Notice of dissenters’ rights

(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 461 14-2-1320 CORPORATIONS & PARTNERSHIPS 14-2-1321 corporate action was taken. (Code 1981, § 14-2-1320, enacted by Ga. L. 1988, p. 1070, § 1; Ga. L. 1993, p. 1231, § 17.) COMMENT Source: Model Act, § 13.20. This replaces former § 14-2-251. Subsection (a) requires the corporation to notify record shareholders of the existence of dissenters’ rights before the vote is taken on the corporate action. This notice provides the reassurance to investors that the right to dissent is intended to provide because many shareholders have no idea what rights of dissent they may have or how to assert them. If the corporation is uncertain whether or not the shareholders have dissenters’ rights, it may comply with this notice requirement by stating that the shareholders ‘‘may have’’ dissenters’ rights. Such notification was required by former law at the time of the notice of the meeting for amendments of the articles of incorporation by § 14-2-191(b)(2); for mergers by § 14-2-212(b)(2); and for asset sales by § 14-2-231(2). Subsection (b) provides that notice be given after the action is taken in situations where the action is validly taken without a vote of shareholders, e.g., in a merger of a subsidiary into its parent under Section 14-2-1104, or in amendments of articles of incorporation taken by written consent of shareholders by a required vote under Section 14-2-704. Subsection 14-2-1104(c) requires the notice to be sent within ten days after corporate action is taken. Similarly, if action amending articles of incorporation is taken by written consent of the required number of shareholders, Section 14-2-704(g) requires notice to be sent to the remaining shareholders within ten days. This notice may be combined with the dissenters’ notice required by Section 14-2-1322. This was previously required by § 14-2-214(b). Note to 1993 Amendment The 1993 amendment added the phrase ‘‘no later than ten days after the corporate action was taken’’ to clarify that the notice required by Section 14-2-1322 does not need to be provided when soliciting a consent, but only after the corporation takes the action creating the dissenters’ rights. Cross-References Acting without meeting, see § 14-2-704. Meeting notice, see § 14-2-705. ‘‘Notice’’ defined, see § 14-2-141. ‘‘Record shareholder’’ defined, see § 14-2-1301. Right to dissent, see § 14-2-1302. ‘‘Shareholder’’ defined, see § 14-2-1301. Shareholders’ meetings, see § 14-2-701 et seq.