1. (1) Except as provided in Subsection (3), and unless otherwise provided in the articles of incorporation or the bylaws, a member of a nonprofit corporation may not transfer:

   1. (a) a membership; or
   2. (b) any right arising from a membership.
2. (2) Except as provided in Subsection (3), where transfer rights have been provided in the articles of incorporation or the bylaws of a nonprofit corporation, a restriction on transfer rights may not be binding with respect to a member holding a membership issued before the adoption of the restriction, unless the restriction is approved by the affected member.

3. (3)

   1. (a) For a water company, unless otherwise provided by the articles of incorporation or bylaws, ownership of shares is transferrable.

   2. (b) Any restriction on the transfer of ownership under Subsection (3)(a):

      1. (i) shall be reasonable;
      2. (ii) shall be adopted in good faith and for a legitimate purpose;
      3. (iii) shall be adopted in the best interest of the water company and its shareholders; and
      4. (iv) may not discriminate against any individual shareholder or class of shareholders, but in a company where there are classes or divisions of stock, restrictions may differ between the classes or divisions.
   3. (c) Nothing in this section is intended to alter any right or remedy a shareholder may have under Sections 16-6a-612, 16-6a-808, 16-6a-809, 16-6a-822, 16-6a-824, and 16-6a-825, or any other applicable law.

Amended by Chapter 358, 2017 General Session