Utah Code » Title 16, Chapter 10a — Utah Revised Business Corporation Act; part 16-10a-8 — Directors and Officers
Utah Code

Utah Code § 16-10a-842 (2026)

Liability of directors for unlawful distributions

✓ laws through the 2026 General Session (checked Sept. 2026)
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A director who votes for or assents to a distribution made in violation of Section 16-10a-640 or the articles of incorporation is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating Section 16-10a-640 or the articles of incorporation, if it is established that the director's duties were not performed in compliance with Section 16-10a-840. In any proceeding commenced under this section, a director has all of the defenses ordinarily available to a director.
A director held liable under Subsection (1) for an unlawful distribution is entitled to contribution:
from every other director who could be held liable under Subsection (1) for the unlawful distribution; and
from each shareholder, who accepted the distribution knowing the distribution was made in violation of Section 16-10a-640 or the articles of incorporation, the amount of the contribution from each shareholder being the amount of the distribution to the shareholder multiplied by the percentage of the amount of distribution to all shareholders that exceeded what could have been distributed to shareholders without violating Section 16-10a-640 or the articles of incorporation.
A proceeding under this section is barred unless it is commenced within two years after the date on which the effect of the distribution is measured under Subsection 16-10a-640(5) or (7).
Notes of Decisions
Cited in 1 case, 2017–2017 · leading case: Rawcliffe v. Anciaux, 2017 UT 72, 416 P.3d 362.
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Rawcliffe v. Anciaux, 2017 UT 72, 416 P.3d 362. “Otherwise, if it is not a breach of subsection (4), the "director or officer is not liable to the corporation [or] its shareholders," absent some other statutory authorization.”
Utah Code § 16-10a-842(1): 1 case
Rawcliffe v. Anciaux, 2017 UT 72, 416 P.3d 362. “Otherwise, if it is not a breach of subsection (4), the "director or officer is not liable to the corporation [or] its shareholders," absent some other statutory authorization.”
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