Fundamental Corporate Changes

Question 1

What are some fundamental corporate changes?

Answer 1

• amending the articles
• merging/consolidating
• transferring substantially all assets
• converting to another form of business
• dissolving

Question 2

What procedure is typically required to do any fundamental corp change?

Answer 2

1. Board action
2. Written notice to SHs
3. SH approval (majority of shares entitled to vote)

Question 3

What is the dissenting shareholder right of appraisal?

Answer 3

A dissenting SH is entitled to appraisal rights (to obtain payment for the fair
market value of his shares) for any of the following fundamental changes:

• merger/consolidation
• transferring substantially all assets
• stock being acquired in a share exchange
• converting business form

Right only available in close corporations!!!

Question 4

What is a transfer of all or substantially all assets?

Answer 4

When the sale is not in the ordinary course of business.

Question 5

When may a corporation be voluntary dissolved?

Answer 5

If shares have not yet been issued or business has not commenced, a majority of the incorporators or initial directors may dissolve by delivering articles of dissolution to the state.

Corporation may also dissolve by a corporate act under the fundamental change procedure (board action, SH notice & approval)