Iowa Code
Chapter 504 - REVISED IOWA NONPROFIT CORPORATION ACT
Section 504.635 - Dismissal.

504.635 Dismissal.
1. A derivative proceeding shall be dismissed by the court on motion by the corporation if one of the groups specified in subsection 2 or 6 has determined in good faith after conducting a reasonable inquiry upon which its conclusions are based that the maintenance of the derivative proceeding is not in the best interests of the corporation. A corporation moving to dismiss on this basis shall submit in support of the motion a short and concise statement of the reasons for its determination.
2. Unless a panel is appointed pursuant to subsection 6, the determination in subsection 1 shall be made by one of the following:
a. A majority vote of independent directors present at a meeting of the board of directors if the independent directors constitute a quorum.
b. A majority vote of a committee consisting of two or more independent directors appointed by majority vote of independent directors present at a meeting of the board of directors, whether or not such independent directors constitute a quorum.
3. None of the following shall by itself cause a director to be considered not independent for purposes of this section:
a. The nomination or election of the director by persons who are defendants in the derivative proceeding or against whom action is demanded.
b. The naming of the director as a defendant in the derivative proceeding or as a person against whom action is demanded.
c. The approval by the director of the act being challenged in the derivative proceeding or demand if the act resulted in no personal benefit to the director.
4. a. If a derivative proceeding is commenced after a determination has been made rejecting a demand by a member or director, the complaint shall allege with particularity facts establishing one of the following:
(1) That a majority of the board of directors did not consist of independent directors at the time the determination was made.
(2) That the requirements of subsection 1 have not been met.
b. All discovery and other proceedings shall be stayed during the pendency of any motion to dismiss unless the court finds upon the motion of any party that particularized discovery is necessary to preserve evidence or prevent undue prejudice to that party.
5. If a majority of the board of directors does not consist of independent directors at the time the determination is made, the corporation shall have the burden of proving that the requirements of subsection 1 have been met. If a majority of the board of directors consists of independent directors at the time the determination is made, the plaintiff shall have the burden of proving that the requirements of subsection 1 have not been met.
6. The court may appoint a panel of one or more independent persons upon motion by the corporation to make a determination whether the maintenance of the derivative proceeding is in the best interests of the corporation. In such case, the plaintiff shall have the burden of proving that the requirements of subsection 1 have not been met.
2004 Acts, ch 1049, §50, 192; 2012 Acts, ch 1023, §157
Referred to in §504.810

Structure Iowa Code

Iowa Code

Title XII - BUSINESS ENTITIES

Chapter 504 - REVISED IOWA NONPROFIT CORPORATION ACT

Section 504.101 - Short title.

Section 504.102 - Reservation of power to amend or repeal.

Section 504.103 - Limitation on requirements imposed on corporations.

Section 504.111 - Filing requirements.

Section 504.111A - Secretary of state — extra services — surcharge.

Section 504.112 - Forms.

Section 504.113 - Filing, service, and copying fees.

Section 504.114 - Effective date of document.

Section 504.115 - Correcting filed document.

Section 504.116 - Filing duty of secretary of state.

Section 504.117 - Appeal from secretary of state’s refusal to file document.

Section 504.118 - Evidentiary effect of copy of filed document.

Section 504.119 - Certificate of existence.

Section 504.120 - Penalty for signing false document.

Section 504.131 - Powers.

Section 504.132 - Secretary of state — internet site.

Section 504.141 - Chapter definitions.

Section 504.142 - Notice.

Section 504.151 - Judicial relief.

Section 504.201 - Incorporators.

Section 504.202 - Articles of incorporation.

Section 504.203 - Incorporation.

Section 504.204 - Liability for preincorporation transactions.

Section 504.205 - Organization of corporation.

Section 504.206 - Bylaws.

Section 504.207 - Emergency bylaws and powers.

Section 504.208 - Foreign-trade zone corporation.

Section 504.301 - Purposes.

Section 504.302 - General powers.

