(1) Unless otherwise provided by the bylaws, except pursuant to a procedure that is fair and reasonable:
     (a) a member of a nonprofit corporation may not be expelled or suspended; and
     (b) membership in a nonprofit corporation may not be terminated or suspended.

(2) For purposes of this section, a procedure is fair and reasonable when either:
     (a) the bylaws or a written policy of the board of directors set forth a procedure that provides:
            (i) not less than 15 days prior written notice of:
                  (A) the expulsion, suspension, or termination; and
                  (B) the reasons for the expulsion, suspension, or termination; and
            (ii) an opportunity for the member to be heard:
                  (A) orally or in writing;
                  (B) not less than five days before the effective date of the expulsion, suspension, or termination; and
                  (C) by one or more persons authorized to decide that the proposed expulsion, termination, or suspension not take place; or
     (b) it is fair and reasonable taking into consideration all of the relevant facts and circumstances.

(3) For purposes of this section, any written notice given by mail shall be given by first-class or certified mail sent to the last address of the member shown on the nonprofit corporation's records.

(4) Unless otherwise provided by the bylaws, any proceeding challenging an expulsion, suspension, or termination, including a proceeding in which defective notice is alleged, shall be commenced within one year after the effective date of the expulsion, suspension, or termination.

(5) Unless otherwise provided by the bylaws, a member who has been expelled or suspended may be liable to the nonprofit corporation for dues, assessments, or fees as a result of an obligation incurred or commitment made prior to the effective date of the expulsion or suspension.

(6) A mutual benefit corporation that complies with Section 70A-8-409.1 is considered to have followed a fair and reasonable procedure for purposes of this section without the existence of a written policy or bylaw otherwise required by this section. 

Amended by Chapter 311, 2011 General Session