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title-14•Title 14 — Corporations, Partnerships, and Associations
title-14Ga. Code Ann. tit. 14CodeJan 1, 1900
Official Code of Georgia Annotated — Title 14. Corporations, Partnerships, and Associations
Snapshot of the Georgia code as mirrored by FindLaw, current as of 2024-03-28.
This chapter shall be known and may be cited as the “Georgia Business Corporation Code.”
The General Assembly has power to amend or repeal all or part of this chapter at any time and all domestic and foreign corporations subject to this chapter are governed by the amendment or repeal.
Each provision of this chapter shall have independent legal significance.
(a) Any corporation, an order for relief with respect to which has been entered pursuant to the federal Bankruptcy Code (11 U.S.C. Section 101, et seq.), may put into effect and carry out any decrees and orders of the court or judge in such bankruptcy proceeding and may take any corporate action provided or directed by such decrees and orders, without further action by its directors or shareholders. Such power and authority may be exercised, and such corporate action may be taken, as may be directed by such decrees and orders, by the trustee or trustees of such corporation appointed or elected in the bankruptcy proceeding, or a majority thereof, or, if none be appointed or elected and acting, by designated officers of the corporation, or by a representative appointed by the court or judge, with like effect as if exercised and taken by unanimous action of the directors and shareholders of the corporation.
(b) Such corporation may, in the manner provided in subsection (a) of this Code section, but without limiting the generality or effect of the foregoing, alter, amend, or repeal its bylaws; constitute or reconstitute and classify or reclassify its board of directors, and name, constitute, or appoint directors and officers in place of or in addition to all or some of the directors or officers then in office; amend its articles of incorporation, and make any change in its shares, or any other amendment, change, or alteration, or provision, authorized by this chapter; be dissolved, transfer all or part of its assets, merge or effect any share exchange in connection with any action taken under this Code section; change the location of its registered office, change its registered agent, and remove or appoint any agent to receive service of process; authorize and fix the terms, manner, and conditions of, the issuance of bonds, debentures, or other obligations, regardless of whether convertible into shares of any class or series, or bearing warrants or other evidences of optional rights to purchase or subscribe for shares of any class or series; or lease its property and franchises to any corporation, if permitted by law. No shareholder shall have the right to dissent under Article 13 of this chapter with respect to such shareholder's shares in connection with any action taken under this Code section.
(c) Articles or a certificate of any amendment, correction, merger, share exchange, or dissolution, made by such corporation pursuant to this Code section, shall be filed with the Secretary of State in accordance with Code Section 14-2-120, and, subject to Code Section 14-2-123 and subsection (c) of Code Section 14-2-124, shall thereupon become effective in accordance with its terms and the provisions thereof. Such articles, certificate, or other instrument shall be made, executed, and acknowledged, as may be directed by such decrees and orders, by the trustee or trustees appointed or elected in the bankruptcy proceeding, or a majority thereof, or, if none be appointed or elected and acting, by the officers of the corporation, or by a representative appointed by the court or judge, and shall certify that provision for the making of such articles, certificate, or instrument is contained in a decree or order of a court or judge having jurisdiction of a proceeding under the federal Bankruptcy Code.
(d) This Code section shall cease to apply to such corporation upon the entry of a final decree in the bankruptcy proceeding closing the case and discharging the trustee or trustees, if any; provided, however, that the closing of a case and discharge of trustee or trustees, if any, will not affect the validity of any act previously performed pursuant to subsection (a), (b), or (c) of this Code section.
(e) On filing any articles, certificate, report, or other paper made or executed pursuant to this Code section, there shall be paid to the Secretary of State for the use of the state the same fees as are payable by corporations not in bankruptcy upon the filing of like articles, certificates, agreements, reports, or other papers.
(a) A document must satisfy the requirements of this Code section and of any other Code section that adds to or varies these requirements to be entitled to filing by the Secretary of State.
(b) This chapter must require or permit filing the document in the office of the Secretary of State.
(c) The document must contain the information required by this chapter. It may contain other information as well.
(d) The document must be typewritten or printed.
(e) The document must be in the English language. A corporate name need not be in English if written in English letters or Arabic or Roman numerals, and the certificate of existence required of foreign corporations need not be in English if accompanied by a reasonably authenticated English translation.
(f) The document must be executed:
(1) By the chairperson of the board of directors of a domestic or foreign corporation, by its president, or by another of its officers;
(2) If directors have not been selected or the corporation has not been formed, by an incorporator; or
(3) If the corporation is in the hands of a receiver, trustee, or other court appointed fiduciary, by that fiduciary;
provided, however, that the person executing the document may do so as an attorney in fact. Powers of attorney relating to the execution of the document do not need to be shown to or filed with the Secretary of State.
(g) The person executing the document shall sign it and state beneath or opposite his or her signature his or her name and the capacity in which he or she signs; provided, however, that if the document is electronically transmitted, the electronic version of such person's name may be used in lieu of a signature. The document may but need not contain:
(1) The corporate seal;
(2) An attestation by the secretary or an assistant secretary; or
(3) An acknowledgment, verification, or proof.
(h) The document must be delivered to the office of the Secretary of State for filing and must be accompanied by one exact or conformed copy (except as provided in Code Sections 14-2-503 and 14-2-1509), the correct filing fee, any certificate required by Code Section 14-2-201.1, 14-2-1006.1, 14-2-1105.1, or 14-2-1403.1, and any penalty required by this chapter or other law.
(i) Notwithstanding the provisions of this chapter, the Secretary of State may authorize the filing of documents by electronic transmission, following the provisions of Chapter 12 of Title 10, the “Uniform Electronic Transactions Act,” and the Secretary of State shall be authorized to promulgate such rules and regulations as are necessary to implement electronic filing procedures.
The Secretary of State may prescribe and furnish on request forms for:
(1) An application for a certificate of existence;
(2) A foreign corporation's application for a certificate of authority to transact business in this state;
(3) A foreign corporation's application for a certificate of withdrawal;
(4) The annual registration; and
(5) Such other forms not in conflict with this chapter as may be prescribed by the Secretary of State.
Notwithstanding any other law to the contrary, the Secretary of State may provide for the annual registration required under this chapter to be valid for a period up to and including three years. The Secretary of State is authorized to adopt the necessary rules and regulations to implement such a registration process.
The Secretary of State shall collect the following fees and penalties when the documents described in this Code section are delivered to him or her for filing:
| | Document | Fee | | --- | --- | --- | | | (1) Articles of incorporation․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․$ 100.00 | | | (2) Application for certificate of authority․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․225.00 | | | (3) Annual registration․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․50.00 | | | (4) Penalty for late filing of annual registration․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․25.00 | | | (5) Agent's statement of resignation․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․No fee | | | (6) Certificate of judicial dissolution․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․No fee | | | (7) Articles of dissolution or intent to dissolve․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․No fee | | | (8) Application of withdrawal․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․No fee | | | (9) Application for reservation of a corporate name․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․25.00 | | | (10) Civil penalty for a foreign corporation transacting business in this state without a certificate of authority | ․․․․․500.00 | | | (11) Statement of change of address of registered agent․․․$5.00 per corporation but not less than | ․․․․․․20.00 | | | (12) Application for reinstatement․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․250.00 | | | (13) Certificate of conversion․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․95.00 | | | (14) Any other document required or permitted to be filed by this chapter․․․․․․․․․․․․ | ․․․․․․20.00 |
(a) Except as provided in subsection (b) of this Code section and subsection (c) of Code Section 14-2-124, a document accepted for filing is effective:
(1) At the time of filing on the date it is filed, as evidenced by the Secretary of State's date and time endorsement on the original document; or
(2) At the time specified in the document as its effective time on the date it is filed.
(b) A document may specify a delayed effective time and date, and if it does so the document shall become effective at the time and date specified. If a delayed effective date but no time is specified, the document shall become effective at the close of business on that date. A delayed effective date for a document may not be later than the ninetieth day after the date on which it is filed.
(c) If a document is determined by the Secretary of State to be incomplete and inappropriate for filing, the Secretary of State may return the document to the person or corporation filing it, together with a brief written explanation of the reason for the refusal to file, in accordance with subsection (c) of Code Section 14-2-125 and, if the applicant returns the document with corrections in accordance with the rules and regulations of the Secretary of State, the filing date of the document will be the filing date that would have been applied had the original document not been deficient.
(a) A domestic or foreign corporation may correct a document filed by the Secretary of State if the document:
(1) Contains an incorrect statement; or
(2) Was defectively executed, attested, sealed, verified, or acknowledged.
(b) A document is corrected:
(1) By preparing articles of correction that:
(A) Describe the document (including its filing date);
(B) Specify the incorrect statement and the reason it is incorrect or the manner in which the execution was defective; and
(C) Correct the incorrect statement or defective execution; and
(2) By delivering the articles to the Secretary of State for filing.
(c) Articles of correction are effective on the effective date of the document they correct except as to persons relying on the uncorrected document and adversely affected by the correction. As to those persons, articles of correction are effective when filed.
(a) If a document delivered to the office of the Secretary of State for filing satisfies the requirements of Code Section 14-2-120, the Secretary of State shall file it.
(b) The Secretary of State files a document by stamping or otherwise endorsing his official title and the date and time of receipt on both the original and the document copy. After filing a document, except as provided in Code Sections 14-2-503 and 14-2-1510, the Secretary of State shall deliver the document copy to the domestic or foreign corporation or its representative.
(c) If the Secretary of State refuses to file a document, he shall return it to the domestic or foreign corporation or its representative within ten days after the document was delivered, together with a brief, written explanation of the reason for his refusal.
(d) The Secretary of State's duty to file documents under this Code section is ministerial. His filing or refusing to file a document does not:
(1) Affect the validity or invalidity of the document in whole or part;
(2) Relate to the correctness or incorrectness of information contained in the document; or
(3) Create a presumption that the document is valid or invalid or that information contained in the document is correct or incorrect.
(a) If the Secretary of State refuses to file a document delivered to his office for filing, the domestic or foreign corporation may appeal the refusal within 30 days after the return of the document to the superior court of the county where the corporation's registered office is or will be located. The appeal is commenced by petitioning the court to compel filing the document and by attaching to the petition the document and the Secretary of State's explanation of his refusal to file.
(b) The matter shall promptly be tried de novo by the court without a jury. The court may summarily order the Secretary of State to file the document or take other action the court considers appropriate.
(c) The court's final decision may be appealed as in other civil proceedings.
A certificate attached to a copy of a document or electronic transmission filed by the Secretary of State, bearing his or her signature, which may be in facsimile, and the printed or embossed seal of this state, or its electronic equivalent, is prima-facie evidence that the original document has been filed with the Secretary of State.
(a) Any person may apply to the Secretary of State to furnish a certificate of existence for a domestic corporation or a certificate of authorization for a foreign corporation.
(b) A certificate of existence or authorization sets forth:
(1) The domestic corporation's corporate name or the foreign corporation's corporate name used in this state;
(2) That the domestic corporation is duly incorporated under the law of this state and the date of its incorporation, or that the foreign corporation is authorized to transact business in this state;
(3) That its most recent annual registration required by Code Section 14-2-1622 has been delivered to the Secretary of State; and
(4) That articles of dissolution have not been filed.
(c) Subject to any qualification stated in the certificate, a certificate of existence or authorization issued by the Secretary of State may be relied upon as prima-facie evidence that the domestic or foreign corporation is in existence or is authorized to transact business in this state.
A person who signs a document he knows is false in any material respect with intent that the document be delivered to the Secretary of State for filing shall be guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine not to exceed $500.00.
The Secretary of State has the power reasonably necessary to perform the duties required of him by this chapter.
As used in this chapter, the term:
(1) “Articles of incorporation” include amended and restated articles of incorporation and articles of merger.
(2) “Authorized shares” means the shares of all classes a domestic or foreign corporation is authorized to issue.
(3) “Conspicuous” or “conspicuously” means so written that a reasonable person against whom the writing is to operate should have noticed it. For example, printing in italics or boldface or contrasting color or typing in capitals or underlined is conspicuous.
(4) “Corporation” or “domestic corporation” means a corporation for profit, which is not a foreign corporation, incorporated under or subject to the provisions of this chapter.
(5) “Deliver” includes delivery by hand, mail, private carrier, and electronic transmission.
(6) “Distribution” means a direct or indirect transfer of money or other property except its own shares or rights to acquire its own shares or incurrence of indebtedness by a corporation to or for the benefit of its shareholders in respect of any of its shares. A distribution may be in the form of a declaration or payment of a dividend; a purchase, redemption, or other acquisition of shares; a distribution of indebtedness; or otherwise.
(7) “Effective date of notice” is defined in Code Section 14-2-141.
(8) “Electronic network” means any medium for sending, receiving, and viewing electronic transmissions among persons.
(9) “Electronic transmission” or “electronically transmitted” means any form of communication not directly involving the physical transmission of paper that creates a record that may be retained, retrieved, and reviewed by a recipient thereof and that may be directly reproduced in paper form by such a recipient through an automated process. Electronic transmissions include, but are not limited to, telegraphs, telegrams, cablegrams, teletypes, email, and facsimile transmissions.
(10) “Employee” includes an officer but not a director. A director may accept duties that make him or her also an employee.
(11) “Entity” includes corporation and foreign corporation; nonprofit corporation and foreign nonprofit corporation; profit and nonprofit unincorporated association; business trust, estate, general partnership, limited partnership, trust, two or more persons having a joint or common economic interest; limited liability company and foreign limited liability company; limited liability partnership and foreign limited liability partnership; and state, United States, and foreign government.
(12) “First class” includes, when used with a reference to postage or mail, any class of postage or mail that is the equivalent of or better than first class under the then prevailing mail classifications.
(13) “Foreign corporation” means a corporation for profit, including, but not limited to, a benefit corporation, social purpose corporation, or a substantially similar entity, incorporated under a law other than the law of this state.
(13.1) “Foreign limited liability company” means a limited liability company formed under the laws of a jurisdiction other than this state.
(14) “Governmental subdivision” includes authority, county, district, and municipality.
(15) “Includes” denotes a partial definition.
(16) “Individual” includes the estate of an incompetent or deceased individual.
(16.1) “Limited liability company” means any limited liability company formed under Chapter 11 of this title.
(17) “Mail” means the United States mail.
(18) “Means” denotes an exhaustive definition.
(19) “National securities exchange” means any securities exchange or securities quotation system if the securities listed on that exchange or system are exempt from the registration requirements of Chapter 5 of Title 10, known as the “Georgia Uniform Securities Act of 2008,” pursuant to Code Section 10-5-10 or any successor provision.
(20) “Notice” is defined in Code Section 14-2-141.
(21) “Person” includes an individual and an entity.
(22) “Principal office” means the office in or out of this state so designated in the annual registration where the principal executive offices of a domestic or foreign corporation are located.
(23) “Proceeding” includes civil suit and criminal, administrative, and investigatory action.
(24) “Record date” means the date established under Article 6 or 7 of this chapter on which a corporation determines the identity of its shareholders and their shareholdings for purposes of this chapter. The determinations shall be made as of the close of business on the record date unless another time for doing so is specified when the record date is fixed.
(25) “Secretary” means the corporate officer to whom the board of directors has delegated responsibility under subsection (c) of Code Section 14-2-840 for custody of the minutes of the meetings of the board of directors and of the shareholders and for authenticating records of the corporation.
(26) “Share exchange” means a plan of exchange of all of the outstanding shares of one or more classes or series of shares in accordance with Code Section 14-2-1102.
(27) “Shareholder” means the person in whose name shares are registered in the records of a corporation or the beneficial owner of shares to the extent of the rights granted by a nominee certificate on file with a corporation.
(28) “Shares” means the units into which the proprietary interests in a corporation are divided.
(29) “Sign” or “signature” includes any manual, facsimile, conformed, or electronic signature.
(30) “State,” when referring to a part of the United States, includes a state and commonwealth and their agencies and governmental subdivisions and a territory and insular possession and their agencies and governmental subdivisions of the United States.
(31) “Subscriber” means a person who subscribes for shares in a corporation, whether before or after incorporation.
(32) “Treasury shares” means shares of a corporation which have been issued and which subsequently have been acquired by the corporation if the articles of incorporation of such corporation provide that shares so acquired become treasury shares. Treasury shares shall be deemed to be issued shares but not outstanding shares.
(33) “United States” includes district, authority, bureau, commission, department, and any other agency of the United States.
(34) “Voting group” means all shares of one or more classes or series that under the articles of incorporation or this chapter are entitled to vote and be counted together collectively on a matter at a meeting of shareholders. All shares entitled by the articles of incorporation or this chapter to vote generally on the matter are for that purpose a single voting group.
(a) Notice under this chapter shall be in writing unless oral notice is reasonable under the circumstances.
(b) Notice may be communicated in person; by telephone, electronic transmission, or other form of wire or wireless communication; or by mail or private carrier. If these forms of personal notice are impracticable, notice may be communicated by a newspaper of general circulation in the area where published or by radio, television, or other form of public broadcast communication. Unless otherwise provided in the articles of incorporation, bylaws, or this chapter, notice by electronic transmission shall be deemed to be notice in writing for purposes of this chapter.
(c) Written notice by a domestic or foreign corporation to its shareholders, if in a comprehensible form, is effective when mailed, if mailed with first-class postage prepaid and correctly addressed to the shareholder's address shown in the corporation's current record of shareholders. If at the record date fixed to determine the shareholders entitled to receive a notice the corporation has a class or series of shares listed on a national securities exchange or has more than 500 shareholders of record, it may utilize a class of mail other than first class; provided, however, that if the notice is of a meeting of shareholders, the notice is mailed, with adequate postage prepaid, not less than 30 days before the date of the meeting.
(d) Written notice to a domestic or foreign corporation (authorized to transact business in this state) may be addressed to its registered agent at its registered office or to the corporation or its secretary at its principal office shown in its most recent annual registration or, in the case of a foreign corporation that has not yet delivered an annual registration, in its application for a certificate of authority.
(e) Except as provided in subsection (c) of this Code section, written notice, if in a comprehensible form, is effective at the earliest of the following:
(1) When received, or when delivered, properly addressed, to the addressee's last known principal place of business or residence;
(2) Five days after its deposit in the mail, as evidenced by the postmark, or such longer period as shall be provided in the articles of incorporation or bylaws, if mailed with first-class postage prepaid and correctly addressed; or
(3) On the date shown on the return receipt, if sent by registered or certified mail or statutory overnight delivery, return receipt requested, and the receipt is signed by or on behalf of the addressee.
(f) Oral notice is effective when communicated if communicated in a comprehensible manner.
(g) In calculating time periods for notice under this chapter, when a period of time measured in days, weeks, months, years, or other measurement of time is prescribed for the exercise of any privilege or the discharge of any duty, the first day shall not be counted but the last day shall be counted.
(h) Without limiting the manner by which notice otherwise may be given effectively under this chapter:
(1) Any notice by a corporation under any provision of this chapter, the articles of incorporation, or the bylaws to record or beneficial holders of its shares shall be effective if given by a single written notice to two or more such holders who share an address if consented to by those holders. Any such consent shall be revocable by a holder by written notice to the corporation. Except as provided in paragraph (2) of this subsection, any such consent shall be in writing and signed by each record or beneficial holder with respect to which such single written notice is to be effective.
(2) Any record or beneficial holder of shares of any class or series which are either listed on a national securities exchange or held of record by more than 500 shareholders who fails to object in writing to the corporation, within 60 days of having been given written notice by the corporation of its intention to send the single notice permitted under paragraph (1) of this subsection to such holders, shall be deemed to have consented to receiving such single written notice.
(i) If this chapter prescribes notice requirements for particular circumstances, those requirements govern. If articles of incorporation or bylaws prescribe notice requirements, not inconsistent with this Code section or other provisions of this chapter, those requirements govern.
(j)(1) Without limiting the manner by which notice otherwise may be given effectively to shareholders, any notice to shareholders given by the corporation under any provision of this chapter, the articles of incorporation, or the bylaws shall be effective if given by a form of electronic transmission consented to by the shareholder to whom the notice is given. Any such consent shall be revocable by the shareholder by written notice to the corporation. Any such consent shall be deemed revoked if:
(A) The corporation is unable to deliver by electronic transmission two consecutive notices given by the corporation in accordance with such consent; and
(B) Such inability becomes known to the secretary or an assistant secretary of the corporation or to the transfer agent or other person responsible for the giving of notice; provided, however, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.
(2) Notice given pursuant to paragraph (1) of this subsection shall be deemed effective:
(A) If by facsimile telecommunication, when transmitted to a telephone number at which the shareholder has consented to receive notice;
(B) If by e-mail, when transmitted to an e-mail address at which the shareholder has consented to receive notice;
(C) If by a posting on an electronic network together with separate notice to the shareholder of such specific posting, upon the later of (i) such posting or (ii) the giving of such separate notice; or
(D) If by any other form of electronic transmission, when transmitted to the shareholder.
(k) An affidavit, certificate, or other written confirmation of the secretary or an assistant secretary or of the transfer agent or other agent of the corporation that the notice has been given under this Code section shall, in the absence of fraud, be prima-facie evidence of the facts stated therein.
(l) The corporation may be obligated to accept from a shareholder consents, requests, demands, or notices given and delivered under this chapter to the principal place of business of the corporation or to an officer or agent of the corporation having custody of the books in which proceedings of meetings of shareholders are recorded by electronic transmission only as provided by resolution of the board of directors of the corporation or in the articles of incorporation.
(m) Unless the registered agent of the corporation provides written consent to the corporation to the receipt of a shareholder's consent, request, demand, or notice by electronic transmission under this chapter, delivery made to a corporation's registered office shall be made by hand or by certified or registered mail or statutory overnight delivery, return receipt requested.
(a) For purposes of this chapter, the following identified as a shareholder in a corporation's current record of shareholders constitute one shareholder:
(1) Three or fewer co-owners;
(2) A corporation, partnership, trust, estate, or other entity;
(3) The trustees, guardians, custodians, or other fiduciaries of a single trust, estate, or account.
(b) For purposes of this chapter, shareholdings registered in substantially similar names constitute one shareholder if it is reasonable to believe that the names represent the same person.
The signatures of the officers of a corporation and the seal of the corporation upon any bond, debenture, interest coupon, or other debt security may be facsimiles if the instrument is authenticated or countersigned by a trustee or transfer agent or registered by a registrar other than the corporation or an employee of the corporation. The transfer agent or registrar may sign manually or in facsimile.
(a) With respect to any contract, conveyance, or similar document executed by or on behalf of a domestic or foreign corporation, the presence of the corporate seal, or a facsimile thereof, attested by the secretary or assistant secretary of the corporation, or other officer to whom the bylaws or the directors have delegated the responsibility for authenticating records of the corporation, shall attest:
(1) That the corporate seal or facsimile thereof affixed to the document is in fact the seal of the corporation or a true facsimile thereof, as the case may be;
(2) That any officer of the corporation executing the document does in fact occupy the official position indicated, that one in such position is duly authorized to execute such document on behalf of the corporation, and that the signature of such officer subscribed thereto is genuine; and
(3) That the execution of the document on behalf of the corporation has been duly authorized.
(b) With respect to any contract, conveyance, or similar document executed by or on behalf of a domestic or foreign corporation, execution by the president or vice-president of the corporation, attested by the secretary or assistant secretary of the corporation or other officer to whom the bylaws or the directors have delegated the responsibility for authenticating records of the corporation, shall attest:
(1) That the person executing the document as president or vice-president of the corporation does in fact occupy the official position, that one in such position is duly authorized to execute such document on behalf of the corporation, and that the signature of such officers subscribed thereto is genuine; and
(2) That the execution of the document on behalf of the corporation has been duly authorized.
(c) When the seal of a corporation or the facsimile thereof is affixed to any document, or where a document is executed by the president or a vice-president of a corporation, and in either case is attested by the secretary or assistant secretary of that corporation or other officer to whom the bylaws or the directors have delegated the responsibility for authenticating records of the corporation, a third party without knowledge or reason to know to the contrary may rely on such document as being what it purports to be.
(d) The seal of the corporation may be affixed to any document executed by the corporation, but the absence of the seal shall not impair the validity of the document or of any action taken in pursuance thereof or in reliance thereon.
One or more persons may act as the incorporator or incorporators of a corporation by delivering articles of incorporation to the Secretary of State for filing.
(a) Together with the articles of incorporation, the incorporator or incorporators shall deliver to the Secretary of State an undertaking (which may appear in the articles of incorporation or be set forth in a letter or other instrument executed by an incorporator or any person authorized to act on behalf of the corporation) to publish a notice of the filing of the articles of incorporation as required by subsection (b) of this Code section.
(b) No later than the next business day after filing the articles of incorporation, the incorporator shall deliver to the publisher of a newspaper which is the official organ of the county where the initial registered office of the corporation is to be located or which is a newspaper of general circulation published within such county whose most recently published annual statement of ownership and circulation reflects a minimum of 60 percent paid circulation a request to publish a notice in substantially the following form:
“NOTICE OF INCORPORATION
Notice is given that articles of incorporation which incorporate _____ (name of corporation) have been delivered to the Secretary of State for filing in accordance with the Georgia Business Corporation Code. The initial registered office of the corporation is located at _____ (address of registered office) and its initial registered agent at such address is _____ (name of agent).”
The request for publication of the notice shall be accompanied by a check, draft, or money order in the amount of $40.00 in payment of the cost of publication. The notice shall be published once a week for two consecutive weeks commencing within ten days after receipt of the notice by the newspaper. Failure on the part of the incorporator to deliver the notice or payment therefor or failure on the part of the newspaper to publish the notice in compliance with this subsection shall not invalidate the incorporation of the corporation or the filing of the articles of incorporation.
(a) The articles of incorporation must set forth:
(1) A corporate name for the corporation that satisfies the requirements of Code Section 14-2-401;
(2) The number of shares the corporation is authorized to issue;
(3) The street address and county of the corporation's initial registered office and the name of its initial registered agent at that office;
(4) The name and address of each incorporator; and
(5) The mailing address of the initial principal office of the corporation, if different from the initial registered office.
(b) The articles of incorporation may set forth:
(1) The names and addresses of the individuals who are to serve as the initial directors;
(2) Provisions not inconsistent with law regarding:
(A) The purpose or purposes for which the corporation is organized;
(B) Managing the business and regulating the affairs of the corporation;
(C) Defining, limiting, and regulating the powers of the corporation, its board of directors, and shareholders;
(D) A par value for authorized shares or classes of shares; and
(E) The imposition of personal liability on shareholders for the debts of the corporation to a specified extent and upon specified conditions;
(3) Any provision that under this chapter is required or permitted to be set forth in the bylaws;
(4) A provision eliminating or limiting the liability of a director to the corporation or its shareholders for monetary damages for any action taken, or any failure to take any action, as a director, except liability:
(A) For any appropriation, in violation of his or her duties, of any business opportunity of the corporation;
(B) For acts or omissions which involve intentional misconduct or a knowing violation of law;
(C) For the types of liability set forth in Code Section 14-2-832; or
(D) For any transaction from which the director received an improper personal benefit,
provided that no such provision shall eliminate or limit the liability of a director for any act or omission occurring prior to the date when such provision becomes effective; and
(5) A provision that, in discharging the duties of their respective positions and in determining what is believed to be in the best interests of the corporation, the board of directors, committees of the board of directors, and individual directors, in addition to considering the effects of any action on the corporation or its shareholders, may consider the interests of the employees, customers, suppliers, and creditors of the corporation and its subsidiaries, the communities in which offices or other establishments of the corporation and its subsidiaries are located, and all other factors such directors consider pertinent; provided, however, that any such provision shall be deemed solely to grant discretionary authority to the directors and shall not be deemed to provide to any constituency any right to be considered.
(c) The articles of incorporation need not set forth any of the corporate powers enumerated in this chapter.
(a) Unless a delayed effective date is specified, the corporate existence begins when the articles of incorporation are filed.
(b) The Secretary of State's filing of the articles of incorporation is conclusive proof that the incorporators satisfied all conditions precedent to incorporation except in a proceeding by the state to cancel or revoke the incorporation or involuntarily dissolve the corporation.
All persons purporting to act as or on behalf of a corporation, knowing there was no incorporation under this chapter, are jointly and severally liable for all liabilities created while so acting.
(a) After incorporation:
(1) If initial directors are named in the articles of incorporation, the initial directors shall hold an organizational meeting at the call of a majority of the directors to complete the organization of the corporation by appointing officers, adopting bylaws, and carrying on any other business brought before the meeting;
(2) If initial directors are not named in the articles, the incorporator or incorporators shall hold an organizational meeting at the call of a majority of the incorporators:
(A) To elect directors and complete the organization of the corporation; or
(B) To elect a board of directors who shall complete the organization of the corporation.
(b) Action required or permitted by this chapter to be taken by incorporators at an organizational meeting may be taken without a meeting if the action taken is evidenced by one or more consents in writing or by electronic transmission describing the action taken and signed by each incorporator.
(c) An organizational meeting may be held in or out of this state.
(a) The incorporators or board of directors of a corporation shall adopt initial bylaws for the corporation. Bylaws adopted by the incorporators or board of directors prior to or contemporaneously with the issuance of any of the corporation's shares shall constitute bylaws adopted by the shareholders for all purposes of this chapter.
(b) The bylaws of a corporation may contain any provision for managing the business and regulating the affairs of the corporation that is not inconsistent with law or the articles of incorporation.
(a) Unless the articles of incorporation provide otherwise, the board of directors of a corporation may adopt bylaws to be effective only in an emergency defined in subsection (d) of this Code section. The emergency bylaws, which are subject to amendment or repeal by the shareholders, may make all provisions necessary for managing the corporation during the emergency, including:
(1) Procedures for calling a meeting of the board of directors;
(2) Quorum requirements for the meeting; and
(3) Designation of additional or substitute directors.
(b) All provisions of the regular bylaws consistent with the emergency bylaws remain effective during the emergency. The emergency bylaws are not effective after the emergency ends.
(c) Corporate action taken in good faith in accordance with the emergency bylaws:
(1) Binds the corporation; and
(2) May not be used to impose liability on a corporate director, officer, employee, or agent.
(d) An emergency exists for purposes of this Code section if a quorum of the corporation's directors cannot readily be assembled because of some catastrophic event.
Every corporation incorporated under this chapter has the purpose of engaging in any lawful business unless a more limited purpose is set forth in the articles of incorporation.
Every corporation has perpetual duration and succession in its corporate name, unless its articles of incorporation adopted on or after April 1, 1969, or an amendment thereto adopted on or after April 1, 1969, provides otherwise. Unless its articles of incorporation provide otherwise, every corporation has the same powers as an individual to do all things necessary or convenient to carry out its business and affairs, including without limitation power:
(1) To sue, be sued, complain, and defend in its corporate name;
(2) To have a corporate seal which may be altered at will, and to use it, or a facsimile of it, by impressing or affixing it or in any other manner reproducing it;
(3) To make and amend bylaws, not inconsistent with its articles of incorporation or with the laws of this state, for managing the business and regulating the affairs of the corporation;
(4) To purchase, receive, lease, or otherwise acquire, own, hold, improve, use, and otherwise deal with real or personal property or any legal or equitable interest in property, wherever located;
(5) To sell, convey, mortgage, pledge, lease, exchange, and otherwise dispose of all or any part of its property;
(6) To purchase, receive, subscribe for, or otherwise acquire, own, hold, vote, use, sell, mortgage, lend, pledge, or otherwise dispose of, and deal in and with shares or other interests in, or obligations of, any other entity;
(7) To make contracts and guarantees, incur liabilities, borrow money, issue its notes, bonds, and other obligations (which may be convertible into or include the option to purchase other securities of the corporation), and secure any of its obligations by mortgage or pledge of any of its property, franchises, or income;
(8) To lend money, invest and reinvest its funds, and receive and hold real and personal property as security for repayment;
(9) To be a promoter, partner, member, associate, or manager of any partnership, joint venture, trust, or other entity;
(10) To conduct its business, locate offices, and exercise the powers granted by this chapter within or without this state;
(11) To elect directors and appoint officers, employees, and agents of the corporation, define their duties, fix their compensation, and lend them money and credit;
(12) To pay pensions and establish pension plans, pension trusts, profit sharing plans, share bonus plans, share option plans, and benefit or incentive plans for any or all of its current or former directors, officers, employees, and agents;
(13) To make donations for the public welfare or for charitable, scientific, or educational purposes;
(14) To transact any lawful business that will aid governmental policy;
(15) To provide insurance for its benefit on the life or physical or mental ability of any of its directors, officers, or employees or any other person whose death or physical or mental disability might cause financial loss to the corporation; or, pursuant to any contractual arrangement with any shareholder concerning the reacquisition of shares owned by him at his death or disability, on the life or physical or mental ability of that shareholder, for the purpose of carrying out such contractual arrangement; or, pursuant to any contract obligating the corporation, as part of compensation arrangements, or pursuant to any contract obligating the corporation as guarantor or surety, on the life of the principal obligor, and for these purposes the corporation is deemed to have an insurable interest in such persons; and
(16) To make payments or donations or do any other act not inconsistent with law that furthers the business and affairs of the corporation.
(a) In anticipation of or during an emergency defined in subsection (d) of this Code section, the board of directors of a corporation may:
(1) Modify lines of succession to accommodate the incapacity of any director, officer, employee, or agent; and
(2) Relocate the principal office, designate alternative principal offices or regional offices, or authorize the officers to do so.
(b) During an emergency defined in subsection (d) of this Code section, unless emergency bylaws provide otherwise:
(1) Notice of a meeting of the board of directors need be given only to those directors whom it is practicable to reach and may be given in any practicable manner, including by publication and radio; and
(2) One or more officers of the corporation present at a meeting of the board of directors may be deemed to be directors for the meeting, in order of rank and within the same rank in order of seniority, as necessary to achieve a quorum.
(c) Corporate action taken in good faith during an emergency under this Code section to further the ordinary business affairs of the corporation:
(1) Binds the corporation; and
(2) May not be used to impose liability on a corporate director, officer, employee, or agent.
(d) An emergency exists for purposes of this Code section if a quorum of the corporation's directors cannot readily be assembled because of some catastrophic event.
(a) Except as provided in subsection (b) of this Code section, the validity of corporate action may not be challenged on the ground that the corporation lacks or lacked power to act.
(b) A corporation's power to act may be challenged:
(1) In a proceeding by a shareholder against the corporation to enjoin the act;
(2) In a proceeding by the corporation, directly, derivatively, or through a receiver, trustee, or other legal representative, against an incumbent or former director, officer, employee, or agent of the corporation; or
(3) In a proceeding by the Attorney General under Code Section 14-2-1430.
(c) In a shareholder's proceeding under paragraph (1) of subsection (b) of this Code section to enjoin an unauthorized corporate act, the court may enjoin or set aside the act, if equitable and if all affected persons are parties to the proceeding, and may award damages for loss, other than anticipated profits, suffered by the corporation or another party because of enjoining the unauthorized act.
Subject to the requirements set forth in paragraph (1) of subsection (b) of Code Section 14-2-1003, with respect to the submission of amendments to the articles of incorporation to shareholders; paragraph (1) of subsection (b) of Code Section 14-2-1103, with respect to the submission of a plan of merger or share exchange to shareholders; paragraph (1) of subsection (b) of Code Section 14-2-1202, with respect to the submission of a disposition of assets requiring shareholder approval to shareholders; and paragraph (1) of subsection (b) of Code Section 14-2-1402, with respect to the submission of a proposed dissolution to shareholders, a corporation may agree to submit a matter to a vote of its shareholders regardless of whether the board of directors determines at any time subsequent to adopting or approving such matter that such matter is no longer advisable and recommends that the shareholders reject or vote against the matter.
(a) A corporate name:
(1) Must contain the word “corporation,” “incorporated,” “company,” or “limited,” or the abbreviation “corp.,” “inc.,” “co.,” or “ltd.,” or words or abbreviations of like import in another language;
(2) May not contain language stating or implying that the corporation is organized for a purpose other than that permitted by Code Section 14-2-301 and its articles of incorporation;
(3) May not contain anything which, in the reasonable judgment of the Secretary of State, is obscene; and
(4) Shall not in any instance exceed 80 characters, including spaces and punctuation.
(b) Except as authorized by subsections (c) and (d) of this Code section, a corporate name must be distinguishable upon the records of the Secretary of State from:
(1) The corporate name of a corporation incorporated or authorized to transact business in this state;
(2) A corporate name reserved under Code Section 14-2-402;
(3) The fictitious name adopted by a foreign corporation authorized to transact business in this state because its real name is unavailable;
(4) The corporate name of a nonprofit corporation incorporated or authorized to transact business in this state;
(5) The name of a limited partnership or professional association filed with the Secretary of State; and
(6) The name of a limited liability company formed or authorized to transact business in this state.
(c) A corporation may apply to the Secretary of State for authorization to use a name that is not distinguishable upon his records from one or more of the names described in subsection (b) of this Code section. The Secretary of State shall authorize use of the name applied for if the other corporation consents to the use in writing and files with the Secretary of State articles of amendment to its articles of incorporation changing its name to a name that is distinguishable upon the records of the Secretary of State from the name of the applying corporation.
(d) A corporation may use the name (including the fictitious name) of another domestic or foreign corporation that is used in this state if the other corporation is incorporated or authorized to transact business in this state and:
(1) The proposed user corporation has merged with the other corporation;
(2) The proposed user corporation has been formed by reorganization of the other corporation; or
(3) The other domestic or foreign corporation has taken the steps required by this chapter to change its name to a name that is distinguishable upon the records of the Secretary of State from the name of the foreign corporation applying to use its former name.
(e) This chapter does not control the use of fictitious or trade names. Issuance of a name under this chapter means that the name is distinguishable for filing purposes on the records of the Secretary of State pursuant to subsection (b) of this Code section. Issuance of a corporate name does not affect the commercial availability of the name.
(a) A person may apply to reserve a name for the purpose of incorporation by paying the fee specified in Code Section 14-2-122. If the Secretary of State finds that the corporate name applied for is available, he or she shall reserve the name for the applicant's use for 30 days or until articles of incorporation are filed, whichever is sooner. If the Secretary of State finds that the name applied for is not distinguishable for filing purposes upon the records of the Secretary of State, he or she shall notify the applicant who may then submit another reservation request within ten days of the date of the rejection notice without payment of an additional reservation fee.
(b) Upon expiration of a name reservation after 30 days without the filing of articles of incorporation, the name may again be reserved for another 30 day period by the same or another applicant under the same guidelines of subsection (a) of this Code section.
(c) A person who has in effect a name reservation under subsection (a) of this Code section may transfer the reservation to another person by delivering to the Secretary of State a signed notice of the transfer that states the name and address of the transferee.
Each corporation must continuously maintain in this state:
(1) A registered office that may be the same as any of its places of business; and
(2) A registered agent, who may be:
(A) A person who resides in this state and whose business office is identical with the registered office;
(B) A domestic corporation, nonprofit domestic corporation, or domestic limited liability company whose business office is identical with the registered office; or
(C) A foreign corporation, nonprofit foreign corporation, or foreign limited liability company authorized to transact business in this state whose business office is identical with the registered office.
(a) A corporation may change its registered office or registered agent by delivering to the Secretary of State for filing an amendment to its annual registration that sets forth:
(1) The name of the corporation;
(2) The street address of its current registered office;
(3) If the current registered office is to be changed, the street address of the new registered office;
(4) The name of its current registered agent;
(5) If the current registered agent is to be changed, the name of the new registered agent; and
(6) That after the change or changes are made, the street addresses of its registered office and the business office of its registered agent will be identical.
(b) If a registered agent changes the street address of his business office, he may change the street address of the registered office of any corporation for which he is the registered agent by notifying the corporation in writing of the change and signing, either manually or in facsimile, and delivering to the Secretary of State for filing a statement of change setting forth the new address and all corporations for which he is the registered agent.
(a) A registered agent may resign his agency appointment by signing and delivering to the Secretary of State for filing a statement of resignation. The statement may include a statement that the registered office is also discontinued.
(b) On or before the date of the filing of the statement of resignation, the registered agent shall deliver or mail a written notice of the agent's intention to resign to the chief executive officer, chief financial officer, secretary of the corporation, or a person holding a position comparable to any of the foregoing, as named and at the address shown in the annual registration, or in the articles of incorporation if no annual registration has been filed.
(c) The agency appointment is terminated, and the registered office discontinued if so provided, on the earlier of the filing by the corporation of an amendment to its annual registration designating a new registered agent and registered office if also discontinued or the thirty-first day after the date on which the statement was filed.
(a) A corporation's registered agent is the corporation's agent for service of process, notice, or demand required or permitted by law to be served on the corporation.
(b) If a corporation has no registered agent or the agent cannot with reasonable diligence be served, the corporation may be served by registered or certified mail or statutory overnight delivery, return receipt requested, addressed to the secretary of the corporation at its principal office. Service is perfected under this subsection at the earliest of:
(1) The date the corporation receives the mail;
(2) The date shown on the return receipt, if signed on behalf of the corporation; or
(3) Five days after its deposit in the mail, as evidenced by the postmark, if mailed postage prepaid and correctly addressed.
(c) This Code section does not prescribe the only means, or necessarily the required means, of serving a corporation.
(a) Venue in proceedings against a corporation shall be determined in accordance with the pertinent constitutional and statutory provisions of this state in effect as of July 1, 1989, or thereafter.
(b) Each domestic corporation and each foreign corporation authorized to transact business in this state shall be deemed to reside and to be subject to venue as follows:
(1) In civil proceedings generally, in the county of this state where the corporation maintains its registered office; or if the corporation fails to maintain a registered office, it shall be deemed to reside in the county where its last named registered office or principal office, as shown by the records of the Secretary of State, was maintained;
(2) In actions based on contracts, in that county in this state where the contract to be enforced was made or is to be performed, if the corporation has an office and transacts business in that county;
(3) In actions for damages because of torts, wrong, or injury done, in the county where the cause of action originated, if the corporation has an office and transacts business in that county;
(4) In actions for damages because of torts, wrong, or injury done, in the county where the cause of action originated. If venue is based solely on this paragraph, the defendant shall have the right to remove the action to the county in Georgia where the defendant maintains its principal place of business. A notice of removal shall be filed within 45 days of service of the summons. Upon motion by the plaintiff filed within 45 days of the removal, the court to which the case is removed may remand the case to the original court if it finds that removal is improper under the provisions of this paragraph. Upon the defendant's filing of a notice of removal, the 45 day time period for filing such notice shall be tolled until the remand, the entry of an order by the court determining that the removal is valid, or the expiration of the time period for the plaintiff to file a motion challenging the removal, whichever occurs first; and
(5) In garnishment proceedings, in the county of this state in which is located the corporate office or place of business where the employee who is the defendant in the main action is employed.
(c) Any residences established by this Code section shall be in addition to, and not in limitation of, any other residence that any domestic or foreign corporation may have by reason of other laws.
(d) Whenever this chapter either requires or permits a proceeding to be brought in the county where the registered office of the corporation is maintained, if the proceeding is against a corporation having a principal office as required under a prior general corporation law, the action or proceeding may be brought in the county where the principal office is located.
(a) The articles of incorporation must prescribe the classes of shares and the number of shares of each class that the corporation is authorized to issue. If more than one class of shares is authorized, the articles of incorporation must prescribe a distinguishing designation for each class and, prior to the issuance of shares of a class, the preferences, limitations, and relative rights of that class must be described in the articles of incorporation. Except to the extent otherwise permitted by Code Section 14-2-624, unless such class is divided into a series, all shares of a class must have preferences, limitations, and relative rights identical with those of other shares of the same class; provided, however, that any of the voting powers, designations, preferences, rights, qualifications, limitations, or restrictions of or on the shares of a class, or the holders thereof, may be made dependent upon facts ascertainable outside the articles of incorporation or of any amendment thereto if the manner in which the facts shall operate upon the voting powers, designations, preferences, rights, qualifications, limitations, or restrictions of or on the shares, or the holders thereof, is clearly and expressly set forth in the articles of incorporation.
(b) The articles of incorporation may create one or more series of shares within a class of shares. If more than one series within a class of shares is authorized, the articles of incorporation must prescribe the number of shares of and a distinguishing designation for each series and, prior to the issuance of shares of a series, the preferences, limitations, and relative rights of that series must be described in the articles of incorporation. Except to the extent otherwise permitted by Code Section 14-2-624, all shares of a series must have preferences, limitations, and relative rights identical with those of other shares of the same series and, except to the extent otherwise provided in the description of the series, with those of other series of the same class; provided, however, that any of the voting powers, designations, preferences, rights, qualifications, limitations, or restrictions of or on the shares of a series, or the holders thereof, may be made dependent upon facts ascertainable outside the articles of incorporation or of any amendment thereto if the manner in which the facts shall operate upon the voting powers, designations, preferences, rights, qualifications, limitations, or restrictions of or on the shares, or the holders thereof, is clearly and expressly set forth in the articles of incorporation.
(c) The articles of incorporation must authorize:
(1) One or more classes of shares that together have unlimited voting rights; and
(2) One or more classes of shares (which may be the same class or classes as those with voting rights) that together are entitled to receive the net assets of the corporation upon dissolution.
(d) The articles of incorporation may authorize one or more classes or series of shares that:
(1) Have special, conditional, or limited voting rights, or no right to vote, except to the extent prohibited by this chapter;
(2) Are redeemable, exchangeable, or convertible as specified in the articles of incorporation:
(A) At the option of the corporation, the shareholder, or another person or upon the occurrence of a designated event;
(B) For cash, indebtedness, securities, or other property; or
(C) In a designated amount or in an amount determined in accordance with a designated formula or by reference to extrinsic data or events;
(3) Entitle the holders to distributions calculated in any manner, including dividends that may be cumulative, noncumulative, or partially cumulative; and
(4) Have preference over any other class or series within a class of shares with respect to distributions, including dividends and distributions upon the dissolution of the corporation.
(e) If at the time the corporation issues shares or other securities that are redeemable or exchangeable for or convertible into shares of another class or series, the corporation does not have authorized and unissued shares sufficient to satisfy the rights if and when exercised, the granting of the rights is not invalid solely by reason of the lack of sufficient authorized but unissued shares to honor the exercise of the rights.
(f) The description of the designations, preferences, limitations, and relative rights of share classes and series in subsection (d) of this Code section is not exhaustive.
(g) Solely for the purpose of any statute or regulation imposing any tax or fee based upon the capitalization of a corporation, all authorized shares of a corporation organized under this chapter shall be deemed to have a nominal or par value of 1¢ per share. If any federal or other statute or regulation applicable to a particular corporation requires that the shares of the corporation have a par value, the shares shall be deemed to have the par value determined by the board solely for the purpose of satisfaction of the requirements of the statute or regulation imposing a tax or fee based upon the capitalization of the corporation.
(h) As used in this Code section, the term “facts” includes, but is not limited to, the occurrence of any event, including a determination or action by any person or body, including the corporation.
(i) Nothing contained in this Code section shall be deemed to limit the board of directors' authority or discretion to determine the terms and conditions of rights, options, or warrants issuable pursuant to Code Section 14-2-624.
(a) If the articles of incorporation so provide, the board of directors may determine, in whole or in part, the preferences, limitations, and relative rights of (1) any class of shares before the issuance of any shares of that class or (2) one or more series within a class, and designate the number of shares within that series, before the issuance of any shares of that series.
(b) Each series of a class must be given a distinguishing designation.
(c) Except to the extent otherwise permitted by Code Section 14-2-624, all shares of a class or, if applicable, series within a class must have preferences, limitations, and relative rights identical with those of other shares of the same class or series and, except to the extent otherwise provided in the description of the series, all shares of a series must have preferences, limitations, and relative rights identical with those of other series of the same class; provided, however, that any of the voting powers, preferences, designations, rights, qualifications, limitations, or restrictions of or on the class or series of shares, or the holders thereof, may be made dependent upon facts ascertainable outside the articles of incorporation if the manner in which the facts shall operate upon the voting powers, designations, preferences, rights, qualifications, limitations, or restrictions of or on the shares, or the holders thereof, is clearly and expressly set forth in the articles of incorporation. As used in this Code section, the term “facts” includes, but is not limited to, the occurrence of any event, including a determination or action by any person or body, including the corporation.
(d) Before issuing any shares of a class or series created under this Code section, the corporation must deliver to the Secretary of State for filing articles of amendment, which are effective without shareholder action, that set forth:
(1) The name of the corporation;
(2) The text of the amendment determining the terms of the class or series of shares;
(3) The date it was adopted; and
(4) A statement that the amendment was duly adopted by the board of directors.
(e) Unless otherwise provided in the articles of incorporation, if a board of directors has established a series in accordance with the terms of this Code section, the board of directors may at any time and from time to time amend the preferences, limitations, and relative rights of the series before any shares of the series have been issued; increase or decrease the number of shares contained in the series, but not below the number of shares then issued; or eliminate the series where no shares are issued. In each case the board shall do so by filing articles of amendment, which are effective without shareholder action, in the manner provided in subsection (d) of this Code section. In case the number of shares contained in a series shall be decreased or a series of shares shall be eliminated, the shares that are the subject of the decrease or that compose the series being eliminated shall resume the status that they had prior to the adoption of the articles of amendment that first established such series unless otherwise provided in the articles of incorporation or unless the board of directors causes such shares to become treasury shares.
(f) Nothing contained in this Code section shall be deemed to limit the board of directors' authority or discretion to determine the terms and conditions of rights, options, or warrants issuable pursuant to Code Section 14-2-624.
(a) A corporation may issue the number of shares of each class or series authorized by the articles of incorporation. Shares that are issued are outstanding shares until they are reacquired, redeemed, converted, or canceled.
(b) The reacquisition, redemption, or conversion of outstanding shares is subject to the limitations of subsection (c) of this Code section and to Code Section 14-2-640.
(c) At all times that shares of the corporation are outstanding, one or more shares that together have unlimited voting rights and one or more shares (which may be of the same class or classes as those with voting rights) that together are entitled to receive the net assets of the corporation upon dissolution must be outstanding.
(a) A corporation may:
(1) Issue fractions of a share or pay in money the value of fractions of a share;
(2) Arrange for disposition of fractional shares by or for the account of the shareholders;
(3) Issue scrip in registered or bearer form entitling the holder to receive a full share upon surrendering enough scrip to equal a full share.
(b) Each certificate representing scrip must be conspicuously labeled “scrip” and must contain the information required by subsection (b) of Code Section 14-2-625.
(c) The holder of a fractional share is entitled to exercise the rights of a shareholder, including the right to vote, to receive dividends, and to participate in the assets of the corporation upon liquidation. The holder of scrip is not entitled to any of these rights unless the scrip provides for them.
(d) The board of directors may authorize the issuance of scrip subject to any condition considered desirable, including:
(1) That the scrip will become void if not exchanged for full shares before a specified date; and
(2) That the shares for which the scrip is exchangeable may be sold and the proceeds paid to the scripholders.
(a) A written subscription for shares entered into before incorporation is irrevocable for six months unless the subscription agreement provides a longer or shorter period or all the subscribers agree to revocation.
(b) The board of directors may determine the payment terms of subscriptions for shares that were entered into before incorporation, unless the subscription agreement specifies them. A call for payment by the board of directors must be uniform so far as practicable as to all shares of the same class or series, unless the subscription agreement specifies otherwise.
(c) Shares issued pursuant to subscriptions entered into before incorporation are fully paid and nonassessable when the corporation receives the consideration specified in the subscription agreement.
(d) If a subscriber defaults in payment of money or property under a subscription agreement entered into before incorporation, the corporation may collect the amount owed as any other debt. Alternatively, unless the subscription agreement provides otherwise, the corporation may rescind the agreement and may sell the shares if the debt remains unpaid more than 20 days after the corporation sends written demand for payment to the subscriber.
(e) A subscription agreement entered into after incorporation is a contract between the subscriber and the corporation subject to Code Section 14-2-621.
(a) The powers granted in this Code section to the board of directors may be reserved to the shareholders by the articles of incorporation.
(b) The board of directors may authorize shares to be issued for consideration consisting of any tangible or intangible property or benefit to the corporation, including cash, promissory notes, services performed, contracts for services to be performed, or other securities of the corporation.
(c) Before the corporation issues shares, the board of directors must determine that the consideration received or to be received for shares to be issued is adequate. That determination by the board of directors is conclusive insofar as the adequacy of consideration for the issuance of shares relates to whether the shares are validly issued, fully paid, and nonassessable, and the authorization by the board of directors of the issuance of shares constitutes such determination.
(d) When the corporation receives the consideration for which the board of directors authorized the issuance of shares, the shares issued therefor are fully paid and nonassessable.
(e) The corporation may place in escrow shares issued for a contract for future services or benefits or a promissory note, or make other arrangements to restrict the transfer of the shares, and may credit distributions in respect of the shares against their purchase price, until the services are performed, the note is paid, or the benefits received. If the services are not performed, the note is not paid, or the benefits are not received, the shares escrowed or restricted and the distributions credited may be canceled in whole or in part.
(a) A purchaser from a corporation of its own shares is not liable to the corporation or its creditors with respect to the shares except to pay the consideration for which the shares were authorized to be issued (Code Section 14-2-621) or specified in the subscription agreement (Code Section 14-2-620).
(b) Unless otherwise provided in the articles of incorporation, a shareholder of a corporation is not personally liable for the acts or debt of the corporation except that he may become personally liable by reason of his own acts or conduct.
(a) Unless the articles of incorporation provide otherwise, shares may be issued pro rata and without consideration to the corporation's shareholders or to the shareholders of one or more classes or series. An issuance of shares under this subsection is a share dividend.
(b) Shares of one class or series may not be issued as a share dividend in respect of shares of another class or series unless:
(1) The articles of incorporation so authorize;
(2) A majority of the votes entitled to be cast by the class or series to be issued approve the issue; or
(3) There are no outstanding shares of the class or series to be issued.
(c) If the board of directors does not fix the record date for determining shareholders entitled to a share dividend, it is the date the board of directors authorizes the share dividend.
(d) If a corporation which has treasury shares declares a share dividend, such dividend shall not be deemed to include a dividend on treasury shares unless the resolution declaring the dividend expressly so provides.
(a) A corporation may issue rights, options, or warrants with respect to the shares of the corporation whether or not in connection with the issuance and sale of any of its shares or other securities. The board of directors shall determine the terms upon which the rights, options, or warrants are issued, their form and content, the consideration for which they are to be issued, and the terms and conditions relating to their exercise, including the time or times, the conditions precedent, and the prices at which and the holders by whom the rights, options, or warrants may be exercised.
(b) If at the time the corporation issues rights, the corporation does not have authorized and unissued shares sufficient to satisfy the rights if and when exercised, the granting of the rights is not invalid solely by reason of the lack of sufficient authorized but unissued shares to honor the exercise of the rights.
(c) The terms of the rights, options, or warrants, including the time or times, the conditions precedent, and the prices at which and the holders by whom the rights, options, or warrants may be exercised, as well as their duration, (1) may preclude or limit the exercise, transfer, or receipt of such rights, options, or warrants or invalidate or void any rights, options, or warrants and (2) may be made dependent upon facts ascertainable outside the documents evidencing the rights, or the resolution providing for the issue of the rights, options, or warrants adopted by the board of directors, if the manner in which the facts shall operate upon the exercise of rights is clearly and expressly set forth in the document evidencing the rights or in the resolution. Such terms and conditions need not be set forth in the articles of incorporation. As used in this Code section, the term “facts” includes, but is not limited to, the occurrence of any event, including a determination or action by any person or body, including the corporation.
(d) The terms and conditions of rights, options, or warrants issuable pursuant to this Code section may include provisions that:
(1) Preclude or limit the exercise, transfer, or receipt of such rights, options, or warrants by, or invalidate or void any such rights, options, or warrants held by, any person that is a beneficial owner of a specified amount of the outstanding equity securities or percentage of the outstanding voting power of the corporation, or by any transferee of such person, except that such provisions shall not affect any person whose beneficial ownership at the date of adoption of any such provision exceeds such specified amount or percentage, unless the amount of outstanding equity securities beneficially owned by such person is subsequently increased; and
(2) Limit, restrict, or condition the power of a future director to vote for the redemption, modification, or termination of the rights, options, or warrants for a period not to exceed 180 days from the initial election of the director, provided that such 180 day time limitation shall not apply to any such limitation, restriction, or condition that is based solely on a director's current or former status as an employee or officer of the corporation; as a director, officer, employee, affiliate, or associate of any interested shareholder or person seeking to become an interested shareholder; or as a director, officer, or employee of an affiliate of an interested shareholder or person seeking to become an interested shareholder.
(e) The provisions of subsection (d) of this Code section shall be applied as follows:
(1) The definition of “beneficial owner” contained in Code Section 14-2-1110 shall be applicable to this Code section, except (A) any exclusion from such definition shall be permitted, and (B) that the effective date of this paragraph shall be December 31, 2000, insofar as it may be deemed to apply to any right, option, or warrant issued or issuable at the date of enactment of this paragraph;
(2) The definition of “affiliate,” “associate,” and “interested shareholder” contained in Code Section 14-2-1110 shall be applicable to this Code section; provided, however, that the inclusion of a person as a nominee for election as a director of the corporation by an interested shareholder or person seeking to become an interested shareholder shall not create an implication that such nominee is an affiliate of an interested shareholder or person seeking to become an interested shareholder; and
(3) Any rights, options, or warrants issued or issuable pursuant to this Code section that contain a provision otherwise permitted by paragraph (2) of subsection (d) of this Code section but which do not purport to comply with the 180 day time limitation specified therein shall not be rendered invalid, but any such provision shall be deemed to be effective only to the extent permitted by paragraph (2) of subsection (d) of this Code section.
(f) The board of directors may, by a resolution adopted by the board, authorize one or more officers of the corporation to do one or both of the following:
(1) Designate officers and employees of the corporation or of any of its subsidiaries to be recipients of rights, options, or warrants to be issued by the corporation; or
(2) Determine the number of rights, options, or warrants to be received by such officers and employees;
provided, however, that the resolution authorizing such officer or officers shall specify the total number of rights, options, or warrants such authorized officer or officers may award. The board of directors may not authorize an officer to designate himself or herself as a recipient of any rights, options, or warrants.
(a) Shares may but need not be represented by certificates. Unless this chapter or another statute expressly provides otherwise, there shall be no differences in the rights and obligations of shareholders based on whether or not their shares are represented by certificates.
(b) At a minimum each share certificate must state on its face:
(1) The name of the issuing corporation and that it is organized under the law of this state;
(2) The name of the person to whom issued; and
(3) The number and class of shares and the designation of the series, if any, the certificate represents.
(c) If the issuing corporation is authorized to issue different classes of shares or different series within a class, a reference on the certificate to the state of incorporation shall be deemed to be a reference to the articles of incorporation and its provisions governing the designations, relative rights, preferences, and limitations applicable to each class and the variations in rights, preferences, and limitations determined for each series (and the authority of the board of directors to determine variations for future series). Alternatively, each certificate may describe the designations, relative rights, preferences, and limitations, or may state conspicuously on its front or back that the corporation will furnish the shareholder this information on request in writing and without charge.
(d) Each share certificate:
(1) Must be signed, either manually or in facsimile, by one or more officers designated in the bylaws or by the board of directors; and
(2) May bear the corporate seal or its facsimile.
If the certificate is signed in facsimile, then it must be countersigned by a transfer agent or registered by a registrar other than the corporation itself or an employee of the corporation. The transfer agent or registrar may sign either manually or by facsimile.
(e) If the person who signed a share certificate, either manually or in facsimile, no longer holds office when the certificate is issued, the certificate is nevertheless valid.
(f) No certificate valid when issued shall cease to be valid by reason of any changes in the information required or permitted to be stated on the certificate and, in the event of a change in the capital structure of a corporation, it shall not be necessary to recall any previously issued share certificate for revision of the information placed thereon pursuant to this Code section.
(a) Unless the articles of incorporation or bylaws provide otherwise, the board of directors of a corporation may authorize the issue of some or all of the shares of any or all of its classes or series without certificates. The authorization does not affect shares already represented by certificates until they are surrendered to the corporation.
(b) Within a reasonable time after the issue or transfer of shares without certificates, the corporation shall send the shareholder a written statement of the information required on certificates by subsection (b) of Code Section 14-2-625 and, if applicable, Code Section 14-2-627.
(a) The articles of incorporation, bylaws, an agreement among shareholders, or an agreement between shareholders and the corporation may impose restrictions on the transfer or registration of transfer of shares of the corporation. A restriction does not affect shares issued before the restriction was adopted unless the holders of the shares are parties to the restriction agreement or voted in favor of the restriction.
(b) A restriction on the transfer or registration of transfer of shares is valid and enforceable against the holder or a transferee of the holder if the restriction is authorized by this Code section and its existence is noted conspicuously on the front or back of the certificate or is contained in the information statement required by subsection (b) of Code Section 14-2-626. Unless so noted, a restriction is not enforceable against a person without knowledge of the restriction. A restriction authorized under this Code section, whether or not so noted, is enforceable against a person with knowledge of the restriction.
(c) A restriction on the transfer or registration of transfer of shares is authorized:
(1) To maintain the corporation's status when it is dependent on the number or identity of its shareholders;
(2) To preserve exemptions under federal or state securities law;
(3) For any other reasonable purpose.
(d) A restriction on the transfer or registration of transfer of shares may:
(1) Obligate the shareholder first to offer the corporation or other persons (separately, consecutively, or simultaneously) an opportunity to acquire the restricted shares;
(2) Obligate the corporation or other persons (separately, consecutively, or simultaneously) to acquire the restricted shares;
(3) Require the corporation, the holders of any class of its shares, or another person to approve the transfer of the restricted shares, if the requirement is not manifestly unreasonable;
(4) Prohibit the transfer of the restricted shares to designated persons or classes of persons, if the prohibition is not manifestly unreasonable.
(e) For purposes of this Code section, the term “shares” includes a security convertible into or carrying a right to subscribe for or acquire shares.
A corporation may pay the expenses of selling or underwriting its shares and of organizing or reorganizing the corporation from the consideration received for shares.
(a) The shareholders of all corporations, other than those described in subsection (b) of this Code section, do not have a preemptive right to acquire the corporation's unissued or treasury shares, if any, except to the extent the articles of incorporation so provide.
(b) The shareholders of the following corporations shall have preemptive rights as provided in subsection (c) of this Code section, unless the articles of incorporation expressly provide otherwise:
(1) Corporations electing statutory close corporation status; and
(2) Corporations in existence on July 1, 1989, whose:
(A) Shareholders had such rights as of that date; or
(B) Articles of incorporation have been restated or amended on or after July 1, 1989, with notice to the shareholders that such restatement or amendment would cause the shareholders of the corporation to have preemptive rights.
(c) A statement included in the articles of incorporation that the corporation elects to have preemptive rights (or words of similar import) means that the following principles apply except to the extent the articles of incorporation expressly provide otherwise:
(1) The shareholders of the corporation have a preemptive right, granted on uniform terms and conditions prescribed by the board of directors to provide a fair and reasonable opportunity to exercise the right, to acquire proportional amounts of the corporation's unissued or treasury shares upon the decision of the board of directors to issue them;
(2) There is no preemptive right with respect to the issuance of:
(A) Shares issued as a share dividend;
(B) Fractional shares;
(C) Shares issued to effect a merger or share exchange;
(D) Shares issued as compensation to directors, officers, agents, or employees of the corporation, its subsidiaries, or affiliates upon terms and conditions approved or ratified by the affirmative vote of the holders of a majority of the shares entitled to vote thereon;
(E) Shares issued to satisfy conversion or option rights created to provide compensation to directors, officers, agents, or employees of the corporation, its subsidiaries, or affiliates upon terms and conditions approved or ratified by the affirmative vote of the holders of a majority of the shares entitled to vote thereon;
(F) Shares authorized in articles of incorporation that are issued within one year from the effective date of incorporation;
(G) Shares issued under a plan of reorganization approved in a proceeding under any applicable act of Congress relating to the reorganization of corporations;
(H) Shares sold otherwise than for money, deemed by the board of directors in good faith to be advantageous to the corporation's business, other than shares sold pursuant to subparagraph (A) or (B) of this paragraph; or
(I) Shares released by waiver from their preemptive right by the affirmative vote or consent in writing or by electronic transmission of the holders of two-thirds of the shares of the class to be issued. Any vote or consent shall be binding on all shareholders and their transferees for the time specified in the vote or consent up to but not exceeding one year from the date thereof and shall protect the corporation, its management, and all persons who may within that time acquire the shares so released;
(3) A shareholder may waive his or her individual preemptive right at any time, and the holders of a class of shares may waive the preemptive rights of the class by the affirmative vote or consent in writing or by electronic transmission of the holders of two-thirds of the shares of the class with preemptive rights. The waiver of preemptive rights with respect to past issuances of shares shall be effective if made by the person who was the shareholder at the time the shares were issued. A waiver evidenced by a writing or by electronic transmission is irrevocable even though it is not supported by consideration;
(4) Holders of shares of any class without general voting rights or with preferential rights to distributions or assets have no preemptive rights with respect to shares of any class;
(5) Holders of shares of any class with general voting rights but without preferential rights to distributions or assets have no preemptive rights with respect to shares of any class with preferential rights to distributions or assets unless the shares with preferential rights are convertible into or carry a right to subscribe for or acquire shares without preferential rights; and
(6) Shares subject to preemptive rights that are not acquired by shareholders may be issued to any person at a consideration set by the board of directors that is not lower than the consideration set for the exercise of preemptive rights.
(d) For purposes of this Code section, the term “shares” includes a security convertible into or carrying a right to subscribe for or acquire shares.
(e) Shares that are otherwise validly issued and outstanding shall not be affected by reason of any violation of preemptive rights with respect to their issuance.
(f) No action shall be maintained to enforce any liability for violation of preemptive rights unless brought within three years of the discovery or notice of the violation, but in no event shall any action be brought to enforce a liability for violation of preemptive rights more than five years after the issuance giving rise to the violation.
(a) A corporation may acquire its own shares and shares so acquired constitute authorized but unissued shares, unless the articles of incorporation provide that reacquired shares become treasury shares or prohibit the reissue of reacquired shares.
(b) If the articles of incorporation prohibit the reissue of acquired shares, the number of authorized shares is reduced by the number of shares acquired, effective upon amendment of the articles of incorporation.
(c) The board of directors may adopt articles of amendment under this Code section without shareholder action. The articles must set forth:
(1) The reduction in the number of authorized shares, itemized by class and series; and
(2) The total number of authorized shares, itemized by class and series, remaining after reduction of the shares.
(d) The board of directors may adopt articles of amendment providing that reacquired shares become treasury shares without shareholder action.
(e) A corporation may create security interests in treasury shares.
(a) A board of directors may authorize and the corporation may make distributions to its shareholders subject to restriction by the articles of incorporation and the limitation in subsection (c) of this Code section.
(b) If the board of directors does not fix the record date for determining shareholders entitled to a distribution (other than one involving a purchase, redemption, or other reacquisition of the corporation's shares), it is the date the board of directors authorizes the distribution.
(c) No distribution may be made if, after giving it effect:
(1) The corporation would not be able to pay its debts as they become due in the usual course of business; or
(2) The corporation's total assets would be less than the sum of its total liabilities plus (unless the articles of incorporation permit otherwise) the amount that would be needed, if the corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution.
(d) The board of directors may base a determination that a distribution is not prohibited under subsection (c) of this Code section either on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances.
(e) Except as provided in subsection (g) of this Code section, the effect of a distribution under subsection (c) of this Code section is measured:
(1) In the case of distribution by purchase, redemption, or other acquisition of the corporation's shares, as of the earlier of:
(A) The date money or other property is transferred or debt incurred by the corporation; or
(B) The date the shareholder ceases to be a shareholder with respect to the acquired shares;
(2) In the case of any other distribution of indebtedness, as of the date the indebtedness is distributed; and
(3) In all other cases, as of:
(A) The date the distribution is authorized if payment occurs within 120 days after the date of authorization; or
(B) The date the payment is made if it occurs more than 120 days after the date of authorization.
(f) A corporation's indebtedness to a shareholder incurred by reason of a distribution made in accordance with this Code section is at parity with the corporation's indebtedness to its general, unsecured creditors except to the extent subordinated by agreement or except to the extent secured.
(g) Indebtedness of a corporation, including indebtedness issued as a distribution, is not considered a liability for purposes of determinations under subsection (c) of this Code section if its terms provide that payment of principal and interest are to be made only if and to the extent that payment of a distribution to shareholders could then be made under this Code section. If the indebtedness is issued as a distribution, each payment of principal or interest is treated as a distribution, the effect of which is measured on the date the payment is actually made.
(a) As used in this Code section, the term:
(1) “Call” means a notice or demand, pursuant to a right contained in the articles of incorporation, resolution of the board of directors, or other document governing rights and preferences of shares or other securities, to redeem, cancel, or otherwise extinguish a part or all of a class or series of securities of an issuing corporation.
(2) “Registered holder” means the holder or owner of shares or other securities as shown upon the records maintained by or on behalf of the issuer for that purpose.
(3) “Redemption” includes the surrender, cancellation, or payment in satisfaction of or with respect to shares or other securities by an issuer.
(b) When a corporation has duly and properly called for redemption of any securities and the registered holder of the securities has been sent notice of call at his or her last address as it appears on the records of the corporation but fails to present the certificate for the securities or otherwise take action as required by the call within 60 days of the effective date of the call or such longer time as may be specified in the notice of the call, then the corporation may transfer the money or other property distributable upon the redemption to a trustee, for the benefit of the registered owner or his or her successors in title, and thereupon the securities shall be deemed as of the effective date of the call to have been redeemed, canceled, or paid and no longer outstanding.
(c) In order for the transfer to the trustee permitted by subsection (b) of this Code section to be effective for this purpose, the corporation must have adopted a plan therefor prior to the call, and must have sent notice to the registered holder of the securities of the details of the plan, including the name and address of the trustee, at the time of the sending of the notice of the call. The registered holder for whom the transfer in trust is made or his or her successors in title shall have only the right to obtain the money or other property from the trustee:
(1) In the case of certificated securities, upon surrender to the trustee of the certificates involved; and
(2) In the case of uncertificated securities, upon satisfying the trustee that he or she was the registered holder.
(d) Any money or other property held by the trustee which is not claimed by the registered holder within six years from the date of the transfer to the trustee shall be distributed to the persons and in the manner provided in the plan previously adopted or, if the provisions for distribution are held to be invalid or the plan does not contain provisions for distribution, shall be distributed to and become the property of the Board of Regents of the University System of Georgia, to be used for educational purposes. The trustee appointed under this Code section must be a bank or trust company located in the State of Georgia.
(e) The procedures specified in subsections (b) through (d) of this Code section shall not be exclusive of other procedures, not otherwise inconsistent with law, specified in the articles of incorporation, including an amendment of the articles of incorporation adopted by the board of directors establishing and designating a series of preferred shares and fixing and determining the relative rights and preferences of a series of preferred shares, or in the instruments governing any other securities, with respect to the redemption of the securities, and, upon compliance by a corporation with any of those procedures, the shares or other securities shall be deemed as of the date provided in those procedures to have been redeemed, canceled, and no longer to be outstanding, regardless of whether the holders thereof shall have taken the steps provided in this Code section.
(a) A corporation shall hold a meeting of shareholders annually at a time stated in or fixed in accordance with the bylaws.
(b)(1) Except as provided for in paragraph (2) of this subsection, annual shareholders' meetings may be held in or out of this state at the place stated in or fixed in accordance with the bylaws. If no place is stated in or fixed in accordance with the bylaws, annual shareholders' meetings shall be held at the corporation's principal office.
(2) Unless the articles of incorporation or the bylaws provide otherwise, the board of directors may determine that an annual shareholders' meeting may be held wholly or partially by means of remote communication as authorized by Code Section 14-2-708.
(c) The failure to hold an annual meeting at the time stated in or fixed in accordance with a corporation's bylaws does not affect the validity of any corporate action.
(a) A corporation shall hold a special meeting of shareholders:
(1) On call of its board of directors or the person or persons authorized to do so by the articles of incorporation or bylaws;
(2) Except as to corporations described in paragraph (3) of this subsection, if the holders of at least 25 percent, or such greater or lesser percentage as may be provided in the articles of incorporation or bylaws, of all the votes entitled to be cast on any issue proposed to be considered at the proposed special meeting, sign, date, and deliver to the corporation one or more demands in writing or by electronic transmission for the meeting describing the purpose or purposes for which it is to be held; or
(3) In the case of a corporation having 100 or fewer shareholders of record, if the holders of at least 25 percent, or such lesser percentage as may be provided in the articles of incorporation or bylaws, of all the votes entitled to be cast on any issue to be considered at the proposed special meeting sign, date, and deliver to the corporation one or more demands in writing or by electronic means for the meeting describing the purpose or purposes for which it is to be held.
(b) If not otherwise fixed under Code Section 14-2-703 or Code Section 14-2-707, the record date for determining shareholders entitled to demand a special meeting is the date the first shareholder signs the demand.
(c)(1) Except as provided for under paragraph (2) of this subsection, special shareholders' meetings may be held in or out of this state at the place stated in or fixed in accordance with the bylaws. If no place is stated or fixed in accordance with the bylaws, special shareholders' meetings shall be held at the corporation's principal office.
(2) Unless the articles of incorporation or the bylaws provide otherwise, the board of directors may determine that a special shareholders' meeting be held wholly or partially by means of remote communication as authorized by Code Section 14-2-708.
(d) Only business within the purpose or purposes described in the meeting notice required by subsection (c) of Code Section 14-2-705 may be conducted at a special shareholders' meeting.
(e) Unless otherwise provided in the articles of incorporation, a demand by a shareholder for a special meeting may be revoked by a written or electronic transmission to that effect by the shareholder received by the corporation prior to the call of the special meeting.
(f) A bylaw provision governing the percentage of shares required to call special meetings is not a quorum or voting requirement.
(a) The superior court of the county where a corporation's registered office is located may summarily order a meeting to be held:
(1) On application of any shareholder of the corporation if an annual meeting was not held within the earlier of six months after the end of a fiscal year of the corporation or 15 months after its last annual meeting; or
(2) On application of a shareholder who signed a demand for a special meeting valid under Code Section 14-2-702, if:
(A) Notice of the special meeting was not given within 30 days after the date the demand was delivered to the corporation's secretary; or
(B) The special meeting was not held in accordance with the notice.
(b) After notice to the corporation, the superior court may order that the meeting be deemed an annual meeting or a special meeting.
(a) Action required or permitted by this chapter to be taken at a shareholders' meeting may be taken without a meeting if the action is taken by all the shareholders entitled to vote on the action or, if so provided in the articles of incorporation, by persons who would be entitled to vote at a meeting shares having voting power to cast not less than the minimum number (or numbers, in the case of voting by groups) of votes that would be necessary to authorize or take the action at a meeting at which all shareholders entitled to vote were present and voted. The action must be evidenced by one or more written consents bearing the date of signature and describing the action taken, signed by shareholders entitled to take action without a meeting and delivered to the corporation for inclusion in the minutes or filing with the corporate records.
(b) No written consent signed under this Code section shall be valid unless:
(1) The consenting shareholder has been furnished the same material that, under this chapter, would have been required to be sent to shareholders in a notice of a meeting at which the proposed action would have been submitted to the shareholders for action, including notice of any applicable dissenters' rights as provided in Code Section 14-2-1320; or
(2) The written consent contains an express waiver of the right to receive the material otherwise required to be furnished.
(c) If the articles of incorporation give the shareholders the right to cumulate their votes, action with respect to any election of directors may be taken without a meeting only by written consent signed by all the shareholders entitled to vote on the election of directors.
(d) If not otherwise fixed under Code Section 14-2-703 or Code Section 14-2-707, the record date for determining shareholders entitled to take action without a meeting is the date the first shareholder signs the consent. No written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest date appearing on a consent delivered to the corporation in the manner required by this Code section, evidence of written consents signed by shareholders sufficient to act by written consent are received by the corporation. A written consent may be revoked by a writing to that effect received by the corporation prior to the receipt by the corporation of unrevoked written consents sufficient in number to take corporate action.
(e) A consent signed under this Code section has the effect of a meeting vote and may be described as such in any document. A consent delivered to the corporation shall become effective on the date of delivery of the last consent required to take action under subsection (d) of this Code section or such later date as it may provide.
(f) If action is taken under this Code section by less than all of the shareholders entitled to vote on the action, all voting shareholders on the record date who did not participate in taking the action shall be given written notice of the action, together with the material described in paragraph (1) of subsection (b) of this Code section, not more than ten days after the taking of action without a meeting.
(g) If this chapter requires that notice of action by shareholders be given to nonvoting shareholders and the action is taken by voting shareholders without a meeting, the corporation must give its nonvoting shareholders written notice of the action not more than ten days after the taking of action without a meeting. The notice must contain or be accompanied by the same material that, under this chapter, would have been required to be sent to nonvoting shareholders in a notice of meeting at which the proposed action would have been submitted to the shareholders for action.
(h) An electronic transmission which is transmitted by a shareholder that evidences a shareholder's consent, requests or demands an action to be taken by the corporation, or provides notice to the corporation under this chapter shall be deemed to be written, signed, and dated for the purposes of this chapter, provided that any such electronic transmission sets forth or is delivered with information from which the corporation can determine:
(1) That the electronic transmission was transmitted by the shareholder; and
(2) The date on which such shareholder transmitted such electronic transmission. The date on which such electronic transmission is transmitted shall be deemed to be the date on which such consent, request, demand, or notice was signed.
(a) A corporation shall notify shareholders of the date, time, and place of each annual and special shareholders' meeting no fewer than ten nor more than 60 days before the meeting date. Unless this chapter or the articles of incorporation require otherwise, the corporation is required to give notice only to shareholders entitled to vote at the meeting.
(b) Unless this chapter or the articles of incorporation require otherwise, notice of an annual meeting need not include a description of the purpose or purposes for which the meeting is called.
(c) Notice of a special meeting must include a description of the purpose or purposes for which the meeting is called.
(d) If not otherwise fixed under Code Section 14-2-703 or Code Section 14-2-707, the record date for determining shareholders entitled to notice of and to vote at an annual or special shareholders' meeting is the close of business on the day before the first notice is delivered to shareholders.
(e) Unless the bylaws require otherwise, if an annual or special shareholders' meeting is adjourned to a different date, time, or place, notice need not be given of the new date, time, or place if the new date, time, or place is announced at the meeting before adjournment. If a new record date for the adjourned meeting is or must be fixed under Code Section 14-2-707, however, notice of the adjourned meeting must be given under this Code section to persons who are shareholders as of the new record date.
(f) Notwithstanding the provisions of this Code section, a corporation need not provide any notice required by this Code section to a shareholder to whom:
(1) Notices of two consecutive annual meetings; or
(2) All and at least two payments of dividends or interest on securities or dividend reinvestment confirmations during a 12 month period
have been mailed addressed to the shareholder's address shown in the corporation's current record of shareholders and have been returned as undeliverable. Any action or meeting which shall be taken or held without notice to any such shareholder shall have the same force and effect as if such notice had been duly given. If any such shareholder shall deliver to the corporation written notice setting forth such shareholder's then current address, the requirement that notice be given to such shareholder shall be reinstated. If the action taken by the corporation requires the filing of a document under any other provision of this chapter, the document need not state that notice was not given to shareholders to whom notice was not required to be given pursuant to this subsection.
(a) A shareholder may waive any notice required by this chapter, the articles of incorporation, or bylaws before or after the date and time stated in the notice. The waiver must be in writing or by electronic transmission, be signed by the shareholder entitled to the notice, and be delivered to the corporation for inclusion in the minutes or filing with the corporate records.
(b) A shareholder's attendance at a meeting:
(1) Waives objection to lack of notice or defective notice of the meeting, unless the shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting; and
(2) Waives objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the shareholder objects to considering the matter when it is presented.
(c) Unless required by the bylaws, neither the business transacted nor the purpose of the meeting need be specified in the waiver, except that any waiver by a shareholder of the notice of a meeting of shareholders with respect to an amendment of the articles of incorporation pursuant to Code Section 14-2-1003, a plan of merger or share exchange pursuant to Code Section 14-2-1103, a sale of assets pursuant to Code Section 14-2-1202, or any other action which would entitle the shareholder to dissent pursuant to Code Section 14-2-1302 and obtain payment for his shares shall not be effective unless:
(1) Prior to the execution of the waiver, the shareholder shall have been furnished the same material that under this chapter would have been required to be sent to the shareholder in a notice of the meeting, including notice of any applicable dissenters' rights as provided in Code Sections 14-2-1320 and 14-2-1322; or
(2) The waiver expressly waives the right to receive the material required to be furnished.
(a) The bylaws may fix or provide the manner of fixing the record date for one or more voting groups in order to determine the shareholders entitled to notice of a shareholders' meeting, to demand a special meeting, to vote, or to take any other action. If the bylaws do not fix or provide for fixing a record date, the board of directors of the corporation may fix a future date as the record date.
(b) A record date fixed under this Code section may not be more than 70 days before the meeting or action requiring a determination of shareholders.
(c) A determination of shareholders entitled to notice of or to vote at a shareholders' meeting is effective for any adjournment of the meeting unless the board of directors fixes a new record date, which it must do if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting.
(d) If a court orders a meeting adjourned to a date more than 120 days after the date fixed for the original meeting, it may provide that the original record date continues in effect or it may fix a new record date.
When authorized by the board of directors, and subject to such guidelines and procedures as the board of directors may adopt, shareholders and holders of proxies of any class or series designated by the board of directors not physically present at a meeting of shareholders may, by means of remote communication:
(1) Participate in a meeting of shareholders; and
(2) Be deemed present in person and vote at a meeting of shareholders, whether such meeting is held at a designated place or held wholly by means of remote communication, provided that:
(A) The corporation implements reasonable procedures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a shareholder or holder of a proxy;
(B) The corporation implements reasonable procedures to provide such shareholders and holders of proxies a reasonable opportunity to participate in the meeting and to vote on matters submitted to such shareholders and holders of proxies, including, but not limited to, an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings; and
(C) When any shareholder or holder of a proxy votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the corporation.
(a) After fixing a record date for a meeting, a corporation shall prepare an alphabetical list of the names of all its shareholders who are entitled to notice of a shareholders' meeting. The list must be arranged by voting group and within each voting group by class or series of shares and show the address of and number of shares held by each shareholder. Nothing contained in this Code section shall require the corporation to include e-mail addresses or other information for delivery of electronic transmissions on such list.
(b) The shareholders' list must be available for inspection by any shareholder, his or her agent, or his or her attorney:
(1) On a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting upon request; or
(2) During ordinary business hours at the principal place of business of the corporation.
In the event that the corporation makes the list available on an electronic network, the corporation may take reasonable steps to ensure that such information is available only to shareholders of the corporation. If the meeting is to be held in person, then the list shall be produced and kept at the time and place of the meeting during the duration of the meeting and may be inspected by any shareholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any shareholder during the duration of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.
(c) If the corporation refuses to allow a shareholder, his agent, or his attorney to inspect the shareholders' list at the meeting, the superior court of the county where a corporation's registered office is located, on application of the shareholder, may summarily order the inspection at the corporation's expense and may postpone the meeting for which the list was prepared until the inspection is complete.
(d) Refusal or failure to prepare or make available the shareholders' list does not affect the validity of action taken at the meeting.
(a) Except as provided in subsections (b) and (c) of this Code section or unless the articles of incorporation provide otherwise, each outstanding share (other than shares of preferred stock issued or authorized before July 1, 1989), regardless of class, is entitled to one vote on each matter voted on at a shareholders' meeting. Only shares are entitled to vote. If articles of incorporation have been restated or amended on or after July 1, 1989, such amendment shall not be deemed to have granted voting rights to holders of preferred shares previously without voting rights unless notice was provided to shareholders that such restatement or amendment would cause the holders of preferred shares to have voting rights, and a shareholder vote approved the restatement or amendment.
(b) Absent special circumstances, the shares of a corporation are not entitled to vote if owned by the corporation as treasury shares or if they are held, directly or indirectly, by a second corporation, domestic or foreign, of which the first corporation owns, directly or indirectly, shares sufficient to elect a majority of the directors of the second corporation.
(c) Subsection (b) of this Code section does not limit the power of a corporation to vote any shares, including its own shares, held by it in a fiduciary capacity.
(d) Redeemable shares are not entitled to vote after notice of redemption is mailed to the holders and a sum sufficient to redeem the shares has been deposited with a bank, trust company, or other financial institution under an irrevocable obligation to pay the holders the redemption price on surrender of the shares.
(a) A shareholder may vote his or her shares in person or by proxy.
(b) A shareholder or his or her agent or attorney in fact may appoint a proxy to vote or otherwise act for the shareholder by signing an appointment form or by an electronic transmission. An electronic transmission must contain or be accompanied by information from which it can be determined that the shareholder, the shareholder's agent, or the shareholder's attorney in fact authorized the electronic transmission.
(c) An appointment of a proxy is effective when a signed appointment form or electronic transmission of the appointment is received by the inspector of election or the officer or agent of the corporation authorized to tabulate votes. An appointment is valid for 11 months unless a longer period is expressly provided in the appointment.
(d) An appointment of a proxy is revocable unless the appointment form or electronic transmission states that it is irrevocable and the appointment is coupled with an interest. Appointments coupled with an interest include the appointment of:
(1) A pledgee;
(2) A person who purchased or agreed to purchase the shares;
(3) A creditor of the corporation who extended it credit under terms requiring the appointment;
(4) An employee of the corporation whose employment contract requires the appointment; or
(5) A party to a voting agreement created under Code Section 14-2-731.
(e) The death or incapacity of the shareholder appointing a proxy does not affect the right of the corporation to accept the proxy's authority unless notice of the death or incapacity is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises his or her authority under the appointment.
(f) An appointment made irrevocable under subsection (d) of this Code section is revoked when the interest with which it is coupled is extinguished.
(g) A transferee for value of shares subject to an irrevocable appointment may revoke the appointment if he or she did not know of its existence when he or she acquired the shares and the existence of the irrevocable appointment was not noted conspicuously on the certificate representing the shares or on the information statement for shares without certificates.
(h) Subject to Code Section 14-2-724 and to any express limitation on the proxy's authority stated in the appointment form or electronic transmission, a corporation is entitled to accept the proxy's vote or other action as that of the shareholder making the appointment.
(i) Any copy, facsimile transmission, or other reliable reproduction of the writing or electronic transmission created pursuant to subsection (b) of this Code section may be substituted or used in lieu of the original writing or electronic transmission for any and all purposes for which the original writing or electronic transmission could be used, provided that such copy, facsimile transmission, or other reproduction shall be a complete reproduction of the entire original writing or electronic transmission.
(j) A corporation may adopt bylaws authorizing additional means or procedures for shareholders to exercise rights granted by this Code section.
(a) A corporation may establish a procedure by which the beneficial owner of shares that are registered in the name of a nominee is recognized by the corporation as the shareholder. The extent of this recognition may be determined in the procedure.
(b) The procedure may set forth:
(1) The types of nominees to which it applies;
(2) The rights or privileges that the corporation recognizes in a beneficial owner;
(3) The manner in which the procedure is selected by the nominee;
(4) The information that must be provided when the procedure is selected;
(5) The period for which selection of the procedure is effective; and
(6) Other aspects of the rights and duties created.
(a) If the name signed on a vote, consent, waiver, or proxy appointment corresponds to the name of a shareholder, the corporation if acting in good faith is entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the shareholder.
(b) If the name signed on a vote, consent, waiver, or proxy appointment does not correspond to the name of its shareholder, the corporation if acting in good faith is nevertheless entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the shareholder if:
(1) The shareholder is an entity and the name signed purports to be that of an officer or agent of the entity;
(2) The name signed purports to be that of an administrator, executor, guardian, or conservator representing the shareholder and, if the corporation requests, evidence of fiduciary status acceptable to the corporation has been presented with respect to the vote, consent, waiver, or proxy appointment;
(3) The name signed purports to be that of a receiver or trustee in bankruptcy of the shareholder and, if the corporation requests, evidence of this status acceptable to the corporation has been presented with respect to the vote, consent, waiver, or proxy appointment;
(4) The name signed purports to be that of a pledgee, beneficial owner, or attorney in fact of the shareholder and, if the corporation requests, evidence acceptable to the corporation of the signatory's authority to sign for the shareholder has been presented with respect to the vote, consent, waiver, or proxy appointment; or
(5) Two or more persons are the shareholder as cotenants or fiduciaries and the name signed purports to be the name of at least one of the co-owners and the person signing appears to be acting on behalf of all the co-owners.
(c) The corporation is entitled to reject a vote, consent, waiver, or proxy appointment if the secretary or other officer or agent authorized to tabulate votes, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatory's authority to sign for the shareholder or about the faithfulness or completeness of the reproduction when the original has not been examined.
(d) The corporation and its officer or agent who accept or reject a vote, consent, waiver, or proxy appointment in good faith and in accordance with the standards of this Code section or subsection (b) of Code Section 14-2-722 are not liable in damages to the shareholder for the consequences of the acceptance or rejection.
(e) Corporate action based on the acceptance or rejection of a vote, consent, waiver, or proxy appointment under this Code section or subsection (b) of Code Section 14-2-722 is valid unless a court of competent jurisdiction determines otherwise.
(a) Shares entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those shares exists with respect to that matter. Unless the articles of incorporation or this chapter provides otherwise, a majority of the votes entitled to be cast on the matter by the voting group constitutes a quorum of that voting group for action on that matter.
(b) Once a share is represented for any purpose at a meeting other than solely to object to holding the meeting or transacting business at the meeting, it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or must be set for that adjourned meeting.
(c) If a quorum exists, action on a matter (other than the election of directors) by a voting group is approved if the votes cast within the voting group favoring the action exceed the votes cast opposing the action, unless the articles of incorporation, a bylaw adopted by the shareholders under Code Section 14-2-1021, or this chapter requires a greater number of affirmative votes.
(d) The election of directors is governed by Code Section 14-2-728.
(a) If the articles of incorporation or this chapter provides for voting by a single voting group on a matter, action on that matter is taken when voted upon by that voting group as provided in Code Section 14-2-725.
(b) If the articles of incorporation or this chapter provides for voting by two or more voting groups on a matter, action on that matter is taken only when voted upon by each of those voting groups counted separately as provided in Code Section 14-2-725. Action may be taken by one voting group on a matter even though no action is taken by another voting group entitled to vote on the matter.
(a) The articles of incorporation or a bylaw adopted under Code Section 14-2-1021 may provide for a greater or lesser quorum (but not less than one-third of the votes entitled to be cast) or a greater voting requirement for shareholders (or voting groups of shareholders) than is provided for by this chapter.
(b) An amendment to the articles of incorporation or bylaws that changes or deletes a greater quorum or voting requirement must meet the same quorum requirement and be adopted by the same vote and voting groups required to take action under the quorum and voting requirements prescribed in the provision being amended.
(a) Unless otherwise provided in:
(1) The articles of incorporation; or
(2) A bylaw that fixes a greater voting requirement for the election of directors and that is adopted by the board of directors of a corporation having shares listed on a national securities exchange or regularly traded in a market maintained by one or more members of a national or affiliated securities association,
directors are elected by a plurality of the votes cast by the shares entitled to vote in the election. Action to elect directors may be taken at a meeting only if a quorum is present.
(b) Shareholders do not have a right to cumulate their votes for directors unless the articles of incorporation so provide.
(c) A statement included in the articles of incorporation that all or a designated voting group of shareholders are entitled to cumulate their votes for directors (or words of similar import) means that the shareholders designated are entitled to multiply the number of votes they are entitled to cast by the number of directors for whom they are entitled to vote and cast the product for a single candidate or distribute the product among two or more candidates.
(d) Shares otherwise entitled to vote cumulatively may not be voted cumulatively at a particular meeting unless:
(1) The meeting notice or proxy statement accompanying the notice states that cumulative voting will be in effect; or
(2) A shareholder who has the right to cumulate his votes gives notice to the corporation not less than 48 hours before the time set for the meeting of his intent to cumulate his votes during the meeting, and if one shareholder gives this notice all other shareholders in the same voting group participating in the election are entitled to cumulate their votes without giving further notice.
The holders of a majority of the voting shares represented at a meeting, whether or not a quorum is present, may adjourn such meeting from time to time.
(a) A corporation having any shares listed on a national securities exchange or regularly traded in a market maintained by one or more members of a national or affiliated securities association shall, and any other corporation may, appoint one or more inspectors to act at a meeting of shareholders and make a written report of the inspectors' determinations. Each inspector shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of the inspector's ability.
(b) The inspectors shall:
(1) Ascertain the number of shares outstanding and the voting power of each;
(2) Determine the shares represented at a meeting;
(3) Determine the validity of proxies and ballots;
(4) Count all votes; and
(5) Determine the result.
(c) An inspector may be an officer or employee of the corporation.
(a) One or more shareholders may create a voting trust, conferring on a trustee the right to vote or otherwise act for them, by signing an agreement setting out the provisions of the trust (which may include anything consistent with its purpose) and transferring their shares to the trustee. When a voting trust agreement is signed, the trustee shall prepare a list of the names and addresses of all owners of beneficial interests in the trust, together with the number and class of shares each transferred to the trust, and deliver a copy of the list and agreement to the corporation's principal office.
(b) A voting trust becomes effective on the date the first shares subject to the trust are registered in the trustee's name. A voting trust is valid for not more than ten years after its effective date unless extended under subsection (c) of this Code section.
(c) All or some of the parties to a voting trust may extend it for additional terms of not more than ten years each by signing an extension agreement and obtaining the voting trustee's written consent to the extension. An extension is valid for ten years from the date the first shareholder signs the extension agreement. The voting trustee must deliver copies of the extension agreement and list of beneficial owners to the corporation's principal office. An extension agreement binds only those parties signing it.
(a) Two or more shareholders may provide for the manner in which their shares will be voted by signing an agreement for that purpose. A voting agreement created under this Code section or under subsection (b), (f), or (g) of Code Section 14-2-920 is not subject to the provisions of Code Section 14-2-730.
(b) A voting agreement created under this Code section is specifically enforceable.
(c) The duration of any agreement created under this Code section shall not exceed 20 years. Failure to state a period of duration or stating a period of duration in excess of 20 years shall not invalidate the agreement, but in either case the period of duration shall be 20 years. Any such agreement may be renewed for a period not in excess of 20 years from the date of renewal by agreement of all the shareholders bound thereby at the date of renewal.
(a) An agreement among the shareholders of a corporation that complies with this Code section is effective among the shareholders and the corporation even though it is inconsistent with one or more other provisions of this Code in that it:
(1) Eliminates the board of directors or restricts the discretion or powers of the board of directors;
(2) Governs the authorization or making of distributions whether or not in proportion to ownership of shares, subject to the limitations of Code Section 14-2-640;
(3) Establishes the directors or officers of the corporation, or their terms of office or manner of selection or removal;
(4) Governs, in general or in regard to specific matters, the exercise or division of voting power by or between the shareholders and directors or by or among any of them, including use of weighted voting rights or director proxies;
(5) Establishes the terms and conditions of any agreement for the transfer or use of property or the provision of services between the corporation and any shareholder, director, officer, or employee of the corporation or among any of them;
(6) Transfers to one or more shareholders or other persons all or part of the authority to exercise the corporate powers or to manage the business and affairs of the corporation, including the resolution of any issue about which there exists a deadlock among directors or shareholders;
(7) Requires dissolution of the corporation at the request of one or more of the shareholders or upon the occurrence of a specified event or contingency; or
(8) Otherwise governs the exercise of the corporate powers or the management of the business and affairs of the corporation or the relationship among the shareholders, the directors, and the corporation, or among any of them, and is not contrary to public policy.
(b) An agreement authorized by this Code section shall be:
(1) Set forth:
(A) In the articles of incorporation or bylaws and approved by all persons who are shareholders at the time of the agreement; or
(B) In a written agreement that is signed by all persons who are shareholders at the time of the agreement and is made known to the corporation;
(2) Subject to amendment only by:
(A) An amendment to the articles of incorporation or bylaws approved by all persons who are shareholders at the time of the amendment; or
(B) An agreement in writing by all persons who are shareholders at the time of the amendment, unless the agreement provides that it may be amended by less than all the shareholders; and
(3) Valid for no more than 20 years. Failure to state a period of duration or stating a period of duration in excess of 20 years shall not invalidate the agreement, but in either case the period of duration shall be 20 years. Any such agreement may be renewed for a period not in excess of 20 years from the date of renewal by agreement of all the shareholders at the date of renewal.
(c) The existence of an agreement authorized by this Code section shall be noted conspicuously on the front or back of each certificate for outstanding shares or on the information statement required by subsection (b) of Code Section 14-2-626. If at the time of the agreement the corporation has shares outstanding represented by certificates, the corporation shall recall the outstanding certificates and issue substitute certificates that comply with this subsection. The failure to note the existence of the agreement on the certificate or information statement shall not affect the validity of the agreement or any action taken pursuant to it. Any purchaser of shares who, at the time of purchase, did not have knowledge of the existence of the agreement shall be entitled to rescission of the purchase. A purchaser shall be deemed to have knowledge of the existence of the agreement if its existence is noted on the certificate or information statement for the shares in compliance with this subsection and, if the shares are not represented by a certificate, the information statement is delivered to the purchaser at or prior to the time of purchase of the shares. An action to enforce the right of rescission authorized by this subsection must be commenced within the earlier of 90 days after discovery of the existence of the agreement or two years after the time of purchase of the shares.
(d) An agreement authorized by this Code section shall cease to be effective when shares of the corporation are listed on a national securities exchange or regularly traded in a market maintained by securities dealers or brokers. If the agreement ceases to be effective for any reason, the board of directors may, if the agreement is contained or referred to in the corporation's articles of incorporation or bylaws, adopt an amendment to the articles of incorporation or bylaws, without shareholder action, to delete the agreement and any references to it.
(e) An agreement authorized by this Code section that limits the discretion or powers of the board of directors shall relieve the directors of, and impose upon the person or persons in whom such discretion or powers are vested, liability for acts or omissions imposed by law on directors to the extent that the discretion or powers of the directors are limited by the agreement.
(f) Except as provided in subsection (e) of this Code section, the existence or performance of an agreement authorized by this Code section shall not be a ground for imposing personal liability on any shareholder for the acts or debts of the corporation even if the agreement or its performance treats the corporation as if it were a partnership or results in failure to observe the corporate formalities otherwise applicable to the matters governed by the agreement.
(g) Incorporators or subscribers for shares may act as shareholders with respect to an agreement authorized by this Code section if no shares have been issued when the agreement is made.
As used in this part, the term:
(1) “Derivative proceeding” means a civil suit in the right of a domestic corporation or, to the extent provided in Code Section 14-2-747, in the right of a foreign corporation.
(2) “Shareholder” includes a beneficial owner whose shares are held in a voting trust or held by a nominee on the owner's behalf.
A shareholder may not commence or maintain a derivative proceeding unless the shareholder:
(1) Was a shareholder of the corporation at the time of the act or omission complained of or became a shareholder through transfer by operation of law from one who was a shareholder at that time; and
(2) Fairly and adequately represents the interests of the corporation in enforcing the right of the corporation.
A shareholder may not commence a derivative proceeding until:
(1) A written demand has been made upon the corporation to take suitable action; and
(2) Ninety days have expired from the date the demand was made unless the shareholder has earlier been notified that the demand has been rejected by the corporation or unless irreparable injury to the corporation would result by waiting for the expiration of the 90 day period.
If the corporation commences an inquiry into the allegations made in the demand or complaint, the court may stay any derivative proceeding for such period as the court deems appropriate.
(a) The court may dismiss a derivative proceeding if, on motion by the corporation, the court finds that one of the groups specified in subsection (b) of this Code section has made a determination in good faith after conducting a reasonable investigation upon which its conclusions are based that the maintenance of the derivative suit is not in the best interests of the corporation. The corporation shall have the burden of proving the independence and good faith of the group making the determination and the reasonableness of the investigation.
(b) The determination in subsection (a) of this Code section shall be made by:
(1) A majority vote of independent directors present at a meeting of the board of directors if the independent directors constitute a quorum;
(2) A majority vote of a committee consisting of two or more independent directors appointed by a majority vote of independent directors present at a meeting of the board of directors, whether or not such independent directors constitute a quorum; or
(3) A panel of one or more independent persons appointed by the court upon motion by the corporation.
(c) None of the following shall by itself cause a director to be considered not independent for purposes of subsection (b) of this Code section:
(1) The nomination or election of the director by directors who are not independent;
(2) The naming of the director as a defendant in the derivative proceeding; or
(3) The fact that the director approved the action being challenged in the derivative proceeding so long as the director did not receive a personal benefit as a result of the action.
A derivative proceeding may not be discontinued or settled without the court's approval. If the court determines that a proposed discontinuance or settlement will substantially affect the interests of the corporation's shareholders or a class of shareholders, the court shall direct that notice be given to the shareholders affected.
On termination of the derivative proceeding the court may:
(1) Order the corporation to pay the plaintiff's reasonable expenses (including attorneys' fees) incurred in the proceeding if it finds that the proceeding has resulted in a substantial benefit to the corporation; or
(2) Order the plaintiff to pay any defendant's reasonable expenses (including attorneys' fees) incurred in defending the proceeding if it finds that the proceeding was commenced or maintained without reasonable cause or for an improper purpose.
In any derivative proceeding in the right of a foreign corporation, the matters covered by this part shall be governed by the laws of the jurisdiction of incorporation of the foreign corporation except for Code Sections 14-2-743 and 14-2-745 and paragraph (2) of Code Section 14-2-746.
(a) Except as provided in Article 9 of this chapter or in a written agreement meeting the requirements of Code Section 14-2-732, each corporation must have a board of directors.
(b) All corporate powers shall be exercised by or under the authority of the board of directors of the corporation, and the business and affairs of the corporation shall be managed by or under the direction, and subject to oversight, of its board of directors, subject to any limitation set forth in the articles of incorporation, in rights, options, or warrants permitted by paragraph (2) of subsection (d) of Code Section 14-2-624, or except as provided in an agreement among the shareholders meeting the requirements of Code Section 14-2-732.
(c) No limitation upon the authority of the directors, whether contained in the articles of incorporation or an agreement among the shareholders meeting the requirements of Code Section 14-2-732, shall be effective against persons, other than shareholders and directors, who are without actual knowledge of the limitation.
Directors shall be natural persons who are 18 years of age or older but need not be residents of this state nor shareholders of the corporation unless the articles of incorporation so require. The articles of incorporation or bylaws may prescribe additional qualifications for directors.
(a) A board of directors must consist of one or more individuals, with the number specified in or fixed in accordance with the articles of incorporation or bylaws.
(b) The number of directors may be increased or decreased from time to time by amendment to, or in the manner provided in, the articles of incorporation or the bylaws.
(c) In the case of a corporation having cumulative voting:
(1) Any amendment of the bylaws decreasing the number or minimum number of directors must be adopted by the shareholders; and
(2) No amendment of either the articles of incorporation or the bylaws decreasing the number or minimum number of directors shall be effective when the number of shares voting against the proposal for decrease would be sufficient to elect a director if voted cumulatively at an annual election.
(d) After initial election or appointment pursuant to Code Section 14-2-205, directors are elected at each annual shareholders' meeting unless their terms are staggered under Code Section 14-2-806.
If the articles of incorporation authorize dividing the shares into classes or series, the articles may also authorize the election of all or a specified number of directors by the holders of one or more authorized classes of shares or series. Each class (or classes) or series of shares entitled to elect one or more directors is a separate voting group for purposes of the election of directors.
(a) The terms of the initial directors of a corporation expire at the first shareholders' meeting at which directors are elected.
(b) The terms of all other directors expire at the next annual shareholders' meeting following their election unless their terms are staggered under Code Section 14-2-806.
(c) A decrease in the number of directors does not shorten an incumbent director's term.
(d) A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office. Any directorship to be filled by reason of an increase in the number of directors may be filled by the board of directors, but only for a term of office continuing until the next election of directors by the shareholders and until the election and qualification of the successor.
(e) Despite the expiration of a director's term, he continues to serve until his successor is elected and qualifies or until there is a decrease in the number of directors.
(a) The articles of incorporation or a bylaw adopted by the shareholders may provide for staggering the terms of directors by dividing the total number of directors into two or three groups. In that event, the terms of directors in the first group expire at the first annual shareholders' meeting after their election, the terms of the second group expire at the second annual shareholders' meeting after their election, and the terms of the third group, if any, expire at the third annual shareholders' meeting after their election. At each annual shareholders' meeting held thereafter, directors shall be chosen for a term of two years or three years, as the case may be, to succeed those whose terms expire.
(b) When the number of directors is increased and any newly created directorships are filled by the board, the terms of the additional directors shall expire at the next annual election of directors by the shareholders.
(a) A director may resign at any time by delivering notice in writing or by electronic transmission to the board of directors, its chairperson, or to the corporation.
(b) A resignation shall be effective when the notice is delivered unless the notice specifies either a later effective date or an effective date determined upon the happening of an event.
(c) A resignation that is conditioned upon the happening of an event may provide that it is irrevocable.
(a) The shareholders may remove one or more directors with or without cause unless the articles of incorporation or a bylaw adopted by the shareholders provides that directors may be removed only for cause.
(b) If a director is elected by a voting group of shareholders, only the shareholders of that voting group may participate in the vote to remove him.
(c) If cumulative voting is authorized, a director may not be removed if the number of votes sufficient to elect him under cumulative voting is voted against his removal. If cumulative voting is not authorized, a director may be removed only by a majority of the votes entitled to be cast.
(d) If the directors have staggered terms as provided in Code Section 14-2-806, directors may be removed only for cause, unless the articles of incorporation or a bylaw adopted by the shareholders provides otherwise.
(e) A director may be removed by the shareholders only at a meeting called for the purpose of removing him and the meeting notice must state that the purpose, or one of the purposes, of the meeting is removal of the director.
(a) Unless the articles of incorporation or a bylaw approved by the shareholders provides otherwise, if a vacancy occurs on a board of directors, including a vacancy resulting from an increase in the number of directors:
(1) The shareholders may fill the vacancy;
(2) The board of directors may fill the vacancy; or
(3) If the directors remaining in office constitute fewer than a quorum of the board, they may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office.