Section 504.303 - Emergency powers.

Section 504.304 - Ultra vires.

Section 504.401 - Corporate name.

Section 504.402 - Reserved name.

Section 504.403 - Registered name.

Section 504.501 - Registered office and registered agent.

Section 504.502 - Change of registered office or registered agent.

Section 504.503 - Resignation of registered agent.

Section 504.504 - Service on corporation.

Section 504.601 - Admission.

Section 504.602 - Consideration.

Section 504.603 - No requirement of members.

Section 504.611 - Differences in rights and obligations of members.

Section 504.612 - Transfers.

Section 504.613 - Member’s liability to third parties.

Section 504.614 - Member’s liability for dues, assessments, and fees.

Section 504.615 - Creditor’s action against member.

Section 504.621 - Resignation.

Section 504.622 - Termination, expulsion, or suspension.

Section 504.623 - Purchase of memberships.

Section 504.631 - Derivative proceedings — definition.

Section 504.632 - Standing.

Section 504.633 - Demand.

Section 504.634 - Stay of proceedings.

Section 504.635 - Dismissal.

Section 504.636 - Discontinuance or settlement.

Section 504.637 - Payment of expenses.

Section 504.638 - Applicability to foreign corporations.

Section 504.641 - Delegates.

Section 504.701 - Annual and regular meetings.

Section 504.702 - Special meeting.

Section 504.702A - Remote participation in meetings of members.

Section 504.703 - Court-ordered meeting.

Section 504.704 - Action by written consent.

Section 504.705 - Notice of meeting.

Section 504.706 - Waiver of notice.

Section 504.707 - Record date — determining members entitled to notice and vote.

Section 504.708 - Action by written ballot.

Section 504.709 - Conduct of meetings.

Section 504.711 - Members’ list for meeting.

Section 504.712 - Voting entitlement generally.

Section 504.713 - Quorum requirements.

Section 504.714 - Voting requirements.

Section 504.715 - Proxies.

Section 504.716 - Cumulative voting for directors.

Section 504.717 - Other methods of electing directors.

Section 504.718 - Corporation’s acceptance of votes.

Section 504.719 - Inspectors of election.

Section 504.721 - Voting agreements.

Section 504.801 - Requirement for and duties of board.

Section 504.802 - Qualifications of directors.

Section 504.803 - Number of directors.

Section 504.804 - Election, designation, and appointment of directors.

Section 504.805 - Terms of directors generally.

Section 504.806 - Staggered terms for directors.

Section 504.807 - Resignation of directors.

Section 504.808 - Removal of directors elected by members or directors.

Section 504.809 - Removal of designated or appointed directors.

Section 504.810 - Removal of directors by judicial proceeding.

Section 504.811 - Vacancy on board.

Section 504.812 - Compensation of directors.

Section 504.821 - Regular and special meetings.

Section 504.822 - Action without meeting.

Section 504.823 - Call and notice of meetings.

Section 504.824 - Waiver of notice.

Section 504.825 - Quorum and voting.

Section 504.826 - Committees of the board.

Section 504.831 - General standards for directors.

Section 504.832 - Standards of liability for directors.

Section 504.833 - Director conflict of interest.

Section 504.834 - Loans to or guarantees for directors and officers.

Section 504.835 - Liability for unlawful distributions.

Section 504.836 - Business opportunities.

Section 504.841 - Required officers.

Section 504.842 - Duties and authority of officers.

Section 504.843 - Standards of conduct for officers.

Section 504.844 - Resignation and removal of officers.

Section 504.845 - Contract rights of officers.

Section 504.846 - Officers’ authority to execute documents.

Section 504.851 - Definitions.

Section 504.852 - Permissible indemnification.

Section 504.853 - Mandatory indemnification.

Section 504.854 - Advance for expenses.

Section 504.855 - Court-ordered indemnification.

Section 504.856 - Determination and authorization of indemnification.

Section 504.857 - Indemnification of officers.

Section 504.858 - Insurance.

