Mont. Code Ann. § 35-2-1304
This is the official text of Mont. Code Ann. § 35-2-1304, part of Montana’s Code Ann — part of the compiled statutory law of Montana, published by the state as "Code Ann." Browse the sections below, each linked to its official government source.
Not legal advice. This page reproduces the official text of a government statute for reference only. Laws change, and how a statute applies depends on your specific facts. For advice about your situation, consult a licensed attorney in your state.
35-2-1304 Dismissal
Official statutory text
35-2-1304 . Dismissal. (1) The court shall dismiss a derivative proceeding 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.
(2) Unless a panel is appointed pursuant to subsection (6), the determination in subsection (1) must be made by:
(a) a majority vote of independent directors present at a meeting of the board of directors if independent directors constitute a quorum; or
(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 the independent directors constitute a quorum.
(3) None of the following may 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 defendant against whom action is demanded; or
(c) the approval by the director of the act being challenged in the derivative proceeding or demand if the act did not result in personal benefit to the director.
(4) If a derivative proceeding is commenced after a determination has been made rejecting a demand by a complainant, the complaint must allege with particularity facts establishing either that a majority of the board of directors did not consist of independent directors at the time the determination was made or that the requirements of subsection (1) have not been met.
(5) If a majority of the board of directors does not consist of independent directors at the time the determination is made, the corporation has 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 complainant has the burden of proving that the requirements of subsection (1) have not been met.
(6) Upon motion by the corporation, the court may appoint a panel of one or more independent persons to make a determination of whether the maintenance of the derivative proceeding is in the best interests of the corporation. In this case, the plaintiff has the burden of proving that the requirements of subsection (1) have not been met.
(2) Unless a panel is appointed pursuant to subsection (6), the determination in subsection (1) must be made by:
(a) a majority vote of independent directors present at a meeting of the board of directors if independent directors constitute a quorum; or
(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 the independent directors constitute a quorum.
(3) None of the following may 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 defendant against whom action is demanded; or
(c) the approval by the director of the act being challenged in the derivative proceeding or demand if the act did not result in personal benefit to the director.
(4) If a derivative proceeding is commenced after a determination has been made rejecting a demand by a complainant, the complaint must allege with particularity facts establishing either that a majority of the board of directors did not consist of independent directors at the time the determination was made or that the requirements of subsection (1) have not been met.
(5) If a majority of the board of directors does not consist of independent directors at the time the determination is made, the corporation has 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 complainant has the burden of proving that the requirements of subsection (1) have not been met.
(6) Upon motion by the corporation, the court may appoint a panel of one or more independent persons to make a determination of whether the maintenance of the derivative proceeding is in the best interests of the corporation. In this case, the plaintiff has the burden of proving that the requirements of subsection (1) have not been met.
Status: in_force · Read it on the official government site
Need a lawyer in Montana?
Find a Montana lawyer
About this page: Statute text is reproduced from official government publishers via the
Open US Law dataset
(Vaquill AI, snapshot v2026.08, CC BY 4.0). Primary legislative text like this is public domain under the government-edicts doctrine
(Georgia v. Public.Resource.Org, 2020). We link every section back to its official source so you can verify it independently.