(b) If the vacant office was held by a director elected by a voting group of shareholders, only the holders of shares of that voting group or the remaining directors elected by that voting group are entitled to vote to fill the vacancy.
(c) A vacancy that may occur at a later date (by reason of a resignation effective at a later date under subsection (b) of Code Section 14-2-807 or otherwise) may be filled before the vacancy occurs, but the new director may not take office until the vacancy occurs.
Unless the articles of incorporation or bylaws provide otherwise, the board of directors may fix the compensation of directors.
(a) The board of directors may hold regular or special meetings in or out of this state.
(b) Unless the articles of incorporation or bylaws provide otherwise, the board of directors may permit any or all directors to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. A director participating in a meeting by this means is deemed to be present in person at the meeting.
(a) Except to the extent the articles of incorporation or bylaws require that action by the board of directors be taken at a meeting, action required or permitted by this chapter to be taken by the board of directors may be taken without a meeting if each director signs a consent describing the action to be taken or ratified and delivers it to the corporation.
(b) A director's consent may be withdrawn by a revocation signed by the director and delivered to the corporation prior to delivery to the corporation of unrevoked written consents signed by all the directors.
(c) Action taken under this Code section is the act of the board of directors when one or more consents signed by all the directors are delivered to the corporation. The consent may specify the time at which the action taken thereunder is to be effective.
(d) A consent signed and delivered by a director under this Code section has the effect of action taken at a meeting of the board of directors and may be described as such in any document.
(a) Unless the articles of incorporation or bylaws provide otherwise, regular meetings of the board of directors may be held without notice of the date, time, place, or purpose of the meeting.
(b) Unless the articles of incorporation or bylaws provide for a longer or shorter period, special meetings of the board of directors must be preceded by at least two days' notice of the date, time, and place of the meeting. The notice need not describe the purpose of the special meeting unless required by the articles of incorporation or bylaws.
(a) A director may waive any notice required by this chapter, the articles of incorporation, or bylaws before or after the date and time stated in the notice. Except as provided by subsection (b) of this Code section, the waiver must be in writing or by electronic transmission, signed by the director entitled to the notice, and delivered to the corporation for inclusion in the minutes or filing with the corporate records.
(b) A director's attendance at or participation in a meeting waives any required notice to him of the meeting unless the director at the beginning of the meeting (or promptly upon his arrival) objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting.
(a) Unless this chapter, the articles of incorporation, or bylaws require a greater number or unless otherwise specifically provided in this chapter, a quorum of a board of directors consists of:
(1) A majority of the fixed number of directors if the corporation has a fixed board size; or
(2) A majority of the number of directors prescribed or, if no number is prescribed, the number in office immediately before the meeting begins, if the corporation has a variable-range size board.
(b) The articles of incorporation or bylaws may authorize a quorum of a board of directors to consist of no fewer than one-third of the fixed or prescribed number of directors determined under subsection (a) of this Code section.
(c) If a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act of the board of directors unless this chapter, the articles of incorporation, or bylaws require the vote of a greater number of directors.
(d) A director who is present at a meeting of the board of directors or a committee of the board of directors when corporate action is taken is deemed to have assented to the action taken unless:
(1) He objects at the beginning of the meeting (or promptly upon his arrival) to holding it or transacting business at the meeting;
(2) His dissent or abstention from the action taken is entered in the minutes of the meeting; or
(3) He delivers written notice of his dissent or abstention to the presiding officer of the meeting before its adjournment or to the corporation immediately after adjournment of the meeting.
The right of dissent or abstention is not available to a director who votes in favor of the action taken.
(e) If a written agreement meeting the requirements of Code Section 14-2-731 provides that any directors shall have more or less than one vote on any matter, every reference in this chapter to a majority or other proportion of directors shall refer to a majority or other proportion of the votes of directors.
(a) Unless this chapter, the articles of incorporation, or the bylaws provide otherwise, a board of directors may create one or more committees and appoint members of the board of directors to serve on any such committee. Each committee may have one or more members, who serve at the pleasure of the board of directors.
(b) Code Sections 14-2-820 through 14-2-824 apply both to committees of the board of directors and to their members.
(c) To the extent specified by the board of directors or in the articles of incorporation or bylaws, each committee may exercise the powers of the board of directors under Code Section 14-2-801.
(d) A committee may not, however:
(1) Approve or propose to shareholders action that this chapter requires to be approved by shareholders;
(2) Fill vacancies on the board of directors or, subject to subsection (f) of this Code section, on any of its committees;
(3) Amend articles of incorporation pursuant to Code Section 14-2-1002 except that a committee may, to the extent authorized by action of the board of directors, amend the articles of incorporation to fix the designations, preferences, limitations, and relative rights of shares pursuant to Code Section 14-2-602 or to increase or decrease the number of shares contained in a series of shares established in accordance with Code Section 14-2-602 but not below the number of such shares then issued; or
(4) Adopt, amend, or repeal bylaws.
(e) The creation of, delegation of authority to, or action by a committee does not alone constitute compliance by a director with the standards of conduct described in Code Section 14-2-830.
(f) The board of directors may appoint one or more directors as alternate members of any committee to replace any absent or disqualified member during the member's absence or disqualification. Unless the articles of incorporation or the bylaws or the board action creating the committee or appointing one or more directors as alternate members provide otherwise, in the event of the absence or disqualification of a member of a committee, the member or members of the committee present at any meeting and not disqualified from voting, unanimously, may appoint another director to act in place of the absent or disqualified member.
(a) A director shall perform his or her duties as a director in good faith and with the degree of care an ordinarily prudent person in a like position would exercise under similar circumstances.
(b) In performing his or her duties a director may rely upon:
(1) Other officers, employees, or agents of the corporation whom the director reasonably believed to be reliable and competent in the functions performed; and
(2) Information, data, opinions, reports, or statements provided by officers, employees, agents of the corporation, legal counsel, public accountants, investment bankers, or other persons as to matters involving the skills, expertise, or knowledge reasonably believed to be reliable and within such person's professional or expert competence.
(c) There shall be a presumption that the process a director followed in arriving at decisions was done in good faith and that such director has exercised ordinary care; provided, however, that this presumption may be rebutted by evidence that such process constitutes gross negligence by being a gross deviation of the standard of care of a director in a like position under similar circumstances.
(d) Nothing contained in this Code section shall:
(1) In any instance when fairness is at issue, such as consideration of the fairness of a transaction to the corporation as evaluated under paragraph (3) of subsection (b) of Code Section 14-2-861, alter the burden of proving the fact or lack of fairness otherwise applicable;
(2) Alter the fact or lack of liability of a director under the Official Code of Georgia Annotated, including the governance of the consequences of an unlawful distribution under Code Section 14-2-832 or a conflicting interest transaction under Code Section 14-2-861;
(3) Affect any rights to which the corporation or its shareholders may be entitled under another law of this state or of the United States; or
(4) Deprive a director of the applicability, effect, or protection of the business judgment rule.
(a) Subject to Code Sections 14-2-830 and 14-2-842, a derivative proceeding, as defined in paragraph (1) of Code Section 14-2-740, may be brought by a shareholder, or an action may be brought by the corporation, against one or more directors or officers of the corporation to procure for the benefit of the corporation a judgment for the following relief:
(1) Subject to any provision of the articles of incorporation authorized pursuant to paragraph (4) of subsection (b) of Code Section 14-2-202, to compel the defendant to account for official conduct or to decree any other relief called for by his or her official conduct in the following cases:
(A) The neglect of, failure to perform, or other violation of his or her duties in the management of the corporation or in the disposition of corporate assets;
(B) The acquisition, transfer to others, loss, or waste of corporate assets due to any neglect of, failure to perform, or other violation of duties; or
(C) The appropriation, in violation of his or her duties, of any business opportunity of the corporation;
(2) To enjoin a proposed unlawful conveyance, assignment, or transfer of corporate assets or other unlawful transaction where there is sufficient evidence that it will be made; and
(3) To set aside an unlawful conveyance, assignment, or transfer of corporate assets where the transferee knew of its unlawfulness and is made a party to the action.
(b) No action shall be brought for the relief provided in subsection (a) of this Code section more than four years from the time the cause of action accrued.
(c) This Code section shall not limit any liability otherwise imposed by law upon any director or officer or any third party.
(a) A director who votes for or assents to a distribution made in violation of Code Section 14-2-640 or the articles of incorporation is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating Code Section 14-2-640 or the articles of incorporation if it is established that he did not perform his duties in compliance with Code Section 14-2-830. In any proceeding commenced under this Code section, a director has all of the defenses ordinarily available to a director.
(b) A director held liable under subsection (a) of this Code section for an unlawful distribution is entitled to contribution:
(1) From every other director who could be held liable under subsection (a) of this Code section for the unlawful distribution; and
(2) From each shareholder for the amount the shareholder accepted knowing the distribution was made in violation of Code Section 14-2-640 or the articles of incorporation.
(c) A proceeding under this Code section is barred unless it is commenced within two years after the date on which the effect of the distribution was measured under subsection (e) or (g) of Code Section 14-2-640.
(a) A corporation has the officers described in its bylaws or appointed by the board of directors in accordance with the bylaws.
(b) The board of directors may elect individuals to fill one or more offices of the corporation. A duly appointed officer may appoint one or more officers if authorized by the bylaws or the board of directors.
(c) The bylaws or the board of directors shall assign to one of the officers responsibility for preparing the minutes of the directors' and shareholders' meetings and for maintaining and authenticating records of the corporation required to be kept under subsections (a) of Code Sections 14-2-1601 and 14-2-1602.
(d) The same individual may simultaneously hold more than one office in a corporation.
Each officer has the authority and shall perform the functions set forth in the bylaws or, to the extent consistent with the bylaws, the functions prescribed by the board of directors or by direction of an officer authorized by the board of directors to prescribe the functions of other officers. Unless the articles of incorporation, bylaws, or action of the board of directors of a corporation provide otherwise, the chief executive officer (or the president if no person has been designated as chief executive officer) of a corporation shall have authority to conduct all ordinary business on behalf of such corporation and may execute and deliver on behalf of a corporation any contract, conveyance, or similar document not requiring approval by the board of directors or shareholders as provided in this chapter.
(a) An officer shall perform his or her duties in good faith and with the degree of care which an ordinarily prudent person in a like position would use under similar circumstances.
(b) In performing his or her duties an officer may rely upon:
(1) Other officers, employees, or agents of the corporation whom the officer reasonably believed to be reliable and competent in the functions performed; and
(2) Information, data, opinions, reports, statements provided by officers, employees, or agents of the corporation, legal counsel, public accountants, investment bankers, or other persons as to matters involving the skills, expertise, or knowledge reasonably believed to be reliable and within such person's professional or expert competence.
(c) There shall be a presumption that the process an officer followed in arriving at decisions was done in good faith and that such officer has exercised ordinary care; provided, however, that this presumption may be rebutted by evidence that such process constitutes gross negligence by being a gross deviation of the standard of care of an officer in a like position under similar circumstances.
(d) Nothing contained in this Code section shall:
(1) In any instance when fairness is at issue, such as consideration of the fairness of a transaction to the corporation as evaluated under paragraph (3) of subsection (c) of Code Section 14-2-864, alter the burden of proving the fact or lack of fairness otherwise applicable;
(2) Alter the fact or lack of liability of an officer under the Official Code of Georgia Annotated, including the governance of the consequences of a transactional interest under Code Section 14-2-864;
(3) Affect any rights to which the corporation or its shareholders may be entitled under another law of this state or of the United States; or
(4) Deprive an officer of the applicability, effect, or protection of the business judgment rule.
(a) An officer may resign at any time by delivering notice to the corporation. A resignation is effective when the notice is delivered unless the notice specifies a future later effective time. A copy of the notice of resignation as delivered to the corporation may be filed with the Secretary of State.
(b) An officer may be removed at any time with or without cause by:
(1) The board of directors;
(2) The officer who appointed such officer, unless the bylaws or the board of directors provide otherwise; or
(3) Any other officer if authorized by the bylaws or the board of directors.
(a) The appointment of an officer does not itself create contract rights.
(b) An officer's removal does not affect the officer's contract rights, if any, with the corporation. An officer's resignation does not affect the corporation's contract rights, if any, with the officer.
As used in this part, the term:
(1) “Corporation” includes any domestic or foreign predecessor entity of a corporation in a merger or other transaction in which the predecessor's existence ceased upon consummation of the transaction.
(2) “Director” or “officer” means an individual who is or was a director or officer, respectively, of a corporation or who, while a director or officer of the corporation, is or was serving at the corporation's request as a director, officer, partner, trustee, employee, or agent of another domestic or foreign corporation, partnership, joint venture, trust, employee benefit plan, or other entity. A director or officer is considered to be serving an employee benefit plan at the corporation's request if his or her duties to the corporation also impose duties on, or otherwise involve services by, the director or officer to the plan or to participants in or beneficiaries of the plan. Director or officer includes, unless the context otherwise requires, the estate or personal representative of a director or officer.
(3) “Disinterested director” means a director who at the time of a vote referred to in subsection (c) of Code Section 14-2-853 or a vote or selection referred to in subsection (b) or (c) of Code Section 14-2-855 or subsection (a) of Code Section 14-2-856 is not:
(A) A party to the proceeding; or
(B) An individual who is a party to a proceeding having a familial, financial, professional, or employment relationship with the director whose indemnification or advance for expenses is the subject of the decision being made with respect to the proceeding, which relationship would, in the circumstances, reasonably be expected to exert an influence on the director's judgment when voting on the decision being made.
(4) “Expenses” includes counsel fees.
(5) “Liability” means the obligation to pay a judgment, settlement, penalty, fine (including an excise tax assessed with respect to an employee benefit plan), or reasonable expenses incurred with respect to a proceeding.
(6) “Official capacity” means:
(A) When used with respect to a director, the office of director in a corporation; and
(B) When used with respect to an officer, as contemplated in Code Section 14-2-857, the office in a corporation held by the officer.
Official capacity does not include service for any other domestic or foreign corporation or any partnership, joint venture, trust, employee benefit plan, or other entity.
(7) “Party” means an individual who was, is, or is threatened to be made a named defendant or respondent in a proceeding.
(8) “Proceeding” means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, arbitrative, or investigative and whether formal or informal.
(a) Except as otherwise provided in this Code section, a corporation may indemnify an individual who is a party to a proceeding because he or she is or was a director against liability incurred in the proceeding if:
(1) Such individual conducted himself or herself in good faith; and
(2) Such individual reasonably believed:
(A) In the case of conduct in his or her official capacity, that such conduct was in the best interests of the corporation;
(B) In all other cases, that such conduct was at least not opposed to the best interests of the corporation; and
(C) In the case of any criminal proceeding, that the individual had no reasonable cause to believe such conduct was unlawful.
(b) A director's conduct with respect to an employee benefit plan for a purpose he or she believed in good faith to be in the interests of the participants in and beneficiaries of the plan is conduct that satisfies the requirement of subparagraph (a)(2)(B) of this Code section.
(c) The termination of a proceeding by judgment, order, settlement, or conviction, or upon a plea of nolo contendere or its equivalent is not, of itself, determinative that the director did not meet the standard of conduct described in this Code section.
(d) A corporation may not indemnify a director under this Code section:
(1) In connection with a proceeding by or in the right of the corporation, except for reasonable expenses incurred in connection with the proceeding if it is determined that the director has met the relevant standard of conduct under this Code section; or
(2) In connection with any proceeding with respect to conduct for which he or she was adjudged liable on the basis that personal benefit was improperly received by him or her, whether or not involving action in his or her official capacity.
A corporation shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which he or she was a party because he or she was a director of the corporation against reasonable expenses incurred by the director in connection with the proceeding.
(a) A corporation may, before final disposition of a proceeding, advance funds to pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding because he or she is a director if he or she delivers to the corporation:
(1) A written affirmation of his or her good faith belief that he or she has met the relevant standard of conduct described in Code Section 14-2-851 or that the proceeding involves conduct for which liability has been eliminated under a provision of the articles of incorporation as authorized by paragraph (4) of subsection (b) of Code Section 14-2-202; and
(2) His or her written undertaking to repay any funds advanced if it is ultimately determined that the director is not entitled to indemnification under this part.
(b) The undertaking required by paragraph (2) of subsection (a) of this Code section must be an unlimited general obligation of the director but need not be secured and may be accepted without reference to the financial ability of the director to make repayment.
(c) Authorizations under this Code section shall be made:
(1) By the board of directors:
(A) When there are two or more disinterested directors, by a majority vote of all the disinterested directors (a majority of whom shall for such purpose constitute a quorum) or by a majority of the members of a committee of two or more disinterested directors appointed by such a vote; or
(B) When there are fewer than two disinterested directors, by the vote necessary for action by the board in accordance with subsection (c) of Code Section 14-2-824, in which authorization directors who do not qualify as disinterested directors may participate; or
(2) By the shareholders, but shares owned or voted under the control of a director who at the time does not qualify as a disinterested director with respect to the proceeding may not be voted on the authorization.
(a) A director who is a party to a proceeding because he or she is a director may apply for indemnification or advance for expenses to the court conducting the proceeding or to another court of competent jurisdiction. After receipt of an application and after giving any notice it considers necessary, the court shall:
(1) Order indemnification or advance for expenses if it determines that the director is entitled to indemnification or advance for expenses under this part; or
(2) Order indemnification or advance for expenses if it determines, in view of all the relevant circumstances, that it is fair and reasonable to indemnify the director or to advance expenses to the director, even if the director has not met the relevant standard of conduct set forth in subsections (a) and (b) of Code Section 14-2-851, failed to comply with Code Section 14-2-853, or was adjudged liable in a proceeding referred to in paragraph (1) or (2) of subsection (d) of Code Section 14-2-851, but if the director was adjudged so liable, the indemnification shall be limited to reasonable expenses incurred in connection with the proceeding.
(b) If the court determines that the director is entitled to indemnification or advance for expenses under paragraph (1) of subsection (a) of this Code section, it shall also order the corporation to pay the director's reasonable expenses to obtain court ordered indemnification or advance for expenses. If the court determines that the director is entitled to indemnification or advance for expenses under paragraph (2) of subsection (a) of this Code section, it may also order the corporation to pay the director's reasonable expenses to obtain court ordered indemnification or advance for expenses.
(c) The court may summarily determine, without a jury, a corporation's obligation to advance expenses.
(a) A corporation may not indemnify a director under Code Section 14-2-851 unless authorized thereunder and a determination has been made for a specific proceeding that indemnification of the director is permissible in the circumstances because he or she has met the relevant standard of conduct set forth in Code Section 14-2-851.
(b) The determination shall be made:
(1) If there are two or more disinterested directors, by the board of directors by a majority vote of all the disinterested directors (a majority of whom shall for such purpose constitute a quorum) or by a majority of the members of a committee of two or more disinterested directors appointed by such a vote;
(2) By special legal counsel:
(A) Selected in the manner prescribed in paragraph (1) of this subsection; or
(B) If there are fewer than two disinterested directors, selected by the board of directors (in which selection directors who do not qualify as disinterested directors may participate); or
(3) By the shareholders, but shares owned by or voted under the control of a director who at the time does not qualify as a disinterested director may not be voted on the determination.
(c) Authorization of indemnification or an obligation to indemnify and evaluation as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible, except that if there are fewer than two disinterested directors or if the determination is made by special legal counsel, authorization of indemnification and evaluation as to reasonableness of expenses shall be made by those entitled under subparagraph (b) (2) (B) of this Code section to select special legal counsel.
(a) If authorized by the articles of incorporation or a bylaw, contract, or resolution approved or ratified by the shareholders by a majority of the votes entitled to be cast, a corporation may indemnify or obligate itself to indemnify a director made a party to a proceeding including a proceeding brought by or in the right of the corporation, without regard to the limitations in other Code sections of this part, but shares owned or voted under the control of a director who at the time does not qualify as a disinterested director with respect to any existing or threatened proceeding that would be covered by the authorization may not be voted on the authorization.
(b) The corporation shall not indemnify a director under this Code section for any liability incurred in a proceeding in which the director is adjudged liable to the corporation or is subjected to injunctive relief in favor of the corporation:
(1) For any appropriation, in violation of the director's duties, of any business opportunity of the corporation;
(2) For acts or omissions which involve intentional misconduct or a knowing violation of law;
(3) For the types of liability set forth in Code Section 14-2-832; or
(4) For any transaction from which he or she received an improper personal benefit.
(c) Where approved or authorized in the manner described in subsection (a) of this Code section, a corporation may advance or reimburse expenses incurred in advance of final disposition of the proceeding only if:
(1) The director furnishes the corporation a written affirmation of his or her good faith belief that his or her conduct does not constitute behavior of the kind described in subsection (b) of this Code section; and
(2) The director furnishes the corporation a written undertaking, executed personally or on his or her behalf, to repay any advances if it is ultimately determined that the director is not entitled to indemnification under this Code section.
(a) A corporation may indemnify and advance expenses under this part to an officer of the corporation who is a party to a proceeding because he or she is an officer of the corporation:
(1) To the same extent as a director; and
(2) If he or she is not a director, to such further extent as may be provided by the articles of incorporation, the bylaws, a resolution of the board of directors, or contract except for liability arising out of conduct that constitutes:
(A) Appropriation, in violation of his or her duties, of any business opportunity of the corporation;
(B) Acts or omissions which involve intentional misconduct or a knowing violation of law;
(C) The types of liability set forth in Code Section 14-2-832; or
(D) Receipt of an improper personal benefit.
(b) The provisions of paragraph (2) of subsection (a) of this Code section shall apply to an officer who is also a director if the sole basis on which he or she is made a party to the proceeding is an act or omission solely as an officer.
(c) An officer of a corporation who is not a director is entitled to mandatory indemnification under Code Section 14-2-852, and may apply to a court under Code Section 14-2-854 for indemnification or advances for expenses, in each case to the same extent to which a director may be entitled to indemnification or advances for expenses under those provisions.
(d) A corporation may also indemnify and advance expenses to an employee or agent who is not a director to the extent, consistent with public policy, that may be provided by its articles of incorporation, bylaws, general or specific action of its board of directors, or contract.
A corporation may purchase and maintain insurance on behalf of an individual who is a director, officer, employee, or agent of the corporation or who, while a director, officer, employee, or agent of the corporation, serves at the corporation's request as a director, officer, partner, trustee, employee, or agent of another domestic or foreign corporation, partnership, joint venture, trust, employee benefit plan, or other entity against liability asserted against or incurred by him or her in that capacity or arising from his or her status as a director, officer, employee, or agent, whether or not the corporation would have power to indemnify or advance expenses to him or her against the same liability under this part.
(a) A corporation may, by a provision in its articles of incorporation or bylaws or in a resolution adopted or a contract approved by its board of directors or shareholders, obligate itself in advance of the act or omission giving rise to a proceeding to provide indemnification or advance funds to pay for or reimburse expenses consistent with this part. Any such obligatory provision shall be deemed to satisfy the requirements for authorization referred to in subsection (c) of Code Section 14-2-853 or subsection (c) of Code Section 14-2-855.
(b) Any provision pursuant to subsection (a) of this Code section shall not obligate the corporation to indemnify or advance expenses to a director of a predecessor of the corporation, pertaining to conduct with respect to the predecessor, unless otherwise specifically provided. Any provision for indemnification or advance for expenses in the articles of incorporation, bylaws, or a resolution of the board of directors or shareholders, partners, or, in the case of limited liability companies, members or managers of a predecessor of the corporation or other entity in a merger or in a contract to which the predecessor is a party, existing at the time the merger takes effect, shall be governed by paragraph (3) of subsection (a) of Code Section 14-2-1106.
(c) A corporation may, by a provision in its articles of incorporation, limit any of the rights to indemnification or advance for expenses created by or pursuant to this part.
(d) This part shall not limit a corporation's power to pay or reimburse expenses incurred by a director or an officer in connection with his or her appearance as a witness in a proceeding at a time when he or she is not a party.
(e) Except as expressly provided in Code Section 14-2-857, this part shall not limit a corporation's power to indemnify, advance expenses to, or provide or maintain insurance on behalf of an employee or agent.
(f) Any provision in a corporation's articles of incorporation or bylaws or in a resolution adopted or contract approved by its board of directors or shareholders that obligates the corporation to provide indemnification to the fullest extent permitted by law shall, unless such provision or another provision in the corporation's articles of incorporation or bylaws or in a resolution adopted or a contract approved by its board of directors or shareholders expressly provides otherwise, be deemed to obligate the corporation:
(1) To advance funds to pay for or reimburse expenses in accordance with Code Section 14-2-853 or subsection (c) of Code Section 14-2-856 to the fullest extent permitted by law; and
(2) To indemnify directors to the fullest extent permitted in Code Section 14-2-856, provided that such provision is duly authorized as required in subsection (a) of Code Section 14-2-856, and to indemnify officers to the fullest extent permitted in paragraph (2) of subsection (a) and subsection (b) of Code Section 14-2-857.
As used in this part, the term:
(1) “Conflicting interest” with respect to a corporation means the interest a director of the corporation has respecting a transaction effected or proposed to be effected by the corporation (or by a subsidiary of the corporation or any other entity in which the corporation has a controlling interest) if:
(A) Whether or not the transaction is brought before the board of directors of the corporation for action, to the knowledge of the director at the time of commitment he or a related person is a party to the transaction or has a beneficial financial interest in or so closely linked to the transaction and of such financial significance to the director or a related person that it would reasonably be expected to exert an influence on the director's judgment if he were called upon to vote on the transaction; or
(B) The transaction is brought (or is of such character and significance to the corporation that it would in the normal course be brought) before the board of directors of the corporation for action, and to the knowledge of the director at the time of commitment any of the following persons is either a party to the transaction or has a beneficial financial interest so closely linked to the transaction and of such financial significance to that person that it would reasonably be expected to exert an influence on the director's judgment if he were called upon to vote on the transaction: (i) an entity (other than the corporation) of which the director is a director, general partner, agent, or employee; (ii) a person that controls one or more of the entities specified in division (i) or an entity that is controlled by, or is under common control with, one or more of the entities specified in division (i) of this subparagraph; or (iii) an individual who is a general partner, principal, or employer of the director.
(2) “Director's conflicting interest transaction” with respect to a corporation means a transaction effected or proposed to be effected by the corporation (or by a subsidiary of the corporation or any other entity in which the corporation has a controlling interest) respecting which a director of the corporation has a conflicting interest.
(3) “Related person” of a director means:
(A) The spouse (or a parent or sibling thereof) of the director or a child, grandchild, sibling, parent (or spouse of any thereof), or an individual having the same home as the director or a trust or estate of which an individual specified in this subparagraph is a substantial beneficiary; or
(B) A trust, estate, incompetent, conservatee, or minor of which the director is a fiduciary.
(4) “Required disclosure” means disclosure by the director who has a conflicting interest of (A) the existence and nature of his conflicting interest, and (B) all facts known to him respecting the subject matter of the transaction that an ordinarily prudent person would reasonably believe to be material to a judgment as to whether or not to proceed with the transaction.
(5) “Time of commitment” respecting a transaction means the time when the transaction is consummated or, if made pursuant to contract, the time when the corporation (or its subsidiary or the entity in which it has a controlling interest) becomes contractually obligated so that its unilateral withdrawal from the transaction would entail significant loss, liability, or other damage.
(a) A transaction effected or proposed to be effected by a corporation (or by a subsidiary of the corporation or by any other entity in which the corporation has a controlling interest) that is not a director's conflicting interest transaction may not be enjoined, set aside, or give rise to an award of damages or other sanctions, in an action by a shareholder or by or in the right of the corporation, on the ground of an interest in the transaction of a director or any person with whom or which he has a personal, economic, or other association.
(b) A director's conflicting interest transaction may not be enjoined, set aside, or give rise to an award of damages or other sanctions, in an action by a shareholder or by or in the right of the corporation, on the ground of an interest in the transaction of the director or any person with whom or which he has a personal, economic, or other association, if:
(1) Directors' action respecting the transaction was at any time taken in compliance with Code Section 14-2-862;
(2) Shareholders' action respecting the transaction was at any time taken in compliance with Code Section 14-2-863; or
(3) The transaction, judged in the circumstances at the time of commitment, is established to have been fair to the corporation.
(a) Directors' action respecting a transaction is effective for purposes of paragraph (1) of subsection (b) of Code Section 14-2-861 if the transaction received the affirmative vote of a majority (but not less than two) of those qualified directors on the board of directors or on a duly empowered committee thereof who voted on the transaction after either required disclosure to them (to the extent the information was not known by them) or compliance with subsection (b) of this Code section.
(b) If a director has a conflicting interest respecting a transaction, but neither he nor a related person of the director specified in subparagraph (A) of paragraph (3) of Code Section 14-2-860 is a party thereto, and if the director has a duty under law or professional canon, or a duty of confidentiality to another person, respecting information relating to the transaction such that the director cannot, consistent with that duty, make the disclosure contemplated by subparagraph (B) of paragraph (4) of Code Section 14-2-860, then disclosure is sufficient for purposes of subsection (a) of this Code section if the director:
(1) Discloses to the directors voting on the transaction the existence and nature of his conflicting interest and informs them of the character of and limitations imposed by that duty prior to their vote on the transaction; and
(2) Plays no part, directly or indirectly, in their deliberations or vote.
(c) A majority (but not less than two) of all the qualified directors on the board of directors, or on the committee, constitutes a quorum for purposes of action that complies with this Code section. Directors' action that otherwise complies with this Code section is not affected by the presence or vote of a director who is not a qualified director.
(d) For purposes of this Code section, “qualified director” means, with respect to a director's conflicting interest transaction, any director who does not have either (1) a conflicting interest respecting the transaction or (2) a familial, financial, professional, or employment relationship with a second director who does have a conflicting interest respecting the transaction, which relationship would, in the circumstances, reasonably be expected to exert an influence on the first director's judgment when voting on the transaction.
(a) Shareholders' action respecting a transaction is effective for purposes of paragraph (2) of subsection (b) of Code Section 14-2-861 if a majority of the votes entitled to be cast by the holders of all qualified shares were cast in favor of the transaction after (1) notice to shareholders describing the director's conflicting interest transaction, (2) provision of the information referred to in subsection (d) of this Code section, and (3) required disclosure to the shareholders who voted on the transaction (to the extent the information was not known by them).
(b) For purposes of this Code section, “qualified shares” means any shares entitled to vote with respect to a director's conflicting interest transaction except shares that, to the knowledge, before the vote, of the secretary (or other officer or agent of the corporation authorized to tabulate votes) are beneficially owned (or the voting of which is controlled) by a director who has a conflicting interest respecting the transaction or by a related person of the director, or both.
(c) A majority of the votes entitled to be cast by the holders of all qualified shares constitutes a quorum for purposes of action that complies with this Code section. Subject to the provisions of subsection (d) of this Code section, shareholders' action that otherwise complies with this Code section is not affected by the presence of holders, or the voting, of shares that are not qualified shares.
(d) For purposes of compliance with subsection (a) of this Code section, a director who has a conflicting interest respecting the transaction shall, before the shareholders' vote, inform the secretary (or other officer or agent of the corporation authorized to tabulate votes) of the number, and the identity of persons holding or controlling the vote, of all shares that to the knowledge of the director are beneficially owned (or the voting of which is controlled) by the director or by a related person of the director, or both.
(e) If a shareholders' vote does not comply with subsection (a) of this Code section solely because of a failure of a director to comply with subsection (d) of this Code section, and if the director establishes that his failure did not determine and was not intended by him to influence the outcome of the vote, the court may, with or without further proceedings respecting paragraph (3) of subsection (b) of Code Section 14-2-861, take such action respecting the transaction and the director, and give such effect, if any, to the shareholders' vote, as it considers appropriate in the circumstances.
(a) As used in this Code section, the term:
(1) “Officer” means a person who is not a director and who is holding an office described in the bylaws of the corporation or appointed by the board of directors in accordance with the bylaws of the corporation.
(2) “Officer's conflicting interest transaction” means any transaction, other than a director's conflicting interest transaction as defined in paragraph (2) of Code Section 14-2-860, between a corporation (or a subsidiary of the corporation or any other entity in which the corporation has a controlling interest) and one or more of its officers or between a corporation and a related person of an officer.
(3) “Related person” of an officer shall have the same meaning with respect to an officer that this term has with respect to a director in paragraph (3) of Code Section 14-2-860.
(4) “Required disclosure” with respect to an officer shall have the same meaning as this term has with respect to a director in paragraph (4) of Code Section 14-2-860.
(5) “Time of commitment” shall have the same meaning as in paragraph (5) of Code Section 14-2-860.
(b) No officer's conflicting interest transaction shall be void or voidable solely because the officer is present at or participates in the meeting of the board of directors or committee thereof which authorizes the contract or transaction.
(c) An officer's conflicting interest transaction may not be enjoined, set aside, or give rise to an award of damages or other sanctions, in an action by a shareholder or by or in the right of the corporation, on the ground of an interest in the transaction of the officer or any person with whom or which he has a personal, economic, or other association, if:
(1) The transaction was approved by the board of directors after required disclosure;
(2) The transaction was approved by the shareholders after required disclosure; or
(3) The transaction, judged in the circumstances at the time of commitment, is established to have been fair to the corporation.
(a) A corporation may disclaim, in its articles of incorporation or bylaws or by action of its shareholders or board of directors, any interest of the corporation in, or in being offered, or in excluding directors or officers from taking advantage of or participating in, specific business opportunities or classes or categories of business opportunities that are, have been, or may be in the future presented to the corporation or to one or more of its directors or officers. For purposes of this part, the terms “director” and “directors” include a person or persons other than directors to the extent discretion or powers of the board of directors are vested in such person or persons pursuant to Code Sections 14-2-732, 14-2-920, or 14-2-922.
(b) A director's or officer's taking advantage of, or participating in, directly or indirectly, a specific business opportunity may not be the subject of equitable relief, or give rise to an award of damages or other sanctions against the director or officer, in a proceeding by a shareholder or by or in the right of the corporation on the ground that such opportunity should have been first offered to the corporation or that the corporation had an interest in, or in being offered, or in excluding the director or officer from taking advantage of or participating in, such opportunity, to the extent the corporation has disclaimed any such interest with respect to such business opportunity pursuant to subsection (a) of this Code section, either with respect to the specific business opportunity or with respect to a class or category of business opportunities that includes such opportunity.
(c) Action by the shareholders or board of directors of the corporation approving a disclaimer pursuant to subsection (a) of this Code section that applies to a director with respect to a specific past, present, or future business opportunity shall be effective for all purposes if the director brings such opportunity to the attention of the corporation (if such opportunity is not known to the corporation) and:
(1) Such disclaimer is approved by qualified directors in compliance with the procedures set forth in Code Section 14-2-862, as if the decision being made concerned a director's conflicting interest transaction; or
(2) Such disclaimer is approved by shareholders' action taken in compliance with the procedures set forth in Code Section 14-2-863, as if the decision being made concerned a director's conflicting interest transaction;
except that, rather than making “required disclosure” as defined in Code Section 14-2-860, in each case the director shall have made prior disclosure to those approving such disclaimer on behalf of the corporation of all material facts concerning the business opportunity that are then known to the director, subject to subsection (e) of this Code section, and that a “qualified director” is a director who, at the time action is to be taken under paragraph (1) of subsection (c) of this Code section, would be a qualified director under subsection (d) of Code Section 14-2-862 if the business opportunity were a director's conflicting interest transaction.
(d) Action by the board of directors or shareholders of the corporation approving a disclaimer pursuant to subsection (a) of this Code section that applies to an officer with respect to a specific past, present, or future business opportunity shall be effective for all purposes if the officer brings such opportunity to the attention of the corporation (if such opportunity is not known to the corporation) and such disclaimer is approved by the board of directors or shareholders in compliance with the procedures set forth in Code Section 14-2-864, as if the decision being made concerned an officer's conflicting interest transaction, except that, rather than making “required disclosure” as defined in Code Section 14-2-864, in each case the officer shall have made prior disclosure to those approving such disclaimer on behalf of the corporation of all material facts concerning the business opportunity that are then known to the officer, subject to subsection (e) of this Code section.
(e) Notwithstanding subsection (c) or (d) of this Code section, a director or officer is not obligated to make prior disclosure to those approving a disclaimer on behalf of the corporation pursuant to subsection (c) or (d) of this Code section of all material facts concerning the business opportunity subject to such disclaimer that are then known to the director or officer to the extent that the director or officer reasonably believes that doing so would violate a duty imposed under law, a legally enforceable obligation of confidentiality, or a professional ethics rule, provided that such director or officer discloses to those acting on behalf of the corporation:
(1) All information required to be disclosed that is not so violative; and
(2) The nature of the director's or officer's duty not to disclose the confidential information.
(f) In any proceeding seeking equitable relief or other remedies based upon an alleged improper taking advantage of or participation in a business opportunity by a director or officer, directly or indirectly, the fact that the director or officer did not employ the procedures described in this Code section before taking advantage of the opportunity shall not:
(1) Create an inference that the opportunity should have been first presented to the corporation, that the corporation had an interest in, or in being offered, or in excluding the director or officer from taking advantage of or participating in, such opportunity or that the director or officer has or will have appropriated the opportunity in violation of his or her duties by taking advantage of or participating in the opportunity; or
(2) Alter the burden of proof otherwise applicable to establish that the director or officer breached a duty to the corporation in the circumstances.
(a) This chapter applies to statutory close corporations to the extent not inconsistent with the provisions of this article.
(b) This article applies to a professional corporation organized under Chapter 7 of this title, known as the “Georgia Professional Corporation Act,” whose articles of incorporation contain the statement required by Code Section 14-7-3, except insofar as the “Georgia Professional Corporation Act” contains inconsistent provisions, if such professional corporation's articles of incorporation also contain the statement required by subsection (a) of Code Section 14-2-902.
(c) This article does not repeal or modify any statute or rule of law that is or would apply to a corporation that is organized under this chapter or Chapter 7 of this title, known as the “Georgia Professional Corporation Act” and that does not elect to become a statutory close corporation under Code Section 14-2-902.
(a) A statutory close corporation is a corporation whose articles of incorporation contain a statement that the corporation is a statutory close corporation.
(b) A corporation having 50 or fewer shareholders may become a statutory close corporation by amending its articles of incorporation to include the statement required by subsection (a) of this Code section. The amendment must be approved by the holders of at least two-thirds of the votes of each class or series of shares of the corporation, voting as separate voting groups, whether or not otherwise entitled to vote on amendments. If the amendment is adopted, a shareholder who voted against the amendment is entitled to assert dissenters' rights under Article 13 of this chapter.
(a) The following statement must appear conspicuously on each share certificate issued by a statutory close corporation:
“The rights of shareholders in a statutory close corporation may differ materially from the rights of shareholders in other corporations. Copies of the articles of incorporation and bylaws, shareholders' agreements, and other documents, any of which may restrict transfers and affect voting and other rights, may be obtained by a shareholder on written request to the corporation.”
(b) Within a reasonable time after the issuance or transfer of uncertificated shares, the corporation shall send to the shareholders a written notice containing the information required by subsection (a) of this Code section.
(c) The notice required by this Code section satisfies all requirements of this article and of Code Section 14-2-627 that notice of share transfer restrictions be given.
(d) A person claiming an interest in shares of a statutory close corporation which has complied with the notice requirement of this Code section is bound by the documents referred to in the notice. Any document referred to in subsection (a) of this Code section, whether or not referred to on the share certificate in the manner required by this Code section, is enforceable against a person with knowledge of the document.
(e) A corporation shall provide to any shareholder upon his written request and without charge copies of provisions that restrict transfer or affect voting or other rights of shareholders appearing in articles of incorporation, bylaws, or shareholders' or voting trust agreements filed with the corporation.
(a) An interest in shares of a statutory close corporation may not be voluntarily or involuntarily transferred, by operation of law or otherwise, except to the extent permitted by the articles of incorporation or under Code Section 14-2-912.
(b) Except to the extent the articles of incorporation provide otherwise, this Code section does not apply to a transfer:
(1) To the corporation or to any other holder of the same class or series of shares;
(2) To members of the shareholder's immediate family (or to a trust, all of whose beneficiaries are members of the shareholder's immediate family), which immediate family consists of his spouse, parents, lineal descendants (including adopted children and stepchildren), and the spouse of any lineal descendant, and brothers and sisters;
(3) That has been approved in writing by all of the holders of the corporation's shares having general voting rights;
(4) To an executor or administrator upon the death of a shareholder or to a trustee or receiver as the result of a bankruptcy, insolvency, dissolution, or similar proceeding brought by or against a shareholder;
(5) By merger or share exchange under Article 11 of this chapter or an exchange of existing shares for other shares of a different class or series of the corporation;
(6) By a pledge as collateral for a loan that does not grant the pledgee any voting rights possessed by the pledgor; or
(7) Made after termination of the corporation's status as a statutory close corporation.
(a) A person desiring to transfer shares of a statutory close corporation subject to the transfer prohibition of Code Section 14-2-911 must first offer them to the corporation by obtaining an offer to purchase the shares for cash from a third person who is eligible to purchase the shares under subsection (b) of this Code section. The offer by the third person must be in writing and state the offeror's name and address, the number and class (or series) of shares offered, the offering price per share, and the other terms of the offer.
(b) A third person is eligible to purchase the shares if:
(1) He is eligible to become a qualified shareholder under any federal or state tax statute the corporation has adopted and he agrees in writing not to terminate his qualification without the approval of the remaining shareholders; and
(2) His purchase of the shares will not impose a personal holding company tax or similar federal or state penalty tax on the corporation.
(c) The person desiring to transfer shares shall deliver the offer to the corporation and by doing so offers to sell the shares to the corporation on the terms of the offer. Within 20 days after the corporation receives the offer, the corporation shall call a special shareholders' meeting, to be held not more than 40 days after the call, to decide whether the corporation should purchase all (but not less than all) of the offered shares. The offer must be approved by the affirmative vote of the holders of a majority of votes entitled to be cast at the meeting, excluding votes in respect of the shares covered by the offer.
(d) The corporation must deliver to the offering shareholder written notice of acceptance within 75 days after receiving the offer or the offer is rejected. If the corporation makes a counteroffer, the shareholder must deliver to the corporation written notice of acceptance within 15 days after receiving the counteroffer or the counteroffer is rejected. If the corporation accepts the original offer or the shareholder accepts the corporation's counteroffer, the shareholder shall deliver to the corporation duly endorsed certificates for the shares, or instruct the corporation in writing to transfer the shares if uncertificated, within 20 days after the effective date of the notice of acceptance. The corporation may specifically enforce the shareholder's delivery or instruction obligation under this subsection.
(e) A corporation accepting an offer to purchase the shares under this Code section may allocate some or all of the shares pro rata to those of its shareholders who desire to purchase the shares unless all of the shareholders who desire to purchase approve a different allocation to the shareholders or to other persons. If the corporation has more than one class (or series) of shares, however, the remaining holders of the class (or series) of shares being purchased are entitled to a first option to purchase the shares not purchased by the corporation in proportion to their shareholdings or in some other proportion agreed to by all the shareholders participating in the purchase.
(f) If an offer to purchase shares under this Code section is rejected, the offering shareholder, for a period of 120 days after the corporation received his offer, is entitled to transfer to the third-person offeror all (but not less than all) of the offered shares in accordance with the terms of his offer to the corporation.
(a) An attempt to transfer shares in a statutory close corporation in violation of a prohibition against transfer binding on the transferee is ineffective.
(b) An attempt to transfer shares in a statutory close corporation in violation of a prohibition against transfer that is not binding on the transferee, either because the notice required by Code Section 14-2-910 was not given or because the prohibition is held unenforceable by a court, gives the corporation an option to purchase the shares from the transferee for the same price and on the same terms that he purchased them; provided, however, that in the case of a gift, the purchase shall be at a price and upon terms which are agreed upon by the parties, or if no agreement is reached, then at the fair value of the shares and upon terms as determined by a court in accordance with standards set forth in Code Section 14-2-942. To exercise its option, the corporation must give the transferee written notice within 30 days after they are presented for registration in the transferee's name. The corporation may specifically enforce the transferee's sale obligation upon exercise of its purchase option.
(a) This Code section and Code Sections 14-2-915 through 14-2-917 apply to a statutory close corporation only if so provided in its articles of incorporation. If these Code sections apply, the executor or administrator of the estate of a deceased shareholder may require the corporation to purchase or cause to be purchased all (but not less than all) of the decedent's shares or to be dissolved.
(b) The provisions of Code Sections 14-2-915 through 14-2-917 may be modified only if the modification is set forth or referred to in the articles of incorporation.
(c) An amendment to the articles of incorporation to provide for application of Code Sections 14-2-915 through 14-2-917, or to modify or delete the provisions of these Code sections, must be approved by the holders of at least two-thirds of the votes of each class or series of shares of the statutory close corporation, voting as separate voting groups, whether or not otherwise entitled to vote on amendments. If the corporation has no shareholders when the amendment is proposed, it must be approved by at least two-thirds of the subscribers for shares, if any, or, if none, by all of the incorporators.
(d) A shareholder who votes against an amendment to modify or delete the provisions of Code Sections 14-2-915 through 14-2-917 is entitled to dissenters' rights under Article 13 of this chapter if the amendment upon adoption terminates or substantially alters his existing rights under these Code sections to have his shares purchased.
(e) A shareholder may waive his and his estate's rights under Code Sections 14-2-915 through 14-2-917 by a signed writing.
(f) Code Sections 14-2-915 through 14-2-917 do not prohibit any other agreement providing for the purchase of shares upon a shareholder's death, nor do they prevent a shareholder from enforcing any remedy he has independently of these Code sections.
(a) A person entitled and desiring to exercise the compulsory purchase right described in Code Section 14-2-914 must deliver a written notice to the corporation, within 120 days after the death of the shareholder, describing the number and class or series of shares beneficially owned by the decedent and requesting that the corporation offer to purchase the shares.
(b) Within 20 days after the effective date of the notice, the corporation shall call a special shareholders' meeting, to be held not more than 40 days after the call, to decide whether the corporation should offer to purchase the shares. A purchase offer must be approved by the affirmative vote of the holders of a majority of votes entitled to be cast at the meeting, excluding votes in respect of the shares covered by the notice.
(c) The corporation must deliver a purchase offer to the person requesting it within 75 days after the effective date of the request notice. A purchase offer must be accompanied by the corporation's balance sheet as of the end of a fiscal year ending not more than 16 months before the effective date of the request notice, an income statement for that year, a statement of changes in shareholders' equity for that year, and the latest available interim financial statements, if any. The person must accept the purchase offer in writing within 15 days after receiving it or the offer is rejected.
(d) A corporation agreeing to purchase shares under this Code section may allocate some or all of the shares pro rata to those of its shareholders who desire to purchase the shares unless all of the shareholders who desire to purchase approve a different allocation to the shareholders or to other persons. If the corporation has more than one class or series of shares, however, the remaining holders of the class or series of shares being purchased are entitled to a first option to purchase the shares not purchased by the corporation in proportion to their shareholdings or in some other proportion agreed to by all the shareholders participating in the purchase.
(e) If price and other terms of a compulsory purchase of shares are fixed or are to be determined by the articles of incorporation, bylaws, or a written agreement, the price and terms so fixed or determined govern the compulsory purchase unless the purchaser defaults, in which event the seller is entitled to commence a proceeding for dissolution under Code Section 14-2-916.
(a) If an offer to purchase shares made under Code Section 14-2-915 is rejected, or if no offer is made, the person exercising the compulsory purchase right may commence a proceeding against the corporation to compel the purchase in the superior court of the county where the corporation's registered office is located. The corporation at its expense shall notify in writing all of its shareholders, and any other person the court directs, of the commencement of the proceeding. The jurisdiction of the court in which the proceeding is commenced under this subsection is plenary and exclusive.
(b) The court shall determine the fair value of the shares subject to compulsory purchase in accordance with standards set forth in Code Section 14-2-942 together with terms for the purchase. Upon making these determinations the court shall order the corporation to purchase or cause the purchase of the shares or empower the person exercising the compulsory purchase right to have the corporation dissolved.
(c) After the purchase order is entered, the corporation may petition the court to modify the terms of purchase and the court may do so if it finds that changes in the financial or legal ability of the corporation or other purchaser to complete the purchase justify a modification.
(d) If the corporation or other purchaser does not make a payment required by the court's order within 30 days of its due date, the seller may petition the court to dissolve the corporation and, absent a showing of good cause for not making the payment, the court shall do so.
(e) A person making a payment to prevent or cure a default by the corporation or other purchaser is entitled to recover the payment from the defaulter.
(a) The court in a proceeding commenced under Code Section 14-2-916 shall determine the total costs of the proceeding, including the reasonable compensation and expenses of appraisers appointed by the court and of attorneys and experts employed by the parties. Except as provided in subsection (b) of this Code section, the court shall assess these costs equally against the corporation and the party exercising the compulsory purchase right.
(b) The court may assess all or a portion of the total costs of the proceedings:
(1) Against the person exercising the compulsory purchase right if the court finds that the fair value of the shares does not substantially exceed the corporation's last purchase offer made before commencement of the proceeding and that the person's failure to accept the offer was arbitrary, vexatious, or otherwise not in good faith; or
(2) Against the corporation if the court finds that the fair value of the shares substantially exceeds the corporation's last purchase offer made before commencement of the proceeding and that the offer was arbitrary, vexatious, or otherwise not made in good faith.
(a) All the shareholders of a statutory close corporation may agree in writing to regulate the exercise of the corporate powers and the management of the business and affairs of the corporation or the relationship among the shareholders of the corporation.
(b) An agreement authorized by this Code section is effective although:
(1) It eliminates a board of directors;
(2) It restricts the discretion or powers of the board or authorizes director proxies or weighted voting rights;
(3) Its effect is to treat the corporation as a partnership; or
(4) It creates a relationship among the shareholders or between the shareholders and the corporation that would otherwise be appropriate only among partners.
(c) If the corporation has a board of directors, an agreement authorized by this Code section restricting the discretion or powers of the board relieves directors of liability imposed by law, and imposes that liability on each person in whom the board's discretion or power is vested, to the extent that the discretion or powers of the board of directors are governed by the agreement.
(d) A provision eliminating a board of directors in an agreement authorized by this Code section is not effective unless the articles of incorporation or bylaws approved by shareholders or an agreement among all the shareholders contains a statement to that effect as required by Code Section 14-2-922.
(e) A provision entitling one or more shareholders to dissolve the corporation under Code Section 14-2-933 is effective only if a statement of this right is contained in the articles of incorporation, a bylaw adopted by the shareholders, or an agreement among all the shareholders.
(f) To amend an agreement authorized by this Code section, all the shareholders must approve the amendment in writing unless the agreement provides otherwise.
(g) Subscribers for shares may act as shareholders with respect to an agreement authorized by this Code section if shares are not issued when the agreement is made.
(h) If the articles of incorporation, a bylaw adopted by the shareholders, or an agreement among all the shareholders provides that directors elected by the holders of a class or series of shares shall have more or less than one vote per director on any matter, every reference in this chapter to a majority or other proportion of directors shall refer to a majority or other proportion of the votes of such directors.
(i) This Code section does not prohibit any other agreement between or among shareholders in a statutory close corporation.
The articles of incorporation or a bylaw adopted by the shareholders of a statutory close corporation may confer upon holders of any class or series of shares the right to elect one or more directors who shall serve for such term and have such voting powers as shall be stated in the articles of incorporation or a bylaw adopted by the shareholders. The terms of office and voting powers of the directors elected in the manner so provided in the articles of incorporation or a bylaw adopted by the shareholders may be greater than or less than those of any other director or class of directors.
(a) A statutory close corporation may operate without a board of directors if its articles of incorporation, bylaws approved by the shareholders, or agreements between the shareholders that are otherwise lawful contain a statement to that effect.
(b) An amendment to articles of incorporation, bylaws approved by the shareholders, or an agreement between the shareholders eliminating a board of directors must be approved by all the shareholders of the corporation, whether or not otherwise entitled to vote on amendments, or if no shares have been issued, by all the subscribers for shares, if any, or if none, by all the incorporators.
(c) While a corporation is operating without a board of directors as authorized by subsection (a) of this Code section:
(1) All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation managed under the direction of, the shareholders;
(2) Unless the articles of incorporation, bylaws approved by the shareholders, or agreements among the shareholders provide otherwise:
(A) Action requiring director approval or both director and shareholder approval is authorized if approved by the shareholders; and
(B) Action requiring a majority or greater percentage vote of the board of directors is authorized if approved by the majority or greater percentage of the votes of shareholders entitled to vote on the action;
(3) Those shareholders in whom the discretion or the powers of the board are vested are liable for the liability imposed by law upon directors;
(4) A requirement by a state or the United States that a document delivered for filing contain a statement that specified action has been taken by the board of directors is satisfied by a statement that the corporation is a statutory close corporation without a board of directors and that the action was approved by the shareholders;
(5) The shareholders by resolution may appoint one or more shareholders to sign documents as “designated directors”; and
(6) Unless the context clearly requires otherwise, the shareholders of the corporation shall be deemed to be directors for purposes of applying provisions of this chapter.
(d) An amendment to articles of incorporation, bylaws approved by the shareholders, or an agreement between the shareholders deleting the statement eliminating a board of directors must be approved by the holders of at least two-thirds of the votes of each class or series of shares of the corporation, voting as separate voting groups, whether or not otherwise entitled to vote on amendments. The amendment must also specify the number, names, and addresses of the corporation's directors or describe who will perform the duties of a board under Code Section 14-2-801.
(a) A statutory close corporation need not adopt bylaws if provisions required by law to be contained in bylaws are contained in either the articles of incorporation or a shareholder agreement authorized by Code Section 14-2-920.
(b) If a corporation does not have bylaws when its statutory close corporation status terminates under Code Section 14-2-931, the corporation shall immediately adopt bylaws under Code Section 14-2-206.
(a) The annual meeting date for a statutory close corporation is the first business day after the thirty-first day of May unless its articles of incorporation, bylaws, or a shareholder agreement authorized by Code Section 14-2-920 fixes a different date.
(b) A statutory close corporation need not hold an annual meeting unless one or more shareholders deliver written notice to the corporation requesting a meeting at least 30 days before the meeting date determined under subsection (a) of this Code section.
Notwithstanding any law to the contrary, an individual who holds more than one office in a statutory close corporation may execute, acknowledge, or verify in more than one capacity any document required to be executed, acknowledged, or verified by the holders of two or more offices.
The failure of a statutory close corporation to observe the usual corporate formalities or requirements relating to the exercise of its corporate powers or management of its business and affairs is not a ground for imposing personal liability on the shareholders for liabilities of the corporation.
(a) A plan of merger or share exchange:
(1) That if effected would terminate statutory close corporation status must be approved by the holders of at least two-thirds of the votes of each class or series of shares of the statutory close corporation, voting as separate voting groups, whether or not the holders are otherwise entitled to vote on the plan; or
(2) That if effected would create the surviving corporation as a statutory close corporation must be approved by the holders of at least two-thirds of the votes of each class or series of shares of the surviving corporation, voting as separate voting groups, whether or not the holders are otherwise entitled to vote on the plan.
(b) A sale, lease, exchange, or other disposition of all or substantially all of the property (with or without the good will) of a statutory close corporation that requires approval of the shareholders pursuant to Code Section 14-2-1202 must be approved by the holders of at least two-thirds of the votes of each class or series of shares of the corporation, voting as separate voting groups, whether or not the holders are otherwise entitled to vote on the transaction.
(a) A statutory close corporation may terminate its statutory close corporation status by amending its articles of incorporation to delete the statement that it is a statutory close corporation. If the statutory close corporation has elected to operate without a board of directors under Code Section 14-2-922, the amendment must either comply with Code Section 14-2-801 or delete the statement dispensing with the board of directors from its articles of incorporation.
(b) An amendment terminating statutory close corporation status must be approved by the holders of at least two-thirds of the votes of each class or series of shares of the corporation, voting as separate voting groups, whether or not the holders are otherwise entitled to vote on amendments.
(c) If an amendment to terminate statutory close corporation status is adopted, each shareholder who voted against the amendment is entitled to assert dissenters' rights under Article 13 of this chapter.
(a) A corporation that terminates its status as a statutory close corporation is thereafter subject to all provisions of this chapter or, if incorporated under Chapter 7 of this title, known as the “Georgia Professional Corporation Act,” to all provisions of that chapter.
(b) Termination of statutory close corporation status does not affect any right of a shareholder or of the corporation under an agreement, the bylaws, or the articles of incorporation unless this article, this chapter, or another law of this state invalidates the right.
(a) The articles of incorporation, bylaws adopted by the shareholders, or an agreement among all the shareholders of a statutory close corporation may authorize one or more shareholders, or the holders of a specified number or percentage of shares of any class or series, to dissolve the corporation at will or upon the occurrence of a specified event or contingency. The shareholder or shareholders exercising this authority must give written notice of the intent to dissolve to all the other shareholders. Thirty-one days after the effective date of the notice, the corporation shall begin to wind up and liquidate its business and affairs and begin dissolution proceedings under Code Sections 14-2-1403 through 14-2-1408.
(b) Unless the articles of incorporation, bylaws adopted by the shareholders, or any agreement among all the shareholders provides otherwise, an amendment to the articles of incorporation, bylaws adopted by the shareholders, or any agreement among all the shareholders to add, change, or delete the authority to dissolve described in subsection (a) of this Code section must be approved by the holders of all the outstanding shares, whether or not otherwise entitled to vote on amendments, or, if no shares have been issued, by all the subscribers for shares, if any, or, if none, by all the incorporators.
(a) Subject to satisfying the conditions of subsections (c) and (d) of this Code section, a shareholder of a statutory close corporation may petition the superior court for any of the relief described in Code Section 14-2-941, 14-2-942, or 14-2-943 if:
(1) The directors or those in control of the corporation have acted, are acting, or will act in a manner that is illegal, oppressive, fraudulent, or unfairly prejudicial to the petitioner, whether in his capacity as shareholder, director, or officer of the corporation;
(2) The directors or those in control of the corporation are deadlocked in the management of the corporation's affairs, the shareholders are unable to break the deadlock, and the corporation is suffering or will suffer irreparable injury or the business and affairs of the corporation can no longer be conducted to the advantage of the shareholders generally because of the deadlock; or
(3) There exists one or more grounds for judicial dissolution of the corporation under Code Section 14-2-1430.
(b) A shareholder must commence a proceeding under subsection (a) of this Code section in the superior court of the county where the corporation's principal office (or, if none in this state, its registered office) is located. The jurisdiction of the court in which the proceeding is commenced is plenary and exclusive.
(c) If a shareholder has agreed in writing to pursue a nonjudicial remedy to resolve disputed matters, he may not commence a proceeding under this Code section with respect to the matters until he has exhausted the nonjudicial remedy.
(d) If a shareholder has dissenters' rights under this article or Article 13 of this chapter with respect to proposed corporate action, he must commence a proceeding under this Code section before he is required to give notice of his intent to demand payment under Code Section 14-2-1321 or to demand payment under Code Section 14-2-1323 or the proceeding is barred.
(e) Except as provided in subsections (c) and (d) of this Code section, a shareholder's right to commence a proceeding under this Code section and the remedies available under Code Sections 14-2-941 through 14-2-943 are in addition to any other right or remedy he may have.
(a) If the court finds that one or more of the grounds for relief described in subsection (a) of Code Section 14-2-940 exist, it may order one or more of the following types of relief:
(1) The performance, prohibition, alteration, or setting aside of any action of the corporation or of its shareholders, directors, or officers or of any other party to the proceeding;
(2) The cancellation or alteration of any provision in the corporation's articles of incorporation, bylaws, or agreement among the shareholders;
(3) The removal from office of any director or officer;
(4) The appointment of any individual as a director or officer;
(5) An accounting with respect to any matter in dispute;
(6) The appointment of a custodian to manage the business and affairs of the corporation;
(7) The appointment of a provisional director (who has all the rights, powers, and duties of a duly elected director) to serve for the term and under the conditions prescribed by the court;
(8) The payment of dividends;
(9) The award of damages to any aggrieved party.
(b) If the court finds that a party to the proceeding acted arbitrarily, vexatiously, or otherwise not in good faith, it may award one or more other parties their reasonable expenses, including attorneys' fees and the expenses of appraisers or other experts, incurred in the proceeding.
(a) If the court finds that the ordinary relief described in subsection (a) of Code Section 14-2-941 is or would be inadequate or inappropriate, it may order the corporation dissolved under Code Section 14-2-943 unless the corporation or one or more of its shareholders purchase all the shares of the shareholder for their fair value and on terms determined under subsection (b) of this Code section.
(b) If the court orders a share purchase, it shall:
(1) Determine the fair value of the shares, considering among other relevant evidence the going concern value of the corporation, any agreement among some or all of the shareholders fixing the price or specifying a formula for determining share value for any purpose, the recommendations of appraisers (if any) appointed by the court, and the legal constraints on the corporation's ability to purchase the shares;
(2) Specify the terms of the purchase, including, if appropriate, terms for installment payments, subordination of the purchase obligation to the rights of the corporation's creditors, security for a deferred purchase price, and a covenant not to compete or other restriction on the seller;
(3) Require the seller to deliver all his shares to the purchaser upon receipt of the purchase price or the first installment of the purchase price;
(4) Provide that after the seller delivers his shares he has no further claim against the corporation, its directors, officers, or shareholders, other than a claim to any unpaid balance of the purchase price and a claim under any agreement with the corporation or the remaining shareholders that is not terminated by the court; and
(5) Provide that if the purchase is not completed in accordance with the specified terms, the corporation is to be dissolved under Code Section 14-2-943.
(c) After the purchase order is entered, any party may petition the court to modify the terms of the purchase and the court may do so if it finds that changes in the financial or legal ability of the corporation or other purchaser to complete the purchase justify a modification.
(d) If the corporation is dissolved because the share purchase was not completed in accordance with the court's order, the selling shareholder has the same rights and priorities in the corporation's assets as if the sale had not been ordered.
(a) The court may dissolve the corporation if it finds that:
(1) There are one or more grounds for judicial dissolution under Code Section 14-2-1430; or
(2) All other relief ordered by the court under Code Section 14-2-941 or Code Section 14-2-942 has failed to resolve the matters in dispute.
(b) In determining whether to dissolve the corporation, the court shall consider among other relevant evidence the financial condition of the corporation but may not refuse to dissolve solely because the corporation has accumulated earnings or current operating profits.
This article applies to all corporations electing statutory close corporation status under Code Section 14-2-902 after July 1, 1989.
(a) A corporation may amend its articles of incorporation at any time to add or change a provision that is required or permitted in the articles of incorporation or to delete a provision not required in the articles of incorporation. Whether a provision is required or permitted in the articles of incorporation is determined as of the effective date of the amendment.
(b) A shareholder of the corporation does not have a vested property right resulting from any provision in the articles of incorporation, including provisions relating to management, control, capital structure, dividend entitlement, or purpose or duration of the corporation.
Unless the articles of incorporation provide otherwise, a corporation's board of directors may adopt one or more amendments to the corporation's articles of incorporation without shareholder action:
(1) To extend the duration of the corporation if it was incorporated at a time when limited duration was required by law;
(2) To delete the names and addresses of the initial directors;
(3) To delete the name and address of the initial registered agent or registered office, if an annual registration is on file with the Secretary of State;
(4) To delete the name and address of each incorporator;
(5) To delete the mailing address of the initial principal office of the corporation if an annual registration is on file with the Secretary of State;
(6) To change each issued or each issued and unissued authorized share of an outstanding class into a greater number of whole shares if the corporation has only shares of that class outstanding;
(7) To change or eliminate the par value of each issued and unissued share of an outstanding class if the corporation has only shares of that class outstanding;
(8) To change the corporate name; or
(9) To make any other change expressly permitted by this chapter to be made without shareholder action.
(a) A corporation's board of directors may propose one or more amendments to the articles of incorporation for submission to the shareholders.
(b) For the amendment to be adopted:
(1) The board of directors shall also transmit to the shareholders a recommendation that the shareholders approve the amendment, unless the board of directors makes a determination that, because of conflicts of interest or other special circumstances, it should either refrain from making such a recommendation or recommend that the shareholders reject or vote against the amendment, in which case the board of directors shall transmit to the shareholders the basis for such determination; and
(2) The shareholders entitled to vote on the amendment must approve the amendment as provided in subsection (e) of this Code section.
(c) The board of directors may condition its submission of the proposed amendment, the effectiveness of the proposed amendment, or both on any basis.
(d) The corporation shall notify each shareholder entitled to vote of the proposed shareholders' meeting in accordance with Code Section 14-2-705. The notice of meeting must also state that the purpose or one of the purposes of the meeting is to consider the proposed amendment and contain or be accompanied by a copy or summary of the amendment.
(e) Unless this chapter, the articles of incorporation, or the board of directors acting pursuant to subsection (c) of this Code section require a greater vote or a vote by voting groups, the amendment to be adopted must be approved by a majority of the votes entitled to be cast on the amendment by each voting group entitled to vote on the amendment.
(f) At any time prior to the time the amendment becomes effective, notwithstanding authorization of the proposed amendment by the shareholders of the corporation, the board of directors may abandon such proposed amendment without further shareholder action. If the amendment is abandoned after articles of amendment have been filed with the Secretary of State but before the amendment has become effective, a statement that the amendment has been abandoned in accordance with this Code section executed on behalf of the corporation shall be delivered to the Secretary of State for filing prior to the effectiveness of the amendment. Upon filing, the statement shall take effect and the amendment shall be deemed abandoned and shall not become effective.
(a) The holders of the outstanding shares of a class are entitled to vote as a separate voting group (unless shareholder voting is not required by virtue of Code Section 14-2-1002) on a proposed amendment if the amendment would:
(1) Increase or decrease the aggregate number of authorized shares of the class; provided, however, that if the articles of incorporation specifically authorize the shares of any class to be increased or decreased without a vote of such class, under such circumstances, the authorized number, terms, conditions, designations, preferences, limitations, and relative rights of those shares may be fixed as provided in the articles of incorporation;
(2) Effect an exchange or reclassification of all or part of the shares of the class into shares of another class;
(3) Effect an exchange or reclassification, or create the right of exchange, of all or part of the shares of another class into shares of the class;
(4) Change the designation, rights, preferences, or limitations of all or part of the shares of the class;
(5) Change the shares of all or part of the class into a different number of shares of the same class;
(6) Create a new class of shares having rights or preferences with respect to distributions or to dissolution that are prior, superior, or substantially equal to the shares of the class;
(7) Increase the rights, preferences, or number of authorized shares of any class that, after giving effect to the amendment, have rights or preferences with respect to distributions or to dissolution that are prior, superior, or substantially equal to the shares of the class;
(8) Limit or deny an existing preemptive right of all or part of the shares of the class;
(9) Cancel or otherwise affect rights to distributions or dividends that have accumulated but not yet been declared on all or part of the shares of the class; or
(10) Cancel, redeem, or repurchase all or part of the shares of the class.
(b) If a proposed amendment would affect a series of a class of shares in one or more of the ways described in subsection (a) of this Code section, the shares of that series are entitled to vote as a separate voting group on the proposed amendment. If a proposed amendment would not affect a series in any manner described in subsection (a) of this Code section, the holders of shares of that series are not entitled to vote as a separate voting group on the proposed amendment unless the articles of incorporation provide otherwise.
(c) If a proposed amendment that entitles two or more series of shares within a class to vote as separate voting groups under this Code section would affect those two or more series in the same or a substantially similar way, the shares of all the series within the class so affected must vote together as a single voting group on the proposed amendment.
(d) A class or series of shares is entitled to the voting rights granted by this Code section although the articles of incorporation provide that the shares are nonvoting shares. The articles of incorporation may provide that a class or series has voting rights in addition to those granted by this Code section.
(a) If a corporation has not yet issued shares, its incorporators or board of directors may adopt one or more amendments to the corporation's articles of incorporation.
(b) If any amendment before shares are issued makes a material change in the articles of incorporation, nonassenting subscribers for shares shall be entitled to rescind their subscriptions.
A corporation amending its articles of incorporation shall deliver to the Secretary of State for filing articles of amendment setting forth:
(1) The name of the corporation;
(2) The text of each amendment adopted;
(3) If an amendment provides for an exchange, reclassification, or cancellation of issued shares, provisions for implementing the amendment if not contained in the amendment itself;
(4) The date of each amendment's adoption;
(5) If an amendment was adopted by the incorporators or board of directors without shareholder action, a statement to that effect and that shareholder action was not required; and
(6) If approval of the shareholders was required, a statement that the amendment was duly approved by the shareholders in accordance with the provisions of Code Section 14-2-1003.
(a) Together with the articles of amendment which change the name of the corporation, the corporation shall deliver to the Secretary of State an undertaking, which may appear in the articles of amendment or be set forth in a letter or other instrument executed by an incorporator or any person authorized to act on behalf of the corporation, to publish a notice of the filing of the articles of amendment as required by subsection (b) of this Code section.
(b) No later than the next business day following the delivery of the articles of amendment and certificate as provided in subsection (a) of this Code section, the corporation shall mail or deliver to the publisher of a newspaper which is the official organ of the county where the registered office of the corporation is located or which is a newspaper of general circulation published within such county whose most recently published annual statement of ownership and circulation reflects a minimum of 60 percent paid circulation a request to publish a notice in substantially the following form:
“NOTICE OF CHANGE OF CORPORATE NAME
Notice is given that articles of amendment which will change the name of _____ (present corporate name) to _____ (proposed corporate name) have been delivered to the Secretary of State for filing in accordance with the Georgia Business Corporation Code. The registered office of the corporation is located at _____ (address of registered office).”
The request for publication of the notice shall be accompanied by a check, draft, or money order in the amount of $40.00 in payment of the cost of publication. The notice shall be published once a week for two consecutive weeks commencing within ten days after receipt of the notice by the newspaper. Failure on the part of the corporation to mail or deliver the notice or payment therefor or failure on the part of the newspaper to publish the notice in compliance with this subsection shall not invalidate the articles of amendment or the change of the name of the corporation.
(a) A corporation's board of directors may restate its articles of incorporation at any time with or without shareholder action.
(b) The restatement may include one or more amendments to the articles. If the restatement includes an amendment requiring shareholder approval, it must be adopted as provided in Code Section 14-2-1003.
(c) If the board of directors submits a restatement for shareholder action, the corporation shall notify each shareholder entitled to vote of the proposed shareholders' meeting in accordance with Code Section 14-2-705. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the proposed restatement and contain or be accompanied by a copy of the restatement that identifies any amendment or other change it would make in the articles or contain or be accompanied by a full and complete summary of any such amendment or other change.
(d) A corporation restating its articles of incorporation shall deliver to the Secretary of State for filing articles of restatement setting forth the name of the corporation and the text of the restated articles of incorporation including, or accompanied by a certificate setting forth, the following information:
(1) Whether the restatement contains an amendment to the articles requiring shareholder approval, and, if it does not, that the board of directors adopted the restatement; or
(2) If the restatement contains an amendment to the articles requiring shareholder approval, the information required by Code Section 14-2-1006.
(e) Duly adopted restated articles of incorporation supersede the original articles of incorporation and all amendments to them.
(f) The Secretary of State may certify restated articles of incorporation as the articles of incorporation currently in effect without including any certificate filed pursuant to subsection (d) of this Code section.
An amendment to articles of incorporation does not affect a cause of action existing against or in favor of the corporation, a proceeding to which the corporation is a party, or the existing rights of persons other than shareholders of the corporation. An amendment changing a corporation's name does not abate a proceeding brought by or against the corporation in its former name.
(a) A corporation's board of directors may amend or repeal the corporation's bylaws or adopt new bylaws unless:
(1) The articles of incorporation or this chapter reserve this power exclusively to the shareholders in whole or in part; or
(2) The shareholders in amending or repealing a particular bylaw provide expressly that the board of directors may not amend or repeal that bylaw.
(b) A corporation's shareholders may amend or repeal the corporation's bylaws or adopt new bylaws even though the bylaws may also be amended or repealed by its board of directors; provided, however, that unless the articles of incorporation provide otherwise, the shareholders may not amend (but may repeal) a bylaw adopted by the board of directors pursuant to subsection (a) of Code Section 14-2-728 or adopt a bylaw changing the plurality standard for the election of directors set forth in such subsection.
(c) A bylaw establishing staggered terms for directors may only be adopted, amended, or repealed by the shareholders.
(d) A bylaw limiting the authority of the board of directors may only be adopted pursuant to an agreement meeting the requirements of Code Section 14-2-732.
(e) Bylaws adopted by the incorporators or board of directors prior to the issuance of any of the corporation's shares may be amended by the incorporators or the board of directors prior to the issuance of any of the corporation's shares.
(a) Except as provided in subsection (b) of Code Section 14-2-1020, a bylaw adopted by the shareholders may fix a greater quorum or voting requirement for shareholders (or voting groups of shareholders) than is required by this chapter. A bylaw in effect on July 1, 1989, fixing a greater quorum or voting requirement for shareholders (or voting groups of shareholders) than is required by this chapter shall remain valid until amended or repealed as provided in subsection (b) of this Code section.
(b) Except as provided in Code Section 14-2-1020, 14-2-1113, or 14-2-1133, a bylaw adopted by the shareholders that fixes a greater quorum or voting requirement for shareholders under subsection (a) of this Code section shall not be adopted, amended, or repealed by the board of directors.
(a) Unless provided otherwise in the articles of incorporation or the bylaws, a bylaw that fixes a greater quorum or voting requirement for the board of directors:
(1) May be adopted, amended, or repealed by the shareholders only by the affirmative vote of a majority of the votes entitled to be cast; or
(2) May be adopted, amended, or repealed by the directors only by a majority of the entire board of directors.
(b) A bylaw adopted or amended by the shareholders that fixes a greater quorum or voting requirement for the board of directors may provide that it may be amended or repealed only by a specified vote of either the shareholders or the board of directors.
(a) One or more corporations may merge into another corporation if the board of directors of each corporation adopts and its shareholders (if required by Code Section 14-2-1103) approve a plan of merger.
(b) The plan of merger must set forth:
(1) The name of each corporation planning to merge and the name of the surviving corporation into which each other corporation plans to merge;
(2) The terms and conditions of the merger; and
(3) The manner and basis of converting the shares of each corporation into shares or other securities, obligations, rights to acquire shares or other securities, cash, other property, or any combination of the foregoing, and if any shares of any holder of a class or series of shares are to be converted in a manner or basis different from any other holder of shares of such class or series, the manner or basis applicable to each such holder.
(c) The plan of merger may set forth:
(1) Amendments to the articles of incorporation of the surviving corporation;
(2) A provision that the plan may be amended prior to the time the merger has become effective, but if shareholders of a corporation that is a party to the merger are required or permitted to vote on the plan, subsequent to approval of the plan by such shareholders the plan may not be amended to change in any respect not expressly authorized by such shareholders in connection with the approval of the plan:
(A) The amount or kind of shares or other securities, obligations, rights to acquire shares or other securities, cash, or other property to be received under the plan by the shareholders of any party to the merger if such change would adversely affect such shareholders;
(B) The articles of incorporation of any corporation that will survive as a result of the merger, except for changes permitted by Code Section 14-2-1002 or changes that would not adversely affect such shareholders; or
(C) Any of the other terms or conditions of the plan if such change would adversely affect such shareholders in any material respect; and
in the event that the plan of merger is amended after articles or a certificate of merger has been filed with the Secretary of State but before the merger has become effective, a certificate of amendment of merger executed on behalf of each party to the merger by an officer or other duly authorized representative shall be delivered to the Secretary of State for filing prior to the effectiveness of the merger; and
(3) Other provisions relating to the merger.
(d) Any of the terms of the plan of merger may be made dependent upon facts ascertainable outside of the plan of merger, provided that the manner in which such facts shall operate upon the terms of the merger is clearly and expressly set forth in the plan of merger. As used in this subsection, the term “facts” includes, but is not limited to, the occurrence of any event, including a determination or action by any person or body, including the corporation.
(a) A corporation may acquire all of the outstanding shares of one or more classes or series of another corporation through a share exchange if the board of directors of each corporation adopts and its shareholders (if required by Code Section 14-2-1103) approve the share exchange.
(b) The plan of share exchange must set forth:
(1) The name of the corporation whose shares will be acquired and the name of the acquiring corporation;
(2) The terms and conditions of the share exchange; and
(3) The manner and basis of exchanging the shares to be acquired for shares or other securities, obligations, rights to acquire shares or other securities, cash, other property, or any combination of the foregoing, and if any shares of any holder of a class or series of shares are to be exchanged in a manner or basis different from any other holder of shares of such class or series, the manner or basis applicable to each such holder.
(c) The plan of share exchange may set forth other provisions relating to the share exchange, including a provision that the plan may be amended prior to the time the share exchange has become effective, but if shareholders of a corporation that is a party to the share exchange are required or permitted to vote on the plan, subsequent to approval of the plan by such shareholders the plan may not be amended to change in any respect not expressly authorized by such shareholders in connection with the approval of the plan:
(1) The amount or kind of shares or other securities, obligations, rights to acquire shares or other securities, cash, or other property to be issued by the corporation or to be received under the plan by the shareholders of any party to the share exchange if such change would adversely affect such shareholders; or
(2) Any of the other terms or conditions of the plan if such change would adversely affect such shareholders in any material respect; and
in the event that the plan of share exchange is amended after articles or a certificate of share exchange has been filed with the Secretary of State but before the share exchange has become effective, a certificate of amendment of share exchange executed on behalf of each party to the share exchange by an officer or other duly authorized representative shall be delivered to the Secretary of State for filing prior to the effectiveness of the share exchange.
(d) Any of the terms of the plan of share exchange may be made dependent upon facts ascertainable outside of the plan of share exchange, provided that the manner in which such facts shall operate upon the terms of the share exchange is clearly and expressly set forth in the plan of share exchange. As used in this subsection, the term “facts” includes, but is not limited to, the occurrence of any event, including a determination or action by any person or body, including the corporation.
(e) This Code section does not limit the power of a corporation to acquire all or part of the shares of one or more classes or series of another corporation through a voluntary exchange of shares or otherwise.
(a) After adopting a plan of merger or share exchange, the board of directors of each corporation party to the merger and the board of directors of the corporation whose shares will be acquired in the share exchange shall submit the plan of merger (except as provided in subsection (h) of this Code section) or share exchange for approval by its shareholders.
(b) For a plan of merger or share exchange to be approved:
(1) The board of directors shall also transmit to the shareholders a recommendation that the shareholders approve the plan, unless the board of directors makes a determination that, because of conflicts of interest or other special circumstances, it should either refrain from making such a recommendation or recommend that the shareholders reject or vote against the plan, in which case the board of directors shall transmit to the shareholders the basis for such determination; and
(2) The shareholders entitled to vote must approve the plan as provided in subsections (e), (f), and (g) of this Code section.
(c) The board of directors may condition its submission of the proposed merger or share exchange, the effectiveness of the proposed merger or share exchange, or both on any basis.
(d) The corporation shall notify each shareholder entitled to vote of the proposed shareholders' meeting in accordance with Code Section 14-2-705. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the plan of merger or share exchange and contain or be accompanied by a copy or summary of the plan.
(e) Unless this chapter, the articles of incorporation, the bylaws, or the board of directors (acting pursuant to subsection (c) of this Code section) requires a greater vote or a vote by voting groups, the plan of merger or share exchange to be authorized must be approved by:
(1) A majority of all the votes entitled to be cast on the plan by all shares entitled to vote on the plan, voting as a single voting group; and
(2) A majority of all the votes entitled to be cast by holders of the shares of each voting group entitled to vote separately on the plan as a voting group by the articles of incorporation.
(f) Shares of a class or series not otherwise entitled to vote on the merger are entitled to vote on a plan of merger if the plan contains a provision that, if contained in a proposed amendment to articles of incorporation, would require action by that class or series of shares voting as a separate voting group on the proposed amendment under Code Section 14-2-1004 as a part of the voting group described in paragraph (1) of subsection (e) of this Code section.
(g) Shares of a class or series included in a share exchange but not otherwise entitled to vote on the plan of share exchange are entitled to vote, with each class or series constituting a separate voting group.
(h) Action by the shareholders of the surviving corporation on a plan of merger or by the shareholders of the acquiring corporation in a share exchange is not required if:
(1) The articles of incorporation of the surviving or acquiring corporation will not differ (except for amendments enumerated in Code Section 14-2-1002) from its articles before the merger or share exchange;
(2) Each share of stock of the surviving or acquiring corporation outstanding immediately before the effective date of the merger or share exchange is to be an identical outstanding or reacquired share immediately after the merger or share exchange; and
(3) The number and kind of shares outstanding immediately after the merger or share exchange, plus the number and kind of shares issuable as a result of the merger or share exchange and by the conversion of securities issued pursuant to the merger or share exchange or the exercise of rights and warrants issued pursuant to the merger or share exchange, will not exceed the total number and kind of shares of the surviving or acquiring corporation authorized by its articles of incorporation immediately before the merger or share exchange.
(i) Unless otherwise provided in a plan of merger or share exchange or in the laws under which a foreign corporation that is a party to a merger or share exchange is organized or by which it is governed, after a merger or share exchange is authorized, and at any time before articles of merger or a certificate of merger or share exchange becomes effective, the plan of merger or share exchange may be abandoned subject to any contractual rights without further shareholder action, in accordance with the procedure set forth in the plan of merger or share exchange or, if none is set forth, in the manner determined by the board of directors and otherwise in accordance with subsection (j) of this Code section.
(j) If a merger or share exchange is abandoned as permitted by subsection (i) of this Code section after articles or a certificate of merger or share exchange has been filed with the Secretary of State but before the merger or share exchange has become effective, a statement that the merger or share exchange has been abandoned in accordance with this Code section executed on behalf of a party to the merger or share exchange by an officer or other duly authorized representative shall be delivered to the Secretary of State for filing prior to the effectiveness of the merger or share exchange. Upon filing, the statement shall take effect and the merger or share exchange shall be deemed abandoned and shall not become effective.
(a) A parent corporation that owns at least 90 percent of the outstanding shares of each class and series of a subsidiary corporation may merge the subsidiary into itself or into another such subsidiary or merge itself into the subsidiary without the approval of the board of directors or shareholders of the subsidiary.
(b) The board of directors of the parent shall adopt a plan of merger that sets forth:
(1) The names of the parent and subsidiary; and
(2) The manner and basis of converting the shares of the parent or subsidiary into shares or other securities, obligations, rights to acquire shares or other securities, cash, other property, or any combination thereof, and if any shares of any holder of a class or series of shares are to be converted in a manner or basis different from any other holder of shares of such class or series, the manner or basis applicable to such holder.
(c) If, as provided under subsection (a) of this Code section, approval of a merger by the subsidiary's shareholders is not required, the surviving corporation shall, within ten days after the effective date of the merger, notify each of the subsidiary's shareholders that the merger has become effective.
(d) Except as provided in subsections (a), (b), and (c) of this Code section, a merger between a parent and a subsidiary shall be governed by the provisions of Article 11 of this chapter applicable to mergers generally.
(e) Any of the terms of the plan of merger may be made dependent upon facts ascertainable outside of the plan of merger, provided that the manner in which such facts shall operate upon the terms of the merger is clearly and expressly set forth in the plan of merger. As used in this subsection, the term “facts” includes, but is not limited to, the occurrence of any event, including a determination or action by any person or body, including the corporation.
(a) After a plan of merger or share exchange is approved by the shareholders, or adopted by the board of directors if shareholder approval is not required, the surviving or acquiring corporation shall deliver to the Secretary of State for filing articles of merger or share exchange setting forth:
(1) The plan of merger or share exchange;
(2) If shareholder approval was not required, a statement to that effect; and
(3) If approval of the shareholders of one or more corporations party to the merger or share exchange was required, a statement that the merger or share exchange was duly approved by the shareholders.
(b) In lieu of filing articles of merger or share exchange that set forth the plan of merger or share exchange, the surviving or acquiring corporation may file a certificate of merger or share exchange which sets forth:
(1) The name and state of incorporation of each corporation which is merging or engaging in a share exchange and, in the case of a merger, the name of the surviving corporation into which each other corporation is merging;
(2) In the case of a merger, any amendments to the articles of incorporation of the surviving corporation;
(3) That the executed plan of merger or share exchange is on file at the principal place of business of the surviving or exchanging corporation, stating the address thereof;
(4) That a copy of the plan of merger or share exchange will be furnished by the surviving or exchanging corporation, on request and without cost, to any shareholder of any corporation that is a party to the merger or whose shares are involved in the share exchange;
(5) If shareholder approval was not required, a statement to that effect; and
(6) If approval of the shareholders of one or more corporations party to the merger or share exchange was required, a statement that the merger or share exchange was duly approved by the shareholders.
(c) Unless a delayed effective date is specified, a merger or share exchange takes effect when the articles or certificate of merger or share exchange is filed.
(a) Together with the articles or certificate of merger or share exchange, the surviving or acquiring corporation shall deliver to the Secretary of State an undertaking (which may appear in the articles or certificate of merger or be set forth in a letter or other instrument executed by an officer or any person authorized to act on behalf of such corporation) that the request for publication of a notice of filing the articles or certificate of merger or share exchange and payment therefor will be made as required by subsection (b) of this Code section.
(b) No later than the next business day after filing the articles or certificate of merger or share exchange, the surviving or acquiring corporation shall mail or deliver to the publisher of a newspaper which is the official organ of the county where the registered office of the surviving or acquiring corporation is to be located, if the surviving corporation will be required to maintain a registered office in Georgia, or where the registered office of the merging or acquired corporation was located prior to the merger or share exchange in any other case, or which is a newspaper of general circulation published within such county whose most recently published annual statement of ownership and circulation reflects a minimum of 60 percent paid circulation a request to publish a notice in substantially the following form:
“NOTICE OF (MERGER) (SHARE EXCHANGE)
Notice is given that articles or a certificate of (merger) (share exchange) which will effect a (merger) (share exchange) by and between _____ (name and state of incorporation of each of the constituent corporations) has been delivered to the Secretary of State for filing in accordance with the Georgia Business Corporation Code. The name of the (surviving) (acquiring) corporation in the (merger) (share exchange) is _____, a corporation incorporated in the State of _____. The registered office of such corporation (is) (will be) located at _____ (address of registered office) and its registered (agent) (agents) at such address (is) (are) _____ (name or names of agent or agents).”
The request for publication of the notice shall be accompanied by a check, draft, or money order in the amount of $40.00 in payment of the cost of publication. The notice shall be published once a week for two consecutive weeks commencing within ten days after receipt of the notice by the newspaper. Failure on the part of the surviving or acquiring corporation to mail or deliver the notice or payment therefor or failure on the part of the newspaper to publish the notice in compliance with this subsection shall not invalidate the merger or share exchange.
(a) When a merger governed by this article takes effect:
(1) Every other corporation or entity party to the merger merges into the surviving corporation or entity and the separate existence of every corporation or entity except the surviving corporation or entity ceases;
(2) The title to all real estate and other property owned by, and every contract right possessed by, each corporation or entity party to the merger is vested in the surviving corporation or entity without reversion or impairment, without further act or deed, and without any conveyance, transfer, or assignment having occurred;
(3) The surviving corporation or entity has all liabilities of each corporation or entity party to the merger;
(4) A proceeding pending against any corporation or entity party to the merger may be continued as if the merger did not occur or the surviving corporation or entity may be substituted in the proceeding for the corporation or entity whose existence ceased;
(5) The articles of incorporation or other governing documents of the surviving corporation or entity are amended to the extent provided in the plan of merger; and
(6) The shares of each corporation party to the merger and the shares of each of the entities party to the merger that are to be converted into shares, obligations, or other securities of the surviving or any other corporation or into cash or other property are converted and the former holders of the shares are entitled only to the rights provided in the plan of merger or to their rights otherwise provided by law.
(b) When a share exchange takes effect, the shares of each acquired corporation are exchanged as provided in the plan, and the former holders of the shares are entitled only to the share exchange rights provided in the plan of share exchange or to their rights under Article 13 of this chapter.
(c) For purposes of this Code section, the definitions contained in Code Section 14-2-1109 shall be applicable.
(a) One or more foreign corporations may merge or enter into a share exchange with one or more domestic corporations if:
(1) In a merger, the merger is permitted by the law of the state or country under whose law each foreign corporation is incorporated and each foreign corporation complies with that law in effecting the merger;
(2) In a share exchange, the corporation whose shares will be acquired is a domestic corporation, whether or not a share exchange is permitted by the law of the state or country under whose law the acquiring corporation is incorporated;
(3) The foreign corporation complies with Code Section 14-2-1105 if it is the surviving corporation of the merger or acquiring corporation of the share exchange; and
(4) Each domestic corporation complies with the applicable provisions of Code Sections 14-2-1101 through 14-2-1104 and, if it is the surviving corporation of the merger or acquiring corporation of the share exchange, with Code Section 14-2-1105.
(b) Upon the merger or share exchange taking effect, the surviving foreign corporation of a merger and the acquiring foreign corporation of a share exchange is deemed:
(1) To appoint the Secretary of State as its agent for service of process in a proceeding to enforce any obligation or the rights of dissenting shareholders of each domestic corporation party to the merger or share exchange; and
(2) To agree that it will promptly pay to the dissenting shareholders of each domestic corporation party to the merger or share exchange the amount, if any, to which they are entitled under Article 13 of this chapter.
(c) This Code section does not limit the power of a foreign corporation to acquire all or part of the shares of one or more classes or series of a domestic corporation through a voluntary exchange or otherwise.
(a) Unless prohibited by the laws of this state, banking, insurance, railroad, trust, canal, navigation, express, and telegraph companies, and other corporations whose charters have been granted by the Secretary of State under provisions other than this chapter, may merge or engage in a share exchange with corporations that are subject to this chapter.
(b) Each merging or exchanging corporation shall comply with all the provisions of this chapter relating to mergers or share exchanges, as the case may be, except that, if the laws which govern a merging or exchanging corporation chartered by the Secretary of State under provisions other than the provisions of this chapter contain provisions relating to merger or share exchange which conflict with this chapter, that corporation shall follow the provisions of the laws to which it is subject.
(c) If the surviving corporation in a merger is to be one which could be organized under this chapter, the time and effectiveness and the effect of the merger shall be as provided in this chapter. If the surviving corporation is to be one which could not be organized under this chapter, the time of effectiveness and the effect of the merger shall be as provided in this chapter except insofar as the laws of this state to which the surviving corporation shall be subject otherwise provide.
(a) As used in this Code section, the term:
(1) “Entity” includes any domestic or foreign nonprofit corporation, domestic or foreign limited liability company, domestic or foreign joint stock association, or domestic or foreign limited partnership.
(2) “Governing agreements” includes the articles of incorporation and bylaws of a corporation or nonprofit corporation, articles of association or trust agreement or indenture and bylaws of a joint stock association, articles of organization and operating agreement of a limited liability company, and the certificate of limited partnership and limited partnership agreement of a limited partnership, and agreements serving comparable purposes under the laws of other states or jurisdictions.
(3) “Joint-stock association” includes any association of the kind commonly known as a joint-stock association or joint-stock company and any unincorporated association, trust, or enterprise having members or having outstanding shares of stock or other evidences of financial and beneficial interest therein, whether formed by agreement or under statutory authority or otherwise, but shall not include a corporation, partnership, limited liability partnership, limited liability company, or nonprofit organization. A joint-stock association as defined in this paragraph may be one formed under the laws of this state, including a trust created pursuant to Article 2 of Chapter 12 of Title 53, or one formed under or pursuant to the laws of any other state or jurisdiction.
(4) “Limited liability company” includes limited liability companies formed under the laws of this state or of any other state or territory or the District of Columbia, unless the laws of such other state or jurisdiction forbid the merger of a limited liability company with a corporation.
(5) “Limited partnership” includes limited partnerships formed under the laws of this state or of any other state or territory or the District of Columbia, unless the laws of such other state or jurisdiction forbid the merger of a limited partnership with a corporation.
(6) “Nonprofit corporation” includes corporations which may make no distributions to their members, directors, or officers, except as reasonable compensation for services rendered, and except as otherwise provided by law, formed under the laws of this state or of any other state or territory or the District of Columbia, unless the laws of such other state or jurisdiction forbid the merger of a nonprofit corporation with a corporation formed under a general corporation law.
(7) “Share” includes shares, memberships, financial or beneficial interests, units, or proprietary or partnership interests in a limited liability company, joint-stock association or a limited partnership, but does not include debt obligations of any entity.
(8) “Shareholder” includes every member of a limited liability company or a joint-stock association that is a party to a merger or holder of a share of stock or other evidence of financial or beneficial interest therein.
(b) Any one or more domestic corporations may merge with one or more entities, except an entity formed under the laws of a state or jurisdiction which forbids a merger with a corporation. The corporation or corporations and one or more entities may merge into a single corporation or other entity, which may be any one of the constituent corporations or entities.
(c) The board of directors of each merging corporation and the appropriate body of each entity, in accordance with its governing agreements and the laws of the state or jurisdiction under which it was formed, shall adopt a plan of merger in accordance with each corporation's and entity's governing agreements and the laws of the state or jurisdiction under which it was formed, as the case may be.
(d) The plan of merger:
(1) Must set forth:
(A) The name of each corporation and entity planning to merge and the name of the surviving corporation or entity into which each other corporation and entity plans to merge;
(B) The terms and conditions of the merger; and
(C) The manner and basis of converting the shares of each corporation and the shares, memberships, or financial or beneficial interests or units in each of the entities into shares or other securities, obligations, rights to acquire shares or other securities, cash, other property, or any combination of the foregoing, and if any shares of any holder of a class or series of shares are to be converted in a manner or basis different from any other holder of shares of such class or series, the manner or basis applicable to each such holder; and
(2) May set forth:
(A) Amendments to the articles of incorporation or governing agreements of the surviving corporation or entity;
(B) A provision that the plan may be amended prior to the time the merger has become effective, but if shareholders of a domestic corporation that is a party to the merger or shareholders, partners, or members of a domestic entity that is a party to the merger are required or permitted to vote on the plan, subsequent to approval of the plan by such shareholders, partners, or members the plan may not be amended to change in any respect not expressly authorized by such approving shareholders, partners, or members in connection with the approval of the plan:
(i) The amount or kind of shares or other securities, obligations, rights to acquire shares or other securities, cash, or other property to be received under the plan by the shareholders, partners, or members of any party to the merger if such change would adversely affect such approving shareholders, partners, or members;
(ii) The articles or certificate of incorporation of any domestic or foreign corporation, or the governing agreements of any other entity, that will survive or be created as a result of the merger, except for changes permitted by Code Section 14-2-1002 or by comparable provisions of the law of the state or jurisdiction under which any such other entity was organized or changes that would not adversely affect such approving shareholders, partners, or members; or
(iii) Any of the other terms or conditions of the plan if such change would adversely affect such approving shareholders, partners, or members in any material respect; and
in the event that the plan of merger is amended after articles or a certificate of merger has been filed with the Secretary of State but before the merger has become effective, a certificate of amendment of merger executed on behalf of each party to the merger by an officer or other duly authorized representative shall be delivered to the Secretary of State for filing prior to the effectiveness of the merger; and
(C) Other provisions relating to the merger.
(e) Any of the terms of the plan of merger may be made dependent upon facts ascertainable outside of the plan of merger, provided that the manner in which such facts shall operate upon the terms of the merger is clearly and expressly set forth in the plan of merger. As used in this subsection, the term “facts” includes, but is not limited to, the occurrence of any event, including a determination or action by any person or body, including the corporation.
(f) For a plan of merger to be approved, the board of directors of each merging corporation must recommend the plan of merger to the shareholders in the same manner and to the same extent as provided in Code Section 14-2-1103. In the case of any other entity, the plan of merger shall be approved in the manner required by its governing agreements and in compliance with any applicable laws of the state or jurisdiction under which it was formed. In addition, each of the corporations shall comply with all other Code sections of this chapter which relate to the merger of domestic corporations. Each other entity shall comply with all other provisions of its governing agreements and all provisions of the laws, if any, of the state or jurisdiction in which it was formed which relate to the merger.
(g) Each merging corporation shall comply with the requirements of Code Section 14-2-1105.
(a) As used in this Code section, the term:
(1) “Limited liability company” means any limited liability company formed under Chapter 11 of this title.
(2) “Limited partnership” means any limited partnership formed under Chapter 9 of this title.
(b) Pursuant to Code Section 14-11-212 or 14-9-206.2 and this Code section, a corporation may elect to become a limited liability company or limited partnership if the board of directors adopts and its shareholders approve a plan of conversion.
(c) The plan of conversion must set forth:
(1) The name of the limited liability company or limited partnership to be formed pursuant to such election;
(2) The manner and basis of converting the shares of such corporation into interests as members of the limited liability company to be formed pursuant to such election or interests as partners of the limited partnership to be formed pursuant to such election or a statement that such information is contained in the written operating agreement proposed for such limited liability company or the written limited partnership agreement proposed for such limited partnership;
(3) The effective date and time of such election, if later than the date and time the certificate of conversion is filed;
(4) The contents of the articles of organization that shall be the articles of organization of the limited liability company to be formed pursuant to such election unless and until modified in accordance with the provisions of Chapter 11 of this title or the contents of the certificate of limited partnership that shall be the certificate of limited partnership of the limited partnership to be formed pursuant to such election unless and until modified in accordance with the provisions of Chapter 9 of this title; and
(5)(A) The contents of the written operating agreement to be entered into among the persons who will be the members of the limited liability company to be formed pursuant to such election, which shall, if not separately provided in the plan of election, state:
(i) The manner and basis for the conversion of the shares of such corporation into interests as members of the limited liability company to be formed pursuant to such election; and
(ii) That approval of the election will be deemed to be execution of the operating agreement by such persons; or
(B) The contents of the written limited partnership agreement to be entered into among the persons who will be the partners of the limited partnership to be formed pursuant to such election, which shall, if not separately provided in the plan of conversion, state:
(i) The manner and basis for the conversion of the shares of such corporation into interests as partners of the limited partnership to be formed pursuant to such conversion; and
(ii) That approval of the election will be deemed to be execution of the limited partnership agreement by such persons.
(d) For a plan of conversion to become a limited liability company or limited partnership to be approved:
(1) The board of directors shall submit the plan of conversion approved by the shareholders and shall recommend the plan of conversion to the shareholders in the same manner and subject to the same exceptions as provided in paragraph (1) of subsection (b) of Code Section 14-2-1103, and may condition its submission and provide notice to each shareholder entitled to vote in the same manner as provided in subsections (c) and (d) of Code Section 14-2-1103; and
(2) All of the shareholders must approve the plan of conversion.
(e) The plan of conversion may set forth other provisions relating to the conversion, including a provision that the plan may be amended prior to the time that the conversion has become effective, but subsequent to approval of the plan by shareholders the plan may not be amended to change in any respect not expressly authorized by such shareholders in connection with the approval of the plan:
(1) The amount or kind of interests, shares or other securities, obligations, or rights to acquire interests, shares or other securities to be received under the plan by the shareholders if the change would adversely affect such shareholders; or
(2) Any of the other terms or conditions of the plan if the change would adversely affect such shareholders in any material respect; and
in the event that the plan of conversion is amended after a certificate of conversion has been filed with the Secretary of State but before the conversion has become effective, a certificate of amendment of conversion executed by an officer or other duly authorized representative shall be delivered to the Secretary of State for filing prior to the effectiveness of the conversion.
(f) Any of the terms of the plan of conversion may be made dependent upon facts ascertainable outside of the plan of conversion, provided that the manner in which such facts shall operate upon the terms of the conversion is clearly and expressly set forth in the plan of conversion. As used in this subsection, the term “facts” includes, but is not limited to, the occurrence of any event, including a determination or action by any person or body, including the corporation.
(g) After a conversion is authorized, unless the plan of conversion provides otherwise, and at any time before the conversion has become effective, the planned conversion may be abandoned, subject to any contractual rights, without further shareholder action, in accordance with the procedure set forth in the plan of conversion or, if none is set forth, in the manner determined by the board of directors.
(h) After a plan of conversion is approved by the shareholders, the corporation shall deliver to the Secretary of State for filing a certificate of conversion complying with subsection (b) of Code Section 14-11-212 or subsection (b) of Code Section 14-9-206.2, as applicable.
(a) A foreign corporation, domestic limited partnership, foreign limited partnership, domestic general partnership, foreign general partnership, domestic limited liability company, or foreign limited liability company may elect to become a corporation. Such election shall require the approval of all of the electing entity's partners, members, or shareholders, or such other approval or compliance as may be sufficient under applicable law or the governing documents of the electing entity to authorize such election.
(b) Such election shall be made by delivering a certificate of conversion to the Secretary of State for filing. The certificate shall set forth:
(1) The name and jurisdiction of organization of the entity making the election;
(2) That the entity elects to become a corporation;
(3) The effective date, or the effective date and time, of such conversion if later than the date and time the certificate of conversion is filed;
(4) That the election has been approved as required by subsection (a) of this Code section;
(5) That filed with the certificate of conversion are articles of incorporation that are in the form required by Code Section 14-2-202, setting forth a name for the corporation that satisfies the requirements of Code Section 14-2-401, and stating that such articles of incorporation shall be the articles of incorporation of the corporation formed pursuant to such election unless and until modified in accordance with this chapter; and
(6) If not provided for in the articles of incorporation required by paragraph (5) of this subsection, a statement setting forth the manner and basis for converting the ownership interests in the entity making the election into shares of the corporation formed pursuant to such election.
(c) Upon the election becoming effective:
(1) The electing entity shall become a corporation formed under this chapter by such election, except that the existence of the corporation so formed shall be deemed to have commenced on the date the entity making the election commenced its existence in the jurisdiction in which such entity was first created, formed, incorporated, or otherwise came into being;
(2) The ownership interests in the entity making the conversion shall be converted on the basis stated or referred to in the certificate of conversion in accordance with paragraph (6) of subsection (b) of this Code section;
(3) The articles of incorporation filed with the certificate of conversion shall be the articles of incorporation of the corporation formed pursuant to such election unless and until amended in accordance with this chapter;
(4) The governing documents of the entity making the election shall be of no further force or effect;
(5) The corporation formed by such election shall thereupon and thereafter possess all of the rights, privileges, immunities, franchises, and powers of the entity making the election; all property, real, personal, and mixed, all contract rights, and all debts due to such entity, as well as all other choses in action, and each and every other interest of or belonging to or due to the entity making the election shall be taken and deemed to be vested in the corporation formed by such election without further act or deed; the title to any real estate, or any interest therein, vested in the entity making the election shall not revert or be in any way impaired by reason of such election; and none of such items shall be deemed to have been conveyed, transferred, or assigned by reason of such election for any purpose; and
(6) The corporation formed by such election shall thereupon and thereafter be responsible and liable for all the liabilities and obligations of the entity making the election, and any claim existing or action or proceeding pending by or against such entity may be prosecuted as if such election had not become effective. Neither the rights of creditors nor any liens upon the property of the entity making such election shall be impaired by such election.
(d) A conversion pursuant to this Code section shall not be deemed to constitute a dissolution of the entity making the election and shall constitute a continuation of the existence of the entity making the election in the form of a corporation. A corporation formed by an election pursuant to this Code section shall for all purposes be deemed to be the same entity as the entity making such election.
(e) A corporation formed by an election pursuant to this Code section may file a copy of such certificate of conversion, certified by the Secretary of State, in the office of the clerk of the superior court of the county where any real property owned by such corporation is located and record such certified copy of the certificate of conversion in the books kept by such clerk for recordation of deeds in such county with the entity electing to become a corporation indexed as the grantor and the corporation indexed as the grantee. No real estate transfer tax under Code Section 48-6-1 shall be due with respect to the recordation of such election.
(a) A corporation may elect to become a foreign limited liability company, a foreign limited partnership, or a foreign corporation, if such a conversion is permitted by the law of the state or jurisdiction under whose law the resulting entity would be formed.
(b) To effect a conversion under this Code section, the corporation must adopt a plan of conversion that sets forth the manner and basis of converting the shares of the corporation into interests, shares, obligations, or other securities, as the case may be, of the resulting entity. The plan of conversion may set forth other provisions relating to the conversion.
(c) For the plan of conversion to be adopted:
(1) The board of directors shall submit the plan of conversion for approval by the shareholders and shall recommend the plan of conversion to the shareholders in the same manner and subject to the same exceptions as provided in paragraph (1) of subsection (b) of Code Section 14-2-1103, and may condition its submission and provide notice to each shareholder entitled to vote in the same manner as provided in subsections (c) and (d) of Code Section 14-2-1103; and
(2) All of the shareholders must approve the plan of conversion.
(d) The plan of conversion may set forth other provisions relating to the conversion, including a provision that the plan may be amended prior to the time that the conversion has become effective, but subsequent to approval of the plan by shareholders the plan may not be amended to change in any respect not expressly authorized by such shareholders in connection with the approval of the plan:
(1) The amount or kind of interests, shares or other securities, obligations, or rights to acquire interests, shares or other securities to be received under the plan by the shareholders if the change would adversely affect such shareholders; or
(2) Any of the other terms or conditions of the plan if the change would adversely affect such shareholders in any material respect; and
in the event that the plan of conversion is amended after a certificate of conversion has been filed with the Secretary of State but before the conversion has become effective, a certificate of amendment of conversion executed by an officer or other duly authorized representative shall be delivered to the Secretary of State for filing prior to the effectiveness of the conversion.
(e) Any of the terms of the plan of conversion may be made dependent upon facts ascertainable outside of the plan of conversion, provided that the manner in which such facts shall operate upon the terms of the conversion is clearly and expressly set forth in the plan of conversion. As used in this subsection, the term “facts” includes, but is not limited to, the occurrence of any event, including a determination or action by any person or body, including the corporation.
(f) After a conversion is authorized, unless the plan of conversion provides otherwise, and at any time before the conversion has become effective, the planned conversion may be abandoned, subject to any contractual rights, without further shareholder action, in accordance with the procedure set forth in the plan of conversion or, if none is set forth, in the manner determined by the board of directors.
(g) The conversion shall be effected as provided in, and shall have the effects provided by, the law of the state or jurisdiction under whose law the resulting entity is formed and by the plan of conversion, to the extent not inconsistent with such law.
(h) If the resulting entity is required to obtain a certificate of authority to transact business in this state by the provisions of this title governing foreign corporations, foreign limited partnerships, or foreign limited liability companies, it shall do so pursuant to Code Section 14-2-1501, 14-9-902, or 14-11-705.
