Title 14

A corporation may pay the expenses of selling or underwriting its shares and of organizing or reorganizing the corporation from the consideration received for shares. (Code 1981, § 14-2-628, enacted by Ga. L. 1988, p. 1070, § 1.) COMMENT Source: Model Act, § 6.28. This replaces f…

(a) The shareholders of all corporations, other than those described in subsection (b) of this Code section, do not have a preemptive right to acquire the corporation’s unissued or treasury shares, if any, except to the extent the articles of incorporation so provide. (b) The sha…

(a) A corporation may acquire its own shares and shares so acquired constitute authorized but unissued shares, unless the articles of incorporation provide that reacquired shares become treasury shares or prohibit the reissue of reacquired shares. (b) If the articles of incorpora…

(a) A board of directors may authorize and the corporation may make distributions to its shareholders subject to restriction by the articles of incorporation and the limitation in subsection (c) of this Code section. (b) If the board of directors does not fix the record date for …

(a) As used in this Code section, the term: (1) ‘‘Call’’ means a notice or demand, pursuant to a right contained in the articles of incorporation, resolution of the board of directors, or other document governing rights and preferences of shares or other securities, to redeem, ca…

The word ‘‘outstanding’’ was moved from the first to the second sentence, in the interest of clarity and emphasis. The articles of incorporation may provide for multiple or fractional votes per share, and may provide that some classes of shares are nonvoting on some or all matter…

Ordinarily the corporation will have no knowledge of the circumstances surrounding the execution of the instrument. This section establishes general rules permitting the corporation to accept instruments if they appear to be executed in the manner described in the section. This p…

(a) A corporation shall hold a meeting of shareholders annually at a time stated in or fixed in accordance with the bylaws. (b) Annual shareholders’ meetings may be held in or out of this state at the place stated in or fixed in accordance with the bylaws. If no place is stated i…

(a) A corporation shall hold a special meeting of shareholders: (1) On call of its board of directors or the person or persons authorized to do so by the articles of incorporation or bylaws; (2) Except as to corporations described in paragraph (3) of this subsection, if the holde…

(a) The superior court of the county where a corporation’s registered office is located may summarily order a meeting to be held: (1) On application of any shareholder of the corporation if an annual meeting was not held within the earlier of six months after the end of a fiscal …

(a) Action required or permitted by this chapter to be taken at a shareholders’ meeting may be taken without a meeting if the action is taken by all the shareholders entitled to vote on the action or, if so provided in the articles of incorporation, by persons who would be entitl…

(a) A corporation shall notify shareholders of the date, time, and place of each annual and special shareholders’ meeting no fewer than ten nor more than 60 days before the meeting date. Unless this chapter or the articles of incorporation require otherwise, the corporation is re…

(a) A shareholder may waive any notice required by this chapter, the articles of incorporation, or bylaws before or after the date and time stated in the notice. The waiver must be in writing or by electronic transmission, be signed by the shareholder entitled to the notice, and …

(a) The bylaws may fix or provide the manner of fixing the record date for one or more voting groups in order to determine the shareholders entitled to notice of a shareholders’ meeting, to demand a special meeting, to vote, or to take any other action. If the bylaws do not fix o…

(a) After fixing a record date for a meeting, a corporation shall prepare an alphabetical list of the names of all its shareholders who are entitled to notice of a shareholders’ meeting. The list must be arranged by voting group and within each voting group by class or series of …

(a) Except as provided in subsections (b) and (c) of this Code section or unless the articles of incorporation provide otherwise, each outstanding share (other than shares of preferred stock issued or authorized before July 1, 1989), regardless of class, is entitled to one vote o…

(a) A shareholder may vote his or her shares in person or by proxy. (b) A shareholder or his or her agent or attorney in fact may appoint a proxy to vote or otherwise act for the shareholder by signing an appointment form or by an electronic transmission. An electronic transmissi…

(a) A corporation may establish a procedure by which the beneficial owner of shares that are registered in the name of a nominee is recognized by the corporation as the shareholder. The extent of this recognition may be determined in the procedure. (b) The procedure may set forth…

(a) If the name signed on a vote, consent, waiver, or proxy appointment corresponds to the name of a shareholder, the corporation if acting in good faith is entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the shareholder. (b) If…

(a) Shares entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those shares exists with respect to that matter. Unless the articles of incorporation or this chapter provides otherwise, a majority of the votes entitled to be cas…

(a) If the articles of incorporation or this chapter provides for voting by a single voting group on a matter, action on that matter is taken when voted upon by that voting group as provided in Code Section 14-2-725. (b) If the articles of incorporation or this chapter provides f…

(a) The articles of incorporation or a bylaw adopted under Code Section 14-2-1021 may provide for a greater or lesser quorum (but not less than one-third of the votes entitled to be cast) or a greater voting requirement for shareholders (or voting groups of shareholders) than is …

(a) Unless otherwise provided in: (1) The articles of incorporation; or (2) A bylaw that fixes a greater voting requirement for the election of directors and that is adopted by the board of directors of a corporation having shares listed on a national securities exchange or regul…

The holders of a majority of the voting shares represented at a meeting, whether or not a quorum is present, may adjourn such meeting from time to time. (Code 1981, § 14-2-729, enacted by Ga. L. 1989, p. 946, § 26.)

