Section History: Recent Form
89 Acts, ch 288, §2
490.103 THROUGH 490.119 Reserved.
490.120 FILING REQUIREMENTS.
1. A document must satisfy the requirements of this section, and
of any other section that adds to or varies these requirements, to be
entitled to filing.
2. The document must be filed in the office of the secretary of
state.
3. The document must contain the information required by this
chapter. It may contain other information as well.
4. The document must be typewritten or printed. If the document
is electronically transmitted, it must be in a format that can be
retrieved or reproduced in typewritten or printed form.
5. The document must be in the English language. A corporate
name need not be in English if written in English letters or Arabic
or Roman numerals, and the certificate of existence required of
foreign corporations need not be in English if accompanied by a
reasonably authenticated English translation.
6. Except as provided in section 490.1622, subsection 2, the
document must be executed by one of the following methods:
a. The chairperson of the board of directors of a domestic or
foreign corporation, its president, or another of its officers.
b. If directors have not been selected or the corporation has
not been formed, by an incorporator.
c. If the corporation is in the hands of a receiver, trustee,
or other court-appointed fiduciary, by that fiduciary.
7. The person executing the document shall sign it and state
beneath or opposite the person's signature, the person's name and the
capacity in which the person signs. The document may, but need not,
contain a corporate seal, attestation, acknowledgment, or
verification.
The secretary of state may accept for filing a document containing
a copy of a signature, however made.
8. If the secretary of state has prescribed a mandatory form for
the document under section 490.121, the document must be in or on the
prescribed form.
9. The document must be delivered to the office of the secretary
of state for filing. Delivery may be made by electronic transmission
if and to the extent permitted by the secretary of state. If it is
filed in typewritten or printed form and not transmitted
electronically, the secretary of state may require one exact or
conformed copy to be delivered with the document, except as provided
in sections 490.503 and 490.1509.
10. When the document is delivered to the office of the secretary
of state for filing, the correct filing fee, and any franchise tax,
license fee, or penalty, shall be paid in a manner permitted by the
secretary of state.
11. The secretary of state may adopt rules for the electronic
filing of documents and the certification of electronically filed
documents.
12. Whenever a provision of this chapter permits any of the terms
of a plan or a filed document to be dependent on facts objectively
ascertainable outside of the plan or filed document, all of the
following provisions apply:
a. The manner in which the facts will operate upon the terms
of the plan or filed document shall be set forth in the plan or filed
document.
b. The facts may include, but are not limited to any of the
following:
(1) Any of the following that is available in a nationally
recognized news or information medium either in print or
electronically: statistical or market indices, market prices of any
security or group of securities, interest rates, currency exchange
rates, or similar economic or financial data.
(2) A determination or action by any person or body, including
the corporation or any other party to a plan or filed document.
(3) The terms of, or actions taken under, an agreement to which
the corporation is a party, or any other agreement or document.
c. As used in this subsection:
(1) "Filed document" means a document filed with the
secretary of state under any provision of this chapter except
division XV or section 490.1622.
(2) "Plan" means a plan of merger or share exchange.
d. The following provisions of a plan or filed document may
not be made dependent on facts outside the plan or filed document:
(1) The name and address of any person required in a filed
document.
(2) The registered office of any entity required in a filed
document.
(3) The registered agent of any entity required in a filed
document.
(4) The number of authorized shares and designation of each class
or series of shares.
(5) The effective date of a filed document.
(6) Any required statement in a filed document of the date on
which the underlying transaction was approved or the manner in which
that approval was given.
e. If a provision of a filed document is made dependent on a
fact ascertainable outside of the filed document, and that fact is
not ascertainable by reference to a source described in paragraph
"b", subparagraph (1), or a document that is a matter of public
record, or the affected shareholders have not received notice of the
fact from the corporation, then the corporation shall file with the
secretary of state articles of amendment setting forth the fact
promptly after the time when the fact referred to is first
ascertainable or thereafter changes. Articles of amendment under
this paragraph are deemed to be authorized by the authorization of
the original filed document to which they relate and may be filed by
the corporation without further action by the board of directors or
the shareholders. Section History: Recent Form
89 Acts, ch 288, §3; 90 Acts, ch 1205, §16; 2002 Acts, ch 1154,
§1, 2, 125; 2007 Acts, ch 140, §1
Referred to in § 490.125, 490.140, 490.202, 490.601, 490.1006,
490.1102, 490.1103, 490.1601, 490.1622
490.121 FORMS.
1. The secretary of state may prescribe and furnish on request
forms including but not limited to the following:
a. A foreign corporation's application for a certificate of
authority to transact business in this state.
b. A foreign corporation's application for a certificate of
withdrawal.
c. The biennial report.
If the secretary of state so requires, use of these listed forms
prescribed by the secretary of state is mandatory.
2. The secretary of state may prescribe and furnish on request
forms for other documents required or permitted to be filed by this
chapter but their use is not mandatory. Section History: Recent Form
89 Acts, ch 288, §4; 96 Acts, ch 1170, § 2; 97 Acts, ch 171, § 5
Referred to in § 490.120
490.122 FILING, SERVICE, AND COPYING FEES.
1. The secretary of state shall collect the following fees when
the documents described in this subsection are delivered to the
secretary's office for filing:
DOCUMENT FEE
a. Articles of incorporation .................... $ 50
b. Application for use of indistinguishable
name .................... $ 10
c. Application for reserved name .................... $ 10
d. Notice of transfer of reserved name $ 10
e. Application for registered name per
month or part thereof .................... $ 2
f. Application for renewal of registered
name .................... $ 20
g. Corporation's statement of change of
registered agent or registered office or both
.................... No fee
h. Agent's statement of change of registered
office for each affected corporation .................... No fee
i. Agent's statement of resignation No fee
j. Amendment of articles of
incorporation .................... $ 50
k. Restatement of articles of incorporation
with amendment of articles .................... $ 50
l. Articles of merger, share exchange, or
conversion .................... $ 50
m. Articles of dissolution .................... $ 5
n. Articles of revocation of dissolution $ 5
o. Certificate of administrative
dissolution .................... No fee
p. Application for reinstatement following
administrative dissolution .................... $ 5
q. Certificate of reinstatement .................... No fee
r. Certificate of judicial dissolution No fee
s. Application for certificate of
authority .................... $100
t. Application for amended certificate of
authority .................... $100
u. Application for certificate of
withdrawal .................... $ 10
v. Certificate of revocation of authority to
transact business .................... No fee
w. Articles of correction .................... $ 5
x. Application for certificate of existence or
authorization .................... $ 5
y. Any other document required or permitted
to be filed by this chapter .................... $ 5
2. The secretary of state shall collect a fee of five dollars
each time process is served on the secretary under this chapter. The
party to a proceeding causing service of process is entitled to
recover this fee as costs if the party prevails in the proceeding.
3. The secretary of state shall collect the following fees for
copying and certifying the copy of any filed document relating to a
domestic or foreign corporation:
a. $1.00 a page for copying.
b. $5.00 for the certificate. Section History: Rnt Form
89 Acts, ch 288, §5; 90 Acts, ch 1205, §17; 97 Acts, ch 171, § 6;
2008 Acts, ch 1162, §116, 155
Referred to in § 499.45, 499.54, 524.303, 524.1402, 524.1410
Filing fee for biennial report; § 490.1622 Footnotes
Authority to refund fees; 2009 Acts, ch 181, §21
490.123 EFFECTIVE TIME AND DATE OF DOCUMENTS.
1. Except as provided in subsection 2 and section 490.124,
subsection 3, a document accepted for filing is effective at the
later of the following times:
a. At the date and time of filing, as evidenced by such means
as the secretary of state may use for the purpose of recording the
date and time of filing.
b. At the time specified in the document as its effective
time on the date it is filed.
2. A document may specify a delayed effective time and date, and
if it does so the document becomes effective at the time and date
specified. If a delayed effective date but no time is specified, the
document is effective at the close of business on that date. A
delayed effective date for a document shall not be later than the
ninetieth day after the date it is filed. Section History: Recent Form
89 Acts, ch 288, §6; 2002 Acts, ch 1154, §3, 125
Referred to in § 490.1622
490.124 CORRECTING FILED DOCUMENTS.
1. A domestic or foreign corporation may correct a document filed
by the secretary of state if the document satisfies one of the
following:
a. The document contains an inaccuracy.
b. The document was defectively executed, attested, sealed,
verified, or acknowledged.
c. The electronic transmission was defective.
2. A document is corrected by complying with both of the
following:
a. By preparing articles of correction that satisfy all of
the following requirements:
(1) Describe the document, including its filing date, or attach a
copy of it to the articles.
(2) Specify the inaccuracy or defect to be corrected.
(3) Correct the inaccuracy or defect.
b. By delivering the articles to the secretary of state for
filing.
3. Articles of correction are effective on the effective date of
the document they correct except as to persons relying on the
uncorrected document and adversely affected by the correction. As to
those persons, articles of correction are effective when filed. Section History: Recent Form
89 Acts, ch 288, §7; 2002 Acts, ch 1154, §4, 125
Referred to in § 490.123
490.125 FILING DUTY OF SECRETARY OF STATE.
1. If a document delivered to the office of the secretary of
state for filing satisfies the requirements of section 490.120, the
secretary of state shall file it.
2. The secretary of state files a document by recording it as
filed on the date and time of receipt. After filing a document,
except the biennial report required by section 490.1622, and except
as provided in sections 490.503 and 490.1509, the secretary of state
shall deliver to the domestic or foreign corporation or its
representative a copy of the document with an acknowledgment of the
date and time of filing.
3. If the secretary of state refuses to file a document, the
secretary of state shall return it to the domestic or foreign
corporation or its representative, together with a brief, written
explanation of the reason for the refusal.
4. The secretary of state's duty to file documents under this
section is ministerial. Filing or refusing to file a document does
not:
a. Affect the validity or invalidity of the document in whole
or part.
b. Relate to the correctness or incorrectness of information
contained in the document.
c. Create a presumption that the document is valid or invalid
or that information contained in the document is correct or
incorrect. Section History: Recent Form
89 Acts, ch 288, §8; 96 Acts, ch 1170, § 3; 97 Acts, ch 171, § 7;
2002 Acts, ch 1154, §5, 125
490.126 APPEAL FROM SECRETARY OF STATE'S REFUSAL TO
FILE DOCUMENT.
1. If the secretary of state refuses to file a document delivered
to the secretary's office for filing, the domestic or foreign
corporation may appeal the refusal, within thirty days after the
return of the document, to the district court for the county in which
the corporation's principal office or, if none in this state, its
registered office is or will be located. The appeal is commenced by
petitioning the court to compel filing the document and by attaching
to the petition the document and the secretary of state's explanation
of the refusal to file.
2. The court may summarily order the secretary of state to file
the document or take other action the court considers appropriate.
3. The court's final decision may be appealed as in other civil
proceedings. Section History: Recent Form
89 Acts, ch 288, §9
490.127 EVIDENTIARY EFFECT OF COPY OF FILED
DOCUMENT.
A certificate from the secretary of state delivered with a copy of
a document filed by the secretary of state is conclusive evidence
that the original document is on file with the secretary of state.
Section History: Recent Form
89 Acts, ch 288, §10; 90 Acts, ch 1205, §18; 2002 Acts, ch 1154,
§6, 125
490.128 CERTIFICATE OF EXISTENCE.
1. Anyone may apply to the secretary of state to furnish a
certificate of existence for a domestic corporation or a certificate
of authorization for a foreign corporation.
2. A certificate of existence or authorization must set forth all
of the following:
a. The domestic corporation's corporate name or the foreign
corporation's corporate name used in this state.
b. That one of the following apply:
(1) If it is a domestic corporation, that it is duly incorporated
under the law of this state, the date of its incorporation, and the
period of its duration if less than perpetual.
(2) If it is a foreign corporation, that it is authorized to
transact business in this state.
c. That all fees required by this chapter have been paid.
d. That its most recent biennial report required by section
490.1622 has been filed by the secretary of state.
e. If it is a domestic corporation, that articles of
dissolution have not been filed.
f. Other facts of record in the office of the secretary of
state that may be requested by the applicant.
3. Subject to any qualification stated in the certificate, a
certificate of existence or authorization issued by the secretary of
state may be relied upon as conclusive evidence that the domestic or
foreign corporation is in existence or is authorized to transact
business in this state. Section History: Recent Form
89 Acts, ch 288, §11; 90 Acts, ch 1205, §19; 97 Acts, ch 171, § 8
490.129 PENALTY FOR SIGNING FALSE DOCUMENT.
1. A person commits an offense if that person signs a document
the person knows is false in any material respect with intent that
the document be delivered to the secretary of state for filing.
2. An offense under this section is a serious misdemeanor
punishable by a fine of not to exceed one thousand dollars. Section History: Recent Form
89 Acts, ch 288, §12
490.130 Repealed by 91 Acts, ch 211, § 13. See §
9.7.
490.131 THROUGH 490.134 Reserved.
490.135 SECRETARY OF STATE -- POWERS.
The secretary of state has the power reasonably necessary to
perform the duties required of the secretary of state by this
chapter. Section History: Recent Form
89 Acts, ch 288, §14
490.136 THROUGH 490.139 Reserved.
490.140 DEFINITIONS.
In this chapter, unless the context requires otherwise:
1. "Articles of incorporation" include amended and restated
articles of incorporation and articles of merger.
2. "Authorized shares" means the shares of all classes a
domestic or foreign corporation is authorized to issue.
3. "Conspicuous" means so written that a reasonable person
against whom the writing is to operate should have noticed it. For
example, printing in italics or boldface or contrasting color, or
typing in capitals or underlined, is conspicuous.
4. "Cooperative association" means an entity which is
structured and operated on a cooperative basis pursuant to 26 U.S.C.
§ 1381(a) and which meets the definitional requirements of an
association as provided in 12 U.S.C. § 1141(j)(a) or 7 U.S.C. § 291.
5. "Corporation" or "domestic corporation" means a
corporation for profit, which is not a foreign corporation,
incorporated under or subject to this chapter.
6. "Deliver" or "delivery" means any method of delivery
used in conventional commercial practice, including delivery in
person, by mail, commercial delivery, and electronic transmission.
7. "Distribution" means a direct or indirect transfer of
money or other property, except its own shares, or incurrence of
indebtedness by a corporation to or for the benefit of its
shareholders in respect of any of its shares. A distribution may be
in the form of a declaration or payment of a dividend; a purchase,
redemption, or other acquisition of shares; a distribution of
indebtedness; or otherwise.
8. "Effective date of notice" is defined in section 490.141.
9. "Electronic transmission" or "electronically
transmitted" means any process of communication not directly
involving the physical transfer of paper that is suitable for the
retention, retrieval, and reproduction of information by the
recipient.
10. "Employee" includes an officer but not a director. A
director may accept duties that make the director also an employee.
11. "Entity" includes corporation and foreign corporation;
not-for-profit corporation; profit and not-for-profit unincorporated
association; business trust, estate, partnership, trust, and two or
more persons having a joint or common economic interest; and state,
United States, and foreign government.
12. The phrase "facts objectively ascertainable" outside of a
filed document or plan is defined in section 490.120, subsection 12.
13. "Foreign corporation" means a corporation for profit
incorporated under a law other than the law of this state.
14. "Governmental subdivision" includes authority, city,
county, district, township, and other political subdivision.
15. "Includes" denotes a partial definition.
16. "Individual" includes the estate of an incompetent, a
ward, or a deceased individual.
17. "Means" denotes an exhaustive definition.
18. "Notice" is defined in section 490.141.
19. "Person" means a person as defined in section 4.1.
20. "Principal office" means the office, in or out of this
state, so designated in the biennial report, where the principal
executive offices of a domestic or foreign corporation are located.
21. "Proceeding" includes civil suit and criminal,
administrative, and investigatory action.
22. "Record date" means the date established under division
VI or VII on which a corporation determines the identity of its
shareholders for purposes of this chapter.
23. "Secretary" means the corporate officer to whom the board
of directors has delegated responsibility under section 490.840,
subsection 3, for custody of the minutes of the meetings of the board
of directors and of the shareholders and for authenticating records
of the corporation.
24. "Share" means the unit into which the proprietary
interests in a corporation are divided.
25. "Shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of
shares to the extent of the rights granted by a nominee certificate
on file with a corporation.
26. "Sign" or "signature" includes any manual, facsimile,
conformed, or electronic signature.
27. "State", when referring to a part of the United States,
includes a state and commonwealth and their agencies and governmental
subdivisions, and a territory and insular possession and their
agencies and governmental subdivisions, of the United States.
28. "Subscriber" means a person who subscribes for shares in
a corporation, whether before or after incorporation.
29. "United States" includes a district, authority, bureau,
commission, department, and any other agency of the United States.
30. "Voting group" means all shares of one or more classes or
series that under the articles of incorporation or this chapter are
entitled to vote and be counted together collectively on a matter at
a meeting of shareholders. All shares entitled by the articles of
incorporation or this chapter to vote generally on the matter are for
that purpose a single voting group.
31. "Voting power" means the current power to vote in the
election of directors. Section History: Recent Form
89 Acts, ch 288, §15; 91 Acts, ch 211, §3; 97 Acts, ch 171, §9;
2001 Acts, ch 142, §1; 2002 Acts, ch 1154, §7, 8, 125; 2007 Acts, ch
140, §2
Referred to in §15E.202
490.141 NOTICE.
1. Notice under this chapter must be in writing unless oral
notice is reasonable under the circumstances. Notice by electronic
transmission is written notice.
2. Notice may be communicated in person; by mail or other method
of delivery; or by telephone, voice mail, or other electronic means.
If these forms of personal notice are impracticable, notice may be
communicated by a newspaper of general circulation in the area where
published; or by radio, television, or other form of public broadcast
communication.
3. Written notice by a domestic or foreign corporation to its
shareholder, if in a comprehensible form, is effective according to
one of the following:
a. Upon deposit in the United States mail, if mailed postpaid
and correctly addressed to the shareholder's address shown in the
corporation's current record of shareholders.
b. When electronically transmitted to the shareholder in a
manner authorized by the shareholder.
4. Written notice to a domestic or foreign corporation authorized
to transact business in this state may be addressed to its registered
agent at its registered office or to the corporation or its secretary
at its principal office shown in its most recent biennial report or,
in the case of a foreign corporation that has not yet delivered a
biennial report, in its application for a certificate of authority.
5. Except as provided in subsection 3, written notice, if in a
comprehensible form, is effective at the earliest of the following:
a. When received.
b. Five days after its deposit in the United States mail, if
mailed postpaid and correctly addressed.
c. On the date shown on the return receipt, if sent by
registered or certified mail, return receipt requested, and the
receipt is signed by or on behalf of the addressee.
6. Oral notice is effective when communicated if communicated in
a comprehensible manner.
7. If this chapter prescribes notice requirements for particular
circumstances, those requirements govern. If articles of
incorporation or bylaws prescribe notice requirements not
inconsistent with this section or other provisions of this chapter,
those requirements govern. Section History: Recent Form
89 Acts, ch 288, §16; 97 Acts, ch 171, § 10; 2002 Acts, ch 1154,
§9, 125
Referred to in § 490.140
490.142 NUMBER OF SHAREHOLDERS.
1. For purposes of this chapter, any of the following identified
as a shareholder in a corporation's current record of shareholders
constitutes one shareholder:
a. Three or fewer co-owners.
b. A corporation, partnership, trust, estate, or other
entity.
c. The trustees, guardians of the property, custodians, or
other fiduciaries of a single trust, estate, or account.
2. For purposes of this chapter, shareholdings registered in
substantially similar names constitute one shareholder if it is
reasonable to believe that the names represent the same person. Section History: Recent Form
89 Acts, ch 288, §17
490.201 INCORPORATORS.
One or more persons may act as the incorporator or incorporators
of a corporation by executing and delivering articles of
incorporation to the secretary of state for filing. Section History: Recent Form
89 Acts, ch 288, §18
Referred to in §15E.206
490.202 ARTICLES OF INCORPORATION.
1. The articles of incorporation must set forth all of the
following:
a. A corporate name for the corporation that satisfies the
requirements of section 490.401.
b. The number of shares the corporation is authorized to
issue.
c. The street address of the corporation's initial registered
office and the name of its initial registered agent at that office.
d. The name and address of each incorporator.
2. The articles of incorporation may set forth any or all of the
following:
a. The names and addresses of the individuals who are to
serve as the initial directors.
b. Provisions not inconsistent with law regarding:
(1) The purpose or purposes for which the corporation is
organized.
(2) Managing the business and regulating the affairs of the
corporation.
(3) Defining, limiting, and regulating the powers of the
corporation, its board of directors, and shareholders.
(4) A par value for authorized shares or classes of shares.
(5) The imposition of personal liability on shareholders for the
debts of the corporation to a specified extent and upon specified
conditions.
c. Any provision that under this chapter is required or
permitted to be set forth in the bylaws.
d. A provision eliminating or limiting the liability of a
director to the corporation or its shareholders for money damages for
any action taken, or any failure to take any action, as a director,
except liability for any of the following:
(1) The amount of a financial benefit received by a director to
which the director is not entitled.
(2) An intentional infliction of harm on the corporation or the
shareholders.
(3) A violation of section 490.833.
(4) An intentional violation of criminal law.
A provision shall not eliminate or limit the liability of a
director for an act or omission occurring prior to the date when the
provision in the articles of incorporation becomes effective.
e. A provision permitting or making obligatory
indemnification of a director for liability, as defined in section
490.850, subsection 5, to any person for any action taken, or any
failure to take any action, as a director, except liability for any
of the following:
(1) Receipt of a financial benefit to which the person is not
entitled.
(2) An intentional infliction of harm on the corporation or its
shareholders.
(3) A violation of section 490.833.
(4) An intentional violation of criminal law.
3. The articles of incorporation need not set forth any of the
corporate powers enumerated in this chapter.
4. Provisions of the articles of incorporation may be made
dependent upon facts objectively ascertainable outside the articles
of incorporation in accordance with section 490.120. Section History: Recent Form
89 Acts, ch 288, §19; 2002 Acts, ch 1154, §10, 125; 2003 Acts, ch
44, §80; 2007 Acts, ch 140, §3
Referred to in § 490.831, 490.851, 490.853, 490.1113, 491.5,
524.1309, 534.501
490.203 INCORPORATION.
1. Unless a delayed effective date or time is specified, the
corporate existence begins when the articles of incorporation are
filed.
2. The secretary of state's filing of the articles of
incorporation is conclusive proof that the incorporators satisfied
all conditions precedent to incorporation except in a proceeding by
the state to cancel or revoke the incorporation or involuntarily
dissolve the corporation. Section History: Recent Form
89 Acts, ch 288, §20
490.204 LIABILITY FOR PREINCORPORATION
TRANSACTIONS.
All persons purporting to act as or on behalf of a corporation,
knowing there was no incorporation under this chapter, are jointly
and severally liable for all liabilities created while so acting. Section History: Recent Form
89 Acts, ch 288, §21
490.205 ORGANIZATION OF CORPORATION.
1. After incorporation:
a. If initial directors are named in the articles of
incorporation, the initial directors shall hold an organizational
meeting, at the call of a majority of the directors, to complete the
organization of the corporation by appointing officers, adopting
bylaws and carrying on any other business brought before the meeting.
b. If initial directors are not named in the articles, the
incorporator or incorporators shall hold an organizational meeting at
the call of a majority of the incorporators to do one of the
following:
(1) Elect directors and complete the organization of the
corporation.
(2) Elect a board of directors who shall complete the
organization of the corporation.
2. Action required or permitted by this chapter to be taken by
incorporators at an organizational meeting may be taken without a
meeting if the action taken is evidenced by one or more written
consents describing the action taken and signed by each incorporator.
3. An organizational meeting may be held in or out of this state.
Section History: Recent Form
89 Acts, ch 288, §22
490.206 BYLAWS.
1. The incorporators or board of directors of a corporation shall
adopt initial bylaws for the corporation.
2. The bylaws of a corporation may contain any provision for
managing the business and regulating the affairs of the corporation
that is not inconsistent with law or the articles of incorporation.
Section History: Recent Form
89 Acts, ch 288, §23
490.207 EMERGENCY BYLAWS.
1. Unless the articles of incorporation provide otherwise, the
board of directors of a corporation may adopt bylaws to be effective
only in an emergency defined in subsection 4. The emergency bylaws,
which are subject to amendment or repeal by the shareholders, may
make all provisions necessary for managing the corporation during the
emergency, including:
a. Procedures for calling a meeting of the board of
directors.
b. Quorum requirements for the meeting.
c. Designation of additional or substitute directors.
2. All provisions of the regular bylaws consistent with the
emergency bylaws remain effective during the emergency. The
emergency bylaws are not effective after the emergency ends.
3. Corporate action taken in good faith in accordance with the
emergency bylaws has both of the following effects:
a. The action binds the corporation.
b. The action shall not be used to impose liability on a
corporate director, officer, employee, or agent.
4. An emergency exists for purposes of this section if a quorum
of the corporation's directors cannot readily be assembled because of
some catastrophic event. Section History: Recent Form
89 Acts, ch 288, §24
490.301 PURPOSES.
1. A corporation incorporated under this chapter has the purpose
of engaging in any lawful business unless a more limited purpose is
set forth in the articles of incorporation.
2. A corporation engaging in a business that is subject to
regulation under another statute of this state may incorporate under
this chapter only if permitted by, and subject to all limitations of,
the other statute. Section History: Recent Form
89 Acts, ch 288, §25
Referred to in § 490.401
490.302 GENERAL POWERS.
Unless its articles of incorporation provide otherwise, a
corporation has perpetual duration and succession in its corporate
name and has the same powers as an individual to do all things
necessary or convenient to carry out its business and affairs,
including without limitation power to do all of the following:
1. Sue and be sued, complain, and defend in its corporate name.
2. Have a corporate seal, which may be altered at will, and use
it, or a facsimile of it, by impressing or affixing it or in any
other manner reproducing it.
3. Make and amend bylaws, not inconsistent with its articles of
incorporation or with the laws of this state, for managing the
business and regulating the affairs of the corporation.
4. Purchase, receive, lease, or otherwise acquire, and own, hold,
improve, use, and otherwise deal with, real or personal property, or
any legal or equitable interest in property, wherever located.
5. Sell, convey, mortgage, pledge, lease, exchange, and otherwise
dispose of all or any part of its property.
6. Purchase, receive, subscribe for, or otherwise acquire, own,
hold, vote, use, sell, mortgage, lend, pledge, or otherwise dispose
of, and deal in and with shares or other interests in, or obligations
of, any other entity.
7. Make contracts and guarantees, incur liabilities, borrow
money, issue its notes, bonds, and other obligations, which may be
convertible into or include the option to purchase other securities
of the corporation, and secure any of its obligations by mortgage or
pledge of any of its property, franchises, or income.
8. Lend money, invest and reinvest its funds, and receive and
hold real and personal property as security for repayment.
9. Be a promoter, partner, member, associate, or manager of any
partnership, joint venture, trust, or other entity.
10. Conduct its business, locate offices, and exercise the powers
granted by this chapter within or without this state.
11. Elect directors and appoint officers, employees, and agents
of the corporation, define their duties, fix their compensation, and
lend them money and credit.
12. Pay pensions and establish pension plans, pension trusts,
profit sharing plans, share bonus plans, share option plans, and
benefit or incentive plans for any or all of its current or former
directors, officers, employees, and agents.
13. Make donations for the public welfare or for charitable,
scientific, or educational purposes.
14. Transact any lawful business that will aid governmental
policy.
15. Make payments or donations, or do any other act, not
inconsistent with law, that furthers the business and affairs of the
corporation. Section History: Recent Form
89 Acts, ch 288, §26
490.303 EMERGENCY POWERS.
1. In anticipation of or during an emergency as defined in
subsection 4, the board of directors of a corporation may do either
or both of the following:
a. Modify lines of succession to accommodate the incapacity
of any director, officer, employee, or agent.
b. Relocate the principal office, designate alternative
principal offices or regional offices, or authorize the officers to
do so.
2. During an emergency defined in subsection 4, unless emergency
bylaws provide otherwise:
a. Notice of a meeting of the board of directors need be
given only to those directors whom it is practicable to reach and may
be given in any practicable manner, including by publication and
radio.
b. One or more officers of the corporation present at a
meeting of the board of directors may be deemed to be directors for
the meeting, in order of rank and within the same rank in order of
seniority, as necessary to achieve a quorum.
3. Corporate action taken in good faith during an emergency under
this section to further the ordinary business affairs of the
corporation shall both:
a. Bind the corporation.
b. Not be used to impose liability on a corporate director,
officer, employee, or agent.
4. An emergency exists for purposes of this section if a quorum
of the corporation's directors cannot readily be assembled because of
some catastrophic event. Section History: Recent Form
89 Acts, ch 288, §27
490.304 ULTRA VIRES.
1. Except as provided in subsection 2, the validity of corporate
action is not challengeable on the ground that the corporation lacks
or lacked power to act.
2. A corporation's power to act may be challenged in any of the
following proceedings:
a. By a shareholder against the corporation to enjoin the
act.
b. By the corporation, directly, derivatively, or through a
receiver, trustee, or other legal representative, against an
incumbent or former director, officer, employee, or agent of the
corporation.
c. By the attorney general under section 490.1430.
3. In a shareholder's proceeding under subsection 2, paragraph
"a", to enjoin an unauthorized corporate act, the court may
enjoin or set aside the act, if equitable and if all affected persons
are parties to the proceeding, and may award damages for loss, other
than anticipated profits, suffered by the corporation or another
party because of enjoining the unauthorized act. Section History: Recent Form
89 Acts, ch 288, §28
490.401 CORPORATE NAME.
1. A corporate name:
a. Must contain the word "corporation", "incorporated",
"company", or "limited", or the abbreviation "corp.", "inc.", "co.",
or "ltd.", or words or abbreviations of like import in another
language.
b. Shall not contain language stating or implying that the
corporation is organized for a purpose other than that permitted by
section 490.301 and its articles of incorporation.
