Fundamental corporate changes

Question 1

Fundamental corporate changes are extraordinary, so board can’t do them alone. need 4 things

Answer 1

1) board action ADOPTING A RESOLUTION of fundamental change
2) board submits PROPOSAL TO SHs w/ written notice
3) must get SH APPROVAL via majority of shares entitled to vote (diff from ordinary matter: majority of votes actually cast)
4) deliver doc to Secretary of State

Question 2

What is dissenting SHs right of appraisal?

Answer 2

right to force corp to buy your stock at fair value (right to be bought out)

Question 3

When does SH have right of appraisal?

Answer 3

1) company MERGING or CONSOLIDATING
2) TRANSFERRING substantially all ASSETS not in ordinary course of business
3) TRANSFERRING its STOCK in a share exchange

Question 4

even if co doing one of the things to give SH right to appraisal, NO appraisal if…

Answer 4

stock listed on national exchange

or co has 2000 or more SHs

(so right of appraisal in close corps)

Question 5

how does SH perfect right of appraisal?

Answer 5

1) before SH vote, file with corp written NOTICE of objection and intent to demand payment
2) abstain or vote against proposed change
3) after vote, within time set by corp, make WRITTEN DEMAND to be bought out and deposit stock w/ corp

Question 6

if Sh and corp can’t agree on fair value of shares…

Answer 6

corp sues and court may appoint appraiser