VirginiaHB3162026 Regular SessionHouseWALLET

Virginia Stock Corporation Act; changes to Act.

Sponsored By: Patrick A. Hope (Democratic)

Became Law

Summary

Virginia Stock Corporation Act. Makes various changes to the Virginia Stock Corporation Act, many of which conform the Act to recent changes to the Model Business Corporation Act produced by the Corporate Laws Committee of the American Bar Association's Business Law Section. Among other things, the bill (i) addresses the authority of a board of directors to delegate authority with respect to the issuance of shares to a committee of the board and one or more of the corporation's officers, (ii) removes the requirement for the cessation of shareholder agreements when a corporation becomes a public corporation, (iii) requires a corporation to maintain in its records certain shareholder agreements, (iv) removes the requirement for a corporation to maintain its financial statements for the three most recent fiscal years, and (v) authorizes a corporation to submit a matter to a vote of its shareholders even if, after approving the matter, the board of directors determines it no longer recommends such matter. This bill is identical to SB 479.

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Bill Overview

Analyzed Economic Effects

11 provisions identified: 1 benefits, 1 costs, 9 mixed.

Fewer post‑approval challenges to deals

After shareholders approve a major corporate action, courts generally do not undo it. Challenges remain only for narrow cases, like lack of proper authorization, fraud or key omissions, conflicted deals without required approvals, or actions taken without at least 10 days’ effective notice to all affected shareholders. For conflict‑of‑interest transactions, disclosure and approval by a majority of disinterested directors or disinterested shareholders protect the deal, or the deal must be fair to the company.

Shareholder vote for major asset sales

A sale, lease, or other disposition needs a shareholder vote if it would leave no significant ongoing business. The company is conclusively treated as keeping significant business if it keeps at least 20% of total assets and at least 20% of either income before tax or revenues from continuing operations. If those 20% tests are met, no shareholder approval is required. Boards may rely on reasonable accounting or a fair valuation; public companies may rely on their most recent GAAP‑audited statements without a going‑concern warning.

Stricter steps for shareholder derivative suits

A shareholder must have owned shares at the time of the wrong and at demand, and must fairly represent the company. The shareholder must deliver a written demand and wait 90 days unless the company rejects earlier or waiting risks irreparable harm. Courts must dismiss a case if a properly disinterested group, after an informed review, decides in good faith that the suit is not in the company’s best interest. Courts can make the company pay the plaintiff’s expenses if the case gives the company a substantial benefit, or make the plaintiff or lawyer pay if the case was arbitrary or in bad faith. For suits about foreign corporations, Virginia courts usually apply the home state’s law, after deciding Virginia is a convenient forum.

Register a foreign corporate name in Virginia

A foreign corporation can register its name in Virginia if it is distinguishable. The application must list the corporate name, where and when it was formed, a short business description, and a certificate of good standing. Registration lasts one year and can be renewed during the 60 days before it expires. It ends if a domestic corporation takes the name, the foreign company gets authority to do business in Virginia, or it consents to another user.

Fixed fees for Virginia corporate filings

The State Corporation Commission charges set fees for common filings. Filing articles of conversion to another entity costs $100. Many major filings cost $25, including incorporation, domestication, amendments, mergers, corrections, and name registration or renewal. Other filings cost $10, including name reservations, indistinguishable‑name applications, and some dissolution and withdrawal filings. A certificate under § 13.1‑781 costs $6.

Shareholder agreements and certificate notices

Shareholder agreements that meet the law bind the corporation and shareholders, even if they differ from default rules. To be valid, they must be in the articles or bylaws and approved by all current shareholders, or be a written agreement signed by all and known to the company. The company must note the agreement on share certificates or the information statement and replace old certificates. A buyer who did not know of the agreement can rescind the purchase if they sue within 90 days after finding out or within two years of buying. An agreement ends if the company becomes public; agreements effective before July 1, 2015, last 10 years unless they say otherwise or are amended.

Board committees: how they work and limits

The board may create committees of two or more directors and appoint members with the required board vote. Board meeting rules on notice, quorum, and voting apply to committees. Committees cannot do certain things, like amend the articles or bylaws, fill most board vacancies, or approve actions that need a shareholder vote. Non‑directors may serve but cannot vote when the committee acts with board authority. A committee that approves issuing shares may consist of officers and does not need directors.

Form a Virginia corporation: articles and bylaws

The law sets what must be in articles of incorporation. You must list the company name, total authorized shares (by class), the registered office, and a qualified registered agent. Incorporators or the board must adopt initial bylaws. The articles may add rules on shareholder rights, purpose, powers, par value, and limits on taking business opportunities. If a business‑opportunity limit covers an officer or related person, disinterested directors must later approve it.

