Section 15: Amendments of Articles of Incorporation

Question 1

How do you ask for permission from the state?

Answer 1

By Applying for an APPLICATION for amendment before the SEC and has to be APPROVED

and consent from directors/ trustees and stockholders/members

Question 2

What vote is required to amend the articles of the incorporation?

Answer 2

Stock Corp - vote of majority of BOD

*vote or writteh assent of stockholders representing 2/3 of capital stock

Non Stock - vote or written assent of majority of BOT

*vote or writteh assent of atleast 2/3 of member

Question 3

What will happen to dissenting (disagreeing) stockholders?

Answer 3

stockholders can exercise their APPRAISAL RIGHTS

Question 4

What is appraisal rights?

Answer 4

they can DEMAND for the full payment of the value of their SHARE; can sell it to the corporation

Question 5

When will the amendment take effect?

Answer 5

ONLY upon APPROVAL by the SEC

if there is NO ACTION from SEC, 6 months from FILING

AMENDMENTS ARE CONSIDERED EFFECTIVE

Question 6

Are there matters that may NOT be amended?

Answer 6

ACCOMPLISHED FACT RULE
1. Name of the incorporators
2. First or INITIAL name of directors/ trustees
3. officers elected
4. names of subscribers
5. names of witnesses

all matter except mentioned aboved can be amended

• amendments that go against the nature of the corporation
  ex. NONSTOCK to STOCK corp.
  *this will in effect allow the distribution of the assets of the nontock corporation in favor of the members

Question 7

What do you submit to the Security and Exchange Commission?

Answer 7

1. Original provision
2. Amended provision must be UNDERSCORED
   2.DIRECTORS / TRUSTEE CERTIFICATE stating that a VOTE was called upon
3. Monitoring Clearance issued by the Compliance
   Monitoring Division (CMD)
4. Secretary’s Certificate - certifying that no action proceeding has been filed or is pending before any court