2. Except as authorized by subsections 3 and 4, a corporate name
must be distinguishable upon the records of the secretary of state
from all of the following:
a. The corporate name of a corporation incorporated or
authorized to transact business in this state.
b. A name reserved, registered, or protected as follows:
(1) For a limited liability partnership, section 486A.1001 or
486A.1002.
(2) For a limited partnership, section 488.108, 488.109, or
488.810.
(3) For a business corporation, this section, or section 490.402,
490.403, or 490.1422.
(4) For a limited liability company under chapter 489, section
489.108, 489.109, or 489.706 and for a limited liability company
under chapter 490A, section 490A.401, 490A.402, or 490A.1322.
(5) For a nonprofit corporation, section 504.401, 504.402,
504.403, or 504.1423.
c. The fictitious name adopted by a foreign corporation or a
not-for-profit foreign corporation authorized to transact business in
this state because its real name is unavailable.
d. The corporate name of a not-for-profit corporation
incorporated or authorized to transact business in this state.
3. A corporation may apply to the secretary of state for
authorization to use a name that is not distinguishable upon the
secretary's records from one or more of the names described in
subsection 2. The secretary of state shall authorize use of the name
applied for if one of the following conditions applies:
a. The other corporation consents to the use in writing and
submits an undertaking in form satisfactory to the secretary of state
to change its name to a name that is distinguishable upon the records
of the secretary of state from the name of the applying corporation.
b. The applicant delivers to the secretary of state a
certified copy of the final judgment of a court of competent
jurisdiction establishing the applicant's right to use the name
applied for in this state.
4. A corporation may use the name, including the fictitious name,
of another domestic or foreign corporation that is used in this state
if the other corporation is incorporated or authorized to transact
business in this state and the proposed user corporation submits
documentation to the satisfaction of the secretary of state
establishing one of the following conditions:
a. Has merged with the other corporation.
b. Has been formed by reorganization of the other
corporation.
c. Has acquired all or substantially all of the assets,
including the corporate name, of the other corporation.
5. This chapter does not control the use of fictitious names;
however, if a corporation or a foreign corporation uses a fictitious
name in this state it shall deliver to the secretary of state for
filing a copy of the resolution of its board of directors, certified
by its secretary, adopting the fictitious name. Section History: Recent Form
89 Acts, ch 288, §29; 90 Acts, ch 1205, §20--22; 96 Acts, ch 1170,
§ 4; 2004 Acts, ch 1049, §183, 191, 192; 2006 Acts, ch 1089, §6; 2008
Acts, ch 1162, §138, 155
Referred to in § 488.108, 490.202, 490.403, 490.1422, 490.1506,
490A.401, 504.401, 504.403 Footnotes
For future amendment to subsection 2, paragraph b, subparagraph
(2), effective December 31, 2010, see 2008 Acts, ch 1162, § 154, 155
490.402 RESERVED NAME.
1. A person may reserve the exclusive use of a corporate name,
including a fictitious name for a foreign corporation whose corporate
name is not available, by delivering an application to the secretary
of state for filing. The application must set forth the name and
address of the applicant and the name proposed to be reserved. If
the secretary of state finds that the corporate name applied for is
available, the secretary of state shall reserve the name for the
applicant's exclusive use for a nonrenewable one hundred twenty day
period.
2. The owner of a reserved corporate name may transfer the
reservation to another person by delivering to the secretary of state
a signed notice of the transfer that states the name and address of
the transferee. Section History: Recent Form
89 Acts, ch 288, §30
Referred to in § 488.108, 490.401, 490.1506, 490A.401, 504.401,
504.403, 504.1506
490.403 REGISTERED NAME.
1. A foreign corporation may register its corporate name, or its
corporate name with any addition required by section 490.1506, if the
name is distinguishable upon the records of the secretary of state
from the corporate names that are not available under section
490.401, subsection 2, paragraph "b".
2. A foreign corporation registers its corporate name, or its
corporate name with any addition required by section 490.1506, by
delivering to the secretary of state for filing an application:
a. Setting forth its corporate name, or its corporate name
with any addition required by section 490.1506, the state or country
and date of its incorporation, and a brief description of the nature
of the business in which it is engaged.
b. Accompanied by a certificate of existence, or a document
of similar import, from the state or country of incorporation.
3. The name is registered for the applicant's exclusive use upon
the effective date of the application.
4. A foreign corporation whose registration is effective may
renew it for successive years by delivering to the secretary of state
for filing a renewal application which complies with the requirements
of subsection 2 between October 1 and December 31 of the preceding
year. The renewal application renews the registration for the
following calendar year.
5. A foreign corporation whose registration is effective may
thereafter qualify as a foreign corporation under that name or
consent in writing to the use of that name by a corporation
thereafter incorporated under this chapter or by another foreign
corporation thereafter authorized to transact business in this state.
The first registration terminates when the domestic corporation is
incorporated with that name or the foreign corporation qualifies or
consents to the qualification of another foreign corporation under
the registered name. Section History: Recent Form
89 Acts, ch 288, §31
Referred to in § 488.108, 490.401, 490.1506, 490A.401, 504.401,
504.403, 504.1506
490.501 REGISTERED OFFICE AND REGISTERED AGENT.
Each corporation must continuously maintain in this state both of
the following:
1. A registered office that may be the same as any of its places
of business.
2. A registered agent, who may be any of the following:
a. An individual who resides in this state and whose business
office is identical with the registered office.
b. A domestic corporation or not-for-profit domestic
corporation whose business office is identical with the registered
office.
c. A foreign corporation or not-for-profit foreign
corporation authorized to transact business in this state whose
business office is identical with the registered office. Section History: Recent Form
89 Acts, ch 288, §32
Referred to in § 491.111, 624.23
490.502 CHANGE OF REGISTERED OFFICE OR REGISTERED
AGENT.
1. A corporation may change its registered office or registered
agent by delivering to the secretary of state for filing a statement
of change that sets forth all of the following:
a. The name of the corporation.
b. If the current registered office is to be changed, the
street address of the new registered office.
c. If the current registered agent is to be changed, the name
of the new registered agent and the new agent's written consent,
either on the statement or attached to it, to the appointment.
d. That after the change or changes are made, the street
addresses of its registered office and the business office of its
registered agent will be identical.
2. If a registered agent changes the street address of the
registered agent's business office, the registered agent may change
the street address of the registered office of any corporation for
which the person is the registered agent by notifying the corporation
in writing of the change and signing, either manually or in
facsimile, and delivering to the secretary of state for filing a
statement that complies with the requirements of subsection 1 and
recites that the corporation has been notified of the change.
3. If a registered agent changes the registered agent's business
address to another place, the registered agent may change the
business address and the address of the registered agent by filing a
statement as required in subsection 2 for each corporation, or a
single statement for all corporations named in the notice, except
that it need be signed only by the registered agent and need not be
responsive to subsection 1, paragraph "c", and must recite that a
copy of the statement has been mailed to each corporation named in
the notice.
4. A corporation may also change its registered office or
registered agent in its biennial report as provided in section
490.1622. Section History: Recent Form
89 Acts, ch 288, §33; 96 Acts, ch 1170, § 5; 97 Acts, ch 171, §
11; 2006 Acts, ch 1089, §7
Referred to in § 490.1622, 490.1701
490.503 RESIGNATION OF REGISTERED AGENT.
1. A registered agent may resign the agent's agency appointment
by signing and delivering to the secretary of state for filing the
signed original statement of resignation. The statement may include
a statement that the registered office is also discontinued. The
registered agent shall send a copy of the statement of resignation by
certified mail to the corporation at its principal office and to the
registered office, if not discontinued. The registered agent shall
certify to the secretary of state that the copies have been sent to
the corporation, including the date the copies were sent.
2. The agency appointment is terminated, and the registered
office discontinued if so provided, on the date on which the
statement was filed. Section History: Recent Form
89 Acts, ch 288, §34; 96 Acts, ch 1170, § 6
Referred to in § 490.120, 490.125
490.504 SERVICE ON CORPORATION.
1. A corporation's registered agent is the corporation's agent
for service of process, notice, or demand required or permitted by
law to be served on the corporation.
2. If a corporation has no registered agent, or the agent cannot
with reasonable diligence be served, the corporation may be served by
registered or certified mail, return receipt requested, addressed to
the secretary of the corporation at its principal office. Service is
perfected under this subsection at the earliest of:
a. The date the corporation receives the mail.
b. The date shown on the return receipt, if signed on behalf
of the corporation.
c. Five days after its deposit in the United States mail, as
evidenced by the postmark, if mailed postpaid and correctly
addressed.
3. A corporation may be served pursuant to this section, as
provided in other provisions of this chapter, or as provided in
sections 617.3 through 617.6, unless the manner of service is
otherwise specifically provided for by statute. Section History: Recent Form
89 Acts, ch 288, §35; 96 Acts, ch 1170, § 7
Referred to in § 490.1114, 490.1421, 490.1422, 490.1423, 624.23
490.601 AUTHORIZED SHARES.
1. The articles of incorporation must set forth any classes of
shares and series of shares within a class, and the number of shares
of each class and series, that the corporation is authorized to
issue. If more than one class or series of shares is authorized, the
articles of incorporation must prescribe a distinguishing designation
for each class or series and must describe, prior to the issuance of
shares of a class or series, the terms, including the preferences,
rights, and limitations of that class or series. Except to the
extent varied as permitted by this section, all shares of a class or
series must have terms, including preferences, rights, and
limitations that are identical with those of other shares of the same
class or series.
2. The articles of incorporation must authorize all of the
following:
a. One or more classes or series of shares that together have
unlimited voting rights.
b. One or more classes or series of shares, which may be the
same class or classes as those with voting rights, that together are
entitled to receive the net assets of the corporation upon
dissolution.
3. The articles of incorporation may authorize one or more
classes or series of shares that have any of the following qualities:
a. Have special, conditional, or limited voting rights, or no
right to vote, except to the extent otherwise provided by this
chapter.
b. Are redeemable or convertible as specified in the articles
of incorporation in any of the following ways:
(1) At the option of the corporation, the shareholder, or another
person or upon the occurrence of a specified event.
(2) For cash, indebtedness, securities, or other property.
(3) At prices and in amounts specified, or determined in
accordance with a designated formula.
c. Entitle the holders to distributions calculated in any
manner, including dividends that may be cumulative, noncumulative, or
partially cumulative.
d. Have preference over any other class or series of shares
with respect to distributions, including distributions upon the
dissolution of the corporation.
4. The terms of shares may be made dependent upon facts
objectively ascertainable outside the articles of incorporation in
accordance with section 490.120, subsection 12.
5. The terms of shares may vary among holders of the same class
or series so long as such variations are expressly set forth in the
articles of incorporation.
6. The description of the preferences, rights, and limitations of
classes or series of shares in subsection 3 is not exhaustive. Section History: Recent Form
89 Acts, ch 288, §36; 2007 Acts, ch 140, §4
Referred to in § 490.602, 534.501, 534.508
490.602 TERMS OF CLASS OR SERIES DETERMINED BY BOARD
OF DIRECTORS.
1. If the articles of incorporation so provide, the board of
directors is authorized, without shareholder approval, to do any of
the following:
a. Classify any unissued shares into one or more series
within a class.
b. Reclassify any unissued shares of any class into one or
more classes or into one or more series within one or more classes.
c. Reclassify any unissued shares of any series of any class
into one or more classes or into one or more series within a class.
2. If the board of directors acts pursuant to subsection 1, it
must determine the terms, including the preferences, rights, and
limitations, to the same extent permitted under section 490.601, of
any of the following:
a. Any class of shares before the issuance of any shares of
that class.
b. Any series within a class before the issuance of any
shares of that series.
3. Before issuing any shares of a class or series created under
this section, the corporation must deliver to the secretary of state
for filing articles of amendment setting forth the terms determined
under subsection 1. Section History: Recent Form
89 Acts, ch 288, §37; 2007 Acts, ch 140, §5
Referred to in § 490.1005, 534.501, 534.508
490.603 ISSUED AND OUTSTANDING SHARES.
1. A corporation may issue the number of shares of each class or
series authorized by the articles of incorporation. Shares that are
issued are outstanding shares until they are reacquired, redeemed,
converted, or canceled.
2. The reacquisition, redemption, or conversion of outstanding
shares is subject to the limitations of subsection 3 and to section
490.640.
3. At all times that shares of the corporation are outstanding,
one or more shares that together have unlimited voting rights and one
or more shares that together are entitled to receive the net assets
of the corporation upon dissolution must be outstanding. Section History: Recent Form
89 Acts, ch 288, §38
Referred to in § 534.508
490.604 FRACTIONAL SHARES.
1. A corporation may:
a. Issue fractions of a share or pay in money the value of
fractions of a share.
b. Arrange for disposition of fractional shares by the
shareholders.
c. Issue scrip in registered or bearer form entitling the
holder to receive a full share upon surrendering enough scrip to
equal a full share.
2. Each certificate representing scrip must be conspicuously
labeled "scrip" and must contain the information required by section
490.625, subsection 2.
3. The holder of a fractional share is entitled to exercise the
rights of a shareholder, including the right to vote, to receive
dividends, and to participate in the assets of the corporation upon
liquidation. The holder of scrip is not entitled to any of these
rights unless the scrip provides for them.
4. The board of directors may authorize the issuance of scrip
subject to any condition considered desirable, including:
a. That the scrip will become void if not exchanged for full
shares before a specified date.
b. That the shares for which the scrip is exchangeable may be
sold and the proceeds paid to the scrip holders. Section History: Recent Form
89 Acts, ch 288, §39
Referred to in § 534.508
490.605 THROUGH 490.619 Reserved.
490.620 SUBSCRIPTION FOR SHARES BEFORE
INCORPORATION.
1. A subscription for shares entered into before incorporation is
irrevocable for six months unless the subscription agreement provides
a longer or shorter period or all the subscribers agree to
revocation.
2. The board of directors may determine the payment terms of
subscriptions for shares that were entered into before incorporation
unless the subscription agreement specifies them. A call for payment
by the board of directors must be uniform so far as practicable as to
all shares of the same class or series, unless the subscription
agreement specifies otherwise.
3. Shares issued pursuant to subscriptions entered into before
incorporation are fully paid and nonassessable when the corporation
receives the consideration specified in the subscription agreement.
4. If a subscriber defaults in payment of money or property under
a subscription agreement entered into before incorporation, the
corporation may collect the amount owed as any other debt.
Alternatively, unless the subscription agreement provides otherwise,
the corporation may rescind the agreement and may sell the shares if
the debt remains unpaid more than twenty days after the corporation
sends written demand for payment to the subscriber.
5. A subscription agreement entered into after incorporation is a
contract between the subscriber and the corporation subject to
section 490.621. Section History: Recent Form
89 Acts, ch 288, §40
Referred to in § 490.622, 534.508
490.621 ISSUANCE OF SHARES.
1. The powers granted in this section to the board of directors
may be reserved to the shareholders by the articles of incorporation.
2. The board of directors may authorize shares to be issued for
consideration consisting of any tangible or intangible property or
benefit to the corporation, including cash, promissory notes,
services performed, contracts for services to be performed, or other
securities of the corporation.
3. Before the corporation issues shares, the board of directors
must determine that the consideration received or to be received for
shares to be issued is adequate. That determination by the board of
directors is conclusive insofar as the adequacy of consideration for
the issuance of shares relates to whether the shares are validly
issued, fully paid, and nonassessable.
4. When the corporation receives the consideration for which the
board of directors authorized the issuance of shares, the shares
issued for that consideration are fully paid and nonassessable.
5. The corporation may place in escrow shares issued for a
contract for future services or benefits or a promissory note, or
make other arrangements to restrict the transfer of the shares, and
may credit distributions in respect of the shares against their
purchase price, until the services are performed, the note is paid,
or the benefits received. If the services are not performed, the
note is not paid, or the benefits are not received, the shares
escrowed or restricted and the distributions credited may be canceled
in whole or in part.
6. a. An issuance of shares or other securities convertible
into or rights exercisable for shares, in a transaction or a series
of integrated transactions, requires approval of the shareholders, at
a meeting at which a quorum exists consisting of at least a majority
of the votes entitled to be cast on the matter, if both of the
following conditions are satisfied:
(1) The shares, other securities, or rights are issued for
consideration other than cash or cash equivalents.
(2) The voting power of shares that are issued and issuable as a
result of the transaction or series of integrated transactions will
comprise more than twenty percent of the voting power of the shares
of the corporation that were outstanding immediately before the
transaction.
b. For purposes of this subsection, the following shall
apply:
(1) For purposes of determining the voting power of shares issued
and issuable as a result of a transaction or series of integrated
transactions, the voting power of shares shall be the greater of the
following:
(a) The voting power of the shares to be issued.
(b) The voting power of the shares that would be outstanding
after giving effect to the conversion of convertible shares and other
securities and the exercise of rights to be issued.
(2) A series of transactions is integrated if consummation of one
transaction is made contingent on consummation of one or more of the
other transactions. Section History: Recent Form
89 Acts, ch 288, §41; 2002 Acts, ch 1154, §11, 125
Referred to in § 490.620, 490.622, 490.1104, 534.508
490.622 LIABILITY OF SHAREHOLDERS.
1. A purchaser from a corporation of its own shares is not liable
to the corporation or its creditors with respect to the shares except
to pay the consideration for which the shares were authorized to be
issued under section 490.621, or specified in the subscription
agreement authorized under section 490.620.
2. Unless otherwise provided in the articles of incorporation, a
shareholder of a corporation is not personally liable for the acts or
debts of the corporation. Section History: Recent Form
89 Acts, ch 288, §42
Referred to in § 534.508
490.623 SHARE DIVIDENDS.
1. Unless the articles of incorporation provide otherwise, shares
may be issued pro rata and without consideration to the corporation's
shareholders or to the shareholders of one or more classes or series.
An issuance of shares under this subsection is a share dividend.
2. Shares of one class or series shall not be issued as a share
dividend in respect of shares of another class or series unless one
or more of the following conditions are met:
a. The articles of incorporation so authorize.
b. A majority of the votes entitled to be cast by the class
or series to be issued approve the issue.
c. There are no outstanding shares of the class or series to
be issued.
3. If the board of directors does not fix the record date for
determining shareholders entitled to a share dividend, it is the date
the board of directors authorizes the share dividend. Section History: Recent Form
89 Acts, ch 288, §43
Referred to in § 534.508
490.624 SHARE OPTIONS.
1. A corporation may issue rights, options, or warrants for the
purchase of shares or other securities of the corporation. The board
of directors shall determine (i) the terms upon which the rights,
options, or warrants are issued, and (ii) the terms, including the
consideration for which the shares or other securities are to be
issued. The authorization by the board of directors for the
corporation to issue such rights, options, or warrants constitutes
authorization of the issuance of the shares or other securities for
which the rights, options, or warrants are exercisable.
2. The terms and conditions of such rights, options, or warrants,
including those outstanding on July 1, 1989, may include, without
limitation, restrictions, or conditions that do any of the following:
a. Preclude or limit the exercise, transfer, or receipt of
such rights, options, or warrants by any person or persons owning or
offering to acquire a specified number or percentage of the
outstanding shares or other securities of the corporation or by any
transferee or transferees of any such person or persons.
b. Invalidate or void such rights, options, or warrants held
by any such person or persons or any such transferee or transferees.
Section History: Recent Form
89 Acts, ch 288, §44; 2007 Acts, ch 140, §6; 2008 Acts, ch 1031,
§55, 116
Referred to in § 534.508
490.624A POISON PILL DEFENSE AUTHORIZED.
The terms and conditions of stock rights or options issued by the
corporation may include, without limitation, restrictions or
conditions that preclude or limit the exercise, transfer, or receipt
of such rights or options by a person, or group of persons, owning or
offering to acquire a specified number or percentage of the
outstanding common shares or other securities of the corporation, or
a transferee of the offeror, or that invalidate or void such stock
rights or options held by an offeror or a transferee of the offeror.
Section History: Recent Form
89 Acts, ch 288, §45
Referred to in § 534.508
490.625 CONTENT OF CERTIFICATES.
1. Shares may be, but need not be, represented by certificates.
Unless this chapter or another section expressly provides otherwise,
the rights and obligations of shareholders are identical whether or
not their shares are represented by certificates.
2. At a minimum each share certificate must state on its face all
of the following:
a. The name of the issuing corporation and that it is
organized under the law of this state.
b. The name of the person to whom issued.
c. The number and class of shares and the designation of the
series, if any, the certificate represents.
3. If the issuing corporation is authorized to issue different
classes of shares or different series within a class, the
designations, relative rights, preferences, and limitations
applicable to each class, the variations in rights, preferences, and
limitations determined for each series, and the authority of the
board of directors to determine variations for future series must be
summarized on the front or back of each certificate. Alternatively,
each certificate may state conspicuously on its front or back that
the corporation will furnish the shareholder this information on
request in writing and without charge.
4. Each share certificate:
a. Must be signed either manually or in facsimile by two
officers designated in the bylaws or by the board of directors.
b. May bear the corporate seal or its facsimile.
5. If the person who signed, either manually or in facsimile, a
share certificate no longer holds office when the certificate is
issued, the certificate is nevertheless valid. Section History: Recent Form
89 Acts, ch 288, §46
Referred to in § 490.604, 490.626, 534.508
490.626 SHARES WITHOUT CERTIFICATES.
1. 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 certificates. The authorization does not affect
shares already represented by certificates until they are surrendered
to the corporation.
2. 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
section 490.625, subsections 2 and 3, and, if applicable, section
490.627. Section History: Recent Form
89 Acts, ch 288, §47
Referred to in § 490.627, 490.732, 534.508
490.627 RESTRICTION ON TRANSFER OF SHARES AND OTHER
SECURITIES.
1. The articles of incorporation, bylaws, an agreement among
shareholders, or an agreement between shareholders and the
corporation may impose restrictions on the transfer or registration
of transfer of shares of the corporation. A restriction does not
affect shares issued before the restriction was adopted unless the
holders of the shares are parties to the restriction agreement or
voted in favor of the restriction.
2. A restriction on the transfer or registration of transfer of
shares is valid and enforceable against the holder or a transferee of
the holder if the restriction is authorized by this section and its
existence is noted conspicuously on the front or back of the
certificate or is contained in the information statement required by
section 490.626, subsection 2. Unless so noted, a restriction is not
enforceable against a person without knowledge of the restriction.
3. A restriction on the transfer or registration of transfer of
shares is authorized for any of the following purposes:
a. To maintain the corporation's status when it is dependent
on the number or identity of its shareholders.
b. To preserve exemptions under federal or state securities
law.
c. For any other reasonable purpose.
4. A restriction on the transfer or registration of transfer of
shares may do any of the following:
a. Obligate the shareholder first to offer the corporation or
other persons, separately, consecutively, or simultaneously, an
opportunity to acquire the restricted shares.
b. Obligate the corporation or other persons, separately,
consecutively, or simultaneously, to acquire the restricted shares.
c. Require the corporation, the holders of any class of its
shares, or another person to approve the transfer of the restricted
shares, if the requirement is not manifestly unreasonable.
d. Prohibit the transfer of the restricted shares to
designated persons or classes of persons, if the prohibition is not
manifestly unreasonable.
5. For purposes of this section, "shares" includes a security
convertible into or carrying a right to subscribe for or acquire
shares. Section History: Recent Form
89 Acts, ch 288, §48
Referred to in § 490.626, 534.508
490.628 EXPENSE OF ISSUE.
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. Section History: Recent Form
89 Acts, ch 288, §49
Referred to in § 534.508
490.629 REVERSION OF DISBURSEMENTS TO COOPERATIVE
ASSOCIATIONS.
1. As used in this section, "disbursement" means an amount of
any distribution or any other increment or sum realized or accruing
from stock or other equity interest in a cooperative association
organized under this chapter.
2. Once a person's stock or other equity interest in a
cooperative association organized under this chapter is deemed
abandoned under section 556.5, any disbursement held by the
cooperative association for or owing to the person shall be subject
to the same requirements as provided in section 499.30A that apply to
a cooperative association organized under chapter 499, including all
of the following:
a. The retention of the disbursement in a reversion fund
established by the cooperative association or the delivery of the
disbursement to the treasurer of state.
b. The payment of the disbursement to a person filing a claim
with the cooperative association who asserts an interest in the
disbursement.
c. The forfeiture of the disbursement to the cooperative
association, and the use of the forfeited disbursement by the
cooperative association in order to teach and promote cooperation or
provide for economic development, including creating economic
opportunities for its shareholders. Section History: Recent Form
2001 Acts, ch 142, §2
Referred to in § 556.5
490.630 SHAREHOLDERS' PREEMPTIVE RIGHTS.
1. The shareholders of a corporation do not have a preemptive
right to acquire the corporation's unissued shares except to the
extent the articles of incorporation so provide.
2. A statement included in the articles of incorporation that
"the corporation elects to have preemptive rights", or words of
similar import, means that the following principles apply except to
the extent the articles of incorporation expressly provide otherwise:
a. The shareholders of the corporation have a preemptive
right, granted on uniform terms and conditions prescribed by the
board of directors to provide a fair and reasonable opportunity to
exercise the right, to acquire proportional amounts of the
corporation's unissued shares upon the decision of the board of
directors to issue them.
b. A shareholder may waive the shareholder's preemptive
right. A waiver evidenced by a writing is irrevocable even though it
is not supported by consideration.
c. There is no preemptive right with respect to:
(1) Shares issued as compensation to directors, officers, agents,
or employees of the corporation, its subsidiaries, or its affiliates.
(2) Shares issued to satisfy conversion or option rights created
to provide compensation to directors, officers, agents, or employees
of the corporation, its subsidiaries, or its affiliates.
(3) Shares authorized in articles of incorporation that are
issued within six months from the effective date of incorporation.
(4) Shares sold otherwise than for money.
d. Holders of shares of any class without general voting
rights but with preferential rights to distributions or assets have
no preemptive rights with respect to shares of any class.
e. Holders of shares of any class with general voting rights
but without preferential rights to distributions or assets have no
preemptive rights with respect to shares of any class with
preferential rights to distributions or assets unless the shares with
preferential rights are convertible into or carry a right to
subscribe for or acquire shares without preferential rights.
f. Shares subject to preemptive rights that are not acquired
by shareholders may be issued to any person for a period of one year
after being offered to shareholders at a consideration set by the
board of directors that is not lower than the consideration set for
the exercise of preemptive rights. An offer at a lower consideration
or after the expiration of one year is subject to the shareholders'
preemptive rights.
3. For purposes of this section, "shares" includes a security
convertible into or carrying a right to subscribe for or acquire
shares. Section History: Recent Form
89 Acts, ch 288, §50; 2006 Acts, ch 1089, §8
Referred to in § 534.508
490.631 CORPORATION'S ACQUISITION OF ITS OWN
SHARES.
1. A corporation may acquire its own shares and, except as may be
otherwise provided pursuant to section 490.632, shares so acquired
constitute authorized but unissued shares.
2. If the articles of incorporation prohibit the reissue of the
acquired shares, the number of authorized shares is reduced by the
number of shares acquired. Section History: Recent Form
89 Acts, ch 288, §51; 90 Acts, ch 1205, §23; 2002 Acts, ch 1154,
§12, 125
Referred to in § 490.1005
490.632 REACQUIRED SHARES AS ISSUED BUT NOT
OUTSTANDING SHARES.
1. A corporation which, as of December 30, 1989, treated any of
its shares which it had reacquired as issued but not outstanding
shares may continue to treat those shares as issued but not
outstanding shares.
2. If a corporation reacquires its own shares after December 30,
1989, but before January 1, 1991, those shares constitute issued but
not outstanding shares as of and after their reacquisition if either
of the following is applicable:
a. When the shares are reacquired, the articles of
incorporation contain a provision specifying that reacquired shares
constitute issued but not outstanding shares.
b. Prior to January 1, 1991, the board of directors adopts a
resolution specifying that shares reacquired after December 30, 1989,
and prior to January 1, 1991, constitute issued but not outstanding
shares.
3. If a corporation reacquires its own shares after December 31,
1990, those shares constitute issued but not outstanding shares if,
at the time they are reacquired by the corporation, either of the
following is applicable:
a. The articles of incorporation contain a provision
specifying that reacquired shares constitute issued but not
outstanding shares.
b. The board of directors has adopted a resolution specifying
that reacquired shares constitute issued but not outstanding shares.
4. Unless otherwise provided in its articles of incorporation, a
corporation may at any time, by resolution adopted by its board of
directors, cancel or otherwise restore to the status of authorized
but unissued shares any of its shares which it has previously
reacquired and treated as issued but not outstanding shares. Section History: Recent Form
90 Acts, ch 1205, §24; 91 Acts, ch 97, §54
Referred to in § 490.631
490.633 THROUGH 490.639 Reserved.
490.640 DISTRIBUTION TO SHAREHOLDERS.
1. 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 3.
2. If the board of directors does not fix the record date for
determining shareholders entitled to a distribution, other than one
involving a repurchase or reacquisition of shares, it is the date the
board of directors authorizes the distribution.
3. No distribution may be made if, after giving it effect either
of the following would result:
a. The corporation would not be able to pay its debts as they
become due in the usual course of business.
b. The corporation's total assets would be less than the sum
of its total liabilities plus, unless the articles of incorporation
permit otherwise, the amount that would be needed, if the corporation
were to be dissolved at the time of the distribution, to satisfy the
preferential rights upon dissolution of shareholders whose
preferential rights are superior to those receiving the distribution.
4. The board of directors may base a determination that a
distribution is not prohibited under subsection 3 either on financial
statements prepared on the basis of accounting practices and
principles that are reasonable in the circumstances or on a fair
valuation or other method that is reasonable in the circumstances.
5. The effect of a distribution under subsection 3 is measured:
a. In the case of distribution by purchase, redemption, or
other acquisition of the corporation's shares, as of the earlier of:
(1) The date money or other property is transferred or debt
incurred by the corporation.
(2) The date the shareholder ceases to be a shareholder with
respect to the acquired shares.
b. In the case of any other distribution of indebtedness, as
of the date the indebtedness is distributed.
c. In all other cases, as of:
(1) The date the distribution is authorized if the payment occurs
within one hundred twenty days after the date of authorization.