(i) After a plan of conversion is approved by the shareholders, the corporation shall deliver to the Secretary of State for filing a certificate of conversion setting forth:
(1) The name of the corporation;
(2) The name and jurisdiction of the entity to which the corporation shall be converted;
(3) The effective date, or the effective date and time, of such conversion if later than the date and time the certificate of conversion is filed;
(4) A statement that the plan of conversion has been adopted as required by subsection (c) of this Code section;
(5) A statement that the authority of its registered agent to accept service on its behalf is revoked as of the effective time of such conversion and that the Secretary of State is irrevocably appointed as the agent for service of process on the resulting entity in any proceeding to enforce an obligation of the corporation arising prior to the effective time of such conversion;
(6) A mailing address to which a copy of any process served on the Secretary of State under paragraph (5) of this subsection may be mailed as provided in subsection (j) of this Code section; and
(7) A statement that the Secretary of State shall be notified of any change in the resulting entity's mailing address.
(j) Upon the conversion's taking effect, the resulting entity is deemed to appoint the Secretary of State as its agent for service of process in a proceeding to enforce any of its obligations arising prior to the effective time of such conversion. Any party that serves process upon the Secretary of State in accordance with this subsection also shall mail a copy of the process to the chief executive officer, chief financial officer, or the secretary of the resulting entity, or a person holding a comparable position, at the mailing address provided in subsection (i) of this Code section.
(k) A converting corporation pursuant to this Code section may file a copy of its certificate of conversion, certified by the Secretary of State, in the office of the clerk of the superior court of the county where any real property owned by such corporation is located and record such certified copy of the certificate of conversion in the books kept by such clerk for recordation of deeds in such county with the corporation indexed as the grantor and the foreign entity indexed as the grantee. No real estate transfer tax otherwise required by Code Section 48-6-1 shall be due with respect to recordation of such certificate of conversion.
As used in this part, the term:
(1) “Affiliate” means a person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a specified person.
(2) “Announcement date” means the date of the first general public announcement of the proposal of the business combination.
(3) “Associate,” when used to indicate a relationship with any person, means:
(A) Any corporation or organization, other than the corporation or a subsidiary of the corporation, of which such person is an officer, director, or partner or is the beneficial owner of 10 percent or more of any class of equity securities;
(B) Any trust or other estate in which such person has a beneficial interest of 10 percent or more or as to which such person serves as trustee or in a similar fiduciary capacity; and
(C) Any relative or spouse of such person, or any relative of such spouse, who has the same home as such person.
(4) “Beneficial owner” means a person shall be considered to be the beneficial owner of any equity securities:
(A) Which such person or any of such person's affiliates or associates owns, directly or indirectly;
(B) Which such person or any of such person's affiliates or associates, directly or indirectly, has:
(i) The right to acquire, whether such right is exercisable immediately or only after the passage of time, pursuant to any agreement, arrangement, or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise; or
(ii) The right to vote pursuant to any agreement, arrangement, or understanding; or
(C) Which are owned, directly or indirectly, by any other person with which such person or any of such person's affiliates or associates has any agreement, arrangement, or understanding for the purpose of acquiring, holding, voting, or disposing of equity securities; provided, however, that a person shall not be considered to be a beneficial owner of any equity securities which (i) have been tendered pursuant to a tender or exchange offer made by such person or such person's affiliates or associates until such tendered stock is accepted for purchase or exchange or (ii) such person or such person's affiliates or associates have the right to vote pursuant to any agreement, arrangement, or understanding if the agreement, arrangement, or understanding to vote such stock arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to ten or more persons.
(5) “Business combination” means:
(A) Any merger of the corporation or any subsidiary with:
(i) Any interested shareholder; or
(ii) Any other corporation, whether or not itself an interested shareholder, which is, or after the merger would be, an affiliate of an interested shareholder that was an interested shareholder prior to the consummation of the transaction;
(B) Any share exchange with (i) any interested shareholder or (ii) any other corporation, whether or not itself an interested shareholder, which is, or after the share exchange would be, an affiliate of an interested shareholder that was an interested shareholder prior to the consummation of the transaction;
(C) Any sale, lease, transfer, or other disposition, other than in the ordinary course of business, in one transaction or in a series of transactions in any 12 month period, to any interested shareholder or any affiliate of any interested shareholder, other than the corporation or any of its subsidiaries, of any assets of the corporation or any subsidiary having, measured at the time the transaction or transactions are approved by the board of directors of the corporation, an aggregate book value as of the end of the corporation's most recently ended fiscal quarter of 10 percent or more of the net assets of the corporation as of the end of such fiscal quarter;
(D) The issuance or transfer by the corporation, or any subsidiary, in one transaction or a series of transactions in any 12 month period, of any equity securities of the corporation or any subsidiary which have an aggregate market value of 5 percent or more of the total market value of the outstanding common and preferred shares of the corporation whose shares are being issued to any interested shareholder or any affiliate of any interested shareholder, other than the corporation or any of its subsidiaries, except pursuant to the exercise of warrants or rights to purchase securities offered pro rata to all holders of the corporation's voting shares or any other method affording substantially proportionate treatment to the holders of voting shares;
(E) The adoption of any plan or proposal for the liquidation or dissolution of the corporation in which anything other than cash will be received by an interested shareholder or any affiliate of any interested shareholder; or
(F) Any reclassification of securities, including any reverse stock split, or recapitalization of the corporation, or any merger of the corporation with any of its subsidiaries, or any share exchange with any of its subsidiaries, which has the effect, directly or indirectly, in one transaction or a series of transactions in any 12 month period, of increasing by 5 percent or more the proportionate amount of the outstanding shares of any class or series of equity securities of the corporation or any subsidiary which is directly or indirectly beneficially owned by any interested shareholder or any affiliate of any interested shareholder.
(6) “Continuing director” means any member of the board of directors who is not an affiliate or associate of an interested shareholder or any of its affiliates, other than the corporation or any of its subsidiaries, and who was a director of the corporation prior to the determination date, and any successor to such continuing director who is not an affiliate or an associate of an interested shareholder or any of its affiliates, other than the corporation or its subsidiaries, and is recommended or elected by a majority of all of the continuing directors.
(7) “Control,” including the terms “controlling,” “controlled by,” and “under common control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise, and the beneficial ownership of shares representing 10 percent or more of the votes entitled to be cast by a corporation's voting shares shall create an irrebuttable presumption of control.
(8) “Corporation,” in addition to the definition contained in Code Section 14-2-140, shall include any trust merging with a domestic corporation pursuant to Code Section 53-12-159.
(9) “Determination date” means the date on which an interested shareholder first became an interested shareholder.
(10) “Fair market value” means:
(A) In the case of securities, the highest closing sale price, during the period beginning with and including the determination date and for 29 days prior to such date, of such a security on the principal United States securities exchange registered under the Securities Exchange Act of 1934 1 on which such securities are listed, or, if such securities are not listed on any such exchange, the highest closing sales price or, if none is available, the average of the highest bid and asked prices reported with respect to such a security, in each case during the 30 day period referred to above, on the National Association of Securities Dealers, Inc., Automatic Quotation System, or any system then in use, or, if no such quotations are available, the fair market value on the date in question of such a security as determined in good faith at a duly called meeting of the board of directors by a majority of all of the continuing directors, or, if there are no continuing directors, by the entire board of directors; and
(B) In the case of property other than securities, the fair market value of such property on the date in question as determined in good faith at a duly called meeting of the board of directors by a majority of all of the continuing directors, or, if there are no continuing directors, by the entire board of directors of the corporation.
(11) “Interested shareholder” means any person, other than the corporation or its subsidiaries, that:
(A) Is the beneficial owner of 10 percent or more of the voting power of the outstanding voting shares of the corporation; or
(B) Is an affiliate of the corporation and, at any time within the two-year period immediately prior to the date in question, was the beneficial owner of 10 percent or more of the voting power of the then outstanding voting shares of the corporation.
For the purpose of determining whether a person is an interested shareholder, the number of voting shares deemed to be outstanding shall not include any unissued voting shares which may be issuable pursuant to any agreement, arrangement, or understanding, or upon exercise of conversion rights, warrants, or options, or otherwise.
(12) “Net assets” means the amount by which the total assets of a corporation exceed the total debts of the corporation.
(13) “Voting shares” means shares entitled to vote generally in the election of directors.
1 15 U.S.C.A. § 78a et seq.
In addition to any vote otherwise required by law or the articles of incorporation of the corporation, a business combination shall be:
(1) Unanimously approved by the continuing directors, provided that the continuing directors constitute at least three members of the board of directors at the time of such approval; or
(2) Recommended by at least two-thirds of the continuing directors and approved by a majority of the votes entitled to be cast by holders of voting shares, other than voting shares beneficially owned by the interested shareholder who is, or whose affiliate is, a party to the business combination.
(a) As used in this Code section, the term “interested shareholder” refers to the interested shareholder which is party to, or an affiliate of which is party to, the business combination in question.
(b) The vote required by Code Section 14-2-1111 does not apply to a business combination if each of the following conditions is met:
(1) The aggregate amount of the cash, and the fair market value as of five days before the consummation of the business combination of consideration other than cash, to be received per share by holders of any class of common shares or any class or series of preferred shares in such business combination is at least equal to the highest of the following:
(A) The highest per share price, including any brokerage commissions, transfer taxes, and soliciting dealers' fees, paid by the interested shareholder for any shares of the same class or series acquired by it:
(i) Within the two-year period immediately prior to the announcement date; or
(ii) In the transaction in which it became an interested shareholder, whichever is higher;
(B) The fair market value per share of such class or series as determined on the announcement date or as determined on the determination date, whichever is higher; or
(C) In the case of shares other than common shares, the highest preferential amount per share to which the holders of shares of such class or series are entitled in the event of any voluntary or involuntary liquidation, dissolution, or winding up of the corporation, provided that this subparagraph shall only apply if the interested shareholder has acquired shares of such class or series within the two-year period immediately prior to the announcement date;
(2) The consideration to be received by holders of any class or series of outstanding shares is to be in cash or in the same form as the interested shareholder has previously paid for shares of the same class or series. If the interested shareholder has paid for shares of any class or series of shares with varying forms of consideration, the form of consideration for such class or series of shares shall be either cash or the form used to acquire the largest number of shares of such class or series previously acquired by it;
(3) After the interested shareholder has become an interested shareholder and prior to the consummation of such business combination:
(A) Unless approved by a majority of the continuing directors, there shall have been:
(i) No failure to declare and pay at the regular date therefor any full periodic dividends, whether or not cumulative, on any outstanding preferred shares of the corporation;
(ii) No reduction in the annual rate of dividends paid on any class of common shares, except as necessary to reflect any subdivision of the shares;
(iii) An increase in such annual rate of dividends as is necessary to reflect any reclassification, including any reverse share split, recapitalization, reorganization, or any similar transaction which has the effect of reducing the number of outstanding shares; and
(iv) No increase in the interested shareholder's percentage ownership of any class or series of shares of the corporation by more than 1 percent in any 12 month period;
(B) The provisions of divisions (i) and (ii) of subparagraph (A) of this paragraph shall not apply if the interested shareholder or an affiliate or associate of the interested shareholder did not vote as a director of the corporation in a manner inconsistent with divisions (i) and (ii) of subparagraph (A) of this paragraph and the interested shareholder, within ten days after any act or failure to act inconsistent with divisions (i) and (ii) of subparagraph (A) of this paragraph, notified the board of directors of the corporation in writing that the interested shareholder disapproved thereof and requested in good faith that the board of directors rectify the act or failure to act; and
(4) After the interested shareholder has become an interested shareholder, the interested shareholder has not received the benefit, directly or indirectly, except proportionately as a shareholder, of any loans, advances, guarantees, pledges, or other financial assistance or any tax credits or other tax advantages provided by the corporation or any of its subsidiaries, whether in anticipation of or in connection with such business combination or otherwise.
(a) The requirements of this part shall not apply to business combinations of a corporation unless the bylaws of the corporation specifically provide that all of such requirements are applicable to the corporation. Such a bylaw may be adopted at any time in the manner provided in this chapter and shall apply to any business combination approved or recommended by the board of directors after the date of the bylaw's adoption. Such a bylaw shall be irrevocable except as provided in subsection (b) of this Code section. Neither the adoption nor the failure to adopt such a bylaw shall constitute grounds for any cause of action against any of the directors of the corporation.
(b) Any bylaw adopted as provided in subsection (a) of this Code section may only be repealed by the affirmative vote of at least two-thirds of the continuing directors and a majority of the votes entitled to be cast by voting shares of the corporation, other than shares beneficially owned by any interested shareholder and affiliates and associates of any interested shareholder, in addition to any other vote required by the articles of incorporation or bylaws to amend the bylaws. Once the bylaw has been repealed in accordance with this subsection, the corporation shall not thereafter be entitled to adopt the bylaw in accordance with subsection (a) of this Code section.
(c) The requirement of Code Section 14-2-1111 shall never apply to business combinations with an interested shareholder or its affiliates if, during the three-year period immediately preceding the consummation of the business combination, the interested shareholder has not at any time during such period:
(1) Ceased to be an interested shareholder; or
(2) Increased its percentage ownership of any class or series of common or preferred shares of the corporation by more than 1 percent in any 12 month period.
(d) Nothing contained in this part shall be deemed to limit in any manner a corporation's right to include in its articles of incorporation or bylaws any provision regarding the approval of business combinations which would not otherwise be prohibited by this article.
For purposes of this part, the definitions contained in Code Section 14-2-1110 shall be applicable with the following exceptions:
(1) For purposes of this part, “business combination” means:
(A) Any merger or consolidation of the resident domestic corporation or any subsidiary with: (i) any interested shareholder; or (ii) any other corporation, whether or not itself an interested shareholder, which is, or after the merger or consolidation would be, an affiliate of an interested shareholder that was an interested shareholder prior to the consummation of the transaction other than as a result of the interested shareholder's ownership of the resident domestic corporation's voting stock;
(B) Any sale, lease, transfer, or other disposition, other than in the ordinary course of business, in one transaction or in a series of transactions, to any interested shareholder or any affiliate or associate of any interested shareholder, other than the resident domestic corporation or any of its subsidiaries, of any assets of the resident domestic corporation or any subsidiary having, measured at the time the transaction or transactions are approved by the board of directors of the resident domestic corporation, an aggregate book value as of the end of the resident domestic corporation's most recently ended fiscal quarter of 10 percent or more of the net assets of the resident domestic corporation as of the end of such fiscal quarter;
(C) The issuance or transfer by the resident domestic corporation, or any subsidiary, in one transaction or a series of transactions, of any equity securities of the resident domestic corporation or any subsidiary which have an aggregate market value of 5 percent or more of the total market value of the outstanding common and preferred shares of the resident domestic corporation whose shares are being issued to any interested shareholder or any affiliate or associate of any interested shareholder, other than the resident domestic corporation or any of its subsidiaries, except pursuant to the exercise of warrants or rights to purchase securities offered pro rata to all holders of the resident domestic corporation's voting shares or any other method affording substantially proportionate treatment to the holders of voting shares, and except pursuant to the exercise or conversion of securities exercisable for or convertible into shares of the resident domestic corporation, or any subsidiary, which securities were outstanding prior to the time that any interested shareholder became such;
(D) The adoption of any plan or proposal for the liquidation or dissolution of the resident domestic corporation;
(E) Any reclassification of securities, including any reverse stock split, or recapitalization of the resident domestic corporation, or any merger or consolidation of the resident domestic corporation with any of its subsidiaries, which has the effect, directly or indirectly, of increasing by 5 percent or more the proportionate amount of the outstanding shares of any class or series of equity securities of the resident domestic corporation or any subsidiary which is directly or indirectly beneficially owned by any interested shareholder or any affiliate of any interested shareholder;
(F) Any receipt by the interested shareholder, or any affiliate or associate of the interested shareholder, other than in the ordinary course of business, of the benefit, directly or indirectly (except proportionately as a shareholder of the corporation), of any loans, advances, guarantees, pledges, or other financial benefits or assistance or any tax credits or other tax advantages provided by or through the resident domestic corporation or any of its subsidiaries; or
(G) Any share exchange with (i) any interested shareholder or (ii) any other corporation, whether or not itself an interested shareholder, which is, or after the share exchange would be, an affiliate of an interested shareholder that was an interested shareholder prior to the consummation of the transaction;
(2) For purposes of this part and Part 2 of this article, the presumption of “control” created by paragraph (7) of Code Section 14-2-1110 shall not apply where such person holds voting stock, in good faith and not for the purpose of circumventing this part or Part 2 of this article, as an agent, bank, broker, nominee, custodian, or trustee for one or more owners who do not individually or as a group have control of the corporation; and
(3) For purposes of this part, a “resident domestic corporation” means:
(A) An issuer of voting stock which is organized under the laws of this state and which has at least 100 beneficial owners in this state and either:
(i) Has its principal office located in this state;
(ii) Has at least 10 percent of its outstanding voting shares beneficially owned by residents of this state;
(iii) Has at least 10 percent of the holders of its outstanding voting shares beneficially owned by residents of this state; or
(iv) Owns or controls assets located in this state which represent the lesser of (I) substantially all of its assets or (II) assets having a market value of at least $25 million. For purposes of this Code section, “substantially all of the corporate assets” means either one-half of the value of the assets of the corporation or the assets of the corporation located in this state which generate more than one-half of the total revenues of the corporation, all on a consolidated basis; and
(B) For purposes of divisions (ii) and (iii) of subparagraph (A) of this paragraph, a holder of voting shares that is a corporation shall be deemed to be located in this state if such corporation is organized under the laws of this state.
(a) Notwithstanding any other provision of this chapter (except for the provisions of subsection (b) of this Code section and Code Section 14-2-1133), a resident domestic corporation shall not engage in any business combination with any interested shareholder for a period of five years following the time that such shareholder became an interested shareholder, unless:
(1) Prior to such time the resident domestic corporation's board of directors approved either the business combination or the transaction which resulted in the shareholder becoming an interested shareholder;
(2) In the transaction which resulted in the shareholder becoming an interested shareholder, the interested shareholder became the beneficial owner of at least 90 percent of the voting stock of the resident domestic corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned by: (A) persons who are directors or officers, their affiliates, or associates; (B) subsidiaries of the resident domestic corporation; and (C) any employee stock plan under which participants do not have the right (as determined exclusively by reference to the terms of such plan and any trust which is part of such plan) to determine confidentially the extent to which shares held under such plan will be tendered in a tender or exchange offer; or
(3) Subsequent to becoming an interested shareholder, such shareholder acquired additional shares resulting in the interested shareholder being the beneficial owner of at least 90 percent of the outstanding voting stock of the resident domestic corporation, excluding for purposes of determining the number of shares outstanding those shares owned by (A) persons who are directors or officers of the resident domestic corporation, their affiliates, or associates; (B) subsidiaries of the resident domestic corporation; and (C) any employee stock plan under which participants do not have the right (as determined exclusively by reference to the terms of such plan and any trust which is part of such plan) to determine confidentially the extent to which shares held under such plan will be tendered in a tender or exchange offer, and the business combination was approved at an annual or special meeting of shareholders by the holders of a majority of the voting stock entitled to vote thereon, excluding from said vote, for the purpose of this paragraph only, the voting stock beneficially owned by the interested shareholder or by (A) persons who are directors or officers of the resident domestic corporation, their affiliates, or associates; (B) subsidiaries of the resident domestic corporation; and (C) any employee stock plan under which participants do not have the right (as determined exclusively by reference to the terms of such plan and any trust which is part of such plan) to determine confidentially the extent to which shares held under such plan will be tendered in a tender or exchange offer.
(b) The restrictions contained in this Code section shall not apply if a shareholder: (1) becomes an interested shareholder inadvertently; (2) as soon as practicable divests sufficient shares so that the shareholder ceases to be an interested shareholder; and (3) would not, at any time within the five-year period immediately prior to a business combination between the resident domestic corporation and such shareholder, have been an interested shareholder but for the inadvertent acquisition.
(a) The requirements of this part shall not apply to business combinations with interested shareholders unless the bylaws of the resident domestic corporation specifically provide that all of such requirements are applicable to the resident domestic corporation. Such a bylaw may be adopted at any time in the manner provided in this chapter and shall apply to any business combination with an interested shareholder after the date of the bylaw's adoption, provided that such bylaw shall not apply to restrict a business combination between the corporation and an interested shareholder of the resident domestic corporation if the interested shareholder became such prior to the effective date of the bylaw. Such a bylaw shall be irrevocable except as provided in subsection (b) of this Code section. Neither the adoption nor the failure to adopt such a bylaw shall constitute grounds for any cause of action against any of the directors of the resident domestic corporation.
(b) Any bylaw adopted as provided in subsection (a) of this Code section may only be repealed by the affirmative vote of at least two-thirds of the continuing directors and a majority of the votes entitled to be cast by voting shares of the resident domestic corporation, other than shares beneficially owned by an interested shareholder, in addition to any other vote required by the articles of incorporation or bylaws to amend the bylaws. Any action to repeal any bylaw in accordance with this subsection shall not be effective until 18 months after the shareholder vote to effect such repeal and shall not apply to any business combination between such resident domestic corporation and any person who became an interested shareholder of such resident domestic corporation on or prior to such repeal. Once the bylaw has been repealed in accordance with this subsection, the resident domestic corporation shall not thereafter be entitled to adopt the bylaw in accordance with subsection (a) of this Code section.
(c) Nothing contained in this part shall be deemed to limit in any manner a resident domestic corporation's right to include in its articles of incorporation or bylaws any provision regarding the approval of business combinations which would not otherwise be prohibited by this chapter.
(d) Nothing contained in this part shall be construed to alter in any manner the rights of a resident domestic corporation to adopt a bylaw pursuant to Code Section 14-2-1113. The requirements of any bylaw adopted under this part will be in addition to the requirements of any bylaw adopted pursuant to Part 2 of this article.
(e) Nothing contained in Part 2 of this article shall be construed to alter in any manner the rights of a resident domestic corporation to adopt a bylaw pursuant to this Code section. The requirements of any bylaw adopted under Part 2 of this article will be in addition to the requirements of any bylaw adopted pursuant to this part.
(a) As used in this Code section, the term “insolvent” means:
(1) The corporation would not be able to pay its debts as they become due in the usual course of business; or
(2) The corporation's total assets would be less than the sum of its total liabilities.
(b) A corporation may, on the terms and conditions and for the consideration determined by the board of directors:
(1) Sell, lease, exchange, or otherwise dispose of all or substantially all of its property if:
(A) The corporation is insolvent and a sale for cash or its equivalent is deemed advisable by the board to meet the liabilities of the corporation; or
(B) The corporation was incorporated for the purpose of liquidating such property and assets;
(2) Mortgage, pledge, dedicate to the repayment of indebtedness, whether with or without recourse, or otherwise encumber any or all of its property whether or not in the usual and regular course of business;
(3) Transfer any or all of its property to a corporation all the shares of which are owned by the corporation; or
(4) Sell, lease, exchange, or otherwise dispose of less than all or substantially all of its property. Assets shall be deemed to be less than substantially all of a corporation's property if the fair value of the assets as of the date of the most recent available financial information does not exceed two-thirds of the fair value of all of the assets of the corporation, and the annual revenues of the corporation for the most recent fiscal year for which such financial information is available represented or produced by such assets do not exceed two-thirds of the total revenues of the corporation for that period. This subsection is intended merely to create an irrebuttable presumption with respect to transactions described in this subsection and shall not create any inference that the sale of assets exceeding the amounts described in this subsection is the sale of substantially all of the property of the corporation.
(c) Unless the articles of incorporation require it, approval by the shareholders of a transaction described in subsection (b) of this Code section is not required.
(a) A corporation may sell, lease, exchange, or otherwise dispose of all or substantially all of its property (with or without the good will), otherwise than pursuant to Code Section 14-2-1201, on the terms and conditions and for the consideration determined by the corporation's board of directors, if the board of directors proposes and its shareholders approve the proposed transaction.
(b) For a transaction to be authorized:
(1) The board of directors shall also transmit to the shareholders a recommendation that the shareholders approve the proposed disposition, unless the board of directors makes a determination that, because of conflicts of interest or other special circumstances, it should either refrain from making such a recommendation or recommend that the shareholders reject or vote against the plan, in which case the board of directors shall transmit to the shareholders the basis for such determination; and
(2) The shareholders entitled to vote must approve the transaction.
(c) The board of directors may condition its submission of the proposed transaction, the effectiveness of the proposed transaction, or both on any basis.
(d) The corporation shall notify each shareholder entitled to vote of the proposed shareholders' meeting in accordance with Code Section 14-2-705. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the sale, lease, exchange, or other disposition of all or substantially all of the property of the corporation and contain or be accompanied by a description of the transaction.
(e) Unless the articles of incorporation, the bylaws, or the board of directors (acting pursuant to subsection (c) of this Code section) require a greater vote or a vote by voting groups, the transaction to be authorized must be approved by a majority of all the votes entitled to be cast on the transaction.
(f) After a sale, lease, exchange, or other disposition of property is authorized, the transaction may be abandoned (subject to any contractual rights) without further shareholder action.
(g) A transaction that constitutes a distribution is governed by Code Section 14-2-640 and not by this Code section.
As used in this article, the term:
(1) “Beneficial shareholder” means the person who is a beneficial owner of shares held in a voting trust or by a nominee as the record shareholder.
(2) “Corporate action” means the transaction or other action by the corporation that creates dissenters' rights under Code Section 14-2-1302.
(3) “Corporation” means the issuer of shares held by a dissenter before the corporate action, or the surviving or acquiring corporation by merger or share exchange of that issuer.
(4) “Dissenter” means a shareholder who is entitled to dissent from corporate action under Code Section 14-2-1302 and who exercises that right when and in the manner required by Code Sections 14-2-1320 through 14-2-1327.
(5) “Fair value,” with respect to a dissenter's shares, means the value of the shares immediately before the effectuation of the corporate action to which the dissenter objects, excluding any appreciation or depreciation in anticipation of the corporate action.
(6) “Interest” means interest from the effective date of the corporate action until the date of payment, at a rate that is fair and equitable under all the circumstances.
(7) “Record shareholder” means the person in whose name shares are registered in the records of a corporation or the beneficial owner of shares to the extent of the rights granted by a nominee certificate on file with a corporation.
(8) “Shareholder” means the record shareholder or the beneficial shareholder.
(a) A record shareholder of the corporation is entitled to dissent from, and obtain payment of the fair value of his or her shares in the event of, any of the following corporate actions:
(1) Consummation of a plan of merger to which the corporation is a party:
(A) If approval of the shareholders of the corporation is required for the merger by Code Section 14-2-1103 or the articles of incorporation and the shareholder is entitled to vote on the merger, unless:
(i) The corporation is merging into a subsidiary corporation pursuant to Code Section 14-2-1104;
(ii) Each shareholder of the corporation whose shares were outstanding immediately prior to the effective time of the merger shall receive a like number of shares of the surviving corporation, with designations, preferences, limitations, and relative rights identical to those previously held by each shareholder; and
(iii) The number and kind of shares of the surviving corporation outstanding immediately following the effective time of the merger, plus the number and kind of shares issuable as a result of the merger and by conversion of securities issued pursuant to the merger, shall not exceed the total number and kind of shares of the corporation authorized by its articles of incorporation immediately prior to the effective time of the merger; or
(B) If the corporation is a subsidiary that is merged with its parent under Code Section 14-2-1104;
(2) Consummation of a plan of share exchange to which the corporation is a party as the corporation whose shares will be acquired, if the shareholder is entitled to vote on the plan;
(3) Consummation of a sale or exchange of all or substantially all of the property of the corporation if a shareholder vote is required on the sale or exchange pursuant to Code Section 14-2-1202, but not including a sale pursuant to court order or a sale for cash pursuant to a plan by which all or substantially all of the net proceeds of the sale will be distributed to the shareholders within one year after the date of sale;
(4) An amendment of the articles of incorporation with respect to a class or series of shares that reduces the number of shares of a class or series owned by the shareholder to a fraction of a share if the fractional share so created is to be acquired for cash under Code Section 14-2-604;
(5) Consummation of an action described in subsection (a) or (b) of Code Section 14-2-1805;
(6) Any corporate action taken pursuant to a shareholder vote to the extent that Article 9 of this chapter, the articles of incorporation, the bylaws, or a resolution of the board of directors provides that voting or nonvoting shareholders are entitled to dissent and obtain payment for their shares; or
(7) Consummation of a division, as defined in Code Section 33-14-120, to which the corporation is a party, provided any such appraisal is subject to the limitations of Code Section 33-14-127.
(b) A shareholder entitled to dissent and obtain payment for his or her shares under this article may not challenge the corporate action creating his or her entitlement unless the corporate action fails to comply with procedural requirements of this chapter or the articles of incorporation or bylaws of the corporation or the vote required to obtain approval of the corporate action was obtained by fraudulent and deceptive means, regardless of whether the shareholder has exercised dissenter's rights.
(c) Notwithstanding any other provision of this article, there shall be no right of dissent in favor of the holder of shares of any class or series which, at the record date fixed to determine the shareholders entitled to receive notice of and to vote at a meeting at which a plan of merger or share exchange or a sale or exchange of property or an amendment of the articles of incorporation is to be acted on, were either listed on a national securities exchange or held of record by more than 2,000 shareholders, unless:
(1) In the case of a plan of merger or share exchange, any holders of shares of the class or series are required under the plan of merger or share exchange to accept for their shares:
(A) Anything except shares of the surviving corporation or another publicly held corporation which at the effective date of the merger or share exchange are either listed on a national securities exchange or held of record by more than 2,000 shareholders, except for scrip or cash payments in lieu of fractional shares; or
(B) Any shares of the surviving corporation or another publicly held corporation which at the effective date of the merger or share exchange are either listed on a national securities exchange or held of record by more than 2,000 shareholders that are different, in type or exchange ratio per share, from the shares to be provided or offered to any other holder of shares of the same class or series of shares in exchange for such shares; or
(2) The articles of incorporation or a resolution of the board of directors approving the transaction provides otherwise.
A record shareholder may assert dissenters' rights as to fewer than all the shares registered in his name only if he dissents with respect to all shares beneficially owned by any one beneficial shareholder and notifies the corporation in writing of the name and address of each person on whose behalf he asserts dissenters' rights. The rights of a partial dissenter under this Code section are determined as if the shares as to which he dissents and his other shares were registered in the names of different shareholders.
(a) If proposed corporate action creating dissenters' rights under Code Section 14-2-1302 is submitted to a vote at a shareholders' meeting, the meeting notice must state that shareholders are or may be entitled to assert dissenters' rights under this article and be accompanied by a copy of this article.
(b) If corporate action creating dissenters' rights under Code Section 14-2-1302 is taken without a vote of shareholders, the corporation shall notify in writing all shareholders entitled to assert dissenters' rights that the action was taken and send them the dissenters' notice described in Code Section 14-2-1322 no later than ten days after the corporate action was taken.
(a) If proposed corporate action creating dissenters' rights under Code Section 14-2-1302 is submitted to a vote at a shareholders' meeting, a record shareholder who wishes to assert dissenters' rights:
(1) Must deliver to the corporation before the vote is taken written notice of his intent to demand payment for his shares if the proposed action is effectuated; and
(2) Must not vote his shares in favor of the proposed action.
(b) A record shareholder who does not satisfy the requirements of subsection (a) of this Code section is not entitled to payment for his shares under this article.
(a) If proposed corporate action creating dissenters' rights under Code Section 14-2-1302 is authorized at a shareholders' meeting, the corporation shall deliver a written dissenters' notice to all shareholders who satisfied the requirements of Code Section 14-2-1321.
(b) The dissenters' notice must be sent no later than ten days after the corporate action was taken and must:
(1) State where the payment demand must be sent and where and when certificates for certificated shares must be deposited;
(2) Inform holders of uncertificated shares to what extent transfer of the shares will be restricted after the payment demand is received;
(3) Set a date by which the corporation must receive the payment demand, which date may not be fewer than 30 nor more than 60 days after the date the notice required in subsection (a) of this Code section is delivered; and
(4) Be accompanied by a copy of this article.
(a) A record shareholder sent a dissenters' notice described in Code Section 14-2-1322 must demand payment and deposit his certificates in accordance with the terms of the notice.
(b) A record shareholder who demands payment and deposits his shares under subsection (a) of this Code section retains all other rights of a shareholder until these rights are canceled or modified by the taking of the proposed corporate action.
(c) A record shareholder who does not demand payment or deposit his share certificates where required, each by the date set in the dissenters' notice, is not entitled to payment for his shares under this article.
(a) The corporation may restrict the transfer of uncertificated shares from the date the demand for their payment is received until the proposed corporate action is taken or the restrictions released under Code Section 14-2-1326.
(b) The person for whom dissenters' rights are asserted as to uncertificated shares retains all other rights of a shareholder until these rights are canceled or modified by the taking of the proposed corporate action.
(a) Except as provided in Code Section 14-2-1327, within ten days of the later of the date the proposed corporate action is taken or receipt of a payment demand, the corporation shall by notice to each dissenter who complied with Code Section 14-2-1323 offer to pay to such dissenter the amount the corporation estimates to be the fair value of his or her shares, plus accrued interest.
(b) The offer of payment must be accompanied by:
(1) The corporation's balance sheet as of the end of a fiscal year ending not more than 16 months before the date of payment, an income statement for that year, a statement of changes in shareholders' equity for that year, and the latest available interim financial statements, if any;
(2) A statement of the corporation's estimate of the fair value of the shares;
(3) An explanation of how the interest was calculated;
(4) A statement of the dissenter's right to demand payment under Code Section 14-2-1327; and
(5) A copy of this article.
(c) If the shareholder accepts the corporation's offer by written notice to the corporation within 30 days after the corporation's offer or is deemed to have accepted such offer by failure to respond within said 30 days, payment for his or her shares shall be made within 60 days after the making of the offer or the taking of the proposed corporate action, whichever is later.
(a) If the corporation does not take the proposed action within 60 days after the date set for demanding payment and depositing share certificates, the corporation shall return the deposited certificates and release the transfer restrictions imposed on uncertificated shares.
(b) If, after returning deposited certificates and releasing transfer restrictions, the corporation takes the proposed action, it must send a new dissenters' notice under Code Section 14-2-1322 and repeat the payment demand procedure.
(a) A dissenter may notify the corporation in writing of his own estimate of the fair value of his shares and amount of interest due, and demand payment of his estimate of the fair value of his shares and interest due, if:
(1) The dissenter believes that the amount offered under Code Section 14-2-1325 is less than the fair value of his shares or that the interest due is incorrectly calculated; or
(2) The corporation, having failed to take the proposed action, does not return the deposited certificates or release the transfer restrictions imposed on uncertificated shares within 60 days after the date set for demanding payment.
(b) A dissenter waives his or her right to demand payment under this Code section and is deemed to have accepted the corporation's offer unless he or she notifies the corporation of his or her demand in writing under subsection (a) of this Code section within 30 days after the corporation offered payment for his or her shares, as provided in Code Section 14-2-1325.
(c) If the corporation does not offer payment within the time set forth in subsection (a) of Code Section 14-2-1325:
(1) The shareholder may demand the information required under subsection (b) of Code Section 14-2-1325, and the corporation shall provide the information to the shareholder within ten days after receipt of a written demand for the information; and
(2) The shareholder may at any time, subject to the limitations period of Code Section 14-2-1332, notify the corporation of his own estimate of the fair value of his shares and the amount of interest due and demand payment of his estimate of the fair value of his shares and interest due.
(a) If a demand for payment under Code Section 14-2-1327 remains unsettled, the corporation shall commence a proceeding within 60 days after receiving the payment demand and petition the court to determine the fair value of the shares and accrued interest. If the corporation does not commence the proceeding within the 60 day period, it shall pay each dissenter whose demand remains unsettled the amount demanded.
(b) The corporation shall commence the proceeding, which shall be a nonjury equitable valuation proceeding, in the superior court of the county where a corporation's registered office is located. If the surviving corporation is a foreign corporation without a registered office in this state, it shall commence the proceeding in the county in this state where the registered office of the domestic corporation merged with or whose shares were acquired by the foreign corporation was located.
(c) The corporation shall make all dissenters, whether or not residents of this state, whose demands remain unsettled parties to the proceeding, which shall have the effect of an action quasi in rem against their shares. The corporation shall serve a copy of the petition in the proceeding upon each dissenting shareholder who is a resident of this state in the manner provided by law for the service of a summons and complaint, and upon each nonresident dissenting shareholder either by registered or certified mail or statutory overnight delivery or by publication, or in any other manner permitted by law.
(d) The jurisdiction of the court in which the proceeding is commenced under subsection (b) of this Code section is plenary and exclusive. The court may appoint one or more persons as appraisers to receive evidence and recommend decision on the question of fair value. The appraisers have the powers described in the order appointing them or in any amendment to it. Except as otherwise provided in this chapter, Chapter 11 of Title 9, known as the “Georgia Civil Practice Act,” applies to any proceeding with respect to dissenters' rights under this chapter.
(e) Each dissenter made a party to the proceeding is entitled to judgment for the amount which the court finds to be the fair value of his shares, plus interest to the date of judgment.
(a) The court in an appraisal proceeding commenced under Code Section 14-2-1330 shall determine all costs of the proceeding, including the reasonable compensation and expenses of appraisers appointed by the court, but not including fees and expenses of attorneys and experts for the respective parties. The court shall assess the costs against the corporation, except that the court may assess the costs against all or some of the dissenters, in amounts the court finds equitable, to the extent the court finds the dissenters acted arbitrarily, vexatiously, or not in good faith in demanding payment under Code Section 14-2-1327.
(b) The court may also assess the fees and expenses of attorneys and experts for the respective parties, in amounts the court finds equitable:
(1) Against the corporation and in favor of any or all dissenters if the court finds the corporation did not substantially comply with the requirements of Code Sections 14-2-1320 through 14-2-1327; or
(2) Against either the corporation or a dissenter, in favor of any other party, if the court finds that the party against whom the fees and expenses are assessed acted arbitrarily, vexatiously, or not in good faith with respect to the rights provided by this article.
(c) If the court finds that the services of attorneys for any dissenter were of substantial benefit to other dissenters similarly situated, and that the fees for those services should not be assessed against the corporation, the court may award to these attorneys reasonable fees to be paid out of the amounts awarded the dissenters who were benefited.
No action by any dissenter to enforce dissenters' rights shall be brought more than three years after the corporate action was taken, regardless of whether notice of the corporate action and of the right to dissent was given by the corporation in compliance with the provisions of Code Section 14-2-1320 and Code Section 14-2-1322.
A majority of the incorporators or initial directors of a corporation that has not issued shares or has not commenced business may dissolve the corporation by delivering to the Secretary of State for filing articles of dissolution that set forth:
(1) The name of the corporation;
(2) The date of its incorporation;
(3) Either that:
(A) None of the corporation's shares has been issued; or
(B) The corporation has not commenced business;
(4) That no debt of the corporation remains unpaid;
(5) That the net assets of the corporation remaining after winding up have been distributed to the shareholders, if shares were issued; and
(6) That a majority of the incorporators or initial directors authorized the dissolution.
(a) A corporation's board of directors may propose dissolution for submission to the shareholders.
(b) For a proposal to dissolve to be adopted:
(1) The board of directors shall also transmit to the shareholders a recommendation that the shareholders approve the proposed dissolution, unless the board of directors makes the recommendation that because of conflicts of interest or other special circumstances, it should either refrain from making such a recommendation or recommend that the shareholders reject or vote against dissolution, in which case the board of directors shall transmit to the shareholders the basis for such determination; and
(2) The shareholders entitled to vote must approve the proposal to dissolve as provided in subsection (e) of this Code section.
(c) The board of directors may condition its submission of the proposal for dissolution on any basis.
(d) The corporation shall notify each shareholder entitled to vote of the proposed shareholders' meeting in accordance with Code Section 14-2-705. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider dissolving the corporation.
(e) Unless the articles of incorporation or the board of directors (acting pursuant to subsection (c) of this Code section) requires a greater vote or a vote by voting groups, the proposal to dissolve to be adopted must be approved by a majority of all the votes entitled to be cast on that proposal.
Upon approval of a proposal for dissolution pursuant to Code Section 14-2-1402, the corporation shall begin dissolution by delivering to the Secretary of State for filing a notice of intent to dissolve setting forth:
(1) The name of the corporation;
(2) The date dissolution was authorized;
(3) If shareholder approval was required for dissolution, a statement that dissolution was duly approved by the shareholders in accordance with Code Section 14-2-1402.
(a) Together with the notice of intent to dissolve provided for in Code Section 14-2-1403, the corporation shall deliver to the Secretary of State an undertaking (which may appear in the notice of intent to dissolve or be set forth in a letter or other instrument executed by an officer or any person authorized to act on behalf of such corporation) that the request for publication of a notice of intent to voluntarily dissolve the corporation and payment therefor will be made as required by subsection (b) of this Code section.
(b) No later than the next business day after filing the notice of intent to dissolve provided for in Code Section 14-2-1403, the corporation shall mail or deliver to the publisher of a newspaper which is the official organ of the county where the registered office of the corporation is located or which is a newspaper of general circulation published within such county whose most recently published annual statement of ownership and circulation reflects a minimum of 60 percent paid circulation a request to publish a notice in substantially the following form:
“NOTICE OF INTENT TO VOLUNTARILY DISSOLVE A CORPORATION
Notice is given that a notice of intent to dissolve _____ (name of corporation), a Georgia corporation with its registered office at _____ (address of registered office), has been delivered to the Secretary of State for filing in accordance with the Georgia Business Corporation Code.”
The notice may also include the information specified in Code Section 14-2-1407. The request for publication of the notice shall be accompanied by a check, draft, or money order in the amount of $40.00 in payment of the cost of publication. The notice shall be published once a week for two consecutive weeks commencing within ten days after receipt of the notice by the newspaper. Failure on the part of the corporation to mail or deliver the notice or payment therefor or failure on the part of the newspaper to publish the notice in compliance with this subsection shall not invalidate the dissolution of the corporation.
(a) A corporation may revoke its dissolution proceedings at any time prior to the filing of articles of dissolution.
(b) Revocation of dissolution proceedings must be authorized in the same manner as the dissolution was authorized unless that authorization permitted revocation by action by the board of directors alone, in which event the board of directors may revoke the dissolution without shareholder action.
(c) After the revocation of dissolution proceedings is authorized, the corporation may revoke the dissolution proceedings by delivering to the Secretary of State for filing a notice of revocation of intent to dissolve, together with a copy of its notice of intent to dissolve, that sets forth:
(1) The name of the corporation;
(2) The date that the revocation of dissolution proceedings was authorized;
(3) If the corporation's board of directors or incorporators revoked the dissolution proceedings, a statement to that effect;
(4) If the corporation's board of directors revoked the dissolution proceedings authorized by the shareholders, a statement that revocation was permitted by action by the board of directors alone pursuant to that authorization; and
(5) If shareholder action was required to revoke the dissolution proceedings, the information required by paragraph (3) of Code Section 14-2-1403.
(d) Revocation of dissolution proceedings is effective when a notice of revocation of intent to dissolve is filed.
(e) When the revocation of dissolution proceedings is effective, it relates back to and takes effect as of the effective date of the filing of the notice of intent to dissolve and the corporation resumes carrying on its business as if dissolution proceedings had never occurred.
A corporation that has filed a notice of intent to dissolve continues its corporate existence but may not carry on any business except that appropriate to wind up and liquidate its business and affairs, including:
(1) Collecting its assets;
(2) Disposing of its properties that will not be distributed in kind to its shareholders;
(3) Discharging or making provision for discharging its liabilities;
(4) Distributing its remaining property among its shareholders according to their interests; and
(5) Doing every other act necessary to wind up and liquidate its business and affairs.
(a) A corporation that has filed a notice of intent to dissolve may dispose of the known claims against it by following the procedure described in this Code section.
(b) The corporation in dissolution shall notify its known claimants in writing of the dissolution proceedings at any time after the filing of the notice of intent to dissolve. The written notice must:
(1) Describe information that must be included in a claim;
(2) Provide a mailing address where a claim may be sent;
(3) State the deadline, which may not be less than six months from the effective date of the written notice, by which the dissolved corporation must receive the claim;
(4) State that the claim will be barred if not received by the deadline; and
(5) State that the corporation will give notice of acceptance or rejection of all claims that are received in timely fashion within six months of the deadline for receipt of claims.
(c) A claim against a corporation in dissolution is barred:
(1) If a claimant who was given written notice under subsection (b) of this Code section does not deliver the claim to the dissolved corporation by the deadline; or
(2) If a claimant whose claim was rejected by the dissolved corporation does not commence a proceeding to enforce the claim within one year from the effective date of the rejection notice.
(d) For purposes of this Code section, the term “claim” does not include a contingent liability or a claim based on an event occurring after the filing of the notice of intent to dissolve.
(a) A corporation that has filed a notice of intent to dissolve may include in the notice of its intent to dissolve published under Code Section 14-2-1403.1 a request that persons with claims against the corporation present them in accordance with subsection (b) of this Code section.
(b) The request must:
(1) Describe the information that must be included in a claim and provide a mailing address where the claim may be sent; and
(2) State that, except for claims that are contingent at the time of the filing of the notice of intent to dissolve or that arise after the filing of the notice of intent to dissolve, a claim against the corporation not otherwise barred will be barred unless a proceeding to enforce the claim is commenced within two years after the publication of the notice.
(c) If a corporation that has filed a notice of intent to dissolve publishes a newspaper notice containing the information specified in subsection (b) of this Code section, all claims not otherwise barred will be barred unless the claimant commences a proceeding to enforce the claim against the dissolved corporation within two years after the publication date of the newspaper notice except:
(1) Claims that are contingent at the time of the filing of the notice of intent to dissolve; and
(2) Claims that arise after the filing of the notice of intent to dissolve.
(d) If a corporation in dissolution publishes a newspaper notice containing the information specified in subsection (b) of this Code section, a claim not otherwise barred of a claimant whose claim is contingent or based on an event occurring after the filing of the notice of intent to dissolve is barred against the corporation, its shareholders, officers, and directors unless the claimant commences a proceeding to enforce the claim against the dissolved corporation within two years after the date of filing of articles of dissolution or five years after the date of publication in accordance with subsection (b) of this Code section, whichever is later.
(e) Subject to the provisions of this Code section, a claim against a corporation in dissolution or against a dissolved corporation may be enforced under this Code section:
(1) Against the corporation, to the extent of its undistributed assets; or
(2) If the assets have been distributed in liquidation, against a shareholder of the corporation to the extent of his pro rata share of the claim or the corporate assets distributed to him in liquidation, whichever is less, but a shareholder's total liability for all claims under this Code section may not exceed the total amount of assets distributed to him.
(a) If a notice of intent to dissolve under Code Section 14-2-1403 has not been revoked, when all known debts, liabilities, and obligations of the corporation have been paid and discharged, or adequate provision made therefor, the corporation may dissolve by delivering to the Secretary of State for filing articles of dissolution setting forth:
(1) The name of the corporation;
(2) The date on which a notice of intent to dissolve was filed and a statement that it has not been revoked;
(3) A statement that all known debts, liabilities, and obligations of the corporation have been paid and discharged, or that adequate provision has been made therefor;
(4) A statement that all remaining property and assets of the corporation have been distributed among its shareholders in accordance with their respective rights and interests, or that adequate provision has been made therefor, or that such property and assets have been deposited with the Office of the State Treasurer as provided in Code Section 14-2-1440; and
(5) A statement that there are no actions pending against the corporation in any court, or that adequate provision has been made for the satisfaction of any judgment, order, or decree which may be entered against it in any pending action.
(b) Upon filing of articles of dissolution the corporation shall cease to exist, except for the purpose of actions or other proceedings, which may be brought against the corporation by service upon any of its last executive officers named in its last annual registration, and except for such actions as the shareholders, directors, and officers take to protect any remedy, right, or claim on behalf of the corporation, or to defend, compromise, or settle any claim against the corporation, all of which may proceed in the corporate name.
(c) Deeds or other transfer instruments requiring execution after the dissolution of a corporation may be signed by any two of the last officers or directors of the corporation and shall operate to convey the interest of the corporation in the real estate or other property described.
(a) A corporation that has been dissolved by the expiration of its period of duration but which has continued in business notwithstanding the expiration, may revive its corporate existence by amending its articles of incorporation at any time during a period of ten years immediately following the expiration date fixed by the articles of incorporation, so as to extend its period of duration.
(b) If a corporation whose period of duration has expired has failed to revive its corporate existence within ten years of the expiration date fixed by its articles of incorporation as provided in subsection (a) of this Code section, the corporation may thereafter revive its corporate existence by amending its articles of incorporation so as to extend its period of duration at any time during the period beginning ten years, and ending 20 years, immediately following the expiration date fixed by its articles of incorporation and filing with the Secretary of State an affidavit attested by one or more of its officers or directors, stating as follows:
(1) That the corporation has continued in business, notwithstanding the expiration of its period of duration, at all times since the expiration date fixed by its articles of incorporation;
(2) That the corporation has not been disqualified from making distributions for the reasons set out in subsection (c) of Code Section 14-2-640 since such expiration date; and
(3) That the revival will not injure the corporation's shareholders, creditors, or the public.
(c) As of the effective date of the amendment of articles of incorporation pursuant to subsection (a) or (b) of this Code section, the corporate existence shall be deemed to have continued without interruption from the former expiration date. If, during the period between expiration and revival, the name of the corporation has been assumed, reserved, or registered by any other person or corporation, the revived corporation shall not engage in business until it has amended its articles of incorporation to change its name.
The dissolution of a corporation in any manner, except by a decree of the superior court when the court has supervised the liquidation of the assets and business of the corporation as provided in Code Sections 14-2-1430 through 14-2-1433, shall not take away or impair any remedy available to such corporation, its directors, officers, or shareholders for any right or claim existing prior to such dissolution if action or other proceeding thereon is pending on the date of such dissolution or is commenced within two years after the date of such dissolution. Any such action or proceeding by the corporation may be prosecuted by the corporation in its corporate name. The shareholders, directors, and officers shall have power to take such corporate or other action as shall be appropriate to protect such remedy, right, or claim.
The Secretary of State may commence a proceeding under Code Section 14-2-1421 to dissolve a corporation administratively if:
(1) The state revenue commissioner has certified to the Secretary of State that the corporation has failed to file a license or occupation tax return and that a period of one year has expired since the last day permitted for timely filing without the filing and payment of all required license and occupation taxes and penalties by the corporation; provided, however, that dissolution proceedings shall be stayed so long as the corporation is contesting, in good faith, in any appropriate proceeding, the alleged grounds for dissolution;
(2) The corporation does not deliver its annual registration to the Secretary of State, together with all required fees and penalties, within 60 days after it is due;
(3) The corporation is without a registered agent or registered office in this state for 60 days or more;
(4) The corporation does not notify the Secretary of State within 60 days that its registered agent or registered office has been changed, that its registered agent has resigned, or that its registered office has been discontinued;
(5) The corporation pays a fee as required to be collected by the Secretary of State pursuant to the Code by a check or some other form of payment which is dishonored and the corporation or its incorporator or its agent does not submit payment for said dishonored payment within 60 days from notice of nonpayment issued by the Secretary of State; or
(6) Any notice which is required to be published by Code Section 14-2-201.1, 14-2-1006.1, 14-2-1105.1, or 14-2-1403.1 has not been published.
(a) If the Secretary of State determines that one or more grounds exist under Code Section 14-2-1420 for dissolving a corporation, he shall provide the corporation with written notice of his determination by mailing a copy of the notice, first-class mail, to the corporation at the last known address of its principal office or to the registered agent.
(b) If the corporation does not correct each ground for dissolution or demonstrate to the reasonable satisfaction of the Secretary of State that each ground determined by the Secretary of State does not exist within 60 days after notice is provided to the corporation, the Secretary of State shall administratively dissolve the corporation by signing a certificate of dissolution that recites the ground or grounds for dissolution and its effective date. The Secretary of State shall file the original of the certificate.
(c) A corporation administratively dissolved continues its corporate existence but may not carry on any business except that necessary to wind up and liquidate its business and affairs under Code Section 14-2-1405. Winding up the business of a corporation administratively dissolved may include the corporation's proceeding, at any time after the effective date of the administrative dissolution, (1) in accordance with Code Section 14-2-1406 to notify known claimants, and (2) to mail or deliver, with accompanying payment of the cost of publication, a notice containing the information specified in subsection (b) of Code Section 14-2-1407 for publication in accordance with subsection (b) of Code Section 14-2-1403.1. Upon such notice, claims against the administratively dissolved corporation will be limited as specified in Code Sections 14-2-1406 and 14-2-1407, respectively.
(d) The administrative dissolution of a corporation does not terminate the authority of its registered agent.
(a) A corporation administratively dissolved under Code Section 14-2-1421 may apply to the Secretary of State for reinstatement within five years after the effective date of such dissolution. The application shall:
(1) Recite the name of the corporation and the effective date of its administrative dissolution;
(2) State that the ground or grounds for dissolution either did not exist or have been eliminated;
(3) Either be executed by the registered agent or an officer, director, or shareholder of the corporation, in each case as set forth in the most recent annual registration of the corporation filed with the Secretary of State, or be accompanied by a notarized statement, executed by a person who was an officer, director, or shareholder, or an heir, successor, or assign of a person who was an officer, director, or shareholder, of the corporation at the time that the corporation was administratively dissolved, stating that such person or decedent was an officer, director, or shareholder of the corporation at the time of administrative dissolution and such person has knowledge of and assents to the application for reinstatement;
(4) Contain a statement by the corporation reciting that all taxes owed by the corporation have been paid; and
(5) Be accompanied by the fee required for the application for reinstatement contained in Code Section 14-2-122.
(b) The Secretary of State shall reserve the name of a corporation administratively dissolved under Code Section 14-2-1421 for such corporation's specific use for a period of five years after the effective date of the dissolution or until the corporation is reinstated, whichever is sooner.
(c) If the Secretary of State determines that the application contains the information required by subsection (a) of this Code section and that the information is correct, the Secretary of State shall prepare a certificate of reinstatement that recites his or her determination and the effective date of reinstatement, file the original of the certificate, and serve a copy on the corporation under Code Section 14-2-504.
(d) When the reinstatement is effective, it relates back to and takes effect as of the effective date of the administrative dissolution and the corporation resumes carrying on its business as if the administrative dissolution had never occurred.
(e) This Code section shall apply to all corporations administratively dissolved under Code Section 14-2-1421 or any similar former statute, regardless of the date of dissolution.
(a) If the Secretary of State denies a corporation's application for reinstatement following administrative dissolution, he shall serve the corporation under Code Section 14-2-504 with a written notice that explains the reason or reasons for denial.
(b) The corporation may appeal the denial of reinstatement to the superior court of the county where the corporation's registered office is or was located within 30 days after service of the notice of denial is perfected. The corporation appeals by petitioning the court to set aside the dissolution and attaching to the petition copies of the Secretary of State's certificate of dissolution, the corporation's application for reinstatement, and the Secretary of State's notice of denial.
(c) The court's final decision may be appealed as in other civil proceedings.
The superior court may dissolve a corporation:
(1) In a proceeding by the Attorney General if it is established that:
(A) The corporation obtained its articles of incorporation through fraud; or
(B) The corporation has continued to exceed or abuse the authority conferred upon it by law;
(2) In a proceeding by a shareholder if it is established that:
(A) The directors are deadlocked in the management of the corporate affairs, the shareholders are unable to break the deadlock, and irreparable injury to the corporation is threatened or being suffered or the business and affairs of the corporation can no longer be conducted to the advantage of the shareholders generally, because of the deadlock;
(B) The directors or those in control of the corporation have acted, are acting, or will act in a manner that is illegal or fraudulent in connection with the operation or management of the business and affairs of the corporation, and the proceeding is initiated by the holders of at least 20 percent or more of all outstanding shares of a corporation;
(C) The shareholders are deadlocked in voting power and have failed, for a period that includes at least two consecutive annual meeting dates, to elect successors to directors whose terms have expired or would have expired; or
(D) The corporate assets are being misapplied or wasted;
(3) In a proceeding by a creditor if it is established that:
(A) The creditor's claim has been reduced to judgment, the execution on the judgment has been returned unsatisfied, and the corporation is insolvent; or
(B) The corporation has admitted in writing that the creditor's claim is due and owing and the corporation is insolvent; or
(4) In a proceeding by the corporation to have its voluntary dissolution continued under court supervision;
provided, however, that all of the actions described in paragraphs (1) through (3) of this Code section shall be stayed so long as the corporation is contesting, in good faith, in any appropriate proceeding, the alleged grounds for dissolution.
(a) Venue for a proceeding by the Attorney General to dissolve a corporation and for a proceeding brought by any other party named in Code Section 14-2-1430 lies in the county where a corporation's registered office is or was last located.
(b) It is not necessary to make shareholders or directors parties to a proceeding to dissolve a corporation unless relief is sought against them individually.
(c) A court in a proceeding brought to dissolve a corporation may issue injunctions, appoint a receiver or custodian pendente lite with all powers and duties the court directs, take other action required to preserve the corporate assets wherever located, and carry on the business of the corporation until a full hearing can be held.
(a) A court in a judicial proceeding brought to dissolve a corporation may appoint one or more receivers to wind up and liquidate, or one or more custodians to manage, the business and affairs of the corporation. The court shall hold a hearing, after notifying all parties to the proceeding and any interested persons designated by the court, before appointing a receiver or custodian. The court appointing a receiver or custodian has exclusive jurisdiction over the corporation and all its property wherever located.
(b) The court may appoint an individual or a domestic or foreign corporation (authorized to transact business in this state) as a receiver or custodian. The court may require the receiver or custodian to post bond, with or without sureties, in an amount the court directs.
(c) The court shall describe the powers and duties of the receiver or custodian in its appointing order, which may be amended from time to time. Among other powers:
(1) The receiver:
(A) May dispose of all or any part of the assets of the corporation wherever located, at a public or private sale, if authorized by the court; and
(B) May sue and defend in his own name as receiver of the corporation in all courts of this state; or
(2) The custodian may exercise all of the powers of the corporation, through or in place of its board of directors or officers, to the extent necessary to manage the affairs of the corporation in the best interests of its shareholders and creditors.
(d) The court during a receivership may redesignate the receiver a custodian and, during a custodianship, may redesignate the custodian a receiver, if doing so is in the best interests of the corporation, its shareholders, and creditors.
(e) The court from time to time during the receivership or custodianship may order compensation paid and expense disbursements or reimbursements made to the receiver or custodian and his attorney from the assets of the corporation or proceeds from the sale of the assets.
(a) If after a hearing the court determines that one or more grounds for judicial dissolution described in Code Section 14-2-1430 exist, it may enter a decree ordering the corporation dissolved, and the clerk of the court shall deliver a certified copy of the decree to the Secretary of State, who shall file it, with the same effect as a notice of intent to dissolve.
(b) After entering the order of dissolution, the court shall direct the winding up and liquidation of the corporation's business and affairs in accordance with Code Section 14-2-1405. Winding up the business of a corporation judicially dissolved may include the corporation's proceeding, after the date of the order of dissolution, (1) in accordance with Code Section 14-2-1406 to notify known claimants, and (2) to mail or deliver, with accompanying payment of the cost of publication, a notice containing the information specified in subsection (b) of Code Section 14-2-1407 for publication in accordance with subsection (b) of Code Section 14-2-1403.1. Upon such notice, claims against the dissolved corporation will be limited as specified in Code Sections 14-2-1406 and 14-2-1407, respectively.
(c) When the costs and expenses of dissolution proceedings and all debts, obligations, and liabilities of the corporation have been paid and discharged or provided for and all of its remaining assets distributed to its shareholders or provided for or such assets have been deposited with the Office of the State Treasurer as provided in Code Section 14-2-1440, the court shall enter a decree of dissolution, and upon filing of the decree with the Secretary of State, it shall have the same effect as articles of dissolution.
Assets of a dissolved corporation that should be transferred to a creditor, claimant, or shareholder of the corporation who cannot be found or who is not competent to receive them shall be reduced to cash and deposited with the Office of the State Treasurer for safekeeping. When the creditor, claimant, or shareholder furnishes satisfactory proof of entitlement to the amount deposited, the Office of the State Treasurer shall pay him or her or his or her representative that amount. After the Office of the State Treasurer has held the unclaimed cash for six months, the Office of the State Treasurer shall pay such cash to the Board of Regents of the University System of Georgia, to be held without liability for profit or interest until a claim for such cash shall be filed with the Office of the State Treasurer by the parties entitled thereto. No such claim shall be made more than six years after such cash is deposited with the Office of the State Treasurer.
(a) A foreign corporation may not transact business in this state until it obtains a certificate of authority from the Secretary of State.
(b) The following activities, among others, do not constitute transacting business within the meaning of subsection (a) of this Code section:
(1) Maintaining or defending any action or any administrative or arbitration proceeding or effecting the settlement thereof or the settlement of claims or disputes;
(2) Holding meetings of its directors or shareholders or carrying on other activities concerning its internal affairs;
(3) Maintaining bank accounts, share accounts in savings and loan associations, custodian or agency arrangements with a bank or trust company, or stock or bond brokerage accounts;
(4) Maintaining offices or agencies for the transfer, exchange, and registration of its securities or appointing and maintaining trustees or depositories with respect to its securities;
(5) Effecting sales through independent contractors;
(6) Soliciting or procuring orders, whether by mail or through employees or agents or otherwise, where the orders require acceptance outside this state before becoming binding contracts and where the contracts do not involve any local performance other than delivery and installation;
(7) Making loans or creating or acquiring evidences of debt, mortgages, or liens on real or personal property, or recording same;
(8) Securing or collecting debts or enforcing any rights in property securing the same;
(9) Owning, without more, real or personal property;
(10) Conducting an isolated transaction not in the course of a number of repeated transactions of a like nature;
(11) Effecting transactions in interstate or foreign commerce;
(12) Serving as trustee, executor, administrator, or guardian, or in like fiduciary capacity, where permitted so to serve by the laws of this state;
(13) Owning (directly or indirectly) an interest in or controlling (directly or indirectly) another entity organized under the laws of, or transacting business within, this state; or
(14) Serving as a manager of a limited liability company organized under the laws of, or transacting business within, this state.
(c) The list of activities in subsection (b) of this Code section is not exhaustive.
(d) This chapter shall not be deemed to establish a standard for activities which may subject a foreign corporation to taxation or to service of process under any of the laws of this state.
(a) A foreign corporation transacting business in this state without a certificate of authority may not maintain a proceeding in any court in this state until it obtains a certificate of authority.
(b) Each foreign corporation that has not obtained a certificate of authority within 30 calendar days after the first day on which it transacts business in this state shall be liable for the civil penalty set out in Code Section 14-2-122. Such civil penalty shall be in addition to other consequences set out in this Code section and shall be collected without discretion by the Secretary of State.
(c) The successor to a foreign corporation that transacted business in this state without a certificate of authority and the assignee of a cause of action arising out of that business may not maintain a proceeding based on that cause of action in any court in this state unless before the commencement of the proceeding the foreign corporation or its successor obtains a certificate of authority.
(d) Notwithstanding subsections (a), (b), and (c) of this Code section, the failure of a foreign corporation to obtain a certificate of authority does not impair the validity of its corporate acts or prevent it from defending any proceeding in this state.
(a) A foreign corporation may apply for a certificate of authority to transact business in this state by delivering an application to the Secretary of State for filing. The application must set forth:
(1) The name of the foreign corporation or, if its name is unavailable for use in this state, a corporate name that satisfies the requirements of Code Section 14-2-1506;
(2) The name of the state or country under whose law it is incorporated;
(3) Its date of incorporation;
(4) The mailing address of its principal office;
(5) The address of its registered office in this state and the name of its registered agent at that office; and
(6) The names and respective business addresses of its chief executive officer, chief financial officer, and secretary, or individuals holding similar positions.
(b) The foreign corporation shall deliver with the completed application a certificate of existence (or a document of similar import) duly authenticated by the secretary of state or other official having custody of corporate records in the state or country under whose law it is incorporated.
(a) A foreign corporation authorized to transact business in this state must obtain an amended certificate of authority from the Secretary of State if it changes:
(1) Its corporate name;
(2) The period of its duration; or
(3) The state or country of its incorporation.
(b) The requirements of Code Section 14-2-1503 for obtaining an original certificate of authority apply to obtaining an amended certificate under this Code section.
(c) If a foreign corporation authorized to transact business in this state converts into a foreign limited liability company:
(1) The foreign corporation shall notify the Secretary of State that such conversion has occurred no later than 30 days after the conversion, using such form as the Secretary of State shall specify, which form may require such information and statements as may be required to be submitted by a foreign limited liability company that applies for a certificate of authority to transact business in this state; and
(2) If such notice is timely given:
(A) The authorization of such entity to transact business in this state shall continue without interruption; and
(B) The certificate of authority issued to such foreign corporation under this article shall constitute a certificate of authority issued under Code Section 14-11-704 to the foreign limited liability company resulting from the conversion effective as of the date of the conversion.
The Secretary of State shall adjust its records accordingly.
(d) If a foreign corporation authorized to transact business in this state converts into a foreign limited partnership:
(1) The foreign corporation shall notify the Secretary of State that such conversion has occurred no later than 30 days after the conversion, using such form as the Secretary of State shall specify, which form may require such information and statements as may be required to be submitted by a foreign limited partnership that applies for a certificate of authority to transact business in this state; and
(2) If such notice is timely given:
(A) The authorization of such entity to transact business in this state shall continue without interruption; and
(B) The certificate of authority issued to such foreign corporation under this part shall constitute a certificate of authority issued under Code Section 14-9-903 to the foreign limited partnership resulting from the conversion effective as of the date of the conversion.
The Secretary of State shall adjust its records accordingly.
(a) A certificate of authority authorizes the foreign corporation to which it is issued to transact business in this state subject, however, to the right of the state to revoke the certificate as provided in this chapter.
(b) A foreign corporation with a valid certificate of authority has the same but no greater rights under this chapter and has the same but no greater privileges under this chapter as, and except as otherwise provided by this chapter is subject to the same duties, restrictions, penalties, and liabilities now or later imposed on, a domestic corporation of like character.
(c) This chapter does not authorize this state to regulate the organization or internal affairs of a foreign corporation authorized to transact business in this state.
(a) If the corporate name of a foreign corporation does not satisfy the requirements of Code Section 14-2-401 or 14-2-1803, the foreign corporation to obtain or maintain a certificate of authority to transact business in this state:
(1) May add the word “corporation,” “incorporated,” “company,” or “limited,” or the abbreviation “corp.,” “inc.,” “co.,” or “ltd.,” or the name of its state of incorporation to its corporate name for use in this state; or
(2) May use a fictitious or trade name to transact business in this state if its real name is unavailable and it delivers to the Secretary of State for filing a copy of the resolution of its board of directors, certified by its secretary, adopting the fictitious or trade name.
(b) Except as authorized by subsections (c) and (d) of this Code section, a corporate name (including a fictitious name) of a foreign corporation must be distinguishable upon the records of the Secretary of State from:
(1) The corporate name of a corporation incorporated or authorized to transact business in this state;
(2) A corporate name reserved under Code Section 14-2-402;
(3) The fictitious name adopted by a foreign corporation authorized to transact business in this state because its real name is unavailable;
(4) The corporate name of a nonprofit corporation incorporated or authorized to transact business in this state; and
(5) The name of a limited partnership or professional association filed with the Secretary of State.
(c) A foreign corporation may apply to the Secretary of State for authorization to use in this state the name of another corporation (incorporated or authorized to transact business in this state) that is not distinguishable upon his records from the name applied for. The Secretary of State shall authorize use of the name applied for if the other corporation files with the Secretary of State articles of amendment to its articles of incorporation changing its name to a name that is distinguishable upon the records of the Secretary of State from the name of the applying corporation.
(d) A foreign corporation may use the name (including the fictitious name) of another domestic or foreign corporation that is used in this state if the other corporation is incorporated or authorized to transact business in this state and:
(1) The foreign corporation has merged with the other corporation;
(2) The foreign corporation has been formed by reorganization of the other corporation; or
(3) The other domestic or foreign corporation has taken the steps required by this chapter to change its name to a name that is distinguishable upon the records of the Secretary of State from the name of the foreign corporation applying to use its former name.
(e) If a foreign corporation authorized to transact business in this state changes its corporate name to one that does not satisfy the requirements of Code Section 14-2-401, it may not transact business in this state under the changed name until it adopts a name satisfying the requirements of Code Section 14-2-401 and obtains an amended certificate of authority under Code Section 14-2-1504.
Each foreign corporation authorized to transact business in this state must continuously maintain in this state:
(1) A registered office that may be the same as any of its places of business; and
(2) A registered agent, who may be:
(A) An individual who resides in this state and whose business office is identical with the registered office;
(B) A domestic corporation, nonprofit domestic corporation, or domestic limited liability company whose business office is identical with the registered office; or
(C) A foreign corporation, foreign or nonprofit corporation, or foreign limited liability company authorized to transact business in this state whose business office is identical with the registered office.
(a) A foreign corporation authorized to transact business in this state may change its registered office or registered agent by delivering to the Secretary of State for filing an amendment to its annual registration that sets forth:
(1) Its name;
(2) The street address of its current registered office;
(3) If the current registered office is to be changed, the street address of its new registered office;
(4) The name of its current registered agent; and
(5) That after the change or changes are made, the street addresses of its registered office and the business office of its registered agent will be identical.
(b) If a registered agent changes the street address of his business office, he may change the street address of the registered office of any foreign corporation for which he is the registered agent by notifying the corporation in writing of the change and signing (either manually or in facsimile) and delivering to the Secretary of State for filing an amendment to the annual registration that complies with the requirements of subsection (a) of this Code section.
(a) The registered agent of a foreign corporation may resign his agency appointment by signing and delivering to the Secretary of State for filing a statement of resignation. The statement may include a statement that the registered office is also discontinued.
(b) On or before the date of filing of the statement of resignation, the registered agent shall deliver or mail a written notice of the agent's intention to resign to the chief executive officer, chief financial officer, or secretary of the corporation, or a person holding a position comparable to any of the foregoing, as named, and at the address shown in the annual registration, or in the articles of incorporation if no annual registration has been filed.
(c) The agency appointment is terminated, and the registered office discontinued if so provided, on the earlier of the filing by the corporation of an amendment to its annual registration designating a new registered agent and registered office if also discontinued or the thirty-first day after the date on which the statement was filed.
(a) The registered agent of a foreign corporation authorized to transact business in this state is the corporation's agent for service of process, notice, or demand required or permitted by law to be served on the foreign corporation.
(b) If a foreign corporation has no registered agent or its registered agent cannot with reasonable diligence be served, the corporation may be served by registered or certified mail or statutory overnight delivery, return receipt requested, addressed to the chief executive officer, chief financial officer, or secretary of the foreign corporation, or a person holding a position comparable to any of the foregoing, at its principal office shown in the later of its application for a certificate of authority or its most recent annual registration. Any party that serves a foreign corporation in accordance with this subsection shall also serve a copy of the process upon the Secretary of State and shall pay a $10.00 filing fee.
(c) Service is perfected under subsection (b) of this Code section at the earliest of:
(1) The date the foreign corporation receives the mail;
(2) The date shown on the return receipt, if signed on behalf of the foreign corporation; or
(3) Five days after its deposit in the United States mail, as evidenced by the postmark, if mailed postpaid and correctly addressed.
(d) This Code section does not prescribe the only means, or necessarily the required means, of serving a foreign corporation.
(a) A foreign corporation authorized to transact business in this state may not withdraw from this state until it obtains a certificate of withdrawal from the Secretary of State. A foreign corporation authorized to transact business in this state that merges with and into a domestic corporation pursuant to Code Section 14-2-1107 and is not the surviving corporation in such merger need not obtain a certificate of withdrawal from the Secretary of State.
(b) A foreign corporation authorized to transact business in this state may apply for a certificate of withdrawal by delivering an application to the Secretary of State for filing. The application must set forth:
(1) The name of the foreign corporation and the name of the state or country under whose law it is incorporated;
(2) That it is not transacting business in this state and that it surrenders its authority to transact business in this state;
(3) That it revokes the authority of its registered agent to accept service on its behalf and appoints the Secretary of State as its agent for service of process in any proceeding based on a cause of action arising during the time it was authorized to transact business in this state;
(4) A mailing address to which a copy of any process served on him under paragraph (3) of this subsection may be mailed under subsection (c) of this Code section; and
(5) A commitment to notify the Secretary of State in the future of any change in its mailing address.
(c) After the withdrawal of the corporation is effective, service of process on the Secretary of State under this Code section is service on the foreign corporation. Any party that serves process upon the Secretary of State in accordance with this subsection shall also mail a copy of the process to the chief executive officer, chief financial officer, the secretary of the foreign corporation, or a person holding a comparable position, at the mailing address set forth under subsection (b) of this Code section.
The Secretary of State may commence a proceeding under Code Section 14-2-1531 to revoke the certificate of authority of a foreign corporation authorized to transact business in this state if:
(1) The foreign corporation does not deliver its annual registration to the Secretary of State within 60 days after it is due;
(2) The foreign corporation does not pay within 60 days after they are due any fees, taxes, or penalties imposed by this chapter or other law;
(3) The foreign corporation is without a registered agent or registered office in this state for 60 days or more;
(4) The foreign corporation does not inform the Secretary of State under Code Section 14-2-1508 or 14-2-1509 that its registered agent or registered office has changed, that its registered agent has resigned, or that its registered office has been discontinued within 60 days of the change, resignation, or discontinuance;
(5) An incorporator, director, officer, or agent of the foreign corporation signed a document he knew was false in any material respect with intent that the document be delivered to the Secretary of State for filing; or
(6) The Secretary of State receives a duly authenticated certificate from the secretary of state or other official having custody of corporate records in the state or country under whose law the foreign corporation is incorporated stating that it has been dissolved or disappeared as the result of a merger.
(a) If the Secretary of State determines that one or more grounds exist under Code Section 14-2-1530 for revocation of a certificate of authority, he shall provide the foreign corporation with written notice of his determination by mailing a copy of the notice, first-class mail, to the foreign corporation at the last known address of its principal office or to the registered agent.
(b) If the foreign corporation does not correct each ground for revocation or demonstrate to the reasonable satisfaction of the Secretary of State that each ground determined by the Secretary of State does not exist within 60 days after notice is provided to the corporation, the Secretary of State may revoke the foreign corporation's certificate of authority by signing a certificate of revocation that recites the ground or grounds for revocation and its effective date.
(c) The authority of a foreign corporation to transact business in this state ceases on the date shown on the certificate revoking its certificate of authority.
(d) The Secretary of State's revocation of a foreign corporation's certificate of authority appoints the Secretary of State as the foreign corporation's agent for service of process in any proceeding based on a cause of action which arose during the time the foreign corporation was authorized to transact business in this state. Service of process on the Secretary of State under this subsection is service on the foreign corporation. Any party that serves process upon the Secretary of State shall also mail a copy of the process to the chief executive officer, chief financial officer, or the secretary of the foreign corporation, or a person holding a comparable position, at its principal office shown in its most recent annual registration or in any subsequent communication received by the Secretary of State from the corporation stating the current mailing address of its principal office, or, if none is on file, in its application for a certificate of authority.
(e) Revocation of a foreign corporation's certificate of authority does not terminate the authority of the registered agent of the corporation.
(a) A foreign corporation may appeal the Secretary of State's revocation of its certificate of authority to the Superior Court of Fulton County within 30 days after service of the certificate of revocation is perfected under Code Section 14-2-1510. The foreign corporation appeals by petitioning the court to set aside the revocation and attaching to the petition copies of its certificate of authority and the Secretary of State's certificate of revocation.
(b) The court may summarily order the Secretary of State to reinstate the certificate of authority or may take any other action the court considers appropriate.
(c) The court's final decision may be appealed as in other civil proceedings.
(a) A foreign corporation which prior to April 1, 1969, has domesticated in this state under the procedure available prior to that date and which is a domesticated foreign corporation on that date shall have perpetual duration as a domesticated foreign corporation of this state unless its existence is terminated in its jurisdiction of incorporation or its domesticated status is dissolved in accordance with the provisions of this chapter relating to involuntary dissolution or until such time as it withdraws from this state in the manner provided in this chapter. Such domesticated foreign corporations and the shareholders thereof shall have all the rights, privileges, and immunities, and be subject to all the duties, liabilities, and disabilities applicable to similar corporations organized under the laws of this state and applicable to the shareholders thereof, except as may be provided with respect to such domesticated foreign corporations by any of the laws of this state existing on April 1, 1969, or coming into existence thereafter.
(b) Whenever the term “foreign corporation authorized to transact business in this state” is used in this chapter, it shall be deemed to include domesticated foreign corporations except where the context or this chapter otherwise requires.
(a) A corporation shall keep as permanent records minutes of all meetings of its shareholders and board of directors, executed consents evidencing all actions taken by the shareholders or board of directors without a meeting, a record of all actions taken by a committee of the board of directors in place of the board of directors on behalf of the corporation, and waivers of notice of all meetings of the board of directors and its committees.
(b) A corporation shall maintain appropriate accounting records.
(c) A corporation or its agent shall maintain a record of its shareholders, in a form that permits preparation of a list of the names and addresses of all shareholders, in alphabetical order by class of shares showing the number and class of shares held by each.
(d) A corporation shall maintain its records in written form or in another form capable of conversion into written form within a reasonable time.
(a) A corporation shall keep a copy of the following records:
(1) Its articles or restated articles of incorporation and all amendments to them currently in effect;
(2) Its bylaws or restated bylaws and all amendments to them currently in effect;
(3) Resolutions adopted by either its shareholders or board of directors increasing or decreasing the number of directors, the classification of directors, if any, and the names and residence addresses of all members of the board of directors;
(4) Resolutions adopted by its board of directors creating one or more classes or series of shares, and fixing their relative rights, preferences, and limitations, if shares issued pursuant to those resolutions are outstanding and any resolutions adopted by the board of directors that affect the size of the board of directors;
(5) The minutes of all shareholders' meetings, executed waivers of notice of meetings, and executed consents, delivered in writing or by electronic transmission, evidencing all action taken by shareholders without a meeting, for the past three years;
(6) All communications in writing or by electronic transmission to shareholders generally within the past three years, including the financial statements furnished for the past three years under Code Section 14-2-1620;
(7) A list of the names and business addresses of its current directors and officers; and
(8) Its most recent annual registration delivered to the Secretary of State under Code Section 14-2-1622.
(b) A shareholder of a corporation is entitled to inspect and copy, during regular business hours at the corporation's principal office, any of the records of the corporation described in subsection (a) of this Code section if he gives the corporation written notice of his demand at least five business days before the date on which he wishes to inspect and copy.
(c) A shareholder of a corporation is entitled to inspect and copy, during regular business hours at a reasonable location specified by the corporation, any of the following records of the corporation if the shareholder meets the requirements of subsection (d) of this Code section and gives the corporation written notice of his demand at least five business days before the date on which he wishes to inspect and copy:
(1) Excerpts from minutes of any meeting of the board of directors, records of any action of a committee of the board of directors while acting in place of the board of directors on behalf of the corporation, minutes of any meeting of the shareholders, and records of action taken by the shareholders or board of directors without a meeting, to the extent not subject to inspection under subsection (a) of this Code section;
(2) Accounting records of the corporation; and
(3) The record of shareholders.
(d) A shareholder may inspect and copy the records described in subsection (c) of this Code section only if:
(1) His demand is made in good faith and for a proper purpose that is reasonably relevant to his legitimate interest as a shareholder;
(2) He describes with reasonable particularity his purpose and the records he desires to inspect;
(3) The records are directly connected with his purpose; and
(4) The records are to be used only for the stated purpose.
(e) The right of inspection granted by this Code section may not be abolished or limited by a corporation's articles of incorporation or bylaws. However, the right to inspection enumerated in subsection (c) of this Code section may be limited by a corporation's articles of incorporation or bylaws for shareholders owning 2 percent or less of the shares outstanding.
(f) This Code section does not affect:
(1) The right of a shareholder to inspect records under Code Section 14-2-720 or, if the shareholder is in litigation with the corporation, to the same extent as any other litigant; or
(2) The power of a court, independently of this chapter, to compel the production of corporate records for examination.
(g) For purposes of this Code section, “shareholder” includes a beneficial owner whose shares are held in a voting trust or by a nominee on his behalf.
(a) A shareholder's agent or attorney has the same inspection and copying rights as the shareholder he represents.
(b) The right to copy records under Code Section 14-2-1602 includes, if reasonable, the right to receive copies made by photographic, xerographic, or other means.
(c) The corporation may impose a reasonable charge, covering the costs of labor and material, for copies of any documents provided to the shareholder. The charge may not exceed the estimated cost of production or reproduction of the records.
(d) A corporation shall convert into written form without charge any record of shareholders not in written form, upon written request of a person entitled to inspect them.
(e) The corporation may comply with a shareholder's demand to inspect the record of shareholders under paragraph (3) of subsection (b) of Code Section 14-2-1602 by providing him with a list of its shareholders that was compiled no earlier than the date of the shareholder's demand.
(a) If a corporation does not allow a shareholder who complies with subsection (b) of Code Section 14-2-1602 to inspect and copy any records required by that subsection to be available for inspection, the superior court of the county where the corporation's registered office is located may summarily order inspection and copying of the records demanded at the corporation's expense upon application of the shareholder.
(b) If a corporation does not within a reasonable time allow a shareholder to inspect and copy any other record, the shareholder who complies with subsections (c) and (d) of Code Section 14-2-1602 may apply to the superior court in the county where the corporation's registered office is located for an order to permit inspection and copying of the records demanded. The court shall dispose of an application under this subsection on an expedited basis.
(c) If the court orders inspection and copying of the records demanded, it shall also order the corporation to pay the shareholder's costs (including reasonable attorneys' fees) incurred to obtain the order unless the corporation proves that it refused inspection in good faith because it had a reasonable basis for doubt about the right of the shareholder to inspect the records demanded.
(d) If the court orders inspection and copying of the records demanded, it may impose reasonable restrictions on the use or distribution of the records by the demanding shareholder.
(a) Not later than four months after the close of each fiscal year and in any case prior to the annual meeting of shareholders, each corporation shall prepare (1) a balance sheet showing in reasonable detail the financial condition of the corporation as of the close of its fiscal year and (2) a profit and loss statement showing the results of its operation during its fiscal year. Upon request in writing or by electronic transmission, the corporation promptly shall mail to any shareholder of record a copy of the most recent balance sheet and profit and loss statement. If prepared for other purposes, the corporation shall also furnish upon request in writing or by electronic transmission a statement of sources and applications of funds and a statement of changes in shareholders' equity for the fiscal year. If financial statements are prepared by the corporation on the basis of generally accepted accounting principles, the annual financial statements must also be prepared and disclose that they are prepared on that basis. If financial statements are prepared otherwise than on the basis of generally accepted accounting principles, they must so disclose and must be prepared on the same basis as other reports or statements prepared by the corporation for the use of others.
(b) If the annual financial statements are reported upon by a public accountant, his report must accompany them. If not, the statements must be accompanied by a statement of the president or the person responsible for the corporation's accounting records:
(1) Stating his reasonable belief whether the statements were prepared on the basis of generally accepted accounting principles and, if not, describing the basis of preparation; and
(2) Describing any respects in which the statements were not prepared on a basis of accounting consistent with the statements prepared for the preceding year.
If a corporation indemnifies or advances expenses to a director under Code Section 14-2-851, 14-2-852, 14-2-853, or 14-2-854 in connection with a proceeding by or in the right of the corporation, the corporation shall report the indemnification or advance in writing to the shareholders with or before the notice of the next shareholders' meeting.
(a) Each domestic corporation and each foreign corporation authorized to transact business in this state shall deliver to the Secretary of State for filing an annual registration that sets forth:
(1) The name of the corporation and the state or country under whose law it is incorporated;
(2) The street address and county of its registered office and the name of its registered agent at that office in this state;
(3) The mailing address of its principal office; and
(4) The names and respective addresses of its chief executive officer, chief financial officer, and secretary, or individuals holding similar positions.
(b) Information in the annual registration must be current as of the date the annual registration is executed on behalf of the corporation.
(c) The first annual registration must be delivered to the Secretary of State between January 1 and April 1, or such other date as the Secretary of State may specify by rules or regulations, of the year following the calendar year in which a domestic corporation was incorporated or a foreign corporation was authorized to transact business. Subsequent annual registrations must be delivered to the Secretary of State between January 1 and April 1, or such other date as the Secretary of State may specify by rules or regulations, of the following calendar years.
(d) The initial annual registration of a domestic corporation shall be filed within 90 days after the day its articles of incorporation are delivered to the Secretary of State for filing. However, the initial annual registration of a domestic corporation whose articles of incorporation are delivered to the Secretary of State for filing subsequent to October 1 shall be filed between January 1 and April 1 of the year next succeeding the calendar year in which its certificate of incorporation is issued by the Secretary of State.
(e) If an annual registration does not contain the information required by this Code section, the Secretary of State shall promptly notify the reporting domestic or foreign corporation in writing and return the report to it for correction. If the report is corrected to contain the information required by this Code section and delivered to the Secretary of State within 30 days after the effective date of notice, it is deemed to be timely filed.
(a) Subject to the limitations of subsection (b) of this Code section, this chapter shall apply:
(1) To all corporations for profit, existing on or formed after July 1, 1989, including corporations for profit organized under or subject to any prior general corporation law of this state;
(2) To all corporations for profit created by special Act of the General Assembly as to which power has been reserved to withdraw the franchise;
(3) To any corporation, organization, professional association, or association, to the extent that the former general corporation law of this state or any of its provisions or this chapter or any of its provisions specifically have been or shall be made applicable to the corporation, organization, professional association, or association; and
(4) To any corporation organized under any statute of this state or if it were originally created by special Act of the General Assembly without reservation of power to withdraw the franchise, if under any prior general corporation law of this state the corporation either has amended its charter or has been a party to a merger or a consolidation, and also to any corporation which after July 1, 1989, in an amendment to its articles of incorporation or restatement of its articles of incorporation or in a merger, elects to be subject to this chapter. Any corporation to which this chapter applies by reason of this paragraph shall have all the rights, privileges, franchises, immunities, and powers and shall be subject to all the duties, liabilities, and disabilities of a corporation to which this chapter applies as well as of the statute or special Act by which the corporation was originally created; but in the event of a conflict between the statute or special Act and this chapter, the statute or special Act shall govern.
(b) This chapter shall not apply:
(1) To corporations organized under a statute of this state other than either this chapter or any prior general corporation law, except to the extent that the former general corporation law or any of its provisions or this chapter or any of its provisions specifically have been or shall be made applicable to those corporations;
(2) To any corporation originally created by special Act of the General Assembly as to which power has not been reserved to withdraw the franchise, except as otherwise provided in subsection (a) of this Code section;
(3) To any corporation originally created by an Act of the General Assembly as to which power has been reserved to withdraw the franchise, if the purpose of the corporation would require its organization to take place under a statute other than this chapter if it were being organized after July 1, 1989, except to the extent that the former general corporation law of this state or any of its provisions or this chapter or any of its provisions specifically have been or shall be made applicable to corporations organized for that purpose;
(4) To any public authority created by an Act of the General Assembly, except to the extent that the former general corporation law of this state or any of its provisions or this chapter or any of its provisions specifically have been or shall be made applicable to the public authority; or
(5) To corporations of any class, to the extent that the class is specifically exempted from this chapter or any of its provisions.
(c) This chapter shall not impair the existence of any corporation existing on July 1, 1989. Any existing corporation to which this chapter is applicable and its shareholders, directors, and officers shall have the same rights and be subject to the same limitations, restrictions, liabilities, and penalties as a corporation formed under this chapter and its shareholders, directors, and officers.
(d) If the articles of incorporation, charter, or bylaws of a corporation in existence on July 1, 1989, contain any provisions that were not authorized or permitted by the prior general corporation law of this state but which are authorized or permitted by this chapter, the provisions of the articles of incorporation, charter, or bylaws shall be valid on and from that date, and action may be taken on and from that date in reliance on those provisions. If the articles of incorporation, charter, or bylaws of a corporation in existence on July 1, 1989, contain any provisions that were authorized or permitted by the prior general corporation law of this state, that were validly adopted under the law in effect at the time of their adoption, and that are authorized or permitted by this chapter, the provisions of the articles of incorporation, charter, or bylaws shall continue to be valid on and from that date, whether or not this chapter imposes requirements for the adoption of such provisions that are different from those in effect at the time the provisions were adopted.
(e) This chapter shall apply to commerce with foreign nations and among the several states only insofar as the application may be permitted under the Constitution and laws of the United States.
A foreign corporation authorized to transact business in this state on July 1, 1989, is subject to this chapter but is not required to obtain a new certificate of authority to transact business under this chapter.
(a) Except as provided in subsection (b) of this Code section, the amendment or repeal of a statute by this chapter does not affect:
(1) The operation of the statute or any action taken under it before its repeal;
(2) Any ratification, right, remedy, privilege, obligation, cause of action, liability, penalty, or action or special proceeding acquired, accrued, or incurred under the statute before its repeal except as provided in subsection (f) of Code Section 14-2-630 and Code Section 14-2-1332; but the same, as well as actions that are pending on July 1, 1989, may be asserted, enforced, prosecuted, or defended as if the prior statute has not been repealed;
(3) Any violation of the statute, or any penalty, forfeiture, or punishment incurred because of the violation, before its repeal;
(4) Transactions validly entered into before July 1, 1989, and the rights, duties, and interests flowing from them shall remain valid thereafter and may be terminated, completed, consummated, or enforced as required or permitted by any statute repealed by this chapter as though the repeal had not occurred;
(5) Any proceeding, reorganization, or dissolution commenced under the statute before its repeal, and the proceeding, reorganization, or dissolution may be completed in accordance with the statute as if it had not been repealed; or
(6) Any provision of the articles of incorporation, charter, or bylaws of a corporation in existence on July 1, 1989, that was authorized or permitted by the prior general corporation law of this state, that was validly adopted under the law in effect at the time of its adoption, and that is authorized or permitted by this chapter.
(b) If a penalty or punishment imposed for violation of a statute repealed by this chapter is reduced by this chapter, the penalty or punishment if not already imposed shall be imposed in accordance with this chapter.
(a) This chapter shall apply to benefit corporations to the extent not inconsistent with the provisions of this article.
(b) Except as expressly provided in this article, this article shall not repeal or modify any statute or rule of law applicable to a corporation that is not a benefit corporation.
As used in this article, the term:
(1) “Benefit corporation” means a corporation whose articles of incorporation contain a public benefit provision and a statement that the corporation is a benefit corporation.
(2) “Public benefit” means a positive effect, or reduction of negative effects, on society, on the environment, or on one or more communities or categories of persons, entities, or interests, other than shareholders in their capacity as shareholders, including effects of an artistic, charitable, cultural, economic, ecological, educational, environmental, literary, medical, religious, scientific, social, or technological nature.
(3) “Public benefit provision” means a provision stating that a purpose of the corporation is to pursue a public benefit or benefits.
The name of a benefit corporation shall satisfy the requirements of Code Section 14-2-401; provided, however, that in lieu of the use of a word or abbreviation as required under paragraph (1) of subsection (a) of Code Section 14-2-401, the phrase “benefit corporation” or “public benefit corporation” or the abbreviation “BC” or “PBC” may be used.
Any stock certificate issued by a benefit corporation shall state conspicuously that the corporation is a benefit corporation.
(a) In addition to any other requirements provided for under this chapter, without approval by the shareholders of at least two-thirds of the votes of each class or series of shares of the corporation, voting as separate voting groups, whether or not otherwise entitled to vote, a corporation that is not a benefit corporation shall not take any of the following actions:
(1) Amend its articles of incorporation to include a public benefit provision;
(2) Transfer property as described in paragraph (3) of subsection (b) of Code Section 14-2-1201 if the transferee is a domestic or foreign benefit corporation, social purpose corporation incorporated under a law other than the law of this state, or substantially similar entity; or
(3) Engage in any transaction or series of transactions subject to Part 1 of Article 11 of this chapter, Code Section 14-2-1202, or Part 1 of Article 14 of this chapter if, as a result of such transaction or series of transactions, the shareholders of the corporation would own shares or interests in a domestic or foreign benefit corporation, social purpose corporation incorporated under a law other than the law of this state, or substantially similar entity in lieu of all or any part of their shares of the corporation.
(b) In addition to any other requirements provided for under this chapter, without approval by the shareholders of at least two-thirds of the votes of each class or series of shares of the corporation, voting as separate voting groups, whether or not otherwise entitled to vote, a benefit corporation shall not take any of the following actions:
(1) Amend its articles of incorporation to delete or substantively modify its public benefit provision;
(2) Transfer property as described in paragraph (3) of subsection (b) of Code Section 14-2-1201 if the transferee is not a domestic or foreign benefit corporation, social purpose corporation incorporated under a law other than the law of this state, or substantially similar entity with a public benefit provision in its articles of incorporation that is substantially similar to the benefit corporation's public benefit provision; or
(3) Engage in any transaction or series of transactions subject to Part 1 of Article 11 of this chapter, Code Section 14-2-1202, or Part 1 of Article 14 of this chapter if, as a result of such transaction or series of transactions, the shareholders of the benefit corporation would own, in lieu of all or any part of their shares of the benefit corporation, shares or interests in a domestic or foreign corporation or other entity that is not a benefit corporation, social purpose corporation incorporated under a law other than the law of this state, or substantially similar entity with a public benefit provision in its articles of incorporation that is substantially similar to the benefit corporation's public benefit provision.
(a) In addition to any other duties imposed by this chapter, the board of directors of a benefit corporation shall:
(1) Pursuant to its incorporation, state that the corporation is a benefit corporation in its articles of incorporation;
(2) Consider the public benefit or benefits specified in the benefit corporation's articles of incorporation when managing or directing the business and affairs of the benefit corporation; and
(3) Adopt a standard or standards by which to measure the benefit corporation's performance in pursuing the public benefit or benefits specified in the benefit corporation's articles of incorporation.
(b) Notwithstanding subsection (a) of this Code section or any other provision of this chapter:
(1) Directors of a benefit corporation have no duty to any person on account of such person having any interest in the public benefit or benefits specified in the articles of incorporation; and
(2) Unless otherwise provided in the articles of incorporation, directors of a benefit corporation have no monetary liability to any person for any failure to comply with any duty created by this Code section or any failure of the benefit corporation to pursue a public benefit or benefits as specified in its articles of incorporation.
(a) A benefit corporation shall include in every notice of a meeting of shareholders a conspicuous statement to the effect that it is a benefit corporation.
(b) A benefit corporation shall, no less than annually, provide to its shareholders of record, and to any other person who may request a copy in writing, a written report addressing the benefit corporation's performance with respect to its pursuit of the public benefit or benefits specified in its articles of incorporation. The report shall include:
(1) The objectives the board of directors established in connection with the pursuit of such public benefit or benefits;
(2) The standard or standards the board of directors adopted to measure the benefit corporation's progress in pursuing such public benefit or benefits;
(3) Factual information responsive to those standards regarding the benefit corporation's success or failure in meeting the objectives for pursuing such public benefit or benefits; and
(4) An assessment of the benefit corporation's success or failure in meeting the objectives and accomplishing such public benefit or benefits.
(c) In addition to complying with subsection (b) of this Code section, a benefit corporation may include in its articles of incorporation or bylaws provisions imposing upon the benefit corporation any or all of the following additional requirements:
(1) That the benefit corporation provide its report more frequently than annually;
(2) That the benefit corporation make the report generally available to the public via the internet or other readily accessible means;
(3) That the benefit corporation use a third-party standard in connection with measuring the benefit corporation's progress in accomplishing its stated public benefit or benefits;
(4) That the benefit corporation provide with its report a periodic third-party certification with respect to the benefit corporation's progress in accomplishing its stated public benefit or benefits; or
(5) That the report comply with any additional requirements as the board of directors may determine.
This chapter shall be known and may be cited as the “Georgia Nonprofit Corporation Code.”
The General Assembly has power to amend or repeal all or part of this chapter at any time, and all domestic corporations and foreign corporations subject to this chapter are governed by the amendment or repeal.
Each provision of this chapter shall have independent legal significance.
(a) Any corporation, with respect to which an order for relief has been entered pursuant to the federal Bankruptcy Code (11 U.S.C. Section 101, et seq.), may put into effect and carry out any decrees and orders of the court or judge in such bankruptcy proceeding and may take any corporate action provided or directed by such decrees and orders, without further action by its directors or members. Such power and authority may be exercised, and such corporate action may be taken, as may be directed by such decrees and orders, by the trustee or trustees of such corporation appointed or elected in the bankruptcy proceeding, or a majority thereof, or, if none are appointed or elected and acting, by designated officers of the corporation, or by a representative appointed by the court or judge, with like effect as if exercised and taken by unanimous action of the directors and members of the corporation.
(b) Such corporation may, in the manner provided in subsection (a) of this Code section, but without limiting the generality or effect of the foregoing, alter, amend, or repeal its bylaws; constitute or reconstitute and classify or reclassify its board of directors and name, constitute, or appoint directors and officers in place of or in addition to all or some of the directors or officers then in office; amend its articles of incorporation or make any other amendment, change, or alteration, or provision authorized by this chapter; be dissolved, transfer all or part of its assets, or merge; change the location of its registered office, change its registered agent, and remove or appoint any agent to receive service of process; authorize and fix the terms, manner, and conditions of the issuance of bonds, debentures, or other obligations; or lease its property and franchises to any corporation, if permitted by law.
(c) Articles or a certificate of any amendment, correction, merger, or dissolution, made by such corporation pursuant to this Code section, shall be filed with the Secretary of State in accordance with Code Section 14-3-120, and, subject to Code Section 14-3-123 and subsection (c) of Code Section 14-3-124, shall thereupon become effective in accordance with its terms and the provisions thereof. Such articles, certificate, or other instrument shall be made, executed, and acknowledged, as may be directed by such decrees and orders, by the trustee or trustees appointed or elected in the bankruptcy proceeding, or a majority thereof, or, if none are appointed or elected and acting, by the officers of the corporation, or by a representative appointed by the court or judge, and shall certify that provision for the making of such articles, certificate, or instrument is contained in a decree or order of a court or judge having jurisdiction of a proceeding under the federal Bankruptcy Code.
(d) This Code section shall cease to apply to such corporation upon the entry of a final decree in the bankruptcy proceeding closing the case and discharging the trustee or trustees, if any; provided, however, that the closing of a case and discharge of the trustee or trustees, if any, will not affect the validity of any act previously performed pursuant to subsection (a), (b), or (c) of this Code section.
(e) On filing any articles, certificate, report, or other paper made or executed pursuant to this Code section, there shall be paid to the Secretary of State for the use of the state the same fees as are payable by corporations not in bankruptcy upon the filing of like articles, certificates, agreements, reports, or other papers.
(a) A document must satisfy the requirements of this Code section and of any other Code section that adds to or varies these requirements to be entitled to filing by the Secretary of State.
(b) This chapter must require or permit filing the document in the office of the Secretary of State.
(c) The document must contain the information required by this chapter. It may contain other information as well.
(d) The document must be typewritten or printed.
(e) The document must be in the English language. However, a corporate name need not be in English if written in English letters or Arabic or Roman numerals, and the certificate of existence required of foreign corporations need not be in English if accompanied by a reasonably authenticated English translation.
(f) The document must be executed:
(1) By the chairperson of the board of directors of a domestic corporation or foreign corporation, by its chief executive officer, or by another of its officers;
(2) If directors have not been selected or the corporation has not been formed, by an incorporator; or
(3) If the corporation is in the hands of a receiver, trustee, or other court appointed fiduciary, by that fiduciary;
provided, however, that the person executing the document may do so as an attorney in fact. Powers of attorney relating to the execution of the document do not need to be shown to or filed with the Secretary of State.
(g) The person executing a document shall sign it and state beneath or opposite the signature his or her name and the capacity in which he or she signs; provided, however, that, if the document is electronically transmitted, the electronic version of such person's name may be used in lieu of a signature. The document may, but need not, contain:
(1) The corporate seal;
(2) An attestation by the secretary or an assistant secretary; or
(3) An acknowledgment, verification, or proof.
(h) The document must be delivered to the office of the Secretary of State for filing and must be accompanied by the correct filing fee, any certificate required by this chapter, and any penalty required by this chapter or other law. The Secretary of State may require that a document delivered in written form be accompanied by an identical or conformed copy.
(i) Notwithstanding the provisions of this chapter, the Secretary of State may authorize the filing of documents by electronic transmission, following the provisions of Chapter 12 of Title 10, the “Uniform Electronic Transactions Act,” and the Secretary of State shall be authorized to promulgate such rules and regulations as are necessary to implement electronic filing procedures.
Notwithstanding any other law to the contrary, the Secretary of State may provide for the annual registration required under this chapter to be valid for a period up to and including three years. The Secretary of State is authorized to adopt the necessary rules and regulations to implement such a registration process.
The Secretary of State may prescribe and furnish on request forms for:
(1) An application for a certificate of existence;
(2) A foreign corporation's application for a certificate of authority to transact business in this state;
(3) A foreign corporation's application for a certificate of withdrawal;
(4) The annual registration; and
(5) Such other forms not in conflict with this chapter as may be prescribed by the Secretary of State.
The Secretary of State shall collect the following fees when the documents described in this Code section are delivered for filing:
| | Document | Fee | | | --- | --- | --- | --- | | | (1) | Articles of incorporation․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | $ 100.00 | | | (2) | Application for certificate of authority․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 225.00 | | | (3) | Annual registration․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 30.00 | | | (4) | Penalty for late filing of annual registration․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 25.00 | | | (5) | Agent's statement of resignation․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | No fee | | | (6) | Certificate of judicial dissolution․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | No fee | | | (7) | Articles of dissolution or intent to dissolve․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | No fee | | | (8) | Application of withdrawal․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | No fee | | | (9) | Application for reservation of a corporate name․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 25.00 | | | (10) | Statement of change of address of registered agent | | | | | ․․․․․․․․․․ $5.00 per corporation but not less than․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 20.00 | | | (11) | Application for reinstatement․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 250.00 | | | (12) | Certificate of conversion․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | 95.00 | | | (13) | Any other document required or permitted to be filed by this chapter․․․․․․․․․․․․ | 20.00 |
(a) Except as provided in subsection (b) of this Code section and subsection (c) of Code Section 14-3-124, a document is effective:
(1) At the time of filing on the date it is filed, as evidenced by the Secretary of State's endorsement on the original document; or
(2) At any later time specified in the document as its effective time on the date it is filed.
(b) A document may specify a delayed effective time and date, and if it does so the document becomes effective at the time and date specified. If a delayed effective date but no time is specified, the document is effective at the close of business on that date. A delayed effective date for a document may not be later than the ninetieth day after the date filed.
(c) If a document is determined by the Secretary of State to be incomplete and inappropriate for filing, the Secretary of State may return the document to the person or corporation filing it, together with a brief written explanation of the reason for the refusal to file, in accordance with subsection (c) of Code Section 14-3-125 and, if the applicant returns the document with corrections in accordance with the rules and regulations of the Secretary of State, the filing date of the document will be the filing date that would have been applied had the original document not been deficient.
(a) A domestic corporation or foreign corporation may correct a document filed by the Secretary of State if the document:
(1) Contains an incorrect statement; or
(2) Was defectively executed, attested, sealed, verified, or acknowledged.
(b) A document is corrected:
(1) By preparing articles of correction that:
(A) Describe the document (including its filing date);
(B) Specify the incorrect statement and the reason it is incorrect or the manner in which the execution was defective; and
(C) Correct the incorrect statement or defective execution; and
(2) By delivering the articles of correction to the Secretary of State for filing.
(c) Articles of correction are effective on the effective date of the document they correct except as to persons relying on the uncorrected document and adversely affected by the correction. As to those persons, articles of correction are effective when filed. Articles of correction shall not state a delayed effective date.
(a) If a document delivered to the office of the Secretary of State for filing satisfies the requirements of Code Section 14-3-120, the Secretary of State shall file it.
(b) The Secretary of State files a document by stamping or otherwise endorsing the Secretary of State's official title and the date and time of receipt on the document. After a document is filed, the Secretary of State shall deliver a copy of the document to the domestic corporation or foreign corporation to which the document relates or the person making the filing or the person's representative.
(c) If the Secretary of State refuses to file a document, the Secretary of State shall return the document to the domestic corporation or foreign corporation to which the document relates or the person making the filing or the person's representative within ten days after the document was delivered, together with a brief written explanation of the reason for his or her refusal.
(d) The Secretary of State's duty to file documents under this Code section is ministerial. Filing or refusing to file a document does not:
(1) Affect the validity or invalidity of the document in whole or in part;
(2) Relate to the correctness or incorrectness of information contained in the document; or
(3) Create a presumption that the document is valid or invalid or that information contained in the document is correct or incorrect.
(a) If the Secretary of State refuses to file a document delivered to the Secretary of State's office for filing, the document may be resubmitted within 30 days accompanied by an opinion in a record from an attorney admitted to practice in this state stating why the document conforms to law and the authorities upon which the opinion is based. The Secretary of State may rely with respect to any disputed point of law upon the opinion in determining whether the document conforms to law.
(b) If the Secretary of State refuses to file a document delivered to the Secretary of State's office for filing, as an alternative to resubmitting the document under subsection (a) of this Code section or following a refusal by the Secretary of State to file the document after it is resubmitted under subsection (a) of this Code section, the domestic corporation or foreign corporation may appeal the refusal to the superior court. Such appeal must be filed with the superior court within 30 days after the return of the document by the Secretary of State. The appeal is commenced by petitioning the court to compel filing of the document and by attaching to the petition the document and the Secretary of State's explanation of his or her refusal to file.
(c) The matter shall promptly be tried de novo by the court without a jury. The court may summarily order the Secretary of State to file the document or take other action the court considers appropriate.
(d) The court's final decision may be appealed as in other civil proceedings.
A certificate attached to a copy of a document or electronic transmission filed by the Secretary of State, bearing his or her signature, which may be in facsimile, and the printed or embossed seal of this state, or its electronic equivalent, is prima-facie evidence that the original document has been filed with the Secretary of State.
