Fundamental Corp Change Flashcards
Five Types of Fundamental Corp Change
(1) Amending articles; (2) Merging or consolidating into another company; (3) Transferring substantially all assets or stock exchange; (4) Converting to another form of business; (5) Dissolving
Reqs to Effect Fundamental Change
(1) BOD axn adopting resolution of fundamental change; (2) BOD submits proposal to SHs with written notice; (3) SH approval by majority of shares entitled to vote
Dissenting SH Right of Appraisal
Right to force the corp to buy your stock for fair value; triggered by merging or consolidating, transferring substantially all assets, stock being acquired in a share exchange, or conversion to another form of business; only available in close corp
Amending the Articles
Requires (1) BOD action (2) notice to SHs and (3) SH approval by majority of shares entitled to vote
Mergers and Consolidations Reqs
BOD axn, notice to SHs, SH approval by majority of shares entitled to vote unless its merged into a parent (90% owned)
Surviving Corporation
Delivers articles of merger/consolidation to Secretary of State; succeeds to all rights and liabilities of the constituents
Transfer of Substantially All Assets
75%
Conversion
Business converts to another form (e.g. corporation to LLC).
Dissolution
Voluntary: BOD and SH approval; corp stays in existence to wind up
Involuntary (by court order): SH can petition because of director abuse, easte of assets, or misconduct; director deadlock harming corp; or SH failure at consecutive annual meeting to fill BOD vacancy
Wind-Up
Give written notice to known creditors and publish notice of dissolution in a newspaper in the county of PPB, gather assets and convert to cash, pay creditors, and distribute remaining sums to SHs pr rata by share unless there is a liquidation preference
Liquidation Preference
Dividend preference stated in Articles that arises only at dissolution