(2) The date the payment is made if it occurs more than one
hundred twenty days after the date of authorization.
6. A corporation's indebtedness to a shareholder incurred by
reason of a distribution made in accordance with this section is at
parity with the corporation's indebtedness to its general, unsecured
creditors except to the extent subordinated by agreement.
7. Indebtedness of a corporation, including indebtedness issued
as a distribution, is not considered a liability for purposes of
determinations under subsection 3 if its terms provide that payment
of principal and interest are made only if and to the extent that
payment of a distribution to shareholders could then be made under
this section. If the indebtedness is issued as a distribution, each
payment of principal or interest is treated as a distribution, the
effect of which is measured on the date the payment is actually made.
8. This section shall not apply to distributions in liquidation
under division XIV. Section History: Recent Form
89 Acts, ch 288, §52; 2002 Acts, ch 1154, §13, 125; 2008 Acts, ch
1015, §1
Referred to in § 490.603, 490.732, 490.833, 490.1434
490.701 ANNUAL MEETING.
1. A corporation shall hold annually, at a time stated in or
fixed in accordance with the bylaws, a meeting of shareholders.
2. 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 in or fixed in accordance with the bylaws,
annual meetings shall be held at the corporation's principal office.
3. The failure to hold an annual meeting at the time stated in or
fixed in accordance with a corporation's bylaws does not affect the
validity of any corporate action. Section History: Recent Form
89 Acts, ch 288, §53
Referred to in § 534.504
490.702 SPECIAL MEETING.
1. Except as provided in subsection 5, a corporation shall hold a
special meeting of shareholders upon the occurrence of either of the
following:
a. On call of its board of directors or the person or persons
authorized to call a special meeting by the articles of incorporation
or bylaws.
b. If the shareholders of at least ten percent of all the
votes entitled to be cast on any issue proposed to be considered at
the proposed special meeting sign, date, and deliver to the
corporation one or more written demands for the meeting describing
the purpose or purposes for which it is to be held, provided that the
articles of incorporation may fix a lower percentage or a higher
percentage not exceeding twenty-five percent of all the votes
entitled to be cast on any issue proposed to be considered. Unless
otherwise provided in the articles of incorporation, a written demand
for a special meeting may be revoked by a writing to that effect
received by the corporation prior to the receipt by the corporation
of demands sufficient in number to require the holding of a special
meeting.
2. If not otherwise fixed under section 490.703 or 490.707, the
record date for determining shareholders entitled to demand a special
meeting is the date the first shareholder signs the demand.
3. Special 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 or fixed in accordance with the bylaws, special
meetings shall be held at the corporation's principal office.
4. Only business with the purpose or purposes described in the
meeting notice required by section 490.705, subsection 3, may be
conducted at a special shareholders' meeting.
5. Notwithstanding subsections 1 through 4, a corporation which
has a class of voting stock that is listed on a national securities
exchange, authorized for quotation on the national association of
securities dealers automated quotations--national market system, or
held of record by more than two thousand shareholders, is required to
hold a special meeting only upon the occurrence of either of the
following:
a. On call of its board of directors or the person or persons
authorized to call a special meeting by the articles of incorporation
or bylaws.
b. If the holders of at least fifty percent of all the votes
entitled to be cast on any issue proposed to be considered at the
proposed special meeting sign, date, and deliver to the corporation's
secretary one or more written demands for the meeting describing the
purpose or purposes for which it is to be held. Section History: Recent Form
89 Acts, ch 288, §54; 97 Acts, ch 117, § 1, 2; 2002 Acts, ch 1154,
§14, 125
Referred to in § 490.703, 534.504
490.703 COURT-ORDERED MEETING.
1. The district court of the county where a corporation's
principal office, or, if none in this state, its registered office,
is located may summarily order a meeting to be held either:
a. On application of any shareholder of the corporation
entitled to participate in an annual meeting if an annual meeting was
not held within the earlier of six months after the end of the
corporation's fiscal year or fifteen months after its last annual
meeting.
b. On application of a shareholder who signed a demand for a
special meeting valid under section 490.702 if either:
(1) Notice of the special meeting was not given within thirty
days after the date the demand was delivered to the corporation's
secretary.
(2) The special meeting was not held in accordance with the
notice.
2. The court may fix the time and place of the meeting, ascertain
the shares entitled to participate in the meeting, specify a record
date for ascertaining shareholders entitled to notice of and to vote
at the meeting, prescribe the form and content of the meeting notice,
fix the quorum required for specific matters to be considered at the
meeting or direct that the votes represented at the meeting
constitute a quorum for action on those matters, and enter other
orders necessary to accomplish the purpose or purposes of the
meeting. Section History: Recent Form
89 Acts, ch 288, §55
Referred to in § 490.702, 490.704, 490.705, 534.504
490.704 ACTION WITHOUT MEETING.
1. Unless otherwise provided in the articles of incorporation,
any action required or permitted by this chapter to be taken at a
shareholders' meeting may be taken without a meeting or vote, and,
except as provided in subsection 5, without prior notice, if one or
more written consents describing the action taken are signed by the
holders of outstanding shares having not less than ninety percent of
the votes entitled to be cast at a meeting at which all shares
entitled to vote on the action were present and voted, and are
delivered to the corporation for inclusion in the minutes or filing
with the corporate records.
2. A written consent shall bear the date of signature of each
shareholder who signs the consent and no written consent is effective
to take the corporate action referred to in the consent unless,
within sixty days of the earliest dated consent delivered in the
manner required by this section to the corporation, written consents
signed by a sufficient number of holders to take action are delivered
to the corporation. A written consent may be revoked by a writing to
that effect received by the corporation prior to the receipt by the
corporation of unrevoked written consents sufficient in number to
take corporate action.
3. If not otherwise fixed under section 490.703 or 490.707, the
record date for determining shareholders entitled to take action
without a meeting is the date the first shareholder signs the consent
under subsection 1.
4. A consent signed under this section has the effect of a
meeting vote and may be described as such in any document.
5. If this chapter requires that notice of proposed action be
given to shareholders not entitled to vote and the action is to be
taken by consent of the voting shareholders, the corporation must
give all shareholders written notice of the proposed action at least
ten days before the action is taken. The notice must contain or be
accompanied by the same material that, under this chapter, would have
been required to be sent to shareholders not entitled to vote in a
notice of meeting at which the proposed action would have been
submitted to the shareholders for action.
6. Prompt notice of the taking of corporate action without a
meeting by less than unanimous written consent shall be given to
those shareholders who have not consented in writing. If the taking
of that corporate action requires the giving of notice under section
490.1320, subsection 2, the notice of the action shall set forth the
matters described in section 490.1322. Section History: Recent Form
89 Acts, ch 288, §56; 2002 Acts, ch 1154, §15, 125
Referred to in § 490.808, 534.504
490.705 NOTICE OF MEETING.
1. 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 sixty days before the meeting date. Unless this
chapter or the articles of incorporation require otherwise, the
corporation is required to give notice only to shareholders entitled
to vote at the meeting.
2. Unless this chapter or the articles of incorporation require
otherwise, notice of an annual meeting need not include a description
of the purpose or purposes for which the meeting is called.
3. Notice of a special meeting must include a description of the
purpose or purposes for which the meeting is called.
4. If not otherwise fixed under section 490.703 or 490.707, the
record date for determining shareholders entitled to notice of and to
vote at an annual or special shareholders' meeting is the close of
business on the day before the first notice is delivered to
shareholders.
5. Unless the bylaws require otherwise, if an annual or special
shareholders' meeting is adjourned to a different date, time, or
place, notice need not be given of the new date, time, or place if
the new date, time, or place is announced at the meeting before
adjournment. If a new record date for the adjourned meeting is or
must be fixed under section 490.707, however, notice of the adjourned
meeting must be given under this section to persons who are
shareholders as of the new record date. Section History: Recent Form
89 Acts, ch 288, §57
Referred to in § 490.702, 534.504
490.706 WAIVER OF NOTICE.
1. 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, be signed
by the shareholder entitled to the notice, and be delivered to the
corporation for inclusion in the minutes or filing with the corporate
records.
2. A shareholder's attendance at a meeting:
a. Waives objection to lack of notice or defective notice of
the meeting, unless the shareholder at the beginning of the meeting
or promptly upon the shareholder's arrival objects to holding the
meeting or transacting business at the meeting.
b. Waives objection to consideration of a particular matter
at the meeting that is not within the purpose or purposes described
in the meeting notice, unless the shareholder objects to considering
the matter when it is presented. Section History: Recent Form
89 Acts, ch 288, §58
Referred to in § 534.504
490.707 RECORD DATE.
1. 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 or provide for fixing a record date, the board of
directors of the corporation may fix a future date as the record
date.
2. A record date fixed under this section shall not be more than
seventy days before the meeting or action requiring a determination
of shareholders.
3. A determination of shareholders entitled to notice of or to
vote at a shareholders' meeting is effective for any adjournment of
the meeting unless the board of directors fixes a new record date,
which it must do if the meeting is adjourned to a date more than one
hundred twenty days after the date fixed for the original meeting.
4. If a court orders a meeting adjourned to a date more than one
hundred twenty days after the date fixed for the original meeting, it
may provide that the original record date continues in effect or it
may fix a new record date. Section History: Recent Form
89 Acts, ch 288, §59
Referred to in § 490.702, 490.704, 490.705, 534.504
490.708 CONDUCT OF THE MEETING.
1. At each meeting of shareholders, a chairperson shall preside.
The chairperson shall be appointed as provided in the bylaws or, in
the absence of such provisions, by the board.
2. The chairperson, unless the articles of incorporation or
bylaws provide otherwise, shall determine the order of business and
shall have the authority to establish rules for the conduct of the
meeting.
3. Any rules adopted for, and the conduct of, the meeting shall
be fair to shareholders.
4. The chairperson of the meeting shall announce at the meeting
when the polls close for each matter voted upon. If no announcement
is made, the polls shall be deemed to have closed upon the final
adjournment of the meeting. After the polls close, no ballots,
proxies, or votes nor any revocations or changes to any ballots,
proxies, or votes may be accepted. Section History: Recent Form
2002 Acts, ch 1154, §16, 125
Referred to in § 534.504
490.709 THROUGH 490.719 Reserved.
490.720 SHAREHOLDERS' LIST FOR MEETING.
1. 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 shares, and show the address of and number of shares held
by each shareholder.
2. The shareholders' list must be available for inspection by any
shareholder beginning two business days after notice of the meeting
is given for which the list was prepared and continuing through the
meeting, at the corporation's principal office or at a place
identified in the meeting notice in the city where the meeting will
be held. A shareholder, or a shareholder's agent or attorney, is
entitled on written demand to inspect and, subject to the
requirements of section 490.1602, subsection 3, to copy the list,
during regular business hours and at the person's expense, during the
period it is available for inspection.
3. The corporation shall make the shareholders' list available at
the meeting, and any shareholder, or a shareholder's agent or
attorney, is entitled to inspect the list at any time during the
meeting or any adjournment.
4. If the corporation refuses to allow a shareholder, or a
shareholder's agent or attorney, to inspect the shareholders' list
before or at the meeting, or copy the list as permitted by subsection
2, the district court of the county where a corporation's principal
office or, if none in this state, its registered office, is located,
on application of the shareholder, may summarily order the inspection
or copying at the corporation's expense and may postpone the meeting
for which the list was prepared until the inspection or copying is
complete.
5. Refusal or failure to prepare or make available the
shareholders' list does not affect the validity of action taken at
the meeting. Section History: Recent Form
89 Acts, ch 288, §60; 91 Acts, ch 211, §4
Referred to in § 490.1602, 534.504
490.721 VOTING ENTITLEMENT OF SHARES.
1. Except as provided in subsections 2 and 3 or unless the
articles of incorporation provide otherwise, each outstanding share,
regardless of class, is entitled to one vote on each matter voted on
at a shareholders' meeting. Only shares are entitled to vote.
2. Absent special circumstances, the shares of a corporation are
not entitled to vote if they are owned, directly or indirectly, by a
second corporation, domestic or foreign, and the first corporation
owns, directly or indirectly, a majority of the shares entitled to
vote for directors of the second corporation.
3. Subsection 2 does not limit the power of a corporation to vote
any shares, including its own shares, held by it in a fiduciary
capacity.
4. Redeemable shares are not entitled to vote after notice of
redemption is mailed to the holders and a sum sufficient to redeem
the shares has been deposited with a bank, trust company, or other
financial institution under an irrevocable obligation to pay the
holders the redemption price on surrender of the shares. Section History: Recent Form
89 Acts, ch 288, §61
Referred to in § 534.504
490.722 PROXIES.
1. A shareholder may vote the shareholder's shares in person or
by proxy.
2. A shareholder or the shareholder's 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 transmission must contain or be accompanied by information
from which one can determine that the shareholder, the shareholder's
agent, or the shareholder's attorney-in-fact authorized the
electronic transmission.
3. An appointment of a proxy is effective when a signed
appointment form or an electronic transmission of the appointment is
received by the inspector of election or the officer or agent of the
corporation authorized to tabulate votes. An appointment is valid
for eleven months unless a longer period is expressly provided in the
appointment.
4. An appointment of a proxy is revocable unless the appointment
form or electronic transmission states that it is irrevocable and the
appointment is coupled with an interest. Appointments coupled with
an interest include, but are not limited to, the appointment of:
a. A pledgee.
b. A person who purchased or agreed to purchase the shares.
c. A creditor of the corporation who extended it credit under
terms requiring the appointment.
d. An employee of the corporation whose employment contract
requires the appointment.
e. A party to a voting agreement created under section
490.731.
5. The death or incapacity of the shareholder appointing a proxy
does not affect the right of the corporation to accept the proxy's
authority unless notice of the death or incapacity is received by the
secretary or other officer or agent authorized to tabulate votes
before the proxy exercises the proxy's authority under the
appointment.
6. An appointment made irrevocable under subsection 4 is revoked
when the interest with which it is coupled is extinguished.
7. A transferee for value of shares subject to an irrevocable
appointment may revoke the appointment if the transferee did not know
of its existence when the transferee acquired the shares and the
existence of the irrevocable appointment was not noted conspicuously
on the certificate representing the shares or on the information
statement for shares without certificates.
8. Subject to section 490.724 and to any express limitation on
the proxy's authority stated in the appointment form or electronic
transmission, a corporation is entitled to accept the proxy's vote or
other action as that of the shareholder making the appointment. Section History: Recent Form
89 Acts, ch 288, §62; 2002 Acts, ch 1154, §17, 125
Referred to in § 490.724, 534.504
490.723 SHARES HELD BY NOMINEES.
1. 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.
2. The procedure may set forth:
a. The types of nominees to which it applies.
b. The rights or privileges that the corporation recognizes
in a beneficial owner.
c. The manner in which the procedure is selected by the
nominee.
d. The information that must be provided when the procedure
is selected.
e. The period for which selection of the procedure is
effective.
f. Other aspects of the rights and duties created. Section History: Recent Form
89 Acts, ch 288, §63
Referred to in § 534.504
490.724 CORPORATION'S ACCEPTANCE OF VOTES.
1. 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.
2. If the name signed on a voted consent, waiver, or proxy
appointment does not correspond to the name of its shareholder, the
corporation if acting in good faith is nevertheless entitled to
accept the vote, consent, waiver, or proxy appointment and give it
effect as the act of the shareholder if:
a. The shareholder is an entity and the name signed purports
to be that of an officer or agent of the entity.
b. The name signed purports to be that of an administrator,
executor, guardian of the property, or conservator representing the
shareholder and, if the corporation requests, evidence of fiduciary
status acceptable to the corporation has been presented with respect
to the vote, consent, waiver, or proxy appointment.
c. The name signed purports to be that of a receiver or
trustee in bankruptcy of the shareholder and, if the corporation
requests, evidence of this status acceptable to the corporation has
been presented with respect to the vote, consent, waiver, or proxy
appointment.
d. The name signed purports to be that of a pledgee,
beneficial owner, or attorney-in-fact of the shareholder and, if the
corporation requests, evidence acceptable to the corporation of the
signatory's authority to sign for the shareholder has been presented
with respect to the vote, consent, waiver, or proxy appointment.
e. Two or more persons are the shareholder as co-tenants or
fiduciaries and the name signed purports to be the name of at least
one of the co-owners and the person signing appears to be acting on
behalf of all the co-owners.
3. The corporation is entitled to reject a vote, consent, waiver,
or proxy appointment if the secretary or other officer or agent
authorized to tabulate votes, acting in good faith, has reasonable
basis for doubt about the validity of the signature on it or about
the signatory's authority to sign for the shareholder.
4. The corporation and its officer or agent who accepts or
rejects a vote, consent, waiver, or proxy appointment in good faith
and in accordance with the standards of this section or section
490.722, subsection 2, are not liable in damages to the shareholder
for the consequences of the acceptance or rejection.
5. Corporate action based on the acceptance or rejection of a
vote, consent, waiver, or proxy appointment under this section is
valid unless a court of competent jurisdiction determines otherwise.
Section History: Recent Form
89 Acts, ch 288, §64; 2002 Acts, ch 1154, §18, 125; 2003 Acts, ch
44, §81
Referred to in § 490.722, 534.504
490.725 QUORUM AND VOTING REQUIREMENTS FOR VOTING
GROUPS.
1. 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 cast on the matter by the voting group
constitutes a quorum of that voting group for action on that matter.
2. Once a share is represented for any purpose at a meeting, it
is deemed present for quorum purposes for the remainder of the
meeting and for any adjournment of that meeting unless a new record
date is or must be set for that adjourned meeting.
3. If a quorum exists, action on a matter, other than the
election of directors, by a voting group is approved if the votes
cast within the voting group favoring the action exceed the votes
cast opposing the action, unless the articles of incorporation or
this chapter require a greater number of affirmative votes.
4. An amendment of articles of incorporation adding, changing, or
deleting a quorum or voting requirement for a voting group greater
than specified in subsection 2 or 3 is governed by section 490.727.
5. The election of directors is governed by section 490.728. Section History: Recent Form
89 Acts, ch 288, §65
Referred to in § 490.726, 534.504
490.726 ACTION BY SINGLE OR MULTIPLE GROUPS.
1. If the articles of incorporation or this chapter provide 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 section
490.725.
2. If the articles of incorporation or this chapter provide for
voting by two or more voting groups on a matter, action on that
matter is taken only when voted upon by each of those voting groups
counted separately as provided in section 490.725. Action may be
taken by one voting group on a matter even though no action is taken
by another voting group entitled to vote on the matter. Section History: Recent Form
89 Acts, ch 288, §66
Referred to in § 534.501, 534.504
490.727 GREATER QUORUM OR VOTING REQUIREMENTS.
1. The articles of incorporation or bylaws may provide for a
greater quorum or voting requirement for shareholders or voting
groups of shareholders than is provided for by this chapter.
2. An amendment to the articles of incorporation or bylaws that
adds, changes, or deletes a greater quorum or voting requirement must
meet the same quorum requirement and be adopted by the same vote and
voting groups required to take action under the quorum and voting
requirements then in effect or proposed to be adopted, whichever is
greater. Section History: Recent Form
89 Acts, ch 288, §67; 2002 Acts, ch 1154, §19, 125; 2003 Acts, ch
44, §82
Referred to in § 490.725, 534.504
490.728 VOTING FOR DIRECTORS -- CUMULATIVE VOTING.
1. Unless otherwise provided in the articles of incorporation,
directors are elected by a plurality of the votes cast by the shares
entitled to vote in the election at a meeting at which a quorum is
present.
2. Shareholders do not have a right to cumulate their votes for
directors unless the articles of incorporation so provide.
3. A statement included in the articles of incorporation that
"[all] [a designated voting group of] shareholders are entitled to
cumulate their votes for directors", or words of similar import,
means that the shareholders designated are entitled to multiply the
number of votes they are entitled to cast by the number of directors
for whom they are entitled to vote and cast the product for a single
candidate or distribute the product among two or more candidates. Section History: Recent Form
89 Acts, ch 288, §68; 90 Acts, ch 1205, §25; 2002 Acts, ch 1154,
§20, 125
Referred to in § 490.725, 534.504
490.729 INSPECTORS OF ELECTION.
1. 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 meeting of shareholders and make a written report of the
inspectors' determinations. Each inspector shall take and sign an
oath faithfully to execute the duties of inspector with strict
impartiality and according to the best of the inspector's ability.
2. The inspectors shall do all of the following:
a. Ascertain the number of shares outstanding and the voting
power of each.
b. Determine the shares represented at a meeting.
c. Determine the validity of proxies and ballots.
d. Count all votes.
e. Determine the result.
3. An inspector may be an officer or employee of the corporation.
Section History: Recent Form
2002 Acts, ch 1154, §21, 125
Referred to in § 534.504
490.730 VOTING TRUSTS.
1. 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 the trustee. When a voting trust agreement is signed, the
trustee shall prepare a list of the names and addresses of all owners
of beneficial interests in the trust, together with the number and
class of shares each transferred to the trust, and deliver copies of
the list and agreement to the corporation's principal office.
2. A voting trust becomes effective on the date the first shares
subject to the trust are registered in the trustee's name. A voting
trust is valid for not more than ten years after its effective date
unless extended under subsection 3.
3. All or some of the parties to a voting trust may extend it for
additional terms of not more than ten years each by signing an
extension agreement and obtaining the voting trustee's written
consent to the extension. An extension is valid for ten years from
the date the first shareholder signs the extension agreement. The
voting trustee must deliver copies of the extension agreement and
list of beneficial owners to the corporation's principal office. An
extension agreement binds only those parties signing it. Section History: Recent Form
89 Acts, ch 288, §69
Referred to in § 490.731, 534.504
490.731 VOTING AGREEMENTS.
1. Two or more shareholders may provide for the manner in which
they will vote their shares by signing an agreement for that purpose.
A voting agreement created under this section is not subject to
section 490.730.
2. A voting agreement created under this section is specifically
enforceable. Section History: Recent Form
89 Acts, ch 288, §70
Referred to in § 490.722, 534.504
490.732 SHAREHOLDER AGREEMENTS.
1. An agreement among the shareholders of a corporation that
complies with this section is effective among the shareholders and
the corporation even though it is inconsistent with one or more other
provisions of this chapter in that it does one of the following:
a. Eliminates the board of directors or restricts the
discretion or powers of the board of directors.
b. Governs the authorization or making of distributions
whether or not in proportion to ownership of shares, subject to the
limitations in section 490.640.
c. Establishes who shall be directors or officers of the
corporation, or their terms of office or manner of selection or
removal.
d. Governs, in general or in regard to specific matters, the
exercise or division of voting power by or between the shareholders
and directors or by or among any of them, including use of weighted
voting rights or director proxies.
e. Establishes the terms and conditions of any agreement for
the transfer or use of property or the provision of services between
the corporation and any shareholder, director, officer, or employee
of the corporation, or among any of them.
f. Transfers to one or more shareholders or other persons all
or part of the authority to exercise the corporate powers or to
manage the business and affairs of the corporation, including the
resolution of any issue about which there exists a deadlock among
directors or shareholders.
g. Requires dissolution of the corporation at the request of
one or more of the shareholders or upon the occurrence of a specified
event or contingency.
h. Otherwise governs the exercise of the corporate powers or
the management of the business and affairs of the corporation or the
relationship among the shareholders, the directors, and the
corporation, or among any of them, and is not contrary to public
policy.
2. An agreement authorized by this section must satisfy all of
the following requirements:
a. Be set forth in one of the following places and manners:
(1) The articles of incorporation or bylaws and approved by all
persons who are shareholders at the time of the agreement.
(2) In a written agreement that is signed by all persons who are
shareholders at the time of the agreement and is made known to the
corporation.
b. Be subject to amendment only by all persons who are
shareholders at the time of the amendment, unless the agreement
provides otherwise.
c. Be valid for ten years, unless the agreement provides
otherwise.
3. The existence of an agreement authorized by this section shall
be noted conspicuously on the front or back of each certificate for
outstanding shares or on the information statement required by
section 490.626, subsection 2. If at the time of the agreement the
corporation has shares outstanding represented by certificates, the
corporation shall recall the outstanding certificates and issue
substitute certificates that comply with this subsection. The
failure to note the existence of the agreement on the certificate or
information statement shall not affect the validity of the agreement
or any action taken pursuant to it. Any purchaser of shares who, at
the time of purchase, did not have knowledge of the existence of the
agreement shall be entitled to recision of the purchase. A purchaser
shall be deemed to have knowledge of the existence of the agreement
if its existence is noted on the certificate or information statement
for the shares in compliance with this subsection and, if the shares
are not represented by a certificate, the information statement is
delivered to the purchaser at or prior to the time of purchase of the
shares. An action to enforce the right of recision authorized by
this subsection must be commenced within the earlier of ninety days
after discovery of the existence of the agreement or two years after
the time of purchase of the shares.
4. An agreement authorized by this section shall cease to be
effective when shares of the corporation are 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.
If the agreement ceases to be effective for any reason, the board of
directors may, if the agreement is contained or referred to in the
corporation's articles of incorporation or bylaws, adopt an amendment
to the articles of incorporation or bylaws, without shareholder
action, to delete the agreement and any references to it.
5. An agreement authorized by this section that limits the
discretion or powers of the board of directors shall relieve the
directors of, and impose upon the person or persons in whom such
discretion or powers are vested, liability for acts or omissions
imposed by law on directors to the extent that the discretion or
powers of the directors are limited by the agreement.
6. The existence or performance of an agreement authorized by
this section shall not be a ground for imposing personal liability on
any shareholder for the acts or debts of the corporation even if the
agreement or its performance treats the corporation as if it were a
partnership or results in failure to observe the corporate
formalities otherwise applicable to the matters governed by the
agreement.
7. Incorporators or subscribers for shares may act as
shareholders with respect to an agreement authorized by this section
if no shares have been issued when the agreement is made. Section History: Recent Form
2002 Acts, ch 1154, §22, 125; 2002 Acts, ch 1175, §88
Referred to in § 490.801, 534.504
490.733 THROUGH 490.739 Reserved.
490.740 DEFINITIONS.
In this part, unless the context otherwise requires:
1. "Derivative proceeding" means a civil suit in the right of
a domestic corporation or, to the extent provided in section 490.747,
in the right of a foreign corporation.
2. "Shareholder" includes a beneficial owner whose shares are
held in a voting trust or held by a nominee on the beneficial owner's
behalf. Section History: Recent Form
89 Acts, ch 288, §71; 2002 Acts, ch 1154, §23, 125
490.741 STANDING.
A shareholder shall not commence or maintain a derivative
proceeding unless the shareholder satisfies both of the following:
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 time.
2. Fairly and adequately represents the interests of the
corporation in enforcing the right of the corporation. Section History: Recent Form
2002 Acts, ch 1154, §24, 125
Referred to in § 490.809
490.742 DEMAND.
A shareholder shall not commence a derivative proceeding until
both of the following have occurred:
1. A written demand has been made upon the corporation to take
suitable action.
2. Ninety days have expired from the date the demand was made,
unless the shareholder has earlier been notified that the demand has
been rejected by the corporation or unless irreparable injury to the
corporation would result by waiting for the expiration of the
ninety-day period. Section History: Recent Form
2002 Acts, ch 1154, §25, 125
490.743 STAY OF PROCEEDINGS.
If the corporation commences an inquiry into the allegations made
in the demand or complaint, the court may stay any derivative
proceeding for a period of time as the court deems appropriate. Section History: Recent Form
2002 Acts, ch 1154, §26, 125
Referred to in § 490.747
490.744 DISMISSAL.
1. A derivative proceeding shall be dismissed by the court on
motion by the corporation if one of the groups specified in
subsection 2 or 6 has determined in good faith after conducting a
reasonable inquiry upon which its conclusions are based that the
maintenance of the derivative proceeding is not in the best interests
of the corporation. A corporation moving to dismiss on this basis
shall submit in support of the motion a short and concise statement
of the reasons for its determination.
2. Unless a panel is appointed pursuant to subsection 6, the
determination in subsection 1 shall be made by one of the following:
a. A majority vote of independent directors present at a
meeting of the board of directors if the independent directors
constitute a quorum.
b. A majority vote of a committee consisting of two or more
independent directors appointed by majority vote of independent
directors present at a meeting of the board of directors, whether or
not such independent directors constitute a quorum.
3. None of the following shall by itself cause a director to be
considered not independent for purposes of this section:
a. The nomination or election of the director by persons who
are defendants in the derivative proceeding or against whom action is
demanded.
b. The naming of the director as a defendant in the
derivative proceeding or as a person against whom action is demanded.
c. The approval by the director of the act being challenged
in the derivative proceeding or demand if the act resulted in no
personal benefit to the director.
4. If a derivative proceeding is commenced after a determination
has been made rejecting a demand by a shareholder, the complaint
shall allege with particularity facts establishing one of the
following:
a. That a majority of the board of directors did not consist
of independent directors at the time the determination was made.
b. That the requirements of subsection 1 have not been met.
All discovery and other proceedings shall be stayed during the
pendency of any motion to dismiss unless the court finds upon the
motion of any party that particularized discovery is necessary to
preserve evidence or prevent undue prejudice to that party.
5. If a majority of the board of directors does not consist of
independent directors at the time the determination is made, the
corporation shall have the burden of proving that the requirements of
subsection 1 have been met. If a majority of the board of directors
consists of independent directors at the time the determination is
made, the plaintiff shall have the burden of proving that the
requirements of subsection 1 have not been met.
6. The court may appoint a panel of one or more independent
persons upon motion by the corporation to make a determination
whether the maintenance of the derivative proceeding is in the best
interests of the corporation. In such case, the plaintiff shall have
the burden of proving that the requirements of subsection 1 have not
been met. Section History: Recent Form
2002 Acts, ch 1154, §27, 125
490.745 DISCONTINUANCE OR SETTLEMENT.
A derivative proceeding shall 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 direct that notice be given to the
shareholders affected. Section History: Recent Form
2002 Acts, ch 1154, §28, 125
Referred to in § 490.747
490.746 PAYMENT OF EXPENSES.
On termination of the derivative proceeding, the court may do
either of the following:
1. Order the corporation to pay the plaintiff's reasonable
expenses, including attorney fees incurred in the proceeding, if it
finds that the proceeding has resulted in a substantial benefit to
the corporation.