(a) Any person may apply to the Secretary of State to furnish a certificate of existence for a domestic corporation or a certificate of authority for a foreign corporation.
(b) A certificate of existence or authority sets forth:
(1) The domestic corporation's corporate name or the foreign corporation's corporate name used in this state;
(2) That the domestic corporation is duly incorporated under the law of this state and the date of its incorporation, or that the foreign corporation is authorized to transact business in this state;
(3) That its most recent annual registration required by Code Section 14-3-1622 has been delivered to the Secretary of State; and
(4) That articles of dissolution have not been filed.
(c) Subject to any qualification stated in the certificate, a certificate of existence or authority issued by the Secretary of State may be relied upon as prima-facie evidence that the domestic corporation or foreign corporation is in existence or is authorized to transact business in this state.
(a) A person who signs a document he or she knows is false in any material respect with intent that the document be delivered to the Secretary of State for filing shall be guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine not to exceed $500.00.
(b) A document filed under this chapter may be signed by an attorney in fact. Whenever this chapter requires a particular individual to sign a document and the individual is deceased or incompetent, the document may be signed by a legal representative of the individual.
(c) A person who signs a document as an attorney in fact or legal representative affirms as a fact that such person is authorized to sign the document.
The Secretary of State has the power reasonably necessary to perform the duties required of him or her by this chapter.
As used in this chapter, the term:
(1) “Articles of incorporation” or “articles” includes amended and restated articles of incorporation and articles of merger.
(2) “Board of directors” or “board” means the person or persons vested with the authority to manage the affairs of the corporation, irrespective of the name of such group, but shall not include any person solely by virtue of powers delegated to him or her by Code Section 14-3-801.
(3) “Business corporation” means a corporation for profit, incorporated under the provisions of Chapter 2 of this title.
(4) “Bylaws” means the code of rules other than the articles adopted pursuant to this chapter for the regulation or management of the affairs of the corporation, irrespective of the name or names of such rules.
(5) “Charitable corporation” means a corporation that meets the requirements of paragraph (2) of subsection (a) of Code Section 14-3-1302.
(6) “Chief executive officer” includes a president or any other individual holding a similar position designated by another title.
(7) “Chief financial officer” includes a treasurer or any other individual holding a similar position designated by another title.
(8) “Class” refers to a group of memberships which have the same rights with respect to voting, dissolution, redemption, and transfer. For the purpose of this Code section, rights shall be considered the same if they are determined by a formula applied uniformly.
(9) “Corporation” or “domestic corporation” means a corporation, other than a foreign corporation, incorporated under or subject to the provisions of this chapter.
(10) “Delegate” means a person elected or appointed to vote in a representative assembly for the election of a director or on other matters. A person is not a member solely by virtue of such person's status as a delegate.
(11) “Deliver” includes delivery by hand, mail, private carrier, and electronic transmission.
(12) “Document” means:
(A) Any tangible medium on which information is inscribed, and includes handwritten, typed, printed, or similar instruments and copies of such instruments; and
(B) Any electronic or other medium that is retrievable in perceivable form.
(13) “Effective date of notice” is described in Code Section 14-3-141.
(14) “Electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.
(15) “Electronic network” means any medium or electronic system for creating, generating, sending, receiving, storing, displaying, processing, or viewing electronic documents or electronic transmissions among persons.
(16) “Electronic transmission” or “electronically transmitted” means any form of electronic communication that creates a record that may be retained, retrieved, and reviewed by a recipient thereof and that may be directly reproduced in paper form by such a recipient through an automated process.
(17) “Entity” includes corporation and foreign corporation; business corporation and foreign business corporation; profit and nonprofit unincorporated association; business trust, estate, general partnership, limited partnership, foreign limited partnership, trust, and two or more persons having a joint or common economic interest; domestic joint-stock association and foreign joint-stock association; limited liability company and foreign limited liability company; limited liability partnership and foreign limited liability partnership; state, United States, and foreign government; and regional commission solely for the purpose of implementing subsection (f) of Code Section 50-8-35.
(18) “Foreign business corporation” means a corporation for profit incorporated under a law other than the law of this state.
(19) “Foreign corporation” means a corporation incorporated under a law other than the law of this state which would be a nonprofit corporation if incorporated under, or subject to, this chapter.
(20) “Foreign limited liability company” means a limited liability company formed under the laws of a jurisdiction other than this state.
(21) “Governing agreements” includes the articles of incorporation and bylaws of a business corporation, foreign business corporation, or corporation or foreign corporation; the articles of association or trust agreement or indenture and bylaws of a joint-stock association; the articles of organization and operating agreement of a limited liability company; the certificate of limited partnership and limited partnership agreement of a limited partnership; and agreements serving comparable purposes under the laws of other states or jurisdictions.
(22) “Governmental subdivision” includes an authority, county, district, and municipality or any other political subdivision.
(23) “Includes” or “including” denotes a partial definition or a nonexclusive list.
(24) “Individual” means a natural person and includes the estate of an incompetent or deceased individual.
(25) “Joint-stock association” includes any association of the kind commonly known as a joint-stock association or joint-stock company and any unincorporated association, trust, or enterprise having members or having outstanding shares of stock or other evidences of financial and beneficial interest therein, whether formed by agreement or under statutory authority or otherwise, but shall not include a corporation, partnership, limited liability partnership, limited liability company, or nonprofit organization. A joint-stock association as defined in this paragraph may be formed under the laws of this state, including a trust created pursuant to Article 2 of Chapter 12 of Title 53 or a trust formed under or pursuant to the laws of any other state or jurisdiction.
(26) “Limited liability company” means any limited liability company formed under Chapter 11 of this title.
(27) “Limited partnership” includes limited partnerships formed under the laws of this state or of any other state or territory of the United States or the District of Columbia.
(28) “Mail” includes the United States mail.
(29) “Means” denotes an exhaustive definition.
(30) “Member” means without regard to the name by which a person is designated in the articles or bylaws any person who is entitled to vote for the election of a director or directors pursuant to a provision of the corporation's articles that expressly provides for or contemplates the existence of members. A person is not a member solely by virtue of any of the following:
(A) Any rights such person has as a delegate;
(B) Any rights such person has to nominate, appoint, or confirm a director or directors;
(C) Any rights such person has as a director; or
(D) A contribution by such person to the corporation.
(31) “Membership corporation” means a corporation whose articles of incorporation provide for a member or members.
(32) “Notice” is described in Code Section 14-3-141.
(33) “Person” includes an individual and an entity.
(34) “Principal office” means the office in or out of this state so designated in the annual registration where the principal executive offices of a domestic corporation or foreign corporation are located.
(35) “Proceeding” includes civil suit and criminal, administrative, and investigatory action.
(36) “Record date” means the date established under Article 6 or 7 of this chapter on which a corporation determines the identity of its members for purposes of this chapter. The determinations shall be made as of the close of business on the record date unless another time for doing so is specified when the record date is fixed.
(37) “Secretary” means the corporate officer to whom the board of directors has delegated responsibility under subsection (d) of Code Section 14-3-840 for custody of the minutes of the meetings of the board of directors and of any members and for authenticating records of the corporation.
(38) “Share” includes shares, memberships, financial or beneficial interests, units, or proprietary or partnership interests in a business corporation or a foreign business corporation, limited liability company, joint-stock association, or limited partnership but does not include debt obligations of any entity.
(39) “Shareholder” means any person who owns or holds title to or beneficial interest in a share.
(40) “Signature” or “sign” includes any manual, facsimile, conformed, or electronic signature.
(41) “State,” when referring to a part of the United States, includes a state, commonwealth, the District of Columbia (and their agencies and governmental subdivisions) and a territory and insular possession (and their agencies and governmental subdivisions) of the United States.
(42) “Superior court” means the superior court of the county in which the corporation's registered office is located; if the corporation has no registered office, the county in which the corporation's principal office is located; or, if the corporation has neither a registered office nor a principal office, then the Superior Court of Fulton County.
(43) “United States” includes district, authority, bureau, commission, department, and any other agency of the United States.
(44) “Voting power” means the total number of votes entitled to be cast for the election of directors at the time the determination of voting power is made, excluding a vote which is contingent upon the happening of a condition or event that has not occurred at the time. Where a class is entitled to vote as a class for directors, the determination of voting power of the class shall be based on the percentage of the number of directors the class is entitled to elect out of the total number of authorized directors.
(a) Notice under this chapter shall be in writing or by electronic transmission unless oral notice is reasonable under the circumstances.
(b) Notice may be communicated in person; by telephone, electronic transmission, or other form of wire or wireless communication; or by mail or private carrier. If these forms of personal notice are impracticable, notice may be communicated by a newspaper of general circulation in the area where published or by radio, television, or other form of public broadcast communication. Unless otherwise provided in the articles of incorporation, bylaws, or this chapter, notice by electronic transmission shall be deemed to be notice in writing for purposes of this chapter.
(c) Written notice by a domestic corporation or a foreign corporation to its members, if in a comprehensible form, is effective when mailed, if mailed with first-class postage prepaid and correctly addressed to the member's address shown in the corporation's or foreign corporation's current record of members. If the corporation or foreign corporation has more than 500 members of record entitled to vote at a meeting, it may utilize a class of mail other than first class if the notice of the meeting is mailed, with adequate postage prepaid, not less than 30 days before the date of the meeting.
(d) Written notice to a domestic corporation or a foreign corporation authorized to transact business in this state may be addressed to its registered agent at its registered office or to such corporation or its secretary at its principal office shown in its most recent annual registration or, in the case of a foreign corporation that has not yet delivered an annual registration, in its application for a certificate of authority.
(e) Except as provided in subsections (c) and (h) of this Code section or in the articles of incorporation or bylaws, written notice, if in a comprehensible form, is effective at the earliest of the following:
(1) When received or when delivered, properly addressed, to the addressee's last known principal place of business or residence;
(2) Five days after its deposit in the mail, as evidenced by the postmark, if mailed with first-class postage prepaid and correctly addressed; or
(3) On the date shown on the return receipt, if sent by registered or certified mail or statutory overnight delivery, return receipt requested, and the receipt is signed by or on behalf of the addressee.
(f) Oral notice is effective when communicated if communicated in a comprehensible manner.
(g) In calculating time periods for notice under this chapter, when a period of time measured in days, weeks, months, years, or other measurement of time is prescribed for the exercise of any privilege or the discharge of any duty, the first day shall not be counted but the last day shall be counted.
(h)(1) Without limiting the manner by which notice otherwise may be given effectively to members, any notice to members given by the corporation under any provision of this chapter, the articles of incorporation, or the bylaws shall be effective if given by a form of electronic transmission consented to by the member to whom the notice is given. Any such consent shall be revocable by the member by written notice to the corporation. Any such consent shall be deemed revoked if:
(A) The corporation is unable to deliver by electronic transmission two consecutive notices given by the corporation in accordance with such consent; and
(B) Such inability becomes known to the secretary or an assistant secretary of the corporation or other person responsible for the giving of notice; provided, however, that the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.
(2) Notice given pursuant to this subsection shall be deemed effective:
(A) If by facsimile telecommunication, when transmitted to a number at which the member has consented to receive notice;
(B) If by email, when transmitted to an email address at which the member has consented to receive notice;
(C) If by a posting on an electronic network together with separate notice to the member of such specific posting, upon the later of (i) such posting or (ii) the giving of such separate notice; and
(D) If by any other form of electronic transmission, when transmitted to the member.
(i) An affidavit, certificate, or other written confirmation of the secretary or an assistant secretary or other agent of the corporation that the notice has been given under this Code section shall, in the absence of fraud, be prima-facie evidence of the facts stated therein.
(j) The corporation may be obligated to accept from a member consents, requests, demands, or notices given and delivered under this chapter to the principal place of business of the corporation or to an officer or agent of the corporation having custody of the books in which proceedings of meetings of members are recorded by electronic transmission only as provided by resolution of the board of directors of the corporation or in the articles of incorporation.
(k) Unless the registered agent of the corporation provides written consent to the corporation to the receipt of a member's consent, request, demand, or notice by electronic transmission under this chapter, delivery to a corporation's registered office shall be made by hand or by certified or registered mail or statutory overnight delivery, return receipt requested.
(l) If this chapter prescribes notice requirements for particular circumstances, those requirements govern. If articles of incorporation or bylaws prescribe notice requirements, not inconsistent with this Code section or other provisions of this chapter, those requirements govern.
(m) Whenever notice would otherwise be required to be given under any provision of this chapter to a member, the notice need not be given if notice of two consecutive annual meetings, and all notices of meetings during the period between such two consecutive annual meetings, have been returned undeliverable or could not be delivered. Unless otherwise provided by the corporation's bylaws, if a member delivers to the corporation a notice setting forth the member's then-current mailing address, telephone number, means of electronic communication, or address for private carrier delivery, the requirement that notice be given to that member shall be reinstated.
(a) If for any reason it is impractical or impossible for a corporation to call or conduct a meeting of its members, delegates, or directors, or otherwise obtain their consent, in the manner prescribed by its articles, bylaws, or this chapter, then upon petition of a director, officer, delegate, member, other person entitled to participate, or the Attorney General, the superior court may order that such a meeting be called or that a ballot in writing or by electronic transmission or other form of obtaining the vote of members, delegates, or directors be authorized, in such a manner as the court finds fair and equitable under the circumstances.
(b) The court shall, in an order issued pursuant to this Code section, provide for a method of notice reasonably designed to give actual notice to all persons who would be entitled to notice of a meeting held pursuant to the articles, bylaws, or this chapter, whether or not the method results in actual notice to all such persons or conforms to the notice requirements that would otherwise apply. In a proceeding under this Code section the court may determine who the members or directors are.
(c) The order issued pursuant to this Code section may dispense with any requirement relating to the holding of or voting at meetings or obtaining votes, including any requirement as to quorums or as to the number or percentage of votes needed for approval, that would otherwise be imposed by the articles, bylaws, or this chapter.
(d) Whenever practical, any order issued pursuant to this Code section shall limit the subject matter of meetings or other forms of consent authorized to items, including amendments to the articles or bylaws, the resolution of which will or may enable the corporation to continue managing its affairs without further resort to this Code section; provided, however, that an order under this Code section may also authorize the obtaining of whatever votes and approvals are necessary for the dissolution, merger, or sale of assets.
(e) Any meeting or other method of obtaining the vote of members, delegates, or directors conducted pursuant to an order issued under this Code section, and that complies with all the provisions of such order, is for all purposes a valid meeting or vote, as the case may be, and shall have the same force and effect as if it complied with every requirement imposed by the articles, bylaws, and this chapter.
(a) The Attorney General may petition the superior court:
(1) To enjoin the proposed unlawful conveyance, transfer, or assignment of assets of a charitable corporation in situations in which the transferee knew of its unlawfulness;
(2) To set aside the unlawful conveyance, transfer, or assignment of assets of a charitable corporation in situations in which the transferee knew of its unlawfulness;
(3) To dissolve a corporation that:
(A) Obtained its articles of incorporation through fraud;
(B) Was reinstated under Code Section 14-3-1422 through fraud; or
(C) Has exceeded or abused, and is continuing to exceed or abuse, the authority conferred upon it by law; or
(4) To compel accounting and restitution or other appropriate relief for violation of Code Sections 14-3-830, 14-3-842, 14-3-860 through 14-3-864, or 14-3-1301.
(b) In connection with any such proceeding or proposed proceeding, the Attorney General shall have the same power to investigate and issue subpoenas as he or she has with respect to investigations authorized under Code Section 45-15-17.
If religious doctrine governing the affairs of a corporation is inconsistent with the provisions of this chapter on the same subject, the religious doctrine shall control to the extent required by the Constitution of the United States or the Constitution of this state or both.
One or more persons may act as the incorporator or incorporators of a corporation by delivering articles of incorporation to the Secretary of State for filing.
(a) The articles of incorporation must set forth:
(1) A corporate name for the corporation that satisfies the requirements of Code Section 14-3-401;
(2) The street address and county of the corporation's initial registered office and the name of its initial registered agent at that office;
(3) The name and address of each incorporator;
(4) Whether or not the corporation will have members;
(5) The mailing address of the initial principal office of the corporation, if different from the initial registered office; and
(6) A statement that the corporation is organized pursuant to the Georgia Nonprofit Corporation Code.
(b) The articles of incorporation may set forth:
(1) The purpose or purposes for which the corporation is organized, which may be, either alone or in combination with other purposes, the transaction of any lawful activity;
(2) The names and addresses of the individuals who are to serve as the initial directors;
(3) Provisions not inconsistent with law regarding:
(A) Managing and regulating the affairs of the corporation;
(B) Defining, limiting, and regulating the powers of the corporation, its board of directors, and members (or any class of members); and
(C) The characteristics, qualifications, rights, limitations, and obligations attaching to each or any class of members;
(4) A provision eliminating or limiting the liability of a director to the corporation or its members for monetary damages for any action taken, or any failure to take any action, as a director, except liability:
(A) For any appropriation, in violation of his or her duties, of any business opportunity of the corporation;
(B) For acts or omissions which involve intentional misconduct or a knowing violation of law;
(C) For the types of liability set forth in Code Sections 14-3-860 through 14-3-864; or
(D) For any transaction from which the director received an improper personal benefit,
provided that no such provision shall eliminate or limit the liability of a director for any act or omission occurring prior to the date when such provision becomes effective;
(5) A provision permitting indemnification of directors as set forth in Code Section 14-3-856, provided that no such provision shall permit indemnification of a director for any act or omission occurring prior to the date when such provision becomes effective.
(6) Any provision that under this chapter is required or permitted to be set forth in the bylaws; and
(7) Provisions not inconsistent with law regarding the distribution of assets on dissolution.
(c) One or more incorporators named in the articles must sign the articles unless the filing is being signed by an attorney in fact.
(d) The articles of incorporation need not set forth any of the corporate powers enumerated in this chapter.
Code Section 14-2-201.1 shall apply equally to the organization of corporations under this chapter, except that the notice to the publisher of the newspaper shall be in substantially the following form:
“NOTICE OF INCORPORATION
Notice is given that articles of incorporation which incorporate __________ (name of corporation) have been delivered to the Secretary of State for filing in accordance with the Georgia Nonprofit Corporation Code. The initial registered office of the corporation is located at __________ (address of registered office) and its initial registered agent at such address is __________ (name of agent).”
(a) Unless a delayed effective date is specified, the corporate existence begins when the articles of incorporation are filed.
(b) The Secretary of State's filing of the articles of incorporation is conclusive proof that the incorporators satisfied all conditions precedent to incorporation except in a proceeding by the state to cancel or revoke the incorporation or administratively dissolve the corporation.
All persons purporting to act as or on behalf of a corporation, knowing there was no incorporation under this chapter, are jointly and severally liable for all liabilities created while so acting.
(a) After incorporation:
(1) If initial directors are named in the articles of incorporation, the initial directors shall hold an organizational meeting, at the call of a majority of the directors, to complete the organization of the corporation by appointing officers, adopting bylaws, and carrying on any other business brought before the meeting; or
(2) If initial directors are not named in the articles, the incorporator or incorporators shall hold an organizational meeting at the call of a majority of the incorporators:
(A) To elect directors and complete the organization of the corporation; or
(B) To elect a board of directors who shall complete the organization of the corporation.
(b) Action required or permitted by this chapter to be taken by incorporators at an organizational meeting may be taken without a meeting if the action taken is evidenced by one or more consents in writing or by electronic transmission describing the action taken and signed by each incorporator.
(c) An organizational meeting may be held in or out of this state or in accordance with Code Section 14-3-821.
(a) The incorporators or board of directors of a corporation shall adopt bylaws for the corporation.
(b) The bylaws may contain any provision for regulating and managing the affairs of the corporation that is not inconsistent with law or the articles of incorporation.
(a) Unless the articles provide otherwise, the directors of a corporation may adopt, amend, or repeal bylaws to be effective only in an emergency defined in subsection (d) of this Code section. The emergency bylaws, which are subject to amendment or repeal by the members, may provide special procedures necessary for managing the corporation during the emergency, including:
(1) How to call a meeting of the board;
(2) Quorum requirements for the meeting; and
(3) Designation of additional or substitute directors.
(b) All provisions of the regular bylaws consistent with the emergency bylaws remain effective during the emergency. The emergency bylaws are not effective after the emergency ends.
(c) Corporate action taken in good faith in accordance with the emergency bylaws:
(1) Binds the corporation; and
(2) May not be used to impose liability on a corporate director, officer, employee, or agent.
(d) An emergency exists for purposes of this Code section if a quorum of the corporation's directors cannot readily be assembled because of some catastrophic event.
(a) Every corporation incorporated under this chapter has the purpose of engaging in any lawful activity unless a more limited purpose is set forth in the articles of incorporation.
(b) A corporation engaging in an activity that is subject to regulation under another statute of this state may incorporate under this chapter only if incorporation under this chapter is not prohibited by the other statute. The corporation shall be subject to all limitations of the other statute.
Every corporation has perpetual duration and succession in its corporate name, unless its articles of incorporation adopted on or after April 1, 1969, or in the case of a corporation existing prior to or on April 1, 1969, an amendment thereto adopted on or after April 1, 1969, provides otherwise. Unless its articles of incorporation provide otherwise, every corporation has the same powers as an individual to do all things necessary or convenient to carry out its business and affairs, including without limitation power:
(1) To sue, be sued, complain, and defend in its corporate name;
(2) To have a corporate seal, which may be altered at will, and to use it, or a facsimile of it, by impressing or affixing or in any other manner reproducing it;
(3) To make and amend bylaws, not inconsistent with its articles of incorporation or with the laws of this state, for regulating and managing the affairs of the corporation;
(4) To purchase, receive, lease, or otherwise acquire, own, hold, improve, use, and otherwise deal with real or personal property or any legal or equitable interest in property, wherever located;
(5) To sell, convey, mortgage, pledge, lease, exchange, and otherwise dispose of all or any part of its property;
(6) To purchase, receive, subscribe for, or otherwise acquire, own, hold, vote, use, sell, mortgage, lend, pledge, or otherwise dispose of, and deal in and with shares or other interests in, or obligations of, any entity;
(7) To make contracts and guaranties; incur liabilities; borrow money; issue notes, bonds, and other obligations; and secure any of its obligations by mortgage or pledge of any of its property, franchises, or income;
(8) To lend money, invest and reinvest its funds, and receive and hold real and personal property as security for repayment, except as limited by Code Sections 14-3-860 through 14-3-864;
(9) To be a promoter, fiduciary, shareholder, partner, member, associate, or manager of any partnership, joint venture, trust, or other entity;
(10) To conduct its activities, locate offices, and exercise the powers granted by this chapter within or without this state;
(11) To elect or appoint directors, officers, delegates, employees, and agents of the corporation; define their duties; fix their compensation; and lend them money and credit;
(12) To pay pensions and establish pension plans, pension trusts, and other benefit and incentive plans for any or all of its current or former directors, officers, employees, and agents;
(13) To make donations not inconsistent with law for the public welfare or for charitable, religious, scientific, or educational purposes and for other purposes that further the corporate interest;
(14) To impose dues, assessments, admission fees, and transfer fees upon its members;
(15) To provide insurance for its benefit on the life or physical or mental ability of any of its directors, officers, or employees or any other person whose death or physical or mental disability might cause financial loss to the corporation; or, pursuant to any contract obligating the corporation, as part of compensation arrangements, or pursuant to any contract obligating the corporation as guarantor or surety, on the life of the principal obligor, and for these purposes the corporation is deemed to have an insurable interest in such persons;
(16) To establish conditions for admission of members, admit members, and issue memberships;
(17) To carry on a business; and
(18) To do all things necessary or convenient, not inconsistent with law, to further the activities and affairs of the corporation.
(a) In anticipation of or during an emergency defined in subsection (d) of this Code section, the board of directors of a corporation may:
(1) Modify lines of succession to accommodate the incapacity of any director, officer, employee, or agent; and
(2) Relocate the principal office, designate alternative principal offices or regional offices, or authorize the officers to do so.
(b) During an emergency defined in subsection (d) of this Code section, unless emergency bylaws provide otherwise:
(1) Notice of a meeting of the board of directors need be given only to those directors it is practicable to reach and may be given in any practicable manner, including by publication and radio;
(2) Those directors who participate in a meeting of the board of directors shall constitute a quorum; and
(3) One or more officers of the corporation present at a meeting of the board of directors may be deemed to be directors for the meeting, in order of rank and within the same rank in order of seniority.
(c) Corporate action taken in good faith during an emergency under this Code section to further the ordinary affairs of the corporation:
(1) Binds the corporation; and
(2) May not be used to impose liability on a corporate director, officer, employee, or agent.
(d) An emergency exists for purposes of this Code section if a quorum of the corporation's directors cannot readily be assembled because of some catastrophic event.
(a) Except as provided in subsection (b) of this Code section, the validity of corporate action may not be challenged on the ground that the corporation lacks or lacked power to act.
(b) A corporation's power to act may be challenged:
(1) In a proceeding by a member against the corporation to enjoin the act;
(2) In a proceeding by the corporation, directly, derivatively, or through a receiver, trustee, or other legal representative, against an incumbent or former director, officer, employee, or agent of the corporation; or
(3) In a proceeding by the Attorney General under Code Section 14-3-170 or 14-3-1430.
(c) In a member's proceeding under paragraph (1) of subsection (b) of this Code section to enjoin an unauthorized corporate act, the court may enjoin or set aside the act, if equitable and if all affected persons are parties to the proceeding, and may award damages for loss, other than anticipated profits, suffered by the corporation or another party because of enjoining the unauthorized act.
(a) As used in this Code section only, the term “nonprofit” means any corporation which is formed, created, or operated by or on behalf of a hospital authority.
(b) Nonprofits shall have all of the rights, powers, benefits, and purposes granted to other corporations under this chapter and shall not be subject to any restrictions contained in Article 4 of Chapter 7 of Title 31, the “Hospital Authorities Law,” except as provided in subsections (c) and (d) of this Code section.
(c) A director of a nonprofit shall be subject to the provisions of Code Section 31-7-74.1 with respect to conflicts of interest regarding such nonprofit and the hospital authority which formed, created, or operates such nonprofit, and Code Section 31-7-74.1 shall be deemed to apply to such nonprofit and such hospital authority only for such purpose.
(d) A nonprofit shall be subject to the provisions of Code Section 31-7-90.1 with respect to reporting community benefits provided by such nonprofit and with respect to annual reports by such nonprofit disclosing certain transactions with the nonprofit or with the hospital authority which formed, created, or operates the nonprofit and Code Section 31-7-90.1 shall be deemed to apply to both that nonprofit and that hospital authority only for such purposes.
(e) Nothing in this Code section shall be deemed or construed to affect in any manner the provisions of Code Section 31-7-75.2, Chapter 14 of Title 50, or Article 4 of Chapter 18 of Title 50 or to change existing law as to whether such statutory provisions are applicable to nonprofits.
(a) A corporate name:
(1) Must contain the word “corporation,” “incorporated,” “company,” or “limited,” or the abbreviation “Corp.,” “Inc.,” “Co.,” or “Ltd.,” or words or abbreviations of like import in a language other than English;
(2) May not contain language stating or implying that the corporation is organized for a purpose other than that permitted by its articles of incorporation and by Code Section 14-3-301;
(3) May not contain anything which, in the reasonable judgment of the Secretary of State, is obscene; and
(4) Shall not in any instance exceed 80 characters, including spaces and punctuation.
(b) Except as authorized by subsections (c) and (d) of this Code section, a corporate name must be distinguishable upon the records of the Secretary of State from:
(1) The corporate name of a corporation, whether for profit or not for profit, incorporated or authorized to transact business in this state;
(2) A name reserved or registered under this title;
(3) The fictitious name adopted by a foreign corporation authorized to transact business in this state because its real name is unavailable;
(4) The name of a limited partnership or professional association reserved or filed with the Secretary of State under this title; and
(5) The name of a limited liability company formed or authorized to transact business in this state.
(c) A corporation may apply to the Secretary of State for authorization to use a name that is not distinguishable upon his or her records from one or more of the names described in subsection (b) of this Code section. The Secretary of State shall authorize use of the name applied for if the other corporation consents to the use in writing and files with the Secretary of State articles of amendment to its articles of incorporation changing its name to a name that is distinguishable upon the records of the Secretary of State from the name of the applying corporation.
(d) A corporation may use the name (including the fictitious name) of another domestic corporation or foreign corporation that is used in this state if the other corporation is incorporated or authorized to transact business in this state and:
(1) The proposed user corporation has merged with the other corporation;
(2) The proposed user corporation has been formed by reorganization of the other corporation; or
(3) The other domestic corporation or foreign corporation has taken the steps required by this chapter to change its name to a name that is distinguishable upon the records of the Secretary of State from the name of the foreign corporation applying to use its former name.
(e) This chapter does not control the use of fictitious or trade names. Issuance of a name under this chapter means that the name is distinguishable for filing purposes on the records of the Secretary of State pursuant to subsection (b) of this Code section. Issuance of a corporate name does not affect the commercial availability of the name.
(a) A person may apply to reserve a name for the purpose of incorporation by paying the fee specified in Code Section 14-3-122. If the Secretary of State finds that the corporate name applied for is available, he or she shall reserve the name for the applicant's use for 30 days or until articles of incorporation are filed, whichever is sooner. If the Secretary of State finds that the name applied for is not distinguishable for filing purposes upon the records of the Secretary of State, he or she shall notify the applicant who may then submit another reservation request within ten days of the date of the rejection notice without payment of an additional reservation fee.
(b) Upon expiration of a name reservation after 30 days without the filing of articles of incorporation, the name may again be reserved for another 30 day period by the same or another applicant under the same guidelines of subsection (a) of this Code section.
(c) A person who has in effect a name reservation under subsection (a) of this Code section may transfer the reservation to another person by delivering to the Secretary of State a signed notice of the transfer that states the name and address of the transferee.
Each corporation must continuously maintain in this state:
(1) A registered office with the same address as that of the registered agent; and
(2) A registered agent, who may be:
(A) A person who resides in this state and whose office is identical with the registered office;
(B) A domestic corporation, business corporation, or domestic limited liability company formed under this title whose office is identical with the registered office; or
(C) A foreign corporation, foreign business corporation, or foreign limited liability company authorized to transact business in this state whose office is identical with the registered office.
(a) A domestic corporation or a foreign corporation may change its registered office or registered agent by delivering to the Secretary of State for filing an amendment to its annual registration that sets forth:
(1) The name of the corporation;
(2) The street address of its current registered office;
(3) If the current registered office is to be changed, the street address of the new registered office;
(4) The name of its current registered agent;
(5) If the current registered agent is to be changed, the name of the new registered agent; and
(6) That after the change or changes are made, the street addresses of its registered office and the office of its registered agent will be identical.
(b) If the street address of a registered agent's office is changed, the registered agent may change the street address of the registered office of any corporation for which the registered agent is the registered agent by notifying the corporation in writing of the change and by signing and delivering to the Secretary of State for filing a statement that complies with the requirements of subsection (a) of this Code section and recites that the corporation has been notified of the change.
(a) A registered agent may resign his or her agency appointment by signing and delivering to the Secretary of State for filing a statement of resignation. The statement may include a statement that the registered office is also discontinued.
(b) On or before the date of the filing of the statement of resignation, the registered agent shall deliver or mail a written notice of the agent's intention to resign to the chief executive officer, chief financial officer, or secretary of the corporation or the foreign corporation, as named and at the address shown in the annual registration or in the articles of incorporation if no annual registration has been filed.
(c) The agency appointment is terminated, and the registered office discontinued if so provided, on the earlier of the filing by the corporation or the foreign corporation of an amendment to its annual registration designating a new registered agent and registered office if also discontinued or the thirty-first day after the date on which the statement was filed.
(d) When a statement of resignation takes effect, the person who resigned ceases to have responsibility under this chapter for any matter thereafter tendered to it as registered agent for the corporation or the foreign corporation. The resignation does not affect any contractual rights the corporation or the foreign corporation has against the registered agent or that the registered agent has against the corporation or the foreign corporation.
(e) A registered agent may resign with respect to a corporation or a foreign corporation regardless of whether the corporation or the foreign corporation is entitled at the time to a certificate of existence or authority under Code Section 14-3-128.
(a) A corporation's registered agent is the corporation's agent for service of process, notice, or demand required or permitted by law to be served on the corporation.
(b) If a corporation has no registered agent, or the agent cannot with reasonable diligence be served, the corporation may be served by registered or certified mail or statutory overnight delivery, return receipt requested, addressed to the secretary of the corporation at its principal office. Service is perfected under this subsection on the earliest of:
(1) The date the corporation receives the mail;
(2) The date shown on the return receipt, if signed on behalf of the corporation; or
(3) Five days after its deposit in the United States mail, if mailed postage prepaid and correctly addressed.
(c) This Code section does not prescribe the only means, or necessarily the required means, of serving a corporation.
(a) Venue in proceedings against a corporation shall be determined in accordance with the pertinent constitutional and statutory provisions of this state in effect as of July 1, 1991, or thereafter.
(b) Each domestic corporation and each foreign corporation authorized to transact business in this state shall be deemed to reside and to be subject to venue as follows:
(1) In civil proceedings generally, in the county of this state where the corporation maintains its registered office, or if the corporation fails to maintain a registered office, it shall be deemed to reside in the county where its last named registered office or principal office, as shown by the records of the Secretary of State, was maintained;
(2) In actions based on contracts, in that county in this state where the contract to be enforced was made or is to be performed, if the corporation has an office and transacts business in that county;
(3) In actions for damages because of torts, wrong, or injury done, in the county where the cause of action originated, if the corporation has an office and transacts business in that county;
(4) In actions for damages because of torts, wrong, or injury done, in the county where the cause of action originated. If venue is based solely on this paragraph, the defendant shall have the right to remove the action to the county in Georgia where the defendant maintains its principal place of business. A notice of removal shall be filed within 45 days of service of the summons. Upon motion by the plaintiff filed within 45 days of the removal, the court to which the case is removed may remand the case to the original court if it finds that removal is improper under the provisions of this paragraph. Upon the defendant's filing of a notice of removal, the 45 day time period for filing such notice shall be tolled until the remand, the entry of an order by the court determining that the removal is valid, or the expiration of the time period for the plaintiff to file a motion challenging the removal, whichever occurs first; and
(5) In garnishment proceedings, in the county of this state in which is located the corporate office or place of business where the employee who is the defendant in the main action is employed.
(c) Any residences established by this Code section shall be in addition to, and not in limitation of, any other residence that any domestic corporation or foreign corporation may have by reason of other laws.
(d) Whenever this chapter either requires or permits a proceeding to be brought in the county where the registered office of the corporation is maintained, if the proceeding is against a corporation having a principal office as required under a prior general corporation law, the action or proceeding may be brought in the county where the principal office is located.
(a) The articles or bylaws may establish criteria or procedures for admission of members.
(b) No person shall be admitted as a member without his or her consent.
(c) A person is not a member of a corporation for the purposes of this chapter unless the person meets the definition of a member under Code Section 14-3-140, regardless of whether the corporation designates or refers to the person as a member.
Except as provided in its articles or bylaws, a corporation may admit members for no consideration or for such consideration as is determined by the board.
A corporation is not required to have members.
Members as defined in Code Section 14-3-140 shall have no voting rights, other than to elect directors, except as specifically provided in the articles or bylaws. All members shall have the same rights and obligations with respect to any other matters, except as set forth in or authorized by the articles or bylaws. Except for the rights specified in Code Sections 14-3-740 through 14-3-747, members of any corporation existing on July 1, 1991, shall be limited to having the same voting and other rights as before such date, until changed by amendment of its articles of incorporation or bylaws.
A member of a corporation is not, as such, personally liable for the acts, debts, liabilities, or obligations of the corporation.
(a) A membership corporation may levy dues, assessments, and fees on its members to the extent authorized in the articles of incorporation or bylaws.
(b) The amount and method of collection of such dues, assessments, and fees may be fixed in the articles of incorporation or bylaws, or the articles or bylaws may authorize the board of directors or members to fix the amount and method of collection.
(c) The articles of incorporation or bylaws may provide reasonable means, such as termination and reinstatement of membership, to enforce the collection of dues, assessments, and fees.
(a) No proceeding may be brought by a creditor to reach the liability, if any, of a member to the corporation unless final judgment has been rendered in favor of the creditor against the corporation and execution has been returned unsatisfied in whole or in part or unless such action would be useless.
(b) All creditors of the corporation, with or without reducing their claims to judgment, may intervene in any creditor's proceeding brought under subsection (a) of this Code section to reach and apply unpaid amounts due the corporation. Any or all members who owe amounts to the corporation may be joined in such proceeding.
(a) Unless otherwise provided by law, a member may resign from membership at any time by delivering notice in writing or by electronic transmission to the corporation. A resignation is effective when the notice is delivered unless the notice specifies a later effective date, although the articles or bylaws may require reasonable notice before the resignation is effective.
(b) This Code section shall not relieve the resigning member from any obligation for charges incurred, services or benefits actually rendered, dues, assessments, or fees, or arising from contract, a condition to ownership of land, an obligation arising out of ownership of land, or otherwise, and this Code section shall not diminish any right of the corporation to enforce any such obligation or obtain damages for its breach.
Unless otherwise expressly provided in a corporation's articles of incorporation or bylaws or, in the case of a corporation in existence before July 1, 1991, by resolution of the directors or members adopted before that date:
(1) No member of a corporation may be expelled or suspended, and no membership or memberships in such corporations may be terminated or suspended except pursuant to a procedure that is fair and reasonable and is carried out in good faith;
(2) A procedure is fair and reasonable when either:
(A) The articles or bylaws set forth a procedure that provides:
(i) Not less than 15 days' prior written notice of the expulsion, suspension, or termination and the reasons therefor; and
(ii) An opportunity for the member to be heard, orally or in writing, not less than five days before the effective date of the expulsion, suspension, or termination by a person or persons authorized to decide that the proposed expulsion, termination, or suspension not take place; or
(B) It is fair and reasonable taking into consideration all of the relevant facts and circumstances;
(3) Any written notice given by mail must be given by first-class or certified mail or statutory overnight delivery, return receipt requested, sent to the last address of the member shown on the corporation's records;
(4) Any proceeding challenging an expulsion, suspension, or termination, including a proceeding in which defective notice is alleged, must be commenced within one year after the effective date of the expulsion, suspension, or termination; and
(5) A member who has been expelled or suspended may be liable to the corporation for dues, assessments, or fees as a result of obligations incurred or commitments made prior to or during expulsion or suspension.
(a) A corporation may provide for delegates having some or all of the rights and authority of members. Any such provision must be set forth in such corporation's articles or bylaws.
(b) If the corporation's articles or bylaws provide for delegates, the articles or bylaws must set forth provisions relating to:
(1) The characteristics, qualifications, rights, limitations, and obligations of delegates, including their selection and removal;
(2) Calling, noticing, holding, and conducting meetings of delegates; and
(3) Carrying on corporate activities during and between meetings of delegates.
(a) A membership corporation shall hold a meeting of members annually at a time stated in or fixed in accordance with the bylaws.
(b) A membership corporation may hold regular meetings of members at the times stated in or fixed in accordance with the bylaws.
(c)(1) Except as provided for in paragraph (2) of this subsection, annual and regular meetings of members may be held in or out of this state at the place stated in or fixed in accordance with the bylaws. If no place is stated in or fixed in accordance with the bylaws, annual and regular meetings shall be held at the corporation's principal office or other suitable place.
(2) Unless the articles of incorporation or the bylaws provide otherwise, the board of directors may determine that an annual and regular meeting of the members may be held wholly or partially by means of remote communication as authorized and provided for in Code Section 14-3-709.
(d) At the annual meeting:
(1) The chief executive officer and chief financial officer shall report on the activities and financial condition of the corporation; and
(2) The members shall consider and act upon such other matters as may be raised consistent with the notice requirements of Code Sections 14-3-704 and 14-3-705.
(e) At regular meetings the members shall consider and act upon such matters as may be raised consistent with the notice requirements of Code Sections 14-3-704 and 14-3-705.
(f) The failure to hold an annual or regular meeting at a time stated in or fixed in accordance with a corporation's bylaws does not affect the validity of any corporate action.
(a) A membership corporation shall hold a special meeting of members:
(1) On call of its board or the person or persons authorized to do so by the articles or bylaws; or
(2) If the holders of at least 5 percent of the voting power of the corporation, or such other amount as the articles of incorporation or bylaws shall specify (but such articles or bylaws shall not require more than 25 percent as a minimum of the voting power), sign, date, and deliver to any corporate officer one or more demands in writing or by electronic transmission for the meeting describing the purpose or purposes for which it is to be held.
(b) If not otherwise fixed under Code Section 14-3-703 or Code Section 14-3-706, the record date for determining members entitled to demand a special meeting is the date the first member signs the demand.
(c) If a notice for a special meeting demanded under paragraph (2) of subsection (a) of this Code section is not given pursuant to Code Section 14-3-704 within 30 days after the date the demand or demands in writing or by electronic transmission are delivered to a corporate officer, regardless of the requirements of subsection (d) of this Code section, a person signing the demand or demands may set the time and place of the meeting and give notice pursuant to Code Section 14-3-704.
(d)(1) Except as provided for in paragraph (2) of this subsection, special meetings of members may be held in or out of this state at the place stated in or fixed in accordance with the bylaws. If no place is stated or fixed in accordance with the bylaws, special meetings shall be held at the corporation's principal office or other suitable place.
(2) Unless the articles of incorporation or the bylaws provide otherwise, the board of directors may determine that a special meeting of members be held wholly or partially by means of remote communication as authorized by Code Section 14-3-709.
(e) Only those matters that are within the purpose or purposes described in the meeting notice required by Code Section 14-3-704 may be conducted at a special meeting of members.
(f) Unless otherwise provided in the articles, a demand by a member for a special meeting may be revoked in writing or by electronic transmission by the member if such revocation is received by the corporation prior to the call of the special meeting.
(g) A bylaw provision governing the voting power required to call special meetings is not a quorum or voting requirement.
(a) The superior court may summarily order a meeting to be held:
(1) On application of any member or other person entitled to participate in an annual meeting, or, in the case of a charitable corporation, the Attorney General, if an annual meeting was not held within the earlier of six months after the end of a fiscal year of the corporation or 15 months after its last annual meeting;
(2) On application of any member or other person entitled to participate in a regular meeting, or, in the case of a charitable corporation, the Attorney General, if a regular meeting is not held within 30 days after the date it was required to be held; or
(3) On application of a member who signed a demand for a special meeting valid under Code Section 14-3-702, a person or persons entitled to call a special meeting, or, in the case of a charitable corporation, the Attorney General, if:
(A) Notice of the special meeting was not given within 30 days after the date the demand was delivered to a corporate officer; or
(B) The special meeting was not held in accordance with the notice.
(b) After notice to the corporation, the court may fix the time and place of the meeting, specify a record date for determining members entitled to notice of and to vote at the meeting, prescribe the form and content of the meeting notice, fix the quorum required for specific matters to be considered at the meeting (or direct that the votes represented at the meeting constitute a quorum for action on those matters), and enter other orders necessary to accomplish the purpose or purposes of the meeting.
(c) If the court orders a meeting, it may also order the corporation to pay the member's or other person's costs (including reasonable attorney's fees) incurred to obtain the order.
(a) A corporation shall give notice consistent with its bylaws of meetings of members in a fair and reasonable manner.
(b) Any notice that conforms to the requirements of subsection (c) of this Code section is fair and reasonable, but other means of giving notice may also be fair and reasonable when all the circumstances are considered; provided, however, that notice of matters referred to in paragraph (2) of subsection (c) of this Code section must be given as provided in subsection (c) of this Code section.
(c) Notice is fair and reasonable if:
(1) The corporation notifies its members of the place, date, and time of each annual, regular, and special meeting of members no fewer than ten days (or if notice is mailed by other than first-class or registered mail or statutory overnight delivery, 30 days) nor more than 60 days before the meeting date;
(2) Notice of an annual or regular meeting includes a description of any matter or matters that must be approved by the members under Code Section 14-3-855, 14-3-856, 14-3-863, 14-3-1003, 14-3-1021, 14-3-1103, 14-3-1202, or 14-3-1402; and
(3) Notice of a special meeting includes a description of the matter or matters for which the meeting is called.
(d) Unless the bylaws require otherwise, if an annual, regular, or special meeting of members is adjourned to a different date, time, or place, notice need not be given of the new date, time, or place, if the new date, time, or place is announced at the meeting before adjournment. If a new record date for the adjourned meeting is or must be fixed under Code Section 14-3-706, however, notice of the adjourned meeting must be given under this Code section to the members of record as of the new record date.
(e) When giving notice of an annual, regular, or special meeting of members, a corporation shall give notice of a matter a member intends to raise at the meeting if:
(1) Requested in writing or by electronic transmission to do so by a person entitled to call a special meeting; and
(2) The request is received by the secretary or chief executive officer at least ten days before the corporation gives notice of the meeting.
(a) A member may waive any notice required by this chapter, the articles, or the bylaws before or after the date and time stated in the notice. The waiver must be in writing or by electronic transmission, be signed by the member entitled to the notice, and be delivered to the corporation for inclusion in the minutes or filing with the corporate records.
(b) A member's attendance at a meeting:
(1) Waives objection to lack of notice or defective notice of the meeting, unless the member at the beginning of the meeting objects to holding the meeting or transacting business at the meeting; and
(2) Waives objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the member objects to considering the matter when it is presented.
(a) The bylaws may fix or provide the manner of fixing the record date to determine the members entitled to notice of a members' meeting, to demand a special meeting to vote, or to take any other action. If the bylaws do not fix or provide for fixing such a record date, the board may fix a future date as such a record date.
(b) A record date fixed under this Code section may not be more than 70 days before the meeting or action requiring a determination of members.
(c) A determination of members entitled to notice of or to vote at a membership meeting is effective for any adjournment of the meeting unless the board fixes a new record date, which it must do if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting.
(d) If a court orders a meeting adjourned to a date more than 120 days after the date fixed for the original meeting, it may provide that the original record date continues in effect or it may fix a new record date.
(a) Unless prohibited or limited by the articles or bylaws, any action that may be taken at any annual, regular, or special meeting of members may be taken without a meeting if the corporation delivers a ballot in writing or by electronic transmission to every member entitled to vote on the matter.
(b) A ballot in writing or by electronic transmission shall:
(1) Set forth each proposed action;
(2) Provide an opportunity to vote for, or withhold a vote for, each candidate for election as a director, if any; and
(3) Provide an opportunity to vote for or against each other proposed action.
(c) Approval by ballot in writing or by electronic transmission pursuant to this Code section shall be valid only when the number of votes cast by ballot equals or exceeds the quorum required to be present at a meeting authorizing the action, and the number of approvals equals or exceeds the number of votes that would be required to approve the matter at a meeting at which the total number of votes cast was the same as the number of votes cast by ballot.
(d) All solicitations for votes by ballot in writing or by electronic transmission shall:
(1) Indicate the number of responses needed to meet the quorum requirements;
(2) State the percentage of approvals necessary to approve each matter other than election of directors; and
(3) Specify the time by which a ballot must be received by the corporation in order to be counted.
(e) Except as otherwise provided in the articles or bylaws, a ballot in writing or by electronic transmission may not be revoked.
(a) Unless limited or prohibited by the articles or bylaws, action required or permitted by this chapter to be approved by the members may be approved without a meeting of members if the action is approved by members who would be entitled to vote at a meeting and who have voting power to cast not less than the minimum number of votes that would be necessary to authorize or take the action at a meeting at which all members entitled to vote were present and voted. The action must be evidenced by one or more consents in writing or by electronic transmission describing the action taken, signed by those members representing the requisite number of votes, and delivered to the corporation for inclusion in the minutes or filing with the corporate records.
(b) No consent in writing or by electronic transmission signed under this Code section shall be valid unless:
(1) The consenting member has been furnished the same material that, under this chapter, would have been required to be sent to members in a notice of a meeting at which the proposed action would have been submitted to the members for action; or
(2) The written consent contains an express waiver of the right to receive the material otherwise required to be furnished.
(c) If not otherwise determined under Code Section 14-3-703 or Code Section 14-3-706, the record date for determining members entitled to take action without a meeting is the date the first member signs the consent.
(d) A consent signed under this Code section has the effect of a meeting vote and may be described as such in any document. Except as otherwise provided in the articles or bylaws, whenever this chapter or the articles or bylaws require a signature of a member, the signature may be a manual, facsimile, conformed, or electronic signature.
(e) Written notice of member approval pursuant to this Code section shall be given to all members who have not signed the written consent. If such written notice is required, member approval pursuant to this Code section shall be effective ten days after such written notice is given.
(f) An electronic transmission which is transmitted by a member that evidences a member's consent, whether such consent is on a ballot or other document; requests or demands an action to be taken by the corporation; or provides notice to the corporation under this chapter shall be deemed to be written, signed, and dated for the purposes of this chapter, provided that any such electronic transmission sets forth or is delivered with information from which the corporation can determine:
(1) That the electronic transmission was transmitted by the member; and
(2) The date on which such member transmitted such electronic transmission. The date on which such electronic transmission is transmitted shall be deemed to be the date on which such consent, request, demand, or notice was signed.
(g) With respect to notices and demands by a member to the corporation, this subsection is in addition to, and not in lieu of, the restrictions and limitations applicable to notices set forth in Code Section 14-3-141.
When authorized by the board of directors, and subject to such guidelines and procedures as such board of directors may adopt, members not physically present at a meeting of the corporation may, by means of remote communication:
(1) Participate in a meeting of members; and
(2) Be deemed present in person and vote at a meeting of members, whether such meeting is held at a designated place or held wholly by means of remote communication, provided that:
(A) The corporation implements reasonable procedures to verify that each person deemed present at the meeting by means of remote communication is a member or holder of a proxy; and
(B) When any member or holder of a proxy votes at the meeting by means of remote communication, a record of such vote or such other action shall be maintained by the corporation.
(a) After fixing a record date for a meeting, a corporation shall prepare an alphabetical list of the names of all its members who are entitled to notice of the meeting. The list must show the address of and number of votes each member is entitled to vote at the meeting. Nothing contained in this Code section shall require the corporation to include email addresses or other information for delivery of electronic transmissions on such list.
(b) The list of members must be available for inspection by any member for the purpose of communication with other members concerning the meeting, beginning two business days after notice is given of the meeting for which the list was prepared and continuing through the meeting: (1) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting or upon request or (2) during ordinary business hours at the corporation's principal office or at a reasonable place identified in the meeting notice in the city where the meeting will be held. In the event that the corporation makes the list available on an electronic network, the corporation may take reasonable steps to ensure that such information is available only to members of the corporation. A member, a member's agent, or a member's attorney is entitled on written demand to inspect and, subject to the limitations of subsection (c) of Code Section 14-3-1602 and Code Section 14-3-1605, to copy the list, at a reasonable time and at the member's expense, during the period it is available for inspection.
(c) The corporation shall make the list of members available at the meeting, and any member, member's agent, or member's attorney is entitled to inspect the list at any time during the meeting or any adjournment. If the meeting is to be held wholly or partially by means of remote communication, then the list shall be open to the examination of any member, member's agent, or member's attorney during the duration of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. In the event that the corporation makes the list available on an electronic network, the corporation may take reasonable steps to ensure that such information is available only to members of the corporation or their agents or attorneys.
(d) If the corporation refuses to allow a member, a member's agent, or a member's attorney to inspect or copy the list of members before or at the meeting (as permitted by subsection (b) of this Code section), the superior court, on application of the member, may summarily order the inspection or copying at the corporation's expense; postpone the meeting for which the list was prepared until the inspection or copying is complete; order the corporation to pay the member's costs, including reasonable attorney's fees, incurred to obtain the order; and order other appropriate relief.
(e) Refusal or failure to prepare or make available the members' list does not affect the validity of action taken at the meeting.
(a) Unless the articles or bylaws provide otherwise, each member is entitled to one vote on each matter voted on by the members.
(b) Unless the articles or bylaws provide otherwise, if a membership stands of record in the names of two or more persons, their acts with respect to voting shall have the following effect:
(1) If only one votes, such act binds all; and
(2) If more than one votes, the vote shall be divided on a pro rata basis.
(a) Members entitled to vote may take action at a meeting on a matter only if a quorum of those members exists with respect to that matter. Unless this chapter, the articles, or the bylaws provide for a higher or lower quorum, a majority of the votes entitled to be cast on a matter shall constitute a quorum for action on that matter.
(b) An amendment to the articles or bylaws that changes or removes a greater quorum requirement shall meet such existing quorum requirement and shall be adopted by the same vote required to take action under the existing quorum requirement prescribed in the provision being amended.
(c) Unless one-third or more of the voting power is present in person or by proxy, the only matters that may be voted upon at an annual or regular meeting of members are those matters that are described in the meeting notice.
(d) Notwithstanding subsection (a) of this Code section, for a corporation in existence prior to July 1, 2023, a quorum shall be 10 percent of the votes entitled to be cast on a matter unless this chapter, the articles, or the bylaws provide for a higher or lower quorum.
(a) Unless this chapter, the articles, or the bylaws require a greater vote or voting by class, if a quorum is present, the affirmative vote of a majority of the votes cast is the act of the members.
(b) The articles or bylaws may provide for a greater voting requirement for members than is provided for by this chapter.
(c) An amendment to the articles or bylaws that changes or removes a greater voting requirement shall be adopted by the same vote required to take action under the existing voting requirement prescribed in the provision being amended.
(a) Unless the articles or bylaws prohibit or limit proxy voting, a member may vote in person or by proxy.
(b) A member or his or her agent or attorney in fact may appoint a proxy to vote or otherwise act for the member by signing an appointment form either personally or by an electronic transmission. An electronic transmission must contain or be accompanied by information from which it can be determined that the member, the member's agent, or the member's attorney in fact authorized the electronic transmission.
(c) An appointment of a proxy is effective when a signed appointment form or electronic transmission of the appointment is received by the secretary or other officer or agent authorized to tabulate votes. An appointment is valid for 11 months unless a different period is expressly provided in the appointment form.
(d) An appointment of a proxy is revocable by the member.
(e) The death or incapacity of the member appointing a proxy does not affect the right of the corporation to accept the proxy's authority unless notice of the death or incapacity is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises authority under the appointment.
(f) Appointment of a proxy is revoked by the person appointing the proxy:
(1) Attending any meeting and voting in person; or
(2) Signing and delivering to the secretary or other officer or agent authorized to tabulate proxy votes either a writing stating that the appointment of the proxy is revoked or a subsequent appointment form.
(g) Subject to Code Section 14-3-727 and any express limitation on the proxy's authority appearing on the face of the appointment form or in the electronic transmission, a corporation is entitled to accept the proxy's vote or other action as that of the member making the appointment.
(h) Any copy, facsimile transmission, or other reliable reproduction of the writing or electronic transmission created pursuant to subsection (b) of this Code section may be substituted or used in lieu of the original writing or electronic transmission for any and all purposes for which the original writing or electronic transmission could be used, provided that such copy, facsimile transmission, or other reproduction shall be a complete reproduction of the entire original writing or electronic transmission.
(i) A corporation may adopt bylaws authorizing additional means or procedures for members to exercise rights granted by this Code section.
(a) Unless otherwise provided in the articles or bylaws, directors are elected by a majority of the votes cast by the members entitled to vote in the election at a meeting at which a quorum is present.
(b) If the articles or bylaws provide for cumulative voting by members, members may so vote, by multiplying the number of votes the members are entitled to cast by the number of directors for whom they are entitled to vote, and cast the product for a single candidate or distribute the product among two or more candidates.
(c) Cumulative voting is not authorized at a particular meeting unless:
(1) The meeting notice or statement accompanying the notice states that cumulative voting will take place; or
(2) A member gives notice during the meeting and before the vote is taken of the member's intent to cumulate votes, and if one member gives this notice all other members participating in the election are entitled to cumulate their votes without giving further notice.
(d) A director elected by cumulative voting may be removed by the members without cause if the requirements of Code Section 14-3-808 are met, unless the votes cast against removal or not consenting in writing to such removal would be sufficient to elect such director if voted cumulatively at an election at which the same total number of votes were cast (or, if such action is taken by written ballot, all memberships entitled to vote were voted) and the entire number of directors authorized at the time of the director's most recent election were then being elected.
(e) Members may not cumulatively vote if the directors and members are identical.
A corporation may provide in its articles or bylaws for election of directors by members or delegates:
(1) By chapter or other organizational unit;
(2) By region or other geographic unit;
(3) By preferential voting;
(4) By class; or
(5) By any other reasonable method.
(a) If the name signed on a vote, consent, waiver, or proxy appointment corresponds to the name of a member, the corporation if acting in good faith is entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the member.
(b) If the name signed on a vote, consent, waiver, or proxy appointment does not correspond to the record name of a member, the corporation if acting in good faith is nevertheless entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the member if:
(1) The member is an entity and the name signed purports to be that of an officer or agent of the entity;
(2) The name signed purports to be that of an attorney in fact of the member and, if the corporation requests, evidence acceptable to the corporation of the signatory's authority to sign for the member has been presented with respect to the vote, consent, waiver, or proxy appointment;
(3) Two or more persons hold the membership as cotenants or fiduciaries and the name signed purports to be the name of at least one of the coholders and the person signing appears to be acting on behalf of all the coholders;
(4) The name signed purports to be that of an administrator, executor, guardian, or conservator representing the member and, if the corporation requests, evidence of fiduciary status acceptable to the corporation has been presented with respect to the vote, consent, waiver, or proxy appointment; or
(5) The name signed purports to be that of a receiver or trustee in bankruptcy of the member, and, if the corporation requests, evidence of this status acceptable to the corporation has been presented with respect to the vote, consent, waiver, or proxy appointment.
(c) The corporation is entitled to reject a vote, consent, waiver, or proxy appointment if the secretary or other officer or agent authorized to tabulate votes, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatory's authority to sign for the member or about the faithfulness or completeness of the reproduction when the original has not been examined.
(d) The corporation and its officer or agent who accept or reject a vote, consent, waiver, or proxy appointment in good faith and in accordance with the standards of this Code section or subsection (b) of Code Section 14-3-724 are not liable in damages to the member for the consequences of the acceptance or rejection.
(e) Corporate action based on the acceptance or rejection of a vote, consent, waiver, or proxy appointment under this Code section or subsection (b) of Code Section 14-3-724 is valid unless a court of competent jurisdiction determines otherwise.
(a) Two or more members may provide for the manner in which they will vote by signing an agreement for that purpose. For charitable corporations, such agreements must have a reasonable purpose not inconsistent with the corporation's public or charitable purposes.
(b) A voting agreement created under this Code section is specifically enforceable.
(c) The duration of any agreement created under this Code section shall not exceed 20 years. Failure to state a period of duration or stating a period of duration in excess of 20 years shall not invalidate the agreement, but in either case the period of duration shall be 20 years. Any such agreement may be renewed for a period not in excess of 20 years from the date of renewal by agreement of all the members bound thereby at the date of renewal.
As used in this article, the term
“derivative proceeding” means a civil suit in the right of a domestic corporation or, to the extent provided in Code Section 14-3-747, in the right of a foreign corporation.
(a) A derivative proceeding may be brought by:
(1) Any director; or
(2) Any member or members having 5 percent or more of the voting power; or
(3) Fifty or more members, regardless of voting power.
(b) A member may not commence or maintain a derivative proceeding unless the member:
(1) Was a member of the corporation at the time of the act or omission complained of or became a member through transfer by operation of law from one who was a member at that time; and
(2) Fairly and adequately represents the interests of the corporation in enforcing the right of the corporation.
(a) No derivative proceeding may be commenced until:
(1) A written demand has been made upon the corporation to take suitable action; and
(2) Ninety days have expired from the date the demand was made unless the complainant has earlier been notified that the demand has been rejected by the corporation or unless irreparable injury to the corporation would result by waiting for the expiration of the 90 day period.
(b) In the case of charitable corporations, the complainant shall deliver a copy of the demand to the Attorney General within ten days of making the demand on the corporation.
If the corporation commences an inquiry into the allegations made in the demand or complaint, the court may stay any derivative proceeding for such period as the court deems appropriate.
(a) The court may dismiss a derivative proceeding if, on motion by the corporation, the court finds that one of the groups specified in subsection (b) of this Code section has made a determination in good faith after conducting a reasonable investigation upon which its conclusions are based that the maintenance of the derivative suit is not in the best interests of the corporation. The corporation shall have the burden of proving the independence and good faith of the group making the determination and the reasonableness of the investigation.
(b) The determination in subsection (a) of this Code section shall be made by:
(1) A majority vote of independent directors present at a meeting of the board of directors if the independent directors constitute a quorum;
(2) A majority vote of a committee consisting of two or more independent directors appointed by a majority vote of independent directors present at a meeting of the board of directors, whether or not such independent directors constitute a quorum; or
(3) A panel of one or more independent persons appointed by the court upon motion by the corporation.
(c) None of the following shall by itself cause a director to be considered not independent for purposes of subsection (b) of this Code section:
(1) The nomination or election of the director by directors who are not independent;
(2) The naming of the director as a defendant in the derivative proceeding; or
(3) The fact that the director approved the action being challenged in the derivative proceeding so long as the director did not receive a personal benefit as a result of the action.
A derivative proceeding may not be discontinued or settled without the court's approval. If the court determines that a proposed discontinuance or settlement will substantially affect the interests of the corporation's members or a class of members, the court shall direct that notice be given to the members affected.
On termination of the derivative proceeding the court may:
(1) Order the corporation to pay the plaintiff's reasonable expenses (including attorney's fees) incurred in the proceeding if it finds that the proceeding has resulted in a substantial benefit to the corporation; or
(2) Order the plaintiff to pay any defendant's reasonable expenses (including attorney's fees) incurred in defending the proceeding if it finds that the proceeding was commenced or maintained without reasonable cause or for an improper purpose.
In any derivative proceeding in the right of a foreign corporation, the matters covered by this article shall be governed by the laws of the jurisdiction of incorporation of the foreign corporation except for Code Sections 14-3-743 and 14-3-745 and paragraph (2) of Code Section 14-3-746.
(a) Each corporation must have a board of directors.
(b) Except as provided in this chapter or subsection (c) of this Code section, all corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation managed under the direction of, its board.
(c) No limitation upon the authority of the directors, whether contained in the articles of incorporation or bylaws, shall be effective against persons, other than members and directors, who are without actual knowledge of the limitation.
(d) The articles may authorize a person or persons to exercise some or all of the powers which would otherwise be exercised by a board. To the extent so authorized any such person or persons shall have the duties and responsibilities of the directors, and the directors shall be relieved to that extent from such duties and responsibilities.
Directors shall be natural persons who are 18 years of age or older but need not be residents of this state nor members of the corporation unless the articles so require. The articles or bylaws may prescribe other qualifications for directors.
(a) A board of directors must consist of one or more natural persons, with the number specified in or fixed in accordance with the articles or bylaws. A corporation without members that is not in existence prior to July 1, 2023, must have a board of directors consisting of three or more natural persons, with the number specified in or fixed in accordance with the articles or bylaws.
(b) The articles or bylaws may authorize the members or the board of directors to fix or change the number of directors or may establish a variable range for the size of the board of directors by fixing a minimum and maximum number of directors. If the variable range is established, the number of directors may be fixed or changed from time to time, within the minimum and maximum, by the members, or if the articles or bylaws so provide, by the board of directors.
(a) If the corporation is a membership corporation, all the directors (except the initial directors) shall be elected at the first annual meeting of members, and at each annual meeting thereafter, unless the articles or bylaws provide some other time or method of election, or provide that some or all of the directors are appointed by some other person or designated in some other manner.
(b) If the articles of incorporation or bylaws authorize dividing the members into classes, the articles or bylaws may also authorize the election of all or a specified number of directors by one or more authorized classes of members. Unless otherwise provided in the articles or bylaws, a class or multiple classes of members entitled to elect one or more directors is a separate voting group for purposes of the election of directors.
(c) If the corporation does not have members, all the directors (except the initial directors) shall be elected, appointed, or designated as provided in the articles or bylaws. If no method of designation or appointment is set forth in the articles or bylaws, the directors (other than the initial directors) shall be elected by the board.
(a) The terms of the initial directors of a corporation expire at the first meeting of members or directors for the election of directors or for such other period as may be specified in the articles of incorporation or bylaws. The articles or bylaws may specify the terms of directors. In the absence of any term specified in the articles or bylaws, the term of each director other than initial directors shall be one year. Directors may be elected for successive terms.
(b) A decrease in the number of directors or term of office does not shorten an incumbent director's term.
(c) A director elected to fill a vacancy shall be elected for the unexpired term of the director's predecessor in office.
(d) Despite the expiration of a director's term, the director continues to serve until the director's successor is elected, designated, or appointed and qualifies, or until there is a decrease in the number of directors.
The articles or bylaws may provide for staggering the terms of directors by dividing the total number of directors into groups. The terms of office of the several groups need not be uniform.
(a) A director may resign at any time by delivering notice in writing or by electronic transmission to the presiding officer of the board of directors, the secretary, or the chief executive officer or in such other manner as the articles or bylaws may provide.
(b) A resignation is effective when the notice is delivered unless the notice specifies a later effective date or an effective date determined by the happening of an event.
(c) A resignation that is conditioned upon the happening of an event may provide that such resignation is irrevocable.
Unless the corporation's articles or bylaws provide otherwise with regard to elected directors:
(1) The members may remove, with or without cause, one or more directors elected by them;
(2) If a director is elected by a class, chapter, or other organizational unit or by region or other geographic grouping, the director may be removed only by the members of that class, chapter, unit, or grouping;
(3) Except as provided in paragraph (9) of this Code section, a director may be removed under paragraph (1) or (2) of this Code section only if the number of votes cast to remove the director would be sufficient to elect the director at a meeting to elect directors;
(4) If cumulative voting is authorized, a director may not be removed if the number of votes, or if the director was elected by a class, chapter, unit, or grouping of members, the director may not be removed if the number of votes of that class, chapter, unit, or grouping, sufficient to elect the director under cumulative voting is voted against the director's removal;
(5) A director elected by members may be removed by the members only at a meeting called for the purpose of removing the director and the meeting notice must state that the purpose, or one of the purposes, of the meeting is removal of the director;
(6) In computing whether a director is protected from removal under paragraphs (2) through (4) of this Code section, it should be assumed that the votes against removal are cast in an election for the number of directors of the class to which the director to be removed belonged on the date of that director's election;
(7) An entire board of directors may be removed under paragraphs (1) through (5) of this Code section;
(8) A director elected by the board may be removed with or without cause by the vote of two-thirds of the directors then in office; provided, however, that a director elected by the board to fill the vacancy of a director elected by the members may be removed without cause by the members, but not the board; and
(9) If, at the beginning of a director's term on the board, the articles or bylaws provide that the director may be removed for missing a specified number of board meetings, the board may remove the director for failing to attend the specified number of meetings. The director may be removed only if a majority of the directors then in office vote for the removal.
(a) A designated director may be removed by an amendment to the articles or bylaws deleting or changing the designation.
(b) Except as otherwise provided in the articles or bylaws with regard to appointed directors:
(1) An appointed director may be removed without cause by the person appointing the director;
(2) The person removing the director shall do so by giving written notice of the removal to the director and to the presiding officer of the board, the corporation's chief executive officer, or the corporation's secretary; and
(3) A removal is effective when the notice is effective unless the notice specifies a future effective date.
(a) The superior court may remove any director of the corporation from office in a proceeding commenced by the corporation, its members holding at least 10 percent of the voting power of any class, or, in the case of a charitable corporation, the Attorney General, if the court finds that:
(1) The director engaged in fraudulent or dishonest conduct, or gross abuse of authority or discretion, with respect to the corporation, or a final judgment has been entered finding that the director has violated a duty set forth in Code Section 14-3-830 or 14-3-831, or the director has been subjected to sanction for participation in a “director’s conflicting interest transaction” as defined in paragraph (2) of Code Section 14-3-860; and
(2) Removal is in the best interest of the corporation.
(b) The court that removes a director may bar the director from serving on the board for a period prescribed by the court.
(c) If members or the Attorney General commence a proceeding under subsection (a) of this Code section, the corporation shall be made a party defendant.
(a) Unless the articles or bylaws provide otherwise, and except as provided in subsections (b) and (c) of this Code section, if a vacancy occurs on a board of directors, including a vacancy resulting from an increase in the number of directors:
(1) The members, if any, may fill the vacancy; if the vacant office was held by a director elected by a class, chapter, or other organizational unit or by region or other geographic grouping, only members of the class, chapter, unit, or grouping are entitled to vote to fill the vacancy if it is filled by the members;
(2) The board of directors may fill the vacancy; or
(3) If the directors remaining in office constitute fewer than a quorum of the board, they may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office.
(b) Unless the articles or bylaws provide otherwise, if a vacant office was held by an appointed director, only the person who appointed the director may fill the vacancy.
(c) If a vacant office was held by a designated director, the vacancy shall be filled as provided in the articles or bylaws. In the absence of an applicable article or bylaw provision, the vacancy may not be filled by the board.
(d) A vacancy that will occur at a specific later date (by reason of a resignation effective at a later date under subsection (b) of Code Section 14-3-807 or otherwise) may be filled before the vacancy occurs but the new director may not take office until the vacancy occurs.
(e) If there are no directors of a corporation without members, the Attorney General or any interested person may petition the superior court to appoint at least three directors or the minimum number required by the articles or bylaws. If the interested person is not the Attorney General, such interested person shall provide notice of the petition to the Attorney General.
Unless the articles or bylaws provide otherwise, the board of directors may fix the compensation of directors.
(a) If the directors of a corporation are deadlocked in the management of the corporate affairs and the members are unable to break the deadlock and if injury to the corporation is being suffered or is threatened by reason thereof, the superior court may, notwithstanding any provisions of the articles of incorporation or bylaws of the corporation to the contrary and whether or not an action is pending for an involuntary dissolution of the corporation, appoint a provisional director pursuant to this Code section.
(b) Action for such appointment may be filed by one-half of the directors or by members holding not less than one-third of all the votes entitled to be cast in an election of directors. Notice of such action shall be served upon the directors, other than those who have filed the action, and upon the corporation in the manner provided by law for service of a summons and complaint, and a hearing shall be held not less than ten days after such service is effected. At such hearing all interested persons shall be given an opportunity to be heard.
(c) The provisional director shall be an impartial person who is neither a member nor a creditor of the corporation nor related by consanguinity or affinity within the third degree, as computed according to the civil law, to any of the other directors of the corporation or to any judge of the court by which he or she is appointed. The provisional director shall have all the rights and powers of a director and shall be entitled to notice of the meetings of the board of directors and to vote at such meetings until he or she is removed by order of the court or by vote or written consent of a majority of the directors or of members holding a majority of the votes entitled to be cast in an election of directors. He or she shall be entitled to receive such compensation as may be agreed upon between him or her and the corporation, and, in the absence of such agreement, he or she shall be entitled to such compensation as shall be fixed by the court.
(a) A board of directors may hold regular or special meetings in or out of this state. If the time and place of a directors' meeting is fixed by the bylaws or the board, the meeting shall be a regular meeting. All other directors' meetings shall be special meetings.
(b) Unless the articles of incorporation or bylaws provide otherwise, the chair of the board or the chief executive officer, or at least 20 percent of the directors then in office, may call and deliver notice of a special meeting of the board of directors.
(c) Unless the articles or bylaws provide otherwise, a board may permit any or all directors to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. A director participating in a meeting by this means is deemed to be present in person at the meeting.
(a) Unless the articles or bylaws provide otherwise, action required or permitted by this chapter to be taken at a board of directors' meeting may be taken without a meeting if the action is taken in accordance with subsection (c) of this Code section.
(b) A director's consent may be withdrawn by a revocation signed by the director and delivered to the corporation prior to delivery to the corporation of unrevoked written consents signed by all the directors required for an action to be taken.
(c) Action taken without a meeting shall be taken by all members of the board, unless the articles or bylaws specifically permit such action to be taken by less than all, but not less than a majority of the board. The action must be evidenced by one or more consents in writing or by electronic transmission describing the action taken, signed by no fewer than the required number of directors, and delivered to the corporation for inclusion in the minutes for filing with the corporate records reflecting the action taken. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
(d) Action taken under this Code section is effective when the last required signed consent is delivered to the corporation, unless the consent specifies a different effective date.
(e) A consent signed and delivered by a director under this Code section has the effect of a meeting vote and may be described as such in any document.
(f) Except as otherwise provided in the articles or bylaws, whenever this chapter, the articles, or the bylaws require the signature of a director, the signature may be manual, facsimile, conformed, or electronic.
(a) Unless the articles or bylaws provide otherwise, regular meetings of the board may be held without notice of the date, time, place, or purpose of the meeting.
(b) Unless the articles or bylaws provide otherwise, special meetings of the board must be preceded by at least two days' notice to each director of the date, time, and place, but not the purpose, of the meeting.
(c) Unless the articles or bylaws provide otherwise, notice shall be provided for any meeting where an amendment to the articles or bylaws or the removal of a director shall be considered. Such notice shall include the date, time, place, and purpose, including the proposed amendment, of the meeting.
(d) The articles of incorporation or bylaws may authorize oral notice of meetings of the board of directors.
(a) A director may waive any notice required by this chapter, the articles of incorporation, or the bylaws before or after the date and time stated in the notice. Except as provided by subsection (b) of this Code section, the waiver must be in writing or by electronic transmission, signed by the director entitled to the notice, and delivered to the corporation for inclusion in the minutes or filing with the corporate records.
(b) A director's attendance at or participation in a meeting waives any required notice to him or her of the meeting unless the director at the beginning of the meeting (or promptly upon his or her arrival) objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting.
(a) Except as otherwise provided in this chapter, the articles, or the bylaws, a quorum of a board of directors consists of:
(1) A majority of the fixed number of directors if the corporation has a fixed board size; or
(2) A majority of the number of directors prescribed or, if no number is prescribed, the number in office immediately before the meeting begins, if the corporation has a variable-range size board.
(b) The articles or bylaws may authorize a quorum of a board of directors to consist of no fewer than one-third of the fixed or prescribed number of directors determined under subsection (a) of this Code section.
(c) If a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act of the board of directors unless this chapter, the articles, or the bylaws require the vote of a greater number of directors.
(d) A director who is present at a meeting of the board of directors or a committee of the board of directors when corporate action is taken is deemed to have assented to the action taken unless:
(1) The director objects at the beginning of the meeting (or promptly upon arrival) to holding it or transacting business at the meeting;
(2) The director's dissent or abstention from the action taken is entered in the minutes of the meeting; or
(3) The director delivers written notice of the director's dissent or abstention to the presiding officer of the meeting before its adjournment or to the corporation immediately after adjournment of the meeting.
(e) The right of dissent or abstention is not available to a director who votes in favor of the action taken.
(f) No director shall vote by proxy at a meeting of the board of directors.
(a) Unless the articles or bylaws provide otherwise, a board of directors may create one or more committees of the board. A committee exercising the authority of the board of directors shall consist of two or more current or former directors, at least one of whom shall be a current director. A committee not exercising authority of the board of directors shall consist of two or more persons, at least one of whom shall be a current director. Committee members shall be appointed by the board of directors or as otherwise provided for in the articles or bylaws.
(b) All provisions of this article applicable to directors shall apply equally to such individuals serving on committees.
(c) Code Sections 14-3-820 through 14-3-824, which govern meetings, action without meetings, notice and waiver of notice, and quorum and voting requirements of the board, apply to committees and committee members as well.
(d) A committee may not
(1) Authorize distributions;
(2) Approve or recommend to members dissolution, merger, or the sale, pledge, or transfer of all or substantially all of the corporation's assets;
(3) Elect, appoint, or remove directors or fill director vacancies on the board;
(4) Unless the articles or bylaws provide otherwise, elect, appoint, or remove directors on any of its committees exercising the authority of the board; or
(5) Adopt, amend, or repeal the articles or bylaws.
(e) The creation of, delegation of authority to, or action by a committee does not alone constitute compliance by a director with the standards of conduct described in Code Section 14-3-830.
(a) Unless a different standard is prescribed by law, a director shall perform his or her duties as a director in good faith and with the degree of care an ordinarily prudent person in a like position would exercise under similar circumstances.
(b) In performing his or her duties, a director may rely upon:
(1) Officers, employees, or agents of the corporation whom the director reasonably believed to be reliable and competent in the functions performed; and
(2) Information, data, opinions, reports, or statements provided by officers, employees, or agents of the corporation or by legal counsel, public accountants, investment bankers, religious authorities, ministers, priests, rabbis, other similar persons in a religious organization, or other persons as to matters involving the skills, expertise, or knowledge reasonably believed to be reliable and within such person's professional or expert competence.
(c) There shall be a presumption that the process a director followed in arriving at decisions was done in good faith and that such director exercised ordinary care; provided, however, that this presumption may be rebutted by evidence that such process constitutes gross negligence by being a gross deviation from the standard of care of a director in a like position under similar circumstances.
(d) Nothing contained in this Code section shall:
(1) In any instance when fairness is at issue, such as consideration of the fairness of a transaction to the corporation as evaluated under paragraph (4) of subsection (b) of Code Section 14-3-861, alter the burden of proving the fact or lack of fairness otherwise applicable;
(2) Alter the fact or lack of liability of a director under the Official Code of Georgia Annotated, including the governance of the consequences of an unlawful distribution under Code Section 14-3-831 or a conflicting interest transaction under Code Section 14-3-861;
(3) Affect any rights to which the corporation or its members may be entitled under another law of this state or of the United States;
(4) Deprive a director of the applicability, effect, or protection of the business judgment rule; or
(5) Deprive a director of the applicability, effect, or protection of Code Section 51-1-20.
(e) A director shall not be deemed to be a trustee with respect to the corporation or with respect to any property held or administered by the corporation, including, without limit, property that may be subject to restrictions imposed by the donor or transferor of such property.
(a) Unless a director complies with the applicable standards of conduct described in Code Section 14-3-830, a director who votes for or assents to a distribution made in violation of this chapter is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating this chapter.
(b) A director held liable for an unlawful distribution under subsection (a) of this Code section is entitled to contribution:
(1) From every other director who voted for or assented to the distribution without complying with the applicable standards of conduct described in Code Section 14-3-830; and
(2) From each person who received an unlawful distribution for the amount of the distribution whether or not the person receiving the distribution knew it was made in violation of this chapter.
(a) A corporation shall have a chief executive officer, a secretary, and a chief financial officer, provided that the articles of incorporation or bylaws may designate other titles in lieu of or in addition to chief executive officer or chief financial officer. The corporation may have additional officers as described in its articles or bylaws or appointed by the board of directors in accordance with the articles or bylaws.
(b) A corporation may have an executive director. Unless the corporation's articles or bylaws state otherwise, the executive director shall be an officer of the corporation.
(c) A duly appointed officer may appoint one or more officers or assistant officers if authorized by the articles or bylaws or the board of directors.
(d) The articles, bylaws, or board shall delegate to one of the officers responsibility for preparing minutes of the directors' and members' meetings and for authenticating records of the corporation.
(e) Unless otherwise provided in the articles or bylaws, the same individual may simultaneously hold more than one office in a corporation, except that the offices of chief executive officer and secretary shall not be held by the same individual.
(f) The officers of a corporation may be designated by such titles as may be provided in the articles or the bylaws, and in such case any document required or permitted by any law of this state to be signed by the chief executive officer, secretary, or any other named officer of a corporation may be signed by such officer as may be stated in such document to correspond to the officer so required or permitted to sign.
Each officer has the authority and shall perform the duties set forth in the articles or bylaws or, to the extent consistent with the articles or bylaws, the duties and authority prescribed by the board or by direction of an officer authorized by the board to prescribe the duties and authority of other officers. Unless the articles, the bylaws, or a resolution of the board of directors of the corporation provides otherwise, the chief executive officer shall have authority to conduct all ordinary business on behalf of the corporation and may execute and deliver on behalf of the corporation any contract, conveyance, or similar document not requiring approval by the board of directors or members as provided in this chapter.
(a) Unless a different standard is prescribed by law, an officer shall perform his or her duties as an officer in good faith and with the degree of care an ordinarily prudent person in a like position would exercise under similar circumstances.
(b) In performing his or her duties, an officer may rely upon:
(1) Other officers, employees, or agents of the corporation whom the officer reasonably believed to be reliable and competent in the functions performed; and
(2) Information, data, opinions, reports, or statements provided by other officers, employees, or agents of the corporation or by legal counsel, public accountants, investment bankers, religious authorities, ministers, priests, rabbis, other similar persons in a religious organization, or other persons as to matters involving the skills, expertise, or knowledge reasonably believed to be reliable and within such person's professional or expert competence.
(c) There shall be a presumption that the process an officer followed in arriving at decisions was done in good faith and that such officer exercised ordinary care; provided, however, that this presumption may be rebutted by evidence that such process constitutes gross negligence by being a gross deviation from the standard of care of an officer in a like position under similar circumstances.
(d) Nothing contained in this Code section shall:
(1) In any instance when fairness is at issue, such as consideration of the fairness of a transaction to the corporation as evaluated under paragraph (4) of subsection (c) of Code Section 14-3-865, alter the burden of proving the fact or lack of fairness otherwise applicable;
(2) Alter the fact or lack of liability of an officer under the Official Code of Georgia Annotated, including the governance of the consequences of a conflicting interest transaction under Code Section 14-3-865;
(3) Affect any rights to which the corporation or its members may be entitled under another law of this state or of the United States;
(4) Deprive an officer of the applicability, effect, or protection of the business judgment rule; or
(5) Deprive an officer of the applicability, effect, or protection of Code Sections 51-1-20 and 51-1-20.1.
(a) An officer may resign at any time by delivering notice in writing or by electronic transmission to the corporation. A resignation is effective when the notice is effective unless the notice specifies a future effective date. If a resignation is made effective at a future date and the corporation accepts the future effective date, its board of directors, or, if authorized by the bylaws, an officer, may fill the pending vacancy before the effective date if the board or such appointing officer provides that the successor does not take office until the effective date.
(b) An officer may be removed at any time with or without cause by:
(1) The board of directors;
(2) The officer who appointed such officer, unless the bylaws or the board of directors provide otherwise; or
(3) Any other officer if authorized by the bylaws or the board of directors.
(c) Unless otherwise provided in the articles or bylaws, any vacancies in the corporation's officers may be filled by the board.
(a) The appointment of an officer does not itself create contract rights.
(b) An officer's removal does not affect the officer's contract rights, if any, with the corporation. An officer's resignation does not affect the corporation's contract rights, if any, with the officer.
Any contract or other instrument in writing executed or entered into between a corporation and any other person is not invalidated as to the corporation by any lack of authority of the signing officers in the absence of actual knowledge on the part of the other person that the signing officers had no authority to execute the contract or other instrument, provided that it is signed by any two officers in category 1 below or by one officer in category 1 below and one officer in category 2 below. Categories shall be as follows:
(1) Category 1 shall consist of the presiding officer of the board and the chief executive officer; and
(2) Category 2 shall consist of a vice president, the secretary, the chief financial officer, and any other officer delineated in the articles or bylaws.
The absence of the signature of such persons from a document shall not itself impair the validity of the document or of any action taken in pursuance thereof or in reliance thereon.
(a) With respect to any contract, conveyance, or similar document executed by or on behalf of a domestic corporation or foreign corporation, the presence of the corporate seal, or a facsimile thereof, attested by the secretary or assistant secretary of the corporation, or other officer to whom the bylaws or the directors have delegated the responsibility for authenticating records of the corporation, shall attest:
(1) That the corporate seal or facsimile thereof affixed to the document is in fact the seal of the corporation or a true facsimile thereof, as the case may be;
(2) That any officer of the corporation executing the document does in fact occupy the official position indicated, that one in such position is duly authorized to execute such document on behalf of the corporation, and that the signature of such officer subscribed thereto is genuine; and
(3) That the execution of the document on behalf of the corporation has been duly authorized.
(b) With respect to any contract, conveyance, or similar document executed by or on behalf of a domestic corporation or a foreign corporation, execution by the chief executive officer, attested by the secretary or assistant secretary of the corporation, or other officer to whom the bylaws or the directors have delegated the responsibility for authenticating records of the corporation, shall attest:
(1) That the person executing the document as chief executive officer does in fact occupy the official position, that one in such position is duly authorized to execute such document on behalf of the corporation, and that the signature of such officer subscribed thereto is genuine; and
(2) That the execution of the document on behalf of the corporation has been duly authorized.
(c) When the seal of a corporation or the facsimile thereof is affixed to any document and is attested by the secretary or assistant secretary of a corporation, or other officer to whom the bylaws or the directors have delegated the responsibility for authenticating records of the corporation, a third party without knowledge or reason to know to the contrary may rely on such document as being what it purports to be.
(d) The seal of the corporation may be affixed to any document executed by the corporation, but the absence of the seal shall not itself impair the validity of the document or of any action taken in pursuance thereof or in reliance thereon.
As used in this part, the term:
(1) “Corporation” includes any domestic or foreign predecessor entity of a corporation in a merger or other transaction in which the predecessor's existence ceased upon consummation of the transaction.
(2) “Director” or “officer” means an individual who is or was a director or officer, respectively, of a corporation who, while a director or officer of the corporation, is or was serving at the corporation's request as a director, officer, partner, trustee, employee, or agent of another domestic or foreign business or nonprofit corporation, partnership, joint venture, trust, employee benefit plan, or other entity. A director or officer is considered to be serving an employee benefit plan at the corporation's request if the director's duties to the corporation also impose duties on, or otherwise involve services by, the director to the plan or to participants in or beneficiaries of the plan. “Director” or “officer” includes, unless the context otherwise requires, the estate or personal representative of a director.
(3) “Disinterested director” means a director who at the time of a vote referred to in paragraph (1) of subsection (c) of Code Section 14-3-853 or a vote or selection referred to in subsection (b) or (c) of Code Section 14-3-855 or subsection (a) of Code Section 14-3-856 is not:
(A) A party to the proceeding; or
(B) An individual having a familial, financial, professional, or employment relationship with the director whose indemnification or advance for expenses is the subject of the decision being made, which relationship would, in the circumstances, reasonably be expected to exert an influence on the director's judgment when voting on the decision being made.
(4) “Disinterested member” means a member who, at the time of a vote referred to in paragraph (2) of subsection (c) of Code Section 14-3-853, a vote referred to in paragraph (3) of subsection (b) of Code Section 14-3-855, or a vote referred to in subsection (a) of Code Section 14-3-856, is not:
(A) A party to the proceeding;
(B) Owned by or under the control of a director who does not qualify as a disinterested director with respect to the proceeding; or
(C) An individual having a familial, financial, professional, or employment relationship with the director whose indemnification or advance for expenses is the subject of the decision being made, which relationship would, in the circumstances, reasonably be expected to exert an influence on the member's judgment when voting on the decision being made.
A director who is also member, but who does not qualify as a disinterested director with respect to the proceeding, cannot qualify or vote as a disinterested member on any matters relating to the proceeding.
(5) “Expenses” includes attorney's fees.
(6) “Liability” means the obligation to pay a judgment, settlement, penalty, fine (including an excise tax assessed with respect to an employee benefit plan), or reasonable expenses actually incurred with respect to a proceeding.
(7) “Official capacity” means:
(A) When used with respect to a director, the office of director in a corporation; and
(B) When used with respect to an officer, as contemplated in Code Section 14-3-858, the office in a corporation held by the officer.
“Official capacity” does not include service for any other domestic or foreign corporation or any partnership, joint venture, trust, employee benefit plan, or other entity.
(8) “Party” means an individual who was, is, or is threatened to be made a named defendant or respondent in a proceeding.
(9) “Proceeding” means any threatened, pending, or completed action, suit, or proceeding whether civil, criminal, administrative, arbitrative, or investigative and whether formal or informal.
(a) Except as otherwise provided in this Code section, a corporation may indemnify an individual who is a party to a proceeding because the individual is or was a director against liability incurred in the proceeding if:
(1) He or she conducted himself or herself in good faith; and
(2) He or she reasonably believed:
(A) In the case of conduct in his or her official capacity, that his or her conduct was in the best interests of the corporation;
(B) In all other cases, that his or her conduct was at least not opposed to the best interests of the corporation; and
(C) In the case of any criminal proceeding, that he or she had no reasonable cause to believe his or her conduct was unlawful.
(b) A director's conduct with respect to an employee benefit plan for a purpose the director believed in good faith to be in the interests of the participants in and beneficiaries of the plan is conduct that satisfies the requirements of subsection (a) of this Code section.
(c) The termination of a proceeding by judgment, order, settlement, or conviction or upon a plea of nolo contendere or its equivalent is not, of itself, determinative that the director did not meet the standard of conduct described in this Code section.
(d) A corporation may not indemnify a director under this Code section:
(1) In connection with a proceeding by or in the right of the corporation, except for reasonable expenses incurred in connection with the proceeding if it is determined that the director has met the relevant standard of conduct under this Code section; or
(2) In connection with any other proceeding with respect to conduct for which the director was adjudged liable on the basis that personal benefit was improperly received by the director, whether or not involving action in the director's official capacity.
A corporation shall indemnify a director who was successful, on the merits or otherwise, in the defense of any proceeding to which the director was a party because the director was a director of the corporation against reasonable expenses incurred by the director in connection with the proceeding.
(a) A corporation may, before final disposition of a proceeding, advance funds to pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding because the director is a director if the director delivers to the corporation:
(1) A written affirmation of the director's good faith belief that the director has met the relevant standard of conduct described in Code Section 14-3-851 or that the proceeding involves conduct for which liability has been eliminated under a provision of the articles of incorporation as authorized by paragraph (4) of subsection (b) of Code Section 14-3-202; and
(2) The director's written undertaking to repay any funds advanced if it is ultimately determined that the director is not entitled to indemnification under this part.
(b) The undertaking required by paragraph (2) of subsection (a) of this Code section must be an unlimited general obligation of the director but need not be secured and may be accepted without reference to the financial ability of the director to make repayment.
(c) Authorizations under this Code section shall be made:
(1) By the board of directors:
(A) If there are two or more disinterested directors, by a majority vote of all the disinterested directors (a majority of whom shall for such purpose constitute a quorum) or by a majority of the members of a committee of two or more disinterested directors appointed by such a vote; or
(B) If there are fewer than two disinterested directors, by the vote necessary for action by the board in accordance with subsection (c) of Code Section 14-3-824, in which authorization directors who do not qualify as disinterested directors may participate; or
(2) By the disinterested members.
(a) A director who is a party to a proceeding because he or she is a director may apply for indemnification or advances of expenses to the court conducting the proceeding or to another court of competent jurisdiction. After receipt of an application, after giving any notice it considers necessary, the court shall:
(1) Order indemnification or advance for expenses if it determines that the director is entitled to indemnification under this part; or
(2) Order indemnification or advance for expenses if it determines, in view of all the relevant circumstances, that it is fair and reasonable:
(A) To indemnify the director; or
(B) To advance expenses to the director,
even if he or she has not met the relevant standard of conduct set forth in subsections (a) and (b) of Code Section 14-3-851, failed to comply with Code Section 14-3-853, or was adjudged liable in a proceeding referred to in paragraph (1) or (2) of subsection (d) of Code Section 14-3-851, but if he or she was adjudged so liable his or her indemnification shall be limited to reasonable expenses incurred in connection with the proceeding.
(b) If the court determines that the director is entitled to indemnification or advance for expenses under paragraph (1) of subsection (a) of this Code section, it shall also order the corporation to pay the director's reasonable expenses to obtain court ordered indemnification or advance for expenses. If the court determines that the director is entitled to indemnification or advance for expenses under paragraph (2) of subsection (a) of this Code section, it may also order the corporation to pay the director's reasonable expenses to obtain court ordered indemnification or advance for expenses.
(c) The court may summarily determine, without a jury, a corporation's obligation to indemnify or advance expenses.
(a) A corporation may not indemnify a director under Code Section 14-3-851 unless authorized thereunder and a determination has been made for a specific proceeding that indemnification of the director is permissible in the circumstances because the director has met the relevant standard of conduct set forth in Code Section 14-3-851.
(b) The determination shall be made:
(1) If there are two or more disinterested directors, by the board of directors by a majority vote of all the disinterested directors (a majority of whom shall for such purpose constitute a quorum), or by a majority of the members of a committee of two or more disinterested directors appointed by such a vote;
(2) By special legal counsel:
(A) Selected in the manner prescribed in paragraph (1) of this subsection; or
(B) If there are fewer than two disinterested directors, selected by the board of directors, in which selection directors who do not qualify as disinterested directors may participate; or
(3) By the disinterested members.
(c) Authorization of indemnification or an obligation to indemnify and evaluation as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible, except that if there are fewer than two disinterested directors or if the determination is made by special legal counsel, authorization of indemnification and evaluation as to reasonableness of expenses shall be made by those entitled under paragraph (3) of subsection (b) of this Code section to select special legal counsel.
(a) If authorized by the articles of incorporation or a bylaw, contract, or resolution approved or ratified by a majority of disinterested members unless otherwise specified in the articles or bylaws, or, in the case of a corporation without members, by a majority of disinterested directors unless otherwise specified in the articles or bylaws, a corporation may indemnify or obligate itself to indemnify a director made a party to a proceeding, including a proceeding brought by or in the right of the corporation, without regard to the limitations in other Code sections of this part.
(b) The corporation shall not indemnify a director under this Code section for any liability incurred in a proceeding in which the director is adjudged liable to the corporation or is subjected to injunctive relief in favor of the corporation:
(1) For any appropriation, in violation of the director's duties, of any business opportunity of the corporation;
(2) For acts or omissions which involve intentional misconduct or a knowing violation of law;
(3) For the types of liability set forth in Code Sections 14-3-860 through 14-3-864; or
(4) For any transaction from which the director received an improper personal benefit.
(c) Where approved or authorized in the manner described in subsection (a) of this Code section, a corporation may advance or reimburse expenses incurred in advance of final disposition of the proceeding only if:
(1) The director furnishes the corporation with a written affirmation of the director's good faith belief that the director's conduct does not constitute behavior of the kind described in subsection (b) of this Code section; and
(2) The director furnishes the corporation with a written undertaking, executed personally or on his or her behalf, to repay any advances for expenses if it is ultimately determined that the director is not entitled to indemnification under this Code section.
(a) A corporation may indemnify and advance expenses under this part to an officer of the corporation who is a party to a proceeding because he or she is an officer of the corporation:
(1) To the same extent as a director; and
(2) If he or she is not a director, to such further extent as may be provided by the articles of incorporation, the bylaws, a resolution of the board of directors, or contract except for liability arising out of conduct that constitutes:
(A) Appropriation, in violation of his or her duties, of any business opportunity of the corporation;
(B) Acts or omissions which involve intentional misconduct or a knowing violation of law;
(C) The types of liability set forth in Code Sections 14-3-860 through 14-3-865; or
(D) Receipt of an improper personal benefit.
(b) The provisions of paragraph (2) of subsection (a) of this Code section shall apply to an officer who is also a director if the sole basis on which he or she is made a party to the proceeding is an act or omission solely as an officer.
(c) An officer of a corporation who is not a director is entitled to mandatory indemnification under Code Section 14-3-852, and may apply to a court under Code Section 14-3-854 for indemnification or advances for expenses, in each case to the same extent to which a director may be entitled to indemnification or advances for expenses under those provisions.
(d) A corporation may also indemnify and advance expenses to an employee or agent who is not a director to the extent, consistent with public policy, that may be provided by its articles of incorporation, its bylaws, general or specific action of its board of directors, or contract.
A corporation may purchase and maintain insurance on behalf of an individual who is a director, officer, employee, or agent of the corporation or who, while a director, officer, employee, or agent of the corporation, serves at the corporation's request as a director, officer, partner, trustee, employee, or agent of another domestic or foreign business or nonprofit corporation, partnership, joint venture, trust, employee benefit plan, or other entity against liability asserted against or incurred by the individual in that capacity or arising from the individual's status as a director, officer, employee, or agent, whether or not the corporation would have power to indemnify or advance expenses to the individual against the same liability under this part.
(a) A corporation may, by a provision in its articles of incorporation or bylaws or in a resolution adopted or a contract approved by its board of directors or members, obligate itself in advance of the act or omission giving rise to a proceeding to provide indemnification or advance funds to pay for or reimburse expenses consistent with this part. Any such obligatory provision shall be deemed to satisfy the requirements for authorization referred to in subsection (c) of Code Section 14-3-853 or subsection (c) of Code Section 14-3-855. Any such provision existing on July 1, 1991, shall be valid to the extent it does not provide for broader indemnification than is allowed under this part.
(b) Any provision pursuant to subsection (a) of this Code section shall not obligate the corporation to indemnify or advance expenses to a director of a predecessor of the corporation, pertaining to conduct with respect to the predecessor, unless otherwise specifically provided. Any provision for indemnification or advance for expenses in the articles of incorporation, the bylaws, or a resolution of the board of directors, members, shareholders, partners, or, in the case of limited liability companies, members or managers of a predecessor of the corporation or other entity in a merger or in a contract to which the predecessor is a party, existing at the time the merger takes effect, shall be governed by paragraph (3) of Code Section 14-3-1105.
(c) A corporation may, by a provision in its articles of incorporation, limit any of the rights to indemnification or advance for expenses created by or pursuant to this part.
(d) This part does not limit a corporation's power to pay or reimburse expenses incurred by a director or an officer in connection with his or her appearance as a witness in a proceeding at a time when he or she is not a party.
(e) Except as expressly provided in Code Section 14-3-857, this part does not limit a corporation's power to indemnify, advance expenses to, or provide or maintain insurance on behalf of an employee or agent.
(f) Any provision in a corporation's articles of incorporation or bylaws or in a resolution adopted or contract approved by its board of directors or members that obligates the corporation to provide indemnification to the fullest extent permitted by law shall, unless such provision or another provision in the corporation's articles of incorporation or bylaws or in a resolution adopted or a contract approved by its board of directors or members expressly provides otherwise, be deemed to obligate the corporation:
(1) To advance funds to pay for or reimburse expenses in accordance with Code Section 14-3-853 or subsection (c) of Code Section 14-3-856 to the fullest extent permitted by law; and
(2) To indemnify directors to the fullest extent permitted in Code Section 14-3-856, provided that such provision is duly authorized as required in subsection (a) of Code Section 14-3-856, and to indemnify officers to the fullest extent permitted in paragraph (2) of subsection (a) and subsection (b) of Code Section 14-3-857.
(g) The provisions of this part may be incorporated by reference into a corporation's articles of incorporation, its bylaws, or a resolution of its members or board of directors. In such case, any such provision shall subsequently be deemed amended to conform with any amendments to this part, unless such provision otherwise expressly provides.
As used in this part, the term:
(1) “Conflicting interest” with respect to a corporation means the interest a director of the corporation has respecting a transaction effected or proposed to be effected by the corporation (or by a subsidiary of the corporation or any other entity in which the corporation has a controlling interest) if:
(A) Whether or not the transaction is brought before the board of directors of the corporation for action, to the knowledge of the director at the time of commitment the director or a related person is a party to the transaction or has a beneficial financial interest in or so closely linked to the transaction and of such financial significance to the director or a related person that it would reasonably be expected to exert an influence on the director's judgment if the director were called upon to vote on the transaction; or
(B) The transaction is brought (or is of such character and significance to the corporation that it would in the normal course be brought) before the board of directors of the corporation for action, and to the knowledge of the director at the time of commitment any of the following persons is either a party to the transaction or has a beneficial financial interest so closely linked to the transaction and of such financial significance to that person that it would reasonably be expected to exert an influence on the director's judgment if the director were called upon to vote on the transaction:
(i) an entity (other than the corporation) of which the director is a director, general partner, agent, or employee; (ii) a person that controls one or more of the entities specified in division (i) of this subparagraph or an entity that is controlled by, or is under common control with, one or more of the entities specified in division (i) of this subparagraph; or (iii) an individual who is a general partner, principal, or employer of the director.
(2) “Director's conflicting interest transaction” with respect to a corporation means a transaction effected or proposed to be effected by the corporation (or by a subsidiary of the corporation or any other entity in which the corporation has a controlling interest) respecting which a director of the corporation has a conflicting interest.
(3) “Related person” of a director means:
(A) The spouse (or a parent or sibling thereof) of the director or a child, grandchild, sibling, parent (or spouse of any thereof), or an individual having the same home as the director, or a trust or estate of which an individual specified in this subparagraph is a substantial beneficiary; or
(B) A trust, estate, incompetent, conservatee, or minor of which the director is a fiduciary.
(4) “Required disclosure” means disclosure by the director who has a conflicting interest of (A) the existence and nature of the director's conflicting interest, and (B) all facts known to the director respecting the subject matter of the transaction that an ordinarily prudent person would reasonably believe to be material to a judgment as to whether or not to proceed with the transaction.
(5) “Time of commitment” respecting a transaction means the time when the transaction is consummated or, if made pursuant to contract, the time when the corporation (or its subsidiary or the entity in which it has a controlling interest) becomes contractually obligated so that its unilateral withdrawal from the transaction would entail significant loss, liability, or other damage.
(a) A transaction effected or proposed to be effected by a corporation (or by a subsidiary of the corporation or by any other entity in which the corporation has a controlling interest) that is not a director's conflicting interest transaction may not be enjoined, set aside, or give rise to an award of damages or other sanctions, in an action under the laws of this state by a member or by or in the right of the corporation or any other person who otherwise has standing, on the ground of an interest in the transaction of a director or any person with whom or which he or she has a personal, economic, or other association.
(b) A director's conflicting interest transaction may not be enjoined, set aside, or give rise to an award of damages or other sanctions, in an action under the laws of this state by a member or by or in the right of the corporation or by any other person who otherwise has standing, on the ground of an interest in the transaction of the director or any person with whom or which he or she has a personal, economic, or other association, if:
(1) Directors' action respecting the transaction was at any time taken in compliance with Code Section 14-3-862;
(2) Members' action respecting the transaction was at any time taken in compliance with Code Section 14-3-863;
(3) Action by the superior court respecting the transaction was at any time taken in compliance with Code Section 14-3-864; or
(4) The transaction, judged in the circumstances at the time of commitment, is established to have been fair to the corporation.
(a) Directors' action respecting a transaction is effective for purposes of paragraph (1) of subsection (b) of Code Section 14-3-861 if the transaction received the affirmative vote of a majority (but not less than two) of those qualified directors on the board of directors or on a duly empowered committee thereof who voted on the transaction after either required disclosure to them (to the extent the information was not known by them) or compliance with subsection (b) of this Code section.
(b) If a director has a conflicting interest respecting a transaction, but neither he or she nor a related person of the director specified in subparagraph (A) of paragraph (3) of Code Section 14-3-860 is a party thereto, and if the director has a duty under law or professional canon, or a duty of confidentiality to another person, respecting information relating to the transaction such that the director cannot, consistent with that duty, make the disclosure contemplated by subparagraph (B) of paragraph (4) of Code Section 14-3-860, then disclosure is sufficient for purposes of subsection (a) of this Code section if the director:
(1) Discloses to the directors voting on the transaction the existence and nature of his or her conflicting interest and informs them of the character of and limitations imposed by that duty prior to their vote on the transaction; and
(2) Plays no part, directly or indirectly, in their deliberations or vote.
(c) A majority (but not less than two) of all the qualified directors on the board of directors, or on the committee, constitutes a quorum for purposes of action that complies with this Code section. Directors' action that otherwise complies with this Code section is not affected by the presence or vote of a director who is not a qualified director.
(d) For purposes of this Code section, “qualified director” means, with respect to a director's conflicting interest transaction, any director who does not have either (1) a conflicting interest respecting the transaction or (2) a familial, financial, professional, or employment relationship with a second director who does have a conflicting interest respecting the transaction, which relationship would, in the circumstances, reasonably be expected to exert an influence on the first director's judgment when voting on the transaction.
(a) Members' action respecting a transaction is effective for purposes of paragraph (2) of subsection (b) of Code Section 14-3-861 if a majority of the votes entitled to be cast by all qualified members were cast in favor of the transaction after (1) notice to members describing the director's conflicting interest transaction, (2) provision of the information referred to in subsection (d) of this Code section, and (3) required disclosure to the members who voted on the transaction (to the extent the information was not known by them).
(b) For purposes of this Code section, “qualified members” means any members entitled to vote with respect to a director's conflicting interest transaction except the director who is a member and who has a conflicting interest respecting the transaction and members that, to the knowledge, before the vote, of the secretary (or other officer or agent of the corporation authorized to tabulate votes) are members with a conflicting interest as described in subparagraph (B) of paragraph (1) of Code Section 14-3-860, are beneficially owned (or whose voting is controlled) by a director who has a conflicting interest respecting the transaction or by a related person of the director, or both.
(c) A majority of the votes entitled to be cast by all qualified members constitutes a quorum for purposes of action that complies with this Code section. Subject to the provisions of subsection (d) of this Code section, members' action that otherwise complies with this Code section is not affected by the presence of, or the voting by, members that are not qualified members.
(d) For purposes of compliance with subsection (a) of this Code section, a director who has a conflicting interest respecting the transaction shall, before the members' vote, inform the secretary (or other officer or agent of the corporation authorized to tabulate votes) of the identity of all members that to the knowledge of the director are members with a conflicting interest as described in subparagraph (B) of paragraph (1) of Code Section 14-3-860, are beneficially owned (or whose voting is controlled) by the director who has a conflicting interest respecting the transaction or by a related person of the director, or both.
(e) If a members' vote does not comply with subsection (a) of this Code section solely because of a failure of a director to comply with subsection (d) of this Code section, and if the director establishes that this failure did not determine and was not intended by him or her to influence the outcome of the vote, the court may, with or without further proceedings respecting paragraph (3) of subsection (b) of Code Section 14-3-861, take such action respecting the transaction and the director, and give such effect, if any, to the members' vote, as it considers appropriate in the circumstances.
In a case involving a charitable corporation a transaction that was not the subject of either directors' action under Code Section 14-3-862 or members' action under Code Section 14-3-863 is effective for purposes of paragraph (3) subsection (b) of Code Section 14-3-861 if the transaction is approved by the superior court, in an action in which the Attorney General is joined as a party.
(a) As used in this Code section, the term:
(1) “Officer” means a person who is not a director and who is holding an office described in the bylaws of the corporation or appointed by the board of directors in accordance with the bylaws of the corporation.