(a) A corporation having any shares listed on a national securities exchange or regularly traded in a market maintained by one or more members of a national or affiliated securities association shall, and any other corporation may, appoint one or more inspectors to act at a meeti…

(a) One or more shareholders may create a voting trust, conferring on a trustee the right to vote or otherwise act for them, by signing an agreement setting out the provisions of the trust (which may include anything consistent with its purpose) and transferring their shares to t…

(a) Two or more shareholders may provide for the manner in which their shares will be voted by signing an agreement for that purpose. A voting agreement created under this Code section or under subsection (b), (f ), or (g) of Code Section 14-2-920 is not subject to the provisions…

(a) An agreement among the shareholders of a corporation that complies with this Code section is effective among the shareholders and the corporation even though it is inconsistent with one or more other provisions of this Code in that it: (1) Eliminates the board of directors or…

— O.C.G.A. § 14-2-742 has nothing to do with the merits of the shareholder’s claim but only with a procedural prerequisite for asserting such a claim. McGregor v. Stachel, 200 Ga. App. 324, 408 S.E.2d 118 (1991). Response to demand. — Comment 4 of O.C.G.A. § 14-2-742 does not pro…

A shareholder may not commence or maintain a derivative proceeding unless the shareholder: (1) Was a shareholder of the corporation at the time of the act or omission complained of or became a shareholder through transfer by operation of law from one who was a shareholder at that…

A shareholder may not commence a derivative proceeding until: (1) A written demand has been made upon the corporation to take suitable action; and (2) Ninety days have expired from the date the demand was made unless the shareholder has earlier been notified that the demand has b…

If the corporation commences an inquiry into the allegations made in the demand or complaint, the court may stay any derivative proceeding for such period as the court deems appropriate. (Code 1981, § 14-2-743, enacted by Ga. L. 1988, p. 1070, § 1; Ga. L. 1989, p. 946, § 30.) COM…

(a) The court may dismiss a derivative proceeding if, on motion by the corporation, the court finds that one of the groups specified in subsection (b) of this Code section has made a determination in good faith after conducting a reasonable investigation upon which its conclusion…

A derivative proceeding may not be discontinued or settled without the court’s approval. If the court determines that a proposed discontinuance or settlement will substantially affect the interests of the corporation’s shareholders or a class of shareholders, the court shall dire…

On termination of the derivative proceeding the court may: (1) Order the corporation to pay the plaintiff’s reasonable expenses (including attorneys’ fees) incurred in the proceeding if it finds that the proceeding has resulted in a substantial benefit to the corporation; or (2) …

In any derivative proceeding in the right of a foreign corporation, the matters covered by this part shall be governed by the laws of the jurisdiction of incorporation of the foreign corporation except for Code Sections 14-2-743 and 14-2-745 and paragraph (2) of Code Section 14-2…

See Section 14-2-842(b). This preserves their treatment in former § 14-2-152.1(b)(2). Nondirector officers with more limited discretionary authority may be judged by a narrower standard, though every corporate officer or agent owes duties of fidelity, honesty, good faith, and fai…

(a) Except as provided in Article 9 of this chapter or in a written agreement meeting the requirements of Code Section 14-2-732, each corporation must have a board of directors. (b) All corporate powers shall be exercised by or under the authority of the board of directors of the…

Directors shall be natural persons who are 18 years of age or older but need not be residents of this state nor shareholders of the corporation unless the articles of incorporation so require. The articles of incorporation or bylaws may prescribe additional qualifications for dir…

(a) A board of directors must consist of one or more individuals, with the number specified in or fixed in accordance with the articles of incorporation or bylaws. (b) The number of directors may be increased or decreased from time to time by amendment to, or in the manner provid…

If the articles of incorporation authorize dividing the shares into classes or series, the articles may also authorize the election of all or a specified number of directors by the holders of one or more authorized classes of shares or series. Each class (or classes) or series of…

(a) The terms of the initial directors of a corporation expire at the first shareholders’ meeting at which directors are elected. (b) The terms of all other directors expire at the next annual shareholders’ meeting following their election unless their terms are staggered under C…

(a) The articles of incorporation or a bylaw adopted by the shareholders may provide for staggering the terms of directors by dividing the total number of directors into two or three groups. In that event, the terms of directors in the first group expire at the first annual share…

(a) A director may resign at any time by delivering notice in writing or by electronic transmission to the board of directors, its chairperson, or to the corporation. (b) A resignation shall be effective when the notice is delivered unless the notice specifies either a later effe…

This is an addition to § 14-2-145(a) which failed to mention the ability of shareholders to impose limits on their own power to remove directors. This strengthens bargains over the allocation of power in close corporations. Subsection (b) provides that if the articles of incorpor…

(a) Unless the articles of incorporation or a bylaw approved by the shareholders provides otherwise, if a vacancy occurs on a board of directors, including a vacancy resulting from an increase in the number of directors: (1) The shareholders may fill the vacancy; (2) The board of…