2. Order the plaintiff to pay any defendant's reasonable
expenses, including attorney fees incurred in defending the
proceeding, if it finds that the proceeding was commenced or
maintained without reasonable cause or for an improper purpose. Section History: Recent Form
2002 Acts, ch 1154, §29, 125
Referred to in § 490.747
490.747 APPLICABILITY TO FOREIGN CORPORATIONS.
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 sections 490.743, 490.745, and 490.746. Section History: Recent Form
2002 Acts, ch 1154, §30, 125
Referred to in § 490.740
490.801 REQUIREMENT FOR AND DUTIES OF BOARD OF
DIRECTORS.
1. Except as provided in section 490.732, each corporation must
have a board of directors.
2. All corporate powers shall be exercised by or under the
authority of, and the business and affairs of the corporation managed
by or under the direction of, its board of directors, subject to any
limitation set forth in the articles of incorporation, or in an
agreement authorized under section 490.732. Section History: Recent Form
89 Acts, ch 288, §72; 2002 Acts, ch 1154, §31, 125
Referred to in § 490.825
490.802 QUALIFICATIONS OF DIRECTORS.
The articles of incorporation or bylaws may prescribe
qualifications for directors. A director need not be a resident of
this state or a shareholder of the corporation unless the articles of
incorporation or bylaws so prescribe. Section History: Recent Form
89 Acts, ch 288, §73
490.803 NUMBER AND ELECTION OF DIRECTORS.
1. 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.
2. The number of directors may be increased or decreased from
time to time by amendment to, or in the manner provided in, the
articles of incorporation or the bylaws.
3. Directors are elected at the first annual shareholders'
meeting and at each annual meeting thereafter unless their terms are
staggered under section 490.806. Section History: Recent Form
89 Acts, ch 288, §74; 91 Acts, ch 211, §5; 2002 Acts, ch 1154,
§32, 125
490.804 ELECTION OF DIRECTORS BY CERTAIN CLASSES OF
SHAREHOLDERS.
If the articles of incorporation authorize dividing the shares
into classes, 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. Each class, or classes, of shares
entitled to elect one or more directors is a separate voting group
for purposes of the election of directors. Section History: Recent Form
89 Acts, ch 288, §75
490.805 TERMS OF DIRECTORS GENERALLY.
1. The terms of the initial directors of a corporation expire at
the first shareholders' meeting at which directors are elected.
2. The terms of all other directors expire at the next annual
shareholders' meeting following their election unless their terms are
staggered under section 490.806.
3. A decrease in the number of directors does not shorten an
incumbent director's term.
4. The term of a director elected to fill a vacancy expires at
the next shareholders' meeting at which directors are elected.
5. Despite the expiration of a director's term, the director
continues to serve until a successor for that director is elected and
qualifies or until there is a decrease in the number of directors.
Section History: Recent Form
89 Acts, ch 288, §76
490.806 STAGGERED TERMS FOR DIRECTORS.
The articles of incorporation may provide for staggering the terms
of directors by dividing the total number of directors into two or
three groups, with each group containing one-half or one-third of the
total, as near as may be. In that event, the terms of directors in
the first group expire at the first annual shareholders' meeting
after their election, the terms of the second group expire at the
second annual shareholders' meeting after their election, and the
terms of the third group, if any, expire at the third annual
shareholders' meeting after their election. At each annual
shareholders' meeting held thereafter, directors shall be chosen for
a term of two years or three years, as the case may be, to succeed
those whose terms expire. Section History: Recent Form
89 Acts, ch 288, §77
Referred to in § 490.803, 490.805
490.807 RESIGNATION OF DIRECTORS.
1. A director may resign at any time by delivering written notice
to the board of directors, its chairperson, or to the corporation.
2. A resignation is effective when the notice is delivered unless
the notice specifies a later effective date. Section History: Recent Form
89 Acts, ch 288, §78
Referred to in § 490.810
490.808 REMOVAL OF DIRECTORS BY SHAREHOLDERS.
1. The shareholders may remove one or more directors with or
without cause unless the articles of incorporation provide that
directors may be removed only for cause.
2. If a director is elected by a voting group of shareholders,
only the shareholders of that voting group may participate in the
vote to remove that director.
3. If cumulative voting is authorized, a director shall not be
removed if the number of votes sufficient to elect that director
under cumulative voting is voted against the director's removal. If
cumulative voting is not authorized, a director may be removed only
if the number of votes cast to remove that director exceeds the
number of votes cast not to remove the director.
4. A director may be removed by the shareholders only at a
meeting called for the purpose of removing the director and after
notice stating that the purpose, or one of the purposes, of the
meeting is removal of the director. A director shall not be removed
pursuant to written consents under section 490.704 unless written
consents are obtained from the holders of all the outstanding shares
of the corporation entitled to vote on the removal of the director.
Section History: Recent Form
89 Acts, ch 288, §79; 91 Acts, ch 211, §6
490.809 REMOVAL OF DIRECTORS BY JUDICIAL
PROCEEDING.
1. The district court of the county where a corporation's
principal office or, if none in this state, its registered office is
located may remove a director of the corporation from office in a
proceeding commenced by or in the right of the corporation if the
court finds that both of the following apply:
a. The director engaged in fraudulent conduct with respect to
the corporation or its shareholders, grossly abused the position of
director, or intentionally inflicted harm on the corporation.
b. Considering the director's course of conduct and the
inadequacy of other available remedies, removal would be in the best
interest of the corporation.
2. A shareholder proceeding on behalf of the corporation under
subsection 1 shall comply with all of the requirements of division
VII, part D, except section 490.741.
3. The court, in addition to removing the director, may bar the
director from reelection for a period prescribed by the court.
4. This section does not limit the equitable powers of the court
to order other relief. Section History: Recent Form
89 Acts, ch 288, §80; 2002 Acts, ch 1154, §33, 125
490.810 VACANCY ON BOARD.
1. Unless the articles of incorporation provide otherwise, if a
vacancy occurs on a board of directors, including a vacancy resulting
from an increase in the number of directors, the vacancy may be
filled in any of the following manners:
a. The shareholders may fill the vacancy.
b. The board of directors may fill the vacancy.
c. If the directors remaining in office constitute fewer than
a quorum of the board, they may fill the vacancy by the affirmative
vote of a majority of all the directors remaining in office.
2. If the vacant office was held by a director elected by a
voting group of shareholders, only the holders of shares of that
voting group are entitled to vote to fill the vacancy if it is filled
by the shareholders.
3. A vacancy that will occur at a specific later date, by reason
of a resignation effective at a later date under section 490.807,
subsection 2 or otherwise, may be filled before the vacancy occurs
but the new director shall not take office until the vacancy occurs.
Section History: Recent Form
89 Acts, ch 288, §81
490.811 COMPENSATION OF DIRECTORS.
Unless the articles of incorporation or bylaws provide otherwise,
the board of directors may fix the compensation of directors. Section History: Recent Form
89 Acts, ch 288, §82
490.812 THROUGH 490.819 Reserved.
490.820 MEETINGS.
1. The board of directors may hold regular or special meetings in
or out of this state.
2. Unless the articles of incorporation or bylaws provide
otherwise, the board of directors may permit any or all directors to
participate in a regular or special meeting by, or conduct the
meeting through the use of, any means of communication by which all
directors participating may simultaneously hear each other during the
meeting. A director participating in a meeting by this means is
deemed to be present in person at the meeting. Section History: Recent Form
89 Acts, ch 288, §83
Referred to in § 490.825
490.821 ACTION WITHOUT MEETING.
1. Except to the extent that the articles of incorporation or
bylaws require that action by the board of directors be taken at a
meeting, action required or permitted by this chapter to be taken by
the board of directors may be taken without a meeting if each
director signs a consent describing the action to be taken and
delivers it to the corporation.
2. Action taken under this section is the act of the board of
directors when one or more consents signed by all the directors are
delivered to the corporation. The consent may specify the time at
which the action taken is to be effective. A director's consent may
be withdrawn by revocation signed by the director and delivered to
the corporation prior to delivery to the corporation of unrevoked
written consents signed by all the directors.
3. A consent signed under this section has the effect of an
action taken at a meeting of the board of directors and may be
described as such in any document. Section History: Recent Form
89 Acts, ch 288, §84; 2002 Acts, ch 1154, §34, 125
Referred to in § 490.825
490.822 NOTICE OF MEETING.
1. Unless the articles of incorporation or bylaws provide
otherwise, regular meetings of the board of directors may be held
without notice of the date, time, place, or purpose of the meeting.
2. Unless the articles of incorporation or bylaws provide for a
longer or shorter period, special meetings of the board of directors
must be preceded by at least two days' notice of the date, time, and
place of the meeting. The notice need not describe the purpose of
the special meeting unless required by the articles of incorporation
or bylaws. Section History: Recent Form
89 Acts, ch 288, §85
Referred to in § 490.825
490.823 WAIVER OF NOTICE.
1. A director 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. Except as provided by subsection 2, the
waiver must be in writing, signed by the director entitled to the
notice, and filed with the minutes or corporate records.
2. A director's attendance at or participation in a meeting
waives any required notice to that director of the meeting unless the
director at the beginning of the meeting or promptly upon the
director's arrival objects to holding the meeting or transacting
business at the meeting and does not thereafter vote for or assent to
action taken at the meeting. Section History: Recent Form
89 Acts, ch 288, §86
Referred to in § 490.825
490.824 QUORUM AND VOTING.
1. Unless the articles of incorporation or bylaws require a
different number, or unless otherwise specifically provided in this
chapter, a quorum of a board of directors consists of either:
a. A majority of the fixed number of directors if the
corporation has a fixed board size.
b. A majority of the number of directors prescribed, or, if
no number is prescribed the number in office immediately before the
meeting begins, if the corporation has a variable- range size board.
2. The articles of incorporation or bylaws may authorize a quorum
of a board of directors to consist of no fewer than one-third of the
fixed or prescribed number of directors determined under subsection
1.
3. If a quorum is present when a vote is taken, the affirmative
vote of a majority of directors present is the act of the board of
directors unless the articles of incorporation or bylaws require the
vote of a greater number of directors.
4. A director who is present at a meeting of the board of
directors or a committee of the board of directors when corporate
action is taken is deemed to have assented to the action taken unless
one or more of the following occurs:
a. The director objects at the beginning of the meeting or
promptly upon the director's arrival to holding it or transacting
business at the meeting.
b. The director's dissent or abstention from the action taken
is entered in the minutes of the meeting.
c. The director delivers written notice of the director's
dissent or abstention to the presiding officer of the meeting before
its adjournment or to the corporation immediately after adjournment
of the meeting.
The right of dissent or abstention is not available to a director
who votes in favor of the action taken. Section History: Recent Form
89 Acts, ch 288, §87; 2002 Acts, ch 1154, §35, 125
Referred to in § 490.825, 490.853
490.825 COMMITTEES.
1. Unless this chapter, the articles of incorporation, or the
bylaws provide otherwise, a board of directors may create one or more
committees and appoint one or more members of the board of directors
to serve on any committee.
2. Unless this chapter provides otherwise, the creation of a
committee and appointment of members to it must be approved by the
greater of either:
a. A majority of all the directors in office when the action
is taken.
b. The number of directors required by the articles of
incorporation or bylaws to take action under section 490.824.
3. Sections 490.820 through 490.824 apply both to committees of
the board and to committee members.
4. To the extent specified by the board of directors or in the
articles of incorporation or bylaws, each committee may exercise the
powers of the board of directors under section 490.801.
5. A committee shall not, however:
a. Authorize or approve distributions, except according to
formula or method, or within limits, prescribed by the board of
directors.
b. Approve or propose to shareholders action that this
chapter requires be approved by shareholders.
c. Fill vacancies on the board of directors or, subject to
subsection 7, on any of its committees.
d. Adopt, amend, or repeal bylaws.
6. The creation of, delegation of authority to, or action by a
committee does not alone constitute compliance by a director with the
standards of conduct described in section 490.830.
7. The board of directors may appoint one or more directors as
alternate members of any committee to replace any absent or
disqualified member during the member's absence or disqualification.
Unless the articles of incorporation or the bylaws or the resolution
creating the committee provide otherwise, in the event of the absence
or disqualification of a member of a committee, the member or members
present at any meeting and not disqualified from voting, unanimously,
may appoint another director to act in place of the absent or
disqualified member. Section History: Recent Form
89 Acts, ch 288, §88; 2002 Acts, ch 1154, §36, 125; 2003 Acts, ch
108, §90
490.826 THROUGH 490.829 Reserved.
490.830 STANDARDS OF CONDUCT FOR DIRECTORS.
1. Each member of the board of directors, when discharging the
duties of a director, shall act in conformity with all of the
following:
a. In good faith.
b. In a manner the director reasonably believes to be in the
best interests of the corporation.
2. The members of the board of directors or a committee of the
board, when becoming informed in connection with their
decision-making function or devoting attention to their oversight
function, shall discharge their duties with the care that a person in
a like position would reasonably believe appropriate under similar
circumstances.
3. In discharging board or committee duties, a director who does
not have knowledge that makes reliance unwarranted is entitled to
rely on the performance by any of the persons specified in subsection
5, paragraph "a", to whom the board may have delegated, formally
or informally by course of conduct, the authority or duty to perform
one or more of the board's functions that are delegable under
applicable law.
4. In discharging board or committee duties a director, who does
not have knowledge that makes reliance unwarranted, is entitled to
rely on information, opinions, reports, or statements, including
financial statements and other financial data, if prepared or
presented by any of the persons specified in subsection 5.
5. A director is entitled to rely, in accordance with subsection
3 or 4, on any of the following:
a. One or more officers or employees of the corporation whom
the director reasonably believes to be reliable and competent in the
functions performed or the information, opinions, reports, or
statements provided.
b. Legal counsel, public accountants, or other persons as to
matters involving skills or expertise the director reasonably
believes are either of the following:
(1) Matters within the particular person's professional or expert
competence.
(2) Matters as to which the particular person merits confidence.
c. A committee of the board of directors of which the
director is not a member if the director reasonably believes the
committee merits confidence. Section History: Recent Form
89 Acts, ch 288, §89; 2002 Acts, ch 1154, §37, 125
Referred to in § 490.825, 490.833, 491.16A
490.831 STANDARDS OF LIABILITY FOR DIRECTORS.
1. A director shall not be liable to the corporation or its
shareholders for any decision as director to take or not to take
action, or any failure to take any action, unless the party asserting
liability in a proceeding establishes both of the following:
a. That any of the following apply:
(1) A provision in the articles of incorporation authorized by
section 490.202, subsection 2, paragraph "d", or the protection
afforded by section 490.832 if interposed as a bar to the proceeding
by the director, does not preclude liability.
(2) The protection afforded by section 490.870 does not preclude
liability.
b. That the challenged conduct consisted or was the result of
one of the following:
(1) Action not in good faith.
(2) A decision that satisfies one of the following:
(a) That the director did not reasonably believe to be in the
best interests of the corporation.
(b) As to which the director was not informed to an extent the
director reasonably believed appropriate in the circumstances.
(3) A lack of objectivity due to the director's familial,
financial, or business relationship with, or a lack of independence
due to the director's domination or control by, another person having
a material interest in the challenged conduct, which also meets both
of the following criteria:
(a) Which relationship or which domination or control could
reasonably be expected to have affected the director's judgment
respecting the challenged conduct in a manner adverse to the
corporation.
(b) After a reasonable expectation to such effect has been
established, the director shall not have established that the
challenged conduct was reasonably believed by the director to be in
the best interests of the corporation.
(4) A sustained failure of the director to devote attention to
ongoing oversight of the business and affairs of the corporation, or
a failure to devote timely attention, by making, or causing to be
made, appropriate inquiry, when particular facts and circumstances of
significant concern materialize that would alert a reasonably
attentive director to the need for such oversight, attention, or
inquiry.
(5) Receipt of a financial benefit to which the director was not
entitled or any other breach of the director's duties to deal fairly
with the corporation and its shareholders that is actionable under
applicable law.
2. a. A party seeking to hold the director liable for money
damages shall also have the burden of establishing both of the
following:
(1) That harm to the corporation or its shareholders has been
suffered.
(2) The harm suffered was proximately caused by the director's
challenged conduct.
b. A party seeking to hold the director liable for other
money payment under a legal remedy, such as compensation for the
unauthorized use of corporate assets, shall also have whatever
persuasion burden may be called for to establish that the payment
sought is appropriate in the circumstances.
c. A party seeking to hold the director liable for other
money payment under an equitable remedy, such as profit recovery by
or disgorgement to the corporation, shall also have whatever
persuasion burden may be called for to establish that the equitable
remedy sought is appropriate in the circumstances.
3. This section shall not do any of the following:
a. In any instance where fairness is at issue, such as
consideration of the fairness of a transaction to the corporation
under section 490.832, alter the burden of proving the fact or lack
of fairness otherwise applicable.
b. Alter the fact or lack of liability of a director under
another section of this chapter, such as the provisions governing the
consequences of an unlawful distribution under section 490.833 or a
transactional interest under section 490.832.
c. Affect any rights to which the corporation or a
shareholder may be entitled under another statute of this state or
the United States. Section History: Recent Form
89 Acts, ch 288, §90; 2002 Acts, ch 1154, §38, 125; 2003 Acts, ch
44, §83; 2008 Acts, ch 1015, §2; 2009 Acts, ch 133, §164
Referred to in § 490.842, 491.16A
490.832 DIRECTOR CONFLICT OF INTEREST.
1. A conflict of interest transaction is a transaction with the
corporation in which a director of the corporation has a direct or
indirect interest. A conflict of interest transaction is not
voidable by the corporation solely because of the director's interest
in the transaction if any one of the following is true:
a. The material facts of the transaction and the director's
interest were disclosed or known to the board of directors or a
committee of the board of directors and the board of directors or
committee authorized, approved, or ratified the transaction.
b. The material facts of the transaction and the director's
interest were disclosed or known to the shareholders entitled to vote
and the shareholders authorized, approved, or ratified the
transaction.
c. The transaction was fair to the corporation.
2. For purposes of this section, a director of the corporation
has an indirect interest in a transaction if either of the following
is true:
a. Another entity in which the director has a material
financial interest or in which the director is a general partner is a
party to the transaction.
b. Another entity of which the director is a director,
officer, or trustee is a party to the transaction and the transaction
is or should be considered by the board of directors of the
corporation.
3. For purposes of subsection 1, paragraph "a", a conflict of
interest transaction is authorized, approved, or ratified if it
receives the affirmative vote of a majority of the directors on the
board of directors or on the committee, who have no direct or
indirect interest in the transaction, but a transaction may not be
authorized, approved, or ratified under this section by a single
director. If a majority of the directors who have no direct or
indirect interest in the transaction vote to authorize, approve, or
ratify the transaction, a quorum is present for the purpose of taking
action under this section. The presence of, or a vote cast by, a
director with a direct or indirect interest in the transaction does
not affect the validity of any action taken under subsection 1,
paragraph "a", if the transaction is otherwise authorized,
approved, or ratified as provided in that subsection.
4. For purposes of subsection 1, paragraph "b", a conflict of
interest transaction is authorized, approved, or ratified if it
receives the vote of a majority of the shares entitled to be counted
under this subsection. Shares owned by or voted under the control of
a director who has a direct or indirect interest in the transaction,
and shares owned by or voted under the control of an entity described
in subsection 2, paragraph "a", shall not be counted in a vote of
shareholders to determine whether to authorize, approve, or ratify a
conflict of interest transaction under subsection 1, paragraph
"b". The vote of those shares, however, is counted in
determining whether the transaction is approved under other sections
of this chapter. A majority of the shares, whether or not present,
that are entitled to be counted in a vote on the transaction under
this subsection constitutes a quorum for the purpose of taking action
under this section. Section History: Recent Form
89 Acts, ch 288, §91; 90 Acts, ch 1205, §26; 2002 Acts, ch 1154,
§39, 125
Referred to in § 490.831, 490.870, 490.1302, 491.16A
490.833 LIABILITY FOR UNLAWFUL DISTRIBUTION.
1. A director who votes for or assents to a distribution in
excess of what may be authorized and made pursuant to section
490.640, subsection 1, or section 490.1409, subsection 1, is
personally liable to the corporation for the amount of the
distribution that exceeds what could have been distributed without
violating section 490.640, subsection 1, or section 490.1409,
subsection 1, if the party asserting liability establishes that when
taking the action the director did not comply with section 490.830.
2. A director held liable for an unlawful distribution under
subsection 1 is entitled to both of the following:
a. Contribution from every other director who could be held
liable under subsection 1 for the unlawful distribution.
b. Recoupment from each shareholder of the pro rata portion
of the amount of the unlawful distribution the shareholder accepted,
knowing the distribution was made in violation of section 490.640,
subsection 1, or section 490.1409, subsection 1.
3. a. A proceeding to enforce the liability of a director
under subsection 1 is barred unless it is commenced within two years
after one of the following dates:
(1) The date on which the effect of the distribution was measured
under section 490.640, subsection 5 or 8.
(2) The date as of which the violation of section 490.640,
subsection 1, occurred as the consequence of disregard of a
restriction in the articles of incorporation.
(3) The date on which the distribution of assets to shareholders
under section 490.1409, subsection 1, was made.
b. A proceeding to enforce contribution or recoupment under
subsection 2 is barred unless it is commenced within one year after
the liability of the claimant has been finally adjudicated under
subsection 1. Section History: Recent Form
89 Acts, ch 288, §92; 2002 Acts, ch 1154, §40, 125
Referred to in § 490.202, 490.831, 491.16A
490.834 THROUGH 490.839 Reserved.
490.840 OFFICERS.
1. A corporation has the offices described in its bylaws or
designated by the board of directors in accordance with the bylaws.
2. The board of directors may elect individuals to fill one or
more offices of the corporation. An officer may appoint one or more
officers if authorized by the bylaws or the board of directors.
3. The bylaws or the board of directors shall assign to one of
the officers responsibility for preparing minutes of the directors'
and shareholders' meetings and for maintaining and authenticating the
records of the corporation required to be kept under section
490.1601, subsections 1 and 5.
4. The same individual may simultaneously hold more than one
office in a corporation. Section History: Recent Form
89 Acts, ch 288, §93; 2002 Acts, ch 1154, §41, 125
Referred to in § 490.140, 491.16A
490.841 DUTIES OF OFFICERS.
Each officer has the authority and shall perform the duties set
forth in the bylaws or, to the extent consistent with the bylaws, the
duties prescribed by the board of directors or by direction of an
officer authorized by the board of directors to prescribe the duties
of other officers. Section History: Recent Form
89 Acts, ch 288, §94
Referred to in § 491.16A
490.842 STANDARDS OF CONDUCT FOR OFFICERS.
1. An officer when performing in such capacity shall act in
conformity with all of the following:
a. In good faith.
b. With the care that a person in a like position would
reasonably exercise under similar circumstances.
c. In a manner the officer reasonably believes to be in the
best interests of the corporation.
2. In discharging the officer's duties an officer, who does not
have knowledge that makes reliance unwarranted, is entitled to rely
on any of the following:
a. The performance of properly delegated responsibilities by
one or more employees of the corporation whom the officer reasonably
believes to be reliable and competent in performing the
responsibilities delegated.
b. Information, opinions, reports, or statements, including
financial statements and other financial data, prepared or presented
by one or more employees of the corporation whom the officer
reasonably believes to be reliable and competent in the matters
presented.
c. Legal counsel, public accountants, or other persons
retained by the corporation as to matters involving skills or
expertise the officer reasonably believes are matters within the
particular person's professional or expert competence, or as to which
the particular person merits confidence.
3. An officer shall not be liable as an officer to the
corporation or its shareholders for any decision to take or not to
take action, or any failure to take any action, if the duties of the
officer are performed in compliance with this section. Whether an
officer who does not comply with this section shall have liability
will depend in such instance on applicable law, including those
principles of section 490.831 that have relevance. Section History: Recent Form
89 Acts, ch 288, §95; 2002 Acts, ch 1154, §42, 125
Referred to in § 491.16A
490.843 RESIGNATION AND REMOVAL OF OFFICERS.
1. An officer may resign at any time by delivering notice to the
corporation. A resignation is effective when the notice is delivered
unless the notice specifies a later effective time. If a resignation
is made effective at a later time and the board or appointing officer
accepts the future effective time, the board or the appointing
officer may fill the pending vacancy before the effective time if the
board or appointing officer provides that the successor does not take
office until the effective time.
2. An officer may be removed at any time with or without cause by
any of the following:
a. The board of directors.
b. The officer who appointed such officer, unless the bylaws
or the board of directors provide otherwise.
c. Any other officer if authorized by the bylaws or the board
of directors.
3. In this section, "appointing officer" means the officer,
including any successor to that officer, who appointed the officer
resigning or being removed. Section History: Recent Form
89 Acts, ch 288, §96; 91 Acts, ch 211, §7; 2002 Acts, ch 1154,
§43, 125
490.844 CONTRACT RIGHTS OF OFFICERS.
1. The appointment of an officer does not itself create contract
rights.
2. An officer's removal does not affect the officer's contract
rights, if any, with the corporation. An officer's resignation does
not affect the corporation's contract rights, if any, with the
officer. Section History: Recent Form
89 Acts, ch 288, §97
490.845 THROUGH 490.849 Reserved.
490.850 DEFINITIONS.
As used in this part of this chapter, unless the context otherwise
requires:
1. "Corporation" includes any domestic or foreign predecessor
entity of a corporation in a merger.
2. "Director" or "officer" means an individual who is or
was a director or officer, respectively, of a corporation or who,
while a director or officer of the corporation, is or was serving at
the corporation's request as a director, officer, partner, trustee,
employee, or agent of another domestic or foreign corporation,
partnership, joint venture, trust, employee benefit plan, or other
entity. A director or officer is considered to be serving an
employee benefit plan at the corporation's request if the director's
duties to the corporation also impose duties on, or otherwise involve
services by, that director to the plan or to participants in or
beneficiaries of the plan. "Director" or "officer" includes,
unless the context requires otherwise, the estate or personal
representative of a director or officer.
3. "Disinterested director" means a director who at the time
of a vote referred to in section 490.853, subsection 3, or a vote or
selection referred to in section 490.855, subsection 2 or 3, is not
either of the following:
a. A party to the proceeding.
b. An individual having a familial, financial, professional,
or employment relationship with the director whose indemnification or
advance for expenses is the subject of the decision being made, which
relationship would, in the circumstances, reasonably be expected to
exert an influence on the director's judgment when voting on the
decision being made.
4. "Expenses" includes counsel fees.
5. "Liability" means the obligation to pay a judgment,
settlement, penalty, fine, including an excise tax assessed with
respect to an employee benefit plan, or reasonable expenses incurred
with respect to a proceeding.
6. "Official capacity" means:
a. When used with respect to a director, the office of
director in a corporation.
b. When used with respect to an officer, as contemplated in
section 490.856, the office in a corporation held by the officer.
"Official capacity" does not include service for any other
domestic or foreign corporation or any partnership, joint venture,
trust, employee benefit plan, or other entity.
7. "Party" means an individual who was, is, or is threatened
to be made a defendant or respondent in a proceeding.
8. "Proceeding" means any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal, administrative,
or investigative and whether formal or informal. Section History: Recent Form
89 Acts, ch 288, §98; 2002 Acts, ch 1154, §44, 125; 2005 Acts, ch
19, §72
Referred to in § 490.202, 491.3, 491.16, 497.34, 498.36, 499.59A,
508C.16, 524.801, 534.605, 534.607
490.851 PERMISSIBLE INDEMNIFICATION.
1. Except as otherwise provided in this section, a corporation
may indemnify an individual who is a party to a proceeding because
the individual is a director against liability incurred in the
proceeding if either of the following apply:
a. All of the following apply:
(1) The individual acted in good faith.
(2) The individual reasonably believed:
(a) In the case of conduct in the individual's official capacity,
that the individual's conduct was in the best interests of the
corporation.
(b) In all other cases, that the individual's conduct was at
least not opposed to the best interests of the corporation.
(3) In the case of any criminal proceeding, the individual had no
reasonable cause to believe the individual's conduct was unlawful.
b. The individual engaged in conduct for which broader
indemnification has been made permissible or obligatory under a
provision of the articles of incorporation as authorized by section
490.202, subsection 2, paragraph "e".
2. A director's conduct with respect to an employee benefit plan
for a purpose the director reasonably believed to be in the interests
of the participants in and beneficiaries of the plan is conduct that
satisfies the requirement of subsection 1, paragraph "b",
subparagraph (2).
3. The termination of a proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent is not, of itself, determinative that the director did not
meet the relevant standard of conduct described in this section.
4. Unless ordered by a court under section 490.854, subsection 1,
paragraph "c", a corporation shall not indemnify a director under
this section in either of the following circumstances:
a. In connection with a proceeding by or in the right of the
corporation, except for reasonable expenses incurred in connection
with the proceeding if it is determined that the director has met the
relevant standard of conduct under subsection 1.
b. In connection with any proceeding with respect to conduct
for which the director was adjudged liable on the basis that the
director received a financial benefit to which the director was not
entitled, whether or not involving action in the director's official
capacity. Section History: Recent Form
89 Acts, ch 288, §99; 2002 Acts, ch 1154, §45, 125; 2003 Acts, ch
44, §84, 116
Referred to in § 490.853, 490.854, 490.855, 490.858, 491.3,
491.16, 497.34, 498.36, 499.59A, 508C.16, 524.801, 534.605, 534.607
490.852 MANDATORY INDEMNIFICATION.
A corporation shall indemnify a director who was wholly
successful, on the merits or otherwise, in the defense of any
proceeding to which the director was a party because the director is
or was a director of the corporation against reasonable expenses
incurred by the director in connection with the proceeding. Section History: Recent Form
89 Acts, ch 288, §100; 2002 Acts, ch 1154, §46, 125
Referred to in § 490.853, 490.854, 490.856, 491.3, 491.16, 497.34,
498.36, 499.59A, 508C.16, 524.801, 534.605, 534.607
490.853 ADVANCE FOR EXPENSES.
1. A corporation may, before final disposition of a proceeding,
advance funds to pay for or reimburse the reasonable expenses
incurred by a director who is a party to a proceeding because the
person is a director if the person delivers all of the following to
the corporation:
a. A written affirmation of the director's good faith belief
that the director has met the relevant standard of conduct described
in section 490.851 or that the proceeding involved conduct for which
liability has been eliminated under a provision of the articles of
incorporation as authorized by section 490.202, subsection 2,
paragraph "d".
b. The director's written undertaking to repay any funds
advanced if the director is not entitled to mandatory indemnification
under section 490.852 and it is ultimately determined under section
490.854 or section 490.855 that the director has not met the relevant
standard of conduct described in section 490.851.