(2) “Officer's conflicting interest transaction” means any transaction, other than a director's conflicting interest transaction as defined in paragraph (2) of Code Section 14-3-860, between a corporation (or a subsidiary of the corporation or any other entity in which the corporation has a controlling interest) and one or more of its officers or between a corporation and a related person of an officer.
(3) “Related person” of an officer shall have the same meaning with respect to an officer that this term has with respect to a director in paragraph (3) of Code Section 14-3-860.
(4) “Required disclosure” with respect to an officer shall have the same meaning as this term has with respect to a director in paragraph (4) of Code Section 14-3-860.
(5) “Time of commitment” shall have the same meaning as in paragraph (5) of Code Section 14-3-860.
(b) No officer's conflicting interest transaction shall be void or voidable solely because the officer is present at or participates in the meeting of the board of directors or committee thereof which authorizes the contract or transaction.
(c) An officer's conflicting interest transaction may not be enjoined, set aside, or give rise to an award of damages or other sanctions, in an action under the laws of this state by a member or by or in the right of the corporation or by any other person who otherwise has standing, on the ground of an interest in the transaction of the officer or any person with whom or which he or she has a personal, economic, or other association, if:
(1) The transaction was approved by the board of directors after required disclosure;
(2) The transaction was approved by the members after required disclosure;
(3) The action was approved by the superior court in an action to which the Attorney General was a party; or
(4) The transaction, judged in the circumstances at the time of commitment, is established to have been fair to the corporation.
(a) A corporation may disclaim, in its articles of incorporation or bylaws or by action of its members or board of directors, any interest of the corporation in, or in being offered, or in excluding directors or officers from taking advantage of or participating in, specific business opportunities or classes or categories of business opportunities that are, have been, or may be in the future presented to the corporation or to one or more of its directors or officers. For purposes of this part, the terms “director” and “directors” include a person or persons other than directors to the extent discretion or powers of the board of directors are vested in such person or persons pursuant to Code Section 14-3-801.
(b) A director's or officer's taking advantage of, or participating in, directly or indirectly, a specific business opportunity shall not be the subject of equitable relief, or give rise to an award of damages or other sanctions against such director or officer, in a proceeding by a member or by or in the right of the corporation or by any other person who otherwise has standing, on the ground that such opportunity should have been first offered to the corporation or that the corporation had an interest in, or in being offered, or in excluding the director or officer from taking advantage of or participating in, such opportunity, to the extent that the corporation has disclaimed any such interest with respect to such business opportunity pursuant to subsection (a) of this Code section, either with respect to the specific business opportunity or with respect to a class or category of business opportunities that includes such opportunity.
(c) Action by the members or board of directors of the corporation approving a disclaimer pursuant to subsection (a) of this Code section that applies to a director with respect to a specific past, present, or future business opportunity shall be effective for all purposes if the director brings such opportunity to the attention of the corporation (if such opportunity is not known to the corporation) and:
(1) Such disclaimer is approved by qualified directors in compliance with the procedures set forth in Code Section 14-3-862, as if the decision being made concerned a director's conflicting interest transaction;
(2) Such disclaimer is approved by members' action taken in compliance with the procedures set forth in Code Section 14-3-863, as if the decision being made concerned a director's conflicting interest transaction; or
(3) Such disclaimer is approved by an action by the superior court respecting the transaction taken in compliance with Code Section 14-3-864; except that, rather than making the required disclosure as defined in Code Section 14-3-860, in each case the director shall have made prior disclosure to those approving such disclaimer on behalf of the corporation of all material facts concerning the business opportunity that are then known to the director, subject to subsection (e) of this Code section, and that a “qualified director” is a director who, at the time action is to be taken under paragraph (1) of this subsection, would be a qualified director under subsection (d) of Code Section 14-3-862 if the business opportunity were a director's conflicting interest transaction.
(d) Action by the board of directors or members of the corporation approving a disclaimer pursuant to subsection (a) of this Code section that applies to an officer with respect to a specific past, present, or future business opportunity shall be effective for all purposes if the officer brings such opportunity to the attention of the corporation (if such opportunity is not known to the corporation) and such disclaimer is approved by the board of directors or members in compliance with the procedures set forth in Code Section 14-3-865, as if the decision being made concerned an officer's conflicting interest transaction, except that, rather than making the required disclosure as defined in Code Section 14-3-865, in each case the officer shall have made prior disclosure to those approving such disclaimer on behalf of the corporation of all material facts concerning the business opportunity that are then known to the officer, subject to subsection (e) of this Code section.
(e) Notwithstanding subsection (c) or (d) of this Code section, a director or officer is not obligated to make prior disclosure to those approving a disclaimer on behalf of the corporation pursuant to subsection (c) or (d) of this Code section of all material facts concerning the business opportunity subject to such disclaimer that are then known to the director or officer to the extent that the director or officer reasonably believes that doing so would violate a duty imposed under law, a legally enforceable obligation of confidentiality, or a professional ethics rule, provided that such director or officer discloses to those acting on behalf of the corporation:
(1) All information required to be disclosed that is not so violative; and
(2) The nature of the director's or officer's duty not to disclose the confidential information.
(f) In any proceeding seeking equitable relief or other remedies based upon an alleged improper taking advantage of or participation in a business opportunity by a director or officer, directly or indirectly, the fact that the director or officer did not employ the procedures described in this Code section before taking advantage of the opportunity shall not:
(1) Create an inference that the opportunity should have been first presented to the corporation; that the corporation had an interest in, or in being offered, or in excluding the director or officer from taking advantage of or participating in, such opportunity; or that the director or officer has or will have appropriated the opportunity in violation of his or her duties by taking advantage of or participating in the opportunity; or
(2) Alter the burden of proof otherwise applicable to establish that the director or officer breached a duty to the corporation in the circumstances.
(a) A corporation may amend its articles of incorporation at any time to add or change a provision that is required or permitted in the articles or to delete a provision not required in the articles. Whether a provision is required or permitted in the articles is determined as of the effective date of the amendment.
(b) Except as provided in the articles of incorporation, a member of a corporation does not have a vested property right resulting from any provision in the articles, including provisions relating to management, control, purpose, or duration of the corporation.
(c) Subsection (b) of this Code section shall not apply to vested real property rights of members of a corporation, including a property owners' association, established pursuant to a recorded declaration of covenants or any other recorded agreement between the corporation and all of its members.
If a corporation has no members or no members entitled to vote thereon, its incorporators until directors have been chosen and thereafter its board of directors may adopt one or more amendments to the corporation's articles subject to any approval required pursuant to Code Sections 14-3-1030 and 14-3-1041.
If the articles or bylaws require a vote of the members:
(1) Unless the articles provide otherwise, a corporation's board of directors may adopt one or more of the following amendments to the corporation's articles without member action:
(A) To extend the duration of the corporation if it was incorporated at a time when limited duration was required by law;
(B) To delete the names and addresses of the initial directors;
(C) To delete the name and address of the initial registered agent or registered office, if an annual registration is on file with the Secretary of State;
(D) To change the corporate name; or
(E) To make any other change expressly permitted by this chapter to be made without member action;
(2) If there are members required to vote thereon, to adopt an amendment to a corporation's articles:
(A) The board of directors must recommend the amendment to the members unless the board of directors elects, because of a conflict of interest or other special circumstances, to make no recommendation and communicates the basis for its election to the members with the amendment;
(B) Unless this chapter, the articles, the bylaws, the members (acting pursuant to paragraph (3) of this Code section), or the board of directors (acting pursuant to paragraph (4) of this Code section) require a greater vote or voting by class, the members entitled to vote on the amendment must approve the amendment by two-thirds of the votes cast or a majority of the voting power, whichever is less; and
(C) Any person or persons whose approval is required by a provision of the articles or bylaws authorized by Code Section 14-3-1030 or 14-3-1041 must approve the amendment in writing;
(3) The members may condition the amendment's adoption on any basis;
(4) The board may condition its submission of the proposed amendment on any basis;
(5) The corporation shall give notice to its members of the proposed membership meeting in writing in accordance with Code Section 14-3-704. The notice must state that the purpose, or one of the purposes, of the meeting is to consider the proposed amendment and contain or be accompanied by a copy or summary of the amendment; and
(6) If the amendment is submitted to the members for approval by written consent or written ballot, the material soliciting the approval shall contain or be accompanied by a copy or summary of the amendment.
If the articles or bylaws provide for voting by classes of members, then unless the articles or bylaws provide otherwise:
(1) The members of a class are entitled to vote as a class on a proposed amendment to the articles if the amendment would change the rights of that class as to voting in a different manner than such amendment would affect another class or members of another class;
(2) If a class is to be divided into two or more classes as a result of an amendment to the articles, the amendment must be approved by the members of each class that would be created by the amendment; and
(3) If a class vote is required to approve an amendment to the articles, the amendment must be approved by the members of the class by two-thirds of the votes cast by the class or a majority of the voting power of the class, whichever is less.
A corporation amending its articles shall deliver to the Secretary of State for filing articles of amendment setting forth:
(1) The name of the corporation;
(2) The text of each amendment adopted;
(3) The date of each amendment's adoption;
(4) If approval of members was not required, a statement to that effect and a statement that the amendment was approved by a sufficient vote of the board of directors or incorporators;
(5) If approval by members was required, a statement that the amendment was duly approved by the members in accordance with the provisions of Code Section 14-3-1003; and
(6) If approval of the amendment by some person or persons other than the members, the board, or the incorporators is required pursuant to Code Section 14-3-1030 or 14-3-1041, a statement that the approval was obtained.
(a) Together with the articles of amendment which change the name of the corporation, the corporation shall deliver to the Secretary of State an undertaking, which may appear in the articles of amendment or be set forth in a letter or other instrument executed by an incorporator or any person authorized to act on behalf of the corporation, to publish a notice of the filing of the articles of amendment as required by subsection (b) of this Code section.
(b) No later than the next business day following the delivery of the articles of amendment and certificate as provided in subsection (a) of this Code section, the corporation shall mail or deliver to the publisher of a newspaper which is the official organ of the county where the registered office of the corporation is located or which is the newspaper of general circulation published within such county whose most recently published annual statement of ownership and circulation reflects a minimum of 60 percent paid circulation a request to publish a notice in substantially the following form:
“NOTICE OF CHANGE OF CORPORATE NAME
Notice is given that articles of amendment which will change the name of __________ (present corporate name) to __________ (proposed corporate name) have been delivered to the Secretary of State for filing in accordance with the Georgia Nonprofit Corporation Code. The registered office of the corporation is located at __________ (address of registered office).”
The request for publication of the notice shall be accompanied by a check, draft, or money order in the amount of $40.00 in payment for the cost of publication. The notice shall be published once a week for two consecutive weeks commencing within ten days after receipt of the notice by the newspaper. Failure on the part of the corporation to mail or deliver the notice or payment therefor or failure on the part of the newspaper to publish the notice in compliance with this subsection shall not invalidate the articles of amendment or the change of the name of the corporation.
(a) A corporation's board of directors may restate its articles of incorporation at any time with or without approval by members or any other person.
(b) The restatement may include one or more amendments to the articles. If the restatement includes an amendment requiring approval by the members or any other person, it must be adopted as provided in Code Section 14-3-1003, 14-3-1030, or 14-3-1041.
(c) If the board seeks to have the restatement approved by the members at a membership meeting, the corporation shall notify each of its members of the proposed membership meeting in writing in accordance with Code Section 14-3-704. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the proposed restatement and contain or be accompanied by a copy of the restatement that identifies any amendments or other change it would make in the articles or contain or be accompanied by a full and complete summary of any such amendment or other change.
(d) If the board seeks to have the restatement approved by the members by written consent or written ballot, the material soliciting the approval shall contain or be accompanied by a copy of the restatement that identifies any amendments or other change it would make in the articles or contain or be accompanied by a full and complete summary of any such amendment or other change.
(e) A corporation restating its articles of incorporation shall deliver to the Secretary of State for filing articles of restatement setting forth the name of the corporation and the text of the restated articles of incorporation, including or accompanied by a certificate setting forth the following information:
(1) Whether the restatement contains an amendment to the articles requiring approval by the members or any other person other than the board of directors and, if it does not, that the board of directors adopted the restatement;
(2) If the restatement contains an amendment to the articles requiring approval by the members, the information required by Code Section 14-3-1005; and
(3) If the restatement contains an amendment to the articles requiring approval by a person whose approval is required pursuant to Code Sections 14-3-1030 and 14-3-1041, a statement that such approval was obtained.
(f) Duly adopted restated articles of incorporation supersede the original articles of incorporation and all amendments to them.
(g) The Secretary of State may certify restated articles of incorporation, as the articles of incorporation currently in effect, without including any certificate filed pursuant to subsection (e) of this Code section.
(a) A corporation's articles may be amended without board approval or approval by the members or approval required pursuant to Code Section 14-3-1030 or 14-3-1041 to carry out a plan of reorganization ordered or decreed by a court of competent jurisdiction under federal statute if the articles after amendment contain only provisions required or permitted by Code Section 14-3-202.
(b) The individual or individuals designated by the court shall deliver to the Secretary of State articles of amendment setting forth:
(1) The name of the corporation;
(2) The text of each amendment approved by the court;
(3) The date of the court's order or decree approving the articles of amendment;
(4) The title of the reorganization proceeding in which the order or decree was entered; and
(5) A statement that the court had jurisdiction of the proceeding under federal statute.
(c) This Code section does not apply after entry of a final decree in the reorganization proceeding even though the court retains jurisdiction of the proceeding for limited purposes unrelated to consummation of the reorganization plan.
An amendment to the articles of incorporation does not affect a cause of action existing against or in favor of the corporation, a proceeding to which the corporation is a party, any requirement or limitation imposed upon the corporation or any property held by it by virtue of any trust upon which such property is held by the corporation, or the existing rights of persons other than members of the corporation. An amendment changing a corporation's name does not abate a proceeding brought by or against the corporation in its former name.
If a corporation has no members or no members entitled to vote thereon, its incorporators until the organizational meeting of directors and thereafter its board of directors may adopt one or more amendments to the corporation's bylaws subject to any approval required pursuant to Code Sections 14-3-1030 and 14-3-1041. The corporation shall require notice of any meeting of directors at which an amendment is to be approved. Such notice shall be provided in accordance with Code Section 14-3-822.
(a) To adopt an amendment to a corporation's bylaws if there are members required to vote thereon:
(1) The board of directors must recommend the amendment to the members unless the board of directors elects, because of a conflict of interest or other special circumstances, to make no recommendation and communicates the basis for its election to the members with the amendment;
(2) Unless this chapter, the articles, the bylaws, the members (acting pursuant to subsection (b) of this Code section), or the board of directors (acting pursuant to subsection (c) of this Code section) require a greater vote or voting by class, the members entitled to vote on the amendment must approve the amendment by two-thirds of the votes cast or a majority of the voting power, whichever is less; and
(3) Any person or persons whose approval is required by a provision of the articles or bylaws authorized by Code Section 14-3-1030 or 14-3-1041 must approve the amendment in writing.
(b) The members may condition the amendment's adoption on any basis.
(c) The board may condition its submission of the proposed amendment on any basis.
(d) The corporation shall give notice to its members of the proposed membership meeting in writing in accordance with Code Section 14-3-704. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the proposed amendment and contain or be accompanied by a copy or summary of the amendment.
(e) If the amendment is submitted to the members for approval by written consent or written ballot, the material soliciting the approval shall contain or be accompanied by a copy or summary of the amendment.
If the articles or bylaws provide for voting by classes of members, then unless the articles or bylaws provide otherwise:
(1) The members of a class are entitled to vote as a class on a proposed amendment to the bylaws if the amendment would change the rights of that class as to voting in a different manner than such amendment would affect another class or members of another class;
(2) If a class is to be divided into two or more classes as a result of an amendment to the bylaws, the amendment must be approved by the members of each class that would be created by the amendment; and
(3) If a class vote is required to approve an amendment to the bylaws, the amendment must be approved by the members of the class by two-thirds of the votes cast by the class or a majority of the voting power of the class, whichever is less.
The articles or the bylaws may require an amendment to the articles or bylaws to be approved in writing by a specified person or persons other than the board. Such an article or bylaw provision may only be amended with the approval in writing of such person or persons.
A corporation organized under this chapter may amend its articles of incorporation to provide that the corporation shall operate as a for profit business corporation.
(a) A charitable corporation may amend its articles of incorporation as provided in Code Section 14-3-1040 only:
(1) Upon the prior approval of the superior court in a proceeding in which the Attorney General has been given notice; or
(2) If on or before the effective date of the amendment:
(A) Assets with a value equal to the greater of the fair market value of the net tangible and intangible assets (including good will) of the corporation, or the fair market value of the corporation if it were to be operated as a business concern, are transferred or conveyed to one or more persons who would have received its assets under subsection (b) of Code Section 14-3-1403 had it dissolved;
(B) It shall return, transfer, or convey any assets held by it upon condition requiring return, transfer, or conveyance, which condition occurs by reason of the amendment, in accordance with such condition; and
(C) The amendment is approved by a majority of the directors of the corporation who are not and will not become shareholders in, or officers, employees, agents, or consultants of, the corporation following the effective date of the amendment.
(b) At least 30 days before the filing of any amendment described in Code Section 14-3-1040 by a corporation described in subsection (a) of this Code section, notice of the proposed amendment shall be delivered to the Attorney General.
(c) Without the prior written consent of the superior court in a proceeding of which the Attorney General has been given notice, no member, director, or officer of a corporation described in subsection (a) of this Code section may receive or keep anything as a result of an amendment described in Code Section 14-3-1040. The court shall approve the transaction if it is in the public interest.
From and after the effective date of any amendment described in Code Section 14-3-1040, the corporation shall be subject to and governed by the provisions of Chapter 2 of this title, the “Georgia Business Corporation Code.”
(a) One or more corporations may merge into another entity or entities, whether foreign or domestic, if the plan of merger is approved for the corporation or corporations as provided in Code Section 14-3-1103 and the merger complies with the applicable approvals, notices, limitations, and restrictions set forth in this article. In addition:
(1) If one or more of the corporations is a charitable corporation, each corporation must comply with Code Section 14-3-1102;
(2) If a foreign corporation or foreign business corporation is a party to a merger authorized by this article, each corporation and each foreign corporation and foreign business corporation must comply with Code Section 14-3-1106; and
(3) If an entity other than a foreign corporation or foreign business corporation is a party to a merger authorized by this article, each corporation and each other entity must comply with Code Section 14-3-1108.
(b) The plan of merger for any merger authorized by this article must set forth:
(1) The name of each corporation planning to merge and the name of the surviving corporation into which each plans to merge;
(2) The terms and conditions of the planned merger; and
(3) The manner and basis, if any, of converting the memberships of each corporation and the obligations, memberships, or other securities of each other entity into obligations, memberships, or other securities of the surviving entity or into cash or other property in whole or in part.
(c) The plan of merger may set forth:
(1) Amendments to the articles of incorporation of the surviving corporation; and
(2) Other provisions relating to the merger.
(d) Any of the terms of the plan of merger may be made dependent upon facts ascertainable outside of the plan of merger, provided that the manner in which such facts shall operate upon the terms of the merger is clearly and expressly set forth in the plan of merger. As used in this subsection, the term “facts” includes, but is not limited to, the occurrence of any event, including a determination or action by any person or body, including the corporation.
(a) A charitable corporation may merge with a corporation or foreign corporation or other entity without the prior approval of the superior court so long as notice is provided to the Attorney General pursuant to subsection (b) of this Code section and:
(1) The corporation or entity which is the surviving corporation or entity is a charitable corporation after the merger; or
(2)(A) On or prior to the effective date of the merger, assets with a value equal to the greater of the fair market value of the net tangible and intangible assets including good will of the corporation or the fair market value of the corporation if it were to be operated as a business concern are transferred or conveyed to one or more persons who would have received its assets under subsection (b) of Code Section 14-3-1403 had it dissolved;
(B) It shall return, transfer, or convey any assets held by it upon condition requiring return, transfer, or conveyance, which condition occurs by reason of the merger, in accordance with such condition; and
(C) The merger is approved by a majority of directors of the corporation who are not and will not become members or shareholders in or officers, employees, agents, or consultants of the surviving corporation or entity.
(b) At least 30 days before consummation of any merger of a corporation pursuant to this Code section, notice, including a copy of the proposed plan of merger, must be delivered to the Attorney General.
(c) No member of a charitable corporation may receive or keep anything as a result of a merger other than membership in the surviving corporation or entity without the prior approval of the superior court in a proceeding in which the Attorney General is provided notice. The court shall approve the transaction if it is in the public interest.
(a) Unless this chapter, the articles, the bylaws, or the board of directors or members acting pursuant to subsection (c) of this Code section require a greater vote or voting by class, a plan of merger to be authorized must be approved:
(1) By the board;
(2) By the members, if any, by two-thirds of the votes cast or a majority of the voting power, whichever is less; and
(3) In writing by any person or persons whose approval is required by a provision of the articles authorized by Code Section 14-3-1030 for an amendment to the articles or bylaws.
(b) If the corporation does not have members, the merger must be approved by a majority of the directors in office at the time the merger is approved. In addition, the corporation shall provide notice of any directors' meeting at which such approval is to be obtained in accordance with subsection (b) of Code Section 14-3-822. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the proposed merger.
(c) The board may condition its submission of the proposed merger, and the members may condition their approval of the merger, on receipt of a higher percentage of affirmative votes or on any other basis.
(d) If the board seeks to have the plan approved by the members at a membership meeting, the corporation shall give notice to its members of the proposed membership meeting in accordance with Code Section 14-3-704. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the plan of merger and contain or be accompanied by a copy or summary of the plan. The copy or summary of the plan for members of the surviving corporation shall include any provision that, if contained in a proposed amendment to the articles of incorporation or bylaws, would entitle members to vote on the provision. The copy or summary of the plan for members of the nonsurviving corporation shall include a copy or summary of the articles and bylaws that will be in effect immediately after the merger takes effect.
(e) If the board seeks to have the plan approved by the members by consent or ballot in writing or electronic transmission, the material soliciting the approval shall contain or be accompanied by a copy or summary of the plan. The copy or summary of the plan for members of the surviving corporation shall include any provision that, if contained in a proposed amendment to the articles of incorporation or bylaws, would entitle members to vote on the provision. The copy or summary of the plan for members of the nonsurviving corporation shall include a copy or summary of the articles and bylaws that will be in effect immediately after the merger takes effect.
(f) Voting by a class of members is required on a plan of merger if the plan contains a provision that, if contained in a proposed amendment to articles of incorporation or bylaws, would entitle the class of members to vote as a class on the proposed amendment under Code Section 14-3-1004 or 14-3-1022. The plan is approved by a class of members by two-thirds of the votes cast by the class or a majority of the voting power of the class, whichever is less.
(g) After a merger is adopted, and at any time before articles of merger are filed, the planned merger may be abandoned (subject to any contractual rights) without further action by members or other persons who approved the plan in accordance with the procedure set forth in the plan of merger or, if none is set forth, in the manner determined by the board of directors.
(a) After a plan of merger is approved by the board of directors, and, if required by Code Section 14-3-1103, by the members and any other persons, and notices have been provided and approvals obtained in accordance with this article, the surviving corporation or entity shall deliver to the Secretary of State for filing articles of merger setting forth:
(1) The plan of merger;
(2) If approval of members was not required, a statement to that effect and a statement that the plan was approved by a sufficient vote of the board of directors;
(3) If approval by members was required:
(A) The designation, number of memberships outstanding, number of votes entitled to be cast by each class entitled to vote separately on the plan, and number of votes of each class indisputably voting on the plan; and
(B) Either the total number of votes cast for and against the plan by each class entitled to vote separately on the plan or the total number of undisputed votes cast for the plan by each class and a statement that the number cast for the plan by each class was sufficient for approval by that class;
(4) If approval of the plan by some person or persons other than the members or the board is required pursuant to paragraph (3) of subsection (a) of Code Section 14-3-1103, a statement that the approval was obtained; and
(5) If approval of the shareholders of one or more corporations or entities party to the merger was required, a statement that the merger was duly approved by the shareholders.
(b) In lieu of filing articles of merger that set forth the plan of merger, the surviving corporation or entity may deliver to the Secretary of State for filing a certificate of merger which sets forth:
(1) The name and state of incorporation of each corporation or entity which is merging and the name of the surviving corporation or entity into which each other corporation or entity is merging;
(2) Any amendments to the articles of incorporation or governing agreements of the surviving corporation or entity;
(3) That the executed plan of merger is on file at the principal place of business of the surviving corporation or entity, stating the address thereof;
(4) That a copy of the plan of merger will be furnished by the surviving corporation or entity, on request and without cost, to any member or shareholder of any corporation or entity that is a party to the merger;
(5) If approval of members was not required, a statement to that effect and a statement that the plan was approved by a sufficient vote of the board of directors;
(6) If approval by members was required:
(A) The designation, number of memberships outstanding, number of votes entitled to be cast by each class entitled to vote separately on the plan, and number of votes of each class indisputably voting on the plan; and
(B) Either the total number of votes cast for and against the plan by each class entitled to vote separately on the plan or the total number of undisputed votes cast for the plan by each class and a statement that the number cast for the plan by each class was sufficient for approval by that class;
(7) If approval of the plan by some person or persons other than the members or the board is required pursuant to paragraph (3) of subsection (a) of Code Section 14-3-1103, a statement that the approval was obtained; and
(8) If approval of the shareholders of one or more corporations or entities party to the merger was required, a statement that the merger was duly approved by the shareholders.
(c) Unless a delayed effective date is specified, a merger takes effect when the articles or certificate of merger is filed.
(a) Together with the articles or certificate of merger, the surviving corporation or entity shall deliver to the Secretary of State an undertaking which may appear in the articles or certificate of merger or be set forth in a letter or other instrument executed by an officer or any person authorized to act on behalf of such corporation or entity that the request for publication of a notice of filing the articles or certificate of merger and payment therefor will be made as required by subsection (b) of this Code section.
(b) No later than the next business day after filing the articles or certificate of merger, the surviving corporation or entity shall mail or deliver to the publisher of a newspaper which is the official organ of the county where the registered office of the surviving corporation or entity is to be located, if the surviving corporation or entity will be required to maintain a registered office in Georgia, or where the registered office of the merging corporation or entity was located prior to the merger in any other case, or which is a newspaper of general circulation published within such county whose most recently published annual statement of ownership and circulation reflects a minimum of 60 percent paid circulation a request to publish a notice in substantially the following form:
“NOTICE OF MERGER
Notice is given that articles or a certificate of merger which will effect a merger by and between (or among) (name and state of incorporation or organization of each constituent corporation or entity) will be delivered to the Secretary of State for filing in accordance with the Georgia Nonprofit Corporation Code. The name of the surviving corporation (or other entity) in the merger will be, a corporation (or other entity) incorporated (organized pursuant to the laws of) in the State of__________. The registered office of such corporation (name of type of entity) (is) (will be) located at __________(address of registered office) and its registered (agent) (agents) at such address (is) (are) __________(name or names of agent or agents).”
The request for publication of the notice shall be accompanied by a check, draft, or money order in the amount of $40.00 in payment of the cost of publication. The notice shall be published once a week for two consecutive weeks commencing within ten days after receipt of the notice by the newspaper. Failure on the part of the surviving corporation or entity to mail or deliver the notice or payment therefor or failure on the part of the newspaper to publish the notice in compliance with this subsection shall not invalidate the merger.
When a merger governed by this chapter takes effect:
(1) Every other corporation or entity party to the merger merges into the surviving corporation or entity and the separate existence of every corporation except the surviving corporation or entity ceases;
(2) The title to all real estate and other property owned by, and every contract right possessed by, each corporation or entity party to the merger is vested in the surviving corporation or entity without reversion or impairment, without further act or deed, and without any conveyance, transfer, or assignment having occurred, subject to any and all conditions to which the property was subject prior to the merger;
(3) The surviving corporation or entity has all liabilities and obligations of each corporation or entity party to the merger;
(4) A proceeding pending against any corporation or entity party to the merger may be continued as if the merger did not occur or the surviving corporation or entity may be substituted in the proceeding for the corporation or entity whose existence ceased; and
(5) The articles of incorporation and bylaws or governing agreements of the surviving corporation or entity are amended to the extent provided in the plan of merger.
(a) One or more foreign corporations or foreign business corporations may merge with one or more corporations if:
(1) The merger is permitted by the law of the state or country under whose law each foreign corporation or foreign business corporation is incorporated and each foreign corporation or foreign business corporation complies with that law in effecting the merger;
(2) The foreign corporation or foreign business corporation complies with Code Sections 14-3-1104 and 14-3-1104.1 if it is the surviving corporation of the merger; and
(3) Each corporation complies with the applicable provisions of Code Sections 14-3-1101 through 14-3-1103 and, if it is the surviving corporation of the merger, with Code Sections 14-3-1104 and 14-3-1104.1.
(b) Upon the merger taking effect, the surviving foreign corporation or foreign business corporation, if it does not have a registered agent in this state, shall be deemed to have appointed the Secretary of State as its registered agent for service of process in a proceeding to enforce any obligation of a domestic corporation party to the merger, until such time as it appoints a registered agent in this state.
Any bequest, devise, gift, grant, or promise contained in a will or other instrument of donation, subscription, or conveyance, that is made to a constituent corporation or entity and that takes effect or remains payable after the merger, inures to the surviving corporation or entity unless the will or other instrument otherwise specifically provides.
(a) Subject to the limitations set forth in Code Sections 14-3-1101 and 14-3-1102, one or more corporations may merge with one or more entities, except an entity formed under the laws of a state or jurisdiction which forbids a merger with a corporation. The corporation or corporations and one or more entities may merge into a single corporation or other entity, which may be any one of the constituent corporations or entities.
(b) The board of directors of each merging corporation and the appropriate body of each entity, in accordance with its governing agreements and the laws of the state or jurisdiction under which it was formed, shall adopt a plan of merger in accordance with each corporation's and entity's governing agreements and the laws of the state or jurisdiction under which it was formed, as the case may be.
(c) In the case of any entity, the plan of merger shall be approved in the manner required by its governing agreements and in compliance with any applicable laws of the state or jurisdiction under which it was formed. In addition, each of the corporations shall comply with all other provisions of this chapter which relate to the merger of corporation. Each other entity shall comply with all other provisions of its governing agreements and all provisions of the laws, if any, of the state or jurisdiction in which it was formed which relate to the merger.
(d) Each merging entity must comply with Code Sections 14-3-1104 and 14-3-1104.1 if such merging entity is the surviving entity of the merger.
(a) By complying with this Code section, a foreign corporation may become a corporation if the law of the foreign jurisdiction authorizes domestication, redomestication, reincorporation, conversion, or a similar statutory procedure to become a corporation.
(b) To become a corporation, a foreign corporation shall elect to become a corporation. Such election shall require such approval as may be sufficient under applicable law or the governing documents of the electing foreign corporation to authorize such election.
(c) The election provided for under subsection (b) of this Code section shall be made by delivering to the Secretary of State for filing a certificate of conversion and accompanying articles of incorporation that comply with Code Section 14-3-202. Such certificate shall set forth:
(1) The name and jurisdiction of the converting foreign corporation; provided, however, that the name of the converting foreign corporation shall meet the requirements of Code Section 14-3-401, including, but not limited to, situations when the name of the converting foreign corporation is unavailable for use in Georgia or the converting foreign corporation desires to change its name in connection with the conversion;
(2) A statement that the converting foreign corporation elects to become a corporation;
(3) If later than the date and time the certificate of conversion is filed, the effective date, or the effective date and time, of the conversion;
(4) A statement that the election has been approved as required by subsection (b) of this Code section; and
(5) A statement that the articles of incorporation accompanying the certificate:
(A) Are in the form required by Code Section 14-3-202;
(B) Set forth the name of the corporation that satisfies the requirements of Code Section 14-3-401; and
(C) Are the articles of incorporation of the corporation formed pursuant to such election unless and until modified in accordance with this chapter.
(d) Upon the conversion provided for in this Code section becoming effective:
(1) The converting foreign corporation shall become a corporation formed under this chapter, provided that the existence of the corporation so formed shall be deemed to have commenced on the date the converting foreign corporation commenced its existence in the jurisdiction in which such foreign corporation was first created, formed, or incorporated or otherwise came into being;
(2) The articles of incorporation filed with the certificate of conversion shall be the articles of incorporation of the corporation formed pursuant to such conversion unless and until amended in accordance with this chapter;
(3) The governing documents of the converting foreign corporation shall be of no further force or effect;
(4) The resulting corporation formed by such conversion shall retain all of the rights, privileges, immunities, franchises, and powers of the converting foreign corporation; all property, real, personal, and mixed; all contract rights; and all debts due to such converting foreign corporation, as well as all other choses in action; and each and every other interest of or belonging to or due to the converting foreign corporation shall be taken and deemed to be vested in the resulting corporation without further act or deed. The title to any real estate, or any interest therein, vested in the converting foreign corporation shall not revert or be in any way impaired, and none of such items shall be deemed to have been conveyed, transferred, or assigned for any purpose; and
(5) The resulting corporation shall thereupon and thereafter be responsible and liable for all the liabilities and obligations of the converting foreign corporation. Any claim existing or action or proceeding pending by or against such converting foreign corporation may be prosecuted as if such conversion had not become effective, and neither the rights of creditors nor any liens upon the property of the converting foreign corporation shall be impaired.
(e) A conversion pursuant to this Code section shall not be deemed to constitute a dissolution of the converting foreign corporation and shall constitute a continuation of the existence of the converting foreign corporation in the form of a corporation. A corporation formed by a conversion pursuant to this Code section shall for all purposes be deemed to be the same entity as the converting foreign corporation.
(f) A corporation formed pursuant to this Code section shall file a copy of its certificate of conversion, certified by the Secretary of State, in the office of the clerk of the superior court of the county where any real property owned by such corporation is located and record such certified copy of the certificate of conversion in the books kept by such clerk for recordation of deeds in such county with the converting foreign corporation indexed as the grantor and the resulting corporation indexed as the grantee. No real estate transfer tax under Code Section 48-6-1 shall be due with respect to the recordation of such certificate of conversion.
(a) By complying with this Code section, a corporation may become a foreign corporation if the law of the foreign jurisdiction authorizes domestication, redomestication, reincorporation, conversion, or a similar statutory procedure to become a foreign corporation.
(b) To become a foreign corporation, a corporation shall convert to a foreign corporation, and to effect such conversion, the corporation shall adopt and file with the Secretary of State a certificate of conversion as required by subsection (n) of this Code section.
(c) To be adopted by a corporation, the certificate of conversion provided for in subsection (b) of this Code section must be approved:
(1) By the board;
(2) By the members, if any, but only if and to the extent that members are entitled to vote on the conversion under the corporation's articles or bylaws, except as provided for under subsection (h) of this Code section; and
(3) In writing by any person or persons whose approval is required by a provision of the articles authorized by Code Section 14-3-1030 for an amendment to the articles or bylaws.
(d) If the corporation does not have members or if the members are not entitled to vote on the conversion, then, unless otherwise provided for in the corporation's articles or bylaws, the certificate of conversion shall be approved by a majority of the directors in office at the time the certificate of conversion is adopted. The corporation shall provide notice as provided for in subsection (b) of Code Section 14-3-822 of any directors' meeting at which adoption of the certificate of conversion will be considered. Such notice shall also state that the purpose, or one of the purposes, of such meeting is for consideration of the adoption of the certificate of conversion.
(e) The board may condition its adoption of the certificate of conversion, and the members may condition their approval of the adoption of the certificate of conversion, on the receipt of a higher percentage of affirmative votes or on any other basis.
(f) If the corporation is required or seeks to have adoption of the certificate of conversion approved by the members at a membership meeting, the corporation shall give notice to its members of the membership meeting in accordance with Code Section 14-3-704. Such notice shall state that the purpose, or one of the purposes, of the meeting is to consider the adoption of the certificate of conversion pursuant to which the corporation will convert into a foreign corporation and shall contain or be accompanied by a copy of the certificate of conversion. Such notice shall conspicuously identify any adverse change to the rights of members that would result from the conversion, including, but not limited to, any adverse change to the rights of members under the law of the foreign jurisdiction applicable to the proposed foreign corporation. Such notice shall also include a copy or summary of the articles of incorporation, the bylaws, and any other similar governing documents of the proposed foreign corporation that will become effective upon the conversion.
(g) If the certificate of conversion may be approved by the members by written consent or written ballot, including consent or ballot by electronic transmission, any material soliciting such approval shall contain or be accompanied by a copy of the certificate of conversion. Such material shall conspicuously identify any adverse change to the rights of members that would result from the conversion, including, but not limited to, any adverse change to the rights of members under the law of the foreign jurisdiction applicable to the proposed foreign corporation. Such material shall also include a copy or summary of the articles of incorporation, the bylaws, and any other similar governing documents of the proposed foreign corporation that will become effective upon the conversion.
(h) Voting by members or classes of members is required to approve the adoption of a certificate of conversion if the conversion will implement any provision that, if contained in a proposed amendment to the articles of incorporation or bylaws of the corporation, would entitle the members or classes of members to vote on such proposed amendment under Code Section 14-3-1003, 14-3-1004, 14-3-1021, or 14-3-1022. In such circumstances, the corporation shall comply with subsection (f) or (g) of this Code section, as applicable, with respect to the members or classes of members entitled to vote. Furthermore, the certificate of conversion may be adopted if it is approved by the members or classes of members entitled to vote in the same manner as would be required to approve such proposed amendment or, if the articles or bylaws do not specify how the members or classes of members vote to approve such proposed amendment, by two-thirds of the votes cast or a majority of the voting power, whichever is less.
(i) A charitable corporation must give written notice to the Attorney General, including a copy of the proposed certificate of conversion and a copy or summary of the articles of incorporation and bylaws, or similar governing documents, of the proposed foreign corporation that will become effective upon the conversion at least 30 days before the certificate of conversion is filed in accordance with subsection (n) of this Code section.
(j) Any of the terms of the certificate of conversion may be made dependent upon facts ascertainable outside of the certificate of conversion, provided that the manner in which such facts shall operate upon the terms of the conversion is clearly and expressly set forth in the certificate of conversion. As used in this subsection, the term “facts” includes, but is not limited to, the occurrence of any event, including a determination or action by any person or body, including the corporation.
(k) After a certificate of conversion has been adopted, unless the certificate of conversion provides otherwise, and at any time before the conversion has become effective, the conversion may be abandoned, subject to any contractual rights, in accordance with the procedure set forth in the certificate of conversion or, if none is set forth, in the manner determined by the board of directors.
(l) The conversion shall be effected as provided in, and shall have the effects provided by, the law of the state or jurisdiction under whose law the resulting foreign corporation is formed and, to the extent not inconsistent with such law, by the terms of the certificate of conversion.
(m) If the resulting foreign corporation is required to obtain a certificate of authority to transact business in this state by the provisions of this title governing foreign corporations, such resulting foreign corporation shall do so pursuant to Code Section 14-3-1501.
(n) After a certificate of conversion is adopted in accordance with this Code section, unless the conversion subsequently is abandoned, the corporation shall deliver to the Secretary of State for filing the certificate of conversion which shall set forth:
(1) The name of the corporation;
(2) The name and jurisdiction of the proposed foreign corporation to which the corporation shall be converted;
(3) A statement that the certificate of conversion has been adopted as required by subsection (c) of this Code section;
(4) A statement that the authority of the corporation's registered agent to accept service on its behalf is revoked as of the effective date of such conversion and that the Secretary of State is irrevocably appointed as the agent for service of process on the resulting foreign corporation in any proceeding to enforce an obligation of the resulting foreign corporation arising prior to the effective date of such conversion;
(5) A mailing address to which a copy of any process served on the Secretary of State under paragraph (4) of this subsection may be mailed as provided in subsection (o) of this Code section; and
(6) A statement that the Secretary of State shall be notified of any change in the resulting foreign corporation's mailing address.
(o) Upon the conversion becoming effective, the resulting foreign corporation is deemed to appoint the Secretary of State as its agent for service of process in any proceeding to enforce any of its obligations arising prior to the effective date of such conversion. Any party that serves process upon the Secretary of State in accordance with this subsection shall also mail a copy of the process to the chief executive officer, chief financial officer, or secretary of the resulting foreign corporation at the mailing address provided pursuant to paragraph (5) of subsection (n) of this Code section.
(p) A converting corporation provided for in this Code section shall file a copy of its certificate of conversion, certified by the Secretary of State, in the office of the clerk of the superior court of the county where any real property owned by such converting corporation is located and record such certified copy of the certificate of conversion in the books kept by such clerk for recordation of deeds in such county with the converting corporation indexed as the grantor and the resulting foreign corporation indexed as the grantee. No real estate transfer tax otherwise required by Code Section 48-6-1 shall be due with respect to the recordation of such certificate of conversion.
(q) Upon the conversion provided for in this Code section becoming effective:
(1) The resulting foreign corporation shall retain all of the rights, privileges, immunities, franchises, and powers of the converting corporation;
(2) All property, real, personal, and mixed; all contract rights; and all debts due to such converting corporation, as well as all other choses in action, and each and every other interest of or belonging to or due to the converting corporation shall be taken and deemed to be vested in the resulting foreign corporation without further act or deed;
(3) Title to any real estate, or any interest therein, vested in the converting corporation shall not revert or be in any way impaired by reason of the conversion;
(4) None of the items described in paragraphs (1) through (3) of this subsection shall be deemed to have been conveyed, transferred, or assigned by reason of the conversion for any purpose; and
(5) The resulting foreign corporation shall thereupon and thereafter be responsible and liable for all the liabilities and obligations of the converting corporation. Any claim existing or action or proceeding pending by or against such converting corporation may be prosecuted as if such conversion had not become effective, and neither the rights of creditors nor any liens upon the property of the converting corporation shall be impaired by such conversion.
Unless otherwise provided by this chapter, the articles, or the bylaws, a corporation may, on the terms and conditions and for the consideration determined by the board of directors, and without the approval of the members or any other person:
(1) Sell, lease, exchange, or otherwise dispose of any, all, or substantially all, of its property in the usual and regular course of its activities;
(2) Mortgage, pledge, dedicate to the repayment of indebtedness (whether with or without recourse), or otherwise encumber any or all of its property whether or not in the usual and regular course of its activities; or
(3) Transfer any or all of such corporation's assets to one or more other corporations or other entities, of which all of the memberships or interests are owned or controlled by such corporation.
(a) A corporation may sell, lease, exchange, or otherwise dispose of all, or substantially all, of its property (with or without the good will) other than in the usual and regular course of its activities on the terms and conditions and for the consideration determined by the corporation's board if the proposed transaction is authorized by subsection (b) of this Code section.
(b) Unless this chapter, the articles, the bylaws, or the board of directors or members (acting pursuant to subsection (d) of this Code section) require a greater vote or voting by class, the proposed transaction to be authorized must be approved:
(1) By the board;
(2) By the members by two-thirds of the votes cast or a majority of the voting power, whichever is less; and
(3) In writing by any person or persons whose approval is required by a provision of the articles authorized by Code Section 14-3-1030 for an amendment to the articles or bylaws.
(c) If the corporation does not have members, the transaction must be approved by a vote of a majority of the directors in office at the time the transaction is approved. In addition, the corporation shall provide notice of any directors' meeting at which such approval is to be obtained in accordance with subsection (b) of Code Section 14-3-822. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the sale, lease, exchange, or other disposition of all, or substantially all, of the property or assets of the corporation and contain or be accompanied by a copy or summary of a description of the transaction.
(d) The board may condition its submission of the proposed transaction, and the members may condition their approval of the transaction, on receipt of a higher percentage of affirmative votes or on any other basis.
(e) If the corporation seeks to have the transaction approved by the members at a membership meeting, the corporation shall give notice to its members of the proposed membership meeting in accordance with Code Section 14-3-704. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the sale, lease, exchange, or other disposition of all, or substantially all, of the property or assets of the corporation and contain or be accompanied by a copy or summary of a description of the transaction.
(f) If the board needs to have the transaction approved by the members by written consent or written ballot, the material soliciting the approval shall contain or be accompanied by a copy or summary of a description of the transaction.
(g) A charitable corporation must give written notice to the Attorney General 30 days before it sells, leases, exchanges, or otherwise disposes of all, or substantially all, of its property if the transaction is not in the usual and regular course of its activities, unless said transaction is with another charitable corporation.
(h) After a sale, lease, exchange, or other disposition of property is authorized, the transaction may be abandoned, subject to any contractual rights, without further action by the members or any other person who approved the transaction in accordance with the procedure set forth in the resolution proposing the transaction or, if none is set forth, in the manner determined by the board of directors.
Except as provided in Code Section 14-3-1302 and Article 14 of this chapter, a corporation shall not pay dividends to or make distributions of any part of its assets, income, or profits to its members, directors, or officers.
(a) Payments to any of the following are not unlawful distributions:
(1) Organizations whether or not incorporated that are organized and operated for the same or similar purposes as the distributing corporation;
(2) Organizations whether or not incorporated that are organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder, member, or individual; or
(3) A state or possession of the United States, or any political subdivision of any of the foregoing, or the United States or the District of Columbia.
(b) Except for charitable corporations, a corporation may repurchase a membership for the consideration that the member paid for his or her membership or return a portion of a membership fee to a withdrawing member if, after the purchase or return is completed:
(1) The corporation would be able to pay its debts as they become due in the normal course of business; and
(2) The corporation's total assets would at least equal the sum of its liabilities.
(c) Payments of indemnification or reasonable compensation, fees, or expenses incurred in the performance of duties on behalf of the corporation are not unlawful distributions.
A majority of the incorporators or initial directors of a corporation that has not admitted members entitled to vote on dissolution, has not commenced activities other than routine formation related activities, and has no net assets may dissolve the corporation by delivering to the Secretary of State for filing articles of dissolution that set forth:
(1) The name of the corporation;
(2) The date of its incorporation;
(3) That:
(A) The corporation has not admitted members entitled to vote on dissolution;
(B) The corporation has not commenced activities; and
(C) The corporation has no net assets;
(4) That no debt of the corporation remains unpaid; and
(5) That a majority of the incorporators or initial directors authorized the dissolution.
(a) A corporation's board of directors may propose dissolution for submission to the members, if there are members entitled to vote thereon as follows:
(1) For a proposal to dissolve to be adopted:
(A) The board of directors must recommend dissolution to the members unless the board of directors elects, because of a conflict of interest or other special circumstances, to make no recommendation and communicates the basis for its determination to the members; and
(B) The members entitled to vote must approve the proposal to dissolve as provided in paragraph (4) of this subsection;
(2) The board of directors may condition its submission of the proposal for dissolution on any basis;
(3) The corporation shall notify each member entitled to vote of the proposed members' meeting in accordance with Code Section 14-3-704. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider dissolving the corporation;
(4) Unless the articles of incorporation, the bylaws, or the board of directors acting pursuant to paragraph (2) of this subsection requires a greater vote or vote by classes, the proposal to dissolve to be adopted must be approved by a majority of all the votes entitled to be cast on that proposal; and
(5) If the board seeks to have dissolution approved by the members by written consent or written ballot, the material soliciting the approval shall contain or be accompanied by a copy or summary of the plan of dissolution.
(b) Unless the articles of incorporation or bylaws require a greater vote, if the corporation does not have members entitled to vote on dissolution, dissolution must be approved by a vote of a majority of the directors in office at the time the transaction is approved. In addition, the corporation shall provide notice of any directors' meeting at which such approval is to be obtained in accordance with Code Section 14-3-822. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider dissolution of the corporation and contain or be accompanied by a copy or summary of the plan of dissolution.
(c) The plan of dissolution shall conform to the requirements of Code Section 14-3-1403 and shall indicate to whom the assets owned or held by the corporation will be distributed after all creditors have been paid.
(a) A plan of dissolution providing for the distribution of assets shall be adopted by a corporation in the process of dissolution. Subject to subsections (b) and (c) of this Code section, such plan of dissolution may provide for the transfer (whether in-kind or otherwise) of any of the assets, business, and affairs of the corporation to one or more persons who may continue the business and affairs of the dissolving corporation.
(b) The plan of dissolution shall provide for distribution of assets as follows:
(1) All liabilities and obligations of the corporation shall be paid and discharged, or adequate provisions shall be made therefor;
(2) Assets held by the corporation upon condition requiring return, transfer, or conveyance, which condition occurs by reason of the dissolution, shall be returned, transferred, or conveyed in accordance with such requirements;
(3) Assets received and held by the corporation subject to limitations permitting their use only for specific charitable, religious, eleemosynary, benevolent, educational, or similar purposes, but not held upon a condition requiring return, transfer, or conveyance by reason of the dissolution, shall be transferred or conveyed, to the extent reasonably feasible, to one or more domestic corporations or foreign corporations, trusts, societies, or organizations that are organized and operated for the same or similar purposes as those of the dissolving corporation, and if not reasonably feasible, to any organization or recipient described in subsection (a) of Code Section 14-3-1302;
(4) Assets held by a charitable corporation shall be distributed to any organization or recipient described in subsection (a) of Code Section 14-3-1302;
(5) Other assets, if any, shall be distributed in accordance with the articles of incorporation and bylaws to the extent that the articles of incorporation or bylaws determine the distributive rights of members, or any class or classes of members, or provide for distribution to others; and
(6) Any remaining assets may be distributed to such persons, trusts, societies, organizations, or domestic corporations or foreign corporations as may be provided in the plan of dissolution.
(c) A charitable corporation shall comply with the following additional requirements:
(1) It shall give the Attorney General written notice of its intent to dissolve at or before the time it delivers its notice of intent to dissolve to the Secretary of State, and such notice to the Attorney General shall include:
(A) The plan of dissolution;
(B) The net value of the corporation's assets at the time the notice of intent to dissolve is filed with the Secretary of State; and
(C) To the extent not already included in the plan of dissolution, a list of those persons (other than creditors) to whom the corporation intends to transfer or convey its assets, including the last known mailing address of the intended recipient or recipients;
(2) Unless otherwise notified by the Attorney General, it shall not transfer or convey any assets as part of the dissolution process until 30 days after it has given the written notice to the Attorney General required by paragraph (1) of this subsection; and
(3) When all or substantially all of the assets of the corporation have been transferred or conveyed, it shall deliver to the Attorney General a list showing those persons (other than creditors) to whom the assets were transferred or conveyed. The list shall indicate the address of each person (other than creditors) who received assets and indicate what assets each received.
Upon approval of a proposal for dissolution pursuant to Code Section 14-3-1402, the corporation shall begin dissolution by delivering to the Secretary of State for filing a notice of intent to dissolve setting forth:
(1) The name of the corporation;
(2) The date dissolution was authorized; and
(3) If member approval was required for dissolution, a statement that dissolution was duly approved by the members in accordance with subsection (a) of Code Section 14-3-1402.
(a) Together with the notice of intent to dissolve provided for in Code Section 14-3-1404, the corporation shall deliver to the Secretary of State a certificate executed by an officer or director of such corporation, or any person undertaking such request on behalf of the corporation, verifying that the request for publication of a notice of intent to voluntarily dissolve the corporation and payment therefor have been made as required by subsection (b) of this Code section.
(b) No later than the next business day after filing the notice of intent to dissolve provided for in Code Section 14-3-1404, the corporation shall mail or deliver to the publisher of a newspaper which is the official organ of the county where the registered office of the corporation is located or which is a newspaper of general circulation published within such county whose most recently published annual statement of ownership and circulation reflects a minimum of 60 percent paid circulation a request to publish a notice in substantially the following form:
“NOTICE OF INTENT TO VOLUNTARILY DISSOLVE A CORPORATION
Notice is given that a notice of intent to dissolve __________(name of corporation), a Georgia nonprofit corporation with its registered office at __________(address of registered office), will be delivered to the Secretary of State for filing in accordance with the Georgia Nonprofit Corporation Code.”
The notice may also include the information specified in Code Section 14-3-1408. The request for publication of the notice shall be accompanied by a check, draft, or money order in the amount of $40.00 in payment of the cost of publication. The notice shall be published once a week for two consecutive weeks commencing within ten days after receipt of the notice by the newspaper. Failure on the part of the corporation to mail or deliver the notice or payment therefor or failure on the part of the newspaper to publish the notice in compliance with this subsection shall not invalidate the dissolution of the corporation.
(a) A corporation may revoke its dissolution proceedings at any time prior to the filing of articles of dissolution.
(b) Revocation of dissolution proceedings must be authorized in the same manner as the dissolution was authorized unless that authorization permitted revocation by action by the board of directors alone, in which event the board of directors may revoke the dissolution without member action.
(c) After the revocation of dissolution proceedings is authorized, the corporation may revoke the dissolution proceedings by delivering to the Secretary of State for filing a notice of revocation of intent to dissolve, together with a copy of its notice of intent to dissolve, that sets forth:
(1) The name of the corporation;
(2) The date that the revocation of dissolution proceedings was authorized;
(3) If the corporation's board of directors or incorporators revoked the dissolution proceedings, a statement to that effect;
(4) If the corporation's board of directors revoked the dissolution proceedings authorized by the members, a statement that revocation was permitted by action by the board of directors alone pursuant to that authorization; and
(5) If member action was required to revoke the dissolution proceedings, the information required by paragraph (3) of Code Section 14-3-1404.
(d) Revocation of dissolution proceedings is effective when a notice of revocation of intent to dissolve is filed.
(e) When the revocation of dissolution proceedings is effective, it relates back to and takes effect as of the effective date of the filing of the notice of intent to dissolve and the corporation resumes carrying on its business as if dissolution proceedings had never occurred.
A corporation that has filed a notice of intent to dissolve continues its corporate existence but may not carry on any business except that appropriate to wind up and liquidate its business and affairs, including:
(1) Collecting its assets;
(2) Disposing of its properties that will not be distributed in kind in accordance with the plan of dissolution;
(3) Discharging or making provision for discharging its liabilities;
(4) Distributing its remaining property in accordance with the plan of dissolution; and
(5) Doing every other act necessary to wind up and liquidate its business and affairs.
(a) A corporation that has filed a notice of intent to dissolve may dispose of the known claims against it by following the procedure described in this Code section.
(b) The corporation in dissolution shall notify its known claimants in writing of the dissolution proceedings at any time after the filing of the notice of intent to dissolve. The written notice must:
(1) Describe information that must be included in a claim;
(2) Provide a mailing address where a claim may be sent;
(3) State the deadline, which may not be less than six months from the effective date of the written notice, by which the dissolved corporation must receive the claim;
(4) State that the claim will be barred if not received by the deadline; and
(5) State that the corporation will give notice of acceptance or rejection of all claims that are received in timely fashion within six months of the deadline for receipt of claims.
(c) A claim against a corporation in dissolution is barred:
(1) If a claimant who was given written notice under subsection (b) of this Code section does not deliver the claim to the dissolved corporation by the deadline; or
(2) If a claimant whose claim was rejected by the dissolved corporation does not commence a proceeding to enforce the claim within one year from the effective date of the rejection notice.
(d) For purposes of this Code section, the term “claim” does not include a contingent liability or a claim based on an event occurring after the filing of the notice of intent to dissolve.
(a) A corporation that has filed a notice of intent to dissolve may include in the notice of its intent to dissolve published under Code Section 14-3-1404.1 a request that persons with claims against the corporation present them in accordance with subsection (b) of this Code section.
(b) The request must:
(1) Describe the information that must be included in a claim and provide a mailing address where the claim may be sent; and
(2) State that, except for claims that are contingent at the time of the filing of the notice of intent to dissolve or that arise after the filing of the notice of intent to dissolve, a claim against the corporation not otherwise barred will be barred unless a proceeding to enforce the claim is commenced within two years after publication of the notice.
(c) If a corporation that has filed a notice of intent to dissolve publishes a newspaper notice containing the information specified in subsection (b) of this Code section, all claims not otherwise barred will be barred unless the claimant commences a proceeding to enforce the claim against the dissolved corporation within two years after the publication date of the newspaper notice except:
(1) Claims that are contingent at the time of the filing of the notice of intent to dissolve; and
(2) Claims that arise after the filing of the notice of intent to dissolve.
(d) If a corporation in dissolution publishes a newspaper notice containing the information specified in subsection (b) of this Code section, a claim against the corporation not otherwise barred of a claimant whose claim is contingent or based on an event occurring after the filing of the notice of intent to dissolve is barred against the corporation, its members, officers, directors, and distributees unless the claimant commences a proceeding to enforce the claim against the dissolved corporation within two years after the date of filing of articles of dissolution or five years after the date of publication in accordance with subsection (b) of this Code section, whichever is later.
(e) Subject to the provisions of this Code section, a claim against a corporation in dissolution or against a dissolved corporation may be enforced under this Code section:
(1) Against the corporation, to the extent of its undistributed assets; or
(2) If the assets have been distributed in liquidation, against a distributee of the corporation to the extent of such distributee's pro rata share of the claim or the corporate assets distributed to him or her in liquidation, whichever is less, but a distributee's total liability for all claims under this Code section may not exceed the total amount of assets distributed to him or her.
(a) If a notice of intent to dissolve under Code Section 14-3-1404 has not been revoked, and for charitable corporations after providing the Attorney General 30 days' notice in accordance with subsection (c) of Code Section 14-3-1403, when all known debts, liabilities, and obligations of the corporation have been paid and discharged, or adequate provision made therefor, the corporation may dissolve by delivering to the Secretary of State for filing articles of dissolution setting forth:
(1) The name of the corporation;
(2) The date on which a notice of intent to dissolve was filed and a statement that it has not been revoked;
(3) A statement that all known debts, liabilities, and obligations of the corporation have been paid and discharged, or that adequate provision has been made therefor;
(4) A statement that all remaining property and assets of the corporation have been distributed in accordance with the plan of dissolution, or that such property and assets have been deposited with the Office of the State Treasurer as provided in Code Section 14-3-1440;
(5) A statement that there are no actions pending against the corporation in any court, or that adequate provision has been made for the satisfaction of any judgment, order, or decree which may be entered against it in any pending action; and
(6) A statement that, if required, it notified the Attorney General of its intent to dissolve and has given the Attorney General time to respond in accordance with subsection (c) of Code Section 14-3-1403.
(b) Upon filing of articles of dissolution the corporation shall cease to exist, except for the purpose of actions or other proceedings, which may be brought against the corporation by service upon any of its last executive officers named in its last annual registration, and except for such actions as the members, directors, and officers take to protect any remedy, right, or claim on behalf of the corporation, or to defend, compromise, or settle any claim against the corporation, all of which may proceed in the corporate name.
(c) Deeds or other transfer instruments requiring execution after the dissolution of a corporation may be signed by any two of the last officers or directors of the corporation and shall operate to convey the interest of the corporation in the real estate or other property described.
The dissolution of a corporation in any manner, except by a decree of the superior court when the court has supervised the liquidation of the assets and business of the corporation as provided in Code Sections 14-3-1430 and 14-3-1433, shall not take away or impair any remedy available to such corporation or its directors, officers, or members for any right or claim existing prior to such dissolution if an action or other proceeding thereon is pending on the date of such dissolution or is commenced within two years after the date of such dissolution. Any such action or proceeding by the corporation may be prosecuted by the corporation in its corporate name. The members, directors, and officers shall have the power to take such corporate or other action as shall be appropriate to protect such remedy, right, or claim.
(a) A corporation that has been dissolved by the expiration of its period of duration but which has continued in business notwithstanding the expiration may revive its corporate existence by amending its articles of incorporation at any time during a period of ten years immediately following the expiration date fixed by the articles of incorporation, so as to extend its period of duration.
(b) If a corporation whose period of duration has expired has failed to revive its corporate existence within ten years of the expiration date fixed by its articles of incorporation as provided in subsection (a) of this Code section, the corporation may thereafter revive its corporate existence by amending its articles of incorporation so as to extend its period of duration at any time during the period beginning ten years and ending 20 years immediately following the expiration date fixed by its articles of incorporation and filing with the Secretary of State an affidavit attested by one or more of its officers or directors, stating as follows:
(1) That the corporation has continued in business, notwithstanding the expiration of its period of duration, at all times since the expiration date fixed by its articles of incorporation; and
(2) That the revival will not injure the corporation's members, the corporation's creditors, or the public.
(c) As of the effective date of the amendment of articles of incorporation pursuant to subsection (a) or (b) of this Code section, the corporate existence shall be deemed to have continued without interruption from the former expiration date. If, during the period between expiration and revival, the name of the corporation has been assumed, reserved, or registered by any other person or corporation, the revived corporation shall not engage in business until it has amended its articles of incorporation to change its name.
The Secretary of State may commence a proceeding under Code Section 14-3-1421 to dissolve a corporation administratively if:
(1) The state revenue commissioner has certified to the Secretary of State that the corporation has failed to file a license or occupation tax return and that a period of one year has expired since the last day permitted for timely filing without the filing and payment of all required license and occupation taxes and penalties by the corporation; provided, however, that dissolution proceedings shall be stayed so long as the corporation is contesting, in good faith, in any appropriate proceeding, the alleged grounds for dissolution;
(2) The corporation does not deliver its annual registration to the Secretary of State, together with all required fees and penalties, within 60 days after it is due;
(3) The corporation is without a registered agent or registered office in this state for 60 days or more;
(4) The corporation does not notify the Secretary of State within 60 days that its registered agent or registered office has been changed, that its registered agent has resigned, or that its registered office has been discontinued; or
(5) The corporation pays a fee as required to be collected by the Secretary of State pursuant to this chapter by a check or some other form of payment which is dishonored and the corporation or its incorporator or its agent does not submit payment for said dishonored payment within 60 days from notice of nonpayment issued by the Secretary of State.
(a) If the Secretary of State determines that one or more grounds exist under Code Section 14-3-1420 for dissolving a corporation, the Secretary of State shall provide the corporation with written notice of the Secretary's determination by mailing a copy of the notice, first-class mail, to the corporation at the last known address of its principal office or to the registered agent.
(b) If the corporation does not correct each ground for dissolution or demonstrate to the reasonable satisfaction of the Secretary of State that each ground determined by the Secretary of State does not exist within 60 days after notice is provided to the corporation, the Secretary of State shall administratively dissolve the corporation by signing a certificate of dissolution that recites the ground or grounds for dissolution and its effective date. The Secretary of State shall file the original of the certificate.
(c) A corporation administratively dissolved continues its corporate existence but may not carry on any business except that necessary to wind up and liquidate its business and affairs under Code Section 14-3-1406. Winding up the business of a corporation that has been administratively dissolved may include the corporation's proceeding, at any time after the effective date of the administrative dissolution, (1) in accordance with Code Section 14-3-1407 to notify known claimants, and (2) to mail or deliver, with accompanying payment of the cost of publication, a notice containing the information specified in subsection (b) of Code Section 14-3-1408 for publication. Upon such notice, claims against the administratively dissolved corporation will be limited as specified in Code Sections 14-3-1407 and 14-3-1408, respectively.
(d) The administrative dissolution of a corporation does not terminate the authority of its registered agent.
(a) A corporation administratively dissolved under Code Section 14-3-1421 may apply to the Secretary of State for reinstatement within five years after the effective date of such dissolution. The application shall:
(1) Recite the name of the corporation and the effective date of its administrative dissolution;
(2) State that the ground or grounds for dissolution either did not exist or have been eliminated;
(3) Either be executed by the registered agent or an officer of the corporation, in each case as set forth in the most recent annual registration of the corporation filed with the Secretary of State, or be accompanied by a notarized statement, executed by a person who was an officer, director, or member, or an heir, successor, or assign of a person who was an officer, director, or member, of the corporation at the time that the corporation was administratively dissolved, stating that such person or decedent was an officer, director, or member of the corporation at the time of administrative dissolution and such person has knowledge of and assents to the application for reinstatement;
(4) Contain a statement by the corporation reciting that all taxes owed by the corporation have been paid; and
(5) Be accompanied by the fee required for the application for reinstatement contained in Code Section 14-3-122.
(b) The Secretary of State shall reserve the name of a corporation administratively dissolved under Code Section 14-3-1421 for such corporation's specific use for a period of five years after the effective date of the dissolution or until the corporation is reinstated, whichever is sooner.
(c) If the Secretary of State determines that the application contains the information required by subsection (a) of this Code section and that the information is correct, the Secretary of State shall prepare a certificate of reinstatement that recites his or her determination and the effective date of reinstatement, file the original of the certificate, and deliver a copy to the corporation under Code Section 14-3-125.
(d) When the reinstatement is effective, it relates back to and takes effect as of the effective date of the administrative dissolution and the corporation resumes carrying on its business as if the administrative dissolution had never occurred.
(e) This Code section shall apply to all corporations administratively dissolved under Code Section 14-3-1421 or any similar former statute, regardless of the date of dissolution.
(a) If the Secretary of State denies a corporation's application for reinstatement following administrative dissolution, the Secretary of State shall deliver to the corporation under Code Section 14-3-125 a written notice that explains the reason or reasons for denial.
(b) The corporation may appeal the denial of reinstatement to the superior court of the county where the corporation's registered office is or was located within 30 days after service of the notice of denial is perfected. The corporation appeals by petitioning the court to set aside the dissolution and attaching to the petition copies of the Secretary of State's certificate of dissolution, the corporation's application for reinstatement, and the Secretary of State's notice of denial.
(c) The court's final decision may be appealed as in other civil proceedings.
The superior court may dissolve a corporation:
(1) In a proceeding by the Attorney General if it is established that:
(A) The corporation obtained its articles of incorporation through fraud or was reinstated under Code Section 14-3-1422 through fraud; or
(B) The corporation has exceeded or abused, and is continuing to exceed or abuse, the authority conferred upon it by law;
(2) In a proceeding by 50 members or members holding at least 5 percent of the voting power, whichever is less, if it is established that:
(A) The directors are deadlocked in the management of the corporate affairs, the members are unable to break the deadlock, and irreparable injury to the corporation is threatened or being suffered or the business and affairs of the corporation can no longer be conducted to the advantage of the members generally, because of the deadlock;
(B) The directors or those in control of the corporation have acted, are acting, or will act in a manner that is illegal or fraudulent in connection with the operation or management of the business and affairs of the corporation;
(C) The members are deadlocked in voting power and have failed, for a period that includes at least two consecutive annual meeting dates, to elect successors to directors whose terms have expired or would have expired; or
(D) The corporate assets are being misapplied or wasted;
(3) In a proceeding by a creditor if it is established that:
(A) The creditor's claim has been reduced to judgment, the execution on the judgment has been returned unsatisfied, and the corporation is insolvent; or
(B) The corporation has admitted in writing that the creditor's claim is due and owing and the corporation is insolvent; or
(4) In a proceeding by the corporation to have its voluntary dissolution continued under court supervision;
provided, however, that all of the actions described in paragraphs (1) through (3) of this Code section shall be stayed so long as the corporation is contesting, in good faith, in any appropriate proceeding, the alleged grounds for dissolution.
(a) Venue for a proceeding by the Attorney General to dissolve a corporation and for a proceeding brought by any other party named in Code Section 14-3-1430 lies in the county where a corporation's registered office is or was last located.
(b) It is not necessary to make members or directors parties to a proceeding to dissolve a corporation unless relief is sought against them individually.
(c) A court in a proceeding brought to dissolve a corporation may issue injunctions, appoint a receiver or custodian pendente lite with all powers and duties the court directs, take other action required to preserve the corporate assets wherever located, and carry on the business of the corporation until a full hearing can be held.
(a) A court in a judicial proceeding brought to dissolve a corporation may appoint one or more receivers to wind up and liquidate, or one or more custodians to manage, the business and affairs of the corporation. The court shall hold a hearing, after notifying all parties to the proceeding and any interested persons designated by the court, before appointing a receiver or custodian. The court appointing a receiver or custodian has exclusive jurisdiction over the corporation and all its property wherever located.
(b) The court may appoint an individual or a domestic corporation or foreign corporation (authorized to transact business in this state) as a receiver or custodian. The court may require the receiver or custodian to post bond, with or without sureties, in an amount the court directs.
(c) The court shall describe the powers and duties of the receiver or custodian in its appointing order, which may be amended from time to time. Among other powers:
(1) The receiver:
(A) May dispose of all or any part of the assets of the corporation wherever located, at a public or private sale, if authorized by the court; and
(B) May sue and defend in the receiver's own name as receiver of the corporation in all courts of this state; or
(2) The custodian may exercise all of the powers of the corporation, through or in place of its board of directors or officers, to the extent necessary to manage the affairs of the corporation in the best interests of its members and creditors.
(d) The court, during a receivership, may redesignate the receiver a custodian and, during a custodianship, may redesignate the custodian a receiver, if doing so is in the best interests of the corporation, its members, and its creditors.
(e) The court from time to time during the receivership or custodianship may order compensation paid and expense disbursements or reimbursements made to the receiver or custodian and the receiver's attorney from the assets of the corporation or proceeds from the sale of the assets.
(a) If after a hearing the court determines that one or more grounds for judicial dissolution described in Code Section 14-3-1430 exist, it may enter a decree ordering the corporation dissolved, and the clerk of the court shall deliver a certified copy of the decree to the Secretary of State, who shall file it, with the same effect as a notice of intent to dissolve.
(b) After entering the order of dissolution, the court shall direct the winding up and liquidation of the corporation's business and affairs in accordance with Code Section 14-3-1406. Winding up the business of a corporation judicially dissolved may include the corporation's proceeding, after the date of the order of dissolution, (1) in accordance with Code Section 14-3-1407 to notify known claimants, and (2) to mail or deliver, with accompanying payment of the cost of publication, a notice containing the information specified in subsection (b) of Code Section 14-3-1408 for publication. Upon such notice, claims against the dissolved corporation will be limited as specified in Code Sections 14-3-1407 and 14-3-1408 respectively.
(c) When the costs and expenses of dissolution proceedings and all debts, obligations, and liabilities of the corporation have been paid and discharged or provided for and all of its remaining assets distributed or provided for, whether to its members or, for charitable corporations, to another entity described under subsection (a) of Code Section 14-3-1302, or such assets have been deposited with the Office of the State Treasurer as provided in Code Section 14-3-1440, the court shall enter a decree of dissolution, and upon filing of the decree with the Secretary of State, it shall have the same effect as articles of dissolution.
Assets of a dissolved corporation that should be transferred to a creditor, claimant, or member of the corporation who cannot be found or who is not competent to receive them shall be reduced to cash and deposited with the Office of the State Treasurer for safekeeping. When the creditor, claimant, or member furnishes satisfactory proof of entitlement to the amount deposited, the Office of the State Treasurer shall pay him or her or his or her representative that amount. After the Office of the State Treasurer has held the unclaimed cash for six months, the Office of the State Treasurer shall pay such cash to the Board of Regents of the University System of Georgia, to be held without liability for profit or interest until a claim for such cash shall be filed with the Office of the State Treasurer by the parties entitled thereto. No such claim shall be made more than six years after such cash is deposited with the Office of the State Treasurer.
(a) A foreign corporation may not transact business in this state until it obtains a certificate of authority from the Secretary of State.
(b) The following activities, among others, do not constitute transacting business within the meaning of subsection (a) of this Code section:
(1) Maintaining or defending any action or any administrative or arbitration proceeding or effecting the settlement thereof or the settlement of claims or disputes;
(2) Holding meetings of its directors or members or carrying on other activities concerning its internal affairs;
(3) Maintaining bank accounts, share accounts in savings and loan associations, custodian or agency arrangements with a bank or trust company, or stock or bond brokerage accounts;
(4) Maintaining offices or agencies for the transfer, exchange, and registration of memberships or securities or maintaining trustees or depositaries with respect to those securities;
(5) Effecting sales through independent contractors;
(6) Soliciting or procuring orders, whether by mail or through employees or agents or otherwise, where the orders require acceptance outside this state before becoming binding contracts and where the contracts do not involve any local performance other than delivery and installation;
(7) Making loans or creating or acquiring evidences of debt, mortgages, or liens on real or personal property, or recording same;
(8) Securing or collecting debts or enforcing any rights in property securing the same;
(9) Owning, without more, real or personal property;
(10) Conducting an isolated transaction not in the course of a number of repeated transactions of a like nature;
(11) Effecting transactions in interstate or foreign commerce;
(12) Serving as trustee, executor, administrator, or guardian, or in like fiduciary capacity, where permitted so to serve by the laws of this state;
(13) Owning directly or indirectly an interest in or controlling directly or indirectly another entity organized under the laws of or transacting business within this state; or
(14) Serving as a manager of a limited liability company organized under the laws of or transacting business within this state.
(c) The list of activities in subsection (b) of this Code section is not exhaustive.
(d) This chapter shall not be deemed to establish a standard for activities which either may or may not subject a foreign corporation to taxation, service of process, registration relating to charitable solicitations under Code Section 43-17-5, or regulation under any laws of this state.
(a) A foreign corporation transacting business in this state without a certificate of authority may not maintain a proceeding in any court in this state until it obtains a certificate of authority.
(b) The successor to a foreign corporation that transacted business in this state without a certificate of authority and the assignee of a cause of action arising out of that business may not maintain a proceeding based on that cause of action in any court in this state unless before the commencement of the proceeding the foreign corporation or its successor obtains a certificate of authority.
(c) Notwithstanding subsections (a) and (b) of this Code section, the failure of a foreign corporation to obtain a certificate of authority does not impair the validity of its corporate acts or prevent it from defending any proceeding in this state.
(a) A foreign corporation may apply for a certificate of authority to transact business in this state by delivering an application to the Secretary of State for filing. The application must set forth:
(1) The name of the foreign corporation or, if its name is unavailable for use in this state, a corporate name that satisfies the requirements of Code Section 14-3-1506;
(2) The name of the state or country under whose law it is incorporated;
(3) Its date of incorporation;
(4) The mailing address of its principal office;
(5) The address of its registered office in this state and the name of its registered agent at that office; and
(6) The names and respective business addresses of its chief executive officer, chief financial officer, and secretary.
(b) The foreign corporation shall deliver with the completed application a certificate of existence (or a document of similar import) duly authenticated by the secretary of state or other official having custody of corporate records in the state or country under whose law it is incorporated.
(a) A foreign corporation authorized to transact business in this state must obtain an amended certificate of authority from the Secretary of State if it changes:
(1) Its corporate name;
(2) The period of its duration; or
(3) The state or country of its incorporation.
(b) If a foreign corporation authorized to transact business in this state converts into a foreign limited partnership or a foreign limited liability company:
(1) Such foreign corporation shall notify the Secretary of State that such conversion has occurred no later than 30 days after the conversion, using such form as the Secretary of State shall specify, which form may require such information and statements required to be submitted by such type of foreign limited partnership or foreign limited liability company initially applying for a certificate of authority to transact business in this state; and
(2) If such notice is timely given and such foreign corporation, foreign limited partnership, or foreign limited liability company is required to obtain a certificate of authority to transact business in this state:
(A) The authorization of such converted foreign corporation to transact business in this state shall continue without interruption; and
(B) The certificate of authority issued to such converted foreign corporation under this article shall constitute an amended certificate of authority that otherwise would be issued under the laws of this state to such type of foreign limited partnership or foreign limited liability company.
(c) The requirements of Code Section 14-3-1503 for obtaining an original certificate of authority apply to obtaining an amended certificate under this Code section.
(a) A certificate of authority authorizes the foreign corporation to which it is issued to transact business in this state subject, however, to the right of the state to revoke the certificate as provided in this chapter.
(b) A foreign corporation with a valid certificate of authority has the same but no greater rights under this chapter and has the same but no greater privileges under this chapter as, and except as otherwise provided by this chapter is subject to the same duties, restrictions, penalties, and liabilities now or later imposed on, a domestic corporation of like character.
(c) This chapter does not authorize this state to regulate the organization or internal affairs of a foreign corporation authorized to transact business in this state.
(a) If the corporate name of a foreign corporation does not satisfy the requirements of Code Section 14-3-401, the foreign corporation to obtain or maintain a certificate of authority to transact business in this state:
(1) May add the word “corporation,” “incorporated,” “company,” or “limited,” or the abbreviation “corp.,” “inc.,” “co.,” or “ltd.,” or the name of its state of incorporation to its corporate name for use in this state; or
(2) May use a fictitious or trade name to transact business in this state if its real name is unavailable and it delivers to the Secretary of State for filing a copy of the resolution of its board of directors, certified by its secretary, adopting the fictitious or trade name.
(b) Except as authorized by subsections (c) and (d) of this Code section, a corporate name (including a fictitious name) of a foreign corporation must be distinguishable upon the records of the Secretary of State from:
(1) The corporate name of a corporation, whether for profit or not for profit, incorporated or authorized to transact business in this state;
(2) A name reserved or registered under this title;
(3) The fictitious name adopted by a foreign corporation authorized to transact business in this state because its real name is unavailable;
(4) The name of a limited partnership or professional association reserved or filed with the Secretary of State under this title; and
(5) The name of a limited liability company formed or authorized to transact business in this state.
(c) A foreign corporation may apply to the Secretary of State for authorization to use in this state the name of another corporation (incorporated or authorized to transact business in this state) that is not distinguishable upon his or her records from the name applied for.
The Secretary of State shall authorize use of the name applied for if the other corporation files with the Secretary of State articles of amendment to its articles of incorporation changing its name to a name that is distinguishable upon the records of the Secretary of State from the name of the applying corporation.
(d) A foreign corporation may use the name (including the fictitious name) of another domestic corporation or foreign corporation whether for profit or not for profit that is used in this state if the other corporation is incorporated or authorized to transact business in this state and:
(1) The foreign corporation has merged with the other corporation;
(2) The foreign corporation has been formed by reorganization of the other corporation; or
(3) The other domestic corporation or foreign corporation has taken the steps required by this chapter to change its name to a name that is distinguishable upon the records of the Secretary of State from the name of the foreign corporation applying to use its former name.
(e) If a foreign corporation authorized to transact business in this state changes its corporate name to one that does not satisfy the requirements of Code Section 14-3-401, it may not transact business in this state under the changed name until it adopts a name satisfying the requirements of Code Section 14-3-401 and obtains an amended certificate of authority under Code Section 14-3-1504.
Each foreign corporation authorized to transact business in this state must continuously maintain in this state:
(1) A registered office that may be the same as any of its places of business; and
(2) A registered agent, who may be:
(A) An individual who resides in this state and whose business office is identical with the registered office;
(B) A domestic corporation, domestic business corporation, or domestic limited liability company whose business office is identical with the registered office; or
(C) A foreign corporation, foreign business corporation, or foreign limited liability company authorized to transact business in this state whose business office is identical with the registered office.
(a) A foreign corporation authorized to transact business in this state may change its registered office or registered agent by delivering to the Secretary of State for filing an amendment to its annual registration that sets forth:
(1) Its name;
(2) The street address of its current registered office;
(3) If the current registered office is to be changed, the street address of its new registered office;
(4) The name of its current registered agent; and
(5) That after the change or changes are made, the street addresses of its registered office and the business office of its registered agent will be identical.
(b) If a registered agent changes the street address of his or her business office, he or she may change the street address of the registered office of any foreign corporation for which he or she is the registered agent by notifying the corporation in writing of the change and signing (either manually or in facsimile) and delivering to the Secretary of State for filing an amendment to the annual registration that complies with the requirements of subsection (a) of this Code section.
(a) The registered agent of a foreign corporation may resign his or her agency appointment by signing and delivering to the Secretary of State for filing a statement of resignation. The statement may include a statement that the registered office is also discontinued.
(b) On or before the date of filing of the statement of resignation, the registered agent shall deliver or mail a written notice of the agent's intention to resign to the chief executive officer, chief financial officer, or secretary of the corporation, as named, and at the address as shown in the annual registration, or in the articles of incorporation if no annual registration has been filed.
(c) The agency appointment is terminated, and the registered office discontinued if so provided, on the earlier of the filing by the corporation of an amendment to its annual registration designating a new registered agent and registered office if also discontinued or the thirty-first day after the date on which the statement was filed.
(a) The registered agent of a foreign corporation authorized to transact business in this state is the corporation's agent for service of any process, notice, or demand required or permitted by law to be served on the foreign corporation.
(b) If a foreign corporation has no registered agent or its registered agent cannot with reasonable diligence be served, the corporation may be served by registered or certified mail or statutory overnight delivery, return receipt requested, addressed to the chief executive officer, chief financial officer, or secretary of the foreign corporation at its principal office shown in the later of its application for a certificate of authority or its most recent annual registration.
Any party that serves a foreign corporation in accordance with this subsection shall also serve a copy of the process upon the Secretary of State and shall pay a $10.00 filing fee.
(c) Service is perfected under subsection (b) of this Code section at the earliest of:
(1) The date the foreign corporation receives the mail;
(2) The date shown on the return receipt, if signed on behalf of the foreign corporation; or
(3) Five days after its deposit in the United States mail, as evidenced by the postmark, if mailed postpaid and correctly addressed.
(d) This Code section does not prescribe the only means, or necessarily the required means, of serving a foreign corporation.
(e) For service in a proceeding to enforce any obligation of a domestic corporation party to a merger, see subsection (b) of Code Section 14-3-1106.
(a) A foreign corporation authorized to transact business in this state may not withdraw from this state until it obtains a certificate of withdrawal from the Secretary of State. A foreign corporation authorized to transact business in this state that merges with and into a domestic corporation pursuant to Code Section 14-3-1106 and is not the surviving corporation in such merger need not obtain a certificate of withdrawal from the Secretary of State.
(b) A foreign corporation authorized to transact business in this state may apply for a certificate of withdrawal by delivering an application to the Secretary of State for filing. The application must set forth:
(1) The name of the foreign corporation and the name of the state or country under whose law it is incorporated;
(2) That it is not transacting business in this state and that it surrenders its authority to transact business in this state;
(3) That it revokes the authority of its registered agent to accept service on its behalf and appoints the Secretary of State as its agent for service of process in any proceeding based on a cause of action arising during the time it was authorized to transact business in this state;
(4) A mailing address to which a copy of any process served on the Secretary of State under paragraph (3) of this subsection may be mailed under subsection (c) of this Code section; and
(5) A commitment to notify the Secretary of State in the future of any change in its mailing address.
(c) After the withdrawal of the corporation is effective, service of process on the Secretary of State under this Code section is service on the foreign corporation. Any party that serves process upon the Secretary of State in accordance with this subsection shall also mail a copy of the process to the chief executive officer, chief financial officer, or the secretary of the foreign corporation at the mailing address set forth under subsection (b) of this Code section.
The Secretary of State may commence a proceeding under Code Section 14-3-1531 to revoke the certificate of authority of a foreign corporation authorized to transact business in this state if:
(1) The foreign corporation does not deliver its annual registration to the Secretary of State within 60 days after it is due;
(2) The foreign corporation does not pay within 60 days after they are due any fees, taxes, or penalties imposed by this chapter or other law;
(3) The foreign corporation is without a registered agent or registered office in this state for 60 days or more;
(4) The foreign corporation does not inform the Secretary of State under Code Section 14-3-1508 or 14-3-1509 that its registered agent or registered office has changed, that its registered agent has resigned, or that its registered office has been discontinued within 60 days of the change, resignation, or discontinuance;
(5) An incorporator, director, officer, or agent of the foreign corporation signed a document he or she knew was false in any material respect with intent that the document be delivered to the Secretary of State for filing; or
(6) The Secretary of State receives a duly authenticated certificate from the secretary of state or other official having custody of corporate records in the state or country under whose law the foreign corporation is incorporated stating that it has been dissolved or disappeared as the result of a merger.
(a) If the Secretary of State determines that one or more grounds exist under Code Section 14-3-1530 for revocation of a certificate of authority, he or she shall provide the foreign corporation with written notice of his or her determination by mailing a copy of the notice, by first-class mail, to the foreign corporation at the last known address of its principal office or to the registered agent.
(b) If the foreign corporation does not correct each ground for revocation or demonstrate to the reasonable satisfaction of the Secretary of State that each ground determined by the Secretary of State does not exist within 60 days after notice is provided to the corporation, the Secretary of State may revoke the foreign corporation's certificate of authority by signing a certificate of revocation that recites the ground or grounds for revocation and its effective date.
(c) The authority of a foreign corporation to transact business in this state ceases on the date shown on the certificate revoking its certificate of authority.
(d) The Secretary of State's revocation of a foreign corporation's certificate of authority appoints the Secretary of State as the foreign corporation's agent for service of process in any proceeding based on a cause of action which arose during the time the foreign corporation was authorized to transact business in this state. Service of process on the Secretary of State under this subsection is service on the foreign corporation. Any party that serves process upon the Secretary of State shall also mail a copy of the process to the chief executive officer, chief financial officer, or the secretary of the foreign corporation, at its principal office shown in its most recent annual registration or in any subsequent communication received by the Secretary of State from the corporation stating the current mailing address of its principal office, or, if none is on file, in its application for a certificate of authority.
(e) Revocation of a foreign corporation's certificate of authority does not terminate the authority of the registered agent of the corporation.
(a) A foreign corporation may appeal the Secretary of State's revocation of its certificate of authority to the Superior Court of Fulton County within 30 days after service of the certificate of revocation is perfected under Code Section 14-3-1510. The foreign corporation appeals by petitioning the court to set aside the revocation and attaching to the petition copies of its certificate of authority and the Secretary of State's certificate of revocation.
(b) The court may summarily order the Secretary of State to reinstate the certificate of authority or may take any other action the court considers appropriate.
(c) The court's final decision may be appealed as in other civil proceedings.
(a) A foreign corporation which prior to April 1, 1969, has domesticated in this state under the procedure available prior to that date and which is a domesticated foreign corporation on that date shall have perpetual duration as a domesticated foreign corporation of this state unless its existence is terminated in its jurisdiction of incorporation or its domesticated status is dissolved in accordance with the provisions of this chapter relating to involuntary dissolution or until such time as it withdraws from this state in the manner provided in this chapter. Such domesticated foreign corporations and the members thereof shall have all the rights, privileges, and immunities and be subject to all the duties, liabilities, and disabilities applicable to similar corporations organized under the laws of this state and applicable to the members thereof, except as may be provided with respect to such domesticated foreign corporations by any of the laws of this state existing on April 1, 1969, or coming into existence thereafter.
(b) Whenever the term “foreign corporation authorized to transact business in this state” is used in this chapter, it shall be deemed to include domesticated foreign corporations, except where the context or this chapter otherwise requires.
(a) A corporation shall keep as permanent records minutes of all meetings of its members and board of directors, executed consents evidencing all actions taken by the members or board of directors without a meeting, a record of all actions taken by a committee of the board of directors in place of the board of directors on behalf of the corporation, and waivers of notice of all meetings of the board of directors and its committees.
(b) A corporation shall maintain appropriate accounting records.
(c) A corporation or its agent shall maintain a record of its members in a form that permits preparation of a list of the name and address of all members, in alphabetical order by class, showing the number of votes each member is entitled to cast.
(d) A corporation shall maintain its records in written form or in another form capable of conversion into written form within a reasonable time.
(a) A corporation shall keep a copy of the following records:
(1) Its articles or restated articles of incorporation and all amendments to them currently in effect;
(2) Its bylaws or restated bylaws and all amendments to them currently in effect;
(3) Resolutions adopted by either its members or board of directors increasing or decreasing the number of directors or the classification of directors, or relating to the characteristics, qualifications, rights, limitations, and obligations of members or any class or category of members;
(4) Resolutions adopted by either its members or board of directors relating to the characteristics, qualifications, rights, limitations, and obligations of members or any class or category of members;
(5) The minutes of all meetings of members, executed waivers of notice of meetings, and executed consents, delivered in writing or by electronic transmission, evidencing all actions taken or approved by the members without a meeting, for the past three years;
(6) All communications in writing or by electronic transmission to members generally within the past three years, including the financial statements furnished for the past three years under Code Section 14-3-1620;
(7) A list of the names and business or home addresses of its current directors and officers; and
(8) Its most recent annual registration delivered to the Secretary of State under Code Section 14-3-1622.
(b) A member is entitled to inspect and copy, at a reasonable time and location specified by the corporation, any of the records of the corporation described in subsection (a) of this Code section if the member gives the corporation written notice or a written demand at least five business days before the date on which the member wishes to inspect and copy.
(c) A member is entitled to inspect and copy, at a reasonable time and reasonable location specified by the corporation, any of the following records of the corporation if the member meets the requirements of subsection (d) of this Code section and gives the corporation written notice at least five business days before the date on which the member wishes to inspect and copy:
(1) Excerpts from minutes of any meeting of the board of directors, records of any action of a committee of the board of directors while acting in place of the board of directors on behalf of the corporation, minutes of any meeting of the members, and records of action taken by the members or the board of directors without a meeting, to the extent not subject to inspection under subsection (a) of this Code section;
(2) Accounting records of the corporation; and
(3) Subject to Code Section 14-3-1605, the membership list.
(d) A member may inspect and copy the records identified in subsection (c) of this Code section only if:
(1) The member's demand is made in good faith and for a proper purpose that is reasonably relevant to the member's legitimate interest as a member;
(2) The member describes with reasonable particularity the purpose and the records the member desires to inspect;
(3) The records are directly connected with this purpose; and
(4) The records are to be used only for the stated purpose.
(e) The corporation may impose reasonable restrictions on the confidentiality, use, or distribution of the records described in subsection (c) of this Code section.
(f) This Code section does not affect:
(1) The right of a member to inspect records under Code Section 14-3-720 or, if the member is in litigation with the corporation, to the same extent as any other litigant; or
(2) The power of a court, independently of this chapter, to compel the production of corporate records for examination.
(a) A member's agent or attorney has the same inspection and copying rights as the member the agent or attorney represents.
(b) The right to copy records under Code Section 14-3-1602 includes, if reasonable, the right to receive copies made by photographic, electronic, or other means.
(c) The corporation may impose a reasonable charge, covering the costs of labor and material, for copies of any documents provided to the member. The charge may not exceed the estimated cost of production or reproduction of the records.
(d) A corporation shall convert into written form without charge any record not in written form, upon written request of a person entitled to inspect it.
(e) The corporation may comply with a member's demand to inspect the record of members under paragraph (3) of subsection (c) of Code Section 14-3-1602 by providing the member with a list of its members that was compiled no earlier than the date of the member's demand.
(a) If a corporation does not allow a member who complies with subsection (b) of Code Section 14-3-1602 to inspect and copy any records required by that subsection to be available for inspection, the superior court may summarily order inspection and copying of the records demanded at the corporation's expense upon application of the member.
(b) If a corporation does not within a reasonable time allow a member to inspect and copy any other record, the member who complies with subsections (b) and (c) of Code Section 14-3-1602 may apply to the superior court for an order to permit inspection and copying of the records demanded. The court shall dispose of an application under this subsection on an expedited basis.
(c) If the court orders inspection and copying of the records demanded, it shall also order the corporation to pay the member's costs (including reasonable attorney's fees) incurred to obtain the order unless the corporation proves that it refused inspection in good faith because it had a reasonable basis for doubt about the right of the member to inspect the records demanded.
(d) If the court orders inspection and copying of the records demanded, it may impose reasonable restrictions on the use or distribution of the records by the demanding member.
Without consent of the board, a membership list or any part thereof may not be obtained or used by any person for any purpose unrelated to a member's interest as a member. Without limiting the generality of the foregoing, without the consent of the board a membership list or any part thereof may not be:
(1) Used to solicit money or property unless such money or property will be used solely to solicit the votes of the members in an election to be held by the corporation;
(2) Used for any commercial purpose; or
(3) Sold to or purchased by any person.
(a) A director of a corporation is entitled to inspect and copy the books, records, and documents of the corporation at any reasonable time to the extent reasonably related to the performance of the director's duties as a director, including duties as a member of a board committee, but not for any other purpose or in any manner that would violate any duty to the corporation or any law.
(b) Upon application of a director who has been refused such inspection and copying rights, the superior court shall order inspection and copying of the books, records, and documents at the corporation's expense, unless the corporation establishes that the director is not entitled to such inspection and copying rights. The court shall dispose of an application under this Code section on an expedited basis.
(c) If an order is issued, the court may include provisions protecting the corporation from undue burden or expense, and prohibiting the director from using information obtained upon exercise of the inspection and copying rights in a manner that would violate a duty to the corporation or any law, and may also order the corporation to reimburse the director for the director's expenses (including attorney's fees) incurred in connection with the application.
(a) A corporation upon request in writing or by electronic transmission from a member shall furnish that member its latest prepared annual financial statements, which may be consolidated or combined statements of the corporation and one or more of its subsidiaries or affiliates, in reasonable detail as appropriate, that include a balance sheet as of the end of the fiscal year and statement of operations for that year. If financial statements are prepared for the corporation on the basis of generally accepted accounting principles, the annual financial statements must also be prepared on that basis.
(b) If annual financial statements are reported upon by a public accountant, the accountant's report must accompany them. If not, the statements must be accompanied by the statement of the chief executive officer or the person responsible for the corporation's financial accounting records:
(1) Stating the chief executive officer's or other person's reasonable belief as to whether the statements were prepared on the basis of generally accepted accounting principles and, if not, describing the basis of preparation; and
(2) Describing any respects in which the statements were not prepared on a basis of accounting consistent with the statements prepared for the preceding year.
If a corporation indemnifies or advances expenses to a director under Code Section 14-3-851, 14-3-852, 14-3-853, or 14-3-854 in connection with a proceeding by or in the right of the corporation, the corporation shall report the indemnification or advance in writing to the members with or before the notice of the next meeting of members.
(a) Each domestic corporation and each foreign corporation authorized to transact business in this state shall deliver to the Secretary of State for filing an annual registration that sets forth:
(1) The name of the corporation and the state or country under whose law it is incorporated;
(2) The street address and county of its registered office and the name of its registered agent at that office in this state;
(3) The mailing address of its principal office, if any; and
(4) The names and respective addresses of its chief executive officer, chief financial officer, and secretary.
(b) Information in the annual registration must be current as of the date the annual registration is executed on behalf of the corporation.
(c) The first annual registration must be delivered to the Secretary of State between January 1 and April 1, or such other date as the Secretary of State may specify by rules or regulations, of the year following the calendar year in which a domestic corporation was incorporated or a foreign corporation was authorized to transact business. Subsequent annual registrations must be delivered to the Secretary of State between January 1 and April 1, or such other date as the Secretary of State may specify by rules or regulations, of the following calendar years.
(d) The initial annual registration of a domestic corporation shall be filed within 90 days after the day its articles of incorporation are delivered to the Secretary of State for filing.
However, the initial annual registration of a domestic corporation whose articles of incorporation are delivered to the Secretary of State for filing subsequent to October 1 shall be filed between January 1 and April 1 of the year next succeeding the calendar year in which its certificate of incorporation is issued by the Secretary of State.
(e) If an annual registration does not contain the information required by this Code section, the Secretary of State shall promptly notify the reporting domestic corporation or foreign corporation in writing and return the report to it for correction. If the report is corrected to contain the information required by this Code section and delivered to the Secretary of State within 30 days after the effective date of notice, it is deemed to be timely filed.
(a) Subject to the limitations of subsection (b) of this Code section, this chapter shall apply:
(1) To all nonprofit corporations, existing on or formed after July 1, 1991, including nonprofit corporations organized under any prior general corporation law of this state or under Chapter 3 of Title 14 of the Official Code of Georgia Annotated in effect prior to July 1, 1991, that is repealed by this chapter;
(2) To all nonprofit corporations created by special Act of the General Assembly as to which power has been reserved to withdraw the franchise;
(3) To any nonprofit corporation, organization, or association, to the extent that the former general corporation law of this state or any of its provisions or this chapter or any of its provisions specifically have been or shall be made applicable to such corporation, organization, or association; and
(4) To any corporation organized under any statute of this state or if it were originally created by special Act of the General Assembly without reservation of power to withdraw the franchise, if under any prior general corporation law of this state applicable to nonprofit corporations such corporation either has amended its charter or has been a party to a merger or a consolidation, and also to any such corporation which after July 1, 1991, in an amendment to its articles of incorporation or restatement of the articles of incorporation or in a merger or a consolidation, elects to be subject to this chapter. Any such corporation shall have all the rights, privileges, franchises, immunities, and powers and shall be subject to all the duties, liabilities, and disabilities of a corporation to which this chapter applies as well as of the statute or special Act by which such corporation was originally created, but in the event of a conflict between such statute or special Act and this chapter, such statute or special Act shall govern.
(b) This chapter shall not apply:
(1) To corporations organized under a statute of this state other than either this chapter or any prior general corporation law, except to the extent that the former general corporation law of this state applicable to nonprofit corporations or any of its provisions or this chapter or any of its provisions specifically have been or shall be made applicable to such corporations;
(2) To any corporation originally created by special Act of the General Assembly as to which power has not been reserved to withdraw the franchise, except as otherwise provided in subsection (a) of this Code section;
(3) To any corporation originally created by special Act of the General Assembly as to which power has been reserved to withdraw the franchise, if the purpose of the corporation would require its organization to take place under a statute other than this chapter, if it were being organized after July 1, 1991, except to the extent that the former general corporation law of this state or any of its provisions or this chapter or any of its provisions specifically have been or shall be made applicable to corporations organized for that purpose;
(4) To any public authority created by special Act of the General Assembly, except to the extent that the former general corporation law of this state or any of its provisions or this chapter or any of its provisions specifically have been or shall be made applicable to such public authority; or
(5) To corporations of any class to the extent that such class is specifically exempted from this chapter or any of its provisions.
(c) This chapter shall not impair the existence of any nonprofit corporation existing on July 1, 1991. Subject to Code Section 14-3-610, any such existing corporation to which this chapter is applicable and its members, directors, and officers shall have the same rights and be subject to the same limitations, restrictions, liabilities, and penalties as a corporation formed under this chapter and its members, directors, and officers.
(d) If the articles of incorporation, charter, or bylaws of a corporation in existence on July 1, 1991, contain any provisions that were not authorized or permitted by the prior general corporation law of this state but which are authorized or permitted by this chapter, the provisions of the articles of incorporation, charter, or bylaws shall be valid on and from that date, and action may be taken on and from that date in reliance on those provisions. If the articles of incorporation, charter, or bylaws of a corporation in existence on July 1, 1991, contain any provisions that were authorized or permitted by the prior nonprofit corporation law of this state, that were validly adopted under the law in effect at the time of their adoption, and that are authorized or permitted by this chapter, the provisions of the articles of incorporation, charter, or bylaws shall continue to be valid on and from that date, whether or not this chapter imposes requirements for the adoption of such provisions that are different from those in effect at the time the provisions were adopted.
(e) This chapter shall apply to commerce with foreign nations and among the several states only insofar as the application may be permitted under the Constitution and laws of the United States.
A foreign corporation transacting business in this state on or after July 1, 1991, is subject to this chapter. A foreign corporation that is authorized to transact business or conduct affairs in this state on July 1, 1991, is not required to obtain a new certificate of authority.
(a) Except as provided in subsection (b) of this Code section, the repeal of a statute by this chapter does not affect:
(1) The operation of the statute or any action taken under it before its repeal;
(2) Any ratification, right, remedy, privilege, obligation, cause of action, liability, penalty, or action or special proceeding acquired, accrued, or incurred under the statute before its repeal; but the same, as well as actions that are pending on July 1, 1991, may be asserted, enforced, prosecuted, or defended as if the prior statute has not been repealed;
(3) Any violation of the statute, or any penalty, forfeiture, or punishment incurred because of the violation, before its repeal;
(4) Transactions validly entered into before July 1, 1991, and the rights, duties, and interests flowing from them shall remain valid thereafter and may be terminated, completed, consummated, or enforced as required or permitted by any statute repealed by this chapter as though the repeal had not occurred;
(5) Any proceeding, reorganization, or dissolution commenced under the statute before its repeal, and the proceeding, reorganization, or dissolution may be completed in accordance with the statute as if it had not been repealed;
(6) Any provision of the articles of incorporation, charter, or bylaws of a corporation in existence on July 1, 1991, that was authorized or permitted by the prior nonprofit corporation law of this state, that was validly adopted under the law in effect at the time of its adoption, and that is authorized or permitted by this chapter; or
(7) Any meeting of members or directors or action by written consent noticed or any action taken before its repeal as a result of a meeting of members or directors or action by written consent.
(b) If a penalty or punishment imposed for violation of a statute repealed by this chapter is reduced by this chapter, the penalty or punishment if not already imposed shall be imposed in accordance with this chapter.
This chapter is intended to be and is merely a recompilation of existing statutes affecting and regulating corporations chartered by the Secretary of State and complements and supplements the express provisions of existing statutes governing banking, trust, insurance, railroad, canal, navigation, express, and telegraph corporations. All references in this chapter to corporations chartered by or incorporated by the Secretary of State shall refer only to the aforesaid corporations, except as otherwise provided, and shall not refer to corporations incorporated by the Secretary of State under Chapter 2 of this title.
Nothing in this chapter shall affect existing statutes with respect to the venue of actions against railroad, electric, banking, trust, insurance, canal, navigation, express, and telegraph companies, which existing statutes include, as to express companies, those statutes codified as Code Sections 46-9-234 through 46-9-236; as to companies under the jurisdiction of the Georgia Public Service Commission, that statute codified as Code Section 46-2-92.
Every banking, trust, insurance, railroad, canal, navigation, express, and telegraph corporation shall have such number of directors, not less than three, as may be provided by its charter, any amendment thereto granted prior to April 1, 1969, or thereafter, or by its bylaws in the absence of any such charter provision. The effect of this Code section shall be that all actions taken prior to April 1, 1969, by the board of directors of any such corporation shall be valid and binding for all purposes as if this Code section had been enacted before such action was taken and as if such board of directors had been constituted as provided by this Code section.
Whenever application is made to the Secretary of State to obtain a charter or the authorization of articles of incorporation for any purpose, it shall be unlawful for the applicant either to use the name of any person, order, lodge, society, or corporation as a corporate name or to mention any such name in connection with the purpose of such proposed organization without furnishing at the time of application an affidavit of consent executed by such person, order, lodge, society, or corporation.
It shall be the right of any person, order, lodge, society, or corporation interested in the result of an application to obtain a charter or the authorization of articles of incorporation in which the name of such person, order, lodge, society, or corporation is used unlawfully under Code Section 14-4-22 to file written objections and to appear before the Secretary of State. The Secretary of State, after hearing the issue formed by the application and objections filed thereto and after hearing evidence thereon, may in his discretion grant or refuse such charter or articles of incorporation. Such application and objections filed thereto may be heard within the office of the Secretary of State at such reasonable time as he may designate.
Either party to a hearing held pursuant to Code Section 14-4-23 who is dissatisfied with the action of the Secretary of State may appeal to the Superior Court of Fulton County, whereupon the matter shall be tried de novo by the court without a jury. The court shall either sustain the action of the Secretary of State or direct him to take such action as the court may deem proper.
(a) The name of a corporation shall become immediately available for use by others upon:
(1) The surrender by the corporation of its franchise;
(2) The effective date of an amendment changing the name of the corporation;
(3) The voluntary or involuntary dissolution of the corporation.
(b) Upon the effective date of a merger or consolidation, the names of the constituent corporations shall become immediately available except insofar as one of such names shall be the name of the surviving or resulting corporation.
(c) Nothing in this Code section shall abrogate or limit the law as to unfair competition or unfair trade practice nor derogate from the common law, or principles of equity, or the statutes of this state or of the United States with respect to the right to acquire and protect trade names and trademarks.
Every corporation having capital stock incorporated prior to April 1, 1969, or thereafter by the Secretary of State or by Act of the General Assembly, including corporations with powers derived from both of such sources, except an insurance company, which shall be subject to the provisions of Code Section 33-14-45, or a banking or trust company, which shall be subject to the provisions of Code Section 7-1-413, may, upon its organization or thereafter in the manner provided in this article, create shares of stock with or without par value and may create two or more classes of stock with such preferences, voting powers, restrictions, and qualifications as shall be designated in its petition, declaration, or other application for incorporation or as subsequently shall be decided upon, provided there shall be but one class of common stock, each share of which shall stand upon an equality with every other share. Before any such corporation can begin business as a corporation there must be at least $1,000.00 paid in for such nonpar value common stock either in cash or in tangible assets at their fairly appraised valuation.
Before any corporation shall avail itself of this article, it shall procure appropriate corporate authority therefor in the manner provided by law. The Secretary of State is authorized to grant such powers to the several classes of corporations of which he has jurisdiction to grant or amend charters.
The provisions of law relating to the issue of shares of capital stock with par value, including in the case of a corporation under the jurisdiction of the Georgia Public Service Commission the laws defining the duties and powers of said commission with respect to the issuance of shares of stock, shall, except as otherwise provided in this article, apply also to the issue of shares without par value.
A corporation may issue and dispose of its authorized shares without par value for such consideration as may be authorized or prescribed in its charter or certificate of incorporation or amendments thereof or, if there is no provision therein with respect thereto, for such consideration as may be fixed by the stockholders at a meeting duly called for that purpose, or by the board of directors when acting under general or special authority granted by the stockholders or under general authority conferred by the charter or certificate of incorporation or amendments thereof. Any and all shares without nominal or par value issued for the consideration prescribed or fixed in accordance with this Code section shall be fully paid and not liable to any further call or assessment thereon; nor shall the subscriber or holder be liable for any further payment.
Every corporation of the character included in Code Section 14-4-40 having shares with par value, whether issued and outstanding or only authorized, may, at a meeting duly called for the purpose, by the vote of a majority of all its stock entitled to vote or, if two or more classes of stock have been issued, of a majority of each class outstanding and entitled to vote, including in any event a majority of the outstanding stock of each class affected, change such shares of any class thereof into an equal or greater number of shares of the same class without par value or provide for the exchange thereof pro rata for an equal or greater number of shares without par value, provided that all shares in any one class shall be changed or exchanged on the same basis; and provided, further, that the preferences, restrictions, and qualities of the outstanding shares so changed or exchanged shall not be otherwise affected nor the relative voting powers of the different classes of shares be altered.
Upon the organization of any corporation having shares of stock without par value, the petition, declaration, or other application for incorporation required by law, in addition to other matters required to be stated, shall state:
(1) The number of shares with par value and the number of shares without par value that may be issued and the designation of the classes, if any, into which such shares are divided;
(2) The par value of the shares, if any, other than the shares to be without par value; and
(3) If there are to be two or more classes of stock, a description of the different classes including a statement of the respective preferences, restrictions, and qualities thereof.
Any law requiring that the amount of par value of the capital stock of a corporation be stated in any certificate, report, or other instrument shall be deemed to be complied with so far as shares without par value are concerned by stating with respect to such shares the number authorized, issued, or to be issued, as the case may be, and the fact that they are without par value.
