from the date determined by the court to be equitable. However, if the court finds that the refusal of the petitioning member to accept an offer of payment was arbitrary or otherwise not in good faith, interest may not be allowed.
(d) If the court finds that the petitioning member had probable ground for relief under Subsection 48-2c-1210 (2)(b) or (2)(d), it may award to the petitioning member reasonable fees and expenses of counsel and experts employed by the petitioning member.
(6) Upon entry of an order under Subsection (3) or (5), the court shall dismiss the petition to dissolve the company under Subsection 48-2c-1210 (2) and the petitioning member shall no longer have any rights or status as a member of the company, except the right to receive the amounts awarded to him by the court. The award is enforceable in the same manner as any other judgment.
(7) (a) The purchase ordered pursuant to Subsection (5) shall be made within ten days after the date the order becomes final, unless before that time the company files with the court a notice of its intention to adopt articles of dissolution pursuant to Section 48-2c-1204 . The articles of dissolution must then be adopted and filed within 60 days after notice.
(b) Upon filing of articles of dissolution, the company is dissolved and shall be wound up pursuant to Part 13 of this chapter, and the order entered pursuant to Subsection (5) is no longer of any force or effect. However, the court may award the petitioning member reasonable fees and expenses in accordance with the provisions of Subsection (5)(d). The petitioning member may continue to pursue any claims previously asserted on behalf of the company.
(8) Any payment by the company pursuant to an order under
Subsection (3) or (5), other than an award of fees and expenses
pursuant to Subsection (5)(d), is subject to the provisions
of Sections
48-2c-1005
and
48-2c-1006
.
2001