2. The undertaking required by subsection 1, paragraph "b",
must be an unlimited general obligation of the director but need not
be secured and may be accepted without reference to the financial
ability of the director to make repayment.
3. Authorizations under this section shall be made according to
one of the following:
a. By the board of directors:
(1) If there are two or more disinterested directors, by a
majority vote of all the disinterested directors, a majority of whom
shall for such purpose constitute a quorum, or by a majority of the
members of a committee of two or more disinterested directors
appointed by such a vote.
(2) If there are fewer than two disinterested directors, by the
vote necessary for action by the board in accordance with section
490.824, subsection 3, in which authorization directors who do not
qualify as disinterested directors may participate.
b. By the shareholders, but shares owned by or voted under
the control of a director who at the time does not qualify as a
disinterested director may not be voted on the authorization. Section History: Recent Form
89 Acts, ch 288, §101; 2002 Acts, ch 1154, §47, 125; 2002 Acts, ch
1175, §89
Referred to in § 490.850, 490.854, 490.858, 491.3, 491.16, 497.34,
498.36, 499.59A, 508C.16, 524.801, 534.605, 534.607
490.854 COURT-ORDERED INDEMNIFICATION.
1. A director who is a party to a proceeding because the person
is a director may apply for indemnification or an advance for
expenses to the court conducting the proceeding or to another court
of competent jurisdiction. After receipt of an application, and
after giving any notice it considers necessary, the court shall do
one of the following:
a. Order indemnification if the court determines that the
director is entitled to mandatory indemnification under section
490.852.
b. Order indemnification or advance for expenses if the court
determines that the director is entitled to indemnification or
advance for expenses pursuant to a provision authorized by section
490.858, subsection 1.
c. Order indemnification or advance for expenses if the court
determines, in view of all the relevant circumstances, that it is
fair and reasonable to do one of the following:
(1) To indemnify the director.
(2) To advance expenses to the director, even if the director has
not met the relevant standard of conduct set forth in section
490.851, subsection 1, failed to comply with section 490.853 or was
adjudged liable in a proceeding referred to in subsection 490.851,
subsection 4, paragraph "a" or "b", but if the director was
adjudged so liable the director's indemnification shall be limited to
reasonable expenses incurred in connection with the proceeding.
2. If the court determines that the director is entitled to
indemnification under subsection 1, paragraph "a", or to
indemnification or advance for expenses under subsection 1, paragraph
"b", it shall also order the corporation to pay the director's
reasonable expenses incurred in connection with obtaining
court-ordered indemnification or advance for expenses. If the court
determines that the director is entitled to indemnification or
advance for expenses under subsection 1, paragraph "c", it may
also order the corporation to pay the director's reasonable expenses
to obtain court-ordered indemnification or advance for expenses. Section History: Recent Form
89 Acts, ch 288, §102; 2002 Acts, ch 1154, §48, 125
Referred to in § 490.851, 490.853, 490.856, 491.3, 491.16, 497.34,
498.36, 499.59A, 508C.16, 524.801, 534.605, 534.607
490.855 DETERMINATION AND AUTHORIZATION OF
INDEMNIFICATION.
1. A corporation shall not indemnify a director under section
490.851 unless authorized for a specific proceeding after a
determination has been made that indemnification of the director is
permissible because the director has met the relevant standard of
conduct set forth in section 490.851.
2. The determination shall be made by any of the following:
a. If there are two or more disinterested directors, by the
board of directors by a majority vote of all the disinterested
directors, a majority of whom shall for such purpose constitute a
quorum, or by a majority of the members of a committee of two or more
disinterested directors appointed by such a vote.
b. By special legal counsel:
(1) Selected in the manner prescribed in paragraph "a".
(2) If there are fewer than two disinterested directors, selected
by the board of directors, in which selection directors who do not
qualify as disinterested directors may participate.
c. By the shareholders, but shares owned by or voted under
the control of a director who at the time does not qualify as a
disinterested director shall not be voted on the determination.
3. Authorization of indemnification shall be made in the same
manner as the determination that indemnification is permissible,
except that if there are fewer than two disinterested directors or if
the determination is made by special legal counsel, authorization of
indemnification shall be made by those entitled under subsection 2,
paragraph "b", to select special legal counsel. Sect History: Recent Form
89 Acts, ch 288, §103; 2002 Acts, ch 1154, §49, 125
Referred to in § 490.850, 490.853, 490.858, 491.3, 491.16, 497.34,
498.36, 499.59A, 508C.16, 524.801, 534.605, 534.607
490.856 INDEMNIFICATION OF OFFICERS.
1. A corporation may indemnify and advance expenses under this
part to an officer of the corporation who is a party to the
proceeding because the person is an officer, according to all of the
following:
a. To the same extent as to a director.
b. If the person is an officer but not a director, to such
further extent as may be provided by the articles of incorporation,
the bylaws, a resolution of the board of directors, or contract,
except for either of the following:
(1) Liability in connection with a proceeding by or in the right
of the corporation other than for reasonable expenses incurred in
connection with the proceeding.
(2) Liability arising out of conduct that constitutes any of the
following:
(a) Receipt by the officer of a financial benefit to which the
officer is not entitled.
(b) An intentional infliction of harm on the corporation or the
shareholders.
(c) An intentional violation of criminal law.
2. The provisions of subsection 1, paragraph "b", shall apply
to an officer who is also a director if the basis on which the
officer is made a party to a proceeding is an action taken or a
failure to take an action solely as an officer.
3. An officer of a corporation who is not a director is entitled
to mandatory indemnification under section 490.852, and may apply to
a court under section 490.854 for indemnification or an advance for
expenses, in each case to the same extent to which a director may be
entitled to indemnification or advance for expenses under those
provisions. Section History: Recent Form
89 Acts, ch 288, §104; 2002 Acts, ch 1154, §50, 125; 2003 Acts, ch
44, §85
Referred to in § 490.850, 491.3, 491.16, 497.34, 498.36, 499.59A,
508C.16, 524.801, 534.605, 534.607
490.857 INSURANCE.
A corporation may purchase and maintain insurance on behalf of an
individual who is a director or officer of the corporation, or who,
while a director or officer of the corporation, serves at the
corporation's request as a director, officer, partner, trustee,
employee, or agent of another domestic or foreign corporation,
partnership, joint venture, trust, employee benefit plan, or other
entity, against liability asserted against or incurred by that
individual in that capacity or arising from the individual's status
as a director or officer, whether or not the corporation would have
power to indemnify or advance expenses to that individual against the
same liability under this part. Section History: Recent Form
89 Acts, ch 288, §105; 2002 Acts, ch 1154, §51, 125
Referred to in § 491.3, 491.16, 497.34, 498.36, 499.59A, 508C.16,
524.801, 534.605, 534.607
490.858 VARIATION BY CORPORATE ACTION -- APPLICATION
OF PART.
1. A corporation may, by a provision in its articles of
incorporation or bylaws or in a resolution adopted or a contract
approved by its board of directors or shareholders, obligate itself
in advance of the act or omission giving rise to a proceeding to
provide indemnification in accordance with section 490.851 or advance
funds to pay for or reimburse expenses in accordance with section
490.853. Any such obligatory provision shall be deemed to satisfy
the requirements for authorization referred to in section 490.853,
subsection 3, and in section 490.855, subsection 3. Any such
provision that obligates the corporation to provide indemnification
to the fullest extent permitted by law shall be deemed to obligate
the corporation to advance funds to pay for or reimburse expenses in
accordance with section 490.853 to the fullest extent permitted by
law, unless the provision specifically provides otherwise.
2. Any provision pursuant to subsection 1 shall not obligate the
corporation to indemnify or advance expenses to a director of a
predecessor of the corporation, pertaining to conduct with respect to
the predecessor, unless otherwise specifically provided. Any
provision for indemnification or advance for expenses in the articles
of incorporation, bylaws, or a resolution of the board of directors
or shareholders of a predecessor of the corporation in a merger or in
a contract to which the predecessor is a party, existing at the time
the merger takes effect, shall be governed by section 490.1106,
subsection 1, paragraph "c".
3. A corporation may, by a provision in its articles of
incorporation, limit any of the rights to indemnification or advance
for expenses created by or pursuant to this part.
4. This part does not limit a corporation's power to pay or
reimburse expenses incurred by a director or an officer in connection
with the director's or officer's appearance as a witness in a
proceeding at a time when the director or officer is not a party.
5. This part does not limit a corporation's power to indemnify,
advance expenses to, or provide or maintain insurance on behalf of an
employee or agent. Section History: Recent Form
89 Acts, ch 288, §106; 2002 Acts, ch 1154, §52, 125
Referred to in § 490.854, 491.3, 491.16, 497.34, 498.36, 499.59A,
508C.16, 524.801, 534.605, 534.607
490.859 EXCLUSIVITY OF PART.
A corporation may provide indemnification or advance expenses to a
director or an officer only as permitted by this part. Section History: Recent Form
2002 Acts, ch 1154, §53, 125
Referred to in § 491.3, 491.16, 497.34, 498.36, 499.59A, 508C.16,
524.801, 534.605, 534.607
490.860 THROUGH 490.869 Reserved.
490.870 BUSINESS OPPORTUNITIES.
1. A director's taking advantage, directly or indirectly, of a
business opportunity may not be the subject of equitable relief, or
give rise to an award of damages or other sanctions against the
director, in a proceeding by or in the right of the corporation on
the ground that such opportunity should have first been offered to
the corporation, if before becoming legally obligated respecting the
opportunity the director brings it to the attention of the
corporation and any of the following apply:
a. Action by qualified directors disclaiming the
corporation's interest in the opportunity is taken in compliance with
the procedures set forth in section 490.832, as if the decision being
made concerned a director's conflicting interest transaction.
b. Shareholders' action disclaiming the corporation's
interest in the opportunity is taken in compliance with the procedure
set forth in section 490.832, as if the decision being made concerned
a director's conflicting interest transaction; except that, rather
than making the disclosure as required in section 490.832, in each
case the director shall have made prior disclosure to those acting on
behalf of the corporation of all material facts concerning the
business opportunity that are then known to the director.
2. In any proceeding seeking equitable relief or other remedy
based upon an alleged improper taking advantage of a business
opportunity by a director, the fact that the director did not employ
the procedure described in subsection 1 before taking advantage of
the opportunity shall not create an inference that the opportunity
should have been first presented to the corporation or alter the
burden of proof otherwise applicable to establish that the director
breached a duty to the corporation in the circumstances. Section History: Recent Form
2008 Acts, ch 1015, §3
Referred to in § 490.831
490.901 FOREIGN-TRADE ZONE CORPORATION.
A corporation may be organized under the laws of this state for
the purpose of establishing, operating, and maintaining a
foreign-trade zone as defined in 19 U.S.C. § 81(a). A corporation
organized for the purposes set forth in this section has all powers
necessary or convenient for applying for a grant of authority to
establish, operate, and maintain a foreign-trade zone under 19 U.S.C.
§ 81(a), et seq., and regulations promulgated under that law, and for
establishing, operating, and maintaining a foreign-trade zone
pursuant to that grant of authority. Section History: Recent Form
89 Acts, ch 288, §107
490.902 FOREIGN INSURANCE COMPANIES BECOMING
DOMESTIC.
The secretary of state, upon a corporation complying with this
section and upon the filing of articles of incorporation and upon
receipt of the fees as provided in this chapter, shall issue an
acknowledgment of receipt of document as of the date of the filing of
the articles of incorporation with the secretary of state. The
acknowledgment of receipt of document shall state on its face that it
is issued in accordance with this section. The secretary of state
shall then notify the appropriate officer of the state or country of
the corporation's last domicile that the corporation is now a
domestic corporation domiciled in this state. This section applies
to life insurance companies, and to insurance companies doing
business under chapter 515. Section History: Recent Form
89 Acts, ch 288, §108; 96 Acts, ch 1170, § 8
Referred to in § 508.12, 515.78, 515E.3A
490.1001 AMENDMENT OF ARTICLES OF INCORPORATION --
AUTHORITY TO AMEND.
1. A corporation may amend its articles of incorporation at any
time to add or change a provision that is required or permitted in
the articles of incorporation as of the effective date of the
amendment or to delete a provision that is not required to be
contained in the articles of incorporation.
2. A shareholder of the corporation does not have a vested
property right resulting from any provision in the articles of
incorporation, including provisions relating to management, control,
capital structure, dividend entitlement, or purpose or duration of
the corporation. Section History: Recent Form
89 Acts, ch 288, §109; 2002 Acts, ch 1154, §54, 125
490.1002 AMENDMENT BEFORE ISSUANCE OF SHARES.
If a corporation has not yet issued shares, its board of
directors, or its incorporators if it has no board of directors, may
adopt one or more amendments to the corporation's articles of
incorporation. Section History: Recent Form
89 Acts, ch 288, §110; 2002 Acts, ch 1154, §55, 125
Referred to in § 534.501
490.1003 AMENDMENT BY BOARD OF DIRECTORS AND
SHAREHOLDERS.
If a corporation has issued shares, an amendment to the articles
of incorporation shall be adopted in the following manner:
1. The proposed amendment must be adopted by the board of
directors.
2. Except as provided in sections 490.1005, 490.1007, and
490.1008, after adopting the proposed amendment, the board of
directors must submit the amendment to the shareholders for their
approval. The board of directors must also transmit to the
shareholders a recommendation that the shareholders approve the
amendment, unless the board of directors makes a determination that
because of conflicts of interest or other special circumstances it
should not make such a recommendation, in which case the board of
directors must transmit to the shareholders the basis for the
determination.
3. The board of directors may condition its submission of the
amendment to the shareholders on any basis.
4. If the amendment is required to be approved by the
shareholders, and the approval is to be given at a meeting, the
corporation must notify each shareholder, whether or not entitled to
vote, of the meeting of shareholders at which the amendment is to be
submitted for approval. The notice must state that the purpose, or
one of the purposes, of the meeting is to consider the proposed
amendment and must contain or be accompanied by a copy of the
amendment.
5. Unless the articles of incorporation, bylaws, or the board of
directors acting pursuant to subsection 3 requires a greater vote or
greater number of shares to be present, approval of the amendment
requires the approval of the shareholders at a meeting at which a
quorum consisting of at least a majority of the votes entitled to be
cast on the amendment exists, and, if any class or series of shares
is entitled to vote as a separate group on the amendment, except as
provided in section 490.1004, subsection 3, the approval of each such
separate voting group at a meeting at which a quorum of the voting
group consisting of at least a majority of the votes entitled to be
cast on the amendment by that voting group exists. Section History: Recent Form
89 Acts, ch 288, §111; 2002 Acts, ch 1154, §56, 125; 2002 Acts, ch
1175, § 90
Referred to in § 490.1007, 534.501
490.1004 VOTING ON AMENDMENTS BY VOTING GROUPS.
1. If a corporation has more than one class of shares
outstanding, the holders of the outstanding shares of a class are
entitled to vote as a separate voting group, if shareholder voting is
otherwise required by this chapter, on a proposed amendment to the
articles of incorporation if the amendment would do any of the
following:
a. Effect an exchange or reclassification of all or part of
the shares of the class into shares of another class.
b. Effect an exchange or reclassification, or create the
right of exchange, of all or part of the shares of another class into
shares of the class.
c. Change the rights, preferences, or limitations of all or
part of the shares of the class.
d. Change the shares of all or part of the class into a
different number of shares of the same class.
e. Create a new class of shares having rights or preferences
with respect to distributions or to dissolution that are prior or
superior to the shares of the class.
f. Increase the rights, preferences, or number of authorized
shares of any class that, after giving effect to the amendment, have
rights or preferences with respect to distributions or to dissolution
that are prior or superior to the shares of the class.
g. Limit or deny an existing preemptive right of all or part
of the shares of the class.
h. Cancel or otherwise affect rights to distributions that
have accumulated but not yet been authorized on all or part of the
shares of the class.
2. If a proposed amendment would affect a series of a class of
shares in one or more of the ways described in subsection 1, the
holders of shares of that series are entitled to vote as a separate
voting group on the proposed amendment.
3. If a proposed amendment that entitles the holders of two or
more classes or series of shares to vote as separate voting groups
under this section would affect those two or more classes or series
in the same or a substantially similar way, the holders of shares of
all the classes or series so affected must vote together as a single
voting group on the proposed amendment, unless otherwise provided in
the articles of incorporation or required by the board of directors.
4. A class or series of shares is entitled to the voting rights
granted by this section although the articles of incorporation
provide that the shares are nonvoting shares. Section History: Recent Form
89 Acts, ch 288, §112; 2002 Acts, ch 1154, §57, 125
Referred to in § 490.1003, 490.1104, 534.501
490.1005 AMENDMENT BY BOARD OF DIRECTORS.
Unless the articles of incorporation provide otherwise, a
corporation's board of directors may adopt amendments to the
corporation's articles of incorporation without shareholder approval
for any of the following purposes:
1. To extend the duration of the corporation if it was
incorporated at a time when limited duration was required by law.
2. To delete the names and addresses of the initial directors.
3. To delete the name and address of the initial registered agent
or registered office, if a statement of change is on file with the
secretary of state.
4. If the corporation has only one class of shares outstanding:
a. To change each issued and unissued authorized share of the
class into a greater number of whole shares of that class.
b. To increase the number of authorized shares of the class
to the extent necessary to permit the issuance of shares as a share
dividend.
5. To change the corporate name by substituting the word
"corporation", "incorporated", "company", "limited", or the
abbreviation "corp.", "inc.", "co.", or "ltd.", for a similar word or
abbreviation in the name, or by adding, deleting, or changing a
geographical attribution for the name.
6. To reflect a reduction in authorized shares, as a result of
the operation of section 490.631, subsection 2, when the corporation
has acquired its own shares and the articles of incorporation
prohibit the reissue of the acquired shares.
7. To delete a class of shares from the articles of
incorporation, as a result of the operation of section 490.631,
subsection 2, when there are no remaining shares of the class because
the corporation has acquired all shares of the class and the articles
of incorporation prohibit the reissue of the acquired shares.
8. To make any change expressly permitted by section 490.602,
subsection 1 or 2, to be made without shareholder approval. Section History: Recent Form
89 Acts, ch 288, §113; 2002 Acts, ch 1154, § 58, 125; 2007 Acts,
ch 140, §7
Referred to in § 490.1003, 490.1102, 490.1104, 534.501
490.1006 ARTICLES OF AMENDMENT.
After an amendment to the articles of incorporation has been
adopted and approved in the manner required by this chapter and by
the articles of incorporation, the corporation shall deliver to the
secretary of state, for filing, articles of amendment, which shall
set forth all of the following:
1. The name of the corporation.
2. The text of each amendment adopted, or the information
required by section 490.120, subsection 12, paragraph "e".
3. If an amendment provides for an exchange, reclassification, or
cancellation of issued shares, provisions for implementing the
amendment, if not contained in the amendment itself, which may be
made dependent upon facts objectively ascertainable outside the
articles of amendment in accordance with section 490.120, subsection
12.
4. If an amendment:
a. Required approval by the shareholders, a statement that
the amendment was duly approved by the shareholders in the manner
required by this chapter and by the articles of incorporation.
b. Is being filed pursuant to section 490.120, subsection 12,
a statement to that effect. Section History: Recent Form
89 Acts, ch 288, §114; 2002 Acts, ch 1154, §59, 125; 2007 Acts, ch
140, §8
Referred to in § 490.1007
490.1007 RESTATED ARTICLES OF INCORPORATION.
1. A corporation's board of directors may restate its articles of
incorporation at any time with or without shareholder approval, to
consolidate all amendments into a single document.
2. If the restated articles include one or more new amendments
that require shareholder approval, the amendments must be adopted and
approved as provided in section 490.1003.
3. A corporation that restates its articles of incorporation
shall deliver to the secretary of state for filing articles of
restatement setting forth the name of the corporation and the text of
the restated articles of incorporation together with a certificate
that states that the restated articles consolidate all amendments
into a single document and, if a new amendment is included in the
restated articles, that also include the statements required under
section 490.1006.
4. Duly adopted restated articles of incorporation supersede the
original articles of incorporation and all amendments to the original
articles of incorporation.
5. The secretary of state may certify restated articles of
incorporation as the articles of incorporation currently in effect,
without including the certificate information required by subsection
3. Section History: Recent Form
89 Acts, ch 288, §115; 2002 Acts, ch 1154, §60, 125
Referred to in § 490.1003
490.1008 AMENDMENT PURSUANT TO REORGANIZATION.
1. A corporation's articles of incorporation may be amended
without action by the board of directors or shareholders to carry out
a plan of reorganization ordered or decreed by a court of competent
jurisdiction under the authority of law of the United States.
2. The individual or individuals designated by the court shall
deliver to the secretary of state for filing articles of amendment
setting forth all of the following:
a. The name of the corporation.
b. The text of each amendment approved by the court.
c. The date of the court's order or decree approving the
articles of amendment.
d. The title of the reorganization proceeding in which the
order or decree was entered.
e. A statement that the court had jurisdiction of the
proceeding under federal statute.
3. This section does not apply after entry of a final decree in
the reorganization proceeding even though the court retains
jurisdiction of the proceeding for limited purposes unrelated to
consummation of the reorganization plan. Section History: Recent Form
89 Acts, ch 288, §116; 2002 Acts, ch 1154, §61, 125
Referred to in § 490.1003
490.1009 EFFECT OF AMENDMENT.
An amendment to the articles of incorporation does not affect a
cause of action existing against or in favor of the corporation, a
proceeding to which the corporation is a party, or the existing
rights of persons other than shareholders of the corporation. An
amendment changing a corporation's name does not abate a proceeding
brought by or against the corporation in its former name. Section History: Recent Form
89 Acts, ch 288, §117; 2002 Acts, ch 1154, §62, 125
490.1010 THROUGH 490.1019 Reserved.
490.1020 AMENDMENT OF BYLAWS BY BOARD OF DIRECTORS OR
SHAREHOLDERS.
1. A corporation's shareholders may amend or repeal the
corporation's bylaws.
2. A corporation's board of directors may amend or repeal the
corporation's bylaws unless either of the following apply:
a. The articles of incorporation or section 490.1021 reserve
that power exclusively to the shareholders in whole or in part.
b. The shareholders in amending, repealing, or adopting a
bylaw expressly provide that the board of directors shall not amend,
repeal, or reinstate that bylaw. Section History: Recent Form
89 Acts, ch 288, §118; 2002 Acts, ch 1154, §63, 125
490.1021 BYLAW INCREASING QUORUM OR VOTING
REQUIREMENT FOR DIRECTORS.
1. A bylaw that increases a quorum or voting requirement for the
board of directors may be amended or repealed as follows:
a. If adopted by the shareholders, only by the shareholders,
unless the bylaws otherwise provide.
b. If adopted by the board of directors, either by the
shareholders or by the board of directors.
2. A bylaw adopted or amended by the shareholders that increases
a quorum or voting requirement for the board of directors may provide
that it can be amended or repealed only by a specified vote of either
the shareholders or the board of directors.
3. Action by the board of directors under subsection 1 to amend
or repeal a bylaw that changes the quorum or voting requirement for
the board of directors must meet the same quorum requirement and be
adopted by the same vote required to take action under the quorum and
voting requirement then in effect or proposed to be adopted,
whichever is greater. Section History: Recent Form
89 Acts, ch 288, §119; 2002 Acts, ch 1154, §64, 125
Referred to in § 490.1020
490.1022 Repealed by 2002 Acts, ch 1154, § 123,
125.
490.1101 DEFINITIONS.
As used in this division, unless the context otherwise requires:
1. "Converted entity" means a corporation or other entity
into which a converting entity converts pursuant to sections 490.1111
through 490.1114.
2. "Converting entity" means a corporation or other entity
that converts into an other entity or corporation pursuant to section
490.1111.
3. "Governing statute" of a corporation or other entity means
the statute that governs the corporation or other entity's internal
affairs.
4. "Interests" means the proprietary interests in an other
entity.
5. "Merger" means a business combination pursuant to section
490.1102.
6. "Organizational documents" means the basic document or
documents that create, or determine the internal governance of, an
other entity.
7. "Other entity" means any association or legal entity,
other than a domestic or foreign corporation, organized to conduct
business, including, without limitation, limited partnerships,
general partnerships, limited liability partnerships, limited
liability companies, joint ventures, joint stock companies, and
business trusts.
8. "Party to a merger" or "party to a share exchange"
means any domestic or foreign corporation or other entity that will
accomplish one of the following during a merger:
a. Merge under a plan of merger.
b. Acquire shares or interests of another corporation or an
other entity in a share exchange.
c. Have all of its shares or interests or all of one or more
classes or series of its shares or interests acquired in a share
exchange.
9. "Share exchange" means a business combination pursuant to
section 490.1103.
10. "Survivor" in a merger means the corporation or other
entity into which one or more other corporations or other entities
are merged. A survivor of a merger may preexist the merger or be
created by the merger. Section History: Recent Form
89 Acts, ch 288, §121; 97 Acts, ch 117, § 3; 97 Acts, ch 171, §
12; 2002 Acts, ch 1154, §65, 125; 2008 Acts, ch 1162, §117, 155
490.1102 MERGER.
1. One or more domestic corporations may merge with a domestic or
foreign corporation or other entity pursuant to a plan of merger.
2. A foreign corporation, or domestic or foreign other entity,
may be a party to the merger, or may be created by the terms of the
plan of merger, only if both of the following are satisfied:
a. The merger is permitted by the laws under which the
corporation or other entity is organized or by which it is governed.
b. In effecting the merger, the corporation or other entity
complies with such laws and with its articles of incorporation or
organizational documents.
3. The plan of merger must include all of the following:
a. The name of each corporation or other entity that will
merge and the name of the corporation or other entity that will be
the survivor of the merger.
b. The terms and conditions of the merger.
c. The manner and basis of converting the shares of each
merging corporation and interests of each merging other entity into
shares, or other securities, interests, obligations, rights to
acquire shares or other securities, cash, other property, or any
combination of the foregoing.
d. The articles of incorporation of any corporation, or the
organizational documents of any other entity, to be created by the
merger, or if a new corporation or other entity is not to be created
by the merger, any amendments to the survivor's articles of
incorporation or organizational documents.
e. Any other provisions required by the laws under which any
party to the merger is organized or by which it is governed, or by
the articles of incorporation or organizational documents of any such
party.
4. The terms of a plan of merger may be made dependent on facts
objectively ascertainable outside the plan in accordance with section
490.120, subsection 12.
5. The plan of merger may also include a provision that the plan
may be amended prior to filing the articles of merger with the
secretary of state, provided that if the shareholders of a domestic
corporation that is a party to the merger are required or permitted
to vote on the plan, the plan must provide that subsequent to
approval of the plan by such shareholders the plan shall not be
amended to change any of the following:
a. Change the amount or kind of shares or other securities,
interests, obligations, rights to acquire shares or other securities,
cash, or other property to be received by the shareholders of or
owners of interests in any party to the merger upon conversion of
their shares or interests under the plan.
b. Change the articles of incorporation of any corporation,
or the organizational documents of any other entity, that will
survive or be created as a result of the merger, except for changes
permitted by section 490.1005 or by comparable provisions of the laws
under which the foreign corporation or other entity is organized or
governed.
c. Change any of the other terms or conditions of the plan if
the change would adversely affect such shareholders in any material
respect. Section History: Recent Form
89 Acts, ch 288, §122; 97 Acts, ch 117, § 4; 2002 Acts, ch 1154, §
66, 125; 2007 Acts, ch 140, §9
Referred to in § 490.1101, 499.69A, 508B.2, 515G.2
490.1103 SHARE EXCHANGE.
1. Either of the following may occur through a share exchange:
a. A domestic corporation may acquire all of the shares of
one or more classes or series of shares of another domestic or
foreign corporation, or all of the interests of one or more classes
or series of interests of a domestic or foreign other entity, in
exchange for shares or other securities, interests, obligations,
rights to acquire shares or other securities, cash, other property,
or any combination of the foregoing, pursuant to a plan of share
exchange.
b. All of the shares of one or more classes or series of
shares of a domestic corporation may be acquired by another domestic
or foreign corporation or other entity, in exchange for shares or
other securities, interests, obligations, rights to acquire shares or
other securities, cash, other property, or any combination of the
foregoing, pursuant to a plan of share exchange.
2. A foreign corporation, or a domestic or foreign other entity,
may be a party to the share exchange only if both of the following
conditions are met:
a. The share exchange is permitted by the laws under which
the corporation or other entity is organized or by which it is
governed.
b. In effecting the share exchange, the corporation or other
entity complies with such laws and with its articles of incorporation
or organizational documents.
3. The plan of share exchange must include all of the following:
a. The name of each corporation or other entity whose shares
or interests will be acquired and the name of the corporation or
other entity that will acquire those shares or interests.
b. The terms and conditions of the share exchange.
c. The manner and basis of exchanging shares of a corporation
or interests in an other entity whose shares or interests will be
acquired under the share exchange into shares or other securities,
interests, obligations, rights to acquire shares or other securities,
cash, other property, or any combination of the foregoing.
d. Any other provisions required by the laws under which any
party to the share exchange is organized or by the articles of
incorporation or organizational documents of any such party.
