Equity Agreement Form For Business In Utah
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Utah state law does not require LLCs to adopt a written operating agreement. However, any good lawyer will recommend that you create a written operating agreement as one of the first actions of starting your Utah LLC.
Equity agreements allow entrepreneurs to secure funding for their start-up by giving up a portion of ownership of their company to investors. In short, these arrangements typically involve investors providing capital in exchange for shares of stock which they will hold and potentially sell in the future for a profit.
Most management actions are protected from judicial scrutiny by the business judgement rule: absent bad faith, fraud, or breach of a fiduciary duty, the judgement of the managers of a corporation is conclusive.
The rule is a defense to a claim of liability for corporate actions.
Under this standard, a court will uphold the decisions of a director as long as they are made (1) in good faith, (2) with the care that a reasonably prudent person would use, and (3) with the reasonable belief that the director is acting in the best interests of the corporation.
The business judgment rule protects companies from frivolous lawsuits by assuming that, unless proved otherwise, management is acting in the interests of the corporation and its stakeholders. The rule assumes that managers will not make optimal decisions all the time.
In an opinion recently published by California's Second Appellate District — Tuli v. Specialty Surgical Center of Thousand Oaks, LLC — the Court confirmed that the business judgment rule (as described above) applies in LLCs too.
To submit the Utah Corporation Franchise Tax Return, you can send it by mail to the Utah State Tax Commission at 210 North 1950 West, Salt Lake City, UT 84134-2000. You may also submit the tax return electronically through approved e-filing services.
Utah state law does not require LLCs to adopt a written operating agreement. However, any good lawyer will recommend that you create a written operating agreement as one of the first actions of starting your Utah LLC.