Section 504.859 - Application of part.

Section 504.860 - Exclusivity of part.

Section 504.901 - Personal liability.

Section 504.1001 - Authority to amend.

Section 504.1002 - Amendment by directors.

Section 504.1003 - Amendment by directors and members.

Section 504.1004 - Class voting by members on amendments.

Section 504.1005 - Articles of amendment.

Section 504.1006 - Restated articles of incorporation.

Section 504.1007 - Amendment pursuant to judicial reorganization.

Section 504.1008 - Effect of amendment and restatement.

Section 504.1021 - Amendment by directors.

Section 504.1022 - Amendment by directors and members.

Section 504.1023 - Class voting by members on amendments.

Section 504.1031 - Approval by third persons.

Section 504.1032 - Amendment terminating members or redeeming or canceling memberships.

Section 504.1101 - Approval of plan of merger.

Section 504.1102 - Limitations on mergers by public benefit or religious corporations.

Section 504.1103 - Action on plan by board, members, and third persons.

Section 504.1104 - Articles of merger.

Section 504.1105 - Effect of merger.

Section 504.1106 - Merger with foreign corporation or foreign unincorporated entity.

Section 504.1107 - Bequests, devises, and gifts.

Section 504.1108 - Conversion.

Section 504.1201 - Sale of assets in regular course of activities and mortgage of assets.

Section 504.1202 - Sale of assets other than in regular course of activities.

Section 504.1301 - Prohibited distributions.

Section 504.1302 - Authorized distributions.

Section 504.1401 - Dissolution by incorporators or directors and third persons.

Section 504.1402 - Dissolution by directors, members, and third persons.

Section 504.1403 - Articles of dissolution.

Section 504.1404 - Revocation of dissolution.

Section 504.1405 - Effect of dissolution.

Section 504.1406 - Known claims against dissolved corporation.

Section 504.1407 - Unknown claims against dissolved corporation.

Section 504.1421 - Grounds for administrative dissolution.

Section 504.1422 - Procedure for and effect of administrative dissolution.

Section 504.1423 - Reinstatement following administrative dissolution.

Section 504.1424 - Appeal from denial of reinstatement.

Section 504.1431 - Grounds for judicial dissolution.

Section 504.1432 - Procedure for judicial dissolution.

Section 504.1433 - Receivership or custodianship.

Section 504.1434 - Decree of dissolution.

Section 504.1441 - Deposit with state treasurer.

Section 504.1501 - Authority to transact business required.

Section 504.1502 - Consequences of transacting business without authority.

Section 504.1503 - Application for certificate of authority.

Section 504.1504 - Amended certificate of authority.

Section 504.1505 - Effect of certificate of authority.

Section 504.1506 - Corporate name of foreign corporation.

Section 504.1507 - Registered office and registered agent of foreign corporation.

Section 504.1508 - Change of registered office or registered agent of foreign corporation.

Section 504.1509 - Resignation of registered agent of foreign corporation.

Section 504.1510 - Service on foreign corporation.

Section 504.1521 - Withdrawal of foreign corporation.

Section 504.1531 - Grounds for revocation.

Section 504.1532 - Procedure for and effect of revocation.

Section 504.1533 - Appeal from revocation.

Section 504.1601 - Corporate records.

Section 504.1602 - Inspection of records by members.

Section 504.1603 - Scope of inspection right.

Section 504.1604 - Court-ordered inspection.

Section 504.1605 - Limitations on use of corporate records.

Section 504.1606 - Inspection of records by directors.

Section 504.1607 - Exception to notice requirement.

Section 504.1611 - Financial statements for members.

Section 504.1612 - Report of indemnification to members.

Section 504.1613 - Biennial report for secretary of state.

Section 504.1701 - Application to existing domestic corporations.

Section 504.1702 - Application to qualified foreign corporations.

Section 504.1703 - Savings provisions.

Section 504.1704 - Severability.

Section 504.1705 - Public benefit, mutual benefit, and religious corporations.