4. The terms of a share exchange may be made dependent on facts
objectively ascertainable outside the plan in accordance with section
490.120, subsection 12.
5. The plan of share exchange may also include a provision that
the plan may be amended prior to filing of the articles of share
exchange with the secretary of state, provided that if the
shareholders of a domestic corporation that is a party to the share
exchange are required or permitted to vote on the plan, the plan must
provide that subsequent to approval of the plan by such shareholders
the plan shall not be amended to change either of the following:
a. The amount or kind of shares or other securities,
interests, obligations, rights to acquire shares or other securities,
cash, or other property to be issued by the corporation or to be
received by the shareholders of or owners of interests in any party
to the share exchange in exchange for their shares or interests under
the plan.
b. Any of the terms or conditions of the plan if the change
would adversely affect such shareholders in any material respect.
6. This section does not limit the power of a domestic
corporation to acquire shares of another corporation or interests in
an other entity in a transaction other than a share exchange. Section History: Recent Form
89 Acts, ch 288, §123; 2002 Acts, ch 1154, §67, 125; 2007 Acts, ch
140, §10
Referred to in § 490.1101
490.1104 ACTION ON A PLAN OF MERGER OR SHARE
EXCHANGE.
In the case of a domestic corporation that is a party to a merger
or share exchange:
1. The plan of merger or share exchange must be adopted by the
board of directors.
2. Except as provided in subsection 7 and in section 490.1105,
after adopting the plan of merger or share exchange the board of
directors must submit the plan to the shareholders for their
approval. The board of directors must also transmit to the
shareholders a recommendation that the shareholders approve the plan,
unless the board of directors makes a determination that because of
conflicts of interest or other special circumstances it should not
make such a recommendation, in which case the board of directors must
transmit to the shareholders the basis for that determination.
3. The board of directors may condition its submission of the
plan of merger or share exchange to the shareholders on any basis.
4. If the plan of merger or share exchange is required to be
approved by the shareholders, and if the approval is to be given at a
meeting, the corporation must notify each shareholder, whether or not
entitled to vote, of the meeting of shareholders at which the plan is
to be submitted for approval. The notice must state that the
purpose, or one of the purposes, of the meeting is to consider the
plan and must contain or be accompanied by a copy or summary of the
plan. If the corporation is to be merged into an existing
corporation or other entity, the notice shall also include or be
accompanied by a copy or summary of the articles of incorporation or
organizational documents of that corporation or other entity. If the
corporation is to be merged into a corporation or other entity that
is to be created pursuant to the merger, the notice shall include or
be accompanied by a copy or summary of the articles of incorporation
or organizational documents of the new corporation or other entity.
5. Unless the articles of incorporation, bylaws, or the board of
directors require a greater vote or a greater number of votes to be
present, the approval of the plan of merger or share exchange shall
require the approval of the shareholders at a meeting at which a
quorum consisting of at least a majority of the votes entitled to be
cast on the plan exists, and, if any class or series of shares is
entitled to vote as a separate group on the plan of merger or share
exchange, the approval of each such separate voting group at a
meeting at which a quorum of the voting group consisting of at least
a majority of the votes entitled to be cast on the merger or share
exchange by that voting group is present.
6. Separate voting by voting groups is required for each of the
following:
a. On a plan of merger, by each class or series of shares
that are to be converted, pursuant to the provisions of the plan of
merger, into shares or other securities, interests, obligations,
rights to acquire shares or other securities, cash, other property,
or any combination of the foregoing, or would have a right to vote as
a separate group on a provision in the plan that, if contained in a
proposed amendment to articles of incorporation, would require action
by separate voting groups under section 490.1004.
b. On a plan of share exchange, by each class or series of
shares included in the exchange, with each class or series
constituting a separate voting group.
c. On a plan of merger or share exchange, if the voting group
is entitled under the articles of incorporation to vote as a voting
group to approve a plan of merger or share exchange.
7. Unless the articles of incorporation otherwise provide,
approval by the corporation's shareholders of a plan of merger or
share exchange is not required if all of the following conditions are
satisfied:
a. The corporation will survive the merger or is the
acquiring corporation in a share exchange.
b. Except for amendments permitted by section 490.1005, its
articles of incorporation will not be changed.
c. Each shareholder of the corporation whose shares were
outstanding immediately before the effective date of the merger or
share exchange will hold the same number of shares, with identical
preferences, limitations, and relative rights, immediately after the
effective date of change.
d. The issuance in the merger or share exchange of shares or
other securities convertible into or rights exercisable for shares
does not require a vote under section 490.621, subsection 6.
8. If, as a result of a merger or share exchange, one or more
shareholders of a domestic corporation would become subject to
personal liability for the obligations or liabilities of any other
person or other entity, approval of the plan of merger shall require
the execution, by each such shareholder, of a separate written
consent to become subject to such personal liability. Section History: Recent Form
89 Acts, ch 288, §124; 2002 Acts, ch 1154, §68, 125
Referred to in § 490.1302, 508B.2, 515G.2, 524.1402
490.1105 MERGER BETWEEN PARENT AND SUBSIDIARY OR
BETWEEN SUBSIDIARIES.
1. A domestic parent corporation that owns shares of a domestic
or foreign subsidiary corporation that carry at least ninety percent
of the voting power of each class and series of the outstanding
shares of the subsidiary that have voting power may merge the
subsidiary into itself or into another such subsidiary, or merge
itself into the subsidiary, without the approval of the board of
directors or shareholders of the subsidiary unless the articles of
incorporation of any of the corporations otherwise provide, and
unless, in the case of a foreign subsidiary, approval by the
subsidiary's board of directors or shareholders is required by the
laws under which the subsidiary is organized.
2. If under subsection 1 approval of a merger by the subsidiary's
shareholders is not required, the parent corporation shall, within
ten days after the effective date of the merger, notify each of the
subsidiary's shareholders that the merger has become effective.
3. Except as provided in subsections 1 and 2, a merger between a
parent and subsidiary shall be governed by the provisions of this
division, applicable to mergers generally. Section History: Recent Form
89 Acts, ch 288, §125; 2002 Acts, ch 1154, §69, 125
Referred to in § 490.1104, 490.1110, 490.1302, 490.1320, 490.1322,
524.1408
490.1106 ARTICLES OF MERGER OR SHARE EXCHANGE.
1. After a plan of merger or share exchange has been adopted and
approved as required by this chapter, articles of merger or share
exchange shall be executed on behalf of each party to the merger or
share exchange by any officer or other duly authorized
representative. The articles shall set forth the following:
a. The names of the parties to the merger or share exchange
and the date on which the merger or share exchange occurred or is to
be effective.
b. If the articles of incorporation of the survivor of a
merger are amended, or if a new corporation is created as a result of
a merger, the amendments to the survivor's articles of incorporation
or the articles of incorporation of the new corporation.
c. If the plan of merger or share exchange required approval
by the shareholders of a domestic corporation that was a party to the
merger or share exchange, a statement that the plan was duly approved
by the shareholders and, if voting by any separate voting group was
required, by each such separate voting group, in the manner required
by this chapter and the articles of incorporation.
d. If the plan of merger or share exchange did not require
approval by the shareholders of a domestic corporation that was a
party to the merger or share exchange, a statement to that effect.
e. As to each foreign corporation and each other entity that
was a party to the merger or share exchange, a statement that the
plan and the performance of its terms were duly authorized by all
action required by the laws under which the corporation or other
entity is organized or by which it is governed, and by its articles
of incorporation or organizational documents.
2. Articles of merger or share exchange shall be delivered to the
secretary of state for filing by the survivor of the merger or the
acquiring corporation in a share exchange and shall take effect on
the effective date of the merger or share exchange. Section History: Recent Form
89 Acts, ch 288, §126; 2002 Acts, ch 1154, §70, 125
Referred to in § 490.858, 499.69A
490.1107 EFFECT OF MERGER OR SHARE EXCHANGE.
1. When a merger becomes effective, certain acts shall occur as
follows:
a. The corporation or other entity that is designated in the
plan of merger as the survivor continues or comes into existence, as
the case may be.
b. The separate existence of every corporation or other
entity that is merged into the survivor ceases.
c. All property owned by, and every contract right possessed
by, each corporation or other entity that merges into the survivor is
vested in the survivor without reversion or impairment.
d. All liabilities of each corporation or other entity that
is merged into the survivor are vested in the survivor.
e. The name of the survivor may, but need not be, substituted
in any pending proceeding for the name of any party to the merger
whose separate existence ceased in the merger.
f. The articles of incorporation or organizational documents
of the survivor are amended to the extent provided in the plan of
merger.
g. The articles of incorporation or organizational documents
of a survivor that is created by the merger become effective.
h. The shares of each corporation that is a party to the
merger, and the interests in another entity that is a party to a
merger, that are to be converted under the plan of merger into
shares, interests, obligations, rights to acquire securities, other
securities, cash, other property, or any combination of the
foregoing, are converted, and the former holders of such shares or
interests are entitled only to the rights provided to them in the
plan of merger or to any rights they may have under division XIII.
2. When a share exchange becomes effective, the shares of each
domestic corporation that are to be exchanged for shares or other
securities, interests, obligations, rights to acquire shares or
securities, other securities, cash, other property, or any
combination of the foregoing, are entitled only to the rights
provided to them in the plan of share exchange or to any rights they
may have under division XIII.
3. Any shareholder of a domestic corporation that is a party to a
merger or share exchange who, prior to the merger or share exchange,
was liable for the liabilities or obligations of such corporation,
shall not be released from such liabilities or obligations by reason
of the merger or share exchange.
4. Upon a merger becoming effective, a foreign corporation, or a
foreign other entity, that is the survivor of the mergers, is deemed
to do both of the following:
a. Appoint the secretary of state as its agent for service of
process in a proceeding to enforce the rights of shareholders of each
domestic corporation that is a party to the merger who exercise
appraisal rights.
b. Agree that it will promptly pay the amount, if any, to
which such shareholders are entitled under division XIII. Section History: Recent Form
89 Acts, ch 288, §127; 2002 Acts, ch 1154, §71, 125
490.1108 ABANDONMENT OF A MERGER OR SHARE EXCHANGE.
1. Unless otherwise provided in a plan of merger or share
exchange or in the laws under which a foreign corporation or a
domestic or foreign other entity that is a party to a merger or a
share exchange is organized or by which it is governed, after the
plan has been adopted and approved as required by this division, and
at any time before the merger or share exchange has become effective,
it may be abandoned by any party to the merger or share exchange
without action by the party's shareholders or owners of interests, in
accordance with any procedures set forth in the plan of merger or
share exchange or, if no such procedures are set forth in the plan,
in the manner determined by the board of directors of a corporation,
or the managers of any other entity, subject to any contractual
rights of other parties to the merger or share exchange.
2. If a merger or share exchange is abandoned under subsection 1
after articles of merger or share exchange have been filed with the
secretary of state but before the merger or share exchange has become
effective, a statement that the merger or share exchange has been
abandoned in accordance with this section, executed on behalf of a
party to the merger or share exchange by an officer or other duly
authorized representative, shall be delivered to the secretary of
state for filing prior to the effective date of the merger or share
exchange. Upon filing, the statement shall take effect and the
merger or share exchange shall be deemed abandoned and shall not
become effective. Section History: Recent Form
89 Acts, ch 288, §128; 2002 Acts, ch 1154, §72, 125
490.1108A CONSIDERATION OF ACQUISITION PROPOSALS --
COMMUNITY INTERESTS.
1. A director, in determining what is in the best interest of the
corporation when considering a tender offer or proposal of
acquisition, merger, consolidation, or similar proposal, may consider
any or all of the following community interest factors, in addition
to consideration of the effects of any action on shareholders:
a. The effects of the action on the corporation's employees,
suppliers, creditors, and customers.
b. The effects of the action on the communities in which the
corporation operates.
c. The long-term as well as short-term interests of the
corporation and its shareholders, including the possibility that
these interests may be best served by the continued independence of
the corporation.
2. If on the basis of the community interest factors described in
subsection 1, the board of directors determines that a proposal or
offer to acquire or merge the corporation is not in the best
interests of the corporation, it may reject the proposal or offer.
If the board of directors determines to reject any such proposal or
offer, the board of directors has no obligation to facilitate, to
remove any barriers to, or to refrain from impeding, the proposal or
offer. Consideration of any or all of the community interest factors
is not a violation of the business judgment rule or of any duty of
the director to the shareholders, or a group of shareholders, even if
the director reasonably determines that a community interest factor
or factors outweigh the financial or other benefits to the
corporation or a shareholder or group of shareholders. Section History: Recent Form
2002 Acts, ch 1154, §73, 125
Referred to in § 508B.13
490.1109 QUALIFIED MERGER -- CORPORATION AND
COOPERATIVE ASSOCIATION.
A corporation and a cooperative association organized under
chapter 499 may merge as provided in section 499.69A. Section History: Recent Form
97 Acts, ch 17, §1
490.1110 BUSINESS COMBINATIONS WITH INTERESTED
SHAREHOLDERS.
1. Notwithstanding any other provision of this chapter, a
corporation shall not engage in any business combination with an
interested shareholder for a period of three years following the time
that the shareholder became an interested shareholder, unless any of
the following apply:
a. Prior to the time the shareholder became an interested
shareholder, the board of directors of the corporation approved
either the business combination or the transaction which resulted in
the shareholder becoming an interested shareholder.
b. Upon consummation of the transaction which resulted in the
shareholder becoming an interested shareholder, the interested
shareholder owned at least eighty-five percent of the voting stock of
the corporation outstanding at the time the transaction commenced,
excluding, for purposes of determining the number of shares
outstanding, those shares owned by persons who are directors and
officers, and by employee stock plans in which employee participants
do not have the right to determine confidentially whether shares held
subject to the plan will be tendered in a tender or exchange offer.
c. At or subsequent to the time the shareholder became an
interested shareholder, the business combination is approved by the
board of directors and authorized at an annual or special meeting of
shareholders by the affirmative vote of at least sixty-six and
two-thirds percent of the outstanding voting stock which is not owned
by the interested shareholder. Such approval shall not be by written
consent.
2. This section does not apply in any of the following
circumstances:
a. The corporation does not have a class of voting stock that
is listed on a national securities exchange, authorized for quotation
on the national association of securities dealers automated
quotations--national market system, or held of record by more than
two thousand shareholders, unless any of the foregoing results from
action taken, directly or indirectly, by an interested shareholder or
from a transaction in which a person becomes an interested
shareholder.
b. The corporation's original articles of incorporation
contain a provision expressly electing not to be governed by this
section.
c. The corporation, by action of its board of directors,
adopts an amendment to its bylaws by no later than September 29,
1997, expressly electing not to be governed by this section, which
amendment shall not be further amended by the board of directors.
d. The corporation, by action of its shareholders, adopts an
amendment to its articles of incorporation or bylaws expressly
electing not to be governed by this section, provided that, in
addition to any other vote required by law, such amendment to the
articles of incorporation or bylaws must be approved by the
affirmative vote of a majority of the shares entitled to vote. An
amendment adopted pursuant to this paragraph is effective immediately
in the case of a corporation that has never had a class of voting
stock that falls within any of the three categories set out in
paragraph "a" and has not elected by a provision in its original
articles of incorporation or any amendment to such articles to be
governed by this section. In all other cases, an amendment adopted
pursuant to this paragraph is not effective until twelve months after
the adoption of the amendment and does not apply to any business
combination between the corporation and any person who became an
interested shareholder of the corporation on or prior to such
adoption.
An amendment to the bylaws adopted pursuant to this paragraph
shall not be further amended by the board of directors.
e. A shareholder becomes an interested shareholder
inadvertently and both of the following apply:
(1) As soon as practicable the shareholder divests itself of
ownership of sufficient shares so that the shareholder ceases to be
an interested shareholder.
(2) The shareholder would not, at any time within the three-year
period immediately prior to a business combination between the
corporation and such shareholder, have been an interested shareholder
but for the inadvertent acquisition of ownership.
f. (1) The business combination is proposed prior to the
consummation or abandonment of and subsequent to the earlier of the
public announcement or the notice required in this paragraph of a
proposed transaction which satisfies all of the following:
(a) Constitutes a transaction described in subparagraph (2).
(b) Is with or by a person who either was not an interested
shareholder during the previous three years or who became an
interested shareholder with the approval of the corporation's board
of directors or who became an interested shareholder during the time
period described in paragraph "g".
(c) Is approved or not opposed by a majority of the members of
the board of directors then in office who were directors prior to any
person becoming an interested shareholder during the previous three
years, or who were recommended for election or elected to succeed
such directors by a majority of such directors.
(2) A proposed transaction under subparagraph (1) is limited to
the following:
(a) A merger of the corporation, other than a merger pursuant to
section 490.1105.
(b) A sale, lease, exchange, mortgage, pledge, transfer, or other
disposition, in one or more transactions and whether as part of a
dissolution or otherwise, of assets of the corporation or of any
direct or indirect majority-owned subsidiary of the corporation,
other than to a direct or indirect wholly owned subsidiary of the
corporation or to the corporation itself, which has an aggregate
market value equal to fifty percent or more of either the aggregate
market value of all of the assets of the corporation determined on a
consolidated basis, or the aggregate market value of all the
outstanding stock of the corporation.
(c) A proposed tender or exchange offer for fifty percent or more
of the outstanding voting stock of the corporation.
(3) The corporation shall give no less than twenty days' notice
to all interested shareholders prior to the consummation of any of
the transactions described in subparagraph (2), subparagraph division
(a) or (b).
g. The business combination is with an interested shareholder
who becomes an interested shareholder of the corporation at a time
when the corporation is not subject to this section pursuant to
paragraph "a", "b", "c", or "d".
Notwithstanding paragraphs "a" through "d", a corporation
may elect under its original articles of incorporation or any
amendment to such articles to be subject to this section. However,
such amendment shall not apply to restrict a business combination
between the corporation and an interested shareholder of the
corporation if the interested shareholder became such prior to the
effective date of the amendment.
3. As used in this section, unless the context otherwise
requires:
a. "Affiliate" means a person that directly, or indirectly,
through one or more intermediaries, controls, or is controlled by, or
is under common control with, another person.
b. "Associate", when used to indicate a relationship with a
person, means any of the following:
(1) A corporation, partnership, unincorporated association, or
other entity of which the person is a director, officer, or partner
or is, directly or indirectly, the owner of twenty percent or more of
any class of voting stock.
(2) A trust or other estate in which the person has at least a
twenty percent beneficial interest or as to which such person serves
as trustee or in a similar fiduciary capacity.
(3) A relative or spouse of the person, or any relative of the
spouse, who has the same residence as the person.
c. "Business combination", with respect to a corporation and
an interested shareholder of such corporation, means any of the
following:
(1) A merger or consolidation of the corporation or any direct or
indirect majority-owned subsidiary of the corporation with the
interested shareholder, or with any other corporation, partnership,
unincorporated association, or other entity if the merger or
consolidation is caused by the interested shareholder and as a result
of such merger the surviving entity is not subject to subsection 1.
(2) A sales, lease, exchange, mortgage, pledge, transfer, or
other disposition, in one transaction or a series of transactions,
except proportionately as a shareholder of such corporation, to or
with the interested shareholder, whether as part of a dissolution or
otherwise, of assets of the corporation or of any direct or indirect
majority-owned subsidiary of the corporation which assets have an
aggregate market value equal to ten percent or more of either the
aggregate market value of all the assets of the corporation
determined on a consolidated basis or the aggregate market value of
all the outstanding stock of the corporation.
(3) A transaction which results in the issuance or transfer by
the corporation or by any direct or indirect majority-owned
subsidiary of the corporation of any stock of the corporation or of
such subsidiary to the interested shareholder, except for the
following:
(a) Pursuant to the exercise, exchange, or conversion of
securities exercisable for, exchangeable for, or convertible into
stock of the corporation or such subsidiary which securities were
outstanding prior to the time that the interested shareholder became
an interested shareholder.
(b) Pursuant to a merger under section 490.1105.
(c) Pursuant to a distribution paid or made, or the exercise,
exchange, or conversion of securities exercisable for, exchangeable
for, or convertible into stock of such corporation or any such
subsidiary, which stock is distributed pro rata to all holders of a
class or series of stock of the corporation subsequent to the time
the interested shareholder became an interested shareholder.
(d) Pursuant to an exchange offer by the corporation to purchase
stock made on the same terms to all holders of the stock.
(e) Any issuance or transfer of stock by the corporation,
provided, however, that in no case under subparagraph divisions (c)
and (d) and this subparagraph division shall there be an increase in
the interested shareholder's proportionate share of the stock of any
class or series of the corporation or of the voting stock of the
corporation.
(4) A transaction involving the corporation or any direct or
indirect majority-owned subsidiary of the corporation which has the
effect, directly or indirectly, of increasing the proportionate share
of the stock of any class or series, or securities convertible into
the stock of any class or series, of the corporation or of any such
subsidiary which is owned by the interested shareholder, except as a
result of immaterial changes due to fractional share adjustments or
as a result of any purchase or redemption of any shares of stock not
caused, directly or indirectly, by the interested shareholder.
(5) The receipt by the interested shareholder of the benefit,
directly or indirectly, except proportionately as a shareholder of
such corporation, of any loans, advances, guarantees, pledges, or
other financial benefits, other than those expressly permitted in
subparagraphs (1) through (4), provided by or through the corporation
or any direct or indirect majority-owned subsidiary.
d. "Control", including the terms "controlling",
"controlled by", and "under common control with", means the
ability, directly or indirectly, to direct or cause the direction of
the management and policies of a person, whether through the
ownership of voting stock, by contract, or otherwise. A person who
is the owner of twenty percent or more of the outstanding voting
stock of any corporation, partnership, unincorporated association, or
other entity is presumed to have control of such entity, in the
absence of proof by a preponderance of the evidence to the contrary.
Notwithstanding this paragraph, a presumption of control shall not
apply where a person holds voting stock, in good faith and not for
the purpose of circumventing this section, as an agent, bank, broker,
nominee, custodian, or trustee for one or more owners who do not
individually or as a group have control of such entity.
e. "Interested shareholder" means any person, other than the
corporation and any direct or indirect majority-owned subsidiary of
the corporation, that is the owner of ten percent or more of the
outstanding voting stock of the corporation, or is an affiliate or
associate of the corporation and was the owner of ten percent or more
of the outstanding voting stock of the corporation at any time within
the three-year period immediately prior to the date on which it is
sought to be determined whether such person is an interested
shareholder, and the affiliates and associates of such person.
"Interested shareholder" does not include a person whose
ownership of shares in excess of the ten percent limitation is the
result of action taken solely by the corporation, provided that such
person is an interested shareholder if, after such action by the
corporation, the person acquires additional shares of voting stock of
the corporation, other than as a result of further corporate action
not caused, directly or indirectly, by such person.
For purposes of determining whether a person is an interested
shareholder, the outstanding voting stock of the corporation does not
include any other unissued stock of the corporation which may be
issuable pursuant to any agreement, arrangement, or understanding, or
upon exercise of conversion rights, warrants, or options, or
otherwise.
f. "Owner", including the terms "own" and "owned"
when used with respect to any stock, means a person that individually
or with or through any of such person's affiliates or associates
satisfies any of the following:
(1) Beneficially owns such stock, directly or indirectly.
(2) Has the right to do either of the following:
(a) Acquire such stock, whether such right is exercisable
immediately or only after the passage of time, pursuant to any
agreement, arrangement, or understanding, or upon the exercise of
conversion rights, exchange rights, warrants, or options, or
otherwise. However, a person is not deemed the owner of stock
tendered pursuant to a tender or exchange offer made by such person
or any of such person's affiliates or associates until such tendered
stock is accepted for purchase or exchange.
(b) Vote such stock pursuant to any agreement, arrangement, or
understanding. However, a person is not deemed the owner of any
stock because of such person's right to vote such stock if the
agreement, arrangement, or understanding to vote such stock arises
solely from the revocable proxy or consent given in response to a
proxy or consent solicitation made to ten or more persons.
(3) Has any agreement, arrangement, or understanding for the
purpose of acquiring, holding, voting, or disposing of such stock
with any other person who beneficially owns, or whose affiliates or
associates beneficially own, directly or indirectly, such stock.
However, an agreement, arrangement, or understanding for the purpose
of voting such stock does not include voting pursuant to a revocable
proxy or consent under subparagraph (2), subparagraph division (b).
g. "Person" means any individual, corporation, partnership,
unincorporated association, or other entity.
h. "Stock" means, with respect to any corporation, capital
stock and, with respect to any other entity, any equity interest.
i. "Voting stock" means, with respect to any corporation,
stock of any class or series entitled to vote generally in the
election of directors and, with respect to any entity that is not a
corporation, any equity interest entitled to vote generally in the
election of the governing body of such entity.
4. The articles of incorporation or bylaws shall not require, for
any vote of shareholders required by this section, a greater vote of
shareholders than that specified in this section. Section History: Recent Form
97 Acts, ch 117, §5; 97 Acts, ch 188, § 52; 98 Acts, ch 1100, §
66; 2002 Acts, ch 1154, §74, 75, 125; 2009 Acts, ch 41, §263
490.1111 CONVERSION.
1. An other entity may convert to a domestic corporation, and a
domestic corporation may convert to an other entity pursuant to this
section and sections 490.1112 through 490.1114 and a plan of
conversion, if all of the following apply:
a. The other entity's governing statute authorizes the
conversion.
b. The conversion is not prohibited by the law of the
jurisdiction that enacted the governing statute.
c. The other entity complies with its governing statute in
effecting the conversion.
2. A plan of conversion must be in a record and must include all
of the following:
a. The name and form of the converting entity before
conversion.
b. The name and form of the converted entity after
conversion.
c. The terms and conditions of the conversion, including the
manner and basis for converting interests in the converting entity
into any combination of money, interests in the converted entity, and
other consideration.
d. The organizational documents or articles of incorporation
and bylaws of the converted entity. Section History: Recent Form
2008 Acts, ch 1162, §118, 155
Referred to in § 490.1101, 490.1302
490.1112 ACTION ON PLAN OF CONVERSION BY CONVERTING
DOMESTIC CORPORATION.
1. In the case of a domestic corporation that is being converted
into an other entity all of the following apply:
a. The plan of conversion must be adopted by the domestic
corporation's board of directors.
b. After adopting the plan of conversion, the domestic
corporation's board of directors must submit the plan to the domestic
corporation's shareholders for their approval. The board of
directors must also transmit to the shareholders a recommendation
that the shareholders approve the plan, unless the board of directors
makes a determination that because of conflicts of interest or other
special circumstances it should not make such a recommendation, in
which case the board of directors must transmit to the shareholders
the basis for that determination.
c. The domestic corporation must notify each shareholder of
the domestic corporation, whether or not entitled to vote, of the
meeting of shareholders at which the plan is to be submitted for
approval. The notice must state that the purpose, or one of the
purposes, of the meeting is to consider the plan of conversion and
must contain or be accompanied by a copy or summary of the plan of
conversion. The notice shall include or be accompanied by a copy of
the organizational documents as they will be in effect immediately
after the conversion.
d. The domestic corporation's board of directors may
condition its submission of the plan of conversion to the domestic
corporation's shareholders on any basis.
e. Unless the articles of incorporation, bylaws, or the board
of directors of the domestic corporation require a greater vote or a
greater number of votes to be present, the approval of the plan of
conversion shall require the approval of the domestic corporation's
shareholders at a meeting at which a quorum consisting of at least a
majority of the votes entitled to be cast on the plan exists, and, if
any classes or series of shares is entitled to vote as a separate
group on the plan of conversion, the approval of each such separate
voting group at a meeting at which a quorum of the voting group
consisting of at least a majority of the votes entitled to be cast on
the conversion by that voting group is present.
f. If any provision of the articles of incorporation, bylaws,
or an agreement of the domestic corporation to which any of the
directors or shareholders of the domestic corporation are parties,
adopted or entered into before the effective date of this section,
applies to a merger of the corporation and the document does not
refer to a conversion of the corporation, the provision shall be
deemed to apply to a conversion of the corporation until such
provision is subsequently amended.
g. If as a result of the conversion as provided in this
subsection, one or more shareholders of the domestic corporation
would become subject to owner liability for the debts, obligations,
or liabilities of any other person or entity, approval of the plan of
conversion shall require the execution, by each such shareholder of
the domestic corporation, of a separate written consent to become so
subject to such owner liability.
2. After a conversion is approved as provided in subsection 1,
and at any time before a filing is made under section 490.1113, a
domestic corporation that is being converted may amend its plan of
conversion or abandon the planned conversion as follows:
a. As provided in the plan of conversion.
b. Except as prohibited by the plan of conversion, by the
same consent as was required to approve the plan of conversion. Section History: Recent Form
2008 Acts, ch 1162, §119, 155; 2009 Acts, ch 41, §147
Referred to in § 490.1101, 490.1111, 490.1302
490.1113 FILINGS REQUIRED FOR CONVERSION -- EFFECTIVE
DATE.
1. After a plan of conversion is approved, all of the following
apply:
a. A domestic corporation that is being converted into an
other entity shall deliver to the secretary of state for filing
articles of conversion, which must include all of the following:
(1) A statement that the domestic corporation has been converted
into an other entity.
(2) The name and form of the other entity and the jurisdiction of
its governing statute.
(3) The date the conversion is effective under the governing
statute of the converted entity.
(4) A statement that the conversion was approved as required by
this chapter.
(5) A statement that the conversion was approved as required by
the governing statute of the converted entity.
(6) If the converted entity is a foreign other entity not
authorized to transact business in this state, the street and mailing
address of an office which the secretary of state may use for the
purposes of section 490.1114, subsection 3.
b. If the converting entity is not a converting domestic
corporation, the converting entity shall deliver to the secretary of
state for filing articles of incorporation, which must include, in
addition to the information required by section 490.202, all of the
following:
(1) A statement that the domestic corporation was converted from
an other entity.
(2) The name and form of the other entity and the jurisdiction of
its governing statute.
(3) A statement that the conversion was approved in a manner that
complied with the other entity's governing statute.