A meeting “duly called for the purpose,” as that phrase is used in this article, shall mean a meeting of the stockholders called and notified for the purpose in the manner prescribed by the bylaws of the corporation concerned. Unless required by the bylaws, no publication of the call or notice in any newspaper shall be necessary.
All corporations have the right to sue and be sued, to have and use a common seal, to make bylaws binding on their own members not inconsistent with the laws of this state and of the United States, to receive donations by gift or will, to purchase and hold such property, real or personal, as is necessary to the purpose of their organization, and to do all such acts as are necessary for the legitimate execution of this purpose.
Every private corporation incorporated in this state on or after April 1, 1969, shall have, in addition to the powers granted in its articles of incorporation or charter and in addition to other general powers conferred by law, power to make donations for the public welfare or for charitable, scientific, or educational purposes. Every private corporation incorporated prior to April 1, 1969, and whose articles of incorporation or charter was issued subject to the right reserved in the state to change the articles of incorporation or charter or withdraw the franchise shall also have the power described in this Code section.
Corporations shall have continuous succession during the time limited by their articles of incorporation or charters, notwithstanding the death of their members. Should any articles of incorporation or charter granted to a private corporation be silent as to its continuance, such articles of incorporation or charter shall expire at the end of 30 years from the date of its grant by the Secretary of State.
Persons who organize a company and transact business in its name before the minimum capital stock has been subscribed for are liable to creditors to make good the minimum capital stock with interest.
Every corporation acts through its officers and is responsible for the acts of such officers in the sphere of their appropriate duties; and no corporation shall be relieved of its liability to third persons for the acts of its officers by reason of any bylaws or other limitation upon the power of the officer not known to such third person.
No corporation or association shall declare any dividend or distribute any money among its members as profits when such dividend or money is not declared or distributed from the actual legitimate net earnings and in any manner increases its debts. Should the president, directors, or other agent of any corporation declare a dividend or dividends in violation of the above provisions they shall be subject to an action for double the amount of damages that any person or persons may sustain in consequence of the declaring of such dividend or dividends.
(a) Any railroad, canal, navigation, express, or telegraph company heretofore incorporated by an Act of the General Assembly or by a certificate of the Secretary of State may have its charter renewed and its corporate existence extended for a period of 30 years by filing with the Secretary of State at any time within six months prior to the expiration of its charter an application signed with its corporate name and under its corporate seal, in which it shall state:
(1) The name of the corporation;
(2) When and how it was incorporated, giving the date of its original charter and all amendments and renewals thereto; and
(3) That it desires a renewal of its charter as set out in the original charter and amendments thereto.
Upon filing such application, the corporation shall pay to the Secretary of State a fee of $100.00 to be paid by him into the state treasury.
(b) Such corporation shall file with the application an abstract from the minutes of the corporation, duly certified by the president and secretary of the corporation, showing that the application for renewal has been authorized by resolution which has been duly adopted by the affirmative vote of the holders of a majority of the shares entitled to vote thereon at a meeting held for the purpose of passing upon such resolution.
(c) Upon the filing of the application and abstract, the Secretary of State shall issue to the petitioning corporation a certificate under the seal of the state renewing its charter for a period of 30 years from the date of its expiration. The Secretary of State shall keep on file the application and abstract and shall record the application, the abstract, and the certificate granting the renewal in a book kept for that purpose.
(d) Upon filing the application and abstract and the issuance of the certificate prescribed, the corporation shall be conclusively presumed to have accepted the renewal of its charter; and the corporation shall be a body corporate and shall continue in existence for the space of 30 years with all the powers, privileges, and liabilities granted in the original charter and the amendments thereto, so far as the same are not in conflict with the Constitution and laws of the state, in force on April 1, 1969, or thereafter.
(a) In all cases where a charter of any corporation incorporated by an Act of the General Assembly or by a certificate of the Secretary of State has expired and such corporation has continued in business in ignorance of such expiration, such charter may be revived in the same manner as original charters are procured from the Secretary of State at any time within ten years from the date of expiration, provided that a majority of the stockholders of the corporation at a regular or special meeting, notice of the purpose of the meeting having been given to the stockholders, shall have adopted a resolution asking for such revival and stating that all the stockholders shall be bound by the resolution.
(b) Upon the issuance by the Secretary of State of a certificate reviving the corporation, all the property and other rights of the corporation shall continue in the corporation as so revived and the acts of such corporation in the period between the date of expiration and date of revival shall be thereby confirmed and held as the acts of the original corporation so revived. The corporation shall continue from the date of issuance of the certificate by the Secretary of State for the full period allowed by law for such corporations.
(a) Any insurance, railroad, canal, navigation, express, or telegraph company, incorporated prior to April 1, 1969, by special Act of the General Assembly, may amend its charter so as to acquire any or all of the corporate powers and privileges granted to a like corporation under the Acts passed prior to April 1, 1969, or thereafter, providing for the grant of corporate powers and privileges to such companies by the Secretary of State, by filing with the Secretary of State an application signed with the corporate name stating the name and character of the corporation, the date of the original Act of incorporation and all amendments thereto, and that it desires an amendment to its charter by having granted to it the corporate powers and privileges granted to similar corporations by the Act or certain specified sections of the Act, providing for the grant of corporate powers and privileges to such corporations by the Secretary of State, and by paying to the Secretary of State the fee provided by law, to be paid by him into the state treasury. The company shall file along with the application an abstract from the minutes of the corporation, duly certified by the president and secretary of the corporation, which abstract shows that the application for amendment has been authorized by resolution which has been duly adopted by the affirmative vote of the holders of a majority of the shares entitled to vote thereon at a meeting held for the purpose of passing upon the resolution.
(b) Whenever any insurance company incorporated by special Act of the General Assembly which is permitted by its charter to do other than a fire insurance business desires to abandon the same or any part thereof, it may, upon application to the Secretary of State, relinquish and surrender any or all of the powers and privileges granted to it for the conduct of such other business, provided no rights of contract are thereby violated.
If application shall be made under subsection (a) of Code Section 14-4-100 to amend the charter of an insurance, railroad, canal, navigation, express, or telegraph company incorporated by special Act of the General Assembly, the Secretary of State shall issue to the corporation the following certificate:
To whom it may concern--Greetings:
(Insert here name of petitioning corporation), a corporation created by an Act of the General Assembly of this state by an Act approved (insert here date of approval of Act), and Acts amendatory thereof, approved (insert here date of approval of amendatory Acts), having petitioned for an amendment of the charter of said corporation, in terms of the law in such case made and provided, the corporate powers and privileges set out in the Act (or certain specified sections of the Act), providing for the grant of corporate powers and privileges by the Secretary of State to (insert charter of company), are hereby conferred upon (insert name of company desiring amendment).
Witness my hand and the seal of this state, this _____ day of _____, _____.
If application shall be made by an insurance company under subsection (b) of Code Section 14-4-100 to amend its charter, the Secretary of State shall issue the insurance company the following certificate:
To whom it may concern--Greetings:
(Insert here name of petitioning insurance company), a corporation created by an Act of the General Assembly of this state by an Act approved (insert here date of approval of Act), and Acts amendatory thereof, approved (insert here date of approval of amendatory Acts), having petitioned for an amendment of the charter of said corporation, in terms of the law in such case made and provided, by (insert here the particular powers or privileges which said insurance company desires to relinquish or surrender), said amendment is hereby granted and allowed and made a part of the charter of the said (insert name of insurance company desiring amendment).
Witness my hand and the seal of this state, this _____ day of _____, _____.
After the filing of an application for an amended charter under Code Section 14-4-100 and the issuance of the certificate prescribed in Code Section 14-4-101 or 14-4-102, the corporation shall be conclusively presumed to have accepted the amendment specified and shall have, enjoy, and exercise all the corporate powers and privileges set out in the Act or the particular section of the Act specified in the application and certificate.
The Secretary of State shall keep on file all applications and abstracts filed with him under Code Section 14-4-100 and a book in which he shall enter the names of all the companies obtaining amendments to charters under that Code section, the date of the amendment, and, if appropriate, the Act or portions of the Act adopted as an amendment.
(a) Notwithstanding any other laws of this state applicable to amendments of charters or certificates of incorporation of railroad companies incorporated under the laws of this state or to changes in the capitalizations thereof or to the issuance of capital stock, bonds, or other securities thereby, in cases in which a plan of reorganization of any such railroad company pursuant to Title 11, U.S.C., the act of Congress of July 1, 1898, entitled “An Act to establish a uniform system of bankruptcy throughout the United States,” as amended, or the Bankruptcy Reform Act of 1978 (either of which federal acts is referred to in this chapter as the “National Bankruptcy Act”) has been confirmed by decree or order of a court of competent jurisdiction, the reorganization managers or committee designated in the plan of reorganization to consummate the same, or such other person or persons as may be so authorized by the court or judge in such reorganization proceedings, shall have full power and authority to adopt such amendments of the charter or certificate of incorporation of such railroad company, to make such changes in its authorized capitalization, and to issue such capital stock, bonds, and other securities as may be necessary and proper to put into effect and carry out such plan of reorganization and the decrees and orders of the court relative thereto without action by the directors or stockholders of such railroad company.
(b) After the adoption of such amendments of the charter or certificate of incorporation of such railroad company and the making of such changes in its authorized capitalization, a petition executed, acknowledged, and sworn to by such reorganization managers or committee, or such other person or persons so authorized by the court or judge to adopt such amendments and make such changes in capitalization, shall be filed in the office of the Secretary of State. Such petition shall show:
(1) The name and character of the company and, if the name has been changed, the name under which it previously existed;
(2) The dates of the original Act of incorporation, charter, or certificate of incorporation and of all amendments thereto;
(3) The amendments adopted;
(4) The new authorized capitalization of such company;
(5) The amount of capital stock, bonds, and other securities to be issued; and
(6) The fact that such amendments, new capitalization, and issuance of capital stock, bonds, and other securities were authorized by the plan of reorganization or in decrees or orders of the court relative thereto and that the plan has been confirmed under Title 11, U.S.C., the National Bankruptcy Act, with the title and venue of the proceeding and the date when the decree or order confirming the plan was made.
(c) Upon the filing of such petition in the office of the Secretary of State and the payment to him of a fee of $25.00, to be paid by him into the state treasury, the Secretary of State shall issue an appropriate certificate of change in the form prescribed in Code Section 14-4-121. Any such reorganized railroad company shall not be precluded from thereafter further amending its charter or certificate of incorporation or changing its capitalization or issuing capital stock, bonds, or other securities in the manner otherwise provided by law.
(a) Any railroad, insurance, express, telegraph, canal, or navigation company, whether incorporated by special Act of the General Assembly or by the Secretary of State under the general law, may have its corporate name, its principal office, the face value of each share of its capital stock, the number of its board of directors, or the amount of its capital stock changed by filing a petition in the office of the Secretary of State. The petition shall be signed with the corporate name and shall state the name and character of the corporation, the date of its original charter and all amendments thereto, and the fact that it desires an amendment to its charter changing its corporate name, its principal office, and the face value of each share of its capital stock, the number of its board of directors, or the amount of any or all of its capital stock, as the case may be.
(b) Such company shall file with the petition a certified abstract from the minutes of the board of directors showing that the petition for the proposed amendment has been authorized by the affirmative vote of the holders of a majority of the capital stock entitled by the terms of the company's charter to vote thereon at a meeting of the stockholders called by resolution of the board of directors for the purpose of voting on the amendment; provided, however, if the petition is to change the principal office of the company, the certified abstract from the minutes shall show that the amendment was authorized by the affirmative vote of the holders of two-thirds of the capital stock of the company. The certified abstract from the minutes shall show also that notice of such meeting was mailed to each stockholder or, in the case of death, to his legal representatives or heirs at law and addressed to his last known residence at least ten days prior to the day of the meeting.
(c) An affidavit made and signed in due form of law by the president or secretary of the company shall be attached to said petition, which affidavit shows that the petition has been published once a week for four weeks in that newspaper in which are published the sheriff's sales of the county in which the principal office of the company is located.
When the petition, abstract, and affidavit required by Code Section 14-4-120 have been filed in the office of the Secretary of State, he shall issue to the petitioning company under the great seal of the state a certificate in the following form:
To all to whom these presents may come--Greetings:
Whereas, the (here insert name of petitioning corporation), a corporation created and existing under the laws of this state, has filed in this office, in terms of the law, a petition asking that its charter be amended by changing (its corporate name, or its principal office, or the face value of each share of its capital stock, or the number of its board of directors, or the amount of any or all of its capital stock, as the case may be) from _____ to _____ and has complied with all the requirements of the law in such cases made and provided; therefore, the State of Georgia hereby amends the charter of the said (insert name of company) by changing (its corporate name, or principal office, etc., as the case may be) from (insert old name, or old principal office, etc.) to (insert new name, or new principal office, etc.).
In witness whereof, these presents have been signed by the Secretary of State, and the great seal has been attached hereof at the capitol in Atlanta on this _____ day of _____, _____.
Any two or more corporations incorporated by the Secretary of State under provisions other than Chapter 2 of this title, except banks and trust companies, may merge into a single corporation or enter into a share exchange in the manner set forth in Article 11 of Chapter 2 of this title.
A corporation which has received its charter from the Secretary of State under provisions other than Chapter 2 of this title, other than a bank or trust company, may merge or enter into a share exchange with a domestic corporation or corporations governed by Chapter 2 of this title in accordance with Code Section 14-2-1108.
A corporation which has received its charter from the Secretary of State under provisions other than Chapter 2 of this title, other than a bank or trust company, may merge or enter into a share exchange with one or more foreign corporations in accordance with Code Section 14-2-1107.
If any corporation incorporated by the Secretary of State under provisions other than Chapter 2 of this title, except banks and trust companies, merges or enters into a share exchange with another corporation pursuant to Code Section 14-4-140, 14-4-141, or 14-4-142, the rights of shareholders of such corporation to dissent from and obtain payment of the fair value of their shares in connection with such merger or share exchange shall be governed by provisions of Article 13 of Chapter 2 of this title.
Within ten days after an appraisal is filed in the office of the clerk of the superior court pursuant to Code Section 14-4-144, either the dissenting stockholder or the corporation may enter an appeal in writing to the superior court from the finding of the arbitrators. At the term succeeding and convening not less than 20 days after the filing of the appeal, the judge of the superior court shall cause an issue to be made and tried by a jury as to the value of the stock with the same right to move for a new trial and to seek appellate review as applies in other cases.
Upon making demand in writing for the value of his stock under Code Section 14-4-143, a stockholder shall forfeit all rights with respect to such stock except the right to receive payment therefor. Upon payment of the agreed value of the stock or of the value of the stock on final judgment, the stockholder shall transfer his stock to the surviving or resulting corporation.
In the event the surviving or resulting corporation shall fail to pay the amount of a judgment determining the value of a dissenting stockholder's stock within ten days after the judgment becomes final, execution shall issue thereon and said judgment shall be enforced as other judgments of the superior court are enforced.
Each stockholder in either of the consolidating or merging corporations at the time the merger or consolidation becomes effective who is entitled to vote but who does not vote against the merger or consolidation and object thereto in writing, as provided in Code Section 14-4-143, and each stockholder in each of the constituent corporations at the time the merger or consolidation becomes effective who is not entitled to vote and who does not object thereto in writing, as provided in Code Section 14-4-143, shall cease to be a stockholder in such constituent corporation and shall be deemed to have assented to the consolidation or merger. Such stockholders together with the stockholders voting in favor of the consolidation or merger shall be entitled to receive certificates of stock in the surviving or resulting corporation or other securities or property in the manner and on the terms specified in the agreement.
The right and power to merge or consolidate provided by this article is cumulative and is in addition to any power or right to merge or consolidate vested in corporations created prior to April 1, 1969, or provided by or under the terms of other statutes or this Code.
Upon the merger or consolidation of corporations as provided in this article, the consolidated corporation or the corporation into which the constituent corporations are merged may cause to be recorded in the records of any clerk of any superior court of this state a certified copy of the charter of the consolidated corporation or the corporation into which the constituent corporations are merged with the certificate of the Secretary of State thereon with the same force and effect as is provided by the statutes of this state for the record of deeds conveying title to land.
(a) A corporation may forfeit its charter:
(1) By failure to file its annual registration with the Secretary of State as required by Code Section 14-4-180 or by failure to file its annual license or occupational tax return on or before the day such return becomes due;
(2) By having procured its charter through fraud; or
(3) By continuing to violate the laws of this state in a manner likely to injure the public or the corporation's shareholders, creditors, or debtors after written notice by the Secretary of State to the corporation at its last known address as shown by the records of the Secretary of State, except that the Secretary of State shall not declare a forfeiture on this ground so long as the corporation is contesting in good faith in any appropriate judicial or administrative proceeding the alleged violation or violations of the laws of this state.
(b) Forfeiture may be declared by the Secretary of State for the reasons stated in this Code section, and such a forfeiture shall have the effect of dissolving the corporation; but before any forfeiture shall be so declared the corporation shall be afforded a hearing by the Secretary of State on not less than 30 days' notice. Such hearing shall be held in the office of the Secretary of State at such reasonable time as he shall designate.
(c) From an adverse decision of the Secretary of State the corporation may appeal to the Superior Court of Fulton County, whereupon the matter shall be tried de novo by the court without a jury; and the court shall either sustain the action of the Secretary of State or direct him to take such action as the court may deem proper.
(a) The dissolution of a corporation either as a result of the expiration of its charter or for any other cause shall not bring about its total extinction nor operate to extinguish any demand or cause of action against it in favor of any person whomsoever, whether arising from contract or tort; nor shall such dissolution work the abatement of any action pending against it at the time of such dissolution; but all such pending actions may be prosecuted and enforced to a conclusion as though such corporation were still undissolved.
(b) Actions for the enforcement of any demand or cause of action due by a dissolved corporation may to a like extent be instituted and enforced against it in any court having jurisdiction thereof at the time of its dissolution; and service thereon may be perfected either by seizure of the property of such corporation, by any form of legal process, or by serving with process issued upon said actions any person who, as an agent or officer of such corporation, was subject to be served as its officer or agent at the time of such dissolution.
It shall be the duty of all corporations incorporated by the Secretary of State to file with the Secretary of State an annual registration as prescribed by Code Section 14-2-1622.
Notwithstanding any other law to the contrary, the Secretary of State may provide for the annual registration required under Code Section 14-4-180 to be valid for a period up to and including three years. The Secretary of State is authorized to adopt the necessary rules and regulations to implement such a registration process.
The Secretary of State shall collect fees as prescribed in Code Section 14-2-122 when the documents described in this chapter are delivered to him for filing.
This chapter is intended to be and is merely a recompilation of existing statutes affecting and regulating corporations and is not intended to change or alter the legal status of any corporation in existence on April 1, 1969.
All corporate powers and privileges of banking, trust, insurance, railroad, canal, navigation, express, and telegraph companies shall be issued and granted by the Secretary of State. Corporate powers and privileges of all other private companies shall be granted only as provided in Chapters 2 and 3 of this title.
In all cases of private charters granted to corporations since January 1, 1863, the state reserves the right to withdraw the franchise unless such right is expressly negatived in the charter.
The existence of a corporation claiming a charter under color of law cannot be collaterally attacked by persons who have dealt with it as a corporation. Such persons are estopped from denying its corporate existence.
(a) It shall be illegal for any corporation incorporated under the laws of, or doing business in, this state or any officer or agent thereof to make or authorize directly or indirectly any contributions from corporate funds for the purpose of influencing the vote, judgment, or action of any officer of this state, whether he is employed in the legislative, executive, or judicial branch.
(b) Any person or corporation or any officer thereof who shall violate subsection (a) of this Code section relating to corporate contributions to influence official action shall be guilty of a felony and, upon conviction thereof, shall be punished by a fine in the sum of ten times the amount of the contribution made or $1,000.00, whichever is greater, or by imprisonment for not less than one year nor more than four years, or both.
(a) Instruments executed by a corporation conveying an interest in real property, when signed by the president or vice-president and attested or countersigned by the secretary or an assistant secretary or the cashier or assistant cashier of the corporation shall, notwithstanding the lack of a corporate seal, be conclusive evidence that the president or vice-president of the corporation executing the instrument does in fact occupy the official position indicated, that the signature of such officer subscribed thereto is genuine, and that the execution of the instrument on behalf of the corporation has been duly authorized. Any corporation may by proper resolution recorded with the instrument or otherwise filed of record and referenced on the face of the instrument authorize the execution of such instruments by other officers of the corporation.
(b) Instruments executed by a corporation releasing or transferring a deed to secure debt, mortgage, or other security agreement, when signed by the president, vice-president, secretary, or assistant secretary of the corporation shall, notwithstanding the lack of a corporate seal, be conclusive evidence that the officer of the corporation executing the instrument does in fact occupy the official position indicated, that the signature of such officer subscribed thereto is genuine, and that the execution of the instrument on behalf of the corporation has been duly authorized. Any corporation may by proper resolution recorded with the instrument or otherwise filed of record and referenced on the face of the instrument authorize the execution of such instruments by other officers of the corporation.
Whenever certificates for shares or other securities issued by domestic or foreign corporations are or have been issued or transferred to two or more persons in joint tenancy on the books or records of the corporation, it is presumed in favor of the corporation, its registrar, and its transfer agent that the shares or other securities are owned by such persons in joint tenancy with right of survivorship and not otherwise. A domestic or foreign corporation or its registrar or transfer agent is not liable for transferring or causing to be transferred on the books of the corporation to the surviving joint tenants where a joint tenant dies a resident of this state any share or shares or other securities theretofore issued by the corporation to two or more persons in joint tenancy with right of survivorship on the books or records of the corporation, whether or not the transfer was made by the corporation or its registrar or transfer agent with actual or constructive knowledge of the existence of any understanding, agreement, condition, or evidence that the shares or securities were held other than in joint tenancy or with actual or constructive knowledge of the invalidity of the joint tenancy or of a breach of trust by the joint tenants.
The court in which is pending an action, attachment, or judgment upon which is sought garnishment against a corporation shall also have jurisdiction of the garnishment proceeding where the corporation has an agent and place of business in the county in which the court is situated. Service of the summons of garnishment upon the agent in charge of the office or business of the corporation in that county shall be sufficient service.
(a) If there is no other statute which authorizes or prescribes the manner in which any domestic corporation which is not otherwise subject to Chapter 2 or Chapter 3 of this title may amend its charter or articles of incorporation, merge, or take any other action which a corporation which is subject to Chapter 2 or Chapter 3 of this title is authorized to take, such domestic corporation is authorized to take such action in the same manner and subject to the same provisions, conditions, limitations, and procedures prescribed in Chapter 2 or Chapter 3 of this title. The provisions of this Code section shall apply to corporations chartered by Acts of the General Assembly of Georgia.
(b) Each domestic corporation and each foreign corporation which is doing business in this state and which is not otherwise required to register with the Secretary of State under any other law of this state shall deliver to the Secretary of State for filing an annual registration in the same manner, containing the same information, and subject to the same conditions, requirements, fees, and procedures as set out in Code Section 14-2-1622. Any corporation failing to file such registration shall be subject to the same penalties as provided in Chapter 2 of this title for corporations which fail to file an annual registration.
Notwithstanding any other law to the contrary, the Secretary of State may provide for the annual registration required under Code Section 14-5-11 to be valid for a period up to and including three years. The Secretary of State is authorized to adopt the necessary rules and regulations to implement such a registration process.
The Secretary of State shall be corporation commissioner and shall be charged with the execution of the duties set forth in Chapters 2 through 5 of this title. The corporation commissioner shall appoint a person as assistant corporation commissioner and shall delegate such of the commissioner's powers and duties to the assistant corporation commissioner as the corporation commissioner desires. Where the office of Secretary of State shall become vacant by resignation, death, or otherwise, the Secretary of State's authority as corporation commissioner shall immediately vest in the assistant corporation commissioner who shall be charged with the execution of the duties of the Secretary of State set forth in this title until the office of Secretary of State ceases to be vacant.
All fees collected by the Secretary of State shall be paid into the state treasury for the use of the state, and the Secretary of State shall include in his or her annual reports a full statement of all fees collected or received under Chapters 2 through 5 of this title and the disposition thereof. The Secretary of State shall be authorized to establish, by rule or regulation, a procedure by which his or her office shall refund fees collected in error or overpayment or to which the state is otherwise not entitled.
The Secretary of State shall accept for filing and recording only those documents which are suitable for reproduction.
Notwithstanding any other law to the contrary, the Secretary of State may promulgate such rules and regulations, not inconsistent with the provisions of this title, which are incidental to and necessary for the implementation and enforcement of such provisions of this title as are administered by the Secretary of State. Such rules and regulations shall be promulgated in accordance with Chapter 13 of Title 50, the “Georgia Administrative Procedure Act.”
Chapter 3 of this title shall be fully applicable to all nonprofit corporations organized for religious, fraternal, or educational purposes, including incorporated churches, religious and fraternal societies, schools, academies, colleges, or universities which are “corporations” as that term is defined in Code Section 14-3-140.
All contracts made with any nonprofit corporation referred to in Code Section 14-5-40, all deposits for its account, and all conveyances of title to or by it shall be legal and valid. All such contracts may be enforced in the same manner and in the same way as if such nonprofit corporation referred to in Code Section 14-5-40 were a private individual.
Nonprofit corporation(s) referred to in Code Section 14-5-40 created prior to April 1, 1969, or created thereafter pursuant to this article are authorized to act in their corporate capacity as trustee to administer and carry into effect any charitable trust created prior to April 1, 1969, or thereafter created by deed or by will which is consistent with their corporate purposes.
The majority of those who adhere to its organization and doctrines represent a church. The withdrawal by one part of a congregation from the original body or the uniting of a part of a congregation with another church or denomination is a relinquishment of all rights in the church abandoned.
In the absence of other property, where a church congregation has incurred a valid debt the church edifice and site are liable to sale for its payment.
Courts are reluctant to interpose in questions affecting the management of the temporalities of a church; but, when property is devoted to a specific doctrine or purpose, the courts will prevent it from being diverted from the trust.
All deeds of conveyance executed before April 1, 1969, or thereafter for any lots of land within this state to any person or persons, to any church or religious society, or to trustees for the use of any church or religious society for the purpose of erecting churches or meeting houses shall be deemed to be valid and available in law for the intents, uses, and purposes contained in the deeds of conveyance. All lots of land so conveyed shall be fully and absolutely vested in such church or religious society or in their respective trustees for the uses and purposes expressed in the deed to be held by them or their trustees for their use by succession, according to the mode of church government or rules of discipline exercised by such churches or religious societies.
All trustees to whom conveyances are or shall be executed, for the purposes expressed in Code Section 14-5-46, shall be subject to the authority of the church or religious society for which they hold the same in trust and may be expelled from said trust by such church or society, according to the form of government or rules of discipline by which they may be governed.
Every church or religious society is authorized to fill all vacancies which may arise in the administration of the trusts described in Code Section 14-5-46 by the death, removal, or expulsion of a trustee or otherwise. When any vacancy shall be filled, the same shall be certified under the hand of the person presiding in the church or society according to the form of government or discipline practiced by the church or society, which certificate shall express the name of the person appointed to fill the vacancy and the name of the person in whose place he shall be appointed. When the certificate has been recorded in the office of the clerk of the superior court of the county in which the land lies, the person so appointed to fill the vacancy shall be as fully vested with the trust as if he had been a party to and named in the original deed, provided that the failure to have recorded the certificate of appointment shall not operate to disqualify or render incompetent to act in any proceeding any trustee duly appointed by the form of government or discipline practiced by the church or society having the power to appoint trustees.
Code Sections 14-5-46 through 14-5-48 shall be so construed as to apply to all societies whether social, charitable, secret, or masonic or by whatever name they may be called; and all criminal laws for the protection of religious societies shall be so construed as to apply to all societies by whatever name they may be called.
The societies referred to in Code Section 14-5-49 shall be bodies politic and corporate for the purposes of receiving in their distinct and proper names by their trustees or officers all property, both personal and real, by purchase, gift, or bequest. They may plead, be impleaded, contract, and be contracted with. When any such society shall have entered the names of its trustees or officers and shall have recorded its name, style, and objects as required by law, it may defend and be defended and shall then be entitled to all the benefits of Code Sections 14-5-46 through 14-5-48.
Any eleemosynary or religious corporation created in this state prior to April 1, 1969, or thereafter chartered is by virtue of its existence authorized, in addition to the propagation of the gospel, to:
(1) Conduct schools for the training of youth;
(2) Own and operate for itself or for others printing plants and publishing houses and any desired methods or means for the dissemination of news and information;
(3) Own and operate hospitals, nursing homes, and any and all kinds of institutions for the alleviation of pain and suffering;
(4) Own and operate for itself or others orphan asylums, old people's homes, and any and all institutions for the care of the needy and dependent;
(5) Conduct and carry into effect any plan for the care, maintenance, and support of its workers and employees who may have become disabled, been retired, or otherwise made eligible for the benefits of said plan and, in connection therewith, to conduct a plan for the establishment and payment of annuities; and
(6) Do anything and everything necessary and proper for the accomplishment of the objects enumerated in this Code section and, in general, to carry on any lawful business necessary or incident to the attainment of these objects.
This chapter shall be known and may be cited as the “Georgia Professional Corporation Act.”
As used in this chapter, the definitions contained in Chapter 2 of this title apply, and the term:
(1) “Licensed” includes registered, certified, admitted to practice, or otherwise legally authorized under the laws of this state by the appropriate regulating board.
(2) “Profession” means the profession of certified public accountancy, architecture, chiropractic, dentistry, professional engineering, land surveying, law, pharmacy, psychology, medicine and surgery, optometry, osteopathy, podiatry, veterinary medicine, registered professional nursing, or harbor piloting.
(3) “Professional corporation” means a corporation, whether domestic or foreign, organized under Chapter 2 of this title which has elected to become subject to this chapter.
(4) “Regulating board” means any board, commission, court, or governmental authority which, under the laws of this state, is charged with the licensing, registration, certification, admission to practice, or other legal authorization of the practitioners of any profession.
A person or a group of persons licensed to practice a profession in this state may elect to practice as a professional corporation by complying with this chapter, irrespective of any law which, on March 11, 1970, prohibited the practice of the profession by a corporation. The articles of incorporation of a professional corporation shall be filed, and the professional corporation shall be organized, under Chapter 2 of this title; and the professional corporation shall pay the fees and costs prescribed therein. The articles shall state that the purpose of the corporation is to practice the profession named in the articles and that the corporation elects to be governed by this chapter. Any corporation organized under the general corporation laws of this state or any professional association organized under Chapter 10 of this title may elect to be governed by this chapter by amending its articles of association so as to make such election and so as to comply with the other requirements of this chapter and with the laws applicable to corporations generally in this state which are not inconsistent with the express provisions of this chapter. A professional corporation and the shareholders of the corporation in their capacity as shareholders shall enjoy the rights, privileges, and immunities and shall be subject to the obligations and liabilities of other corporations organized for profit under Chapter 2 of this title and those of the shareholders of such corporations, except as changed, restricted, or enlarged by this chapter. Professional associations organized under Chapter 10 of this title are expressly authorized to continue to perform professional services pursuant to that Chapter 10 of this title without electing to comply with this chapter.
(a) A professional corporation may practice only one profession, but for the purpose of this chapter:
(1) The practice of architecture, professional engineering, and land surveying shall be considered the practice of only one profession to the extent that existing laws permit overlapping practices by members of those specific professions not inconsistent with the ethics of the professions involved;
(2) To the extent not inconsistent with the ethics of the professions involved or otherwise prohibited by law, physicians specializing in ophthalmology who are practicing within their scope of practice as established by law may organize and jointly own a professional corporation with optometrists who are practicing within their scope of practice as established by law; provided, however, that nothing in this paragraph shall authorize optometrists to attach the title “physician” to such optometrists' names or to the name of the professional corporation;
(3) To the extent not inconsistent with the ethics of the professions involved or otherwise prohibited by law, Doctors of Podiatric Medicine who are practicing within their scope of practice as established by law may organize and jointly own a professional corporation with any Doctors of Medicine or Doctors of Osteopathy who are practicing within their own scope of practice as established by law; and
(4) To the extent not inconsistent with the ethics of the professions involved or otherwise prohibited by law, chiropractors who are practicing within their scope of practice as established by law may organize and jointly own a professional corporation with physicians who are practicing within their scope of practice as established by law; provided, however, that nothing in this paragraph shall authorize chiropractors to attach the title “physician” to such chiropractors' names or to the name of the professional corporation.
(b) A professional corporation shall engage in the practice of a profession only through its officers, employees, and agents who are duly licensed or otherwise legally authorized to practice the profession in this state. This restriction shall not, however, prevent the corporation from employing unlicensed persons in capacities in which they are not rendering professional services to the public in the course of their employment.
(c) At least one member of the board of directors and the president of a professional corporation shall be licensed to practice the profession for which the corporation is organized. If the governing board of a professional corporation includes persons not so licensed, the corporation shall, by creation of a standing committee of the board or otherwise, vest the responsibility for decisions relating wholly to professional considerations in persons who are so licensed.
(a) Shares in a professional corporation may only be issued to, held by, or transferred to a person who is licensed to practice the profession for which the corporation is organized and who, unless disabled, is actively engaged in such practice as an active practicing member of the issuing corporation, except as otherwise permitted under this Code section. Each stock certificate shall be appropriately endorsed disclosing this restriction and stating that shares standing in the name of a disqualified or retired person, or in the name of the personal representative of a deceased person, except during the holding period provided in this Code section, are void.
(b) Shares in a professional corporation shall be voted by the holder of record or by another shareholder in the same corporation in accordance with a proxy or an agreement providing for the voting of the shares.
(c) Shares in a professional corporation held by a deceased or retired shareholder shall, within six months after the date of death or retirement of such shareholder, be either redeemed or canceled by the corporation or transferred to a person or persons authorized to hold the shares unless transferred under a written agreement to an authorized shareholder pursuant to subsection (d) of this Code section. The shares held by a shareholder who becomes legally disqualified from practicing the profession for which the corporation is organized or who is disqualified as a shareholder under subsection (a) of this Code section shall be so redeemed, canceled, or transferred within 90 days after the disqualification becomes final. In the absence of an article or bylaw provision or an agreement providing for the redemption or transfer of such shares or, if the shares are not redeemed or transferred pursuant to such a provision or agreement within the required period of time, the corporation is authorized to and shall cancel the shares on its books at the termination of the required period. If valuation and payment terms are not fixed under such an existing provision or agreement and are not agreed upon either prior to or at any time after the termination of the required period, the fair value of the redeemed or canceled shares shall be determined and paid in the same manner as if the personal representative of the deceased shareholder, or the retired or disqualified shareholder, were a shareholder entitled to valuation and payment for his shares under Code Section 14-2-1327. The personal representative of the deceased shareholder, or the retired or disqualified shareholder, shall not be authorized at any time to participate in or vote on any matter concerning the rendering of professional services by the corporation. Upon the actual transfer or redemption or termination of the required holding period, whichever first occurs, the personal representative of the deceased shareholder, or the retired or disqualified shareholder, shall cease to be a holder of record for all purposes and shall deliver the share certificates to the purchaser or to the corporation with any required endorsement.
(d) Shares held in a professional corporation and owned by a shareholder may be transferred under a written agreement to an authorized shareholder which allows the shares to remain outstanding provided that the shares are collateral under a security agreement for the purchase price of the shares. In the event that the purchase price is not paid and the shares held as collateral are returned to the selling shareholder, the selling shareholder shall have a reasonable period of time, not to exceed one year after the return of the shares, to transfer the shares to an authorized shareholder. During that period the shareholder, if an active or inactive member of his profession, may vote the shares.
(e) If a professional corporation at any time ceases to have a shareholder licensed or otherwise authorized to practice and actually practicing, the profession for which the corporation is organized, or if a professional corporation does not redeem, cancel, or transfer the shares of a disqualified, retired, or deceased person in accordance with this Code section, the corporation shall cease to be a professional corporation and shall operate as a corporation for profit organized under Chapter 2 of this title for the sole purpose of liquidation. The corporation may at any time after it ceases to be a professional corporation change its purpose by amending its articles.
The name of a professional corporation shall satisfy the requirements of Code Section 14-2-401; provided, however, that, in lieu of the use of a word or abbreviation as required by paragraph (1) of subsection (a) of that Code section, the word “associated,” the phrase “professional association,” the phrase “professional corporation,” or an abbreviation of any of them may be used.
Nothing contained in this chapter shall limit the authority and duty of any regulating board to regulate the several professions including the right to establish and enforce standards of practice, and nothing contained in this chapter shall change the law or existing standards applicable to the relationship between the person furnishing a professional service and the person receiving such service, including, but not by way of limitation, the rules of privileged communication and the contract, tort, and other legal liabilities and professional relationships between such persons.
This chapter shall be known and may be cited as the “Uniform Partnership Act.”
As used in this chapter, the term:
(1) “Bankrupt” means a person who is the subject of:
(A) The entry of an order for relief under Section 303(h) of the Bankruptcy Code (11 U.S.C. Section 303(h)) or the filing of a petition for voluntary bankruptcy under Section 301 of the Bankruptcy Code (11 U.S.C. Section 301) as these provisions may be now or hereafter amended; or
(B) An equivalent order or petition under any successor statute or code of general application; or
(C) An equivalent order or petition under any state insolvency Act.
(2) “Business” includes every trade, occupation, or profession.
(3) “Conveyance” includes every assignment, deed, transfer, lease (including the creation of a usufruct), mortgage or pledge of tangible, intangible, or real property, and also the creation or cancellation of any lien, encumbrance, or security title.
(4) “Court” includes every court and judge having jurisdiction in the case.
(4.1) “Foreign limited liability company” means a limited liability company formed under the laws of a jurisdiction other than this state.
(5) “Foreign limited liability partnership” means any limited liability partnership and any limited liability limited partnership formed under the laws of a jurisdiction other than this state.
(6) “Interest” means interest at the legal rate which applies where the rate percent is not named in the contract as provided by Code Section 7-4-2 or any successor statute.
(6.05) “Limited liability company” means any limited liability company formed under Chapter 11 of this title.
(6.1) “Limited liability partnership” means any partnership governed by this chapter, and any limited partnership that either is organized under Chapter 9 of this title or has elected to be subject to the provisions of Chapter 9 of this title pursuant to subsection (b) of Code Section 14-9-1201, that has become a limited liability partnership under Code Section 14-8-62 and that complies with Code Section 14-8-63.
(7) “Person” includes a natural person, partnership, limited liability partnership, limited partnership (domestic or foreign), trust, estate, association, or corporation. Any person may be a partner unless the person lacks capacity apart from this chapter.
(8) “Real property” includes any estate or interest, including usufructory interests, in, over, or under land, including minerals, structures, fixtures, and other things which by custom, usage, or law pass with a conveyance of land though not described or mentioned in an instrument of conveyance or in a contract to make such a conveyance.
(a) A person has “knowledge” of a fact within the meaning of this chapter not only when such person has actual knowledge thereof, but also when he has knowledge of such other facts as in the circumstances shows bad faith.
(b) A person has “notice” of a fact within the meaning of this chapter when the person who claims the benefit of the notice:
(1) States the fact to such person; or
(2) Delivers through the mail, or by other means of communication, a written statement of the fact to such person or to a proper person at his place of business or residence.
(a) The rule that statutes in derogation of the common law are to be strictly construed shall have no application to this chapter.
(b) The law of estoppel shall apply under this chapter.
(c) The law of agency shall apply under this chapter.
(d) This chapter shall be so interpreted and construed as to effect its general purpose to make uniform the law of those states which enact it.
(e) This chapter shall not be construed so as to impair the obligations of any contract existing when this chapter goes into effect, nor to affect any action or proceedings begun or right accrued before this chapter takes effect.
(f) This chapter being a general Act intended as a unified coverage of its subject matter, no part of it shall be deemed to be impliedly repealed by subsequent legislation if that construction can reasonably be avoided.
(g) The validity of an instrument executed on behalf of the partnership by a partner shall not be affected by the formality with which the partnership contract was executed.
In any case not provided for in this chapter, the other provisions of this Code and the rules of common law and equity shall govern.
(a) A partnership is an association of two or more persons to carry on as co-owners a business for profit and includes, for all purposes of the laws of this state, a limited liability partnership.
(b) But any association formed under any other statute of this state, or any statute adopted by authority, other than the authority of this state, is not a partnership under this chapter, unless such association would have been a partnership in this state prior to the adoption of this chapter; but this chapter shall apply to limited partnerships except insofar as the statutes relating to such partnerships are inconsistent with this chapter.
In determining whether a partnership exists, the following rules shall apply:
(1) Except as provided by Code Section 14-8-16 persons who are not partners as to each other are not partners as to third persons;
(2) Joint tenancy, tenancy in common, tenancy by the entireties, joint property, common property, or part ownership does not of itself establish a partnership, whether such co-owners do or do not share any profits made by the use of the property;
(3) The sharing of gross returns does not of itself establish a partnership, whether or not the persons sharing them have a joint or common right or interest in any property from which the returns are derived;
(4) The receipt by a person of a share of the profits of a business is prima-facie evidence that he is a partner in the business; provided, however, that no such inference shall be drawn if profits were received in payment of the following, even though the amount of payment varies with the profits of the business:
(A) A debt, whether by installments or otherwise;
(B) Wages, salary, or other compensation to an employee or independent contractor;
(C) Rent to a landlord;
(D) An annuity or other payment to a surviving spouse or representative of a deceased partner;
(E) Interest or other payment or charge on a loan;
(F) Consideration for the sale of good will of a business or other property, whether by installments or otherwise.
(a) Subject to subsection (d) of this Code section, property, whether real or personal, is presumed to be partnership property where:
(1) It is included as such in the agreement of partnership or described in any recorded statement of partnership under Code Section 14-8-10.1; or
(2) It is acquired in the partnership name.
(b) Subject to subsection (d) of this Code section, property is presumed to be partnership property if it is purchased with partnership funds even though the title or other interest is acquired in the name of an individual partner or partners.
(c) Subject to paragraph (1) of subsection (a) and subsection (d) of this Code section, where property is acquired in the name of an individual partner or partners without use of partnership funds the property shall be presumed to be the separate property of that individual partner or partners even though the property was used for partnership purposes.
(d) Real property and other property held of public record otherwise than in the partnership name, the ownership of which is customarily publicly recorded, shall not be deemed to be partnership property to the prejudice of a person who is not a partner and who did not have actual knowledge to the contrary.
(e) Where property was partnership property under a predecessor partnership, the business of which was continued under a new or reconstituted partnership, the presumption of subsection (c) of this Code section shall not be applicable and whether such property is to be considered partnership property of the new partnership or the separate property of the surviving members of the predecessor partnership shall be determined on the basis of the intention of the parties.
(f) Any estate in real property may be acquired in the partnership name and title to any estate so acquired shall vest in the partnership itself rather than in the partners individually. Title may be conveyed in accordance with Code Section 14-8-10.
(g) A conveyance to a partnership in the partnership name, though without words of inheritance, passes the entire estate of the grantor unless a contrary intent appears.
Subject to the provisions of Code Section 14-8-10.1:
(1) Every partner is an agent of the partnership for the purpose of its business, and the act of every partner, including the execution in the partnership name of any instrument, for apparently carrying on in the usual way the business of the partnership of which he is a member binds the partnership, unless the partner so acting has in fact no authority to act for the partnership in the particular matter, and the person with whom he is dealing has knowledge of the fact that he has no such authority;
(2) An act of a partner which is not apparently for the carrying on of the business of the partnership in the usual way does not bind the partnership unless authorized by the other partners in the partnership agreement, at the time of the transaction or at any other time;
(3) Unless authorized by the other partners or unless they have abandoned the business, one or more but less than all the partners have no authority to:
(A) Assign the partnership property in trust for creditors or on the assignee's promise to pay the debts of the partnership;
(B) Dispose of the good will of the business;
(C) Do any other act which would make it impossible to carry on the ordinary business of a partnership;
(D) Confess a judgment;
(E) Submit a partnership claim or liability to arbitration or reference;
(4) No act of a partner in contravention of a restriction on authority shall bind the partnership to persons having knowledge of the restriction.
(a) Where title to real property is in the partnership name, any partner may convey title to such property by a conveyance executed in the partnership name; but the partnership may recover such property if the partnership proves that the partner's act did not bind the partnership under the provisions of Code Section 14-8-9, unless such property has been conveyed by the grantee or a person claiming through such grantee to a holder for value without knowledge that the partner, in making the conveyance, has exceeded his authority.
(b) Where title to real property is in the name of one or more but not all the partners, and the record does not disclose the right of the partnership, the partners in whose name the title stands may convey title to such property, but the partnership may recover such property if the partnership proves that the partners' act did not bind the partnership under the provisions of Code Section 14-8-9, unless the purchaser or his assignee is a holder for value without knowledge.
(c) Where title to real property is in the name of one or more or all the partners, or in a third person in trust for the partnership, a conveyance executed by a partner in the partnership name, or in his own name, passes the equitable interest of the partnership unless the partnership proves that the act was not one within the authority of the partner under the provisions of Code Section 14-8-9.
(d) Where the title to real property is in the names of all the partners a conveyance executed by all the partners passes all their rights in such property.
(a) A statement of partnership in the name of the partnership, signed by all of the partners and witnessed and notarized, may be recorded in the office of the clerk of the superior court of any county and shall be recorded by such clerk in a book to be kept for that purpose and open to public inspection. If the partnership shall desire to file such a statement in more than one county, a transcript of the statement, duly certified by the clerk in whose office it was originally filed, under such clerk's official seal, shall be filed and recorded in like manner in the office of the clerk of the superior court in every such county. As a prerequisite to such filing, the clerk of each such registry may collect a fee in the amount of the fee then allowed for the filing of certificates of limited partnerships.
(b) A statement of partnership shall state:
(1) The name of the partnership;
(2) The location of the principal place of business of the partnership, if any;
(3) The names and places of residence of all of the partners;
(4) The term for which the partnership is to exist, or that it is to exist until terminated by law or according to its provisions;
(5) Any limitations on the authority of one or more partners to act on behalf of the other partners or the partnership, beyond that authority defined in this chapter, which the partnership desires to disclose;
(6) Any authority beyond that defined in this chapter on the part of one or more partners to act on behalf of the other partners or the partnership which the partnership desires to disclose;
(7) Any property (including real property) belonging to the partnership, which the partnership desires to disclose; provided that, with respect to real property, owned by the partnership but not titled in the name of the partnership, at the time the statement (or any amendment thereto disclosing such real property) is filed, the partnership shall also file and record in the deed records of the county wherein such real property lies a deed or deeds conveying such real property to the partnership filing the statement (or amendment). Title to all real property so conveyed shall be deemed to be held in the partnership name from the date of the filing of such statement (or amendment) and deed or deeds in the county wherein such real property lies;
(8) If the partnership or the partnership business has been continued despite the death or withdrawal of any partner by reason of an agreement provided for in Code Section 14-8-31 or 14-8-38, the statement or any amendment thereto may state the name and date of death or withdrawal of such deceased or withdrawing (whether voluntarily or involuntarily, according to the terms of the agreement) partner and that the partnership or the partnership business was continued despite such death or withdrawal because of the existence of such agreement; and
(9) If a new partner has been admitted to the partnership, the statement or any amendment thereto may state the name and date of admission of such new partner.
(c) A statement of partnership may state such other matters as the partnership may desire to disclose.
(d) The information referred to in subsections (b) and (c) of this Code section may be provided in whole or in part by recording a partnership agreement as the statement of partnership.
(e) A statement of partnership may be amended at any time and for any proper purpose the partners may determine by instrument executed and recorded in the same manner as such statement. Such instrument shall set forth:
(1) The name of the partnership;
(2) The date or dates of filing of the statement of partnership and any prior amendments thereto;
(3) The place or places (by reference to book and page) wherein the statement of partnership and any prior amendments thereto are recorded; and
(4) The amendment to the statement of partnership.
(f) It shall be conclusively presumed against the partnership that all facts stated in the statement of partnership are true. Without limiting the generality of the foregoing, it shall be conclusively presumed against the partnership that the persons named as partners in a statement of partnership are members of the partnership named, that they are all of the members of the partnership, that the partners have the authority disclosed by this statement, that there are no limitations on this authority beyond those contained in this chapter other than those disclosed in this statement, that any partner stated to be dead is deceased, that any partner stated to have been admitted as a new partner has been admitted to the partnership, and that any partner stated to have withdrawn has withdrawn from the partnership. The conclusive presumption under this subsection or under subsection (g) of this Code section shall not arise with respect to a statement of partnership if and from the date that there is recorded by anyone claiming to be a partner, or a personal representative, whether executor, administrator, guardian, or conservator, of such partner, an affidavit, sworn to by the person executing it, which shall set forth the name of the partnership, a statement that such person claims to be a member of such partnership, or a personal representative of such member, or a statement that any of the persons named in a previously recorded statement of partnership are not members of such partnership, or a statement that any of the other facts stated in a previously recorded statement of partnership are not true. Said affidavit shall not be effective to the prejudice of a person who is not a partner:
(1) In connection with a transaction involving partnership real property, unless the affidavit was recorded in the county in which the property is located; or
(2) In connection with any other transaction if the affidavit was not recorded in a county in which the statement of partnership was recorded, the person relied on a statement of partnership recorded in such county, and the person had no knowledge or notice of the affidavit.
(g) The existence of the facts described in subsection (f) of this Code section shall be conclusively presumed in favor of the partnership and against a grantee from the partnership, or a person claiming through such grantee, of partnership real property located in a county in which a statement of partnership or a certified copy thereof has been recorded. It shall also be conclusively presumed in favor of the partnership and against such a grantee or person that a partner's authority to act for the partnership is limited as provided in a statement of partnership.
An admission or representation made by any partner concerning partnership affairs within the scope of his authority is evidence against the partnership.
Notice to any partner of any matter relating to partnership affairs, and the knowledge of the partner acting in the particular matter, acquired while a partner or then present to his mind, and the knowledge of any other partner who reasonably could and should have communicated it to the acting partner operate as notice to or knowledge of the partnership, except in the case of a fraud on the partnership committed by or with the consent of that partner.
Where, by any wrongful act or omission of any partner acting in the ordinary course of the business of the partnership or with the authority of his copartners, loss or injury is caused to any person, not being a partner in the partnership, or any penalty is incurred, the partnership is liable therefor to the same extent as the partner so acting or omitting to act.
The partnership is bound to make good the loss:
(1) Where one partner acting within the scope of his apparent authority receives money or property of a third person and misapplies it; and
(2) Where the partnership in the course of its business receives money or property of a third person and the money or property so received is misapplied by any partner while it is in the custody of the partnership.
(a) Except as provided in subsection (b) of this Code section, all partners are jointly and severally liable for all debts, obligations, and liabilities of the partnership.
(b) Subject to subsection (c) of this Code section and to any contrary agreement among the partners, a partner in a limited liability partnership is not individually liable or accountable either directly or indirectly by way of indemnification, reimbursement, contribution, assessment, or otherwise for any debts, obligations, or liabilities of or chargeable to the partnership or another partner, whether arising in tort, contract, or otherwise, that are incurred, created, or assumed while such partnership is a limited liability partnership, solely by reason of being such a partner or acting or omitting to act in such capacity or otherwise participating in the conduct of the activities of the limited liability partnership. Notwithstanding the provisions of this subsection, a partner may be personally liable for tax liabilities arising from the operation of the limited liability partnership as provided in Code Section 48-2-52.
(c) Subsection (b) of this Code section shall not affect the liability of a partner in a limited liability partnership or the liability of the limited liability partnership for such partner's own errors, omissions, negligence, malpractice, wrongful acts, incompetence, or misconduct.
(d) A partner in a limited liability partnership is not a proper party to a proceeding if the object of the proceeding is to hold such partner liable either directly or indirectly by way of indemnification, reimbursement, contribution, assessment, or otherwise for liabilities for which such partner is not liable by reason of the provisions of this Code section.
A partnership may sue or be sued in its common name.
(a) When a person, by words spoken or written or by conduct, represents himself, or consents to another representing him to any one, as a partner in an existing partnership or with one or more persons not actual partners, he is liable to any such person to whom such representation has been made, who has, on the faith of such representation, given credit to the actual or apparent partnership, and if he has made such representation or consented to its being made in a public manner he is liable to such person, whether the representation has or has not been made or communicated to such person so giving credit by or with the knowledge of the apparent partner making the representation or consenting to its being made.
(1) When a partnership liability results, he is liable as though he were an actual member of the partnership.
(2) When no partnership liability results, he is liable jointly with the other persons, if any, so consenting to the contract or representation as to incur liability, otherwise separately.
(b) When a person has been thus represented to be a partner in an existing partnership, or with one or more persons not actual partners, he is an agent of the persons consenting to such representation to bind them to the same extent and in the same manner as though he were a partner in fact, with respect to persons who rely upon the representation. Where all the members of the existing partnership consent to the representation, a partnership act or obligation results; but in all other cases it is the joint act or obligation of the person acting and the persons consenting to the representation.
A person admitted as a partner into an existing partnership is liable for all the obligations of the partnership arising before his admission as though he had been a partner when such obligations were incurred, except that this liability shall be satisfied only out of partnership property.
The rights and duties of the partners in relation to the partnership shall be determined, subject to any agreement between them, by the following rules:
(1) Each partner shall be repaid his or her contributions, whether by way of capital or advances to the partnership property and share equally in the profits and surplus remaining after all liabilities, including those to partners, are satisfied; and, except as provided in subsection (b) of Code Section 14-8-15, must contribute towards the losses, whether of capital or otherwise, sustained by the partnership according to his or her share in the profits;
(2) The partnership must indemnify every partner in respect of payments made and personal liabilities reasonably incurred by him in the ordinary and proper conduct of its business, or for the preservation of its business or property;
(3) A partner, who in aid of the partnership makes any payment or advance beyond the amount of capital which he agreed to contribute, shall be paid interest from the date of the payment or advance;
(4) A partner shall receive interest on the capital contributed by him only from the date when repayment should be made;
(5) All partners have equal rights in the management and conduct of the partnership business;
(6) No partner is entitled to remuneration for acting in the partnership business, except that a surviving partner is entitled to reasonable compensation for his services in winding up the partnership affairs;
(7) No person can become a member of a partnership without the consent of all the partners;
(8) Any difference arising as to ordinary matters connected with the partnership business may be decided by a majority of the partners; but no act in contravention of any agreement between the partners may be done rightfully without the consent of all the partners.
The partnership books shall be kept, subject to any agreement between the partners, at the principal place of business of the partnership, and every partner shall at all times have access to and may inspect and copy any of them.
Partners shall render, to the extent the circumstances render it just and reasonable, true and full information of all things affecting the partners to any partner and to the legal representative of any deceased partner or of any partner under legal disability.
(a) Every partner must account to the partnership for any benefit, and hold as trustee for it any profits derived by him without the consent of the other partners from any transaction connected with the formation, conduct, or liquidation of the partnership or from any use by him of its property.
(b) This Code section applies also to the representatives of a deceased partner engaged in the liquidation of the affairs of the partnership as the personal representatives of the last surviving partner.
In addition to the remedies or methods of dispute resolution provided for in the partnership agreement, any partner shall have the right to a formal accounting as to partnership affairs:
(1) If he is wrongfully excluded from the partnership business or possession of its property by his copartners;
(2) If the right exists under the terms of any agreement;
(3) If the right exists under Code Section 14-8-21; or
(4) Whenever other circumstances render it just and reasonable.
(a) When a partnership for a fixed term or particular undertaking is continued after the termination of such term or particular undertaking without any express agreement, the rights and duties of the partners remain the same as they were at such termination, so far as is consistent with a partnership at will.
(b) A continuation of the business by the partners or such of them as habitually acted therein during the term, without any settlement or liquidation of the partnership affairs, is prima-facie evidence of a continuation of the partnership.
The property rights of a partner are:
(1) His rights in specific partnership property;
(2) His interest in the partnership; and
(3) His right to participate in the management.
(a) A partner is co-owner with his partners of specific partnership property holding as a tenant in partnership.
(b) The incidents of the tenancy are such that:
(1) A partner, subject to the provisions of this chapter and to any agreement between the partners, has an equal right with his partners to possess specific partnership property for partnership purposes; but he has no right to possess such property for any other purpose without the consent of his partners;
(2) A partner's right in specific partnership property is not assignable except in connection with the assignment of rights of all the partners in the same property;
(3) A partner's right in specific partnership property is not subject to attachment, judgment lien, execution, or other enforcement of a claim except on a claim against the partnership. When partnership property is attached for a partnership debt the partners, or any of them, or the representatives of a deceased partner, cannot claim any right under the homestead or exemption laws;
(4) On the death of a partner his right in specific partnership property vests in the surviving partner or partners, except where the deceased was the last surviving partner, when his right in such property vests in his legal representative. Such surviving partner or partners, or the legal representative of the last surviving partner, has no right to possess the partnership property for any but a partnership purpose;
(5) A partner's right in specific partnership property is not subject to the year's support provided for in former Code Sections 53-5-1 and 53-5-2 as such existed on December 31, 1997, if applicable, or in Code Sections 53-3-1, 53-3-2, 53-3-4, 53-3-5, and 53-3-7.
(c) Nothing in Code Section 14-8-24 and this Code section shall modify, affect, or act in derogation of any portion of this chapter concerning the manner of vesting title to property (including, without limitation, real property) in the name of the partnership or the ownership of such property by the partnership.
A partner's interest in the partnership is his share of the profits and surplus, and the same is personal property.
(a) Except as provided in the partnership agreement, a partnership interest is assignable in whole or in part.
(b) A conveyance by a partner of his interest in the partnership does not of itself dissolve the partnership, nor, as against the other partners in the absence of agreement, entitle the assignee, during the continuance of the partnership, to interfere in the management or administration of the partnership business or affairs, or to require any information or account of partnership transactions, or to inspect the partnership books; but it merely entitles the assignee to receive in accordance with his contract the profits to which the assigning partner would otherwise be entitled.
(c) In case of a dissolution of the partnership, the assignee is entitled to receive his assignor's interest and may require an account pursuant to Code Section 14-8-43 from the date only of the last account agreed to by all the partners.
(a) On due application to a competent court by any judgment creditor of a partner or of any assignee of an interest in the partnership, the court which entered the judgment, order, or decree, or any other court, may charge the interest of the debtor partner or such assignee with payment of the unsatisfied amount of such judgment debt with interest thereon and may then or later appoint a receiver of his share of the profits, and of any other money or other assets due or to fall due to him in respect of the partnership, and, subject to subsection (b) of this Code section, make all other orders, directions, accounts, and inquiries which the debtor partner or such assignee might have made, or which the circumstances of the case may require.
(b) An interest charged pursuant to subsection (a) of this Code section is not liable to be seized and sold by the judgment creditor under execution.
(c) The interest charged may be redeemed or purchased without thereby causing a dissolution:
(1) With separate property, by any one or more of the partners; or
(2) With the partnership property, by any one or more of the partners with the consent of all the partners whose interests are not so charged or sold.
(d) Nothing in this chapter shall be held to deprive a partner of his right, if any, under the exemption law, as regards his interest in the partnership.
(e) In addition to the remedy conferred by subsection (a) of this Code section, the interest of a partner in the partnership may be reached by a judgment creditor by process of garnishment served on the firm, provided that the complaint upon which the judgment was obtained was personally served upon such partner.
(f) Subject to subsection (b) of this Code section, the remedies conferred by subsections (a) and (e) of this Code section shall not be deemed exclusive of others which may exist.
Upon dissolution of a partnership the partners cease to be associated in the carrying on of the partnership. The partnership shall continue until termination pursuant to Code Section 14-8-30 and until termination the partners shall be associated in the winding up of the partnership.
On dissolution the partnership is not terminated, but continues until the winding up of the partnership affairs is completed.
(a) Dissolution is caused:
(1) By the termination of the definite term or particular undertaking specified in the agreement;
(2) By the express will or withdrawal of any partner;
(3) By the expulsion of any partner from the business in accordance with the terms of the agreement between the partners;
(4) By any event which makes it unlawful for the business of the partnership to be carried on or for the members to carry it on in partnership;
(5) By the death of any partner, unless there is a written agreement between the partners expressly providing otherwise;
(6) By decree of court under Code Section 14-8-32;
(7) In other circumstances as provided in the agreement between the partners.
(b) Unless otherwise provided in the partnership agreement, dissolution is not caused solely by admission of a new partner.
(c) Subject to contrary agreement of the partners, a dissolution is not in contravention of the partnership agreement if it is caused at any time by the express will of all of the partners who have not assigned their interests or suffered them to be charged for their separate debts.
(a) On application by or for a partner the court shall decree a dissolution whenever:
(1) A partner has been declared mentally incapacitated in any judicial proceeding or is shown to be of unsound mind;
(2) A partner becomes in any other way incapable of performing his part of the partnership contract;
(3) A partner has been guilty of such conduct as tends to affect prejudicially the carrying on of the business;
(4) A partner willfully or persistently commits a breach of the partnership agreement or otherwise so conducts himself in matters relating to the partnership business that it is not reasonably practicable to carry on the business in partnership with him;
(5) Other circumstances render a dissolution equitable.
(b) On the application of the purchaser of a partner's interest under Code Section 14-8-27, the court shall decree a dissolution:
(1) After the termination of the specified term or particular undertaking;
(2) At any time if the partnership was a partnership at will when the interest was assigned.
Except so far as may be necessary to wind up partnership affairs or to complete transactions begun but not then finished, dissolution terminates all authority of any partner to act for the partnership:
(1) With respect to the partners, as declared in Code Section 14-8-34; and
(2) With respect to persons not partners, as declared in Code Section 14-8-35.
Subject to contrary agreement of the partners, each partner is liable to his or her copartners for his or her share of any liability created by any partner acting for the partnership after dissolution as if the partnership had not been dissolved; provided, however, that a partner shall not be liable to the partner acting for the partnership after dissolution where:
(1) The dissolution being by act of any partner, the partner acting for the partnership had knowledge of the dissolution;
(2) The dissolution being by the death of a partner, the partner acting for the partnership had knowledge or notice of the death;
(3) The dissolution is not by the act or death of a partner; or
(4) The liability is for a debt or obligation for which the partner is not liable as provided in subsection (b) of Code Section 14-8-15.
(a) After dissolution a partner can bind the partnership except as provided in subsection (c) of this Code section:
(1) By any act appropriate for winding up partnership affairs or completing transactions unfinished at dissolution;
(2) By any transaction which would bind the partnership if dissolution had not taken place, provided the other party to the transaction:
(A) Was a creditor of the partnership at the time of dissolution or had extended credit to the partnership within two years prior to dissolution and, in either case, had no knowledge or notice of such partner's want of authority;
(B) Though he had not so extended credit, had nevertheless known of the partnership prior to dissolution, and, having no knowledge or notice of dissolution, the fact of dissolution had not been advertised in a newspaper of general circulation in the place (or in each place if more than one) at which the partnership business was regularly carried on.
(b) The liability of a partner under paragraph (2) of subsection (a) of this Code section shall be satisfied out of partnership assets alone when such partner had been prior to dissolution:
(1) Unknown as a partner to the person with whom the contract is made; and
(2) So far unknown and inactive in partnership affairs that the business reputation of the partnership could not be said to have been in any degree due to his connection with it.
(c) The partnership is in no case bound by any act of a partner after dissolution:
(1) Where the partnership is dissolved because it is unlawful to carry on the business, unless the act is appropriate for winding up partnership affairs;
(2) Where the partner has become bankrupt; or
(3) Where the partner has no authority to wind up partnership affairs; except by a transaction with one who:
(A) Was a creditor of the partnership at the time of dissolution or had extended credit to the partnership within two years prior to dissolution and, in either case, had no knowledge or notice of such partner's want of authority;
(B) Had not extended credit to the partnership prior to dissolution, and, having no knowledge or notice of such partner's want of authority, the fact of such partner's want of authority had not been advertised in the manner provided for advertising the fact of dissolution in subparagraph (a)(2)(B) of this Code section.
(d) Nothing in this Code section shall affect the liability under Code Section 14-8-16 of any person who after dissolution represents himself or consents to another representing him as a partner in a partnership engaged in carrying on business.
(a) The dissolution of the partnership does not of itself discharge the existing liability of any partner.
(b) A partner is discharged from any existing liability upon dissolution of the partnership by an agreement to that effect between himself, the partnership creditor, and the person or partnership continuing the business; and such agreement may be inferred from the course of dealing between the creditor having knowledge of the dissolution and the person or partnership continuing the business.
(c) Where a person agrees to assume the existing obligations of a dissolved partnership, the partners whose obligations have been assumed shall be discharged from any liability to any creditor of the partnership who knowing of the agreement, and without the consent of the partners whose obligations have been assumed, consents to a material alteration in the nature or time of payment of such obligations.
(d) The individual property of a deceased partner shall be liable for those obligations of the partnership incurred while the deceased partner was a partner and for which he or she was liable under Code Section 14-8-15, but subject to the prior payment of his or her separate debts.
Unless otherwise agreed, the partners who have not wrongfully dissolved the partnership or the legal representative of the last surviving partner, not bankrupt, has the right to wind up the partnership affairs, including the right to convey any real property of the partnership; provided, however, that any partner, his legal representative, or his assignee, upon cause shown, may obtain winding up by the court.
(a) Unless otherwise agreed by the partners in the partnership agreement, at the time of the transaction, or at any other time, including, but not limited to, an agreement to continue the business of the partnership, when dissolution is caused in any way, other than wrongfully either in contravention of the partnership agreement or as a result of other wrongful conduct of a partner, any partner, or the legal representative of the estate of a deceased partner, as against his copartners and all persons claiming through them in respect of their interests in the partnership, may have the partnership property applied to discharge its liabilities and the surplus applied to pay in cash or its equivalent the net amount owing to the respective partners. The foregoing provision shall not apply if dissolution is caused by expulsion of a partner in accordance with the terms of a partnership agreement. Unless otherwise agreed by the partners, in the event of such expulsion the expelled partner shall receive the net amount due him from the partnership and the partners who continue the business shall obtain his discharge or appropriately hold him harmless from all present or future partnership liabilities.
(b) Unless otherwise agreed by the partners in the partnership agreement at the time of the transaction or at any other time, when dissolution is caused wrongfully either in contravention of the partnership agreement or as a result of other wrongful conduct of a partner, the rights of the partners shall be as follows:
(1) Each partner who has not caused dissolution wrongfully shall have:
(A) All the rights specified in subsection (a) of this Code section; and
(B) The right, as against each partner who has caused the dissolution wrongfully, to damages for such wrongful dissolution and to any other right or remedy provided for in the partnership agreement;
(2) The partners who have not caused the dissolution wrongfully may, if they all so agree at the time of the transaction or if the partnership agreement so provides, continue the business in the same name, either by themselves or jointly with others, and for that purpose may possess the partnership property. If the partners continue the business, they shall pay to any partner who has caused the dissolution wrongfully the value of his interest in the partnership at the dissolution less any damages or other amounts recoverable under subparagraph (B) of paragraph (1) of this subsection and obtain his discharge or appropriately hold him harmless from all present or future partnership liabilities;
(3) A partner who has caused the dissolution wrongfully shall have:
(A) If the business is not continued under the provisions of paragraph (2) of subsection (b) of this Code section, all the rights of a partner under subsection (a) of this Code section, subject to subparagraph (B) of paragraph (1) of this subsection;
(B) If the business is continued under paragraph (2) of subsection (b) of this Code section the right, as against his copartners and all claiming through them in respect of their interests in the partnership, to have the value of his interest in the partnership, less any damages or other amounts recoverable under subparagraph (B) of paragraph (1) of this subsection, ascertained and paid to him and to have the partners who continue the business obtain his discharge or appropriately hold him harmless from all present or future partnership liabilities; but in ascertaining the value of the partner's interest the value of the good will of the business shall not be considered.
When a partnership is dissolved for any reason, either pursuant to the provisions of this chapter or the partnership agreement or otherwise, and the business is continued as a partnership, the title to any real property or other property vested in such dissolved partnership shall, by operation of law, be vested in the partnership continuing the business without reversion or impairment and without further act or deed or other instrument of transfer or conveyance.
In every instance prior to July 1, 1989, where a partnership has been dissolved for any reason, either pursuant to the provisions of this chapter or the partnership agreement or otherwise, and the business is continued as a partnership, but no deed or other instrument of transfer or conveyance for any real property or other property to the partnership continuing the business has been duly executed and properly recorded, title to such real property or other property shall, by operation of law, be vested in such partnership continuing the business without reversion or impairment and in as valid and effectual a manner in every case as if a deed or other instrument of transfer or conveyance from such dissolved partnership to such partnership continuing the business had been duly executed and properly recorded.
Where a partnership agreement is rescinded on the ground of the fraud or misrepresentation of one of the parties thereto the party entitled to rescind is, without prejudice to any other right, entitled:
(1) To a lien on, or a right of retention of, the surplus of the partnership property after satisfying the partnership liabilities to third persons for any sum of money paid by him for the purchase of an interest in the partnership and for any capital or advances contributed by him;
(2) To stand, after all liabilities to third persons have been satisfied, in the place of the creditors of the partnership for any payments made by him in respect of the partnership liabilities; and
(3) To be indemnified by the person guilty of the fraud or making the representation against all debts and liabilities of the partnership.
In settling accounts between the partners after dissolution, the following rules shall be observed, subject to any agreement to the contrary:
(1) The assets of the partnership are:
(A) The partnership property;
(B) The contributions of the partners specified in paragraph (4) of this Code section;
(2) The liabilities of the partnership shall rank in order of payment, as follows:
(A) Those owing to creditors other than partners;
(B) Those owing to partners other than for capital and profits;
(C) Those owing to partners in respect of capital;
(D) Those owing to partners in respect of profits;
(3) The assets shall be applied in the order of their declaration in paragraph (1) of this Code section to the satisfaction of the liabilities;
(4) Except as provided in subsection (b) of Code Section 14-8-15:
(A) The partners shall contribute, as provided by paragraph (1) of Code Section 14-8-18, the amount necessary to satisfy the liabilities; and
(B) If any, but not all, of the partners are insolvent, or, not being subject to process, refuse to contribute, the other partners shall contribute their share of the liabilities, and, in the relative proportions in which they share the profits, the additional amount necessary to pay the liabilities;
(5) An assignee for the benefit of creditors or any person appointed by the court shall have the right to enforce the contributions specified in paragraph (4) of this Code section;
(6) Any partner or his legal representative shall have the right to enforce the contributions specified in paragraph (4) of this Code section, to the extent of the amount which he has paid in excess of his share of the liability;
(7) The individual property of a deceased partner shall be liable for the contributions specified in paragraph (4) of this Code section;
(8) When partnership property and the individual properties of the partners are in possession of a court for distribution, partnership creditors shall have priority on partnership property and separate creditors on individual property, subject to the rights of lien or secured creditors;
(9) Where a partner has become bankrupt or his estate is insolvent the claims against his separate property shall rank in the following order:
(A) Those owing to separate creditors;
(B) Those owing to partnership creditors;
(C) Those owing to partners by way of contribution.
(a) When any partner withdraws, is expelled, or dies and the business of the dissolved partnership is continued by one or more of the partners, either alone or with others, without liquidation of the partnership affairs, creditors of the first or dissolved partnership are also creditors of the person or partnership continuing the business.
(b) When all the partners or their representatives assign their rights in partnership property to one or more third persons who promise to pay the debts and who continue the business of the dissolved partnership, creditors of the dissolved partnership are also creditors of the person or partnership continuing the business.
(c) The liability of a third person becoming a partner in the partnership continuing the business, under this Code section, to the creditors of the dissolved partnership shall be satisfied out of partnership property only.
(d) When the business of a partnership after dissolution is continued under any conditions set forth in this Code section the creditors of the dissolved partnership, as against the separate creditors of the withdrawing or deceased partner or the representative of the deceased partner, have a prior right to any claim of the withdrawn partner or the representative of the deceased partner against the person or partnership continuing the business, on account of the withdrawn or deceased partner's interest in the dissolved partnership or on account of any consideration promised for such interest or for his right in partnership property.
(e) Nothing in this Code section shall be held to modify any right of creditors to set aside any assignment on the ground of fraud.
(f) The use by the person or partnership continuing the business of the partnership name, or the name of a deceased partner as part thereof, shall not of itself make the individual property of the deceased partner liable for any debts contracted by such person or partnership.
When any partner withdraws or dies, and the business is continued under any of the conditions set forth in subsection (a) of Code Section 14-8-41 or paragraph (2) of subsection (b) of Code Section 14-8-38, without any settlement of accounts as between the withdrawn partner or the legal representative of the estate of a deceased partner and the persons or partnership continuing the business, unless otherwise agreed:
(1) Such persons or partnership shall obtain the discharge of the withdrawn partner or the legal representative of the estate of the deceased partner, or appropriately hold him harmless from all present or future partnership liabilities, and shall ascertain the value of his interest at the date of dissolution; and
(2) The withdrawn partner or legal representative of the estate of the deceased partner shall receive as an ordinary creditor an amount equal to the value of his interest in the dissolved partnership with interest, or, at his option, in lieu of interest, the profits attributable to the use of his right in the property of the dissolved partnership, provided that the creditors of the dissolved partnership as against the separate creditors, or the representative of the withdrawn or deceased partner, shall have priority on any claim arising under this Code section, as provided by subsection (d) of Code Section 14-8-41.
The right to an account of his interest shall accrue to any partner, his assignee, or his legal representative, as against the winding up partners or the surviving partners or the person or partnership continuing the business, at the date of dissolution, in the absence of any agreement to the contrary.
(a) The laws of the jurisdiction under which a foreign limited liability partnership is organized govern its organization and internal affairs and the liability of its partners, regardless of whether the foreign limited liability partnership procured or should have procured a certificate of authority under this chapter.
(b) A foreign limited liability partnership may not be denied a certificate of authority by reason of any difference between the laws of the jurisdiction under which the foreign limited liability partnership is organized and the laws of this state.
(a) A foreign limited liability partnership transacting business in this state shall procure a certificate of authority to do so from the Secretary of State. In order to procure a certificate of authority to transact business in this state, a foreign limited liability partnership shall submit to the Secretary of State an application for a certificate of authority as a foreign limited liability partnership, signed by a person duly authorized to sign such instruments by the laws of the jurisdiction under which the foreign limited liability partnership is organized, setting forth:
(1) The name of the foreign limited liability partnership and, if different, the name under which it proposes to qualify and transact business in this state;
(2) The name of the jurisdiction under whose laws it is organized;
(3) Its date of organization and period of duration;
(4) The street address and county of its registered office in this state and the name of its registered agent at that office;
(5) A statement that the Secretary of State is appointed the agent of the foreign limited liability partnership for service of process if no agent has been appointed under subsection (a) of Code Section 14-8-46 or, if appointed, the agent's authority has been revoked or the agent cannot be found or served by the exercise of reasonable diligence;
(6) The address of the office required to be maintained in the jurisdiction of its organization by the laws of that jurisdiction or, if no such office is required, its principal office;
(7) The address of the office at which is kept a list of the names and addresses of its partners, together with an undertaking by it to keep those records until its registration in this state is canceled or revoked; and
(8) The name and a business address of a partner who has substantial responsibility for managing its business activities.
(b) Without excluding other activities which may not constitute transacting business in this state, a foreign limited liability partnership shall not be considered to be transacting business in this state, for the purpose of qualification under this chapter, solely by reason of carrying on in this state any one or more of the following activities:
(1) Maintaining or defending any action or administrative or arbitration proceeding or effecting the settlement thereof or the settlement of claims or disputes;
(2) Holding meetings of its partners or carrying on other activities concerning its internal affairs;
(3) Maintaining bank accounts, share accounts in savings and loan associations, custodial or agency arrangements with a bank or trust partnership, or stock or bond brokerage accounts;
(4) Maintaining offices or agencies for the transfer, exchange, and registration of partnership interests in it or appointing and maintaining trustees or depositaries with relation to such interests;
(5) Effecting sales through independent contractors;
(6) Soliciting or procuring orders, whether by mail or through employees or agents or otherwise, where such orders require acceptance outside this state before becoming binding contracts and where such contracts do not involve any local performance other than delivery and installation;
(7) Making loans or creating or acquiring evidences of debt, mortgages, or liens on real or personal property or recording the same;
(8) Securing or collecting debts or enforcing any rights in property securing the same;
(9) Effecting transactions in interstate or foreign commerce;
(10) Owning or controlling another entity organized under the laws of, or transacting business within, this state;
(11) Conducting an isolated transaction not in the course of a number of repeated transactions of like nature; or
(12) Serving as trustee, executor, administrator, or guardian or, in like fiduciary capacity, where permitted so to serve by the laws of this state.
(c) The list of activities in subsection (b) of this Code section is not exhaustive.
(d) This Code section shall not be deemed to establish a standard for activities that may subject a foreign limited liability partnership to taxation or to service of process under any of the laws of this state.
(a) Each foreign limited liability partnership that is required to procure a certificate of authority to do business in this state shall continuously maintain in this state a registered office and a registered agent at such registered office for service of process on the foreign limited liability partnership.
(b) A registered agent must be an individual resident of this state, a domestic corporation, professional corporation, or limited liability company, or a foreign corporation or limited liability company authorized to do business in this state.
(c) A foreign limited liability partnership may change its registered office or its registered agent, or both, by indicating any such change on its annual registration statement filed pursuant to Code Section 14-8-56 or by executing and delivering to the Secretary of State for filing a statement setting forth:
(1) The name of the foreign limited liability partnership;
(2) The street address and county of its then registered office;
(3) If the address of its registered office is to be changed, the new street address and county of the registered office;
(4) The name of its then registered agent; and
(5) If its registered agent is to be changed, the name of its successor registered agent.
(d) If the Secretary of State finds that such statement conforms to subsection (c) of this Code section, the Secretary of State shall file such statement in his or her office; and upon such filing, the change of address of the registered office or the change of the registered agent, or both, as the case may be, shall become effective.
(e) A registered agent of a foreign limited liability partnership may resign as such agent upon filing a written notice thereof with the Secretary of State. The appointment of such agent shall terminate upon the expiration of 30 days after receipt of such notice by the Secretary of State. There shall be attached to such notice an affidavit of such agent, if an individual, or of an officer thereof, if a corporation, that at least ten days prior to the date of filing such notice a written notice of the agent's intention to resign was mailed to the person, and at the address, indicated in its most recently filed annual registration statement pursuant to paragraph (5) of subsection (a) of Code Section 14-8-56, or, if no annual registration statement has been filed, in its application for a certificate of authority to transact business pursuant to paragraph (8) of subsection (a) of Code Section 14-8-45. Upon such resignation becoming effective, the address of the office of the resigned registered agent shall no longer be the address of the registered office of the foreign limited liability partnership.
(f) A registered agent may change the agent's office and the address of the registered office of any foreign limited liability partnership of which the agent is the registered agent to another place within this state by filing a statement as required in subsection (c) of this Code section, except that it need be signed only by the registered agent and need not be responsive to paragraph (5) of subsection (c) of this Code section and must recite that a copy of the statement has been mailed to the person, and at the address, indicated in its most recently filed annual registration statement pursuant to paragraph (5) of subsection (a) of Code Section 14-8-56, or, if no annual registration statement has been filed, in its application for a certificate of authority to transact business pursuant to paragraph (8) of subsection (a) of Code Section 14-8-45.
(g) The registered agent of one or more foreign limited liability companies may resign and appoint a successor registered agent by filing a statement with the Secretary of State stating that the agent resigns and stating the name, street address, and county of the office of the successor registered agent. There shall be attached to such statement a statement executed by each affected foreign limited liability partnership ratifying and approving such change of registered agent. Upon such filing, the successor registered agent shall become the registered agent of each such foreign limited liability partnership as has ratified and approved such substitution, and the successor registered agent's office, as stated in such statement, shall become the registered office in this state of each such foreign limited liability partnership. The Secretary of State shall furnish to the successor registered agent a certified copy of the statement of resignation.
(h) The registered agent of a foreign limited liability partnership authorized to transact business in this state is an agent of the foreign limited liability partnership on whom may be served any process, notice, or demand required or permitted by law to be served on the foreign limited liability partnership.
(i) Whenever a foreign limited liability partnership required to procure a certificate of authority to do business in this state shall fail to appoint or maintain a registered agent in this state, or whenever its registered agent cannot with reasonable diligence be found at the registered office, the Secretary of State shall be an agent of such foreign limited liability partnership upon whom any process, notice, or demand may be served. Service on the Secretary of State of any such process, notice, or demand shall be made by delivering to and leaving with the Secretary of State or with any persons designated by the Secretary of State to receive such service a copy of such process, notice, or demand. The plaintiff or his or her attorney shall certify in writing to the Secretary of State that the foreign limited liability partnership failed either to maintain a registered office or appoint a registered agent in this state and that he or she has forwarded by registered mail or statutory overnight delivery such process, service, or demand to the last registered agent at the last registered office listed on the records of the Secretary of State and that service cannot be effected at such office.
(j) The Secretary of State shall keep a record of all processes, notices, and demands served upon him or her under this Code section and shall record therein the time of such service and his or her action with reference thereto.
(k) This Code section does not prescribe the only means, or necessarily the required means, of serving any process, notice, or demand required or permitted by law to be served on a foreign limited liability partnership.
(l) Venue in proceedings against a foreign limited liability partnership shall be determined in accordance with the pertinent constitutional and statutory provisions of this state in effect on July 1, 1994, or thereafter. For purposes of determining venue, the residence of each foreign limited liability partnership authorized to transact business in this state shall be determined in accordance with Code Section 14-2-510 as though such foreign limited liability partnership were a foreign corporation.
(a) If the Secretary of State finds that an application for a certificate of authority conforms to law and all requisite fees and any penalty due pursuant to Code Section 14-8-52 have been paid, the Secretary of State shall:
(1) Stamp or otherwise endorse his or her official title and the date and time of receipt on the application;
(2) File in his or her office a copy of the application; and
(3) Issue a certificate of authority to transact business in this state.
(b) The certificate of authority must be returned to the person who filed the application or such person's representative.
(c) If the certificate of authority is issued by the Secretary of State, a foreign limited liability partnership shall be deemed authorized to transact business in this state from the time of filing its application for the certificate of authority.
(a) A foreign limited liability partnership may apply for a certificate of authority with the Secretary of State under any name, whether or not it is the name under which it is registered in its jurisdiction of organization; provided, however, that such name:
(1) Must contain the words “limited liability partnership” or “limited liability limited partnership” (it being permitted to abbreviate the word “limited” as “ltd.”) or the abbreviation “L.L.P.” or “L.L.L.P.” or the designation “LLP” or “LLLP”;
(2) Must be distinguishable on the records of the Secretary of State from the name of any corporation, nonprofit corporation, limited partnership, foreign limited liability partnership, professional corporation, professional association, limited liability company, or limited liability partnership on file with the Secretary of State pursuant to this title; and
(3) May not contain any words indicating that the business is organized other than as a limited liability partnership.
(b) Whenever a foreign limited liability partnership is unable to procure a certificate of authority to transact business in this state because its name does not comply with paragraph (2) of subsection (a) of this Code section, it may nonetheless apply for authority to transact business in this state by adding in parentheses to its name in such application a word, abbreviation, or other distinctive and distinguishing element such as the name of the jurisdiction where it is organized. If in the judgment of the Secretary of State the name of the foreign limited liability partnership with such addition would comply with subsection (a) of this Code section, subsection (a) of this Code section shall not be a bar to the issuance to such foreign limited liability partnership of a certificate of authority to transact business in this state. In such case, any such certificate issued to such foreign limited liability partnership shall be issued in its name with such additions, and the foreign limited liability partnership shall use such name with such additions in all its dealings with the Secretary of State.
A foreign limited liability partnership authorized to transact business in this state must procure an amended certificate of authority from the Secretary of State if it changes its name or its jurisdiction of organization. The requirements of Code Sections 14-8-45 and 14-8-47 for procuring an original certificate of authority shall apply to procuring an amended certificate under this Code section.
(a) A foreign limited liability partnership authorized to transact business in this state may not withdraw from this state until it obtains a certificate of withdrawal from the Secretary of State.
(b) A foreign limited liability partnership authorized to transact business in this state may apply for a certificate of withdrawal by delivering to the Secretary of State for filing an application that sets forth:
(1) The name of the foreign limited liability partnership and the name of the jurisdiction under whose laws it is organized;
(2) That it is not transacting business in this state and that it surrenders its authority to transact business in this state;
(3) That it revokes the authority of its registered agent to accept service on its behalf and appoints the Secretary of State as its agent for service of process in any proceeding based on a cause of action arising during the time it was authorized to transact business in this state;
(4) A mailing address to which a copy of any process served on the Secretary of State pursuant to paragraph (3) of this subsection may be mailed under subsection (c) of this Code section; and
(5) A commitment to notify the Secretary of State in the future of any change in the mailing address provided pursuant to paragraph (4) of this subsection.
(c) After the withdrawal of the foreign limited liability partnership is effective, service of process on the Secretary of State under this Code section is service on the foreign limited liability partnership. Any party that serves process on the Secretary of State in accordance with this subsection shall also mail a copy of the process to the foreign limited liability partnership at the mailing address provided pursuant to subsection (b) of this Code section.
The Secretary of State may commence a proceeding under Code Section 14-8-52 to revoke the certificate of authority of a foreign limited liability partnership authorized to transact business in this state if:
(1) The foreign limited liability partnership does not deliver its annual registration to the Secretary of State within 60 days after it is due;
(2) The foreign limited liability partnership does not pay within 60 days after they are due any fees, taxes, or penalties imposed by this chapter or other law;
(3) The foreign limited liability partnership is without a registered agent or registered office in this state for 60 days or more;
(4) The foreign limited liability partnership does not inform the Secretary of State under Code Section 14-8-46 that its registered agent or registered office has changed, that its registered agent has resigned, or that its registered office has been discontinued within 60 days of the change, resignation, or discontinuation;
(5) A partner or agent of the foreign limited liability partnership signed a document such person knew was false in a material respect with intent that the document be delivered to the Secretary of State for filing; or
(6) The Secretary of State receives a duly authenticated certificate from the secretary of state or other official having custody of records in the jurisdiction under whose law the foreign limited liability partnership is organized stating that it has been dissolved, terminated, or disappeared as a result of a merger.
(a) If the Secretary of State determines that one or more grounds exist under Code Section 14-8-51 for revocation of a certificate of authority, the Secretary of State shall provide the foreign limited liability partnership with written notice of such determination by mailing a copy of the notice, first-class mail, to the person and at the address indicated in its most recently filed annual registration statement pursuant to paragraph (5) of subsection (a) of Code Section 14-8-56 or, if no annual registration statement has been filed, in its application for a certificate of authority to transact business pursuant to paragraph (8) of subsection (a) of Code Section 14-8-45 or to the registered agent.
(b) If the foreign limited liability partnership does not correct each ground for revocation or demonstrate to the reasonable satisfaction of the Secretary of State that each ground determined by the Secretary of State does not exist within 60 days after the notice is provided to the foreign limited liability partnership, the Secretary of State may revoke the foreign limited liability partnership's certificate of authority by signing a certificate of revocation that recites the ground or grounds for revocation and its effective date.
(c) The authority of a foreign limited liability partnership to transact business in this state ceases on the date shown on the certificate revoking its certificate of authority.
(d) The Secretary of State's revocation of a foreign limited liability partnership's certificate of authority appoints the Secretary of State as the foreign limited liability partnership's agent for service of process in any proceeding based on a cause of action which arose during the time the foreign limited liability partnership was authorized to transact business in this state. Service of process on the Secretary of State under this subsection is service on the foreign limited liability partnership. Any party that serves process on the Secretary of State shall also mail a copy of the process to the person and at the address indicated in its most recently filed annual registration statement pursuant to paragraph (5) of subsection (a) of Code Section 14-8-56 or, if no annual registration statement has been filed, in its application for a certificate of authority to transact business pursuant to paragraph (8) of subsection (a) of Code Section 14-8-45 or to the registered agent. This subsection does not prescribe the only means, or necessarily the required means, of serving any process, notice, or demand required or permitted by law to be served on a foreign limited liability partnership.
(e) Revocation of a foreign limited liability partnership's certificate of authority does not terminate the authority of the registered agent of the foreign limited liability partnership.
(a) A foreign limited liability partnership may appeal the Secretary of State's revocation of its certificate of authority to the Superior Court of Fulton County within 30 days after service of the certificate of revocation is perfected under Code Section 14-8-52. The foreign limited liability partnership appeals by petitioning the court to set aside the revocation and attaching to the petition copies of its certificate of authority and the Secretary of State's certificate of revocation.
(b) The court may summarily order the Secretary of State to reinstate the certificate of authority or may take any other action the court considers appropriate.
(c) The court's final decision may be appealed as in other civil proceedings.
(a) A foreign limited liability partnership transacting business in this state may not maintain an action, suit, or proceeding in a court of this state until it is authorized to transact business in this state.
(b) The failure of a foreign limited liability partnership to procure a certificate of authority does not impair the validity of any contract or act of the foreign limited liability partnership or prevent the foreign limited liability partnership from defending any action, suit, or proceeding in any court of this state.
(c) A foreign limited liability partnership that transacts business in this state without registering as required by this chapter shall be liable to the state:
(1) For all fees which would have been imposed by this chapter upon such foreign limited liability partnership had it registered as required by this chapter; and
(2) If it has not been authorized to transact business in this state within 30 days after the first day on which it transacts business in this state, for a penalty of $500.00 for each year or part thereof during which it so transacts business.
The Attorney General may maintain an action to restrain a foreign limited liability partnership from transacting business in this state in violation of this chapter.
(a) Each foreign limited liability partnership authorized to transact business in this state shall deliver to the Secretary of State for filing an annual registration that sets forth:
(1) The name of the foreign limited liability partnership and the jurisdiction under whose laws it is organized;
(2) The street address and county of its registered office in this state and the name of its registered agent at that office;
(3) The address of the office it is required to maintain in the jurisdiction of its organization by the laws of that jurisdiction or, if no such office is required to be maintained, of its principal office;
(4) The address of the office at which is kept a list of the names and addresses of the partners and other owners of the foreign limited liability partnership;
(5) The name and a business address of a partner who has substantial responsibility for managing the business activities of the foreign limited liability partnership; and
(6) Any additional information that is necessary to enable the Secretary of State to carry out the provisions of this chapter.
(b) Information in the annual registration must be current as of the date the annual registration is executed on behalf of the foreign limited liability partnership.
(c) The first annual registration must be delivered to the Secretary of State between January 1 and April 1, or such other date as the Secretary of State may specify by rules or regulations, of the year following the calendar year in which the foreign limited liability partnership was authorized to transact business in this state. Subsequent annual registrations must be delivered to the Secretary of State between January 1 and April 1, or such other date as the Secretary of State may specify by rules or regulations, of the following calendar years.
(d) If an annual registration does not contain the information required by this Code section, the Secretary of State shall promptly notify the reporting foreign limited liability partnership in writing and return the report to it for correction. If the report is corrected to contain the information required by this Code section and delivered to the Secretary of State within 30 days after the effective date of notice, it is deemed to be timely filed.
Notwithstanding any other law to the contrary, the Secretary of State may provide for the annual registration required under this chapter to be valid for a period up to and including three years. The Secretary of State is authorized to adopt the necessary rules and regulations to implement such a registration process.
The Secretary of State shall collect the following fees and penalties when the documents described below are delivered to the Secretary of State for filing pursuant to the chapter:
| | Document | Fee | | | --- | --- | --- | --- | | | (1) | Application for certificate of authority to transact business․․․․․․․․․․․․․․․․․ | ․․․․$200.00 | | | (2) | Statement of change of registered office or registered agent․․․ 5.00 per foreign limited liability partnership, but not less than | ․․․․․․20.00 | | | (3) | Registered agent's statement of resignation pursuant to subsection (e) of Code Section 14-8-46 | ․․․․․No fee | | | (4) | Annual registration․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․25.00 | | | (5) | Penalty for late filing of annual registration․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․25.00 | | | (6) | Application of withdrawal․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․No fee | | | (7) | Any other document required or permitted to be filed by this chapter․․․․․․․․․․ | ․․․․․․20.00 |
The Secretary of State shall have the power and authority reasonably necessary to enable him or her to administer this chapter efficiently and to perform the duties imposed upon him or her pursuant to this chapter, including, without limitation, the power and authority to employ from time to time such additional personnel as in his or her judgment are required for such purposes.
The Secretary of State may promulgate such rules and regulations, not inconsistent with the provisions of this chapter, which are incidental to and necessary for the implementation and enforcement of such provisions of this chapter as are administered by the Secretary of State. Such rules and regulations shall be promulgated in accordance with Chapter 13 of Title 50, the “Georgia Administrative Procedure Act.”
The Secretary of State's duty to file documents under this chapter is ministerial. The Secretary of State's filing or refusing to file a document does not:
(1) Affect the validity or invalidity of the document in whole or part;
(2) Relate to the correctness or incorrectness of information contained in the document; or
(3) Create a presumption that the document is valid or invalid or that information contained in the document is correct or incorrect.
Code Sections 14-8-44 through 14-8-60 and this Code section shall become effective on July 1, 1994, and shall govern all foreign limited liability partnerships transacting business in this state on or after July 1, 1994.
(a) To become and to continue as a limited liability partnership, a partnership shall record in the office of the clerk of the superior court of any county in which the partnership has an office a limited liability partnership election. Such election shall be recorded by such clerk in a book to be kept for that purpose, which may be the book in which are recorded statements of partnership recorded pursuant to Code Section 14-8-10.1, and open to public inspection. As a prerequisite to such filing, the clerk of each such registry may collect a fee in the amount of the fee then allowed for the filing of statements of partnership. A limited liability partnership election shall state:
(1) The name of the partnership, which must comply with Code Section 14-8-63;
(2) The business, profession, or other activity in which the partnership engages;
(3) That the partnership thereby elects to be a limited liability partnership;
(4) That such election has been duly authorized; and
(5) Any other matters the partnership determines to include therein.
(b) Subject to any contrary agreement among the partners, the election shall be executed by a majority of the partners or by one or more partners authorized to execute an election.
(c) A partnership becomes a limited liability partnership at the time of the recording of the election or at such later date or time, if any, as is stated in the election and continues to be a limited liability partnership until a cancellation of limited liability partnership election, which states that it has been duly authorized, is:
(1) Subject to any contrary agreement among the partners, executed by a majority of the partners or by one or more partners authorized to execute such a cancellation; and
(2) Recorded in the office of the clerk of the superior court of each county in which the partnership recorded a limited liability partnership election.
(d) The status of a partnership as a limited liability partnership shall not be affected by changes, after the recording of a limited liability partnership election, in the information stated in the election.
(e) The fact that a limited liability partnership election has been recorded as required by this Code section is notice that the partnership is a limited liability partnership.
(f) If a limited liability partnership is dissolved and its business continued without liquidation of the partnership's affairs, the new partnership shall succeed to the old partnership's election to become a limited liability partnership and shall continue to be a limited liability partnership until cancellation of such election.
(g) A limited partnership organizing under or subject to Chapter 9 of this title may become and continue as a limited liability partnership if its certificate of limited partnership specifies a name which complies with subsection (b) of Code Section 14-8-63 and otherwise complies with the name requirements of Code Section 14-9-102 and includes in its certificate of limited partnership a statement that the limited partnership is a limited liability partnership. Subject to any contrary agreement among the partners, an amendment to become a limited liability partnership by an existing limited partnership shall be approved by all of the partners. A limited partnership becomes a limited liability partnership at the time its certificate which complies with the foregoing provisions of this subsection becomes effective and continues to be a limited liability partnership until its certificate of limited partnership is amended to remove the statement that such limited partnership is a limited liability partnership and so that its name no longer contains the words “limited liability limited partnership,” or the abbreviation “L.L.L.P.,” or the designation “LLLP.” The fact that the certificate of limited partnership of a limited partnership has been amended as set forth in this subsection is notice that the limited partnership is a limited liability partnership. If a limited partnership that is a limited liability partnership is dissolved and its business continued without liquidation of the limited partnership's affairs, the new limited partnership shall continue to be a limited liability partnership until its certificate of limited partnership is amended as provided in this subsection. A limited partnership that becomes a limited liability partnership pursuant to this subsection shall otherwise remain subject to Chapter 9 of this title, including, without limitation, the annual registration provisions of Code Section 14-9-206.5.
(a) Except as provided in subsection (b) of this Code section, the name of a limited liability partnership shall contain the words “limited liability partnership,” it being permitted to abbreviate the word “limited” as “ltd.,” or the abbreviation “L.L.P.” or the designation “LLP” as the last words or letters of its name.
(b) The name of a limited partnership that is a limited liability partnership shall contain the words “limited liability limited partnership,” it being permitted to abbreviate the word “limited” as “ltd.,” or the abbreviation “L.L.L.P.” or the designation “LLLP” as the last words or letters of its name.
(a) A partnership, including a limited liability partnership, formed and existing under this chapter, may conduct its business, carry on its operations, and have and exercise the powers granted by this chapter in any state, territory, district, or possession of the United States or in any foreign country. It is the intent of this state that the legal existence of limited liability partnerships be recognized outside the boundaries of this state.
(b) It is the policy of this state that the internal affairs of partnerships, including limited liability partnerships, formed and existing under this chapter, including the liability of partners for debts, obligations, and liabilities of partnerships, shall be subject to and governed by the laws of this state.
This chapter shall be known and may be cited as the “Georgia Revised Uniform Limited Partnership Act.”
As used in this chapter, unless the context of a provision of this chapter otherwise requires or unless otherwise defined in the partnership agreement:
(1) “Certificate of limited partnership” means the certificate referred to in Code Section 14-9-201, and such certificate as amended or restated.
(2) “Contribution” means a contribution to the capital of a limited partnership authorized by Code Section 14-9-501.
(2.1) “Electronic transmission” or “electronically transmitted” means any process of communication not directly involving the physical transfer of paper that is suitable for the retention, retrieval, and reproduction of information by the recipient.
(3) “Event of withdrawal of a general partner” means an event that causes a person to cease to be a general partner as provided in Code Section 14-9-602.
(3.1) “Foreign limited liability company” means a limited liability company formed under the laws of a jurisdiction other than this state.
(4) “Foreign limited partnership” means a partnership formed under the laws of another state and having as partners one or more general partners and one or more limited partners.
(5) “General partner” means a person who:
(A) Becomes a general partner upon the formation of a limited partnership in accordance with Code Section 14-9-201 or becomes a general partner in accordance with Code Section 14-9-401, is named in the certificate of limited partnership as a general partner and has not ceased to be a general partner pursuant to Code Section 14-9-602; or
(B) Is a general partner of a foreign limited partnership in accordance with the law of the state of organization.
(6) “Interest” means interest at the legal rate that applies when the percentage rate is not named in the contract as provided by Code Section 7-4-2 or any successor statute.
(6.1) “Limited liability company” means any limited liability company formed under Chapter 11 of this title.
(7) “Limited partner” means a person who:
(A) Has been admitted to a limited partnership as a limited partner in accordance with Code Section 14-9-301 and has not withdrawn as a limited partner pursuant to Code Section 14-9-603; or
(B) Is a limited partner in a foreign limited partnership in accordance with the law of the state of organization.
(8) “Limited partnership” and “domestic limited partnership” mean a partnership formed in accordance with Code Section 14-9-201 by two or more persons under the laws of this state and having one or more general partners and one or more limited partners.
(9) “Partner” means a limited partner or general partner of a limited partnership.
(10) “Partnership agreement” means an agreement, written or oral, of the partners of a limited partnership as to the affairs of the limited partnership and the conduct of its business.
(11) “Partnership interest” means a partner's share of the capital and profits and losses of a limited partnership, the right to receive distributions of partnership assets, and the right to receive any allocation of income, gain, loss, deduction, credit, or similar items.
(12) “Person” means an individual, corporation, business trust, estate, trust, partnership, association, joint venture, government, governmental subdivision or agency, or any other legal or commercial entity, or any person acting in a representative capacity.
(13) “State” means the District of Columbia or the Commonwealth of Puerto Rico or any state, territory, possession, or other jurisdiction of the United States.
(a) The name of each limited partnership shall be as set forth in its certificate of limited partnership and:
(1) Must contain the words “limited partnership” or the abbreviation “L.P.”;
(2) Must be distinguishable on the records of the Secretary of State from the name of any active limited partnership which is organized under this chapter or which has elected to adopt this chapter pursuant to subsection (b) of Code Section 14-9-1201; and any active foreign limited partnership having a certificate of authority in this state; and any corporation, professional corporation, or professional association on file with the Secretary of State pursuant to this title; and
(3) May not contain any words indicating that the business is organized other than as a limited partnership.
(b) If by reason of paragraph (1) or (3) of subsection (a) of this Code section a name would otherwise be unavailable to a limited partnership which files with the Secretary of State under the provisions of subsection (b) of Code Section 14-9-1201, such name shall nonetheless be available to such limited partnership, but such limited partnership shall be distinguished on the records of the Secretary of State by the Secretary of State's adding as necessary:
(1) “(L.P.)” to the name of the partnership on its records; and
(2) Adding to the name of such partnership on its records in parentheses the name of the county in which it was organized and, if necessary to distinguish multiple partnerships making such filings that were organized in the same county, by adding a numerical distinction to the county name. Such addition of a county name and numerical distinction to a limited partnership name by the Secretary of State shall be solely for the purpose of distinguishing limited partnerships on the files of the Secretary of State, shall not constitute a change in the name of the limited partnership, and shall have no effect whatsoever on the authority of the limited partnership to use its name.
(c) This chapter does not control the use of fictitious or trade names. Issuance of a name under this chapter means that the name is distinguishable for filing purposes on the records of the Secretary of State pursuant to paragraph (2) of subsection (a) of this Code section. Issuance of a limited partnership name does not affect the commercial availability of the name.
(a) A person may apply to reserve a name for the purpose of forming a limited partnership by paying the fee specified in Code Section 14-9-1101. If the Secretary of State finds that the limited partnership name applied for is available, he or she shall reserve the name for the applicant's use for 30 days or until the certificate of limited partnership is filed, whichever is sooner. If the Secretary of State finds that the name applied for is not distinguishable for filing purposes upon the records of the Secretary of State, he or she shall notify the applicant who may then submit another reservation request within ten days of the date of the rejection notice without payment of an additional reservation fee.
(b) Upon expiration of a name reservation after 30 days without the filing of a certificate of limited partnership, the name may again be reserved for another 30 day period by the same or another applicant under the same guidelines of subsection (a) of this Code section.
(c) A person who has in effect a name reservation under subsection (a) of this Code section may transfer the reservation to another person by delivering to the Secretary of State a signed notice of the transfer that states the name and address of the transferee.
(a) Each limited partnership shall continuously maintain in this state:
(1) A registered office which may, but need not, be a place of its business in this state; and
(2) A registered agent for service of process on the limited partnership. The address of the business office of the registered agent shall be the same as the address of the registered office referred to in paragraph (1) of this subsection.
(b) An agent for service of process must be an individual resident of this state, a domestic corporation, professional corporation, or limited liability company, or a foreign corporation or limited liability company authorized to transact business in this state.
(c) A limited partnership may change its registered office or its registered agent by filing an amendment to its annual registration setting forth:
(1) The name of the limited partnership;
(2) The address of its then registered office;
(3) If the address of its registered office is to be changed, the new address of the registered office;
(4) The name or names of its then registered agent or agents;
(5) If its registered agent or agents are to be changed, the name or names of its successor registered agent or agents and the written consent of each successor agent to his or her or its appointment; and
(6) That the address of its registered office and the address of the business office of its registered agent or agents, as changed, will be identical.
(d) If the Secretary of State finds that such statement conforms to subsection (a) of this Code section, he or she shall file such statement in his or her office; and upon such filing the change of address of the registered office or the change of the registered agent or agents, or both, as the case may be, shall become effective.
(e) Any registered agent of a limited partnership may resign as such agent upon filing a written notice thereof with the Secretary of State. The appointment of such agent shall terminate upon the expiration of 30 days after receipt of such notice by the Secretary of State. There shall be attached to such notice an affidavit of such agent, if an individual, or of an officer thereof, if a corporation, that at least ten days prior to the date of filing such notice a written notice of the agent's intention to resign was mailed or delivered to the limited partnership for which such agent is acting. Upon such resignation becoming effective, the address of the business office of the resigned registered agent shall no longer be the address of the registered office of the limited partnership.
(f) A registered agent may change his or her or its business address and the address of the registered office of any limited partnership of which he or she or it is a registered agent to another place within this state by filing a statement as required in subsection (c) of this Code section, except that it need be signed only by the registered agent and need not be responsive to paragraph (5) of subsection (c) of this Code section and must recite that a copy of the statement has been mailed or delivered to a representative or agent of each such limited partnership other than the notifying registered agent.
(g) Whenever a limited partnership shall fail to appoint or maintain a registered agent in this state, or whenever its registered agent cannot with reasonable diligence be found at the registered office, then the Secretary of State shall be an agent of such limited partnership upon whom any process, notice, or demand may be served. Service on the Secretary of State of any such process, notice, or demand shall be made by delivering to and leaving with him or her or with any other person or persons designated by the Secretary of State to receive such service a copy of such process, notice, or demand. The plaintiff or his or her attorney shall certify in writing to the Secretary of State that he or she has forwarded by registered mail or statutory overnight delivery such process, service, or demand to the last registered office or agent listed on the records of the Secretary of State, that service cannot be effected at such office, and that it therefore appears that the limited partnership has failed either to maintain a registered office or appoint a registered agent in this state. Any such service by certification to the Secretary of State shall be answerable in not more than 30 days. The provisions of this subsection may be used notwithstanding any inconsistent provisions of Chapter 11 of Title 9.
(h) The Secretary of State shall keep a record of all processes, notices, and demands served upon him or her under this Code section and shall record therein the time of such service and his or her action with reference thereto.
