Sale or other disposal of assets in usual course of activities; mortgage or other encumbrance of assets

Unless otherwise provided by this chapter, the articles, or bylaws, a corporation may on the terms and conditions, for the consideration determined by the board of directors, and without the approval of the members or any other person: (1) Sell, lease, exchange, or otherwise dispose of all, or substantially all, of its property in the usual and regular course of its activities; or (2) Mortgage, pledge, dedicate to the repayment of indebtedness (whether with or without recourse), or otherwise encumber any or all of its property whether or not in the usual and regular course of its activities. (Code 1981, § 14-3-1201, enacted by Ga. L. 1991, p. 465, § 1.) COMMENT This section is based on the Model Act. It deals with two types of transactions. First, it authorizes the board to approve a sale or other disposition of all or substantially all of a corporation’s property in the usual and regular course of its activities. While such a sale or disposition would not normally be in the regular course of a corporation’s activities, if it is it may be approved by the board alone, unless the articles or bylaws or this Code provide otherwise. The second type of transaction is one in which a corporation mortgages, pledges or dedicates to the repayment of indebtedness any or all of its property, whether or not the transaction is in the usual and regular course of the corporation’s activities. Subject to a contrary provision in the articles or bylaws, the directors alone may approve such a pledge or mortgage.