VirginiaSB4792026 Regular SessionSenateWALLET

Virginia Stock Corporation Act; changes to Act.

Sponsored By: David W. Marsden (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 HB 316.

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Bill Overview

Analyzed Economic Effects

9 provisions identified: 0 benefits, 2 costs, 7 mixed.

Board bylaws and committee power limits

Incorporators or the board adopt the first bylaws. Bylaws can include shareholder nomination rules for proxy materials and pick a Virginia court as the exclusive forum if it has jurisdiction. Shareholders cannot use bylaws to block the board from changing reasonable nomination procedures. Boards may create committees of two or more directors. Committees cannot fill board vacancies, change articles or bylaws, approve certain mergers, or issue shares or distributions beyond board limits. Non‑directors may serve on committees but usually cannot vote on board functions.

Derivative suits: demand, review, costs

To sue on the company’s behalf, a shareholder must have owned shares at the time of the act, make a written demand, and usually wait 90 days. Beneficial owners must include proof with the demand. A court must dismiss the case if disinterested directors, a disinterested committee, or a court‑appointed panel does an informed, good‑faith review and decides the case is not in the company’s best interest. Plaintiffs must plead detailed facts to challenge that review. If the case brings a substantial benefit, a court may order the company to pay the plaintiff’s expenses. If the demand or suit was arbitrary, vexatious, or not in good faith, the plaintiff or the plaintiff’s lawyer can be ordered to pay the defendants’ expenses. For suits about foreign corporations, Virginia courts apply the law of the company’s home jurisdiction if Virginia is a convenient forum.

Rules for stock, options, and agreements

The board, a board committee, or authorized officers must approve share issuances. Payment can be cash, notes, services, or other value, and the adequacy decision makes shares fully paid. Shares for future services can be escrowed or canceled if promises are not met. Companies can grant rights, options, or warrants; authorized officers may choose recipients within board limits, but not themselves. Shareholder agreements are allowed even if they differ from normal rules. They must be approved or signed by all shareholders at the time and noted on certificates. A buyer who did not know of the agreement can cancel within 90 days of learning or within two years of purchase, whichever is earlier. Agreements end if the company becomes publicly held.

Shareholder votes on major asset sales

Shareholders must approve a sale, lease, or other asset deal if it would leave no significant continuing business. A company is treated as keeping a real business if it keeps at least 20% of total assets and at least 20% of either income before tax or revenues from continuing operations. Determinations use the most recent fiscal year, and public companies may rely on audited statements.

New filing fees and name rules

Virginia sets fixed State Corporation Commission fees. Articles of conversion cost $100. Many common filings cost $25. Name reservations, some dissolutions, and certain notices cost $10. A certificate under § 13.1-781 costs $6. A foreign company can register its name for one year and renew in the 60 days before it expires. Registration ends if a Virginia company takes the name, the foreign company becomes authorized in Virginia, or the registrant releases it.

Requirements to form and keep records

Articles of incorporation must list the company name, total authorized shares, classes or series, the registered office, and a qualified registered agent. The agent must be a Virginia resident director, a Virginia lawyer, or an authorized entity. Corporations must keep minutes, actions without meetings, accounting records, current shareholder lists, articles, bylaws, three years of shareholder communications, director and officer names, and the latest annual report. Records can be electronic if they can be printed on paper. Shareholder lists need not include electronic contact info, and some beneficial owners can be omitted unless the company uses a registration procedure.

Dissolution triggers and reinstatement process

A corporation dissolves when an event in its articles or bylaws occurs, directors and shareholders vote to dissolve, a court orders it, or the law causes automatic or involuntary termination. A terminated corporation can apply to reinstate within five years unless barred. It must pay a $100 reinstatement fee plus all past‑due annual registration fees and penalties, file the last annual report, and fix name or registered agent issues. If reinstated, the company’s existence is treated as continuous from the termination date.

Safe harbors for insider deals

A deal involving a director or officer conflict is valid if one of three things happens. Disinterested directors approve it after full disclosure. Or disinterested shareholders approve it after full disclosure. Or the deal is fair to the company. The law also defines who counts as a related person.

Shareholder voting and challenge limits

A matter can still go to a shareholder vote even if the board withdraws its recommendation. After shareholders approve a corporate action, most later lawsuits to undo it are barred. Challenges are allowed only for lack of authorization, fraud or material misstatements or omissions, interested‑party problems without required approvals, or when proper notice was not given for actions taken without unanimous consent. For those consent actions, a shareholder must sue within the law’s 10‑day windows.

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 • Other: 1

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

Passed by for the day Block Vote (Voice Vote)

Yes: 0 • No: 0

Senate vote 1/28/2026

Constitutional reading dispensed Block Vote (on 1st reading)

Yes: 40 • 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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