(a) The general partners shall cause the limited partnership to keep the following:
(1) A current list of the full name and last known business address of each partner, separately identifying in alphabetical order the general partners and the limited partners;
(2) A copy of the certificate of limited partnership, all certificates of amendment thereto, and all certificates of merger filed in mergers of which the limited partnership was the surviving partnership, together with executed copies of any powers of attorney pursuant to which any certificate has been executed;
(3) Copies of the limited partnership's federal, state, and local income tax returns and reports, if any, for the four most recent years;
(4) Copies of any then effective written partnership agreements, merger agreements in connection with mergers of which the limited partnership was the surviving partnership, and of any annual financial statements of the limited partnership for the four most recent years; and
(5) Unless contained in a written partnership agreement, a writing or writings setting out:
(A) The cash and property contributed by each partner to the capital of the partnership; and
(B) The cash and property to be contributed by each partner to the capital of the partnership and terms upon which such contributions are to be made.
(b) The general partners shall make available records kept under this Code section in accordance with Code Section 14-9-305.
(a) A limited partnership may engage in any activity except to the extent provided by law or in the partnership agreement.
(b) Any estate in real property may be acquired in the name of a domestic limited partnership or of a foreign limited partnership (whether or not such foreign limited partnership has procured, or is required under the provisions of Code Section 14-9-902 to procure, a certificate of authority to transact business in this state), and title to any estate so acquired shall vest in the domestic or foreign limited partnership itself rather than in the partners individually. The specification of this power shall not be construed to limit any other power which such domestic or foreign limited partnership may possess.
(c) Instruments executed by a domestic or foreign limited partnership conveying an interest in real property located in this state, when signed on behalf of such limited partnership by a person purporting to be a general partner of such limited partnership, shall be presumed to have been duly authorized by and binding upon such limited partnership unless contrary limitations on the authority of the general partner are set forth in the certificate of limited partnership and a copy of the certificate of limited partnership certified by the Secretary of State is filed in the office of the clerk of the superior court of the county where the real property is located and recorded in the book kept by such clerk for statements of partnership pursuant to Code Section 14-8-10.1.
Except as provided in the partnership agreement, a partner may lend money to and transact other business with the limited partnership and, subject to other applicable law, has the same rights and obligations with respect thereto as a person who is not a partner.
(a) Subject to any limitations expressly set forth in the partnership agreement, a limited partnership may, and shall have the power to, indemnify and hold harmless any partner or other person from and against any and all claims and demands whatsoever, provided that the partnership shall not indemnify any person:
(1) For intentional misconduct or a knowing violation of law; or
(2) For any transaction for which the person received a personal benefit in violation or breach of any provision of the partnership agreement.
This Code section shall govern limited partnerships to the exclusion of paragraph (2) of Code Section 14-8-18.
(b) To the extent that, at law or in equity, a partner has duties including but not limited to fiduciary duties and liabilities relating thereto to a limited partnership or another partner:
(1) The partner's duties and liabilities may be expanded, restricted, or eliminated by provisions in the partnership agreement; provided, however, that no such provision shall eliminate or limit the liability of a partner for intentional misconduct or a knowing violation of law or for any transaction for which the partner received a personal benefit in violation or breach of any provision of the partnership agreement; and
(2) The partner shall have no liability to the limited partnership or to any other partner for his or her good faith reliance on the provisions of the partnership agreement, including, without limitation, provisions thereof that relate to the scope of duties including but not limited to fiduciary duties of partners.
A certificate attached to a copy of a document or electronic transmission filed by the Secretary of State, bearing his or her signature, which may be in facsimile, and the printed or embossed seal of this state, or its electronic equivalent, is prima-facie evidence that the original document has been filed with the Secretary of State.
(a) In order to form a limited partnership, a certificate of limited partnership must be executed and filed in the office of the Secretary of State. The certificate must set forth:
(1) The name of the limited partnership;
(2) The address of the registered office and the name and address of the initial agent for service of process required to be maintained by Code Section 14-9-104;
(3) The name and the business address of each general partner; and
(4) Any other matters the general partners determine to include therein.
(b) A limited partnership exists from the time of the filing of the certificate of limited partnership in the office of the Secretary of State or from a later time or later time and date, not to exceed 90 days from the date of filing, specified in the certificate of limited partnership, to the time of cancellation pursuant to subsection (c) of Code Section 14-9-206.
(a) A certificate of limited partnership is amended by filing a certificate of amendment thereto in the office of the Secretary of State. The certificate must set forth:
(1) The name of the limited partnership;
(2) The date of filing of the certificate of limited partnership;
(3) The amendment to the certificate; and
(4) If the amendment is to become effective later than the time of filing, the effective date, or effective time and date, which may not be later than 90 days after the filing date of the amendment.
(b) A certificate of limited partnership may be amended at any time for any proper purpose the general partners determine.
A certificate of cancellation may be filed in the office of the Secretary of State when all debts, liabilities, and obligations of the limited partnership have been paid and discharged or reasonably adequate provision therefor has been made, and all of the remaining property and assets of the limited partnership have been distributed to the partners, or when there are no limited partners. Such certificate shall set forth:
(1) The name of the limited partnership;
(2) The date of filing of its certificate of limited partnership;
(3) The basis permitted by this Code section for filing the certificate of cancellation;
(4) If the cancellation is to become effective later than the date of filing, the effective date of cancellation or effective time and date, which may not be later than 90 days after the filing date of the cancellation; and
(5) Any other information determined to be necessary by the general partners filing the certificate.
(a) Each certificate required by this article to be filed in the office of the Secretary of State must be executed, in such form as may be prescribed by the Secretary of State, in the following manner:
(1) An original certificate of limited partnership must be signed by all general partners;
(2) A certificate of amendment must be signed by at least one general partner and by each other general partner designated in the certificate as a new general partner;
(3) A certificate of cancellation must be signed by all general partners; and
(4) A certificate of merger must be executed by at least one general partner of any surviving limited partnership.
(b) Any person may sign a certificate by an attorney in fact, but a power of attorney to sign a certificate relating to the admission of a general partner must specifically describe the admission.
(a) If a person required by Code Section 14-9-204 to execute a certificate fails or refuses to do so, any other person who is adversely affected by the failure or refusal may petition the superior court of the county where the registered office of the limited partnership is located to direct the execution of the certificate. If the court finds that it is proper for the certificate to be executed and that any person so designated has failed or refused to execute the certificate, it shall order the Secretary of State to record an appropriate certificate.
(b) The court shall assess the costs and expenses of such proceeding against the limited partnership, except that all or any part of such costs and expenses may be apportioned and assessed, as the court may determine, against any or all of the persons required by Code Section 14-9-204 to execute a certificate who failed or refused to do so if the court finds that such failure or refusal was arbitrary, vexatious, or otherwise not in good faith.
(a) A signed copy, and facsimile thereof, of the certificate of limited partnership and of any certificates of amendment, cancellation, or merger, or of any judicial decree of amendment, cancellation, or merger must be delivered to the Secretary of State; provided, however, that if the document is electronically transmitted, the electronic version of such person's name may be used in lieu of a signature. A person who executes a certificate as an agent or fiduciary need not exhibit evidence of his or her authority as a prerequisite to filing. Unless the Secretary of State finds that a certificate does not conform to law, upon receipt of all filing fees required by law he or she shall:
(1) Stamp or otherwise endorse his or her official title and the date and time of receipt on both the original and the facsimile copy;
(2) File the signed copy in his or her office; and
(3) Return the facsimile of the signed copy to the person who filed it or to his or her representative.
(b) Upon the later of the filing of a certificate of amendment pursuant to this Code section or the effective time, or effective date and time, of the amendment pursuant to paragraph (4) of subsection (a) of Code Section 14-9-202, or upon the recording pursuant to Code Section 14-9-205 of a certificate of amendment, the certificate of limited partnership is amended as set forth in the certificate of amendment.
(c) Upon the later of the filing of a certificate of cancellation pursuant to this Code section or the effective time or the effective date and time of the cancellation pursuant to paragraph (4) of Code Section 14-9-203, or upon the recording pursuant to Code Section 14-9-205 of a certificate of cancellation, the certificate of limited partnership is canceled.
(d) Upon the later of the filing of a certificate of merger pursuant to this Code section or the effective time or the effective date and time pursuant to paragraph (4) of subsection (b) of Code Section 14-9-206.1 of a certificate of merger, or upon the recording pursuant to Code Section 14-9-205 of a certificate of merger, the constituent entities named in the certificate are merged.
(e) Notwithstanding the provisions of this chapter, the Secretary of State may authorize the filing of documents by electronic transmission, following the provisions of Chapter 12 of Title 10, the “Uniform Electronic Transactions Act,” and the Secretary of State shall be authorized to promulgate such rules and regulations as are necessary to implement electronic filing procedures.
(a) Pursuant to a written agreement, a domestic limited partnership may merge with one or more domestic or foreign limited partnerships, limited liability companies, or corporations. The agreement shall designate the surviving domestic or foreign limited partnership, domestic or foreign limited liability company, or domestic or foreign corporation. The agreement of merger may also set forth:
(1) The terms and conditions of the merger;
(2) The manner and basis of converting the interests in the constituent domestic or foreign limited partnerships, domestic or foreign limited liability companies, or domestic or foreign corporations into interests in the surviving domestic or foreign limited partnership, domestic or foreign limited liability company, or domestic or foreign corporation or, in whole or in part, into cash or other property; and
(3) The rights and, subject to Code Section 14-9-502, obligations of the partners of the surviving domestic limited partnership.
(b) The surviving entity shall file a certificate of merger with the Secretary of State on behalf of each domestic limited partnership that is a party to the merger. The certificate shall state:
(1) The name and state of domicile of each of the constituent entities;
(2) That an agreement of merger has been approved by the requisite action by each of the constituent entities;
(3) The name and state of domicile of the surviving partnership, limited liability company, or corporation;
(4) If the merger is to become effective later than the time of filing of the certificate of merger, the effective date or the effective time and date of the merger, which may not be later than 90 days after the filing; and
(5) If the surviving entity is a foreign limited partnership, foreign corporation, or foreign limited liability company without a certificate of authority to do business in this state, that the Secretary of State is appointed agent of the surviving limited partnership, foreign corporation, or foreign limited liability company on whom process in this state in any action, suit, or proceeding for the enforcement of an obligation of a domestic limited partnership constituent to the merger may be served and the address to which a copy of the process is to be mailed.
If the surviving entity is a domestic or foreign limited liability company, it shall also comply with the filing requirements of the laws of the state of its formation governing limited liability companies. If the surviving entity is a domestic or foreign corporation, it shall also comply with the filing requirements of the laws of the state of its incorporation governing corporations.
(c) On the effective date of the merger, each partnership that is not the surviving limited partnership in the merger is terminated.
(d) The certificate of merger filed pursuant to subsection (b) of this Code section shall have the effect of the certificate of cancellation for a domestic or registered foreign limited partnership that is not the surviving domestic or foreign limited partnership in the merger.
(e) On service on the Secretary of State pursuant to appointment under paragraph (5) of subsection (b) of this Code section, subsection (i) of Code Section 14-9-902.1 is applicable, except that the plaintiff in the action, suit, or proceeding shall certify to the Secretary of State that he or she has forwarded by registered mail or statutory overnight delivery such process, service, or demand to the address specified in the certificate of merger as required by paragraph (5) of subsection (b) of this Code section.
(f) When the certificate of merger required by subsection (b) of this Code section is effective, then for all purposes of the law of this state:
(1) The surviving entity shall thereupon and thereafter possess all of the rights, privileges, immunities, franchises, and powers of each of the merging domestic limited partnerships, and all property, real, personal, and mixed, and all debts due to any of those limited partnerships, as well as all other choses in action, and each and every other interest of or belonging to or due to each of the merged domestic limited partnerships shall be taken and deemed to be transferred to and vested in the surviving entity without further act or deed; and the title to any real estate, or any interest therein, vested in any of the merged domestic limited partnerships shall not revert or be in any way impaired by reason of such merger;
(2) The surviving entity shall thereupon and thereafter be responsible and liable for all the liabilities and obligations of each of the merged domestic limited partnerships; and any claim existing or action or proceeding pending by or against any of such partnerships may be prosecuted as if such merger had not taken place, or such surviving entity may be substituted in its place. Neither the rights of creditors nor any liens upon the property of any such partnership shall be impaired by such merger;
(3) When a limited partnership merges with a corporation pursuant to this Code section, the effect of the merger shall be the same as if the limited partnership had been a corporation under the law governing the surviving corporation; and
(4) When a limited partnership merges with a limited liability company pursuant to this Code section, the effect of the merger shall be the same as if the limited partnership had been a limited liability company under the law governing the surviving limited liability company.
(g) A foreign corporation or foreign limited liability company authorized to transact business in this state that merges with and into a domestic limited partnership pursuant to this Code section and is not the surviving entity in such merger need not obtain a certificate of withdrawal from the Secretary of State.
(a) A corporation, foreign corporation, limited liability company, foreign limited liability company, foreign limited partnership, general partnership, or foreign general partnership may elect to become a limited partnership. Such election shall require:
(1) Compliance with Code Section 14-2-1109.1 in the case of a Georgia corporation; or
(2) Approval of all of its partners, members, or shareholders, or such other approval as may be sufficient under applicable law or the governing documents of the electing entity to authorize such election, in the case of a foreign corporation, limited liability company, foreign limited liability company, foreign limited partnership, general partnership, or foreign general partnership.
(b) Such election is made by delivery of a certificate of conversion to the Secretary of State for filing. The certificate shall set forth:
(1) The name and jurisdiction of organization of the entity making the election;
(2) That the entity elects to become a limited partnership;
(3) The effective date and time of such election if later than the date and time the certificate of conversion is filed;
(4) That the election has been approved as required by subsection (a) of this Code section;
(5) That filed with the certificate of conversion is a certificate of limited partnership that is in the form required by Code Section 14-9-201, that sets forth a name for the limited partnership that satisfies the requirements of Code Section 14-9-102, and that shall be the certificate of limited partnership of the limited partnership formed pursuant to such election unless and until modified in accordance with this chapter; and
(6) A statement setting forth either:
(A) The manner and basis for converting the ownership interests in the entity making the election into interests as partners of the limited partnership formed pursuant to such election; or
(B)(i) That a written limited partnership agreement has been entered into among the persons who will be the partners of the limited partnership formed pursuant to such election;
(ii) That such limited partnership agreement will be effective immediately upon the effectiveness of such election; and
(iii) That such limited partnership agreement provides for the manner and basis of such conversion.
(c) Upon the election becoming effective the:
(1) Electing entity shall become a limited partnership formed under this chapter by such election except that the existence of the limited partnership so formed shall be deemed to have commenced on the date the entity making the election commenced its existence in the jurisdiction in which such entity was first created, formed, incorporated, or otherwise came into being;
(2) Ownership interests in the entity making the election shall be converted on the basis stated or referred to in the certificate of conversion in accordance with paragraph (6) of subsection (b) of this Code section;
(3) Certificate of limited partnership filed with the certificate of conversion shall be the certificate of limited partnership of the limited partnership formed pursuant to such election unless and until amended in accordance with this chapter;
(4) Governing documents of the entity making the election shall be of no further force or effect;
(5) Limited partnership formed by such election shall thereupon and thereafter possess all of the rights, privileges, immunities, franchises, and powers of the entity making the election; all property, real, personal, and mixed, all contract rights, and all debts due to such entity, as well as all other choses in action, and each and every other interest of, belonging to, or due to the entity making the election shall be taken and deemed to be vested in the limited partnership formed by such election without further act or deed; the title to any real estate, or any interest in real estate, vested in the entity making the election shall not revert or be in any way impaired by reason of such election; and none of such items shall be deemed to have been conveyed, transferred, or assigned by reason of such election for any purpose; and
(6) Limited partnership formed by such election shall thereupon and thereafter be responsible and liable for all the liabilities and obligations of the entity making the election, and any claim existing or action or proceeding pending by or against such entity may be prosecuted as if such election had not become effective. Neither the rights of creditors nor any liens upon the property of the entity making such election shall be impaired by such election.
(d) A conversion pursuant to this Code section shall not be deemed to constitute a dissolution of the entity making the election and shall constitute a continuation of the existence of the entity making the election in the form of a limited partnership. A limited partnership formed by an election pursuant to this Code section shall for all purposes be deemed to be the same entity as the entity making such election.
(e) A limited partnership formed by the election pursuant to this Code section may file a copy of such certificate of conversion, certified by the Secretary of State, in the office of the clerk of the superior court of the county where any real property owned by such limited partnership is located and record such certified copy of the certificate of conversion in the books kept by such clerk for recordation of deeds in such county with the entity electing to become a limited partnership indexed as the grantor and the limited partnership indexed as the grantee. No real estate transfer tax under Code Section 48-6-1 shall be due with respect to the recordation of such election.
(f) The Secretary of State shall be authorized to promulgate such rules and charge such filing fees as are necessary to carry out the purpose of this Code section.
(a) A limited partnership may correct a document filed by the Secretary of State if the document:
(1) Contains an incorrect statement; or
(2) Was defectively executed, attested, sealed, verified, or acknowledged.
(b) A document is corrected:
(1) By preparing articles of correction that:
(A) Describe the document, including its filing date;
(B) Specify the incorrect statement and the reason it is incorrect or the manner in which the execution was defective; and
(C) Correct the incorrect statement or defective execution; and
(2) By delivering the articles of correction to the Secretary of State for filing.
(c) Articles of correction are effective on the effective date of the document they correct except as to persons relying on the uncorrected document and adversely affected by the correction. As to those persons, articles of correction are effective when filed.
(a) Each domestic limited partnership and each foreign limited partnership authorized to transact business in this state shall deliver to the Secretary of State for filing an annual registration that sets forth:
(1) The name of the limited partnership and the state under whose law it is organized;
(2) The street address and county of its registered office and the name of its registered agent at that office in this state;
(3) The mailing address of its principal office; and
(4) Any additional information that is necessary to enable the Secretary of State to carry out the provisions of this chapter.
(b) Information in the annual registration must be current as of the date the annual registration is executed on behalf of the limited partnership.
(c) The first annual registration must be delivered to the Secretary of State between January 1 and April 1, or such other date as the Secretary of State may specify by rules or regulations, of the year following the calendar year in which a domestic limited partnership was organized or a foreign limited partnership was authorized to transact business. Subsequent annual registrations must be delivered to the Secretary of State between January 1 and April 1, or such other date as the Secretary of State may specify by rules or regulations, of the following calendar years.
(d) If an annual registration does not contain the information required by this Code section, the Secretary of State shall promptly notify the reporting domestic or foreign limited partnership in writing and return the report to it for correction. If the report is corrected to contain the information required by this Code section and delivered to the Secretary of State within 30 days after the effective date of notice, it is deemed to be timely filed.
A limited partnership, domestic or foreign, which fails for three consecutive years to meet any filing requirement of this chapter may be placed on an inactive filing status in the automated data base of the Secretary of State and its name shall become available for reservation pursuant to Code Section 14-9-103. Such inactive status shall not affect any limitation on personal liability of a limited partner as provided by this chapter.
(a) A limited partnership may elect to become a foreign limited liability company, a foreign limited partnership, or a foreign corporation, if such a conversion is permitted by the law of the state or jurisdiction under whose law the resulting entity would be formed.
(b) To effect a conversion under this Code section, the limited partnership must adopt a plan of conversion that sets forth the manner and basis of converting the interests of the partners of the limited partnership into interests, shares, obligations, or other securities, as the case may be, of the resulting entity. The plan of conversion may set forth other provisions relating to the conversion.
(c) The limited partnership shall have the plan of conversion authorized and approved by the unanimous consent of the partners, unless the limited partnership agreement of such limited partnership provides otherwise.
(d) After a conversion is authorized, unless the plan of conversion provides otherwise, and at any time before the conversion has become effective, the planned conversion may be abandoned, subject to any contractual rights, in accordance with the procedure set forth in the plan of conversion or, if none is set forth, by the unanimous consent of the partners of the limited partnership, unless the limited partnership agreement of such limited partnership provides otherwise.
(e) The conversion shall be effected as provided in, and shall have the effects provided by, the law of the state or jurisdiction under whose law the resulting entity is formed and by the plan of conversion, to the extent not inconsistent with such law.
(f) If the resulting entity is required to obtain a certificate of authority to transact business in this state by the provisions of this title governing foreign corporations, foreign limited partnerships, or foreign limited liability companies, it shall do so.
(g) After a plan of conversion is approved by the partners, the limited partnership shall deliver to the Secretary of State for filing a certificate of conversion setting forth:
(1) The name of the limited partnership;
(2) The name and jurisdiction of the entity to which the limited partnership shall be converted;
(3) The effective date, or the effective date and time, of such conversion if later than the date and time the certificate of conversion is filed;
(4) A statement that the plan of conversion has been approved as required by subsection (c) of this Code section;
(5) A statement that the authority of its registered agent to accept service on its behalf is revoked as of the effective time of such conversion and that the Secretary of State is irrevocably appointed as the agent for service of process on the resulting entity in any proceeding to enforce an obligation of the limited partnership arising prior to the effective time of such conversion;
(6) A mailing address to which a copy of any process served on the Secretary of State under paragraph (5) of this subsection may be mailed as provided in subsection (h) of this Code section; and
(7) A statement that the Secretary of State shall be notified of any change in the resulting entity's mailing address.
(h) Upon the conversion's taking effect, the resulting entity is deemed to appoint the Secretary of State as its agent for service of process in a proceeding to enforce any of its obligations arising prior to the effective time of such conversion. Any party that serves process upon the Secretary of State in accordance with this subsection also shall mail a copy of the process to the chief executive officer, chief financial officer, or the secretary of the resulting entity, or a person holding a comparable position, at the mailing address provided in subsection (g) of this Code section.
(i) A converting limited partnership pursuant to this Code section may file a copy of its certificate of conversion, certified by the Secretary of State, in the office of the clerk of the superior court of the county where any real property owned by such limited partnership is located and record such certified copy of the certificate of conversion in the books kept by such clerk for recordation of deeds in such county with the limited partnership indexed as the grantor and the foreign entity indexed as the grantee. No real estate transfer tax otherwise required by Code Section 48-6-1 shall be due with respect to recordation of such certificate of conversion.
Notwithstanding any other law to the contrary, the Secretary of State may provide for the annual registration required under this chapter to be valid for a period up to and including three years. The Secretary of State is authorized to adopt the necessary rules and regulations to implement such a registration process.
(a) Subject to subsection (b) of this Code section, a person may become a limited partner in a limited partnership:
(1) In the case of a person acquiring a partnership interest directly from the limited partnership, upon compliance with the partnership agreement or, if the partnership agreement does not so provide in writing, upon the written consent of all partners; and
(2) In the case of an assignee of a partnership interest, as provided in Code Section 14-9-704.
(b) The effective time of admission of a limited partner to a limited partnership shall be the later of:
(1) The date the limited partnership is formed; or
(2) The time provided in the partnership agreement, or if no such time is provided therein, then when the person's admission is reflected in the records of the limited partnership.
(a) The partnership agreement may grant:
(1) The right to vote to all or certain identified limited partners or specified classes or groups of the limited partners on a per capita or any other basis, separately or with all or any class or group of the limited partners or the general partners, on all matters or on one or more specified matters; and
(2) Dissenters' rights to all or certain identified limited partners.
(b) A partnership agreement that grants a right to vote may set forth provisions relating to notice of the time, place, or purpose of any meeting at which any matter is to be voted on by any limited partners, waiver of any such notice, action by consent without a meeting, the establishment of a record date, quorum requirements, voting in person or by proxy, or any other matter with respect to the exercise of any such right to vote. Subject to such provisions in the partnership agreement, the matters referred to in this subsection may be decided by the general partners.
(c) In addition to the relative rights, powers, and duties authorized by subsections (a) and (b) of this Code section, a partnership agreement may provide for classes or groups of limited partners to have such relative rights, powers, and duties as the partnership agreement may provide.
A limited partner is not liable for the obligations of a limited partnership by reason of being a limited partner and does not become so by participating in the management or control of the business.
(a) Except as provided in subsection (b) of this Code section, and, as between the parties to the business enterprise, except as provided in their agreement, a person who makes a contribution to a business enterprise and erroneously believes that he has become a limited partner in the enterprise is not a general partner in the enterprise and is not bound by its obligations by reason of making the contribution, receiving distributions from the enterprise, or exercising any right of a limited partner, if, on ascertaining the mistake, he:
(1) Causes an appropriate certificate of limited partnership or a certificate of amendment to be executed and filed in accordance with Code Sections 14-9-204 through 14-9-206; or
(2) Files or causes to be filed with the Secretary of State in accordance with the procedures contained in subsection (a) of Code Section 14-9-206 a writing entitled “Filing Pursuant to Paragraph (2) of Subsection (a) of Code Section 14-9-304 of the Official Code of Georgia Annotated” that sets forth:
(A) The name of the limited partnership;
(B) The name and mailing address of the person signing the writing;
(C) That the person signing the writing acquired a limited partnership interest in the partnership;
(D) That the person signing the writing has done one or both of the following:
(i) Requested a general partner of the limited partnership to file an accurate certificate of limited partnership required by this chapter;
(ii) Instituted a proceeding pursuant to Code Section 14-9-205, which proceeding has not been concluded; and
(E) That the writing is being filed pursuant to paragraph (2) of subsection (a) of this Code section, and that the person signing the writing is claiming that he is not a general partner of the limited partnership named in the writing; or
(3) Files or causes to be filed with the Secretary of State in accordance with the procedures contained in subsection (a) of Code Section 14-9-206 a writing entitled “Filing Pursuant to Paragraph (3) of Subsection (a) of Code Section 14-9-304 of the Official Code of Georgia Annotated” that sets forth the information described in subparagraphs (A) through (C) of paragraph (2) of this subsection and the following additional information:
(A) That the person signing the writing has renounced future equity participation in the enterprise; and
(B) That the writing is being filed pursuant to this paragraph, and that the person signing the writing is claiming status as a limited partner of the enterprise for the period including and prior to the filing of the certificate pursuant to this subsection.
(b) A person who makes a contribution of the kind described in subsection (a) is liable as a general partner, irrespective of whether the enterprise is a general partnership, to any third party who transacts business with the enterprise prior to the occurrence of the earliest of the events referred to in subsection (a) of this Code section:
(1) If the contributor knew either that no certificate of limited partnership had been filed or that the certificate inaccurately referred to the contributor as a general partner; and
(2) If the third party reasonably believed that the contributor was a general partner at the time of the transaction and extended credit to the partnership in reasonable reliance on the credit of the contributor.
(c) More than one party claiming limited partnership status under this Code section may sign the writing to be filed pursuant to subsection (a) of this Code section.
(a) Subject to such reasonable procedural standards as may be set forth in the partnership agreement or otherwise established by the general partners, a limited partner may, for any purpose reasonably related to the limited partner's interest as a limited partner:
(1) Upon his reasonable request during ordinary business hours inspect at the registered office of the limited partnership and copy at his expense any partnership record required to be maintained by Code Section 14-9-105;
(2) Upon his reasonable request during ordinary business hours inspect and copy at his expense other partnership books and records of account; and
(3) Obtain from the general partners from time to time upon reasonable request:
(A) True information to such extent and in such form as is reasonably related to such limited partner's interest as a limited partner, regarding the state of the business and financial condition of the limited partnership;
(B) Promptly after becoming available, a copy of the limited partnership's federal, state, and local income tax returns for each year; and
(C) Other information regarding the affairs of the limited partnership as is just and reasonable; provided, however, that a general partner shall have the right to keep confidential from limited partners for such period of time as the general partner deems reasonable, any information which the general partner reasonably believes to be in the nature of trade secrets or other information, the disclosure of which the general partner in good faith believes is not in the best interests of the limited partnership or could damage the limited partnership or its business or which the limited partnership is required by law or by agreement with a third party to keep confidential.
(b) If the limited partnership or a partner or agent of the limited partnership refuses to permit the inspection authorized by subsection (a) of this Code section, the limited partner demanding inspection may apply to the superior court for the county in which the registered office of the limited partnership is located, upon such notice as the court may require, for an order directing the limited partnership, its partners, or agent to show cause why an order permitting such inspection by the applicant should not be granted. The court shall hear the parties summarily, by affidavit or otherwise, and if the limited partnership fails to establish that the applicant is not entitled to such inspection, the court shall grant an order permitting such inspection, subject to any limitations which the court may prescribe, and grant such other relief, including costs and reasonable attorneys' fees, as the court may deem just and proper.
After the formation of a limited partnership, additional general partners may be admitted as provided in writing in the partnership agreement or, if the partnership agreement does not provide in writing for the admission of additional general partners, with the written consent of all partners.
(a) Except as otherwise provided in this chapter or in the partnership agreement, a general partner of a limited partnership has the rights and powers and is subject to the restrictions of and liabilities to the partnership and to the other partners of a partner in a partnership without limited partners.
(b) Except as otherwise provided in this chapter, a general partner of a limited partnership has the liabilities of a partner in a partnership without limited partners to persons other than the partnership and the other partners.
(c) If a limited partnership is a limited liability partnership under Chapter 8 of this title, then, except as otherwise provided in this chapter or in the partnership agreement, the liabilities of each general partner of such limited partnership shall be determined by reference to the provisions of Chapter 8 of this title regarding limited liability partnerships.
A person may be both a general partner and a limited partner in a limited partnership if his interests are separately designated in the partnership agreement. A person who is both a general partner and a limited partner has the rights and powers and is subject to the restrictions and liabilities of a general partner and, except as provided in the partnership agreement, also has the rights and powers and is subject to the restrictions and liabilities, if any, of a limited partner to the extent of his participation in the partnership as a limited partner.
(a) The partnership agreement may grant:
(1) The right to vote to all or certain identified general partners or specified classes or groups of the general partners on a per capita or any other basis, separately or with all or any class or group of the limited partners or the general partners, on all matters or on one or more specified matters; and
(2) Dissenters' rights to all or certain identified general partners.
(b) A partnership agreement that grants a right to vote may set forth provisions relating to notice of the time, place, or purpose of any meeting at which any matter is to be voted on by any general partners, waiver of any such notice, action by consent without a meeting, the establishment of a record date, quorum requirements, voting in person or by proxy, or any other matter with respect to the exercise of any such right to vote. Subject to such provisions in the partnership agreement, the matters referred to in this subsection may be decided by the general partners.
(c) In addition to the relative rights, powers, and duties authorized by subsections (a) and (b) of this Code section and by Code Section 14-9-504, a partnership agreement may provide for classes or groups of general partners having such relative rights, powers, and duties as the partnership agreement may provide.
The contribution of a partner to the capital of a limited partnership may be in such form as is provided in the partnership agreement, including, unless otherwise provided therein but without limitation, cash, property, and services rendered, and may be made in such manner as is provided in the partnership agreement, including, unless otherwise provided therein but without limitation, by delivery of a promissory note or other obligation to contribute cash or property or to perform services.
(a) Notwithstanding any other provision of law regarding unwritten contracts, including but not limited to Code Section 13-5-31, a promise by a person to make a contribution to the capital of a limited partnership is not enforceable unless set out in a writing signed by the person or his attorney in fact.
(b) Except as provided in the partnership agreement:
(1) A partner is obligated to the limited partnership to perform an otherwise enforceable promise to contribute cash or property or to perform services and to pay interest on the agreed contribution from the date the contribution is due; and
(2) This obligation exists even if the partner is unable to perform because of death, disability, or any other reason.
(c) Unless otherwise provided in the partnership agreement, the obligation of a partner to make a contribution to the capital of the partnership may be reduced or eliminated only by consent of all partners.
All deductions, credits, income, gains, losses, and distributions of a limited partnership shall be allocated among the partners, and among classes of partners, in the manner provided in writing in the partnership agreement. If the partnership agreement does not so provide in writing, all allocations shall be made on the basis of the amount, as stated in the partnership records required to be kept pursuant to Code Section 14-9-105, of the contributions made by each partner to the extent that they have been received by the partnership and have not been returned.
(a) A partner is entitled to receive distributions from a limited partnership before his withdrawal from the limited partnership and before the dissolution and winding up thereof only to the extent and at the times or upon occurrence of the events specified in the partnership agreement.
(b) A limited partnership may redeem all or a portion of the interest of any limited or general partner in accordance with the partnership agreement or as agreed among all of the persons who are partners at the time of redemption.
(a) A person ceases to be a general partner of a limited partnership upon the occurrence of one or more of the following events:
(1) The general partner withdraws by voluntary act from the limited partnership as provided in subsection (c) of this Code section;
(2) The general partner ceases to be a member of the limited partnership as provided in paragraph (4) of subsection (a) of Code Section 14-9-702;
(3) The general partner is removed as a general partner in accordance with the partnership agreement;
(4) Unless otherwise provided in writing in the partnership agreement or approved by written consent of all partners at the time, the general partner:
(A) Makes an assignment for the benefit of creditors;
(B) Files a voluntary petition in bankruptcy;
(C) Is adjudicated a bankrupt or insolvent;
(D) Files a petition or answer seeking for himself any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law, or regulation;
(E) Files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against him in any proceeding of this nature; or
(F) Seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator of the general partner or of all or any substantial part of his properties;
(5) Unless otherwise provided in the partnership agreement or approved by written consent of all partners at the time, 120 days after the commencement of any proceeding against the general partner seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law, or regulation, the proceeding has not been dismissed, or if within 90 days after the appointment without his consent or acquiescence of a trustee, receiver, or liquidator of the general partner or of all or any substantial part of his properties, the appointment is not vacated or stayed or within 90 days after the expiration of any stay, the appointment is not vacated;
(6) In the case of a general partner who is an individual:
(A) His death; or
(B) The entry of an order by a court of competent jurisdiction adjudicating him incompetent to manage his person or his estate;
(7) Unless otherwise provided in writing in the partnership agreement or approved by written consent of all partners at the time, in the case of a general partner who is a trust or is acting as a general partner by virtue of being a trustee of a trust, the termination of the trust, but not merely the substitution of a new trustee;
(8) Unless otherwise provided in writing in the partnership agreement or approved by written consent of all partners at the time, in the case of a general partner that is a separate partnership, the dissolution and commencement of winding up of the separate partnership;
(9) Unless otherwise provided in writing in the partnership agreement or approved by written consent of all partners at the time, in the case of a general partner that is a corporation, the filing of a certificate of the corporation's dissolution or the equivalent for the corporation or the revocation of its charter and the lapse of 90 days after notice to the corporation of revocation without a reinstatement of its charter;
(10) In the case of an estate, the distribution by the fiduciary of the estate's entire interest in the partnership; or
(11) Except as approved by written consent of all partners at the time, any event specified in writing in the partnership agreement as resulting in a person ceasing to be a general partner.
(b) The withdrawing general partner shall give such notice of withdrawal, if any, as is provided for in subsection (c) of this Code section or in writing in the partnership agreement and is subject to damages caused by the failure to give such notice or to such penalties, if any, as are provided for in the agreement for failure to give notice.
(c) A general partner may withdraw by voluntary act from a limited partnership at any time by giving 90 days' written notice to the other partners, or such other notice as is provided for in the partnership agreement, but if the withdrawal violates the partnership agreement or it occurs as a result of otherwise wrongful conduct of the general partner, the limited partnership may recover from the withdrawing general partner damages for breach of the partnership agreement, including the reasonable cost of obtaining replacement of the services the withdrawing general partner was obligated to perform and may offset the damages against the amount otherwise distributable to him, in addition to pursuing any remedies provided for in the partnership agreement or otherwise available under applicable law. Unless otherwise provided in the partnership agreement, in the case of a partnership for a definite term or particular undertaking, a withdrawal by a general partner before the expiration of that term or completion of that undertaking is a breach of the partnership agreement.
(d) A general partner who ceases to be a general partner under this Code section shall be personally liable to any creditor who extended credit to the limited partnership prior to the time:
(1) The partnership causes an appropriate certificate of amendment to be executed and filed in accordance with Code Sections 14-9-204 through 14-9-206; or
(2) He or his representative files or causes to be filed with the Secretary of State in accordance with the procedures contained in subsection (a) of Code Section 14-9-206 a writing entitled “Filing Pursuant to Paragraph (2) of Subsection (d) of Code Section 14-9-602 of the Official Code of Georgia Annotated” that sets forth:
(A) The name of the limited partnership;
(B) The name and mailing address of the person signing the writing;
(C) That the person signing the writing has ceased to be a general partner in the partnership;
(D) That the person signing the writing has done one or both of the following:
(i) Requested a general partner of the limited partnership to file an amended certificate of limited partnership;
(ii) Instituted a proceeding pursuant to Code Section 14-9-204, which proceeding has not been concluded; and
(E) That the writing is being filed pursuant to this paragraph and that the person signing the writing is claiming that he has ceased to be a general partner in the partnership named in the writing.
(e) A general partner who ceases to be a general partner under this Code section shall not be personally liable as a general partner for any partnership debt incurred after one of the events specified in subsection (d) of this Code section unless the applicable creditor at the time the partnership debt is incurred had a reasonable basis for believing that the partner remained a general partner. The creditor shall be deemed to have a reasonable basis for believing that the partner remained a general partner if the creditor was a creditor of the partnership at the time of the general partner's withdrawal or had extended credit to the partnership within two years prior to the withdrawal and, in either case, had no knowledge or notice of the general partner's withdrawal.
(f) The filing of a writing or certificate provided for in subsection (d) of this Code section shall not alone constitute notice within the meaning of subsection (e) of this Code section.
A limited partner may withdraw from a limited partnership at the time or upon the occurrence of events specified in writing in the partnership agreement.
Subject to contrary provision in the partnership agreement, a withdrawing partner is entitled to receive, within a reasonable time after withdrawal, the fair value as of the date of withdrawal of the interest in the limited partnership with respect to which the withdrawal has occurred.
Except as provided in writing in the partnership agreement, a partner, regardless of the nature of his contribution, has no right to demand or to receive any distribution from a limited partnership in any form other than cash. Except as provided in writing in the partnership agreement, a partner may not be compelled to accept a distribution of any asset in kind from a limited partnership to the extent that the percentage of the asset distributed to him exceeds a percentage of that asset which is equal to the percentage in which he shares in distributions from the limited partnership.
Except as otherwise provided in the partnership agreement at the time a partner becomes entitled to receive a distribution, he has the status of, and is entitled to all remedies available to, a creditor of the limited partnership with respect to the distribution.
A partnership interest is personal property. A partner has no interest in specific partnership property.
(a) Unless otherwise provided in the partnership agreement:
(1) A partnership interest is assignable in whole or in part;
(2) An assignment of a partnership interest does not dissolve a limited partnership or entitle the assignee to become or to exercise any rights of a partner;
(3) An assignment entitles the assignee to receive, to the extent assigned, the assignor's partnership interest;
(4) Until the assignee of a partnership interest becomes a partner, the assignor partner continues to be a partner and to have the power to exercise any rights or powers of a partner, except to the extent those rights or powers are assigned; provided that on the assignment by a general partner of all of the general partner's rights as a general partner, the general partner's status as a general partner may be terminated by the affirmative vote of a majority in interest of the limited partners;
(5) Until an assignee of a partnership interest becomes a partner, the assignee has no liability as a partner solely as a result of the assignment; and
(6) The assignor of a partnership interest is not released from his liability as a partner solely as a result of the assignment.
(b) A written partnership agreement may provide that a partner's partnership interest may be evidenced by a certificate of partnership interest issued by the limited partnership and may also provide for the assignment or transfer of a partnership interest represented by such a certificate and make other provisions with respect to those certificates.
(a) On application to a competent court by a judgment creditor of a partner or of any assignee of a partner, the court may charge the partnership interest of the partner or such assignee with payment of the unsatisfied amount of the judgment, with interest. To the extent so charged, the judgment creditor has only the rights of an assignee of the partnership interest. This chapter shall not deprive any partner of the benefit of any exemption laws applicable to his partnership interest.
(b) The remedy conferred by this Code section shall not be deemed exclusive of others which may exist, including, without limitation, the right of a judgment creditor to reach the interest of a partner in the partnership by process of garnishment served on the partnership.
(a) An assignee of a partnership interest, including an assignee of a general partner, may become a limited partner if and to the extent that:
(1) The partnership agreement so provides; or
(2) All other partners consent.
(b) An assignee who has become a limited partner has, to the extent assigned, the rights and powers and is subject to the restrictions and liabilities of a limited partner under the partnership agreement and this chapter. An assignee who becomes a limited partner also is liable for the obligations of his assignor to make contributions as provided in Code Section 14-9-502. However, unless otherwise agreed between the assignee and the assignor, such assignee is not obligated for liabilities unknown to the assignee at the time he became a limited partner and which could not be ascertained from the written partnership agreement.
(c) Subject to contrary provision in the partnership agreement, if an assignee of a partnership interest becomes a limited partner, the assignor is not released from his liability to the limited partnership under Code Section 14-9-502.
(a) If a partner who is an individual dies or a court of competent jurisdiction adjudges him to be incompetent to manage his person or his property, the partner's executor, administrator, conservator, or other legal representative may exercise all the partner's rights for the purpose of settling his estate or administering his property, including any power the partner had to give an assignee the right to become a limited partner. If a partner is a corporation, trust, or other entity and is dissolved or terminated, the powers of that partner may be exercised by its legal representative or successor.
(b) The estate of a deceased partner or the successor of a partner that is a dissolved or terminated corporation, trust, or other entity shall be liable for all of the partner's liabilities as a partner.
A limited partnership is dissolved and its affairs must be wound up upon the first of the following to occur:
(1) Events specified in writing in the partnership agreement;
(2) Written consent of all partners;
(3) An event of withdrawal of a general partner unless:
(A) There remains at least one other general partner and the written provisions of the partnership agreement permit the business of the limited partnership to be carried on by the remaining general partner or general partners alone or together with new general partners, and that partner or those general partners do so; or
(B) Within 90 days after the withdrawal, all partners other than the general partner with respect to which the event of withdrawal has occurred (or such partners as are provided for in the written provisions of the partnership agreement) agree in writing to continue the business of the limited partnership and, if there is no remaining general partner, to the appointment, effective as of the date of withdrawal, of one or more new general partners; or
(4) Entry of a decree of judicial dissolution under Code Section 14-9-802.
On application by or for a partner, the court may decree dissolution of a limited partnership whenever:
(1) It is not reasonably practicable to carry on the business in conformity with the partnership agreement; or
(2) A general partner has been guilty of such misconduct as tends to affect prejudicially the carrying on of the business.
(a) After dissolution, except as provided in the partnership agreement, the general partners who have not withdrawn or, if none, the limited partners may wind up the limited partnership's affairs but, if one or more of such general partners have engaged in wrongful conduct, or upon other cause shown, the court may wind up the limited partnership's affairs upon application of a partner, his legal representative, or assignee.
(b) Unless otherwise provided in writing in the partnership agreement, the persons winding up the limited partnership's affairs may, in the name of, and for and on behalf of, the limited partnership:
(1) Prosecute and defend suits, whether civil, criminal, or administrative;
(2) Settle and close the limited partnership's business;
(3) Dispose of and convey the limited partnership's property for cash;
(4) Discharge the limited partnership's liabilities; and
(5) Distribute to the partners any remaining assets of the limited partnership.
Upon the winding up of a limited partnership, the assets must be distributed as follows:
(1) To creditors, including partners who are creditors, to the extent permitted by law, in satisfaction of liabilities of the limited partnership other than liabilities for distributions to partners under Code Section 14-9-601 or 14-9-604;
(2) Except as provided in the partnership agreement, to partners and former partners in satisfaction of liabilities for distributions under Code Section 14-9-601 or 14-9-604; and
(3) Except as provided in the partnership agreement, to partners first for the return of their contributions and second, respecting their partnership interests, in the proportions in which the partners share in distributions.
Deeds or other transfer instruments requiring execution after the filing of a certificate of cancellation by a dissolved limited partnership may be signed by any person who had authority to wind up the dissolved partnership under the provisions of subsection (a) of Code Section 14-9-803.
Subject to the Constitution of this state:
(1) The laws of the state under which a foreign limited partnership is organized govern its organization and internal affairs and the liability of its limited partners regardless of whether the foreign limited partnership procured or should have procured a certificate of authority under this chapter; and
(2) A foreign limited partnership may not be denied a certificate of authority by reason of any difference between those laws and the laws of this state.
(a) A foreign limited partnership transacting business in this state shall procure a certificate of authority to do so from the Secretary of State. In order to procure a certificate of authority to transact business in this state, a foreign limited partnership shall submit to the Secretary of State an application for a certificate of authority as a foreign limited partnership, signed by a general partner setting forth:
(1) The name of the foreign limited partnership and, if different, the name under which it proposes to qualify and transact business in this state;
(2) The state and date of its formation;
(3) The name and address of any qualified agent for service of process on the foreign limited partnership as required to be maintained by Code Section 14-9-902.1;
(4) A statement that the Secretary of State is, pursuant to subsection (i) of Code Section 14-9-902.1, appointed the agent of the foreign limited partnership for service of process if no agent has been appointed under subsection (a) of Code Section 14-9-902.1 or, if appointed, the agent's authority has been revoked or the agent cannot be found by the exercise of reasonable diligence or served;
(5) The address of the office required to be maintained in the state of its organization by the laws of that state or, if not so required, of the principal office of the foreign limited partnership;
(6) The name and business address of each general partner; and
(7) The address of the office, if any, at which is kept a list of the names and addresses of the limited partners and their capital contributions, together with an undertaking by the foreign limited partnership to keep those records until the foreign limited partnership's registration in this state is canceled or withdrawn.
(b) Without excluding other activities which may not constitute transacting business in this state, a foreign limited partnership shall not be considered to be transacting business in this state, for the purpose of qualification under this chapter, solely by reason of carrying on in this state any one or more of the following activities:
(1) Maintaining or defending any action or administrative or arbitration proceeding or effecting the settlement thereof or the settlement of claims or disputes;
(2) Holding meetings of its partners or carrying on other activities concerning its internal affairs;
(3) Maintaining bank accounts, share accounts in savings and loan associations, custodial or agency arrangements with a bank or trust company, or stock or bond brokerage accounts;
(4) Maintaining offices or agencies for the transfer, exchange, and registration of its partnership interests, or appointing and maintaining trustees or depositaries with relation to its partnership interests;
(5) Effecting sales through independent contractors;
(6) Soliciting or procuring orders, whether by mail or through employees or agents or otherwise, where such orders require acceptance outside this state before becoming binding contracts and where such contracts do not involve any local performance other than delivery and installation;
(7) Making loans or creating or acquiring evidences of debt, mortgages, or liens on real or personal property, or recording same;
(8) Securing or collecting debts or enforcing any rights in property securing the same;
(9) Owning, without more, real or personal property;
(10) Conducting an isolated transaction not in the course of a number of repeated transactions of a like nature;
(11) Effecting transactions in interstate or foreign commerce;
(12) Serving as trustee, executor, administrator, or guardian, or in like fiduciary capacity, where permitted so to serve by the laws of this state; or
(13) Owning directly or indirectly an interest in or controlling directly or indirectly another person organized under the laws of or transacting business within this state.
(c) This Code section shall not be deemed to establish a standard for activities that may subject a foreign limited partnership to taxation or to service of process under any of the laws of this state.
(a) Each foreign limited partnership that is required to obtain a certificate of authority to do business in this state shall continuously maintain in this state an agent for service of process on the foreign limited partnership.
(b) An agent for service of process must be an individual resident of this state, a domestic corporation, professional corporation, or limited liability company, or a foreign corporation or limited liability company authorized to do business in this state.
(c) A foreign limited partnership may change its registered office or its registered agent or agents, or both, by executing and filing in the office of the Secretary of State a statement setting forth:
(1) The name of the foreign limited partnership;
(2) The address of its then registered office;
(3) If the address of its registered office is to be changed, the new address of the registered office;
(4) The name or names of its then registered agent or agents;
(5) If its registered agent or agents are to be changed, the name or names of its successor registered agent or agents; and
(6) That the address of its registered office and the address of the business office of its resident agent or agents, as changed, will be identical.
(d) If the Secretary of State finds that such statement conforms to subsection (a) of this Code section, he shall file such statement in his office; and upon such filing the change of address of the registered office or the change of the registered agent or agents, or both, as the case may be, shall become effective.
(e) Any registered agent of a foreign limited partnership may resign as such agent upon filing a written notice thereof with the Secretary of State. The appointment of such agent shall terminate upon the expiration of 30 days after receipt of such notice by the Secretary of State. There shall be attached to such notice an affidavit of such agent, if an individual, or of an officer thereof, if a corporation, that at least ten days prior to the date of filing such notice a written notice of the agent's intention to resign was mailed or delivered to the president, secretary, or treasurer of the corporation for which such agent is acting. Upon such resignation becoming effective, the address of the business office of the resigned registered agent shall no longer be the address of the registered office of the limited partnership.
(f) A registered agent may change his or its business address and the address of the registered office of any foreign limited partnership of which he or it is registered agent to another place within this state by filing a statement as required in subsection (c) of this Code section, except that it need be signed only by the registered agent and need not be responsive to paragraph (5) of subsection (c) of this Code section and must recite that a copy of the statement has been mailed or delivered to a representative or agent of each such limited partnership other than the notifying registered agent.
(g) The registered agent of one or more foreign limited partnerships may resign and appoint a successor registered agent by filing a statement with the Secretary of State stating that he or it resigns and the name and address of the successor registered agent. There shall be attached to such certificate a statement executed by each affected foreign limited partnership ratifying and approving such change of registered agent. Upon such filing, the successor registered agent shall become the registered agent of such foreign limited partnerships as have ratified and approved such substitution, and the successor registered agent's address, as stated in such statement, shall become the address of each such limited partnership's registered office in this state. The Secretary of State shall furnish to the successor registered agent a certified copy of the statement of resignation.
(h) All general partners of, and the registered agent of a foreign limited partnership authorized in this state, are agents of the foreign limited partnership on whom may be served any process, notice, or demand required or permitted by law to be served on the foreign limited partnership.
(i) Whenever a foreign limited partnership required to procure a certificate of authority to do business in this state shall fail to appoint or maintain a registered agent in this state, or whenever its registered agent cannot with reasonable diligence be found at the registered office, the Secretary of State shall be an agent of such foreign limited partnership upon whom any process, notice, or demand may be served. Service on the Secretary of State of any such process, notice, or demand shall be made by delivering to and leaving with him or with any persons designated by the Secretary of State to receive such service a copy of such process, notice, or demand. The plaintiff or his attorney shall certify in writing to the Secretary of State that the foreign limited partnership has failed either to maintain a registered office or appoint a registered agent in this state and that he has forwarded by registered mail or statutory overnight delivery such process, service, or demand to the last registered office or agent listed on the records of the Secretary of State and that service cannot be effected at such office.
(j) The Secretary of State shall keep a record of all processes, notices, and demands served upon him under this Code section and shall record therein the time of such service and his action with reference thereto.
(a) If the Secretary of State finds that an application for certificate of authority conforms to law and all requisite fees and any penalty due pursuant to Code Section 14-9-907 have been paid, he shall:
(1) Stamp or otherwise endorse his official title and the date and time of receipt on the application;
(2) File in his office a copy of the application; and
(3) Issue a certificate of authority to transact business in this state.
(b) The certificate of authority must be returned to the person who filed the application or his representative.
(c) If the certificate of authority is issued by the Secretary of State, a foreign limited partnership shall be deemed authorized to transact business in this state from the time of filing its application for the certificate of authority.
(a) A foreign limited partnership may apply for a certificate of authority with the Secretary of State under any name, whether or not it is the name under which it is registered in its state of organization, that could be registered by a domestic limited partnership.
(b) Except as provided in subsection (c) of this Code section, whenever a foreign limited partnership is unable to obtain a certificate of authority to transact business in this state because its name does not comply with any part of Code Section 14-9-102, it may nonetheless apply for authority to transact business in this state by adding in parentheses to its name in such application a word, abbreviation, or other distinctive and distinguishing element such as the name of the state where it is organized. If in the judgment of the Secretary of State the name of the limited partnership with such addition would comply with Code Section 14-9-102, said Code section shall not be a bar to the issuance to such limited partnership of a certificate of authority to transact business in this state. In such case, any such certificate issued to such foreign limited partnership shall be issued in its name with such additions, and the limited partnership shall use such name with such additions in all its dealings with the Secretary of State and in the conduct of its affairs in this state.
(c) Whenever the name of a foreign limited partnership that was organized prior to July 1 of the year in which this chapter becomes effective and that on such date is transacting business in this state does not comply with any part of Code Section 14-9-102, such foreign limited partnership may nonetheless apply for authority to transact business in this state and Code Section 14-9-102 shall not be a bar to the issuance to such limited partnership of a certificate of authority to transact business in this state; provided, however, in any such case such foreign limited partnership shall be distinguished on the records of the Secretary of State by the Secretary of State's adding to the name of such foreign limited partnership on its records in parentheses the name of the state in which it was organized and, if necessary to distinguish multiple partnerships having such characteristics and making such application that were organized in the same state, by adding a numerical distinction to the state name. Such addition of a state name and numerical distinction to the name of a foreign limited partnership by the Secretary of State shall be solely for the purpose of distinguishing limited partnerships on the files of the Secretary of State, shall not constitute a change in the name of the foreign limited partnership, and shall have no effect whatsoever on the authority of the foreign limited partnership to use its name.
(a) A foreign limited partnership authorized to transact business in this state must obtain an amended certificate of authority from the Secretary of State if it changes its name or its state of organization. The requirements of Code Sections 14-9-902 and 14-9-903 for obtaining an original certificate of authority shall apply to obtaining an amended certificate under this Code section.
(b) If a foreign limited partnership authorized to transact business in this state converts into a foreign limited liability company:
(1) The foreign limited partnership shall notify the Secretary of State that such conversion has occurred no later than 30 days after the conversion, using such form as the Secretary of State shall specify, which form may require such information and statements as may be required to be submitted by a foreign limited liability company that applies for a certificate of authority to transact business in this state; and
(2) If such notice is timely given:
(A) The authorization of such entity to transact business in this state shall continue without interruption; and
(B) The certificate of authority issued to such foreign limited partnership under this article shall constitute a certificate of authority issued under Code Section 14-11-704 to the foreign limited liability company resulting from the conversion effective as of the date of the conversion.
The Secretary of State shall adjust its records accordingly.
(c) If a foreign limited partnership authorized to transact business in this state converts into a foreign corporation:
(1) The foreign limited partnership shall notify the Secretary of State that such conversion has occurred no later than 30 days after the conversion, using such form as the Secretary of State shall specify, which form may require such information and statements as may be required to be submitted by a foreign corporation that applies for a certificate of authority to transact business in this state; and
(2) If such notice is timely given:
(A) The authorization of such entity to transact business in this state shall continue without interruption; and
(B) The certificate of authority issued to such foreign limited partnership under this article shall constitute a certificate of authority issued under Code Sections 14-2-1501 and 14-2-1503 to the foreign corporation resulting from the conversion effective as of the date of the conversion.
The Secretary of State shall adjust its records accordingly.
A foreign limited partnership authorized to transact business in this state may apply for a certificate of withdrawal by delivering to the Secretary of State for filing an application that sets forth:
(1) The name of the limited partnership and the name of the jurisdiction under whose law it is organized;
(2) That it is not transacting business in this state and that it surrenders its authority to transact business in this state;
(3) That it revokes the authority of its registered agent to accept service on its behalf and appoints the Secretary of State as its agent for service of process in any proceeding based on a cause of action arising during the time it was authorized to transact business in this state;
(4) A mailing address to which a copy of any process served on the Secretary of State pursuant to paragraph (3) of this Code section may be mailed; and
(5) A commitment to notify the Secretary of State in the future of any change in the mailing address provided pursuant to paragraph (4) of this Code section.
(a) A foreign limited partnership transacting business in this state may not maintain an action, suit, or proceeding in a court of this state until it has obtained a certificate of authority.
(b) The failure of a foreign limited partnership to obtain a certificate of authority does not impair the validity of any contract or act of the foreign limited partnership or prevent the foreign limited partnership from defending any action, suit, or proceeding in any court of this state.
(c) A foreign limited partnership that transacts business in this state without registering as required by this article shall be liable to the state:
(1) For all fees which would have been imposed by this article upon such foreign limited partnership had it registered as required by this article; and
(2) If it has not registered within 30 days after the first day on which it transacts business in this state, for a penalty of $ 500.00.
The Attorney General may maintain an action to restrain a foreign limited partnership from transacting business in this state in violation of this chapter.
A limited partner may maintain an action in the right of a limited partnership to recover a judgment in its favor if general partners with authority to do so have refused to bring the action or an effort to cause those general partners to bring the action is not likely to succeed. The foregoing authority to bring an action in the right of a limited partnership shall not limit any right a limited partner might have under the partnership agreement or otherwise.
Except to the extent provided by the partnership agreement, in a derivative action, the plaintiff must be a partner at the time of bringing the action and:
(1) Must have been a partner at the time of the transaction of which he complains; or
(2) His status as a partner must have devolved upon him by operation of law or pursuant to the terms of the partnership agreement from a person who was a partner at the time of the transaction.
In a derivative action, the complaint must set forth with particularity the effort of the plaintiff to secure commencement of the action by a general partner or the reasons for not making the effort.
If a derivative action is successful, in whole or in part, or if anything is received by the plaintiff as a result of a judgment, compromise, or settlement of an action or claim, the court may award the plaintiff reasonable expenses, including reasonable attorneys' fees, and shall direct him to remit to the limited partnership the remainder of those proceeds received by him.
The Secretary of State shall charge and collect for filing:
| | Document | Fee | | --- | --- | --- | | | (1) A certificate of limited partnership․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․$ 100.00 | | | (2) A registration of a foreign limited partnership․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․225.00 | | | (3) An annual registration․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․50.00 | | | (4) Penalty for late filing of annual registration․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․25.00 | | | (5) Agent's statement of resignation․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․No fee | | | (6) Certificate of cancellation․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․No fee | | | (7) Application of withdrawal․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․No fee | | | (8) Statement of change of address of registered agent or registered office․․․ $5.00 per limited partnership but not less than | ․․․․․․20.00 | | | (9) An amendment to a certificate of limited partnership for the purpose of becoming a limited liability partnership | ․․․․․100.00 | | | (10) Certificate of election to become a limited partnership․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․80.00 | | | (11) Certificate of conversion․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․95.00 | | | (12) Application for reservation of a name․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․25.00 | | | (13) Any other document required or permitted pursuant to this chapter․․․․․․․․․․․․․․․ | ․․․․․ 20.00 |
The Secretary of State shall have the power and authority reasonably necessary to enable him to administer this chapter efficiently and to perform the duties therein imposed upon him, including, without limitation, the power and authority to employ from time to time such additional personnel as in his judgment are required for those purposes.
The Secretary of State may promulgate such rules and regulations, not inconsistent with the provisions of this chapter, which are incidental to and necessary for the implementation and enforcement of such provisions of this chapter as are administered by the Secretary of State. Such rules and regulations shall be promulgated in accordance with Chapter 13 of Title 50, the “Georgia Administrative Procedure Act.”
The Secretary of State's duty to file documents under this chapter is ministerial. His filing or refusing to file a document does not:
(1) Affect the validity or invalidity of the document in whole or part;
(2) Relate to the correctness or incorrectness of information contained in the document; or
(3) Create a presumption that the document is valid or invalid or that information contained in the document is correct or incorrect.
(a) This chapter governs all domestic limited partnerships formed on or after July 1 of the year in which this chapter becomes effective and all foreign limited partnerships transacting business in this state on or after July 1 of the year in which this chapter becomes effective.
(b) A domestic limited partnership formed before July 1 of the year in which this chapter becomes effective may voluntarily elect, in accordance with any provision in its partnership agreement permitting it to do so or by complying with the procedures provided in its partnership agreement for amending the partnership agreement, to adopt the provisions of this chapter and thereafter may become subject to its provisions as of July 1 of the year in which this chapter becomes effective by filing with the Secretary of State at any time after April 15 of the year in which this chapter becomes effective a certificate of limited partnership that complies with this chapter or a certificate of amendment that would cause its certificate of limited partnership to comply with this chapter and that, in each case, specifically states that the limited partnership is electing to adopt the provisions of this chapter. Upon the later of July 1 of the year in which this chapter becomes effective or the filing of a document complying with the immediately preceding sentence, all provisions of this chapter shall thereafter apply to the limited partnership.
(c) A domestic limited partnership formed before July 1 of the year in which this chapter becomes effective that does not adopt the provisions of this chapter pursuant to subsection (b) of this Code section shall continue to be governed by Article 1 or Article 2 of Chapter 9A of this title, as applicable.
(a) This chapter shall not apply to limited partnerships existing before July 1 of the year in which this chapter becomes effective except as provided in Code Section 14-9-1201.
(b) This chapter shall not be construed so as to impair, or otherwise affect, the organization or the continued existence of a limited partnership existing before July 1 of the year in which this chapter becomes effective. This chapter shall not be construed so as to impair any contract or to affect any action or proceedings begun or right accrued before July 1 of the year in which this chapter becomes effective.
(a) The intent of this Code section is to ensure an orderly transition to a centralized filing system for limited partnerships and to give existing limited partnerships an opportunity to establish name availability and other files with the Secretary of State to permit an orderly implementation of this chapter.
(b) In order to preserve the availability of its name, a domestic limited partnership or a foreign limited partnership existing prior to July 1 of the year in which this chapter becomes effective may file with the Secretary of State a nonrenewable one-year name reservation after April 15 and before July 1 of the year in which this chapter becomes effective. Any of such limited partnerships which do not so file shall be subject to the name restrictions of Code Section 14-9-102.
The provisions of Chapter 8 of this title, known as the “Uniform Partnership Act,” shall govern in any case not provided for in this chapter.
This article shall be known and may be cited as the “Uniform Limited Partnership Act.”
A limited partnership is a partnership formed by two or more persons under Code Section 14-9A-20, having as members one or more general partners and one or more limited partners. The limited partners as such shall not be bound by the obligations of the partnership.
This article is applicable only to limited partnerships to which Chapter 9 of this title or Article 2 of this chapter does not apply as provided by Code Section 14-9-1201 or 14-9A-110.
(a) The rule that statutes in derogation of the common law are to be strictly construed shall have no application to this article.
(b) This article shall be so interpreted and construed as to effect its general purpose to make uniform the law of those states which enact it.
(c) This article shall not be so construed as to impair the obligations of any contract existing when the article goes into effect, nor to affect any action on proceedings begun or right accrued before this article takes effect.
In any case not provided for in this article, the rules of law and equity, including the law merchant, shall govern.
(a) A limited partnership formed under any statute of this state prior to the adoption of this article may become a limited partnership under this article by complying with Code Section 14-9A-20, provided the certificate sets forth:
(1) The amount of the original contribution of each limited partner and the time when the contribution was made; and
(2) That the property of the partnership exceeds the amount sufficient to discharge its liabilities to persons not claiming as general or limited partners by an amount greater than the sum of the contributions of its limited partners.
(b) A limited partnership formed under any statute of this state prior to the adoption of this article, until or unless it becomes a limited partnership under this article, shall continue to be governed by Article 2 of this chapter, except that such partnership shall not be renewed unless so provided in the original agreement.
(a) Two or more persons desiring to form a limited partnership shall:
(1) Sign and swear to a certificate, which shall state:
(A) The name of the partnership;
(B) The character of the business;
(C) The location of the principal place of business;
(D) The name and place of residence of each member, designating which of the members are general partners and which are limited partners;
(E) The term for which the partnership is to exist, or that it is to exist until terminated by law or according to the termination provisions of the partnership agreement, which provisions shall be set forth in the certificate;
(F) The amount of cash and a description and the agreed value of the other property contributed by each limited partner;
(G) The additional contributions, if any, agreed to be made by each limited partner and the times at which or events upon the happening of which they shall be made;
(H) The time, if agreed upon, when the contribution of each limited partner is to be returned;
(I) The share of the profits or the other compensation by way of income which each limited partner shall receive by reason of his contribution;
(J) The right, if given, of a limited partner to substitute an assignee as contributor in his place and the terms and conditions of the substitution;
(K) The right, if given, of the partners to admit additional limited partners;
(L) The right, if given, of one or more of the limited partners to priority over other limited partners, as to contributions or as to compensation by way of income, and the nature of such priority;
(M) The right, if given, of the remaining general partner or partners to continue the business on the death, retirement, or insanity of a general partner; and
(N) The right, if given, of a limited partner to demand and receive property other than cash in return for his contribution.
(2) File the certificate in the office of the clerk of the superior court of the county in which the principal place of business of the partnership shall be situated, to be recorded by the clerk in a book to be kept for that purpose and open to public inspection. If the partnership shall have places of business situated in different counties, a transcript of the certificate, duly certified by the clerk in whose office it shall be filed and under his official seal, shall be filed and recorded in like manner in the office of the clerk of the superior court in every such county.
(b) A limited partnership is formed if there has been substantial compliance in good faith with the requirements of subsection (a) of this Code section.
(a) A limited partnership may carry on any business which a partnership without limited partners may carry on, except for banking, insurance, railroad, trust, canal, navigation, express, and telegraph businesses.
(b) A limited partnership may acquire property of any nature and take title thereto in the name of the partnership. The specification of this power shall not be construed to limit any other power which such limited partnership may have.
(a) The surname of a limited partner shall not appear in the partnership name, unless:
(1) It is also the surname of a general partner; or
(2) Prior to the time when the limited partner became such, the business had been carried on under a name in which his surname appeared.
(b) A limited partner whose name appears in a partnership name contrary to subsection (a) of this Code section is liable as a general partner to partnership creditors who extend credit to the partnership without actual knowledge that he is not a general partner.
After the formation of a limited partnership, additional limited partners may be admitted upon filing an amendment to the original certificate in accordance with the requirements of Code Section 14-9A-26.
(a) A person may be a general partner and a limited partner in the same partnership at the same time.
(b) A person who is at the same time both a general and a limited partner shall have all the rights and powers and be subject to all the restrictions of a general partner, except that, in respect to his contributions, he shall have the rights against the other members which he would have had as a limited partner if he were not also a general partner.
(a) The certificate required under Code Section 14-9A-20 shall be canceled when the partnership is dissolved or all limited partners cease to be such.
(b) A certificate shall be amended when:
(1) There is a change in the name of the partnership or in the amount or character of the contribution of any limited partner;
(2) A person is substituted as a limited partner;
(3) An additional limited partner is admitted;
(4) A person is admitted as a general partner;
(5) A general partner retires, dies, or becomes insane and the business is continued under Code Section 14-9A-90;
(6) There is a change in the character of the business of the partnership;
(7) There is a false or erroneous statement in the certificate;
(8) There is a change in the time as stated in the certificate for the dissolution of the partnership or for the return of a contribution;
(9) A time is fixed for the dissolution of the partnership or the return of a contribution, no time having been specified in the certificate; or
(10) The members desire to make a change in any other statement in the certificate in order that it shall accurately represent the agreement between them.
(a) The writing to amend a certificate shall:
(1) Conform to the requirements of paragraph (1) of subsection (a) of Code Section 14-9A-20 as far as necessary to set forth clearly the change in the certificate which it is desired to make; and
(2) Be signed and sworn to by all members. An amendment substituting a limited partner or adding a limited or general partner shall be signed also by the member to be substituted or added; and when a limited partner is to be substituted, the amendment shall also be signed by the assigning limited partner.
(b) The writing to cancel a certificate shall be signed by all members.
(c) A person desiring the cancellation or amendment of a certificate, if any person designated in subsections (a) and (b) of this Code section as a person who must execute the writing refuses to do so, may petition the superior court of the county wherein the principal place of business of said partnership is situated to direct a cancellation or amendment thereof.
(d) If the court finds that the petitioner has a right to have the writing executed by a person who refuses to do so, it shall order the clerk of the superior court in the office where the certificate is recorded to record the cancellation or amendment of the certificate; and where the certificate is to be amended, the court shall also cause to be filed for record in said office a certified copy of its decree setting forth the amendment.
(e) A certificate is amended or canceled when there is filed for record in the office of the clerk of the superior court where the certificate is recorded:
(1) A writing in accordance with subsection (a) or (b) of this Code section; or
(2) A certified copy of the order of court in accordance with subsection (d) of this Code section.
(f) After the certificate is duly amended in accordance with this Code section, the amended certificate shall thereafter be for all purposes the certificate provided for by this article.
If the certificate required under Code Section 14-9A-20 contains a false statement, one who suffers loss by reliance on such statement may hold liable any party to the certificate who knew the statement to be false:
(1) At the time he signed the certificate; or
(2) Subsequently, but within a sufficient time before the statement was relied upon to enable him to cancel or amend the certificate or to file a petition for its cancellation or amendment as provided in subsection (c) of Code Section 14-9A-26.
The contributions of a limited partner may be cash or other property but not services.
A limited partner shall not become liable as a general partner unless, in addition to the exercise of his rights and powers as a limited partner, he takes part in the control of the business.
(a) A limited partner shall have the same rights as a general partner to:
(1) Have the partnership books kept at the principal place of business of the partnership and at all times to inspect and copy any of them;
(2) Have on demand true and full information of all things affecting the partnership and a formal account of partnership affairs whenever circumstances render it just and reasonable; and
(3) Have dissolution and winding up by decree of court.
(b) A limited partner shall have the right to receive a share of the profits or other compensation by way of income and to the return of his contribution as provided in Code Sections 14-9A-46 and 14-9A-47.
A person who has contributed to the capital of a business conducted by a person or partnership erroneously believing that he has become a limited partner in a limited partnership is not, by reason of his exercise of the rights of a limited partner, a general partner with the person or in the partnership carrying on the business, or bound by the obligations of such person or partnership if, on ascertaining the mistake, he promptly renounces his interest in the profits of the business or other compensation by way of income.
(a) A limited partner may loan money to and transact other business with the partnership and, unless he is also a general partner, receive on account of resulting claims against the partnership, with general creditors, a pro rata share of the assets. No limited partner shall in respect to any such claim:
(1) Receive or hold as collateral security any partnership property; or
(2) Receive from a general partner or the partnership any payment, conveyance, or release from liability, if at the time the assets of the partnership are not sufficient to discharge partnership liabilities to persons not claiming as general or limited partners.
(b) The receiving of collateral security, or a payment, conveyance, or release in violation of subsection (a) of this Code section is a fraud on the creditors of the partnership.
Where there are several limited partners, the members may agree that one or more of the limited partners shall have a priority over other limited partners as to the return of their contributions, as to their compensation by way of income, or as to any other matter. If such an agreement is made, it shall be stated in the certificate required under Code Section 14-9A-20, and in the absence of such a statement all the limited partners shall stand upon equal footing.
A limited partner may receive from the partnership the share of the profits or the compensation by way of income stipulated in the certificate, provided that after such payment is made, whether from the property of the partnership or that of a general partner, the partnership assets are in excess of all liabilities of the partnership except liabilities to limited partners on account of their contributions and to general partners.
(a) A limited partner shall not receive from a general partner or out of partnership property any part of his contribution until:
(1) All liabilities of the partnership, except liabilities to general partners and to limited partners on account of their contributions, have been paid or there remains property of the partnership sufficient to pay them;
(2) The consent of all members is had, unless the return of the contribution may be rightfully demanded under subsection (b) of this Code section; and
(3) The certificate required under Code Section 14-9A-20 is canceled or so amended as to set forth the withdrawal or reduction.
(b) Subject to subsection (a) of this Code section a limited partner may rightfully demand the return of his contribution:
(1) On the dissolution of a partnership; or
(2) When the date specified in the certificate for its return has arrived; or
(3) After he has given six months' notice in writing to all other members, if no time is specified in the certificate, either for the return of the contribution or for the dissolution of the partnership.
(c) In the absence of any statement in the certificate to the contrary or of the consent of all members, a limited partner, irrespective of the nature of his contribution, has only the right to demand and receive cash in return for his contribution.
(d) A limited partner may have the partnership dissolved and its affairs wound up when:
(1) He rightfully but unsuccessfully demands the return of his contribution; or
(2) The other liabilities of the partnership have not been paid, or the partnership property is insufficient for their payment as required by paragraph (1) of subsection (a) of this Code section and the limited partner would otherwise be entitled to the return of his contribution.
(a) A limited partner is liable to the partnership:
(1) For the difference between his contribution as actually made and that stated in the certificate required under Code Section 14-9A-20 as having been made; and
(2) For any unpaid contribution which he agreed in the certificate to make in the future at the time and on the conditions stated in the certificate.
(b) A limited partner holds as trustee for the partnership:
(1) Specific property stated in the certificate as contributed by him, but which was not contributed or which has been wrongfully returned; and
(2) Money or other property wrongfully paid or conveyed to him on account of his contribution.
(c) The liabilities of a limited partner as set forth in this Code section can be waived or compromised only by the consent of all members; but a waiver or compromise shall not affect the right of a creditor of a partnership, who extended credit or whose claim arose after the filing and before a cancellation or amendment of the certificate, to enforce such liabilities.
(d) When a contributor has rightfully received the return in whole or in part of the capital of his contribution, he is nevertheless liable to the partnership for any sum, not in excess of such return with interest, necessary to discharge its liabilities to all creditors who extended credit or whose claims arose before such return.
A limited partner's interest in the partnership is personal property.
(a) A limited partner's interest is assignable.
(b) A substituted limited partner is a person admitted to all the rights of a limited partner who has died or has assigned his interest in a partnership.
(c) An assignee who does not become a substituted limited partner has no right to require any information or account of the partnership transactions or to inspect the partnership books; he is only entitled to receive the share of the profits or other compensation by way of income, or the return of his contribution, to which his assignor would otherwise be entitled.
(d) An assignee shall have the right to become a substituted limited partner if all the members, except the assignor, consent thereto or if the assignor, being thereunto empowered by the certificate required under Code Section 14-9A-20, gives the assignee that right.
(e) An assignee becomes a substituted limited partner when the certificate is appropriately amended in accordance with Code Section 14-9A-26.
(f) The substituted limited partner has all the rights and powers and is subject to all the restrictions and liabilities of his assignor, except those liabilities of which he was ignorant at the time he became a limited partner and which could not be ascertained from the certificate.
(g) The substitution of the assignee as a limited partner does not release the assignor from liability to the partnership under Code Sections 14-9A-27 and 14-9A-48.
(a) On the death of a limited partner, his executor or administrator shall have all the rights of a limited partner for the purpose of settling his estate and such power as the deceased had to constitute his assignee a substituted limited partner.
(b) The estate of a deceased limited partner shall be liable for all his liabilities as a limited partner.
(a) On due application to a court of competent jurisdiction by any judgment creditor of a limited partner, the court may charge the interest of the indebted limited partner with payment of the unsatisfied amount of the judgment debt and may appoint a receiver and make all other orders, directions, and inquiries which the circumstances of the case may require.
(b) The interest may be redeemed with the separate property of any general partner, but may not be redeemed with partnership property.
(c) The remedies conferred by subsection (a) of this Code section shall not be deemed exclusive of others which may exist.
(d) Nothing in this article shall be held to deprive a limited partner of his statutory exemption.
A general partner shall have all the rights and powers and be subject to all the restrictions and liabilities of a partner in a partnership without limited partners, except that without the written consent or ratification of the specific act by all the limited partners, a general partner or all of the general partners have no authority to:
(1) Do any act in contravention of the certificate required under Code Section 14-9A-20;
(2) Do any act which would make it impossible to carry on the ordinary business of the partnership;
(3) Confess a judgment against the partnership;
(4) Possess partnership property, or assign their rights in specific partnership property, for other than a partnership purpose;
(5) Admit a person as a general partner, unless the partnership agreement provides otherwise;
(6) Admit a person as a limited partner, unless the right so to do is given in the certificate;
(7) Continue the business with partnership property on the death, retirement, or insanity of a general partner, unless the right so to do is given in the certificate.
A contributor, unless he is a general partner, is not a proper party to proceedings by or against a partnership, except where the object is to enforce a limited partner's right against, or liability to, the partnership.
The retirement, death, or insanity of a general partner dissolves the partnership, unless the business is continued by the remaining general partners:
(1) Under a right to do so stated in the certificate required under Code Section 14-9A-20; or
(2) With the consent of all members.
(a) In settling accounts after dissolution, the liabilities of the partnership shall be entitled to payment in the following order:
(1) Those to creditors, in the order of priority as provided by law, except those to limited partners on account of their contributions and to general partners;
(2) Those to limited partners in respect to their share of the profits and other compensation by way of income on their contributions;
(3) Those to limited partners in respect to the capital of their contributions;
(4) Those to general partners other than for capital and profits;
(5) Those to general partners in respect to profits;
(6) Those to general partners in respect to capital.
(b) Subject to any statement in the certificate required under Code Section 14-9A-20 or to subsequent agreement, limited partners share in the partnership assets in respect to their claims for capital, and in respect to their claims for profits or for compensation by way of income on their contributions respectively, in proportion to the respective amounts of such claims.
(a) This article is applicable only to limited partnerships which were in existence on February 15, 1952, and which have not become limited partnerships subject to Article 1 of this chapter or Chapter 9 of this title.
(b) No limited partnership continuing existence under this article shall be renewed pursuant to this article unless such renewal is provided for in the original agreement.
(c) Except as otherwise provided in this Code section, this article shall have no force or effect after February 15, 1952, and no limited partnership shall be formed pursuant to this article after said date.
(a) A limited partnership may be formed by two or more persons upon the terms, with the rights and powers, and subject to the conditions and liabilities prescribed in this article for the purpose of transacting any mercantile, commercial, mechanical, manufacturing, mining, or agricultural business within this state; but this article shall not be construed to authorize the formation of any such partnership for the purposes of banking or insurance.
(b) Of the two or more persons forming a limited partnership, one or more shall be general partners who shall be jointly and severally liable for the debts of the partnership; and one or more persons shall be special partners who shall contribute a specific sum in actual cash as capital to the common stock and who shall not be liable for debts of the partnership beyond the fund so contributed by him or them to the capital, except as provided in this article.
The business of a limited partnership may be conducted under a firm name in which the name of at least one of the partners is contained, to which may be added the word “company” or other general term to denote that there are special partners in the business, or under such firm or trade name as the partners may select; provided, however, that in all cases when the firm is a limited partnership, the firm name shall have added the word “limited” in parentheses so that all persons dealing with the partnership may know that the firm name identifies a limited partnership. The firm name shall be registered as a limited partnership with the clerk of the superior court as required by Part 3 of Article 16 of Chapter 1 of Title 10, which provides for the registration of trade names, partnership names, etc.
(a) Persons desirous of forming a limited partnership shall make and severally sign, either themselves or by attorneys in fact, a certificate which shall contain:
(1) The name of the firm under which such partnership is to be conducted;
(2) The general nature of the business intended to be transacted;
(3) The names of all the general and special partners, distinguishing which are general and which are special partners, and their respective places of residence;
(4) The amount of capital which each special partner shall have contributed to the common stock; and
(5) The time at which the partnership is to commence and the time at which it shall terminate.
(b) If the certificate is signed by an attorney in fact, the power of attorney, duly authenticated, shall be recorded along with such certificate.
The certificate required under Code Section 14-9A-113 shall be acknowledged by the several persons signing the same, or their attorneys in fact, before a judge of the superior court or a judge of the probate court, magistrate, or notary public, and such acknowledgment shall be certified by the officer before whom the same is made.
The certificate and power of attorney in fact required under Code Section 14-9A-113, so acknowledged and certified, shall be filed in the office of the clerk of the superior court of the county in which the principal place of business of the partnership shall be situated and shall be recorded by the clerk at large in a book to be kept for that purpose, open to public inspection. If the partnership shall have places of business situated in different counties, a transcript of the certificate and power of attorney and of the acknowledgments thereof, duly certified by the clerk in whose office they shall be filed, under his official seal, shall be filed and recorded in like manner in the office of the clerk of the superior court in every such county. The clerk for each registry required by this article shall be entitled to the sum of $5.00.
At the time of filing the original certificate required under Code Section 14-9A-113, with the evidence of the acknowledgment thereof, an affidavit or affidavits of the several general partners shall also be filed in the same office, stating that the sums specified in the certificate to have been contributed by each of the special partners to the common stock have been actually and in good faith paid in cash.
No limited partnership shall be deemed to have been formed until the certificate required under Code Section 14-9A-113 shall have been made, acknowledged, filed, and recorded, nor until an affidavit shall have been filed as directed by Code Section 14-9A-116; and if any false statement shall be made in such certificate or affidavit, or if such partnership business shall be commenced before such certificate or affidavit is filed, all the persons interested in such partnership shall be liable for all the engagements thereof as general partners.
(a) The partners shall publish the terms of the partnership, when registered, for at least six weeks immediately after such registry in at least two newspapers published in the county in which the place of business is situated, provided there are two newspapers published in such county. If only one newspaper is published in such county, then the terms shall be published in that newspaper. If no newspaper is published in the county in which the business is to be transacted, the notice shall be published in the newspaper in which the sheriff advertises.
(b) If such publication shall not be made within two months from the filing of such certificate and affidavit, the partnership shall be deemed general.
(c) Affidavits of the publication of such notice by the printers, publishers, or editors of the newspapers in which the same shall be published may be filed in the office of the clerk of the superior court in which the certificate has been filed and shall be evidence of the facts therein contained.
Every renewal or continuance of a limited partnership beyond the time fixed for its duration shall be certified, acknowledged, and recorded; an affidavit of a general partner shall be made and filed; notice shall be given in the manner required in this article for its original formation; and every such partnership which shall be otherwise renewed or continued shall be deemed a general partnership.
(a) Except as provided in this Code section, every change made in the firm name of the general partners, in the nature of the business, or in the capital or shares thereof contributed, held, or owned or to be contributed, held, or owned by any of the special partners, or the death of any partner, whether general or special, shall dissolve the limited partnership, or if such partnership is continued, shall constitute such partnership a general partnership in respect to all business transacted after such alterations or death, unless the articles of partnership shall provide that in the event of the death of a partner the partnership may be continued by the survivors. If the articles so provide, the partnership shall be so continued with the consent of the personal representative of the deceased partner, and the personal representative may succeed to the partnership rights of such deceased partner and continue the business as if such partner had remained alive.
(b) Any special partner may from time to time increase the amount of capital stock contributed, held, or owned by him; or one or more special partners may be added to the partnership on actually paying in an additional amount of capital, to be agreed on by the general and special partners, and on filing in the office of the clerk with whom the original certificate was filed an additional certificate of the general partners, in the partnership name, verified by the oath of one of them, stating the increase of capital stock and by whom, the names and residences of such additional special partners and whether of legal age, and the amounts contributed by each to the common stock, together with the affidavit of one or more of the general partners stating that the amounts specified in such additional certificates have been actually and in good faith paid in cash. Such alteration shall not make the partnership general. No additional publication of the terms of the partnership nor of the alteration thereof is required in any of such cases.
(c) Any special partner or the legal representative of any such deceased special partner may sell his interest in the partnership or any portion thereof without working a dissolution thereof or rendering the partnership general, if a notice of such sale is filed within ten days thereafter in the office of the clerk with whom the original certificate of partnership was filed; and the purchaser thereof shall thereupon become a special partner with the same rights as an original special partner.
(a) No dissolution of a limited partnership by the acts of the partners shall take place prior to the time specified in the original certificate or the certificate of renewal until a notice of such intended dissolution, signed by all the partners or their representatives, has been filed and recorded in the clerk's office in which the original certificate was recorded and published at least once a week for four weeks in a newspaper printed in each of the counties where the partnership has places of business. If no newspaper is printed in such counties, the notice shall be published for four weeks in the newspapers in which the sheriffs of such counties advertise.
(b) Nothing contained in this Code section shall be construed to affect the collection of any demand against any of the special partners which may have been contracted prior to the commencement of such limited partnership.
(a) Only the general partners shall be authorized to transact business, sign for the partnership, and bind the partnership.
(b) A special partner may at any time examine the conditions and progress of the partnership concerns, advise as to the management of the same, and, when the general partner or partners may be rendered incompetent to act because of illness, temporary absence, or other cause, direct and control the business of the partnership with the authority of a general partner; provided, however, such special partner, before assuming such direction and control, shall place in a position easily seen by all parties dealing with said partnership a placard or sign indicating which of the partners of the firm are general partners and which are special partners; otherwise the special partner or partners shall not transact any business on account of the said partnership nor be employed for that purpose as agent or in any capacity akin thereto. If, contrary to this Code section, a special partner shall in any manner interfere with the business and affairs of the partnership, he shall be deemed a general partner; provided, however, a special partner may act as the attorney or counselor at law for the partnership without becoming liable as a general partner.
(a) No part of the sum which any special partner shall have contributed to the capital stock shall be withdrawn by him or paid or transferred to him in the shape of dividends, profits, or otherwise at any time during the continuance of the partnership, but any partner may annually receive lawful interest on the sum so contributed by him, if the payment of such interest shall not reduce the original amount of such capital. If, after the payment of such interest, any profits shall remain to be divided, he may also receive his portion of such profits, but shall not be liable for any debts previously contracted by the general partners.
(b) If it shall appear that, by the payment of interest or profits to any special partner, the original capital has been reduced, or the firm shall be unable to pay its debts, the partner receiving the same shall be bound to restore the interest or profits received by him necessary to make good his original share of the original stock.
In case of the insolvency or bankruptcy of the partnership, no special partner shall, under any circumstances, be allowed to claim as a creditor until the claims of all the other creditors of the partnership shall be satisfied.
Actions brought by limited partnerships shall be in the name or names of the general partners only. Actions brought against limited partnerships shall be brought against the general partners only, except in cases where the special partners are liable in the same manner as general partners. In such cases, actions may be brought against all the partners jointly or severally; or any one or more of the special partners may be subject to liability in the same action with the general partners.
The general partners of a limited partnership shall be liable, both in law and equity, to each other and to the special partners for their management of the business of the firm as other partners are liable.
Every partner who shall be guilty of any fraud in the affairs or business of the partnership shall be liable civilly to the party injured to the extent of his damage.
(a) Every sale, assignment, or transfer of any of the property or effects of a limited partnership made by such partnership when insolvent or in contemplation of insolvency or made after or in contemplation of the insolvency of any partner, with the intent of giving a preference to any creditor of such partnership or insolvent partner over other creditors of such partnership or insolvent partner; and every judgment confessed, lien created, or security given by such partnership under the like circumstances and with the like intent shall be void as against the creditors of such partnership.
(b) Every such sale, assignment, or transfer of any of the property or effects of a general or special partner who may have become liable as a general partner made by such general or special partner when insolvent or in contemplation of insolvency or made after or in contemplation of the insolvency of the partnership, with the intention of giving to any creditor of his own, or of the partnership, a preference over creditors of the partnership; and every judgment confessed, lien created, or security given by any such partner under like circumstances and with like intent shall be void as against the creditors of the partnership.
(c) Any special partner who shall violate any provision of subsections (a) and (b) of this Code section or who shall concur in, or assent to, any such violation by the partnership or by any individual partner shall be liable as a general partner.
Every partner who shall work any fraud in the affairs or business of a limited partnership shall be guilty of a misdemeanor.
This chapter shall be known and may be cited as “The Georgia Professional Association Act.”
As used in this chapter, the term:
(1) “Professional association” means an unincorporated association, as distinguished from a partnership, organized under this chapter for the purpose of rendering one type of professional service.
(2) “Professional service” means the personal services rendered by attorneys at law and any type of professional service which may be legally performed only pursuant to a license from a board pursuant to Title 43, for example, the personal services rendered by certified public accountants, chiropractors, dentists, osteopaths, physicians and surgeons, and podiatrists (chiropodists).
Any two or more persons duly licensed to practice a profession under the laws of this state may form a professional association, as distinguished from a partnership and a corporation, by associating themselves for the purpose of carrying on a profession and dividing the gains therefrom upon compliance with the terms of this chapter. No professional association organized pursuant to this chapter shall render professional service in more than one type of professional service.
(a) Articles of association.
(1) FILING; CONTENTS.To form a professional association, such persons shall execute and file articles of association in the office of the clerk of the superior court in the county in which the association's principal office is located. Articles of association may contain any provision not in violation of law or the public policy of this state as the members of the association may decide.
(2) Recording; fees. The clerk shall record the articles of association and any amendments thereto or instruments of dissolution thereof in the same manner as required for articles of incorporation and shall receive a fee as required by paragraph (1) of subsection (g) of Code Section 15-6-77. Articles shall not be required to be published or recorded elsewhere. Such record of the articles, when so recorded, shall be notice of the articles to the world as well as to all parties dealing with such association.
(3) AMENDMENT; DISSOLUTION.The articles may be amended or dissolved at any time by agreement of two-thirds of the members at any regular meeting or at a special meeting called for that purpose and upon filing the amendment or instrument of dissolution in the same place or places as the original article of association.
(b) Name. The persons forming the association shall adopt such name for the association as they in their discretion may determine; but the name selected shall be followed by the words “Professional Association” or the abbreviation “P.A.”
A professional association may be organized only for the purpose of rendering one specific kind of professional service and shall not engage in any business other than rendering the professional service for which it was organized. However, it may invest its funds in real estate, mortgages, stocks, bonds, or any other type of investment and may own real or personal property necessary or appropriate for rendering its professional service.
A professional association may render professional service only through officers, employees, and agents who are themselves duly licensed or otherwise legally authorized to render professional service within this state. The term “employee” as used in this Code section does not include clerks, bookkeepers, technicians, nurses, or other individuals who are not usually and ordinarily considered by custom and practice to be rendering professional services for which a license or other legal authorization is required in connection with the profession practiced by a particular professional association; nor does the term “employee” include any other person who performs all his employment under the direct supervision and control of an officer, agent, or employee who is himself rendering professional service to the public on behalf of the professional association; but no person shall, under the guise of employment, practice a profession unless duly licensed to practice that profession under the laws of this state.
(a) This chapter does not modify any law applicable to the relationship between a person furnishing and a person receiving professional service, including liability arising out of such professional service and including the confidential relationship between the person rendering and the person receiving such professional service, if any. All confidential relationships enjoyed under the laws of this state prior to April 5, 1961, or enacted thereafter shall remain inviolate.
(b) Subject to subsection (a) of this Code section, the members or shareholders of any professional association organized pursuant to this chapter shall not be individually liable for the debts of, or claims against, the professional association unless such member or shareholder has personally participated in the transaction for which the debt or claim is made or out of which it arises.
(a) Board of governors; officers. A professional association organized pursuant to this chapter shall be governed by a board of governors elected by the members or shareholders and represented by officers elected by the board of governors so that centralization of management will be assured and no member shall have the power to bind the association within the scope of the association's business or profession merely by virtue of his being a member or shareholder of the association. Members of the board of governors need not be members or shareholders of the professional association. Officers, with the exception of the president, need not be members of the board of governors. No officer or member of the board of governors who is not duly licensed to practice the profession for which the professional association was organized shall participate in any decisions constituting the practice of said profession. The officers of the association shall include a president, vice-president, secretary, treasurer, and such other officers as the board of governors may determine. Any one person may serve in more than one office, except that the president and the secretary of the professional association shall not be the same person.
(b) Bylaws. The members may adopt such bylaws as they may deem proper, or the power to promulgate bylaws of the association may be delegated by the articles of association to the board of governors of the professional association as the members or shareholders may decide.
(c) Voting. Each member or shareholder shall have such power to cast such vote or votes at the meeting of the members or shareholders as the articles of association shall provide.
(d) Agents and employees. The officers of the professional association may employ such agents or employees of the association as they may deem advisable, subject to Code Section 14-10-6.
Unless the articles of association expressly provide otherwise, a professional association shall continue as a separate entity independent of its members or shareholders, for all purposes for such period of time as provided in the articles, or until dissolved by a vote of two-thirds of the members. An association shall continue notwithstanding the death, insanity, incompetency, conviction for felony, resignation, withdrawal, transfer of membership or ownership of shares, retirement, or expulsion of any one or more of the members or shareholders; the admission of or transfer of membership or shares to any new member or members or shareholder or shareholders; or the happening of any other event, which under the law of this state and under like circumstances would work a dissolution of a partnership, it being the aim and intention of this Code section that such professional association shall have continuity of life independent of the life or status of its members or shareholders. No member or shareholder of a professional association shall have the power to dissolve the association by his independent act of any kind.
(a) Stock-type and nonstock associations. A professional association organized pursuant to this chapter may issue stock or certificates evidencing ownership of an interest in the assets of the professional association to its members; the association may be a nonstock organization with the members owning no individual interest in the assets of the association but with the rights and duties specified in the articles of association; or the association may be a nonstock organization with the members owning undivided interests in the assets of the association according to the articles of association.
(b) Transferability. The stock or certificates of ownership, if a stock-type association or a membership in a nonstock association, shall be freely transferable except as may be lawfully restricted in the articles of association.
(c) Shareholders and members. A professional association may issue its capital stock if it is a stock-type association or accept as members of the professional association, if a nonstock association, only persons who are duly licensed or otherwise legally authorized to render the same professional service as that for which the professional association was organized.
(d) Estate of deceased shareholder or member. Subject to the articles of association, the estate of a member or shareholder who was a person duly licensed or otherwise legally authorized to render the same professional service as that for which the professional association was organized may continue to hold stock or membership pursuant to the articles of association for a reasonable period of administration of the estate, but shall not be authorized to participate in any decisions concerning the rendering of professional service.
If any member, shareholder, agent, or employee of a professional association becomes legally disqualified to render a professional service within this state or accepts employment or is elected to a public office which, pursuant to existing law, is a restriction or limitation upon the rendering of professional service, he shall sever all employment with, or financial interest in, such professional association forthwith. A professional association's failure to comply or require compliance with this requirement shall be a ground for the forfeiture of its right to render professional service as a professional association pursuant to this chapter. When a professional association's failure to comply with this requirement is brought to the attention of the Secretary of State, the Secretary of State shall certify that fact to the Attorney General for appropriate action to dissolve the professional association.
If the articles of association or bylaws of a professional association fail to fix a price at which a professional association or its members or shareholders may purchase the membership or shares of a deceased, retired, expelled, or disqualified member or shareholder, and if the articles of association or bylaws do not otherwise provide, then the price for such membership or shares shall be the book value of such membership or shares at the end of the month immediately preceding the death or disqualification of the member or shareholder. Book value shall be determined by an independent certified public accountant employed for such purpose from the books and records of the professional association by the regular method of accounting employed by the professional association. The determination by the certified public accountant of book values shall be conclusive on the professional association and its members or shareholders.
A member or shareholder of a professional association may sell or transfer his membership or shares in such professional association only to another individual who is duly licensed or otherwise legally authorized to render the same professional services as those for which the association was organized.
In the event of dissolution of a stock-type professional association, the board of governors, as trustees of the property of such professional association, shall apply the assets first to the payment of debts of the association and, secondly, to the holders of the stock as provided in the articles of association. In the event of dissolution of a nonstock association, the assets shall be distributed or sold and the net proceeds distributed first to the payment of debts of the association and, secondly, to or among the members of the association as the articles of association shall provide.
A professional association organized pursuant to this chapter may contract in its own name, take, hold, and sell real and personal property in its own name, independent of its members, and sue and be sued as an independent entity as provided by law. Any conveyance in the name of the professional association to a third person executed by the president and attested by the secretary shall be conclusively presumed to be properly executed and shall divest all right, title, and interest of the professional association, its members, and the board of governors thereof. The assets of a professional association shall not be liable to attachment for the individual debts of its members or shareholders.
Code Sections 9-2-24 and 9-2-25 are incorporated by reference and shall govern professional associations organized pursuant to this chapter in all respects as contained therein.
A professional association organized pursuant to this chapter shall be governed generally by all laws governing or applying to corporations, where applicable, and not in conflict with this chapter; and no such association shall be held or deemed to be a partnership nor shall such association be governed by laws relating to partnerships.
This chapter shall be known and may be cited as the “Georgia Limited Liability Company Act.”
As used in this chapter, unless the context otherwise requires, the term:
(1) “Articles of organization” means the articles filed under Code Section 14-11-203 and such articles as amended or restated.
(2) “Business entity” means a limited liability company, a foreign limited liability company, a limited partnership, a foreign limited partnership, a general partnership, a corporation, or a foreign corporation.
(3) “Conflicting interest” with respect to a limited liability company means the interest a member or manager of the limited liability company has respecting a transaction effected or proposed to be effected by the limited liability company (or by a person in which the limited liability company has a controlling interest), with respect to which the member or manager has the power to act or vote, if:
(A) Whether or not the transaction is brought before the members or managers responsible for the decision, as the case may be, of the limited liability company for action, to the knowledge of the member or manager at the time of commitment, he or she or a related person is a party to the transaction or has a beneficial financial interest in or so closely linked to the transaction and of such financial significance to the member or manager or a related person that it would reasonably be expected to exert an influence on the member or manager's judgment if he or she were called upon to vote on the transaction; or
(B) The transaction is brought (or is of such character and significance to the limited liability company that it would in the normal course be brought) before the members or managers responsible for the decision, as the case may be, of the limited liability company for action and, to the knowledge of the member or manager at the time of commitment, any of the following persons is either a party to the transaction or has a beneficial financial interest so closely linked to the transaction and of such financial significance to that person that it would reasonably be expected to exert an influence on the member or manager's judgment if he or she were called upon to vote on the transaction: an entity (other than the limited liability company) of which the member or manager is a director, general partner, member, manager, agent, or employee; an entity that controls, is controlled by, or is under common control with one or more of the entities specified in the preceding clause; or an individual who is a general partner, principal, or employer of the member or manager.
(4) “Contribution” means a contribution to the capital of a limited liability company authorized by Code Section 14-11-401.
(5) “Corporation” means a corporation incorporated under Chapter 2 of this title.
(6) “Distribution” means a direct or indirect transfer of money or other property (except its own limited liability company interests) by a limited liability company to or for the benefit of its members or their assignees in respect of any of its limited liability company interests. A distribution may be in the form of a transfer of money or other property; a purchase, redemption, or other acquisition of a limited liability company interest; a distribution of indebtedness; or otherwise.
(6.1) “Electronic transmission” or “electronically transmitted” means any process of communication not directly involving the physical transfer of paper that is suitable for the retention, retrieval, and reproduction of information by the recipient.
(7) “Event of dissociation” means an event that causes a person to cease to be a member, as provided in Code Section 14-11-601 or 14-11-601.1.
(8) “Foreign corporation” means a corporation for profit formed under the laws of a jurisdiction other than this state.
(9) “Foreign limited liability company” means a limited liability company formed under the laws of a jurisdiction other than this state.
(10) “Foreign limited partnership” means a limited partnership formed under the laws of a jurisdiction other than this state.
(11) “General partnership” means a partnership (other than a limited partnership) existing under the laws of this state or the laws of any other jurisdiction.
(12) “Limited liability company” means a limited liability company formed under this chapter.
(13) “Limited liability company interest” means a member's share of the profits and losses of a limited liability company and a member's right to receive distributions.
(14) “Limited partnership” means a limited partnership formed under the laws of this state.
(15) “Manager” means a person in whom management is vested in accordance with subsection (b) of Code Section 14-11-304.
(16) “Member” means a person who has been admitted to a limited liability company as a member as provided in Code Section 14-11-505 and who has not ceased to be a member as provided in Code Section 14-11-601 or 14-11-601.1.
(17) “Member or manager's conflicting interest transaction” with respect to a limited liability company means a transaction effected or proposed to be effected by the limited liability company (or by a person in which the limited liability company has a controlling interest) respecting which a member or manager of the limited liability company having the power to act or vote has a conflicting interest.
(18) “Operating agreement” means any agreement, written or oral, of the member or members as to the conduct of the business and affairs of a limited liability company. In the case of a limited liability company with only one member, a writing signed by that member stating that it is intended to be a written operating agreement shall constitute a written operating agreement and shall not be unenforceable by reason of there being only one person who is a party to the operating agreement. A limited liability company is not required to execute its operating agreement and, except as otherwise provided in the operating agreement, is bound by its operating agreement whether or not the limited liability company executes the operating agreement. An operating agreement may provide enforceable rights to any person, including a person who is not a party to the operating agreement, to the extent set forth therein.
(19) “Person” means an individual, business entity, business trust, estate, trust, association, joint venture, government, governmental subdivision or agency, or any other legal or commercial entity.
(20) “Proceeding” means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative and whether formal or informal.
(21) “Related person” of a member or manager means:
(A) A child, grandchild, sibling, parent, or spouse of, or an individual occupying the same household as, the member or manager or a trust or estate of which an individual specified in this subparagraph is a substantial beneficiary; or
(B) A trust, estate, incompetent, conservator, or minor of which the member or manager is a fiduciary.
(22) “Required disclosure” means disclosure by the member or manager who has a conflicting interest of (A) the existence and nature of his or her conflicting interest, and (B) all facts known to him or her respecting the subject matter of the transaction that an ordinarily prudent person would reasonably believe to be material to a judgment as to whether or not to proceed with the transaction.
(23) “State” means the District of Columbia or the Commonwealth of Puerto Rico or any state, territory, possession, or other jurisdiction of the United States.
(24) “Time of commitment” respecting a member's or manager's conflicting interest transaction means the time when the transaction is consummated or, if made pursuant to contract, the time when the limited liability company (or the person in which it has a controlling interest) becomes contractually obligated so that its unilateral withdrawal from the transaction would entail significant loss, liability, or other damage.
A certificate attached to a copy of a document or electronic transmission filed by the Secretary of State, bearing his or her signature, which may be in facsimile, and the printed or embossed seal of this state, or its electronic equivalent, is prima-facie evidence that the original document has been filed with the Secretary of State.
(a) A limited liability company may be formed under this chapter for any lawful purpose. If the purpose for which a limited liability company is formed makes it subject to a special provision of law, the limited liability company shall also comply with that provision.
(b) A limited liability company formed under this chapter has, unless a more limited purpose is set forth in the articles of organization or a written operating agreement, the purpose of engaging in any lawful activity.
Each limited liability company formed in this state shall have the same powers as any person has to do all things necessary to carry out its purpose, business, and affairs.
(a) One or more persons may act as the organizer or organizers of a limited liability company by delivering articles of organization to the Secretary of State for filing and supplying to the Secretary of State, in such form as the Secretary of State may require, the following information:
(1) The name and address of each organizer;
(2) The street address and county of the limited liability company's initial registered office and the name of its initial registered agent at that office; and
(3) The mailing address of the limited liability company's principal place of business.
(b) An organizer need not be a member of the limited liability company at the time of formation or thereafter.
(c) A limited liability company is formed when the articles of organization become effective pursuant to Code Section 14-11-206.
(d) The Secretary of State's filing of the articles of organization is conclusive proof that the organizers satisfied all conditions precedent to formation, except in a proceeding by the state to cancel or revoke the formation.
(e) During any period when a limited liability company has any members it may have one or more members.
(a) The articles of organization shall set forth the name of the limited liability company, which name must satisfy the requirements of Code Section 14-11-207.
(b) The articles of organization may set forth:
(1) That management of the limited liability company is vested in one or more managers; and
(2) Any other provisions not inconsistent with law.
(a) Unless otherwise specified in any other Code section of this chapter, any document required or permitted by this chapter to be delivered to the Secretary of State for filing shall be executed:
(1) By any member;
(2) By any manager if management of the limited liability company is vested in one or more managers;
(3) By any organizer if the limited liability company has been formed but it has no members or managers; or
(4) If the limited liability company is in the hands of a receiver, trustee, or other court-appointed fiduciary, by that fiduciary.
(b) The person executing the document shall sign it and state beneath or opposite his or her signature his or her name and the capacity in which he or she signs.
(c) The person executing the document may do so as an attorney-in-fact. Powers of attorney relating to the execution of the document do not need to be shown to or filed with the Secretary of State.
(a) A signed original and one exact or conformed copy of any document required or permitted to be filed pursuant to this chapter shall be delivered to the Secretary of State; provided, however, that if the document is electronically transmitted, the electronic version of such person's name may be used in lieu of a signature. Unless the Secretary of State finds that the document does not conform to the filing provisions of this chapter, upon receipt of all filing fees and additional information required by law, he or she shall:
(1) Stamp or otherwise endorse his or her official title and the date and time of receipt on both the original and copy;
(2) File the original in his or her office; and
(3) Return the copy to the person who delivered the document to the Secretary of State or the person's representative.
(b) If the Secretary of State refuses to file a document, he or she shall return it to the limited liability company or its representative within ten days after the document was delivered, together with a brief written explanation of the reason for his or her refusal.
(c) The Secretary of State's duty to file documents under this chapter is ministerial.
(d) If the Secretary of State finds that any document delivered for filing does not conform to the filing provisions of this chapter at the time such document is delivered to the Secretary of State, such document is deemed to have been filed at the time of delivery (or such later time and date as is authorized by paragraph (2) of subsection (e) or subsection (f) of this Code section) if the Secretary of State subsequently determines that:
(1) The document as delivered so conforms to the filing provisions of this chapter; or
(2) Within 30 days after notification of nonconformance is given by the Secretary of State to the person who delivered the documents for filing or that person's representative, the documents are brought into conformance.
(e) Except as provided in subsection (d) of this Code section, a document accepted for filing is effective:
(1) At the time of filing on the date it is filed, as evidenced by the Secretary of State's date and time endorsement on the original document; or
(2) At the time specified in the document as its effective time on the date it is filed.
(f) A document may specify a delayed effective time and date, and, if it does so, the document shall become effective at the time and date specified. If a delayed effective date but no effective time is specified, the document shall become effective at the close of business on that date. A delayed effective date for a document may not be later than the ninetieth day after the date on which it is filed.
(g) A certificate attached to a copy of a document filed by the Secretary of State, bearing his or her signature, which may be in facsimile, and the printed or embossed seal of this state, or its electronic equivalent, is prima-facie evidence that the original document has been filed with the Secretary of State.
(h) Notwithstanding the provisions of this chapter, the Secretary of State may authorize the filing of documents by electronic transmission, following the provisions of Chapter 12 of Title 10, the “Uniform Electronic Transactions Act,” and the Secretary of State shall be authorized to promulgate such rules and regulations as are necessary to implement electronic filing procedures.
(a) The name of each limited liability company shall be as set forth in its articles of organization and:
(1) Must contain the words “limited liability company” or “limited company” (it being permitted to abbreviate the word “limited” as “ltd.” and the word “company” as “co.”) or the abbreviation “L.L.C.”, “LLC”, “L.C.” or “LC”;
(2) Must be distinguishable on the records of the Secretary of State from the name of any corporation, limited liability company, or limited partnership; any foreign corporation, foreign limited liability company or foreign limited partnership having a certificate of authority to transact business in this state; any nonprofit corporation, professional corporation, or professional association, domestic or foreign, on file with the Secretary of State pursuant to this title; or any name reserved or registered under this title; and
(3) Shall not in any instance exceed 80 characters, including spaces and punctuation.