2. A conversion becomes effective according to the following:
a. If the converted entity is a domestic corporation, when
the articles of incorporation are filed.
b. If the converted entity is not a domestic corporation, as
provided by the governing statute of the converted other entity. Section History: Recent Form
2008 Acts, ch 1162, §120, 155
Referred to in § 490.1101, 490.1111, 490.1112, 490.1302
490.1114 EFFECT OF CONVERSION.
1. A domestic corporation or other entity that has been converted
pursuant to this article is for all purposes the same domestic
corporation or other entity that existed before the conversion.
2. When a conversion takes effect, all of the following apply:
a. All property owned by the converting entity remains vested
in the converted entity.
b. All debts, liabilities, and other obligations of the
converting entity continue as obligations of the converted entity.
c. An action or proceeding pending by or against the
converting entity may be continued as if the conversion had not
occurred.
d. The shares or interests of the converting entity are
reclassified into shares, interests, other securities, obligations,
rights to acquire shares, interests or other securities, or into cash
or other property in accordance with the plan of conversion; and the
shareholders or interest holders of the converting entity are
entitled only to the rights provided to them under the terms of the
conversion and to any appraisal rights they may have under the
organic law of the converting entity.
e. Except as prohibited by other law, all of the rights,
privileges, immunities, powers, and purposes of the converting entity
remain vested in the converted entity.
f. Except as otherwise provided in the plan of conversion,
the terms and conditions of the plan of conversion take effect.
g. Except as otherwise agreed, the conversion does not
dissolve a converting domestic corporation for the purposes of
division XIV.
3. A converted entity that is a foreign other entity consents to
the jurisdiction of the courts of this state to enforce any
obligation owed by the converting corporation, if before the
conversion the converting corporation was subject to suit in this
state on the obligation. A converted other entity that is a foreign
other entity and not authorized to transact business in this state
appoints the secretary of state as its agent for service of process
for purposes of enforcing an obligation under this subsection.
Service on the secretary of state under this subsection is made in
the same manner and with the same consequences as in section 490.504.
Section History: Recent Form
2008 Acts, ch 1162, §121, 155
Referred to in § 490.1101, 490.1111, 490.1113, 490.1302
490.1201 DISPOSITION OF ASSETS NOT REQUIRING
SHAREHOLDER APPROVAL.
Approval of the shareholders of a corporation is not required to
do any of the following, unless the articles of incorporation
otherwise provide:
1. To sell, lease, exchange, or otherwise dispose of any or all
of the corporation's assets in the usual and regular course of
business.
2. To mortgage, pledge, dedicate to the repayment of
indebtedness, whether with or without recourse, or otherwise encumber
any or all of the corporation's assets, whether or not in the usual
and regular course of business.
3. To transfer any or all of the corporation's assets to one or
more corporations or other entities, all of the shares or interests
of which are owned by the transferring corporation.
4. To distribute assets pro rata to the holders of one or more
classes or series of the corporation's shares. Section History: Recent Form
89 Acts, ch 288, §129; 2002 Acts, ch 1154, §76, 125
Referred to in § 490.1202
490.1202 SHAREHOLDER APPROVAL OF CERTAIN
DISPOSITIONS.
1. A sale, lease, exchange, or other disposition of assets, other
than a disposition described in section 490.1201, requires approval
of the corporation's shareholders if the disposition would leave the
corporation without a significant continuing business activity. If a
corporation retains a business activity that represented at least
twenty-five percent of total assets at the end of the most recently
completed fiscal year, and twenty-five percent of either income from
continuing operations before taxes or revenues from continuing
operations for that fiscal year, in each case of the corporation and
its subsidiaries on a consolidated basis, the corporation will
conclusively be deemed to have retained a significant continuing
business activity; but no presumption that the disposition will leave
the corporation without a significant continuing business activity
shall arise from the fact that the corporation's continuing business
activity does not equal or exceed any of these percentages.
2. A disposition that requires approval of the shareholders under
subsection 1 shall be initiated by a resolution by the board of
directors authorizing the disposition. After adoption of such a
resolution, the board of directors shall submit the proposed
disposition to the shareholders for their approval. The board of
directors shall also transmit to the shareholders a recommendation
that the shareholders approve the proposed disposition, unless the
board of directors makes a determination that because of conflicts of
interest or other special circumstances it should not make such a
recommendation, in which case the board of directors shall transmit
to the shareholders the basis for that determination.
3. The board of directors may condition its submission of a
disposition to the shareholders under subsection 2 on any basis.
4. If a disposition is required to be approved by the
shareholders under subsection 1, and if the approval is to be given
at a meeting, the corporation shall notify each shareholder, whether
or not entitled to vote, of the meeting of shareholders at which the
disposition is to be submitted for approval. The notice shall state
that the purpose, or one of the purposes, of the meeting is to
consider the disposition and shall contain a description of the
disposition, including the terms and conditions of the disposition
and the consideration to be received by the corporation.
5. Unless the articles of incorporation, bylaws, or the board of
directors acting pursuant to subsection 3 require a greater vote or a
greater number of votes to be present, the approval of a disposition
by the shareholders shall require the approval of the shareholders at
a meeting at which a quorum consisting of at least a majority of the
votes entitled to be cast on the disposition exists.
6. After a disposition has been approved by the shareholders
under subsection 2, and at any time before the disposition has been
consummated, it may be abandoned by the corporation without action by
the shareholders, subject to any contractual rights of other parties
to the disposition.
7. A disposition of assets in the course of dissolution under
division XIV is not governed by this section.
8. The assets of a direct or indirect consolidated subsidiary
shall be deemed the assets of the parent corporation for the purposes
of this section. Section History: Recent Form
89 Acts, ch 288, §130; 2002 Acts, ch 1154, §77, 125
Referred to in § 490.1302
490.1301 DEFINITIONS.
In this division, unless the context otherwise requires:
1. "Affiliate" means a person that directly or indirectly
through one or more intermediaries controls, is controlled by, or is
under common control with another person or is a senior executive
thereof. For purposes of section 490.1302, subsection 2, paragraph
"d", a person is deemed to be an affiliate of its senior
executives.
2. "Beneficial shareholder" means a person who is the
beneficial owner of shares held in a voting trust or by a nominee on
the beneficial owner's behalf.
3. "Corporation" means the issuer of the shares held by a
shareholder demanding appraisal. In addition, for matters covered in
sections 490.1322 through 490.1331, "corporation" includes the
surviving entity in a merger.
4. "Fair value" means the value of the corporation's shares
determined according to the following:
a. Immediately before the effectuation of the corporate
action to which the shareholder objects.
b. Using customary and current valuation concepts and
techniques generally employed for similar businesses in the context
of the transaction requiring appraisal.
c. Without discounting for lack of marketability or minority
status except, if appropriate, for amendments to the articles
pursuant to section 490.1302, subsection 1, paragraph "e".
With respect to shares of a corporation that is a bank holding
company as defined in section 524.1801, the factors identified in
section 524.1406, subsection 3, paragraph "a", shall also be
considered in determining fair value.
5. "Interest" means interest from the effective date of the
corporate action until the date of payment, at the rate of interest
on judgments in this state on the effective date of the corporate
action.
6. "Preferred shares" means a class or series of shares whose
holders have preference over any other class or series with respect
to distributions.
7. "Record shareholder" means the person in whose name shares
are registered in the records of the corporation or the beneficial
owner of shares to the extent of the rights granted by a nominee
certificate on file with the corporation.
8. "Senior executive" means the chief executive officer,
chief operating officer, chief financial officer, and anyone in
charge of a principal business unit or function.
9. "Shareholder" means both a record shareholder and a
beneficial shareholder. Section History: Recent Form
89 Acts, ch 288, §131; 2000 Acts, ch 1211, §2; 2002 Acts, ch 1154,
§78, 125
Referred to in §524.1406
490.1302 SHAREHOLDERS' RIGHT TO APPRAISAL.
1. A shareholder is entitled to appraisal rights, and to obtain
payment of the fair value of the shareholder's shares, in the event
of any of the following corporate actions:
a. Consummation of a merger to which the corporation is a
party if either of the following apply:
(1) Shareholder approval is required for the merger by section
490.1104 and the shareholder is entitled to vote on the merger,
except that appraisal rights shall not be available to any
shareholder of the corporation with respect to shares of any class or
series that remain outstanding after consummation of the merger.
(2) The corporation is a subsidiary and the merger is governed by
section 490.1105.
b. Consummation of a share exchange to which the corporation
is a party as the corporation whose shares will be acquired, if the
shareholder is entitled to vote on the exchange, except that
appraisal rights shall not be available to any shareholder of the
corporation with respect to any class or series of shares of the
corporation that is not exchanged.
c. Consummation of a disposition of assets pursuant to
section 490.1202 if the shareholder is entitled to vote on the
disposition.
d. An amendment of the articles of incorporation with respect
to a class or series of shares that reduces the number of shares of a
class or series owned by the shareholder to a fraction of a share if
the corporation has the obligation or right to repurchase the
fractional share so created.
e. Any other amendment to the articles of incorporation,
merger, share exchange, or disposition of assets to the extent
provided by the articles of incorporation, bylaws, or a resolution of
the board of directors.
f. Consummation of a conversion of the corporation to an
other entity pursuant to sections 490.1111 through 490.1114.
2. Notwithstanding subsection 1, the availability of the
appraisal rights under subsection 1, paragraphs "a" through
"d", shall be limited in accordance with the following
provisions:
a. Appraisal rights shall not be available for the holders of
shares of any class or series of shares:
(1) Listed on the New York stock exchange or the American stock
exchange or designated as a national market system security on an
interdealer quotation system by the national association of
securities dealers, inc.
(2) Not so listed or designated, but has at least two thousand
shareholders and the outstanding shares of such class or series has a
market value of at least twenty million dollars, exclusive of the
value of such shares held by its subsidiaries, senior executives,
directors, and beneficial shareholders owning more than ten percent
of such shares.
b. The applicability of paragraph "a" shall be determined
according to the following:
(1) The record date fixed to determine the shareholders entitled
to receive notice of, and to vote at, the meeting of shareholders to
act upon the corporate action requiring appraisal rights.
(2) The day before the effective date of such corporate action if
there is no meeting of shareholders.
c. Paragraph "a" shall not be applicable and appraisal
rights shall be available pursuant to subsection 1 for the holders of
any class or series of shares who are required by the terms of the
corporate action requiring appraisal rights to accept for such shares
anything other than cash or shares of any class or any series of
shares of any corporation, or any other proprietary interest of any
other entity, that satisfies the standards set forth in paragraph
"a", at the time the corporate action becomes effective.
d. Paragraph "a" shall not be applicable and appraisal
rights shall be available pursuant to subsection 1 for the holders of
any class or series of shares where any of the following applies:
(1) Any of the shares or assets of the corporation are being
acquired or converted, whether by merger, share exchange, or
otherwise, pursuant to the corporate action by a person, or by an
affiliate of a person, who fulfills either of the following:
(a) Is, or at any time in the one-year period immediately
preceding approval by the board of directors of the corporate action
requiring appraisal rights was, the beneficial owner of twenty
percent or more of the voting power of the corporation, excluding any
shares acquired pursuant to an offer for all shares having voting
power if such offer was made within one year prior to the corporate
action requiring appraisal rights for consideration of the same kind
and of a value equal to or less than that paid in connection with the
corporate action.
(b) Directly or indirectly has, or at any time in the one-year
period immediately preceding approval by the board of directors of
the corporation of the corporate action requiring appraisal rights
had, the power, contractually or otherwise, to cause the appointment
or election of twenty-five percent or more of the directors to the
board of directors of the corporation.
(2) Any of the shares or assets of the corporation are being
acquired or converted, whether by merger, share exchange, or
otherwise, pursuant to such corporate action by a person, or by an
affiliate of a person, who is, or at any time in the one-year period
immediately preceding approval by the board of directors of the
corporate action requiring appraisal rights was, a senior executive
or director of the corporation or a senior executive of any affiliate
thereof, and that senior executive or director will receive, as a
result of the corporate action, a financial benefit not generally
available to other shareholders as such, other than any of the
following:
(a) Employment, consulting, retirement, or similar benefits
established separately and not as part of or in contemplation of the
corporate action.
(b) Employment, consulting, retirement, or similar benefits
established in contemplation of, or as part of, the corporate action
that are not more favorable than those existing before the corporate
action or, if more favorable, that have been approved on behalf of
the corporation in the same manner as is provided in section 490.832.
(c) In the case of a director of the corporation who will, in the
corporate action, become a director of the acquiring entity in the
corporate action or one of its affiliates, rights and benefits as a
director that are provided on the same basis as those afforded by the
acquiring entity generally to other directors of such entity or such
affiliate.
e. For the purposes of paragraph "d" only, the term
"beneficial owner" means any person who, directly or indirectly,
through any contract, arrangement, or understanding, other than a
revocable proxy, has or shares the power to vote, or to direct the
voting of, shares, provided that a member of a national securities
exchange shall not be deemed to be a beneficial owner of securities
held directly or indirectly by such member on behalf of another
person solely because the member is the record holder of such
securities if the member is precluded by the rules of such exchange
from voting without instruction on contested matters or matters that
may affect substantially the rights or privileges of the holders of
the securities to be voted. When two or more persons agree to act
together for the purpose of voting their shares of the corporation,
each member of the group formed thereby shall be deemed to have
acquired beneficial ownership, as of the date of such agreement, of
all voting shares of the corporation beneficially owned by any member
of the group.
3. Notwithstanding any other provision of this section, the
articles of incorporation as originally filed or any amendment
thereto may limit or eliminate appraisal rights for any class or
series of preferred shares, but any such limitation or elimination
contained in an amendment to the articles of incorporation that
limits or eliminates appraisal rights for any of such shares that are
outstanding immediately prior to the effective date of such amendment
or that the corporation is or may be required to issue or sell
thereafter pursuant to any conversion, exchange, or other right
existing immediately before the effective date of such amendment,
shall not apply to any corporate action that becomes effective within
one year of that date if such action would otherwise afford appraisal
rights.
4. A shareholder entitled to appraisal rights under this chapter
is not entitled to challenge a completed corporate action for which
appraisal rights are available unless such corporate action meets one
of the following standards:
a. It was not effectuated in accordance with the applicable
provisions of division X, XI, or XII or the corporation's articles of
incorporation, bylaws, or board of directors' resolution authorizing
the corporate action.
b. It was procured as a result of fraud or material
misrepresentation. Section History: Recent Form
89 Acts, ch 288, §132; 2002 Acts, ch 1154, §79, 125; 2008 Acts, ch
1162, §122, 155
Referred to in § 490.1301, 490.1320, 490.1321, 490.1322
490.1303 ASSERTION OF RIGHTS BY NOMINEES AND
BENEFICIAL OWNERS.
1. A record shareholder may assert appraisal rights as to fewer
than all the shares registered in the record shareholder's name but
owned by a beneficial shareholder only if the record shareholder
objects with respect to all shares of the class or series owned by
the beneficial shareholder and notifies the corporation in writing of
the name and address of each beneficial shareholder on whose behalf
appraisal rights are being asserted. The rights of a record
shareholder who asserts appraisal rights for only part of the shares
held of record in the record shareholder's name under this subsection
shall be determined as if the shares as to which the record
shareholder objects and the record shareholder's other shares were
registered in the names of different record shareholders.
2. A beneficial shareholder may assert appraisal rights as to
shares of any class or series held on behalf of the shareholder only
if the shareholder does both of the following:
a. Submits to the corporation the record shareholder's
written consent to the assertion of such rights no later than the
date referred to in section 490.1322, subsection 2, paragraph
"b", subparagraph (2).
b. Does so with respect to all shares of the class or series
that are beneficially owned by the beneficial shareholder. Section History: Recent Form
89 Acts, ch 288, §133; 2002 Acts, ch 1154, §80, 125; 2002 Acts, ch
1175, § 91
490.1304 THROUGH 490.1319 Reserved.
490.1320 NOTICE OF APPRAISAL RIGHTS.
1. If proposed corporate action described in section 490.1302,
subsection 1, is to be submitted to a vote at a shareholders'
meeting, the meeting notice must state that the corporation has
concluded that the shareholders are, are not, or may be entitled to
assert appraisal rights under this part. If the corporation
concludes that appraisal rights are or may be available, a copy of
this part must accompany the meeting notice sent to those record
shareholders entitled to exercise appraisal rights.
2. In a merger pursuant to section 490.1105, the parent
corporation must notify in writing all record shareholders of the
subsidiary who are entitled to assert appraisal rights that the
corporate action became effective. Such notice must be sent within
ten days after the corporate action became effective and include the
materials described in section 490.1322. Section History: Recent Form
89 Acts, ch 288, §134; 2002 Acts, ch 1154, §81, 125
Referred to in § 490.704, 490.1330, 490.1331
490.1321 NOTICE OF INTENT TO DEMAND PAYMENT.
1. If proposed corporate action requiring appraisal rights under
section 490.1302 is submitted to a vote at a shareholders' meeting, a
shareholder who wishes to assert appraisal rights with respect to any
class or series of shares must do all of the following:
a. Deliver to the corporation before the vote is taken
written notice of the shareholder's intent to demand payment if the
proposed action is effectuated.
b. Not vote, or cause or permit to be voted, any shares of
such class or series in favor of the proposed action.
2. A shareholder who does not satisfy the requirements of
subsection 1 is not entitled to payment under this part. Section History: Recent Form
89 Acts, ch 288, §135; 2002 Acts, ch 1154, §82, 125
Referred to in § 490.1322
490.1322 APPRAISAL NOTICE AND FORM.
1. If proposed corporate action requiring appraisal rights under
section 490.1302, subsection 1, becomes effective, the corporation
must deliver a written appraisal notice and form required by
subsection 2, paragraph "a", to all shareholders who satisfied
the requirements of section 490.1321. In the case of a merger under
section 490.1105, the parent must deliver a written appraisal notice
and form to all record shareholders who may be entitled to assert
appraisal rights.
2. The appraisal notice must be sent no earlier than the date the
corporate action became effective and no later than ten days after
such date and must do all of the following:
a. Be accompanied by a form that specifies the date of the
first announcement to shareholders of the principal terms of the
proposed corporate action and requires the shareholder asserting
appraisal rights to certify whether or not beneficial ownership of
those shares for which appraisal rights are asserted was acquired
before that date, and that the shareholder did not vote for the
transaction.
b. State all of the following:
(1) Where the form must be sent and where certificates for
certificated shares must be deposited and the date by which those
certificates must be deposited, which date shall not be earlier than
the date for receiving the required form under subparagraph (2).
(2) A date by which the corporation must receive the form, which
date shall not be fewer than forty nor more than sixty days after the
date the appraisal notice and form are sent under subsection 1, and
state that the shareholder shall have waived the right to demand
appraisal with respect to the shares unless the form is received by
the corporation by such specified date.
(3) The corporation's estimate of the fair value of the shares.
(4) That, if requested in writing, the corporation will provide,
to the shareholder so requesting, within ten days after the date
specified in subparagraph (2) the number of shareholders who return
the forms by the specified date and the total number of shares owned
by them.
(5) The date by which the notice to withdraw under section
490.1323 must be received, which date must be within twenty days
after the date specified in subparagraph (2).
c. Be accompanied by a copy of this division. Seon History: Recent Form
89 Acts, ch 288, §136; 91 Acts, ch 211, §8; 2002 Acts, ch 1154,
§83, 125
Referred to in § 490.704, 490.1301, 490.1303, 490.1320, 490.1323,
490.1324, 490.1325, 490.1330, 490.1331
490.1323 PERFECTION OF RIGHTS -- RIGHT TO WITHDRAW.
1. A shareholder who receives notice pursuant to section 490.1322
and who wishes to exercise appraisal rights must certify on the form
sent by the corporation whether the beneficial owner of such shares
acquired beneficial ownership of the shares before the date required
to be set forth in the notice pursuant to section 490.1322,
subsection 2, paragraph "a". If a shareholder fails to make this
certification, the corporation may elect to treat the shareholder's
shares as after-acquired shares under section 490.1325. In addition,
a shareholder who wishes to exercise appraisal rights must execute
and return the form and, in a case of certificated shares, deposit
the shareholder's certificates in accordance with the terms of the
notice by the date referred to in the notice pursuant to section
490.1322, subsection 2, paragraph "b", subparagraph (2). Once a
shareholder deposits that shareholder's certificates or, in the case
of uncertificated shares, returns the executed forms, that
shareholder loses all rights as a shareholder, unless the shareholder
withdraws pursuant to subsection 2.
2. A shareholder who has complied with subsection 1 may
nevertheless decline to exercise appraisal rights and withdraw from
the appraisal process by so notifying the corporation in writing by
the date set forth in the appraisal notice pursuant to section
490.1322, subsection 2, paragraph "b", subparagraph (5). A
shareholder who fails to so withdraw from the appraisal process shall
not thereafter withdraw without the corporation's written consent.
3. A shareholder who does not execute and return the form and, in
the case of certificated shares, deposit the shareholder's share
certificates where required, each by the date set forth in the notice
described in section 490.1322, subsection 2, shall not be entitled to
payment under this division. Section History: Recent Form
89 Acts, ch 288, §137; 2002 Acts, ch 1154, §84, 125; 2003 Acts, ch
44, §86
Referred to in § 490.1301, 490.1322, 490.1324
490.1324 PAYMENT.
1. Except as provided in section 490.1325, within thirty days
after the form required by section 490.1322, subsection 2, paragraph
"b", subparagraph (2), is due, the corporation shall pay in cash
to those shareholders who complied with section 490.1323, subsection
1, the amount the corporation estimates to be the fair value of their
shares, plus interest.
2. The payment to each shareholder pursuant to subsection 1 must
be accompanied by all of the following:
a. Financial statements of the corporation that issued the
shares to be appraised, consisting of a balance sheet as of the end
of a fiscal year ending not more than sixteen months before the date
of payment, an income statement for that year, a statement of changes
in shareholders' equity for that year, and the latest available
interim financial statements, if any.
b. A statement of the corporation's estimate of the fair
value of the shares, which estimate must equal or exceed the
corporation's estimate given pursuant to section 490.1322, subsection
2, paragraph "b", subparagraph (3).
c. A statement that shareholders described in subsection 1
have the right to demand further payment under section 490.1326 and
that if any such shareholder does not do so within the time period
specified therein, such shareholder shall be deemed to have accepted
the payment to the shareholder pursuant to subsection 1 in full
satisfaction of the corporation's obligations under this chapter. Section History: Recent Form
89 Acts, ch 288, §138; 2002 Acts, ch 1154, §85, 125; 2003 Acts, ch
44, §87
Referred to in § 490.1301, 490.1325, 490.1326, 490.1331, 524.1406
490.1325 AFTER-ACQUIRED SHARES.
1. A corporation may elect to withhold payment required by
section 490.1324 from any shareholder who did not certify that
beneficial ownership of all of the shareholder's shares for which
appraisal rights are asserted was acquired before the date set forth
in the appraisal notice sent pursuant to section 490.1322, subsection
2, paragraph "a".
2. If the corporation elects to withhold payment under subsection
1, it must within thirty days after the form required by section
490.1322, subsection 2, paragraph "b", subparagraph (2), is due,
notify all shareholders who are described in subsection 1 regarding
all of the following:
a. Of the information required by section 490.1324,
subsection 2, paragraph "a".
b. Of the corporation's estimate of fair value pursuant to
section 490.1324, subsection 2, paragraph "b".
c. That they may accept the corporation's estimate of fair
value, plus interest, in full satisfaction of their demands or demand
appraisal under section 490.1326.
d. That those shareholders who wish to accept such offer must
notify the corporation of their acceptance of the corporation's offer
within thirty days after receiving the offer.
e. That those shareholders who do not satisfy the
requirements for demanding appraisal under section 490.1326 shall be
deemed to have accepted the corporation's offer.
3. Within ten days after receiving the shareholder's acceptance
pursuant to subsection 2, the corporation must pay in cash the amount
it offered under subsection 2, paragraph "b", to each shareholder
who agreed to accept the corporation's offer in full satisfaction of
the shareholder's demand.
4. Within forty days after sending the notice described in
subsection 2, the corporation must pay in cash the amount it offered
to pay under subsection 2, paragraph "b", to each shareholder
described in subsection 2, paragraph "e". Section Hiry: Recent Form
89 Acts, ch 288, §139; 91 Acts, ch 211, §9; 2002 Acts, ch 1154,
§86, 125
Referred to in § 490.1301, 490.1323, 490.1324, 490.1326, 490.1330,
490.1331
490.1326 PROCEDURE IF SHAREHOLDER DISSATISFIED WITH
PAYMENT OR OFFER.
1. A shareholder paid pursuant to section 490.1324 who is
dissatisfied with the amount of the payment must notify the
corporation in writing of that shareholder's estimate of the fair
value of the shares and demand payment of that estimate plus
interest, less any payment under section 490.1324. A shareholder
offered payment under section 490.1325 who is dissatisfied with that
offer must reject the offer and demand payment of the shareholder's
stated estimate of the fair value of the shares plus interest.
2. A shareholder who fails to notify the corporation in writing
of that shareholder's demand to be paid the shareholder's stated
estimate of the fair value plus interest under subsection 1 within
thirty days after receiving the corporation's payment or offer of
payment under section 490.1324 or 490.1325, respectively, waives the
right to demand payment under this section and shall be entitled only
to the payment made or offered pursuant to those respective sections.
Section History: Recent Form
89 Acts, ch 288, §140; 91 Acts, ch 211, §10; 97 Acts, ch 171, §
13; 2002 Acts, ch 1154, §87, 125
Referred to in § 490.1301, 490.1324, 490.1325, 490.1330, 490.1331
490.1327 AND 490.1328 Repealed by 2002 Acts, ch
1154, § 123, 125.
490.1329 Reserved.
490.1330 COURT ACTION.
1. If a shareholder makes a demand for payment under section
490.1326 that remains unsettled, the corporation shall commence a
proceeding within sixty days after receiving the payment demand and
petition the court to determine the fair value of the shares and
accrued interest. If the corporation does not commence the
proceeding within the sixty-day period, it shall pay in cash to each
shareholder the amount the shareholder demanded pursuant to section
490.1326 plus interest.
2. The corporation shall commence the proceeding in the district
court of the county where the corporation's principal office or, if
none, its registered office, in this state is located. If the
corporation is a foreign corporation without a registered office in
this state, it shall commence the proceeding in the county in this
state where the principal office or registered office of the domestic
corporation merged with the foreign corporation was located at the
time of the transaction.
3. The corporation shall make all shareholders, whether or not
residents of this state, whose demands remain unsettled, parties to
the proceeding as in an action against their shares and all parties
must be served with a copy of the petition. Nonresidents may be
served by registered or certified mail or by publication as provided
by law.
4. The jurisdiction of the court in which the proceeding is
commenced under subsection 2 is plenary and exclusive. The court may
appoint one or more persons as appraisers to receive evidence and
recommend a decision on the question of fair value. The appraisers
shall have the powers described in the order appointing them, or in
any amendment to it. The shareholders demanding appraisal rights are
entitled to the same discovery rights as parties in other civil
proceedings. There shall be no right to a jury trial.
5. Each shareholder made a party to the proceeding is entitled to
judgment for either of the following:
a. The amount, if any, by which the court finds the fair
value of the shareholder's shares, plus interest, exceeds the amount
paid by the corporation to the shareholder for such shares.
b. The fair value, plus interest, of the shareholder's shares
for which the corporation elected to withhold payment under section
490.1325.
6. Notwithstanding the provisions of this division, if the
corporation is a bank holding company as defined in section 524.1801,
fair value, at the election of the bank holding company, may be
determined as provided in section 524.1406, subsection 3, prior to
giving notice under section 490.1320 or 490.1322. The fair value as
determined shall be included in any notice under section 490.1320 or
490.1322, and section 490.1326 shall not apply. Section History: Recent Form
89 Acts, ch 288, §143; 2000 Acts, ch 1211, §1; 2002 Acts, ch 1154,
§88, 125
Referred to in § 490.1301, 490.1331
490.1331 COURT COSTS AND COUNSEL FEES.
1. The court in an appraisal proceeding commenced under section
490.1330 shall determine all costs of the proceeding, including the
reasonable compensation and expenses of appraisers appointed by the
court. The court shall assess the costs against the corporation,
except that the court may assess costs against all or some of the
shareholders demanding appraisal, in amounts the court finds
equitable, to the extent the court finds such shareholders acted
arbitrarily, vexatiously, or not in good faith with respect to the
rights provided by this division.
2. The court in an appraisal proceeding may also assess the fees
and expenses of counsel and experts for the respective parties, in
amounts the court finds equitable, for either of the following:
a. Against the corporation and in favor of any or all
shareholders demanding appraisal if the court finds the corporation
did not substantially comply with the requirements of section
490.1320, 490.1322, 490.1324, or 490.1325.
b. Against either the corporation or a shareholder demanding
appraisal, in favor of any other party, if the court finds that the
party against whom the fees and expenses are assessed acted
arbitrarily, vexatiously, or not in good faith with respect to the
rights provided by this chapter.
3. If the court in an appraisal proceeding finds that the
services of counsel for any shareholder were of substantial benefit
to other shareholders similarly situated, and that the fees for those
services should not be assessed against the corporation, the court
may award to such counsel reasonable fees to be paid out of the
amounts awarded the shareholders who were benefited.
4. To the extent the corporation fails to make a required payment
pursuant to section 490.1324, 490.1325, or 490.1326, the shareholder
may sue directly for the amount owed and, to the extent successful,
shall be entitled to recover from the corporation all costs and
expenses of the suit, including counsel fees. Section History: Recent Form
89 Acts, ch 288, §144; 2002 Acts, ch 1154, §89, 125
Referred to in § 490.1301
490.1401 DISSOLUTION BY INCORPORATORS OR INITIAL
DIRECTORS.
A majority of the incorporators or initial directors of a
corporation that has not issued shares or has not commenced business
may dissolve the corporation by delivering to the secretary of state
for filing articles of dissolution that set forth all of the
following:
1. The name of the corporation.
2. The date of its incorporation.
3. Either of the following:
a. That none of the corporation's shares has been issued.
b. That the corporation has not commenced business.
