HB0225 Smith, Philip

P R E F I L E D

HB 225 -- Corporations

This bill expands redemptions of stock a corporation may make from preferred stock to any class or series of stock. When a corporation makes such a redemption of stock, it must have at least one stock class or series with full voting powers that is not subject to the redemption. Exceptions are made for stock of an investment company regulated under the Investment Company Act of 1940, for stock of a company that holds a license or contract from a governmental agency to conduct its business, or where the company is a member of a national securities exchange.

Where directors of the corporation are elected by class by shareholders, a director elected by the board of directors to fill a vacancy or a newly created directorship does not need to be presented to the shareholders for election at that time. Election by the shareholders of the new director does not occur until the class of which he or she is part stands for election.

Where a proxy does not direct how to vote on one of the matters being considered, those shares shown by the proxy are deemed not represented. A decision of the majority of shares represented in person or by proxy is a valid act of the shareholders, except where the chapter requires a larger vote, or in the case of cumulative voting for directors. The bill stipulates that written and electronic authorization are valid means by which a shareholder authorizes a person to serve as proxy.

Requirements are established for adjournment of a shareholders' meeting to be on a specified date within 90 days or at another specified place. Notice of the adjournment and place or date need only be given at the original meeting. Any business that could be conducted at the original meeting may be transacted at the new meeting if these measures are met. Postponement of the original meeting may also be made if public notice of the new date and place is given prior to the original meeting date.

The bill also clarifies that certain actions to be taken upon the dissolution of a corporation are taken after the dissolution is authorized. Written notice to claimants of the dissolution must be by U.S. mail. The bill specifies a 2 year time limit within which an administratively dissolved corporation may apply to the Secretary of State for reinstatement.