1. (1) The legality of a proposed or completed corporate action described in 35-14-1302(1) may not be contested, and the corporate action may not be enjoined, set aside, or rescinded, in a legal or equitable proceeding by a shareholder after the shareholders have approved the corporate action.

2. (2) Subsection (1) does not apply to a corporate action that:

   1. (a) was not authorized and approved in accordance with the applicable provisions of:

      1. (i) part 9, 10, 11, or 12 of this chapter;
      2. (ii) the articles of incorporation or bylaws; or
      3. (iii) the resolution of the board of directors authorizing the corporate action;
   2. (b) was procured as a result of fraud, a material misrepresentation, or an omission of a material fact necessary to make statements made, in light of the circumstances in which they were made, not misleading;
   3. (c) is an interested transaction unless it has been recommended by the board of directors in the manner provided in 35-14-862 and has been approved by the shareholders in the manner provided in 35-14-863 as if the interested transaction were a director's conflicting interest transaction; or

   4. (d) is approved by less than unanimous consent of the voting shareholders pursuant to 35-14-704 if:

      1. (i) the challenge to the corporate action is brought by a shareholder who did not consent and as to whom notice of the approval of the corporate action was not effective at least 10 days before the corporate action was effected; and
      2. (ii) the proceeding challenging the corporate action is commenced within 10 days after notice of the approval of the corporate action is effective as to the shareholder bringing the proceeding.

History: En. Sec. 183, Ch. 271, L. 2019.