Notice of intent to demand payment

(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: 462 14-2-1321 (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. (Code 1981, § 14-2-1321, enacted by Ga. L. 1988, p. 1070, § 1.) COMMENT Source: Model Act, § 13.21. This replaces former § 14-2-251. If a shareholder’s vote is called for, subsection (a) requires the shareholder to give notice of his intent to demand payment before the vote on the corporate action is taken. This notice enables other voters to determine how much of a cash payment may be required. It also serves to limit the number of persons to whom the corporation must give further notice, including the technical details of depositing share certificates. This subsection has no application to actions taken without a shareholder vote. This is consistent with former law, § 14-2-251(a). In order to be and remain a dissenter eligible to demand payment for his shares, the section requires that a shareholder must not only give the notice required by this section, but must also vote against, or abstain from voting on, the proposal. This is clearer than the similar provision of former § 14-2-251(b). The time available to file the notice required in § 14-2-1321 may be shorter than the notice period previously available, because generally notice of meetings to approve mergers, share exchanges and asset sales is set at a minimum of 10 days under the Code, where it was 20 days under prior law. Thus § 14-2-1003(d) (amendments of articles of incorporation), § 14-2-1103(d) (mergers) and § 14-2-1202(d) (asset sales) all refer to the notice required by § 14-2-705, which sets notice requirements of no fewer than 10 nor more than 60 days, while previously the requirements were 10 days for amendments to articles (§ 14-2-191(b)(2) and § 14-2-113(a)); 20 days for mergers and consolidations (§ 14-2-212(b)(1), and 20 days for asset sales (§ 14-2-231(2)). Cross-References ‘‘Deliver’’ includes mail, see § 14-2-140. Dissenters’ rights as exclusive remedy, see § 14-2-1302. Effective date of notice, see § 14-2-141. ‘‘Notice’’ defined, see § 14-2-141.