(b) This chapter does not control the use of fictitious or trade names. Issuance of a name under this chapter means that the name is distinguishable for filing purposes on the records of the Secretary of State pursuant to paragraph (2) of subsection (a) of this Code section. Issuance of a limited liability company name does not affect the commercial availability of the name.
(a) A person may apply to reserve a name for the purpose of forming a limited liability company by paying the fee specified in Code Section 14-11-1101. If the Secretary of State finds that the limited liability company name applied for is available, he or she shall reserve the name for the applicant's use for 30 days or until articles of organization are filed, whichever is sooner. If the Secretary of State finds that the name applied for is not distinguishable for filing purposes upon the records of the Secretary of State, he or she shall notify the applicant who may then submit another reservation request within ten days of the date of the rejection notice without payment of an additional reservation fee.
(b) Upon expiration of a name reservation after 30 days without the filing of articles of organization, the name may again be reserved for another 30 day period by the same or another applicant under the same guidelines of subsection (a) of this Code section.
(c) A person who has in effect a name reservation under subsection (a) of this Code section may transfer the reservation to another person by delivering to the Secretary of State a signed notice of the transfer that states the name and address of the transferee.
(a) Each limited liability company shall continuously maintain in this state:
(1) A registered office which may, but need not, be a place of its business in this state; and
(2) A registered agent for service of process on the limited liability company. The address of the business office of the registered agent shall be the same as the address of the registered office referred to in paragraph (1) of this subsection.
(b) A registered agent must be an individual resident of this state, a corporation, another limited liability company, or a foreign corporation or a foreign limited liability company having a certificate of authority to transact business in this state.
(c) A limited liability company may change its registered office or its registered agent, or both, by filing an amendment to its annual registration that sets forth:
(1) The name of the limited liability company;
(2) The street address and county of its then registered office;
(3) If the address of its registered office is to be changed, the new street address and county of the registered office;
(4) The name of its then registered agent; and
(5) If its registered agent is to be changed, the name of its successor registered agent.
(d) A registered agent of a limited liability company may resign as such agent by signing and delivering to the Secretary of State for filing a statement of resignation, which may include a statement that the registered office is also discontinued. On or before the date of the filing of the statement of resignation, the registered agent shall deliver or mail a written notice of the registered agent's intention to resign to the limited liability company at the most recent mailing address of the limited liability company's principal place of business in this state listed in the records of the Secretary of State. The agency appointment is terminated, and the registered office discontinued if so provided, on the earlier of the filing of the limited liability company's annual registration or a statement designating a new registered agent and registered office if also discontinued or the thirty-first day after the date on which the statement of resignation was filed.
(e) A registered agent may change the agent's office and the address of the registered office of any limited liability company of which the agent is the registered agent to another place within this state by filing a statement, as required in subsection (c) of this Code section, setting forth the required information for all limited liability companies for which he or she is the registered agent, except that it need be signed only by the registered agent and need not be responsive to paragraph (5) of subsection (c) of this Code section and must recite that a copy of the statement has been mailed to the limited liability company at the most recent mailing address of the limited liability company's principal place of business listed on the records of the Secretary of State.
(f) Whenever a limited liability company shall fail to appoint or maintain a registered agent in this state or whenever its registered agent cannot with reasonable diligence be found at the registered office, then the Secretary of State shall be an agent of such limited liability company upon whom any process, notice, or demand may be served. Service on the Secretary of State of any such process, notice, or demand shall be made by delivering to and leaving with him or her or with any other person or persons designated by the Secretary of State to receive such service a copy of such process, notice, or demand. The plaintiff or his or her attorney shall certify in writing to the Secretary of State that the limited liability company failed either to maintain a registered office or appoint a registered agent in this state and that he or she has forwarded by registered or certified mail or statutory overnight delivery such process, notice, or demand to the most recent registered office listed on the records of the Secretary of State and that service cannot be effected at such office.
(g) The Secretary of State shall keep a record of all processes, notices, and demands served upon him or her under this Code section and shall record therein the time of such service and his or her action with reference thereto.
(h) This Code section does not prescribe the only means, or necessarily the required means, of serving any process, notice, or demand required or permitted by law to be served on a limited liability company.
(a) A limited liability company amending its articles of organization shall deliver to the Secretary of State for filing articles of amendment setting forth:
(1) The name of the limited liability company;
(2) The date the articles of organization were filed;
(3) The amendment to the articles of organization; and
(4) The effective date and time of the amendment if later than the date and time the articles of amendment are filed.
(b) The articles of organization may be amended in any and as many respects as may be desired so long as the articles of organization as amended contain only provisions that may be lawfully contained in articles of organization at the time of making the amendment.
(c) Articles of organization may be restated to include only those provisions then in effect, or amended and so restated, at any time. Restated articles of organization shall be delivered to the Secretary of State for filing and shall be specifically designated as such in the heading.
(a) A limited liability company or foreign limited liability company may correct a document filed by the Secretary of State if the document:
(1) Contains an incorrect statement; or
(2) Was defectively executed.
(b) A document is corrected:
(1) By preparing articles of correction that:
(A) Describe the document (including its filing date);
(B) Specify the incorrect statement and the reason it is incorrect or the manner in which the execution was defective; and
(C) Correct the incorrect statement or defective execution; and
(2) By delivering the articles to the Secretary of State for filing.
(c) Articles of correction that are filed by the Secretary of State are effective on the effective date of the document they correct except as to persons relying on the uncorrected document and adversely affected by the correction. As to those persons, articles of correction are effective when filed.
(a) A corporation, foreign corporation, foreign limited liability company, limited partnership, foreign limited partnership, general partnership, or foreign general partnership may elect to become a limited liability company. Such election shall require (1) compliance with Code Section 14-2-1109.1 in the case of a Georgia corporation, or (2) the approval of all of its partners, members or shareholders (or such other approval or compliance as may be sufficient under applicable law or the governing documents of the electing entity to authorize such election) in the case of a foreign corporation, foreign limited liability company, limited partnership, foreign limited partnership, general partnership, or foreign general partnership.
(b) Such election is made by delivering a certificate of conversion to the Secretary of State for filing. The certificate shall set forth:
(1) The name and jurisdiction of organization of the entity making the election;
(2) That the entity elects to become a limited liability company;
(3) The effective date, or the effective date and time, of such election if later than the date and time the certificate of conversion is filed;
(4) That the election has been approved as required by subsection (a) of this Code section;
(5) That filed with the certificate of conversion are articles of organization that are in the form required by Code Section 14-11-204, that set forth a name for the limited liability company that satisfies the requirements of Code Section 14-11-207, and that shall be the articles of organization of the limited liability company formed pursuant to such election unless and until modified in accordance with this chapter; and
(6) A statement setting forth either (A) the manner and basis for converting the ownership interests in the entity making the election into interests as members of the limited liability company formed pursuant to such election or canceling them, or (B)(i) that a written operating agreement has been entered into among the persons who will be the members of the limited liability company formed pursuant to such election, (ii) that such operating agreement will be effective immediately upon the effectiveness of such election, and (iii) that such operating agreement provides for the manner and basis of such conversion or cancellation.
(c) Upon the election becoming effective:
(1) The electing entity shall become a limited liability company formed under this chapter by such election except that the existence of the limited liability company so formed shall be deemed to have commenced on the date the entity making the election commenced its existence in the jurisdiction in which such entity was first created, formed, incorporated, or otherwise came into being;
(2) The ownership interests in the entity making the election shall be converted or canceled on the basis stated or referred to in the certificate of conversion in accordance with paragraph (6) of subsection (b) of this Code section;
(3) The articles of organization filed with the certificate of conversion shall be the articles of organization of the limited liability company formed pursuant to such election unless and until amended in accordance with this chapter;
(4) The governing documents of the entity making the election shall be of no further force or effect;
(5) The limited liability company formed by such election shall thereupon and thereafter possess all of the rights, privileges, immunities, franchises, and powers of the entity making the election; all property, real, personal, and mixed, all contract rights, and all debts due to such entity, as well as all other choses in action, and each and every other interest of or belonging to or due to the entity making the election shall be taken and deemed to be vested in the limited liability company formed by such election without further act or deed; and the title to any real estate, or any interest therein, vested in the entity making the election shall not revert or be in any way impaired by reason of such election; and none of such items shall be deemed to have been conveyed, transferred, or assigned by reason of such election for any purpose; and
(6) The limited liability company formed by such election shall thereupon and thereafter be responsible and liable for all the liabilities and obligations of the entity making the election, and any claim existing or action or proceeding pending by or against such entity may be prosecuted as if such election had not become effective. Neither the rights of creditors nor any liens upon the property of the entity making such election shall be impaired by such election.
(d) A conversion pursuant to this Code section shall not be deemed to constitute a dissolution of the entity making the election and shall constitute a continuation of the existence of the entity making the election in the form of a limited liability company. A limited liability company formed by an election pursuant to this Code section shall for all purposes be deemed to be the same entity as the entity making such election.
(e) A limited liability company formed by an election pursuant to this Code section may file a copy of such certificate of conversion, certified by the Secretary of State, in the office of the clerk of the superior court of the county where any real property owned by such limited liability company is located and record such certified copy of the certificate of conversion in the books kept by such clerk for recordation of deeds in such county with the entity electing to become a limited liability company indexed as the grantor and the limited liability company indexed as the grantee. No real estate transfer tax under Code Section 48-6-1 shall be due with respect to recordation of such election.
(a) Except as provided in subsection (b) of this Code section, every member is an agent of the limited liability company for the purpose of its business and affairs, and the act of any member, including, but not limited to, the execution in the name of the limited liability company of any instrument for apparently carrying on in the usual way the business and affairs of the limited liability company of which he or she is a member, binds the limited liability company, unless the member so acting has, in fact, no authority to act for the limited liability company in the particular matter, and the person with whom he or she is dealing has knowledge of the fact that the member has no such authority.
(b) If the articles of organization provide that management of the limited liability company is vested in a manager or managers:
(1) No member, acting solely in the capacity as a member, is an agent of the limited liability company; and
(2) Every manager is an agent of the limited liability company for the purpose of its business and affairs, and the act of any manager, including, but not limited to, the execution in the name of the limited liability company of any instrument for apparently carrying on in the usual way the business and affairs of the limited liability company of which he or she is a manager, binds the limited liability company, unless the manager so acting has, in fact, no authority to act for the limited liability company in the particular matter, and the person with whom he or she is dealing has knowledge of the fact that the manager has no such authority.
(c) An act of a manager or a member that is not apparently for the carrying on in the usual way the business or affairs of the limited liability company does not bind the limited liability company unless authorized in accordance with a written operating agreement at the time of the transaction or at any other time.
(d) No act of a manager or member in contravention of a restriction on authority shall bind the limited liability company to persons having knowledge of the restriction.
Limitations on the authority of any or all members or managers that are set forth in a limited liability company's articles of organization shall be conclusively presumed in favor of the limited liability company and against a grantee of the limited liability company, or a person claiming through such grantee, with respect to limited liability company real property located in a county of this state if a copy of the articles of organization certified by the Secretary of State is filed in the office of the clerk of the superior court of the county where the real property is located and recorded in the book kept by such clerk for statements of partnership pursuant to Code Section 14-8-10.1.
(a) A person who is a member, manager, agent, or employee of a limited liability company is not liable, solely by reason of being a member, manager, agent, or employee of the limited liability company, under a judgment, decree, or order of a court, or in any other manner, for a debt, obligation, or liability of the limited liability company, including liabilities and obligations of the limited liability company to any member or assignee, whether arising in contract, tort, or otherwise, or for the acts or omissions of any other member, manager, agent, or employee of the limited liability company, whether arising in contract, tort, or otherwise. Notwithstanding the provisions of this subsection, a member, manager, or employee may be personally liable for tax liabilities arising from the operation of the limited liability company as provided in Code Section 48-2-52.
(b) Notwithstanding the provisions of subsection (a) of this Code section, under a written operating agreement or under another written agreement, a member or manager may agree to be obligated personally for any or all of the debts, obligations, and liabilities of the limited liability company.
(a) Unless the articles of organization or a written operating agreement vests management of the limited liability company in a manager or managers, management of the business and affairs of the limited liability company shall be vested in the members, and, subject to any provisions in the articles of organization or a written operating agreement, the members shall have the right and authority to manage the affairs of the limited liability company and to make all decisions with respect thereto. The articles of organization or a written operating agreement may contain any provision relating to any phase of managing the business or regulating the affairs of the limited liability company.
(b) If the articles of organization or a written operating agreement vests management of the limited liability company in one or more managers, then such persons shall have such right and authority to manage the business and affairs of the limited liability company as is provided in the articles of organization or a written operating agreement. Unless otherwise provided in the articles of organization or a written operating agreement, such persons:
(1) Shall be designated, appointed, elected, removed, or replaced by the approval of more than one half by number of the members;
(2) Need not be members of the limited liability company or natural persons; and
(3) Unless they have been earlier removed or have earlier resigned, shall hold office until their successors shall have been elected and qualified.
(c) A written operating agreement may provide that (1) a member or manager who fails to perform in accordance with, or to comply with the terms and conditions of, the written operating agreement shall be subject to specified penalties or specified consequences, and (2) at the time or upon the happening of events specified in a written operating agreement, a member or manager shall be subject to specified penalties or specified consequences.
(d) A person who is both a manager and member has the rights and powers, and is subject to the restrictions and liabilities, of a manager and, except as provided in the articles of organization or a written operating agreement, also has the rights and powers, and is subject to the restrictions and liabilities, of a member to the extent of his or her participation in the limited liability company as a member.
In managing the business or affairs of a limited liability company:
(1) A member or manager shall act in a manner he or she believes in good faith to be in the best interests of the limited liability company and with the care an ordinarily prudent person in a like position would exercise under similar circumstances. A member or manager is not liable to the limited liability company, its members, or its managers for any action taken in managing the business or affairs of the limited liability company if he or she performs the duties of his or her office in compliance with this Code section. Except as otherwise provided in the articles of organization or a written operating agreement, a person who is a member of a limited liability company in which management is vested in one or more managers, and who is not a manager, shall have no duties to the limited liability company or to the other members solely by reason of acting in his or her capacity as a member;
(2) A member or manager, as the case may be, is entitled to rely on information, opinions, reports, or statements, including but not limited to financial statements or other financial data, if prepared or presented by:
(A) One or more members, managers, or employees of the limited liability company whom the member or manager reasonably believes to be reliable and competent in the matter presented;
(B) Legal counsel, public accountants, or other persons as to matters the member or manager reasonably believes are within the person's professional or expert competence; or
(C) A committee of members or managers of which he or she is not a member if the manager reasonably believes the committee merits confidence;
(3) In the instances described in paragraph (2) of this Code section, a member or manager is not entitled to rely if he or she has knowledge concerning the matter in question that makes reliance otherwise permitted by paragraph (2) of this Code section unwarranted; and
(4) To the extent that, pursuant to paragraph (1) of this Code section or otherwise at law or in equity, a member or manager has duties (including fiduciary duties) and liabilities relating thereto to a limited liability company or to another member or manager:
(A) The member's or manager's duties and liabilities may be expanded, restricted, or eliminated by provisions in the articles of organization or a written operating agreement; provided, however, that no such provision shall eliminate or limit the liability of a member or manager:
(i) For intentional misconduct or a knowing violation of law; or
(ii) For any transaction for which the person received a personal benefit in violation or breach of any provision of a written operating agreement; and
(B) The member or manager shall have no liability to the limited liability company or to any other member or manager for his or her good faith reliance on the provisions of a written operating agreement, including, without limitation, provisions thereof that relate to the scope of duties (including fiduciary duties) of members and managers.
Subject to such standards and restrictions, if any, as are set forth in the articles of organization or a written operating agreement, a limited liability company may, and shall have the power to, indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever arising in connection with the limited liability company; provided, however, that no limited liability company shall have the power to indemnify any member or manager for any liability that may not be eliminated or limited by the articles of organization or a written operating agreement by reason of division (4)(A)(i) or (ii) of Code Section 14-11-305.
(a) The provisions of this Code section shall apply to a limited liability company unless its articles of organization or a written operating agreement provides that they shall not apply. If the provisions of this Code section apply to a limited liability company, its articles of organization or a written operating agreement may limit, expand, or modify, in any manner whatsoever, the effect thereof. If the provisions of this Code section do not apply to a limited liability company, its articles of organization or a written operating agreement may, but is not required to, contain any provision whatsoever relating to transactions that might give rise to conflicts of interest for members or managers.
(b) A transaction effected or proposed to be effected by a limited liability company (or by a person in which the limited liability company has a controlling interest) that is not a member's or manager's conflicting interest transaction may not be enjoined, set aside, or give rise to an award of damages or other sanctions, in an action by a member or by or in the right of the limited liability company, on the ground of a conflicting interest in the transaction of a member or manager or any person with whom or which he or she has a personal, economic, or other association.
(c) A member's or manager's conflicting interest transaction may not be enjoined, set aside, or give rise to an award of damages or other sanctions, in an action by a member or by or in the right of the limited liability company, on the ground of a conflicting interest in the transaction of the member or manager, as the case may be, or any person with whom or which he or she has a personal, economic, or other association, if:
(1) The member's or manager's action respecting the transaction was at any time taken in compliance with this Code section; or
(2) The transaction, judged in the circumstances at the time of commitment, is established to have been fair to the limited liability company.
(d) A member's or manager's action respecting a transaction is effective for purposes of paragraph (1) of subsection (c) of this Code section if the transaction received the approval of a majority of those qualified members or managers who expressed approval or disapproval of the transaction after either required disclosure to them (to the extent the information was not known by them) or compliance with subsection (e) of this Code section.
(e) If a member or manager has a conflicting interest respecting a transaction, but neither he or she nor a related person of the member or manager specified in paragraph (21) of Code Section 14-11-101 is a party thereto, and if the member or manager has a duty under law or professional canon, or a duty of confidentiality to another person, respecting information relating to the transaction such that the member or manager cannot, consistent with that duty, make the disclosure contemplated by paragraph (22) of Code Section 14-11-101, then disclosure is sufficient for purposes of subsection (d) of this Code section if the member or manager:
(1) Discloses to the members or managers voting on the transaction the existence and nature of his or her conflicting interest and informs them of the character of and limitations imposed by that duty prior to their vote on the transaction; and
(2) Plays no part, directly or indirectly, in their deliberations or vote.
(f) A majority of all the qualified members or managers constitutes a quorum for purposes of action that complies with this Code section. Members' or managers' action that otherwise complies with this Code section is not affected by the presence or vote of a member or manager who is not a qualified member or manager.
(g) For purposes of this Code section, “qualified member or manager” means, with respect to a member's or manager's conflicting interest transaction, any member (if management of the limited liability company is not vested in a manager or managers) or manager (if management of the limited liability company is vested in a manager or managers) who does not have either a conflicting interest respecting the transaction or a familial, financial, professional, or employment relationship with a second member or manager who does have a conflicting interest respecting the transaction, which relationship would, in the circumstances, reasonably be expected to exert an influence on the first member's or manager's judgment when voting on the transaction.
(a) Except as otherwise provided in this chapter or in the articles of organization or a written operating agreement, and subject to subsection (b) of this Code section:
(1) If management of the limited liability company is vested in the members, each member shall have one vote with respect to, and the affirmative vote, approval, or consent of a majority of the members shall be required to decide, any matter arising in connection with the business and affairs of the limited liability company; and
(2) If management of the limited liability company is vested in a manager or managers, each manager shall have one vote with respect to, and the affirmative vote, approval, or consent of a majority of the managers shall be required to decide, any matter arising in connection with the business and affairs of the limited liability company.
(b) Unless otherwise provided in the articles of organization or a written operating agreement, the unanimous vote or consent of the members shall be required to approve the following matters:
(1) The dissolution of the limited liability company under paragraph (3) of subsection (a) or paragraph (3) of subsection (b) of Code Section 14-11-602;
(2) The merger of the limited liability company under subsection (a) of Code Section 14-11-903;
(3) The sale, exchange, lease, or other transfer of all or substantially all of the assets of the limited liability company. For the purposes of this paragraph, assets shall be deemed to be less than all or substantially all of a limited liability company's assets if the value of the assets does not exceed two-thirds of the value of all of the assets of the limited liability company and the revenues represented or produced by such assets do not exceed two-thirds of the total revenues of the limited liability company; provided, however, that this paragraph shall not create any inference that the sale, exchange, lease, or other transfer of assets exceeding the amounts described in this paragraph is the sale of all or substantially all of the assets of the limited liability company;
(4) The admission of any new member of the limited liability company under subsection (b) of Code Section 14-11-505;
(5) An amendment to the articles of organization under Code Section 14-11-210 or an amendment to a written operating agreement;
(6) Action under subsection (b) of Code Section 14-11-402 to reduce or eliminate an obligation to make a contribution to the capital of a limited liability company;
(7) Action to approve a distribution under Code Section 14-11-404; or
(8) Action to continue a limited liability company under paragraph (4) of subsection (a) or paragraph (4) of subsection (b) of Code Section 14-11-602.
Except as otherwise provided in the articles of organization or a written operating agreement:
(1) Action required or permitted by this chapter to be taken by members or managers may be taken without a meeting if the action is taken by all the members or managers entitled to vote on the action or, if so provided in the articles of organization or a written operating agreement, by persons who would be entitled to vote not less than the minimum number of votes that would be necessary to authorize or take the action. The action must be evidenced by one or more written consents describing the action taken, signed by members or managers entitled to take such action, and delivered to the limited liability company for inclusion in its records;
(2) If not otherwise fixed under the articles of organization or a written operating agreement, the record date for determining members or managers entitled to take action without a meeting is the date the first member or manager signs the consent;
(3) A consent signed under this Code section has the effect of a meeting vote and may be described as such in any document; and
(4) If action is taken under this Code section by less than all of the members or managers entitled to vote on the action, all members or managers entitled to vote on the action who did not participate in taking the action shall be given written notice of the action not more than ten days after the taking of the action without a meeting, but the failure to give such notice shall not invalidate the action so taken.
(a) Except as otherwise provided in the articles of organization or a written operating agreement, if the limited liability company has more than one manager:
(1) Meetings of managers may be called by any manager;
(2) At least two days' notice of any meeting of managers shall be given by any manager calling the meeting;
(3) Managers may participate in any meeting by, or conduct the meeting through the use of, any means of communication by which all members participating may simultaneously hear each other during the meeting. A manager participating in a meeting by this means is deemed to be present in person at the meeting;
(4) A majority in number of managers shall constitute a quorum for a meeting of managers; and
(5) The act of a majority of managers at a meeting of managers at which a quorum is present shall be required for managers to take action on any matter where a vote of managers is required.
(b) Unless otherwise provided in the articles of organization or a written operating agreement:
(1) Meetings of members may be called by at least 25 percent of the members;
(2) At least two days' notice of all meetings of members shall be given by the members authorized to call meetings;
(3) Members may participate in any meeting by, or conduct the meeting through the use of, any means of communication by which all members participating may simultaneously hear each other during the meeting. A member participating in a meeting by this means is deemed to be present in person at the meeting;
(4) A majority of the members shall constitute a quorum for a meeting of members; and
(5) Except as otherwise provided in this chapter, the act of a majority of members present at a meeting at which a quorum is present shall be required to take action on any matter where a vote of members is required.
Except as otherwise provided in the articles of organization or a written operating agreement:
(1) Notice shall be in writing unless oral notice is reasonable under the circumstances;
(2) Notice may be communicated in person; by telephone, electronic transmission, or other form of wire or wireless communication; or by mail or private carrier. If these forms of personal notice are impracticable, notice may be communicated by a newspaper of general circulation in the area where published or by radio, television, or other form of public broadcast communication;
(3) Written notice to a person that is required by this title to maintain a registered agent and a registered office in this state may be, but is not required to be, addressed to its registered agent at its registered office;
(4) Written notice, if in a comprehensible form, is effective at the earliest of the following:
(A) When received, or when delivered, properly addressed, as permitted by paragraph (2) of this Code section or to the addressee's last known principal place of business or residence;
(B) Five days, or such other period as shall be provided in the articles of organization or a written operating agreement, after its deposit in the mail, as evidenced by the postmark, if mailed with first-class postage prepaid and correctly addressed to a member or manager at the address shown in the limited liability company's current record of members or managers; or
(C) On the date shown on the return receipt, if sent by registered or certified mail or statutory overnight delivery, return receipt requested, and the receipt is signed by or on behalf of the addressee;
(5) Oral notice is effective when communicated if communicated in a comprehensible manner;
(6) In calculating time periods for notice under this chapter, when a period of time measured in days, weeks, months, years, or other measurement of time is prescribed for the exercise of any privilege or the discharge of any duty, the first day shall not be counted but the last day shall be counted; and
(7) If this chapter prescribes notice requirements for particular circumstances, those requirements govern.
Except as otherwise provided in the articles of organization or a written operating agreement:
(1) A member or manager may waive any notice required by this chapter, the articles of organization, or an operating agreement before or after the date and time stated in the notice. The waiver must be in writing, be signed by the member or manager entitled to the notice, and be delivered to the limited liability company for inclusion in its records;
(2) A member or manager's attendance at a meeting:
(A) Waives objection to lack of notice or defective notice of the meeting, unless the member or manager at the beginning of the meeting objects to holding the meeting or transacting business at the meeting; and
(B) Waives objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the member or manager objects to considering the matter when it is presented; and
(3) Unless required by a written operating agreement, neither the business transacted nor the purpose of the meeting need be specified in the waiver.
Except as otherwise provided in the articles of organization or a written operating agreement:
(1) Each limited liability company shall keep at its principal office the following:
(A) A current list of the name and last known address of each member and manager;
(B) Copies of records that would enable a member to determine the relative voting rights, if any, of the members;
(C) A copy of the articles of organization, together with any amendments thereto;
(D) Copies of the limited liability company's federal, state, and local income tax returns, if any, for the three most recent years;
(E) A copy of any operating agreement that is in writing, together with any amendments thereto; and
(F) Copies of financial statements, if any, of the limited liability company for the three most recent years;
(2) A member may:
(A) At the member's own expense, inspect and copy any limited liability company record upon reasonable request during ordinary business hours;
(B) Obtain from time to time upon reasonable demand:
(i) True and complete information regarding the state of the business and financial condition of the limited liability company;
(ii) Promptly after becoming available, a copy of the limited liability company's federal, state, and local income tax returns, if any, for each year; and
(iii) Other information regarding the affairs of the limited liability company as is just and reasonable; and
(3) If the limited liability company refuses to permit the inspection authorized by paragraph (2) of this Code section, the member demanding inspection may apply to the superior court for the county in which the registered office of the limited liability company is located, upon such notice as the court may require, for an order directing the limited liability company to show cause why an order permitting such inspection by the applicant should not be granted. The court shall hear the parties summarily, by affidavit or otherwise, and if the limited liability company fails to establish that the applicant is not entitled to such inspection, the court shall grant an order permitting such inspection, subject to any limitations which the court may prescribe, and grant such other relief, including costs and reasonable attorneys' fees, as the court may deem just and proper.
This chapter does not alter any law applicable to the relationship between a person rendering professional services and a person receiving those services, including liability arising out of those professional services. This chapter does not alter any law with respect to disregarding legal entities. The failure of a limited liability company to observe formalities relating to the exercise of its powers or the management of its business and affairs is not a ground for imposing personal liability on a member, manager, agent, or employee of the limited liability company for liabilities of the limited liability company.
A contribution to the capital of a limited liability company may be in cash, tangible or intangible property, services rendered, or a promissory note or other obligation to contribute cash or tangible or intangible property, or to perform services.
(a) Notwithstanding any other provision of law regarding unwritten contracts, including but not limited to Code Section 13-5-31, a promise to make a contribution to the capital of a limited liability company is not enforceable unless it is set out in the articles of organization or a written operating agreement that is binding on the person to be charged or in another writing signed by that person.
(b) Unless otherwise provided in the articles of organization or a written operating agreement, the obligation of a person to make a contribution to the capital of a limited liability company may be reduced or eliminated only with the unanimous consent of the members.
(c) A written operating agreement may provide that the interest of any member who fails to make any contribution that he or she is obligated to make shall be subject to specified penalties for, or specified consequences of, such failure. Such penalty or consequence may take the form of reducing or eliminating the defaulting member's proportionate interest in a limited liability company, subordinating his or her limited liability company interest to that of nondefaulting members, a forced sale of his or her limited liability company interest, forfeiture of his or her limited liability company interest, the lending by other members of the amounts necessary to meet his or her commitment, a fixing of the value of his or her limited liability company interest by appraisal or by formula and redemption or sale of his or her limited liability company interest at such value, or other penalty or consequence.
The profits and losses, and each item thereof, of a limited liability company shall be allocated among the members in the manner provided in the articles of organization or in a written operating agreement. If the articles of organization or a written operating agreement does not so provide, profits and losses, and each item thereof, shall be allocated equally among the members.
A member shall be entitled to receive distributions from a limited liability company before the dissolution and winding up of the limited liability company only to the extent, and at the times or upon the happening of the events, specified in the articles of organization or a written operating agreement, or as otherwise approved by all of the members. Subject to Code Section 14-11-405, distributions by a limited liability company to its members, both prior to and after the dissolution of the limited liability company, shall be shared among the members in the manner provided in the articles of organization or a written operating agreement. Subject to Code Section 14-11-405, if the articles of organization or a written operating agreement does not provide the manner in which distributions are to be shared, distributions shall be shared equally among the members.
(a) Effective for limited liability companies formed prior to July 1, 1999, except as otherwise provided in the articles of organization or a written operating agreement, and subject to Code Section 14-11-407, a member with respect to which an event of dissociation occurs (other than one of the events specified in paragraphs (1), (2), and (4) of subsection (b) of Code Section 14-11-601) is entitled to receive, within a reasonable time after the occurrence of the event, the fair value of the member's interest in the limited liability company as of the date of such occurrence, but only if such event does not result in dissolution of the limited liability company.
(b) Effective for limited liability companies formed on or after July 1, 1999, except as otherwise provided in the articles of organization or a written operating agreement, a member with respect to which an event of dissociation occurs under Code Section 14-11-601.1 is not entitled to receive any payment by reason of such event and will become an assignee as to such limited liability company interest.
Except as provided in the articles of organization or a written operating agreement:
(1) A member, regardless of the nature of the member's contribution, has no right to demand and receive any distribution from a limited liability company in any form other than cash; and
(2) No member may be compelled to accept from a limited liability company a distribution of any asset in kind to the extent that the percentage of the asset distributed to the member exceeds a percentage that is equal to the percentage in which the member shares in distributions from the limited liability company.
(a) No distribution to a member, to an assignee, or with respect to the interest of a member as to which an event of dissociation has occurred may be made if, after giving effect to the distribution:
(1) The limited liability company would not be able to pay its debts as they become due in the usual course of business; or
(2) The limited liability company's total assets would be less than the sum of its total liabilities plus, unless the articles of organization or a written operating agreement provides otherwise, the amount that would be needed, if the limited liability company were to be dissolved at the time of the distribution, to satisfy the preferential rights, if any, of other members upon dissolution that are superior to the rights of the member receiving the distribution.
(b) The limited liability company may base a determination that a distribution is not prohibited under subsection (a) of this Code section either on:
(1) Financial statements prepared on the basis of accounting practices and principles that are reasonable under the circumstances; or
(2) A fair valuation or other method that is reasonable under the circumstances.
(c) Except as provided in subsection (e) of this Code section, the effect of a distribution under subsection (a) of this Code section is measured:
(1) In the case of distribution by purchase, redemption, or other acquisition of a limited liability company interest, as of the earlier of:
(A) The date money or other property is transferred or debt incurred by the limited liability company; or
(B) The date the member ceases to be a member with respect to the acquired limited liability company interest;
(2) In the case of any other distribution of indebtedness, as of the date the indebtedness is distributed; and
(3) In all other cases, as of:
(A) The date the distribution is authorized if payment occurs within 120 days after the date of authorization; or
(B) The date the payment is made if it occurs more than 120 days after the date of authorization.
(d) A limited liability company's indebtedness incurred by reason of a distribution made in accordance with this Code section is at parity with the limited liability company's indebtedness to its general, unsecured creditors, except to the extent subordinated by agreement or except to the extent secured.
(e) Indebtedness of a limited liability company, including indebtedness issued as a distribution, is not considered a liability for purposes of determinations made under subsection (a) of this Code section if its terms provide that payment of principal and interest is to be made only if, and to the extent that, payment of a distribution to members could then be made under this Code section, and if such indebtedness is issued as a distribution, each payment of principal or interest on the indebtedness is treated as a distribution, the effect of which is measured on the date the payment is actually made.
(a) A member or manager who votes for or expressly consents to a distribution that is made in violation of Code Section 14-11-407 is personally liable to the limited liability company for the amount of the distribution that exceeds what could have been distributed without violating Code Section 14-11-407, if it is established that such member or manager did not act in compliance with Code Section 14-11-407 and violated a duty owed under Code Section 14-11-305 (without regard to any limitation on such duty permitted by paragraph (4) of Code Section 14-11-305).
(b) Each member or manager held liable under subsection (a) of this Code section for an unlawful distribution is entitled to contribution:
(1) From each other member or manager who could be held liable under subsection (a) of this Code section for the unlawful distribution; and
(2) From each member for the amount the member received knowing that the distribution was made in violation of Code Section 14-11-407.
(c) A proceeding under this Code section is barred unless it is commenced within two years after the date on which the effect of the distribution is measured under Code Section 14-11-407.
At the time a member becomes entitled to receive a distribution, the member has the status of, and is entitled to all remedies available to, a creditor of the limited liability company with respect to the distribution.
(a) A limited liability company interest is personal property. A member has no interest in specific limited liability company property.
(b) An operating agreement or the articles of organization may provide that a limited liability company interest may be evidenced by a certificate issued by the limited liability company.
Except as otherwise provided in the articles of organization or a written operating agreement:
(1) A limited liability company interest is assignable in whole or in part;
(2) An assignment entitles the assignee to share in the profits and losses and to receive the distributions to which the assignor was entitled, to the extent assigned;
(3) An assignment of a limited liability company interest does not of itself dissolve the limited liability company or entitle the assignee to participate in the management and affairs of the limited liability company or to become or exercise any rights of a member until admitted as a member pursuant to Code Section 14-11-505;
(4) Until the assignee of a limited liability company interest becomes a member, the assignor continues to be a member with respect to the assigned limited liability company interest, subject to the other members' right to remove the assignor pursuant to subparagraph (b)(3)(B) of Code Section 14-11-601 or subparagraph (b)(2)(B) of Code Section 14-11-601.1;
(5) Until the assignee of a limited liability company interest becomes a member, the assignee shall have no liability as a member solely as a result of the assignment;
(6) A member who assigns his or her entire limited liability company interest ceases to be a member or to have the power to exercise any rights of a member when all of the assignees of his or her entire limited liability company interest become members with respect to the assigned limited liability company interest, subject to the other members' right to remove the assignor earlier pursuant to subparagraph (b)(3)(B) of Code Section 14-11-601 or subparagraph (b)(2)(B) of Code Section 14-11-601.1; and
(7) The pledge of, or granting of a security interest, lien, or other encumbrance in or against, any or all of the limited liability company interest of a member is not an assignment and shall not cause the member to cease to be a member or to cease to have the power to exercise any rights or powers of a member.
Except as otherwise provided in the articles of organization or a written operating agreement:
(1) An assignee of a limited liability company interest may become a member only if the other members unanimously consent;
(2) An assignee who has become a member has, to the extent assigned, the rights and powers, and is subject to the restrictions and liabilities, of a member under the articles of organization, any operating agreement, and this chapter;
(3) An assignee who becomes a member is liable for the obligations to make contributions that are enforceable against his or her assignor under Code Section 14-11-402, but he or she is not liable for:
(A) The obligations of his or her assignor under Code Section 14-11-408; or
(B) Other obligations of his or her assignor (including obligations to make contributions) of which the assignee had no knowledge at the time he or she became a member and which could not be ascertained from the articles of organization or a written operating agreement; and
(4) Whether or not an assignee of a limited liability company interest becomes a member, the assignor is not released from his or her liability to the limited liability company under Code Section 14-11-402 or Code Section 14-11-408.
(a) On application to a court of competent jurisdiction by any judgment creditor of a member or of any assignee of a member, the court may charge the limited liability company interest of the member or such assignee with payment of the unsatisfied amount of the judgment with interest. To the extent so charged, the judgment creditor has only the rights of an assignee of the limited liability company interest. This chapter does not deprive any member of the benefit of any exemption laws applicable to his or her limited liability company interest.
(b) The remedy conferred by this Code section shall not be deemed exclusive of others which may exist, including, without limitation, the right of a judgment creditor to reach the limited liability company interest of the member by process of garnishment served on the limited liability company, provided that, except as otherwise provided in the articles of organization or a written operating agreement, a judgment creditor shall have no right under this chapter or any other state law to interfere with the management or force dissolution of a limited liability company or to seek an order of the court requiring a foreclosure sale of the limited liability company interest.
(a) In connection with the formation of a limited liability company, a person is admitted as a member of the limited liability company upon the later to occur of:
(1) The formation of the limited liability company; or
(2) The time provided in and upon compliance with the articles of organization or a written operating agreement or, if the articles of organization and any written operating agreement do not so provide, when the person's admission is reflected in the records of the limited liability company.
(b) After the formation of a limited liability company, a person is admitted as a member of the limited liability company at the time provided in and upon compliance with the articles of organization and any written operating agreement or, if the articles of organization or a written operating agreement does not so provide, upon the consent of all members and when the person's admission is reflected in the records of the limited liability company.
(c) An assignee is admitted as a member of the limited liability company upon compliance with paragraph (1) of Code Section 14-11-503 and at the time provided in and upon compliance with the articles of organization and any written operating agreement or, if the articles of organization or a written operating agreement does not so provide, when any such person's permitted admission is reflected in the records of the limited liability company; provided, however, that an assignee shall not be admitted as a member of the limited liability company until such assignee has consented to such admission.
(d) A written operating agreement may provide that a person shall be admitted as a member of a limited liability company, or shall become an assignee of a limited liability company interest or other rights or powers of a member to the extent assigned, and shall become bound by the operating agreement and the provisions of the articles of organization (A) if such person (or a representative authorized by such person) executes the operating agreement or any other writing evidencing the intent of such person to become a member or assignee, or (B) without such execution, if such person (or a representative authorized by such person) complies with the conditions for becoming a member or assignee as set forth in the written operating agreement or any other writing and such person or representative requests in writing that the records of the limited liability company reflect such admission or assignment.
(e) A person may be admitted to a limited liability company as a member of the limited liability company and may receive a limited liability company interest in the limited liability company without making a contribution or being obligated to make a contribution to the limited liability company. Unless otherwise provided in a written operating agreement, a person may be admitted to a limited liability company as a member of the limited liability company without acquiring a limited liability company interest in the limited liability company. Unless otherwise provided in a written operating agreement, a person may be admitted as the sole member of a limited liability company without making a contribution or being obligated to make a contribution to the limited liability company or without acquiring a limited liability company interest in the limited liability company.
(f) In the case of a person being admitted as a member of a surviving limited liability company pursuant to a merger in accordance with Article 9 of this chapter, a person is admitted as a member of the limited liability company as provided in the operating agreement of the surviving limited liability company or in the agreement of merger, and in the event of any inconsistency, the terms of the agreement of merger shall control. In connection with the conversion into a limited liability company in accordance with Code Section 14-11-212, a person is admitted as a member of the limited liability company as provided in the limited liability company agreement.
Except as otherwise provided in the articles of organization or a written operating agreement, if a member who is an individual dies or a court of competent jurisdiction adjudges him or her to be incompetent to manage his or her person or his or her property, the member's executor, administrator, guardian, conservator, or other legal representative has all of the rights of an assignee of all of the member's limited liability company interest. Except as otherwise provided in the articles of organization or a written operating agreement, if the last member of a limited liability company dies or a court of competent jurisdiction adjudges him or her to be incompetent to manage his or her person or his or her property, the member's executor, administrator, guardian, conservator, or other legal representative shall become a member of the limited liability company, unless such executor, administrator, guardian, conservator, or other legal representative elects not to become a member by written notice given to the limited liability company within 90 days of such death or adjudication (or within such other period as is provided for in a written operating agreement).
(a) This Code section is effective for limited liability companies formed prior to July 1, 1999.
(b) A person ceases to be a member of a limited liability company upon the occurrence of any of the following events:
(1) The member withdraws by voluntary act from the limited liability company as provided in subsection (d) of this Code section;
(2) The member ceases to be a member of the limited liability company as provided in paragraph (6) of Code Section 14-11-502;
(3) The member is removed as a member:
(A) In accordance with the articles of organization or a written operating agreement; or
(B) Subject to contrary provision in the articles of organization or in a written operating agreement, when the member assigns all of his or her limited liability company interest, by an affirmative vote of a majority in number of the members who have not assigned all of their limited liability company interests;
(4) The member's entire interest in the limited liability company is purchased or redeemed by the limited liability company;
(5) Subject to contrary provision in the articles of organization or a written operating agreement, or written consent of all other members at the time, the member (A) makes an assignment for the benefit of creditors; (B) files a voluntary petition in bankruptcy; (C) is adjudicated a bankrupt or insolvent; (D) files a petition or answer seeking for the member any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law, or regulation; (E) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the member in any proceeding of this nature; or (F) seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator of the member or of all or any substantial part of the member's properties;
(6) Subject to contrary provision in the articles of organization or a written operating agreement, or written consent of all other members at the time, if within 120 days after the commencement of any proceeding against the member seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law, or regulation, the proceeding has not been dismissed, or if within 90 days after the appointment without his or her consent or acquiescence of a trustee, receiver, or liquidator of the member or of all or any substantial part of his or her properties, the appointment is not vacated or stayed, or within 90 days after the expiration of any stay, the appointment is not vacated; or
(7) Subject to contrary provision in the articles of organization or a written operating agreement, or written consent of all other members at the time, in the case of a member who is an individual:
(A) On the date of his or her death; or
(B) On the date of the entry of an order by a court of competent jurisdiction adjudicating the member incompetent to manage his or her person or his or her property.
(c) The articles of organization or a written operating agreement may provide for other events the occurrence of which result in a person ceasing to be a member of the limited liability company.
(d) Except as otherwise provided in the articles of organization or a written operating agreement, a member may withdraw from the limited liability company at any time by giving written notice to the other members at least 30 days in advance of his or her withdrawal or such other notice as is provided for in a written operating agreement.
(a) This Code section is effective for limited liability companies formed on or after July 1, 1999.
(b) A person ceases to be a member of a limited liability company upon the occurrence of any of the following events:
(1) The member ceases to be a member of the limited liability company as provided in paragraph (6) of Code Section 14-11-502;
(2) The member is removed as a member:
(A) In accordance with the articles of organization or a written operating agreement; or
(B) Subject to contrary provision in the articles of organization or in a written operating agreement, when the member assigns all of his or her limited liability company interest, by an affirmative vote of a majority in number of the members who have not assigned all of their limited liability company interests;
(3) The member's entire interest in the limited liability company is purchased or redeemed by the limited liability company;
(4) Subject to contrary provision in the articles of organization or a written operating agreement, or written consent of all other members at the time, the member (A) makes an assignment for the benefit of creditors; (B) files a voluntary petition in bankruptcy; (C) is adjudicated a bankrupt or insolvent; (D) files a petition or answer seeking for the member any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law, or regulation; (E) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the member in any proceeding of this nature; or (F) seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator of the member or of all or any substantial part of the member's properties;
(5) Subject to contrary provision in the articles of organization or a written operating agreement, or written consent of all other members at the time, if within 120 days after the commencement of any proceeding against the member seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law, or regulation, the proceeding has not been dismissed, or if within 90 days after the appointment without his or her consent or acquiescence of a trustee, receiver, or liquidator of the member or of all or any substantial part of his or her properties, the appointment is not vacated or stayed, or within 90 days after the expiration of any stay, the appointment is not vacated; or
(6) Subject to contrary provision in the articles of organization or a written operating agreement, or written consent of all other members at the time, in the case of a member who is an individual:
(A) On the date of his or her death; or
(B) On the date of the entry of an order by a court of competent jurisdiction adjudicating the member incompetent to manage his or her person or his or her property.
(c) The articles of organization or a written operating agreement may provide for other events the occurrence of which result in a person ceasing to be a member of the limited liability company.
(d) Except as otherwise provided in the articles of organization or a written operating agreement, a member may not withdraw from the limited liability company.
(a) Effective for limited liability companies formed prior to July 1, 1999, a limited liability company is dissolved and its affairs shall be wound up upon the first to occur of the following:
(1) At the time specified in the articles of organization or a written operating agreement;
(2) Upon the happening of events specified in the articles of organization or a written operating agreement;
(3) Subject to contrary provision in the articles of organization or a written operating agreement, at a time approved by all the members;
(4) Subject to contrary provision in the articles of organization or a written operating agreement, 90 days after any event of dissociation with respect to any member (other than an event specified in paragraph (1) of subsection (b) of Code Section 14-11-601), unless within such 90 day period the limited liability company is continued by the written consent of all other members or as otherwise provided in the articles of organization or a written operating agreement; or
(5) Entry of a decree of judicial dissolution under subsection (a) of Code Section 14-11-603.
(b) Effective for limited liability companies formed on or after July 1, 1999, a limited liability company is dissolved and its affairs shall be wound up upon the first to occur of the following:
(1) At the time specified in the articles of organization or a written operating agreement;
(2) Upon the happening of events specified in the articles of organization or a written operating agreement;
(3) Subject to contrary provision in the articles of organization or a written operating agreement, at a time approved by all the members;
(4) Subject to contrary provision in the articles of organization or a written operating agreement, 90 days after an event of dissociation with respect to the last remaining member, unless otherwise provided in the articles of organization or a written operating agreement; or
(5) Entry of a decree of judicial dissolution under subsection (a) of Code Section 14-11-603.
(c) Notwithstanding paragraphs (1), (2), (3), and (4) of subsections (a) and (b) of this Code section, the limited liability company shall not be dissolved and its affairs shall not be wound up if, prior to the filing of a certificate of termination in the office of the Secretary of State, either:
(1) The limited liability company's articles of organization or operating agreement, or both, are amended such that, after giving effect to such amendment, such event does not result in dissolution of the limited liability company pursuant to subsection (a) or (b) of this Code section; or
(2) If the limited liability company then has at least one member, a decision to continue the limited liability is taken by all of the members of the limited liability company (and all other persons, if any, with power to require dissolution of the limited liability company under its articles of organization or written operating agreement).
Any amendment or other action contemplated by paragraph (1) or (2) of this subsection shall, to the extent necessary to achieve the purposes of this subsection, be effective as of and from and after the applicable event described in subsection (a) or (b) of this Code section.
(a) On application by or for a member, the court may decree dissolution of a limited liability company whenever it is not reasonably practicable to carry on the business in conformity with the articles of organization or a written operating agreement. A certified copy of any such decree shall be delivered to the Secretary of State, who shall file it.
(b)(1) The Secretary of State may commence a proceeding under this subsection to dissolve a limited liability company administratively if:
(A) The limited liability company does not deliver its annual registration to the Secretary of State, together with all required fees and penalties, within 60 days after it is due;
(B) The limited liability company is without a registered agent or registered office in this state for 60 days or more;
(C) The limited liability company does not notify the Secretary of State within 60 days that its registered agent or registered office has been changed, that its registered agent has resigned, or that its registered office has been discontinued; or
(D) The limited liability company pays a fee as required to be collected by the Secretary of State by a check or some other form of payment which is dishonored and the limited liability company or its agent does not submit payment for said dishonored payment within 60 days from notice of nonpayment issued by the Secretary of State.
(2) If the Secretary of State determines that one or more grounds exist under this subsection for dissolving a limited liability company, he or she shall provide the limited liability company with written notice of his or her determination by mailing a copy of the notice, first-class mail, to the limited liability company at the last known address of its principal office or to the registered agent. If the limited liability company does not correct each ground for dissolution or demonstrate to the reasonable satisfaction of the Secretary of State that each ground determined by the Secretary of State does not exist within 60 days after notice is provided to the limited liability company, the Secretary of State shall administratively dissolve the limited liability company by signing a certificate of dissolution that recites the ground or grounds for dissolution and its effective date. The Secretary of State shall file the original of the certificate.
(3) A limited liability company administratively dissolved continues its existence but may not carry on any business except that necessary to wind up and liquidate its business and affairs. Winding up the business of a limited liability company administratively dissolved may include, without limitation, the limited liability company proceeding, at any time after the effective date of the administrative dissolution, in accordance with Code Sections 14-11-607 and 14-11-608. The administrative dissolution of a limited liability company does not terminate the authority of its registered agent.
(4) A limited liability company administratively dissolved under this Code section may apply to the Secretary of State for reinstatement within five years after the effective date of such dissolution. The application shall:
(A) Recite the name of the limited liability company and the effective date of its administrative dissolution;
(B) State that the ground or grounds for dissolution either did not exist or have been eliminated;
(C) Either be executed by the registered agent or a member or manager of the limited liability company, in each case as set forth in the most recent annual registration of the limited liability company filed with the Secretary of State, or be accompanied by a notarized statement, executed by a person who was a member or manager, or an heir, successor, or assign of a person who was a member or manager, of the limited liability company at the time that the limited liability company was administratively dissolved, stating that such person or decedent was a member or manager of the limited liability company at the time of administrative dissolution and such person has knowledge of and assents to the application for reinstatement;
(D) Contain a statement by the limited liability company reciting that all taxes owed by the limited liability company have been paid; and
(E) Be accompanied by the fee required for the application for reinstatement contained in Code Section 14-11-1101.
If the Secretary of State determines that the application contains the information required by this paragraph and that the information is correct, he or she shall prepare a certificate of reinstatement that recites his or her determination and the effective date of reinstatement, file the original of the certificate, and serve a copy on the limited liability company. When the reinstatement is effective, it relates back to and takes effect as of the effective date of the administrative dissolution, and the limited liability company resumes carrying on its business as if the administrative dissolution had never occurred.
(5) If the Secretary of State denies a limited liability company's application for reinstatement following administrative dissolution, he or she shall serve the limited liability company with a written notice that explains the reason or reasons for denial. The limited liability company may appeal the denial of reinstatement to the superior court of the county where the limited liability company's registered office is or was located within 30 days after service of the notice of denial is perfected. The limited liability company appeals by petitioning the court to set aside the dissolution and attaching to the petition copies of the Secretary of State's certificate of dissolution, the limited liability company's application for reinstatement, and the Secretary of State's notice of denial. The court's final decision may be appealed as in other civil proceedings.
(6) The Secretary of State shall reserve the name of a limited liability company administratively dissolved under Code Section 14-2-1421 for such limited liability company's specific use for a period of five years after the effective date of the dissolution or until the limited liability company is reinstated, whichever is sooner.
(a) Except as otherwise provided in the articles of organization or a written operating agreement, upon dissolution, the members or managers in whom management of the limited liability company was vested prior to dissolution may wind up a dissolved limited liability company's affairs, or, if there are no such members or managers at the time of or at any time after such dissolution, such persons as may be designated by the persons then entitled to receive a majority of all subsequent distributions, if any, from the limited liability company may wind up the limited liability company's affairs. For cause shown, the court may wind up a dissolved limited liability company's affairs on application of any member as to which an event of dissociation has not occurred, any such member's legal representative, or any such member's assignee, or if there is no such member, legal representative, or assignee, on application of any assignee of an interest in the limited liability company.
(b) Except so far as may be appropriate to wind up the limited liability company's affairs or to complete transactions begun but not then finished, dissolution terminates all authority of every person to act for the limited liability company; provided, however, that, prior to the filing of a statement of commencement of winding up, the limited liability company shall be bound to any person who lacks knowledge of the dissolution with respect to any transaction which would bind the limited liability company if dissolution had not taken place.
(a) In connection with its winding up, a limited liability company shall (1) discharge, make provision to discharge, or dispose of pursuant to Code Sections 14-11-607 and 14-11-608, its liabilities, and (2) subject to any applicable provisions in the articles of organization or a written operating agreement, distribute its remaining assets to its members.
(b) To the extent a dissolved limited liability company does not discharge, make provision to discharge, or dispose of pursuant to Code Sections 14-11-607 and 14-11-608 a claim against it, such claim may be enforced:
(1) Against the limited liability company, to the extent of its undistributed assets; or
(2) Against each member receiving a distribution in winding up, to the extent of the assets so distributed to such member; provided that a member's total liability for all such claims shall not exceed the total amount of assets so distributed to him or her.
As respects any such claims, the limited liability company and its members shall have rights of contribution among themselves so as to produce, insofar as practicable, the effects that would have been produced had such claim been discharged by the limited liability company prior to any distribution to members.
Upon dissolution, a statement of commencement of winding up may be delivered for filing to the Secretary of State by any person authorized to wind up the limited liability company's affairs. Such statement shall set forth:
(1) The name of the limited liability company;
(2) The fact that the limited liability company has dissolved and commenced its winding up activities; and
(3) Any other provision, not inconsistent with law, that the persons charged with winding up the limited liability company's affairs elect to include.
(a) A dissolved limited liability company that has filed a statement of commencement of winding up may dispose of the known claims against it by following the procedures described in this Code section.
(b) The dissolved limited liability company may notify its known claimants in writing of the winding up proceedings at any time after the filing of the statement of commencement of winding up. The written notice must:
(1) Describe information that the limited liability company determines must be included in a claim;
(2) Provide a mailing address where a claim may be sent;
(3) State the deadline, which may not be less than six months from the date of mailing of the written notice, by which the dissolved limited liability company must receive the claim;
(4) State that the claim will be barred if not received by the deadline; and
(5) State that the limited liability company will give notice of acceptance or rejection of all claims that are received in timely fashion within six months after the deadline for receipt of claims.
(c) A claim against a dissolved limited liability company is barred:
(1) If a claimant who was given written notice under subsection (b) of this Code section does not deliver the claim to the dissolved limited liability company by the deadline; or
(2) If a claimant whose claim was rejected by the dissolved limited liability company does not commence a proceeding to enforce the claim within one year from the date of mailing of the rejection notice.
(d) For purposes of this Code section, the term “claim” does not include a contingent liability or a claim based on an event occurring after the filing of the statement of commencement of winding up.
(a) A dissolved limited liability company that has filed a statement of commencement of winding up may publish, in the manner prescribed by Code Section 14-11-609, a request that persons with claims against the limited liability company present them in accordance with subsection (b) of this Code section.
(b) The request must:
(1) Describe the information that the limited liability company determines must be included in a claim and provide a mailing address where the claim may be sent; and
(2) State that, except for claims that are contingent at the time of the filing of the statement of commencement of winding up or that arise after the filing of the statement of commencement of winding up, a claim against the limited liability company not otherwise barred will be barred unless a proceeding to enforce the claim is commenced within two years after the publication of the request.
(c) If a dissolved limited liability company that has filed a statement of commencement of winding up publishes a request described in subsection (b) of this Code section, all claims not otherwise barred will be barred unless the claimant commences a proceeding to enforce the claim against the dissolved limited liability company within two years after the date of the publication of the request, except:
(1) Claims that are contingent at the time of the filing of the statement of commencement of winding up; and
(2) Claims that arise after the filing of the statement of commencement of winding up.
(d) If a dissolved limited liability company publishes a request described in subsection (b) of this Code section, a claim not otherwise barred of a claimant whose claim is contingent at the time of the filing of the statement of commencement of winding up or based on an event occurring after the filing of the statement of commencement of winding up is barred against the limited liability company, its members, and managers unless the claimant commences a proceeding to enforce the claim against the dissolved limited liability company within two years after the date of filing of a certificate of termination or five years after the date of the second publication of the request in accordance with subsection (b) of this Code section, whichever is later.
A limited liability company seeking to publish a request for claims described in Code Section 14-11-608 shall mail or deliver to the publisher of a newspaper that is the official organ of the county where the registered office of the limited liability company is located, or that is a newspaper of general circulation published within such county whose most recently published annual statement of ownership and circulation reflects a minimum of 60 percent paid circulation, a request to publish the request for claims. The request for publication of the request for claims shall be accompanied by a check, draft, or money order in the amount of $40.00 in payment of the cost of publication. The notice shall be published once a week for two consecutive weeks commencing within ten days after receipt of the notice by the newspaper.
A dissolved limited liability company may deliver to the Secretary of State for filing a certificate of termination when the statements required to be included therein can be truthfully made. Such a certificate of termination shall set forth:
(1) The name of the limited liability company;
(2) That all known debts, liabilities, and obligations of the limited liability company have been paid, discharged, or barred or that adequate provision has been made therefor; and
(3) That there are no actions pending against the limited liability company in any court, or that adequate provision has been made for the satisfaction of any judgment, order, or decree that may be entered against it in any pending action.
Deeds or other instruments requiring execution after the filing of a certificate of termination by a dissolved limited liability company may be signed by any person who had authority to wind up the dissolved limited liability company under the provisions of subsection (a) of Code Section 14-11-604.
(a) The laws of the jurisdiction under which a foreign limited liability company is organized govern its organization and internal affairs and the liability of its managers, members, and other owners, regardless of whether the foreign limited liability company procured or should have procured a certificate of authority under this chapter.
(b) A foreign limited liability company may not be denied a certificate of authority by reason of any difference between the laws of the jurisdiction under which such company is organized and the laws of this state.
(a) A foreign limited liability company transacting business in this state shall procure a certificate of authority to do so from the Secretary of State. In order to procure a certificate of authority to transact business in this state, a foreign limited liability company shall submit to the Secretary of State an application for a certificate of authority as a foreign limited liability company, signed by a person duly authorized to sign such instruments by the laws of the jurisdiction under which the foreign limited liability company is organized, setting forth:
(1) The name of the foreign limited liability company and, if different, the name under which it proposes to qualify and transact business in this state;
(2) The name of the jurisdiction under whose laws it is organized;
(3) Its date of organization and period of duration;
(4) The street address and county of its registered office in this state and the name of its registered agent at that office;
(5) A statement that the Secretary of State is, pursuant to subsection (h) of Code Section 14-11-703, appointed the agent of the foreign limited liability company for service of process if no agent has been appointed under subsection (a) of Code Section 14-11-703 or, if appointed, the agent's authority has been revoked or the agent cannot be found or served by the exercise of reasonable diligence;
(6) The address of its principal place of business;
(7) The address of the office at which is kept a list of the names and addresses of its members and other owners, together with an undertaking by it to keep those records until its registration in this state is canceled or revoked; and
(8) The name and a business address of a person who, under the laws of the jurisdiction under which it was formed, has substantial responsibility for managing its business activities.
(b) Without excluding other activities which may not constitute transacting business in this state, a foreign limited liability company shall not be considered to be transacting business in this state, for the purpose of qualification under this chapter, solely by reason of carrying on in this state any one or more of the following activities:
(1) Maintaining or defending any action or administrative or arbitration proceeding or effecting the settlement thereof or the settlement of claims or disputes;
(2) Holding meetings of its managers, members, or other owners or carrying on other activities concerning its internal affairs;
(3) Maintaining bank accounts, share accounts in savings and loan associations, custodial or agency arrangements with a bank or trust company, or stock or bond brokerage accounts;
(4) Maintaining offices or agencies for the transfer, exchange, and registration of membership or other ownership interests in it or appointing and maintaining trustees or depositaries with relation to such interests;
(5) Effecting sales through independent contractors;
(6) Soliciting or procuring orders, whether by mail or through employees or agents or otherwise, where such orders require acceptance outside this state before becoming binding contracts and where such contracts do not involve any local performance other than delivery and installation;
(7) Making loans or creating or acquiring evidences of debt, mortgages, or liens on real or personal property or recording the same;
(8) Securing or collecting debts or enforcing any rights in property securing the same;
(9) Owning, without more, real or personal property;
(10) Conducting an isolated transaction not in the course of a number of repeated transactions of a like nature;
(11) Effecting transactions in interstate or foreign commerce;
(12) Serving as trustee, executor, administrator, or guardian, or in like fiduciary capacity, where permitted so to serve by the laws of this state; or
(13) Owning directly or indirectly an interest in or controlling directly or indirectly another person organized under the laws of or transacting business within this state.
(c) The list of activities in subsection (b) of this Code section is not exhaustive.
(d) This Code section shall not be deemed to establish a standard for activities that may subject a foreign limited liability company to taxation or to service of process under any of the laws of this state.
(a) Each foreign limited liability company that is required to procure a certificate of authority to transact business in this state shall continuously maintain in this state:
(1) A registered office that may, but need not, be a place of its business in this state; and
(2) A registered agent for service of process on the foreign limited liability company. The address of the business office of the registered agent shall be the same as the address of the registered office referred to in paragraph (1) of this subsection.
(b) A registered agent must be an individual resident of this state, a corporation, limited liability company, or a foreign corporation or another foreign limited liability company having a certificate of authority to transact business in this state.
(c) A foreign limited liability company may change its registered office or its registered agent, or both, by indicating any such change on its annual registration filed pursuant to this chapter or by delivering to the Secretary of State for filing a statement setting forth:
(1) The name of the foreign limited liability company;
(2) The street address and county of its then registered office;
(3) If the address of its registered office is to be changed, the new street address and county of the registered office;
(4) The name of its then registered agent; and
(5) If its registered agent is to be changed, the name of its successor registered agent.
(d) A registered agent of a foreign limited liability company may resign as such agent by signing and delivering to the Secretary of State for filing a statement of resignation, which may include a statement that the registered office is also discontinued. On or before the date of the filing of the statement of resignation, the registered agent shall deliver or mail a written notice of the registered agent's intent to resign to the foreign limited liability company at the most recent mailing address of the foreign limited liability company's principal place of business listed in the records of the Secretary of State. The agency appointment is terminated, and the registered office discontinued if so provided, on the earlier of the filing of the limited liability company's annual registration or a statement designating a new registered agent and registered office if also discontinued or the thirty-first day after the date on which the statement of resignation was filed.
(e) A registered agent of a foreign limited liability company may change the agent's office and the address of the registered office of any foreign limited liability company of which the agent is registered agent to another place within this state by filing a statement, as required in subsection (c) of this Code section, setting forth the required information for all foreign limited liability companies for which he or she is the registered agent, except that it need be signed only by the registered agent and need not be responsive to paragraph (5) of subsection (c) of this Code section and must recite that a copy of the statement has been mailed to the foreign limited liability company at the most recent mailing address of the foreign limited liability company's principal place of business listed on the records of the Secretary of State.
(f) The registered agent of one or more foreign limited liability companies may resign and appoint a successor registered agent by signing and delivering to the Secretary of State for filing a statement stating that the agent resigns and the name and street address and county of the office of the successor registered agent. There shall be attached to such statement a statement executed by each affected foreign limited liability company ratifying and approving such change of registered agent. Upon such filing, the successor registered agent shall become the registered agent of such foreign limited liability companies as have ratified and approved such substitution, and the successor registered agent's office, as stated in such statement, shall become the registered office in this state of each such foreign limited liability company. The Secretary of State shall furnish to the successor registered agent a certified copy of the statement filed pursuant to this subsection.
(g) The registered agent of a foreign limited liability company authorized to transact business in this state is an agent of the foreign limited liability company on whom may be served any process, notice, or demand required or permitted by law to be served on the foreign limited liability company.
(h) Whenever a foreign limited liability company required to procure a certificate of authority to transact business in this state shall fail to appoint or maintain a registered agent in this state, or whenever its registered agent cannot with reasonable diligence be found at the registered office, then the Secretary of State shall be an agent of such foreign limited liability company upon whom any process, notice, or demand may be served. Service on the Secretary of State of any such process, notice, or demand shall be made by delivering to and leaving with him or her or with any other person or persons designated by the Secretary of State to receive such service a copy of such process, notice, or demand. The plaintiff or his or her attorney shall certify in writing to the Secretary of State that the foreign limited liability company failed either to maintain a registered office or appoint a registered agent in this state and that he or she has forwarded by registered or certified mail or statutory overnight delivery such process, notice, or demand to the last registered agent at the most recent registered office listed on the records of the Secretary of State and that service cannot be effected at such office.
(i) The Secretary of State shall keep a record of all processes, notices, and demands served upon him or her under this Code section and shall record therein the time of such service and his or her action with reference thereto.
(j) This Code section does not prescribe the only means, or necessarily the required means, of serving any process, notice, or demand required or permitted by law to be served on a foreign limited liability company.
(a) If the Secretary of State finds that an application for a certificate of authority conforms to the filing requirements of this chapter and all requisite fees and any penalty due pursuant to Code Section 14-11-711 have been paid, he or she shall:
(1) Stamp or otherwise endorse his or her official title and the date and time of receipt on the application;
(2) File the application in his or her office; and
(3) Issue a certificate of authority to transact business in this state.
(b) The certificate of authority must be returned to the person who filed the application or such person's representative.
(c) If the certificate of authority is issued by the Secretary of State, a foreign limited liability company shall be deemed authorized to transact business in this state from the time of filing its application for the certificate of authority.
(a) A foreign limited liability company may apply for a certificate of authority with the Secretary of State under any name, whether or not it is the name under which it is registered in its jurisdiction of organization; provided, however, that such name:
(1) Must contain the words “limited liability company” or “limited company” (it being permitted to abbreviate the word “limited” as “ltd.” and the word “company” as “co.”) or the abbreviations “L.L.C.,” “LLC,” “L.C.” or “LC”; and
(2) Must be distinguishable on the records of the Secretary of State from the name of any corporation, limited liability company, or limited partnership; any foreign corporation, foreign limited liability company, or foreign limited partnership having a certificate of authority to transact business in this state; any nonprofit corporation, professional corporation, or professional association, domestic or foreign, on file with the Secretary of State pursuant to this title; or any name reserved or registered under this title.
(b) Whenever a foreign limited liability company is unable to procure a certificate of authority to transact business in this state because its name does not comply with paragraph (2) of subsection (a) of this Code section, it may nonetheless apply for authority to transact business in this state by adding in parentheses to its name in such application a word, abbreviation, or other distinctive and distinguishing element such as the name of the jurisdiction where it is organized. If in the judgment of the Secretary of State the name of the foreign limited liability company with such addition would comply with subsection (a) of this Code section, subsection (a) of this Code section shall not be a bar to the issuance to such foreign limited liability company of a certificate of authority to transact business in this state. In such case, any such certificate issued to such foreign limited liability company shall be issued in its name with such additions, and the foreign limited liability company shall use such name with such additions in all its dealings with the Secretary of State.
(a) A foreign limited liability company authorized to transact business in this state must procure an amended certificate of authority from the Secretary of State if it changes its name or its jurisdiction of organization. The requirements of Code Sections 14-11-702 and 14-11-704 for procuring an original certificate of authority shall apply to procuring an amended certificate under this Code section.
(b) If a foreign limited liability company authorized to transact business in this state converts into a foreign limited partnership:
(1) The foreign limited liability company shall notify the Secretary of State that such conversion has occurred no later than 30 days after the conversion, using such form as the Secretary of State shall specify, which form may require such information and statements as may be required to be submitted by a foreign limited partnership that applies for a certificate of authority to transact business in this state; and
(2) If such notice is timely given:
(A) The authorization of such entity to transact business in this state shall continue without interruption; and
(B) The certificate of authority issued to such foreign limited liability company under this article shall constitute a certificate of authority issued under Code Section 14-11-903 to the foreign limited partnership resulting from the conversion effective as of the date of the conversion.
The Secretary of State shall adjust its records accordingly.
(c) If a foreign limited liability company authorized to transact business in this state converts into a foreign corporation:
(1) The foreign limited liability company shall notify the Secretary of State that such conversion has occurred no later than 30 days after the conversion, using such form as the Secretary of State shall specify, which form may require such information and statements as may be required to be submitted by a foreign corporation that applies for a certificate of authority to transact business in this state; and
(2) If such notice is timely given:
(A) The authorization of such entity to transact business in this state shall continue without interruption; and
(B) The certificate of authority issued to such foreign limited liability company under this article shall constitute a certificate of authority issued under Code Section 14-2-1501 to the foreign corporation resulting from the conversion effective as of the date of the conversion.
The Secretary of State shall adjust its records accordingly.
(a) A foreign limited liability company authorized to transact business in this state may not withdraw from this state until it obtains a certificate of withdrawal from the Secretary of State.
(b) A foreign limited liability company authorized to transact business in this state may apply for a certificate of withdrawal by delivering to the Secretary of State for filing an application that sets forth:
(1) The name of the foreign limited liability company and the name of the jurisdiction under whose law it is organized;
(2) That it is not transacting business in this state and that it surrenders its authority to transact business in this state;
(3) That it revokes the authority of its registered agent to accept service on its behalf and appoints the Secretary of State as its agent for service of process in any proceeding based on a cause of action arising during the time it was authorized to transact business in this state;
(4) A mailing address to which a copy of any process served on the Secretary of State pursuant to paragraph (3) of this subsection may be mailed under subsection (c) of this Code section; and
(5) A commitment to notify the Secretary of State in the future of any change in the mailing address provided pursuant to paragraph (4) of this subsection.
(c) After the withdrawal of the foreign limited liability company is effective, service of process on the Secretary of State under this Code section is service on the foreign limited liability company. Any party that serves process on the Secretary of State in accordance with this subsection shall also mail a copy of the process to the foreign limited liability company at the mailing address provided pursuant to subsection (b) of this Code section.
The Secretary of State may commence a proceeding under Code Section 14-11-709 to revoke the certificate of authority of a foreign limited liability company authorized to transact business in this state if:
(1) The foreign limited liability company does not deliver its annual registration to the Secretary of State within 60 days after it is due;
(2) The foreign limited liability company does not pay within 60 days after they are due any fees, taxes, or penalties imposed by this chapter or other law;
(3) The foreign limited liability company is without a registered agent or registered office in this state for 60 days or more;
(4) The foreign limited liability company does not inform the Secretary of State under Code Section 14-11-703 that its registered agent or registered office has changed, that its registered agent has resigned, or that its registered office has been discontinued within 60 days of the change, resignation, or discontinuance;
(5) A member, manager, other owner, or agent of the foreign limited liability company signed a document such person knew was false in a material respect with intent that the document be delivered to the Secretary of State for filing; or
(6) The Secretary of State receives a duly authenticated certificate from the secretary of state or other official having custody of records in the jurisdiction under whose law the foreign limited liability company is organized stating that it has been dissolved, terminated, or disappeared as the result of a merger.
(a) If the Secretary of State determines that one or more grounds exist under Code Section 14-11-708 for revocation of a certificate of authority, the Secretary of State shall provide the foreign limited liability company with written notice of such determination by mailing a copy of the notice, first-class mail, to the foreign limited liability company at the address of its principal place of business indicated in its most recently filed annual registration, or if no annual registration has been filed, in its application for a certificate of authority to transact business, or to its registered agent.
(b) If the foreign limited liability company does not correct each ground for revocation or demonstrate to the reasonable satisfaction of the Secretary of State that each ground determined by the Secretary of State does not exist within 60 days after the notice is provided to the foreign limited liability company, the Secretary of State may revoke the foreign limited liability company's certificate of authority by signing a certificate of revocation that recites the ground or grounds for revocation and its effective date.
(c) The authority of a foreign limited liability company to transact business in this state ceases on the date shown on the certificate revoking its certificate of authority.
(d) The Secretary of State's revocation of a foreign limited liability company's certificate of authority appoints the Secretary of State as the foreign limited liability company's agent for service of process in any proceeding based on a cause of action which arose during the time the foreign limited liability company was authorized to transact business in this state. Service of process on the Secretary of State under this subsection is service on the foreign limited liability company. Any party that serves process on the Secretary of State shall also mail a copy of the process to the foreign limited liability company at the most recent address of its principal place of business listed on the records of the Secretary of State or to its registered agent. This subsection does not prescribe the only means, or necessarily the required means, of serving any process, notice, or demand required or permitted by law to be served on a foreign limited liability company.
(e) Revocation of a foreign limited liability company's certificate of authority does not terminate the authority of the registered agent of the foreign limited liability company.
(a) A foreign limited liability company may appeal the Secretary of State's revocation of its certificate of authority to the Superior Court of Fulton County within 30 days after service of the certificate of revocation is perfected under Code Section 14-11-709. The foreign limited liability company appeals by petitioning the court to set aside the revocation and attaching to the petition copies of its certificate of authority and the Secretary of State's certificate of revocation.
(b) The court may summarily order the Secretary of State to reinstate the certificate of authority or may take any other action the court considers appropriate.
(c) The court's final decision may be appealed as in other civil proceedings.
(a) A foreign limited liability company transacting business in this state may not maintain an action, suit, or proceeding in a court of this state until it is authorized to transact business in this state.
(b) The failure of a foreign limited liability company to procure a certificate of authority does not impair the validity of any contract or act of the foreign limited liability company or prevent the foreign limited liability company from defending any action, suit, or proceeding in any court of this state.
(c) A foreign limited liability company that transacts business in this state without registering as required by this chapter shall be liable to the state:
(1) For all fees which would have been imposed by this chapter upon such foreign limited liability company had it registered as required by this article; and
(2) If it has not been authorized to transact business in this state within 30 days after the first day on which it transacts business in this state, for a penalty of $500.00.
The Attorney General may maintain an action to restrain a foreign limited liability company from transacting business in this state in violation of this chapter.
A member may commence a derivative action in the right of the limited liability company to recover a judgment in its favor if all of the following conditions are met:
(1) Either management of the limited liability company is vested in a manager or managers who have the sole authority to cause the limited liability company to sue in its own right or management of the limited liability company is vested in the members but the plaintiff does not have the authority to cause the limited liability company to sue in its own right under the provisions of the articles of organization or a written operating agreement;
(2) The plaintiff has made written demand on those managers or those members with such authority requesting that such managers or such members take suitable action;
(3) Ninety days have expired from the date the demand was made unless the member has earlier been notified that the demand has been rejected by the limited liability company or unless irreparable injury to the limited liability company would result by waiting for the expiration of the 90 day period;
(4) The plaintiff (A) is a member of the limited liability company at the time of bringing the action, and (B) was a member of the limited liability company at the time of the transaction of which he or she complains, or his or her status as a member of the limited liability company has devolved upon him or her by operation of law from a person who was a member at the time of the transaction; and
(5) The plaintiff fairly and adequately represents the interests of the limited liability company in enforcing the right of the limited liability company.
In a derivative action, the complaint must set forth with particularity the effort of the plaintiff to secure commencement of the action by the managers or the members who would otherwise have the authority to cause the limited liability company to sue in its own right.
If the limited liability company commences an inquiry into the allegations made in the demand or complaint, the court may stay any derivative action for such period as the court deems appropriate.
Except as otherwise provided by the articles of organization or written operating agreement, a derivative action may not be discontinued or settled without the court's approval. If the court determines that a proposed discontinuance or settlement will substantially affect the interests of the limited liability company's members, the court shall direct that notice be given to the members affected.
(a) The court may dismiss a derivative proceeding if, on motion by the limited liability company, the court finds that one of the groups specified in subsection (b) of this Code section has made a determination in good faith after conducting a reasonable investigation upon which its conclusions are based that the maintenance of the derivative suit is not in the best interests of the limited liability company. The limited liability company shall have the burden of proving the independence and good faith of the group making the determination and the reasonableness of the investigation.
(b) The determination in subsection (a) of this Code section shall be made by:
(1) A majority vote of the independent managers or members present at a meeting of managers or members, as the case may be, if the independent managers or members constitute a quorum;
(2) A majority vote of a committee consisting of two or more independent managers or members appointed by a majority of independent managers or members present at a meeting of managers or members, as the case may be, whether or not such independent managers or members constitute a quorum; or
(3) A panel of one or more independent persons appointed by the court upon motion of the limited liability company.
(c) None of the following shall by itself cause a manager or member to be considered not independent for purposes of subsection (b) of this Code section:
(1) The nomination or election of the manager or member by managers or members who are not independent;
(2) The naming of the manager or member as a defendant in the derivative proceeding; or
(3) The fact that the manager or member approved the action being challenged in the derivative proceeding so long as the manager or member did not receive a personal benefit as a result of the action.
(a) If a derivative action is successful, in whole or in part, or if anything is received by the plaintiff as a result of a judgment, compromise, or settlement of an action or claim, the court may award the plaintiff reasonable expenses, including reasonable attorneys' fees, and shall direct him or her to remit to the limited liability company the remainder of those proceeds received by him or her.
(b) In any derivative action instituted on or after March 1, 1994, in the right of any domestic or foreign limited liability company by a member or members thereof, the court having jurisdiction, upon termination of such action and a finding that the action was commenced or maintained without reasonable cause or for an improper purpose, may order the plaintiff or plaintiffs to pay to the parties named as defendants the reasonable expenses, including reasonable attorneys' fees, incurred by them in the defense of such action.
In any derivative action in the right of a foreign limited liability company, the matters covered by this article shall be governed by the laws of the jurisdiction of organization of the foreign limited liability company except for Code Sections 14-11-803 and 14-11-804 and paragraph (b) of Code Section 14-11-806.
(a) Pursuant to a written agreement, which, unless otherwise provided therein, will constitute the plan of merger required by Code Section 14-11-902 if it contains the provisions required by that Code section, a limited liability company may merge with or into one or more business entities with such limited liability company or other business entity as the agreement shall provide being the surviving limited liability company or other business entity.
(b) In the case of a merger involving a foreign limited liability company, foreign limited partnership, or foreign corporation, the merger may take place if:
(1) The merger is permitted by the law of the state or jurisdiction under whose laws each foreign constituent entity is organized or formed and each foreign constituent entity complies with that law in effecting the merger;
(2) The foreign constituent entity complies with Code Section 14-11-904 if it is the surviving entity of the merger; and
(3) Each limited liability company complies with the applicable provisions of this Code section, Code Sections 14-11-902 and 14-11-903, and, if it is the surviving entity, with Code Section 14-11-904.
(a) Each constituent business entity shall adopt a written plan of merger, which shall be approved in accordance with Code Section 14-11-903.
(b) The plan of merger must set forth:
(1) The name of each limited liability company and each other business entity that is a constituent entity planning to merge and the name of the surviving business entity into which each other constituent entity proposes to merge;
(2) The terms and conditions of the merger; and
(3) The manner and basis of converting the interests of the members of each limited liability company and the shares or other interests in each other business entity that is a constituent entity in the merger into interests, shares, obligations, or other securities, as the case may be, of the surviving or any other business entity or, in whole or in part, into cash or other property.
(c) The plan of merger may set forth:
(1) Amendments to the articles of organization of a limited liability company that is the surviving entity in the merger; and
(2) Other provisions relating to the merger.
(a) A limited liability company party to a proposed merger shall have the plan of merger authorized and approved by the unanimous consent of the members, unless the articles of organization or a written operating agreement of such limited liability company provides otherwise. A corporation or limited partnership party to a proposed merger shall have the plan of merger authorized and approved in accordance with the applicable chapter of this title.
(b) A plan of merger complying with the requirements of Code Section 14-11-902 shall be approved by each foreign constituent business entity in accordance with the laws of the state or jurisdiction in which it was organized or formed.
(c) After a merger is authorized, unless the plan of merger provides otherwise, and at any time before articles of merger (as provided for in Code Section 14-11-904) are filed by the Secretary of State, the planned merger may be abandoned (subject to any contractual rights) in accordance with the procedure set forth in the plan of merger or, if none is set forth, as follows:
(1) By the unanimous consent of the members of each limited liability company that is a constituent entity, unless the articles of organization or a written operating agreement of any such limited liability company provides otherwise;
(2) By each corporation and limited partnership that is a constituent entity in accordance with the applicable chapter of this title; and
(3) By each foreign constituent business entity in accordance with the laws of the state or jurisdiction in which it was organized or formed.
After a plan of merger is approved as provided in Code Section 14-11-903, the surviving limited liability company or other business entity shall deliver to the Secretary of State for filing articles of merger setting forth:
(1) The name and jurisdiction of organization or formation of each constituent business entity that is merging and the name of the surviving limited liability company or other business entity into which each other constituent business entity is merging;
(2) Any amendments to the articles of organization of the surviving limited liability company;
(3) The effective date and time of the merger if later than the date and time the articles of merger are filed;
(4) That the executed plan of merger is on file at the principal place of business of the surviving limited liability company or other business entity, stating the address thereof;
(5) That a copy of the plan of merger will be furnished by the surviving limited liability company or other business entity, on request and without cost, to any member of any constituent entity;
(6) A statement that the plan of merger has been duly authorized and approved by each constituent business entity in accordance with Code Section 14-11-903;
(7) If the surviving entity is a foreign limited liability company, foreign limited partnership, or foreign corporation without a certificate of authority to transact business in this state, that the Secretary of State is appointed as agent of the surviving entity on whom process in this state in any action, suit, or proceeding for the enforcement of an obligation of each limited liability company constituent to the merger may be served and the address to which a copy of the process is to be mailed; and
(8) Any other provisions relating to the merger that the constituent business entities determine to include therein.
(a) If the surviving entity is a limited liability company, when a merger takes effect:
(1) Every other constituent business entity party to the merger merges into the limited liability company designated in the plan of merger as the surviving entity;
(2) The separate existence of each constituent business entity party to the plan of merger except the surviving limited liability company shall cease;
(3) The title to all real estate and other property owned by each constituent business entity is vested in the surviving limited liability company without reversion or impairment;
(4) The surviving limited liability company has all the liabilities of each constituent business entity;
(5) A proceeding pending against any constituent business entity may be continued as if the merger did not occur or the surviving limited liability company may be substituted in the proceeding for the constituent business entity whose existence ceased;
(6) Neither the rights of creditors nor any liens on the property of any constituent business entity shall be impaired by the merger;
(7) The articles of organization of the surviving limited liability company shall be amended to the extent provided in the articles of merger; and
(8) The interests or shares in each merging constituent business entity that are to be converted into interests of the surviving limited liability company, or into cash or other property under the terms of the plan of merger, or cancelled, are so converted or cancelled, and the former holders thereof are entitled only to the rights provided in the plan of merger or their rights otherwise provided by law.
(b) If the surviving business entity is to be governed by the laws of any jurisdiction other than this state, the effects of merger shall be the same as provided in this Code section, except insofar as the laws of such other jurisdiction provide otherwise.
(c) Nothing in this article shall abridge or impair any dissenters' or appraisal rights that may otherwise be available to the members or shareholders or other holders of an interest in any constituent business entity.
(d) A foreign business entity authorized to transact business in this state that merges with and into a limited liability company pursuant to this chapter and is not the surviving entity in such merger need not obtain a certificate of withdrawal from the Secretary of State.
(a) A limited liability company may elect to become a foreign limited liability company, a foreign limited partnership, or a foreign corporation, if such a conversion is permitted by the law of the state or jurisdiction under whose law the resulting entity would be formed.
(b) To effect a conversion under this Code section, the limited liability company must adopt a plan of conversion that sets forth the manner and basis of converting the interests of the members of the limited liability company into interests, shares, obligations, or other securities, as the case may be, of the resulting entity. The plan of conversion may set forth other provisions relating to the conversion.
(c) The limited liability company shall have the plan of conversion authorized and approved by the unanimous consent of the members, unless the articles of organization or a written operating agreement of such limited liability company provides otherwise.
(d) After a conversion is authorized, unless the plan of conversion provides otherwise, and at any time before the conversion has become effective, the planned conversion may be abandoned, subject to any contractual rights, in accordance with the procedure set forth in the plan of conversion or, if none is set forth, by the unanimous consent of the members of the limited liability company, unless the articles of organization or a written operating agreement of such limited liability company provides otherwise.
(e) The conversion shall be effected as provided in, and shall have the effects provided by, the law of the state or jurisdiction under whose law the resulting entity is formed and by the plan of conversion, to the extent not inconsistent with such law.
(f) If the resulting entity is required to obtain a certificate of authority to transact business in this state by the provisions of this title governing foreign corporations, foreign limited partnerships, or foreign limited liability companies, it shall do so.
(g) After a plan of conversion is approved by the members, the limited liability company shall deliver to the Secretary of State for filing a certificate of conversion setting forth:
(1) The name of the limited liability company;
(2) The name and jurisdiction of the entity to which the limited liability company shall be converted;
(3) The effective date, or the effective date and time, of such conversion if later than the date and time the certificate of conversion is filed;
(4) A statement that the plan of conversion has been approved as required by subsection (c) of this Code section;
(5) A statement that the authority of its registered agent to accept service on its behalf is revoked as of the effective time of such conversion and that the Secretary of State is irrevocably appointed as the agent for service of process on the resulting entity in any proceeding to enforce an obligation of the limited liability company arising prior to the effective time of such conversion, including the rights, if any, of dissenting members;
(6) A mailing address to which a copy of any process served on the Secretary of State under paragraph (5) of this subsection may be mailed; and
(7) A statement that the Secretary of State shall be notified of any change in the resulting entity's mailing address.
(h) Upon the conversion's taking effect, the resulting entity is deemed:
(1) To appoint the Secretary of State as its agent for service of process in a proceeding to enforce any of its obligations arising prior to the effective time of such conversion, including the rights, if any, of dissenting members; and
(2) To agree that it will promptly pay to any dissenting members the amount, if any, to which such member is entitled under Article 10 of this chapter.
(i) A converting limited liability company pursuant to this Code section may file a copy of its certificate of conversion, certified by the Secretary of State, in the office of the clerk of the superior court of the county where any real property owned by such limited liability company is located and record such certified copy of the certificate of conversion in the books kept by such clerk for recordation of deeds in such county with the limited liability company indexed as the grantor and the foreign entity indexed as the grantee. No real estate transfer tax otherwise required by Code Section 48-6-1 shall be due with respect to recordation of such certificate of conversion.
As used in this article, the term:
(1) “Beneficial member” means the person who is a beneficial owner of the membership interest held in a voting trust or by a nominee as the record member.
(2) “Dissenter” means a member who is entitled to dissent from limited liability company action under Code Section 14-11-1002 and who exercises that right when and in the manner required by Code Sections 14-11-1003 through 14-11-1010.
(3) “Fair value” with respect to a membership interest means the value of the membership interest immediately before the effectuation of the limited liability company action to which the dissenter objects, excluding any appreciation or depreciation in anticipation of such action.
(4) “Interest” means interest from the effective date of the limited liability company action until the date of payment, at a rate that is fair and equitable under all the circumstances.
(5) “Limited liability company” means the limited liability company of which the dissenter is a member before the limited liability company action to which the dissenter objects or the surviving entity by merger of that limited liability company.
(6) “Member” means the record member or the beneficial member.
(7) “Membership interest” means a member's rights in the limited liability company, collectively, including the member's share of the profits and losses of the limited liability company, the right to receive distributions of the limited liability company's assets, and any right to vote or participate in management.
(8) “Record member” means the person in whose name the membership interest is registered in the records of a limited liability company.
(a) Unless otherwise provided by the articles of organization or a written operating agreement, a record member of the limited liability company is entitled to dissent from, and obtain payment of the fair value of his or her membership interest in the event of, any of the following actions:
(1) Consummation of a plan of merger to which the limited liability company is a party if approval of less than all of the members of the limited liability company is required for the merger by the articles of organization or a written operating agreement and the member is entitled to vote on the merger;
(2) Consummation of a plan of conversion pursuant to Code Section 14-2-1109.2 or 14-11-906;
(3) Consummation of a sale, lease, exchange, or other disposition of all or substantially all of the property of the limited liability company if approval of less than all of the members is required by the articles of organization or a written operating agreement and the member is entitled to vote on the sale, lease, exchange, or other disposition, but not including a sale pursuant to court order or a sale for cash pursuant to a plan by which all or substantially all of the net proceeds of the sale will be distributed to the members within one year after the date of sale;
(4) An amendment of the articles of organization that materially and adversely affects rights in respect of a dissenter's membership interest in the limited liability company because it:
(A) Alters or abolishes a preferential right of the member's interest;
(B) Creates, alters, or abolishes a right in respect of redemption, including a provision respecting a sinking fund for the redemption or repurchase, of the membership interest;
(C) Alters or abolishes a preemptive right of the holder of the membership interest to acquire additional interest or other securities;
(D) Excludes or limits the right of the member to vote on any matter, other than a limitation by dilution through additional member contributions or other securities with similar voting rights; or
(E) Cancels, redeems, or repurchases all or part of the membership interest of the class; or
(5) Any limited liability company action taken pursuant to a member vote to the extent that the articles of organization or a written operating agreement provides that voting or nonvoting members are entitled to dissent and obtain payment for their membership interests.
(b) A member entitled to dissent and obtain payment for his or her membership interest under this article may not challenge the limited liability company action creating his or her entitlement unless the limited liability company action fails to comply with procedural requirements of this chapter, the articles of organization, or the written operating agreement or if the vote required to obtain approval of the limited liability company action was obtained by fraudulent and deceptive means, regardless of whether the member has exercised dissenters' rights.
(a) If proposed limited liability company action creating dissenters' rights under Code Section 14-11-1002 is submitted to a vote at a members' meeting, the meeting notice must state that members are or may be entitled to assert dissenters' rights under this article and be accompanied by a copy of this article.
(b) If limited liability company action creating dissenters' rights under Code Section 14-11-1002 is taken without a vote of members, the limited liability company shall notify in writing all members entitled to assert dissenters' rights that the action was taken and send them the dissenters' notice described in Code Section 14-11-1005.
(a) If proposed limited liability company action creating dissenters' rights under Code Section 14-11-1002 is submitted to a vote at a members' meeting, a record member who wishes to assert dissenters' rights:
(1) Must deliver to the limited liability company before the vote is taken written notice of his or her intent to demand payment for his or her membership interest if the proposed action is effectuated; and
(2) Must not vote his or her membership interest in favor of the proposed action.
(b) A record member who does not satisfy the requirements of subsection (a) of this Code section is not entitled to payment for his or her membership interest under this article.
(a) If proposed limited liability company action creating dissenters' rights under Code Section 14-11-1002 is authorized at a members' meeting, the limited liability company shall deliver a written dissenters' notice to all members who satisfied the requirements of Code Section 14-11-1004.
(b) The dissenters' notice must be sent no later than ten days after the limited liability company action was taken and must:
(1) State where the payment demand must be sent and where and when certificates for certificated membership interests must be deposited;
(2) Inform holders of uncertificated membership interests to what extent transfer of the membership interests will be restricted after the payment demand is received;
(3) Set a date by which the limited liability company must receive the payment demand, which date may not be fewer than 30 nor more than 60 days after the date the notice required in subsection (a) of this Code section is delivered; and
(4) Be accompanied by a copy of this article.
(a) A record member sent a dissenters' notice described in Code Section 14-11-1005 must demand payment and deposit his or her certificates for certificated membership interests in accordance with the terms of the notice.
(b) A record member who demands payment and deposits his or her certificates under subsection (a) of this Code section retains all other rights of a member until these rights are canceled or modified by the taking of the proposed limited liability company action.
(c) A record member who does not demand payment or deposit his or her membership interest certificates where required, each by the date set in the dissenters' notice, is not entitled to payment for his or her membership interest under this article.
(a) The limited liability company may restrict the transfer of uncertificated membership interests from the date the demand for their payment is received until the proposed limited liability company action is taken or the restrictions are released under Code Section 14-11-1009.
(b) The person for whom dissenters' rights are asserted as to uncertificated membership interests retains all other rights of a member until these rights are canceled or modified by the taking of the proposed limited liability company action.
(a) Except as provided in Code Section 14-11-1010, within ten days of the later of the date the proposed limited liability company action is taken or receipt of a payment demand, the limited liability company shall offer to pay each dissenter who complied with Code Section 14-11-1006 the amount the limited liability company estimates to be the fair value of his or her membership interest, plus accrued interest.
(b) The offer of payment must be accompanied by:
(1) The limited liability company's balance sheet as of the end of a fiscal year ending not more than 16 months before the date of payment, an income statement for that year, a statement of changes in members' equity for that year, and the latest available interim financial statements, if any;
(2) A statement of the limited liability company's estimate of the fair value of the membership interest;
(3) An explanation of how the interest was calculated;
(4) A statement of the dissenter's right to demand payment under Code Section 14-11-1010; and
(5) A copy of this article.
(c) If the member accepts the limited liability company's offer by written notice to the limited liability company within 30 days after the limited liability company's offer, payment for his or her membership interest shall be made within 60 days after the making of the offer or the taking of the proposed limited liability company action, whichever is later.
(a) If the limited liability company does not take the proposed action within 60 days after the date set for demanding payment and depositing membership interest certificates, the limited liability company shall return the deposited certificates and release the transfer restrictions imposed on uncertificated membership interests.
(b) If, after returning deposited certificates and releasing transfer restrictions, the limited liability company takes the proposed action, it must send a new dissenters' notice under Code Section 14-11-1005 and repeat the payment demand procedure.
(a) A dissenter may notify the limited liability company in writing of his or her own estimate of the fair value of his membership interest and amount of interest due, and demand payment of his or her estimate of the fair value of his or her membership interest and interest due, if:
(1) The dissenter believes that the amount offered under Code Section 14-11-1008 is less than the fair value of his or her membership interest or that the interest due is incorrectly calculated; or
(2) The limited liability company, having failed to take the proposed action, does not return the deposited certificates or release the transfer restrictions imposed on uncertificated membership interests within 60 days after the date set for demanding payment.
(b) A dissenter waives his or her right to demand payment under this Code section unless he or she notifies the limited liability company of his or her demand in writing under subsection (a) of this Code section within 30 days after the limited liability company offered payment for his or her membership interest, as provided in Code Section 14-11-1008.
(c) If the limited liability company does not offer payment within the time set forth in subsection (a) of Code Section 14-11-1008:
(1) The member may demand the information required under subsection (b) of Code Section 14-11-1008, and the limited liability company shall provide the information to the member within ten days after receipt of a written demand for the information; and
(2) The member may at any time, subject to the limitations period of Code Section 14-11-1013, notify the limited liability company of his or her own estimate of the fair value of his membership interest and the amount of interest due and demand payment of his or her estimate of the fair value of his or her membership interest and interest due.
(a) If a demand for payment under Code Section 14-11-1010 remains unsettled, the limited liability company shall commence a proceeding within 60 days after receiving the payment demand and petition the court to determine the fair value of the membership interest and accrued interest. If the limited liability company does not commence the proceeding within the 60 day period, it shall pay each dissenter whose demand remains unsettled the amount demanded.
(b) The limited liability company shall commence the proceeding, which shall be a nonjury equitable valuation proceeding, in the superior court of the county where a limited liability company's registered office is located. If the surviving entity is a foreign entity without a registered office in this state, it shall commence the proceeding in the county in this state where the registered office of the domestic entity merged with the foreign entity was located.
(c) The limited liability company shall make all dissenters, whether or not residents of this state, whose demands remain unsettled parties to the proceeding, which shall have the effect of an action quasi in rem against their membership interests. The limited liability company shall serve a copy of the petition in the proceeding upon each dissenting member who is a resident of this state in the manner provided by law for the service of a summons and complaint and upon each nonresident dissenting member either by registered or certified mail or statutory overnight delivery and publication or in any other manner permitted by law.
(d) The jurisdiction of the court in which the proceeding is commenced under subsection (b) of this Code section is plenary and exclusive. The court may appoint one or more persons as appraisers to receive evidence and recommend decision on the question of fair value. The appraisers have the powers described in the order appointing them or in any amendment to it. Except as otherwise provided in this chapter, Chapter 11 of Title 9, known as the “Georgia Civil Practice Act,” applies to any proceeding with respect to dissenters' rights under this chapter.
(e) Each dissenter made a party to the proceeding is entitled to judgment for the amount which the court finds to be the fair value of his or her membership interest, plus interest to the date of judgment.
(a) The court in an appraisal proceeding commenced under Code Section 14-11-1011 shall determine all costs of the proceeding, including the reasonable compensation and expenses of appraisers appointed by the court, but not including fees and expenses of attorneys and experts for the respective parties. The court shall assess the costs against the limited liability company, except that the court may assess the costs against all or some of the dissenters, in amounts the court finds equitable, to the extent the court finds the dissenters acted arbitrarily, vexatiously, or not in good faith in demanding payment under Code Section 14-11-1010.
(b) The court may also assess the fees and expenses of attorneys and experts for the respective parties, in amounts the court finds equitable:
(1) Against the limited liability company and in favor of any or all dissenters if the court finds the limited liability company did not substantially comply with the requirements of Code Sections 14-11-1103 through 14-11-1109; or
(2) Against either the limited liability company or a dissenter, in favor of any other party, if the court finds that the party against whom the fees and expenses are assessed acted arbitrarily, vexatiously, or not in good faith with respect to the rights provided by this article.
(c) If the court finds that the services of attorneys for any dissenter were of substantial benefit to other dissenters similarly situated and that the fees for those services should not be assessed against the limited liability company, the court may award to these attorneys reasonable fees to be paid out of the amounts awarded the dissenters who were benefited.
No action by any dissenter to enforce dissenters' rights shall be brought more than three years after the limited liability company action was taken, regardless of whether notice of the limited liability company action and of the right of dissent was given by the limited liability company in compliance with the provisions of Code Section 14-11-1003 and Code Section 14-11-1005.
(a) The Secretary of State shall collect the following fees when the documents described below are delivered to the Secretary of State for filing pursuant to this chapter:
| | Document | Fee | | --- | --- | --- | | | (1) Articles of organization․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․$100.00 | | | (2) Articles of amendment․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․․20.00 | | | (3) Articles of merger․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․․20.00 | | | (4) Certificate of election under Code Section 14-11-212 (together with articles of organization) | ․․․․․․․․․․․․․․․95.00 | | | (5) Application for certificate of authority to transact business․․․․․․․․․․․ | ․․․․․․․․․․․․․․225.00 | | | (6) Statement of commencement of winding up․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․No fee | | | (7) Certificate of termination․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․No fee | | | (8) Application of withdrawal․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․No fee | | | (9) Articles of correction․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․․20.00 | | | (10) Application for reservation of a name․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․․25.00 | | | (11) Statement of change of registered office or registered agent․․․$ 5.00 per limited liability company (foreign or domestic), but not less than | ․․․․․․․․․․․․․․․20.00 | | | (12) Registered agent's statement of resignation pursuant to subsection (d) of Code Section 14-11-209 or subsection (d) of Code Section 14-11-703 | ․․․․․․․․․․․․․․No fee | | | (13) Certificate of judicial dissolution․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․No fee | | | (14) Annual registration (foreign or domestic)․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․․50.00 | | | (15) Penalty for late filing of annual registration․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․․25.00 | | | (16) Reinstatement fee․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․250.00 | | | (17) Any other document required or permitted to be filed by this chapter․․․ | ․․․․․․․․․․․․․․․20.00 | | | (18) Certificate of conversion․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․․95.00 |
(b) The Secretary of State shall collect the penalty provided for in paragraph (2) of subsection (c) of Code Section 14-11-711.
(a) If each person required by Code Section 14-11-205 to execute any document fails or refuses to do so, any other person who is adversely affected by the failure or refusal may petition the superior court of the county where the registered office of the limited liability company is located to direct the execution of the document. If the court finds that it is proper for the document to be executed and that every person so designated has failed or refused to execute the document, it shall order the Secretary of State to file the document in appropriate form notwithstanding the lack of required execution.
(b) The court shall assess the costs and expenses of such proceeding against the limited liability company, except that all or any part of such costs and expenses may be apportioned and assessed, as the court may determine, against any or all of the persons required by Code Section 14-2-205 to execute a document who failed or refused to do so if the court finds that such failure or refusal was arbitrary, vexatious, or otherwise not in good faith.
(a) Each limited liability company and each foreign limited liability company authorized to transact business in this state shall deliver to the Secretary of State for filing an annual registration that sets forth:
(1) The name of the limited liability company or the foreign limited liability company and the jurisdiction under whose law it is organized;
(2) The street address and county of its registered office and the name of its registered agent at that office in this state;
(3) The mailing address of its principal place of business; and
(4) Any additional information that is necessary to enable the Secretary of State to carry out the provisions of this chapter.
(b) Information in the annual registration must be current as of the date the annual registration is executed on behalf of the limited liability company or foreign limited liability company.
(c) The first annual registration must be delivered to the Secretary of State between January 1 and April 1, or such other date as the Secretary of State may specify by rules or regulations, of the year following the calendar year in which the limited liability company was formed or a foreign limited liability company was authorized to transact business. Subsequent annual registrations must be delivered to the Secretary of State between January 1 and April 1, or such other date as the Secretary of State may specify by rules and regulations, of the following calendar years.
(d) If an annual registration does not contain the information required by this Code section, the Secretary of State shall promptly notify the limited liability company or foreign limited liability company in writing and return the registration to it for correction. If the registration is corrected to contain the information required by this Code section and delivered to the Secretary of State within 30 days after the date of notice, it is deemed to be timely filed.
Notwithstanding any other law to the contrary, the Secretary of State may provide for the annual registration required under this chapter to be valid for a period up to and including three years. The Secretary of State is authorized to adopt the necessary rules and regulations to implement such a registration process.
Each limited liability company and foreign limited liability company shall be classified as a partnership for Georgia income tax purposes unless classified otherwise for federal income tax purposes, in which case the limited liability company or foreign limited liability company shall be classified for Georgia income tax purposes in the same manner as it is classified for federal income tax purposes. A member or an assignee of a member of a limited liability company or foreign limited liability company shall be treated for Georgia income tax purposes as either a resident or nonresident partner in the limited liability company or foreign limited liability company unless classified otherwise for federal income tax purposes, in which case the member or assignee of a member shall have the same status for Georgia income tax purposes as such member or assignee of a member has for federal income tax purposes.
The Secretary of State shall have the power and authority reasonably necessary to enable him or her to administer this chapter efficiently and to perform the duties imposed upon him or her pursuant to this chapter, including, without limitation, the power and authority to employ from time to time such additional personnel as in his or her judgment are required for such purposes.
The Secretary of State may promulgate such rules and regulations, not inconsistent with the provisions of this chapter, as are incidental to and necessary for the implementation and enforcement of such provisions of this chapter as are administered by the Secretary of State. Such rules and regulations shall be promulgated in accordance with Chapter 13 of Title 50, the “Georgia Administrative Procedure Act.”
(a) The rule that statutes in derogation of the common law are to be strictly construed shall have no application to this chapter.
(b) It is the policy of this state with respect to limited liability companies to give maximum effect to the principle of freedom of contract and to the enforceability of operating agreements.
(c) Unless displaced by particular provisions of this chapter, the principles of law and equity supplement this chapter.
(d) If any provision of this chapter or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this chapter that can be given effect without the invalid provision or application. To this end, the provisions of this chapter are severable.
(e) A limited liability company may conduct its business, carry on its operations and have and exercise the powers granted by this chapter in any state, territory, district, or possession of the United States or in any foreign country.
(f) The laws of this state relating to establishment and regulation of professional services are amended and superseded to the extent such laws are inconsistent as to form of organization with the provisions of this chapter and are deemed amended to permit the provision of professional services within this state by limited liability companies.
(g) Nothing in this chapter is intended to restrict or limit in any manner the authority and duty of any regulatory or other body licensing professionals within this state to license individuals rendering professional services or to regulate the practice of any profession that is within the jurisdiction of the regulatory or other body licensing such professionals within this state, notwithstanding that the person is a member, manager, or employee of a limited liability company and rendering the professional services or engaging in the practice of the profession through a limited liability company.
(h) The personal liability of a member of a limited liability company to any person or in any action or proceeding for the debts, obligations, or liabilities of the limited liability company, or for the acts or omissions of other members, managers, employees, or agents of the limited liability company, shall be governed solely and exclusively by this chapter and the laws of this state. Whenever a conflict arises between the laws of this state and the laws of any other state with regard to the liability of members of a limited liability company for the debts, obligations, and liabilities of the limited liability company or for the acts or omissions of other members, managers, employees, or agents of the limited liability company, this state's laws shall be deemed to govern in determining such liability.
(i) The provisions of this chapter shall determine the rights and obligations of a limited liability company organized under this chapter in commerce with foreign nations and among the several states to the extent permitted by law.
(j) A member of a limited liability company is not a proper party to a proceeding by or against a limited liability company, solely by reason of being a member of the limited liability company, except:
(1) Where the object of the proceeding is to enforce a member's right against or liability to the limited liability company; or
(2) In a derivative action authorized by Article 8 of this chapter.
(k) The General Assembly has power to amend or repeal all or part of this chapter at any time, and all limited liability companies and foreign limited liability companies subject to this chapter are governed by the amendment or repeal.
(l) Any provision that this chapter requires or permits to be set forth in an operating agreement may be set forth in the articles of organization. In the event of any conflict between a provision of the articles of organization and a provision of an operating agreement, the provision of the articles of organization shall govern.
(m) Each provision of this chapter shall have independent legal significance.
(n) Nothing in this chapter shall be construed as establishing that a limited liability company interest is not a “security” within the meaning of paragraph (31) of Code Section 10-5-2 (or any successor statute).
(a) A limited liability company's registered agent is the limited liability company's agent for service of process, notice, or demand required or permitted by law to be served on the limited liability company. If a limited liability company has no registered agent or the agent cannot with reasonable diligence be served, the limited liability company may be served by registered or certified mail or statutory overnight delivery, return receipt requested, addressed to the limited liability company at its principal office. Service is perfected under the immediately preceding sentence at the earliest of:
(1) The date the limited liability company receives the mail;
(2) The date shown on the return receipt, if signed on behalf of the limited liability company; or
(3) Five days after its deposit in the mail, as evidenced by the postmark, if mailed postage prepaid and correctly addressed.
This subsection does not prescribe the only means, or necessarily the required means, of serving a limited liability company.
(b) Venue in proceedings against a limited liability company or foreign limited liability company shall be determined in accordance with the pertinent constitutional and statutory provisions of this state in effect on March 1, 1994, or thereafter. For purposes of determining venue, the residence of a limited liability company or foreign limited liability company shall be determined in accordance with Code Section 14-2-510 as though such limited liability company or foreign limited liability company were a corporation.
This chapter shall become effective on March 1, 1994. The provisions of law that became effective on July 1, 1992, and that were codified at Code Sections 14-11-1 through 14-11-19 are hereby repealed. A foreign limited liability company that prior to March 1, 1994, obtained a certificate of authority to transact business in this state is not required to obtain a new certificate of authority by reason of the enactment of this chapter.
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