Rules for issuing stock and options

The board must authorize share issuances, or a committee or officers if allowed. Shares can be paid with cash, notes, services already done, contracts for future services, other securities, or other value. The company may put shares tied to future services or notes in escrow, restrict transfers, credit dividends to the price, and cancel shares if obligations are not met. The board can let officers set terms and pick recipients within limits, but an officer cannot award themself. If it is unclear whether shares are fully paid, a good‑faith board finding makes them conclusively fully paid and nonassessable.

When a Virginia corporation dissolves

A corporation dissolves and winds up when the first of several events happens. These include an event stated in the articles or bylaws, a board‑and‑shareholder dissolution, a court decree, an automatic termination, or an involuntary termination under the law.

Proxy access and Virginia lawsuit forums

Bylaws can require the company to include shareholder‑nominated director candidates in its proxy materials, subject to bylaw rules. Bylaws can also pick Virginia courts (state or federal) as the exclusive forum for internal corporate claims. A forum bylaw does not create jurisdiction and does not apply if the named court lacks it. A company can also keep its promise to submit a matter for a shareholder vote even if the board no longer recommends it.

Sponsors & Cosponsors

Sponsor

  • Patrick A. Hope

    Democratic • House

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 493 • No: 1

House vote 3/12/2026

Senate amendments agreed to by House

Yes: 97 • No: 0

Senate vote 3/11/2026

Commerce and Labor Amendments agreed to

Yes: 0 • No: 0

Senate vote 3/11/2026

Passed Senate with amendments Block Vote

Yes: 40 • No: 0

Senate vote 3/11/2026

Reconsideration of Senate passage agreed to by Senate Block Vote

Yes: 40 • No: 0

Senate vote 3/11/2026

Passed Senate with amendments Block Vote

Yes: 39 • No: 0

Senate vote 3/10/2026

Passed by for the day Block Vote (Voice Vote)

Yes: 0 • No: 0

Senate vote 3/10/2026

Constitutional reading dispensed Block Vote (on 2nd reading)

Yes: 37 • No: 0

Senate vote 3/9/2026

Reported from Commerce and Labor with amendments

Yes: 14 • No: 0

House vote 2/4/2026

Passed House Block Vote

Yes: 98 • No: 0

House vote 2/4/2026

Read third time and passed House Block Vote

Yes: 97 • No: 1

House vote 1/29/2026

Reported from Labor and Commerce with substitute

Yes: 22 • No: 0

House vote 1/27/2026

Subcommittee recommends reporting with substitute

Yes: 9 • No: 0 • Other: 1

Actions Timeline

  1. Acts of Assembly Chapter text (CHAP0383)

    4/8/2026Governor
  2. Approved by Governor-Chapter 383 (effective 7/1/2026)

    4/8/2026Governor
  3. Fiscal Impact Statement from State Corporation Commission (HB316)

    4/6/2026House
  4. Governor's Action Deadline 11:59 p.m., April 13, 2026

    3/31/2026Governor
  5. Enrolled Bill communicated to Governor on March 31, 2026

    3/31/2026House
  6. Signed by Speaker

    3/31/2026House
  7. Bill text as passed House and Senate (HB316ER)

    3/30/2026House
  8. Enrolled

    3/30/2026House
  9. Signed by President

    3/30/2026Senate
  10. Senate amendments agreed to by House (97-Y 0-N 0-A)

    3/12/2026House
  11. Passed Senate with amendments Block Vote (40-Y 0-N 0-A)

    3/11/2026Senate
  12. Reconsideration of Senate passage agreed to by Senate Block Vote (40-Y 0-N 0-A)

    3/11/2026Senate
  13. Passed Senate with amendments Block Vote (39-Y 0-N 0-A)

    3/11/2026Senate
  14. Commerce and Labor Amendments agreed to

    3/11/2026Senate
  15. Engrossed by Senate as amended

    3/11/2026Senate
  16. Read third time

    3/11/2026Senate
  17. Passed by for the day Block Vote (Voice Vote)

    3/10/2026Senate
  18. Constitutional reading dispensed Block Vote (on 2nd reading) (37-Y 0-N 0-A)

    3/10/2026Senate
  19. Rules suspended

    3/10/2026Senate
  20. Senate committee offered

    3/9/2026Senate
  21. Reported from Commerce and Labor with amendments (14-Y 0-N)

    3/9/2026Senate
  22. Referred to Committee on Commerce and Labor

    2/5/2026Senate
  23. Constitutional reading dispensed (on 1st reading)

    2/5/2026Senate
  24. Passed House Block Vote (98-Y 0-N 0-A)

    2/4/2026House
  25. Reconsideration of passage agreed to by House

    2/4/2026House

Bill Text

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