VirginiaSB4792026 Regular SessionSenateWALLET

Virginia Stock Corporation Act; changes to Act.

Sponsored By: David W. Marsden (Democratic)

Signed by Governor

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 HB 316.

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Bill Overview

Analyzed Economic Effects

8 provisions identified: 3 benefits, 2 costs, 3 mixed.

Officers gain power to issue shares

Virginia corporate boards can let officers approve share issues, sales, and sale contracts within board-set limits. Officers can set share classes and their rights, and decide whether payment for shares is enough. Boards can also assign share-sale decisions to committees made up only of officers, with no directors. Authorized officers can issue rights, options, and warrants and set their terms, including terms for the underlying securities. That power remains subject to any power reserved to shareholders in the company's founding documents.

Shareholder agreements can stay in force

Qualifying shareholder agreements no longer end automatically when a corporation becomes public. Agreements that miss the law's special shareholder-agreement requirements can still bind shareholders and the corporation. They must follow the rest of the Virginia Stock Corporation Act. Once an agreement ends, the board can remove it and its references from founding documents or bylaws without shareholder action.

Shareholder votes can survive board reversals

A corporation can agree to submit a matter to shareholders for a vote. That vote can proceed even after the board stops recommending the matter. The rule applies when the corporation has agreed to hold the vote.

Shareholders face tighter company lawsuit rules

Shareholders suing on a corporation's behalf must first deliver a written demand detailing their reasons, requested action, and possible lawsuit. Beneficial shareholders and unrestricted voting trust beneficial owners must include proof of ownership. The usual wait is 90 days, unless the company rejects the demand sooner or waiting risks irreparable harm to it. A company can seek dismissal after an adequately informed, good-faith review finds the suit against its interests and explains why. Shareholders challenging that review must state specific facts; discovery is limited to those facts, and shareholders generally must prove noncompliance. The company must prove reviewers lacked conflicting interests only when specific allegations raise a substantial question about their independence.

Foreign corporations lose new name registrations

Corporations formed outside Virginia no longer have a process to initially register their names under this provision. Existing name registrations can be renewed during the 60 days before expiration. Registrations last one year. Renewal filings must give the company's name, place and date of incorporation, business description, and proof of good standing.

Companies can direct shareholder court claims

Virginia stock corporations can use bylaws to require internal company claims to go to named courts. Covered claims include disputes governed by the law of the company's internal affairs. The bylaw must exist before the case begins, and the named court must already have authority to hear it. Companies cannot use these bylaws to block Virginia courts or require arbitration.

Insider deals gain protection, challenges narrow

Deals involving directors, officers, or related people gain protection from conflict-based damages and court orders through approval safeguards or fairness. Protection requires disclosure of key facts and approval by directors or shareholders without conflicting interests, or fairness to the corporation. Director approval requires a majority of directors without conflicts; one director alone cannot approve, and materially interested insiders' controlled shares do not count for shareholder approval. Related people include those whose family, financial, work, or professional ties could impair an insider's judgment. Shareholders generally cannot challenge or undo covered actions after shareholder approval. Exceptions preserve challenges involving improper approval, fraud, material misstatements or omissions, insider deals lacking required recommendation or approval, and specified nonunanimous-consent cases.

More corporations qualify for paid reinstatement

More corporations that have ceased to exist can apply to the State Corporation Commission for reinstatement within five years. Corporations terminated for continued abuse or overreach of legal authority remain ineligible. Court-dissolved corporations cannot qualify when the dissolution order makes no provision for reinstatement. Reinstatement requires the required filings, all past annual registration fees and penalties, and a $100 reinstatement fee. Reinstated corporations are treated as having existed continuously.

Sponsors & Cosponsors

Sponsor

  • David W. Marsden

    Democratic • Senate

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 262 • No: 0

Senate vote • 3/11/2026

House amendments agreed to by Senate

Yes: 40 • No: 0

House vote • 3/10/2026

Passed House with amendments Block Vote

Yes: 99 • No: 0

House vote • 3/5/2026

Reported from Labor and Commerce with amendment(s)

Yes: 21 • No: 0

House vote • 3/3/2026

Subcommittee recommends reporting with amendment(s)

Yes: 9 • No: 0

Senate vote • 1/30/2026

Read third time and passed Senate Block Vote

Yes: 38 • No: 0

Senate vote • 1/29/2026

Engrossed by Senate Block Vote (Voice Vote)

Yes: 0 • No: 0

Senate vote • 1/29/2026

Commerce and Labor Substitute agreed to

Yes: 0 • No: 0

Senate vote • 1/28/2026

Constitutional reading dispensed Block Vote (on 1st reading)

Yes: 40 • No: 0

Senate vote • 1/28/2026

Passed by for the day Block Vote (Voice Vote)

Yes: 0 • No: 0

Senate vote • 1/26/2026

Reported from Commerce and Labor with substitute

Yes: 15 • No: 0

Actions Timeline

  1. Acts of Assembly Chapter text (CHAP0892)

    4/13/2026Governor
  2. Approved by Governor-Chapter 892 (effective 7/1/2026)

    4/13/2026Governor
  3. Fiscal Impact Statement from State Corporation Commission (SB479)

    4/6/2026Senate
  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

    3/31/2026Senate
  6. Signed by Speaker

    3/31/2026House
  7. Bill text as passed Senate and House (SB479ER)

    3/30/2026Senate
  8. Enrolled

    3/30/2026Senate
  9. Signed by President

    3/30/2026Senate
  10. House amendments agreed to by Senate (40-Y 0-N 0-A)

    3/11/2026Senate
  11. Passed House with amendments Block Vote (99-Y 0-N 0-A)

    3/10/2026House
  12. Engrossed by House as amended

    3/10/2026House
  13. committee amendments agreed to

    3/10/2026House
  14. Read third time

    3/10/2026House
  15. Read second time

    3/9/2026House
  16. Reported from Labor and Commerce with amendment(s) (21-Y 0-N)

    3/5/2026House
  17. House subcommittee offered

    3/3/2026House
  18. Subcommittee recommends reporting with amendment(s) (9-Y 0-N)

    3/3/2026House
  19. Fiscal Impact Statement from State Corporation Commission (SB479)

    2/26/2026Senate
  20. Assigned HCL sub: Subcommittee #1

    2/25/2026House
  21. Referred to Committee on Labor and Commerce

    2/4/2026House
  22. Read first time

    2/4/2026House
  23. Placed on Calendar

    2/4/2026House
  24. Read third time and passed Senate Block Vote (38-Y 0-N 0-A)

    1/30/2026Senate
  25. Engrossed by Senate Block Vote (Voice Vote)

    1/29/2026Senate

Bill Text

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