Shares without certificates

(a) Unless the articles of incorporation or bylaws provide otherwise, the board of directors of a corporation may authorize the issue of some or all of the shares of any or all of its classes or series without 135 14-2-626 CORPORATIONS & PARTNERSHIPS 14-2-627 certificates. The authorization does not affect shares already represented by certificates until they are surrendered to the corporation. (b) Within a reasonable time after the issue or transfer of shares without certificates, the corporation shall send the shareholder a written statement of the information required on certificates by subsection (b) of Code Section 14-2-625 and, if applicable, Code Section 14-2-627. (Code 1981, § 14-2-626, enacted by Ga. L. 1988, p. 1070, § 1.) COMMENT Source: Model Act, § 6.26. This replaces former § 14-2-87. Subsection (a) authorizes the creation of uncertificated shares either by original issue or in substitution for shares previously represented by certificates. No such authority was formerly granted by Georgia law. This subsection gives the board of directors the widest discretion so that a particular class and series of shares might be entirely represented by certificates, entirely uncertificated, or represented partly by each. The second sentence ensures that a corporation may not treat as uncertificated, and accordingly transferable on its books without due presentation of a certificate, any shares for which a certificate is outstanding. The statement required by subsection (b) ensures that holders of uncertificated shares will receive from the corporation the same information that the holders of certificates receive when certificates are issued. There is no requirement that this information be delivered to purchasers of uncertificated shares before purchase. Cross-References Certificates for shares, see § 14-2-625. Information on share certificates, see § 14-2-625. Share transfer restrictions, see § 14-2-627.