4. That no debt of the corporation remains unpaid.
5. That the net assets of the corporation remaining after winding
up have been distributed to the shareholders, if shares were issued.
6. That a majority of the incorporators or initial directors
authorized the dissolution. Section History: Recent Form
89 Acts, ch 288, §145
490.1402 DISSOLUTION BY BOARD OF DIRECTORS AND
SHAREHOLDERS.
1. A corporation's board of directors may propose dissolution for
submission to the shareholders.
2. For a proposal to dissolve to be adopted both of the following
must apply:
a. The board of directors must recommend dissolution to the
shareholders unless the board of directors determines that because of
conflict of interest or other special circumstances it should make no
recommendation and communicates the basis for its determination to
the shareholders.
b. The shareholders entitled to vote must approve the
proposal to dissolve as provided in subsection 5.
3. The board of directors may condition its submission of the
proposal for dissolution on any basis.
4. The corporation shall notify each shareholder, whether or not
entitled to vote, of the proposed shareholders' meeting. The notice
must also state that the purpose, or one of the purposes, of the
meeting is to consider dissolving the corporation.
5. Unless the articles of incorporation, bylaws, or the board of
directors acting pursuant to subsection 3 requires a greater vote, a
greater number of shares to be present, or a vote by voting groups,
adoption of the proposal to dissolve shall require the approval of
the shareholders at a meeting at which the quorum consisting of at
least a majority of the votes entitled to be cast exists. Section History: Recent Form
89 Acts, ch 288, §146; 2002 Acts, ch 1154, §90, 125
Referred to in § 490.1434
490.1403 ARTICLES OF DISSOLUTION.
1. At any time after dissolution is authorized, the corporation
may dissolve by delivering to the secretary of state for filing
articles of dissolution setting forth all of the following:
a. The name of the corporation.
b. The date dissolution was authorized.
c. If dissolution was approved by the shareholders, a
statement that the proposal to dissolve was duly approved by the
shareholders in the manner required by this chapter and by the
articles of incorporation.
2. A corporation is dissolved upon the effective date of its
articles of dissolution.
3. For purposes of this division, "dissolved corporation"
means a corporation whose articles of dissolution have become
effective and includes a successor entity to which the remaining
assets of the corporation are transferred subject to its liabilities
for purposes of liquidation. Section History: Recent Form
89 Acts, ch 288, §147; 2002 Acts, ch 1154, §91, 125
Referred to in § 490.1404, 490.1434
490.1404 REVOCATION OF DISSOLUTION.
1. A corporation may revoke its dissolution within one hundred
twenty days of the effective date of its articles of dissolution.
2. Revocation of dissolution must be authorized in the same
manner as the dissolution was authorized unless that authorization
permitted revocation by action of the board of directors alone, in
which event the board of directors may revoke the dissolution without
shareholder action.
3. After the revocation of dissolution is authorized, the
corporation may revoke the dissolution by delivering to the secretary
of state for filing articles of revocation of dissolution, together
with a copy of its articles of dissolution, that set forth all of the
following:
a. The name of the corporation.
b. The effective date of the dissolution that was revoked.
c. The date that the revocation of dissolution was
authorized.
d. If the corporation's board of directors or incorporators
revoked the dissolution, a statement to that effect.
e. If the corporation's board of directors revoked a
dissolution authorized by the shareholders, a statement that
revocation was permitted by action by the board of directors alone
pursuant to that authorization.
f. If shareholder action was required to revoke the
dissolution, the information required by section 490.1403, subsection
1, paragraph "c".
4. Revocation of dissolution is effective upon the effective date
of the articles of revocation of dissolution.
5. When the revocation of dissolution is effective, it relates
back to and takes effect as of the effective date of the dissolution
as if the dissolution had never occurred. Section History: Recent Form
89 Acts, ch 288, §148; 2002 Acts, ch 1154, §92, 125; 2003 Acts, ch
44, §88
Referred to in §524.1306
490.1405 EFFECT OF DISSOLUTION.
1. A dissolved corporation continues its corporate existence but
shall not carry on any business except that appropriate to wind up
and liquidate its business and affairs, including any of the
following:
a. Collecting its assets.
b. Disposing of its properties that will not be distributed
in kind to its shareholders.
c. Discharging or making provision for discharging its
liabilities.
d. Distributing its remaining property among its shareholders
according to their interests.
e. Doing every other act necessary to wind up and liquidate
its business and affairs.
2. Dissolution of a corporation does not do any of the following:
a. Transfer title to the corporation's property.
b. Prevent transfer of its shares or securities, although the
authorization to dissolve may provide for closing the corporation's
share transfer records.
c. Subject its directors or officers to standards of conduct
different from those prescribed in division VIII.
d. Change quorum or voting requirements for its board of
directors or shareholders; change provisions for selection,
resignation, or removal of its directors or officers or both; or
change provisions for amending its bylaws.
e. Prevent commencement of a proceeding by or against the
corporation in its corporate name.
f. Abate or suspend a proceeding pending by or against the
corporation on the effective date of dissolution.
g. Terminate the authority of the registered agent of the
corporation. Section History: Recent Form
89 Acts, ch 288, §149
Referred to in § 490.1421, 490.1433, 490.1434
490.1406 KNOWN CLAIMS AGAINST DISSOLVED
CORPORATION.
1. A dissolved corporation may dispose of the known claims
against it by notifying its known claimants in writing of the
dissolution at any time after its effective date.
2. The written notice must do all of the following:
a. Describe information that must be included in a claim.
b. Provide a mailing address where a claim may be sent.
c. State the deadline, which may not be fewer than one
hundred twenty days from the effective date of the written notice, by
which the dissolved corporation must receive the claim.
d. State that the claim will be barred if not received by the
deadline.
3. A claim against the dissolved corporation is barred if either
of the following occur:
a. A claimant who was given written notice under subsection 2
does not deliver the claim to the dissolved corporation by the
deadline.
b. A claimant whose claim was rejected by the dissolved
corporation does not commence a proceeding to enforce the claim
within ninety days from the effective date of the rejection notice.
4. For purposes of this section, "claim" does not include a
contingent liability or a claim based on an event occurring after the
effective date of dissolution. Section History: Recent Form
89 Acts, ch 288, §150; 2002 Acts, ch 1154, §93, 125
Referred to in § 490.1407, 490.1409, 490.1421, 490.1433, 490.1434
490.1407 OTHER CLAIMS AGAINST DISSOLVED
CORPORATION.
1. A dissolved corporation may also publish notice of its
dissolution and request that persons with claims against the
dissolved corporation present them in accordance with the notice.
2. The notice must meet all of the following requirements:
a. Be published one time in a newspaper of general
circulation in the county where the dissolved corporation's principal
office or, if none in this state, its registered office is or was
last located.
b. Describe the information that must be included in a claim
and provide a mailing address where the claim may be sent.
c. State that a claim against the dissolved corporation will
be barred unless a proceeding to enforce the claim is commenced
within three years after the publication of the notice.
3. If the dissolved corporation publishes a newspaper notice in
accordance with subsection 2, the claim of each of the following
claimants is barred unless the claimant commences a proceeding to
enforce the claim against the dissolved corporation within three
years after the publication date of the newspaper notice:
a. A claimant who was not given written notice under section
490.1406.
b. A claimant whose claim was timely sent to the dissolved
corporation but not acted on.
c. A claimant whose claim is contingent or based on an event
occurring after the effective date of dissolution.
4. A claim that is not barred by section 490.1406, subsection 2,
or subsection 3 of this section, may be enforced in either of the
following ways:
a. Against the dissolved corporation, to the extent of its
undistributed assets.
b. Except as provided in section 490.1408, subsection 4, if
the assets have been distributed in liquidation, against a
shareholder of the dissolved corporation to the extent of the
shareholder's pro rata share of the claim or the corporate assets
distributed to the shareholder in liquidation, whichever is less, but
a shareholder's total liability for all claims under this section
shall not exceed the total amount of assets distributed to the
shareholder in liquidation. Section History: Recent Form
89 Acts, ch 288, §151; 2002 Acts, ch 1154, §94, 125
Referred to in § 490.1408, 490.1409, 490.1421, 490.1433, 490.1434
490.1408 COURT PROCEEDINGS.
1. A dissolved corporation that has published a notice under
section 490.1407 may file an application with the district court of
the county where the dissolved corporation's principal office or, if
none in this state, its registered office is located for a
determination of the amount and form of security to be provided for
payment of claims that are contingent or have not been made known to
the dissolved corporation or that are based on an event occurring
after the effective date of dissolution but that, based on the facts
known to the dissolved corporation, are reasonably estimated to arise
after the effective date of dissolution. Provision need not be made
for any claim that is or is reasonably anticipated to be barred under
section 490.1407, subsection 3.
2. Within ten days after the filing of the application, notice of
the proceeding shall be given by the dissolved corporation to each
claimant holding a contingent claim whose contingent claim is shown
on the records of the dissolved corporation.
3. The court may appoint a guardian ad litem to represent all
claimants whose identities are unknown in any proceeding brought
under this section. The reasonable fees and expenses of such
guardian, including all reasonable expert witness fees, shall be paid
by the dissolved corporation.
4. Provision by the dissolved corporation for security in the
amount and the form ordered by the court under subsection 1, shall
satisfy the dissolved corporation's obligations with respect to
claims that are contingent, have not been made known to the dissolved
corporation or are based on an event occurring after the effective
date of dissolution, and such claims shall not be enforced against a
shareholder who received assets in liquidation. Section History: Recent Form
2002 Acts, ch 1154, §95, 125
Referred to in § 490.1407, 490.1409
490.1409 DIRECTOR DUTIES.
1. Directors shall cause the dissolved corporation to discharge
or make reasonable provision for the payment of claims and make
distributions of assets to shareholders after payment or provision
for claims.
2. Directors of a dissolved corporation which has disposed of
claims under section 490.1406, 490.1407, or 490.1408 shall not be
liable for breach of subsection 1, with respect to claims against the
dissolved corporation that are barred or satisfied under section
490.1406, 490.1407, or 490.1408. Section History: Recent Form
2002 Acts, ch 1154, §96, 125
Referred to in § 490.833
490.1410 THROUGH 490.1419 Reserved.
490.1420 GROUNDS FOR ADMINISTRATIVE DISSOLUTION.
The secretary of state may commence a proceeding under section
490.1421 to administratively dissolve a corporation if any of the
following apply:
1. The corporation has not delivered a biennial report to the
secretary of state in a form that meets the requirements of section
490.1622, within sixty days after it is due, or has not paid the
filing fee as determined by the secretary of state, within sixty days
after it is due.
2. The corporation is without a registered agent or registered
office in this state for sixty days or more.
3. The corporation does not notify the secretary of state within
sixty days that its registered agent or registered office has been
changed, that its registered agent has resigned, or that its
registered office has been discontinued.
4. The corporation's period of duration stated in its articles of
incorporation expires. Section History: Recent Form
89 Acts, ch 288, §152; 96 Acts, ch 1170, § 9, 10; 97 Acts, ch 171,
§ 14
Referred to in § 490.1421
490.1421 PROCEDURE FOR AND EFFECT OF ADMINISTRATIVE
DISSOLUTION.
1. If the secretary of state determines that one or more grounds
exist under section 490.1420 for dissolving a corporation, the
secretary of state shall serve the corporation with written notice of
the secretary of state's determination under section 490.504.
2. If the corporation does not correct each ground for
dissolution or demonstrate to the reasonable satisfaction of the
secretary of state that each ground determined by the secretary of
state does not exist within sixty days after service of the notice is
perfected under section 490.504, the secretary of state shall
administratively dissolve the corporation by signing a certificate of
dissolution that recites the ground or grounds for dissolution and
its effective date. The secretary of state shall file the original
of the certificate and serve a copy on the corporation under section
490.504.
3. A corporation administratively dissolved continues its
corporate existence but shall not carry on any business except that
necessary to wind up and liquidate its business and affairs under
section 490.1405 and notify claimants under sections 490.1406 and
490.1407.
4. The administrative dissolution of a corporation does not
terminate the authority of its registered agent.
5. The secretary of state's administrative dissolution of a
corporation pursuant to this section appoints the secretary of state
the corporation's agent for service of process in any proceeding
based on a cause of action which arose during the time the
corporation was authorized to transact business in this state.
Service of process on the secretary of state under this subsection is
service on the corporation. Upon receipt of process, the secretary
of state shall serve a copy of the process on the corporation as
provided in section 490.504. This subsection does not preclude
service on the corporation's registered agent, if any. Section History: Recent Form
89 Acts, ch 288, §153; 96 Acts, ch 1170, § 11
Referred to in § 490.1420, 490.1422
490.1422 REINSTATEMENT FOLLOWING ADMINISTRATIVE
DISSOLUTION.
1. A corporation administratively dissolved under section
490.1421 may apply to the secretary of state for reinstatement at any
time after the effective date of dissolution. The application must
meet all of the following requirements:
a. Recite the name of the corporation at its date of
dissolution and the effective date of its administrative dissolution.
b. State that the ground or grounds for dissolution have been
eliminated.
c. If the application is received more than five years after
the effective date of dissolution, state a corporate name that
satisfies the requirements of section 490.401.
d. State the federal tax identification number of the
corporation.
2. a. The secretary of state shall refer the federal tax
identification number contained in the application for reinstatement
to the department of revenue. The department of revenue shall report
to the secretary of state the tax status of the corporation. If the
department reports to the secretary of state that a filing
delinquency or liability exists against the corporation, the
secretary of state shall not cancel the certificate of dissolution
until the filing delinquency or liability is satisfied.
b. (1) If the secretary of state determines that the
application contains the information required by subsection 1, and
that a delinquency or liability reported pursuant to paragraph
"a" has been satisfied, and that the information is correct, the
secretary of state shall cancel the certificate of dissolution and
prepare a certificate of reinstatement that recites the secretary of
state's determination and the effective date of reinstatement, file
the certificate of reinstatement, and deliver a copy to the
corporation under section 490.504.
(2) If the corporate name in subsection 1, paragraph "c", is
different than the corporate name in subsection 1, paragraph "a",
the certificate of reinstatement shall constitute an amendment to the
articles of incorporation insofar as it pertains to the corporate
name. A corporation shall not relinquish the right to retain its
corporate name if the reinstatement is effective within five years of
the effective date of the corporation's dissolution.
3. When the reinstatement is effective, it relates back to and
takes effect as of the effective date of the administrative
dissolution as if the administrative dissolution had never occurred.
Section History: Recent Form
89 Acts, ch 288, § 154; 92 Acts, ch 1244, § 46; 93 Acts, ch 17, §
1; 93 Acts, ch 126, § 7, 8; 94 Acts, ch 1053, §1; 96 Acts, ch 1170, §
12, 13; 2003 Acts, ch 145, §286; 2006 Acts, ch 1089, §9--12
Referred to in § 488.108, 490.401, 490A.401, 504.401, 504.403
490.1423 APPEAL FROM DENIAL OF REINSTATEMENT.
1. If the secretary of state denies a corporation's application
for reinstatement following administrative dissolution, the secretary
of state shall serve the corporation under section 490.504 with a
written notice that explains the reason or reasons for denial.
2. The corporation may appeal the denial of reinstatement to the
district court within thirty days after service of the notice of
denial is perfected. The corporation appeals by petitioning the
court to set aside the dissolution and attaching to the petition
copies of the secretary of state's certificate of dissolution, the
corporation's application for reinstatement, and the secretary of
state's notice of denial.
3. The court may summarily order the secretary of state to
reinstate the dissolved corporation or may take other action the
court considers appropriate.
4. The court's final decision may be appealed as in other civil
proceedings. Section History: Recent Form
89 Acts, ch 288, §155
490.1424 THROUGH 490.1429 Reserved.
490.1430 GROUNDS FOR JUDICIAL DISSOLUTION.
The district court may dissolve a corporation in any of the
following ways:
1. A proceeding by the attorney general, if it is established
that either of the following apply:
a. The corporation obtained its articles of incorporation
through fraud.
b. The corporation has continued to exceed or abuse the
authority conferred upon it by law.
2. A proceeding by a shareholder if it is established that any of
the following conditions exist:
a. The directors are deadlocked in the management of the
corporate affairs, the shareholders are unable to break the deadlock,
and either irreparable injury to the corporation is threatened or
being suffered, or the business and affairs of the corporation can no
longer be conducted to the advantage of the shareholders generally,
because of the deadlock.
b. The directors or those in control of the corporation have
acted, are acting, or will act in a manner that is illegal,
oppressive, or fraudulent.
c. The shareholders are deadlocked in voting power and have
failed, for a period that includes at least two consecutive annual
meeting dates, to elect successors to directors whose terms have
expired.
d. The corporate assets are being misapplied or wasted.
3. A proceeding by a creditor if it is established that either of
the following apply:
a. The creditor's claim has been reduced to judgment, the
execution on the judgment returned unsatisfied, and the corporation
is insolvent.
b. The corporation has admitted in writing that the
creditor's claim is due and owing and the corporation is insolvent.
4. A proceeding by the corporation to have its voluntary
dissolution continued under court supervision. Section History: Recent Form
89 Acts, ch 288, §156
Referred to in § 490.304, 490.1431, 490.1433, 490.1434
490.1431 PROCEDURE FOR JUDICIAL DISSOLUTION.
1. Venue for a proceeding by the attorney general to dissolve a
corporation lies in Polk county. Venue for a proceeding brought by
any other party named in section 490.1430 lies in the county where a
corporation's principal office or, if none in this state, its
registered office is or was last located.
2. It is not necessary to make shareholders parties to a
proceeding to dissolve a corporation unless relief is sought against
them individually.
3. A court in a proceeding brought to dissolve a corporation may
issue injunctions, appoint a receiver or custodian pendente lite with
all powers and duties the court directs, take other action required
to preserve the corporate assets wherever located, and carry on the
business of the corporation until a full hearing can be held.
4. Within ten days of the commencement of a proceeding under
section 490.1430, subsection 2, to dissolve a corporation that has no
shares listed on a national securities exchange or regularly traded
in a market maintained by one or more members of a national
securities exchange, the corporation must send to all shareholders,
other than the petitioner, a notice stating that the shareholders are
entitled to avoid the dissolution of the corporation by electing to
purchase the petitioner's shares under section 490.1434, and a copy
of section 490.1434. Section History: Recent Form
89 Acts, ch 288, §157; 2002 Acts, ch 1154, §97, 125
490.1432 RECEIVERSHIP OR CUSTODIANSHIP.
1. A court in a judicial proceeding brought to dissolve a
corporation may appoint one or more receivers to wind up and
liquidate, or one or more custodians to manage, the business and
affairs of the corporation. The court shall hold a hearing, after
notifying all parties to the proceeding and any interested persons
designated by the court, before appointing a receiver or custodian.
The court appointing a receiver or custodian has exclusive
jurisdiction over the corporation and all its property wherever
located.
2. The court may appoint an individual or a domestic or foreign
corporation authorized to transact business in this state as a
receiver or custodian. The court may require the receiver or
custodian to post bond, with or without sureties, in an amount the
court directs.
3. The court shall describe the powers and duties of the receiver
or custodian in its appointing order, which may be amended from time
to time. Among other powers:
a. The receiver may do either or both of the following:
(1) Dispose of all or any part of the assets of the corporation
wherever located, at a public or private sale, if authorized by the
court.
(2) Sue and defend in the receiver's own name as receiver of the
corporation in all courts of this state.
b. The custodian may exercise all of the powers of the
corporation, through or in place of its board of directors or
officers, to the extent necessary to manage the affairs of the
corporation in the best interests of its shareholders and creditors.
4. The court during a receivership may redesignate the receiver a
custodian, and during a custodianship may redesignate the custodian a
receiver, if doing so is in the best interests of the corporation,
its shareholders, and creditors.
5. The court from time to time during the receivership or
custodianship may order compensation paid and expense disbursements
or reimbursements made to the receiver or custodian and the
receiver's or custodian's counsel from the assets of the corporation
or proceeds from the sale of the assets. Section History: Recent Form
89 Acts, ch 288, §158
490.1433 DECREE OF DISSOLUTION.
1. If after a hearing the court determines that one or more
grounds for judicial dissolution described in section 490.1430 exist,
it may enter a decree dissolving the corporation and specifying the
effective date of the dissolution, and the clerk of the court shall
deliver a certified copy of the decree to the secretary of state, who
shall file it.
2. After entering the decree of dissolution, the court shall
direct the winding up and liquidation of the corporation's business
and affairs in accordance with section 490.1405 and the notification
of claimants in accordance with sections 490.1406 and 490.1407. Section History: Recent Form
89 Acts, ch 288, §159
Referred to in §602.8102(68)
490.1434 ELECTION TO PURCHASE IN LIEU OF
DISSOLUTION.
1. In a proceeding under section 490.1430, subsection 2, to
dissolve a corporation that has no 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,
the corporation may elect or, if it fails to elect, one or more
shareholders may elect to purchase all shares owned by the
petitioning shareholder at the fair value of the shares. An election
pursuant to this section shall be irrevocable unless the court
determines that it is equitable to set aside or modify the election.
2. An election to purchase pursuant to this section may be filed
with the court at any time within ninety days after the filing of the
petition under section 490.1430, subsection 2, or at such later time
as the court in its discretion may allow. If the election to
purchase is filed by one or more shareholders, the corporation shall,
within ten days thereafter, give written notice to all shareholders,
other than the petitioner. The notice must state the name and number
of shares owned by the petitioner and the name and number of shares
owned by each electing shareholder and must advise the recipients of
their right to join the election to purchase shares in accordance
with this section. Shareholders who wish to participate must file
notice of their intention to join in the purchase no later than
thirty days after the effective date of the notice to them. All
shareholders who have filed an election or notice of their intention
to participate in the election to purchase thereby become parties to
the proceeding and shall participate in the purchase in proportion to
their ownership of shares as of the date the first election was
filed, unless they otherwise agree or the court otherwise directs.
After an election has been filed by the corporation or one or more
shareholders, the proceeding under section 490.1430, subsection 2,
shall not be discontinued or settled, nor shall the petitioning
shareholder sell or otherwise dispose of the shareholder's shares,
unless the court determines that it would be equitable to the
corporation and the shareholders, other than the petitioner, to
permit such discontinuance, settlement, sale, or other disposition.
3. If, within sixty days of the filing of the first election, the
parties reach agreement as to the fair value and terms of purchase of
the petitioner's shares, the court shall enter an order directing the
purchase of the petitioner's shares upon the terms and conditions
agreed to by the parties.
4. If the parties are unable to reach an agreement as provided
for in subsection 3, the court, upon application of any party, shall
stay the section 490.1430, subsection 2, proceedings and determine
the fair value of the petitioner's shares as of the day before the
date on which the petition under section 490.1430, subsection 2, was
filed or as of such other date as the court deems appropriate under
the circumstances.
5. Upon determining the fair value of the shares, the court shall
enter an order directing the purchase upon such terms and conditions
as the court deems appropriate, which may include payment of the
purchase price in installments, where necessary in the interests of
equity, provision for security to assure payment of the purchase
price and any additional costs, fees, and expenses as may have been
awarded, and, if the shares are to be purchased by shareholders, the
allocation of shares among them. In allocating petitioner's shares
among holders of different classes of shares, the court shall attempt
to preserve the existing distribution of voting rights among holders
of different classes insofar as practicable and may direct that
holders of a specific class or classes shall not participate in the
purchase. Interest may be allowed at the rate and from the date
determined by the court to be equitable, but if the court finds that
the refusal of the petitioning shareholder to accept an offer of
payment was arbitrary or otherwise not in good faith, no interest
shall be allowed. If the court finds that the petitioning
shareholder has probable grounds for relief under section 490.1430,
subsection 2, paragraph "b" or "d", it may award to the
petitioning shareholder reasonable fees and expenses of counsel and
of any experts employed by the shareholder.
6. Upon entry of an order under subsection 3 or 5, the court
shall dismiss the petition to dissolve the corporation under section
490.1430, and the petitioning shareholder shall no longer have any
rights or status as a shareholder of the corporation, except the
right to receive the amounts awarded to the shareholder by the order
of the court which shall be enforceable in the same manner as any
other judgment.
7. The purchase ordered pursuant to subsection 5 shall be made
within ten days after the date the order becomes final, unless before
that time the corporation files with the court a notice of its
intention to adopt articles of dissolution pursuant to sections
490.1402 and 490.1403, which articles must then be adopted and filed
within fifty days thereafter. Upon filing of such articles of
dissolution, the corporation shall be dissolved in accordance with
the provisions of sections 490.1405 through 490.1407, and the order
entered pursuant to subsection 5 shall no longer be of any force or
effect, except that the court may award the petitioning shareholder
reasonable fees and expenses in accordance with the provisions of the
last sentence of subsection 5 and the petitioner may continue to
pursue any claims previously asserted on behalf of the corporation.
8. Any payment by the corporation pursuant to an order under
subsection 3 or 5, other than an award of fees and expenses pursuant
to subsection 5, is subject to the provisions of section 490.640. Section History: Recent Form
2002 Acts, ch 1154, §98, 125
Referred to in § 490.1431
Effective date of notice, see § 490.141
490.1435 THROUGH 490.1439 Reserved.
490.1440 DEPOSIT WITH STATE TREASURER.
Assets of a dissolved corporation that should be transferred to a
creditor, claimant, or shareholder of the corporation who cannot be
found or who is not competent to receive them shall be reduced to
cash and deposited with the treasurer of state or other appropriate
state official for safekeeping. When the creditor, claimant, or
shareholder furnishes satisfactory proof of entitlement to the amount
deposited, the treasurer of state or other appropriate state official
shall pay the creditor, claimant, or shareholder or that person's
representative that amount. Section History: Recent Form
89 Acts, ch 288, §160
Referred to in § 489.1112, 490A.1512, 524.1305, 524.1310, 533.404,
556.6
490.1501 AUTHORITY TO TRANSACT BUSINESS REQUIRED.
1. A foreign corporation shall not transact business in this
state until it obtains a certificate of authority from the secretary
of state.
2. The following activities, among others, do not constitute
transacting business within the meaning of subsection 1:
a. Maintaining, defending, or settling any proceeding.
b. Holding meetings of the board of directors or shareholders
or carrying on other activities concerning internal corporate
affairs.
c. Maintaining bank accounts.
d. Maintaining offices or agencies for the transfer,
exchange, and registration of the corporation's own securities or
maintaining trustees or depositories with respect to those
securities.
e. Selling through independent contractors.
f. Soliciting or obtaining orders, whether by mail or through
employees or agents or otherwise, if the orders require acceptance
outside this state before they become contracts.
g. Creating or acquiring indebtedness, mortgages, and
security interests in real or personal property.
h. Securing or collecting debts or enforcing mortgages and
security interests in property securing the debts.
i. Owning, without more, real or personal property.
j. Conducting an isolated transaction that is completed
within thirty days and that is not one in the course of repeated
transactions of a like nature.
k. Transacting business in interstate commerce.
3. The list of activities in subsection 2 is not exhaustive. Section History: Recent Form
89 Acts, ch 288, §161
490.1502 CONSEQUENCES OF TRANSACTING BUSINESS WITHOUT
AUTHORITY.
1. A foreign corporation transacting business in this state
without a certificate of authority shall not maintain a proceeding in
any court in this state until it obtains a certificate of authority.
2. The successor to a foreign corporation that transacted
business in this state without a certificate of authority and the
assignee of a cause of action arising out of that business shall not
maintain a proceeding based on that cause of action in any court in
this state until the foreign corporation or its successor obtains a
certificate of authority.
3. A court may stay a proceeding commenced by a foreign
corporation, its successor, or assignee until it determines whether
the foreign corporation or its successor requires a certificate of
authority. If it so determines, the court may further stay the
proceeding until the foreign corporation or its successor obtains the
certificate.
4. A foreign corporation is liable for a civil penalty of not to
exceed a total of one thousand dollars if it transacts business in
this state without a certificate of authority. The attorney general
may collect all penalties due under this subsection.
5. Notwithstanding subsections 1 and 2, the failure of a foreign
corporation to obtain a certificate of authority does not impair the
validity of its corporate acts or prevent it from defending any
proceeding in this state. Section History: Recent Form
89 Acts, ch 288, §162
490.1503 APPLICATION FOR CERTIFICATE OF AUTHORITY.
1. A foreign corporation may apply for a certificate of authority
to transact business in this state by delivering an application to
the secretary of state for filing. The application must set forth
all of the following:
a. The name of the foreign corporation or, if its name is
unavailable for use in this state, a corporate name that satisfies
the requirements of section 490.1506.
b. The name of the state or country under whose law it is
incorporated.
c. Its date of incorporation and period of duration.
d. The street address of its principal office.
e. The address of its registered office in this state and the
name of its registered agent at that office.
f. The names and usual business addresses of its current
directors and officers.
2. The foreign corporation shall deliver the completed
application to the secretary of state, and also deliver to the
secretary of state a certificate of existence or a document of
similar import duly authenticated by the secretary of state or other
official having custody of corporate records in the state or country
under whose law it is incorporated which is dated no earlier than
ninety days prior to the date the application is filed with the
secretary of state. Section History: Recent Form
89 Acts, ch 288, §163; 96 Acts, ch 1170, § 14
Referred to in § 490.1504
490.1504 AMENDED CERTIFICATE OF AUTHORITY.
1. A foreign corporation authorized to transact business in this
state must obtain an amended certificate of authority from the
secretary of state if it changes any of the following:
a. Its corporate name.
b. The period of its duration.
c. The state or country of its incorporation.
2. The requirements of section 490.1503 for obtaining an original
certificate of authority apply to obtaining an amended certificate
under this section. Section History: Recent Form
89 Acts, ch 288, §164
Referred to in § 490.1506
490.1505 EFFECT OF CERTIFICATE OF AUTHORITY.
1. A certificate of authority authorizes the foreign corporation
to which it is issued to transact business in this state subject,
however, to the right of the state to revoke the certificate as
provided in this chapter.
2. A foreign corporation with a valid certificate of authority
has the same but no greater rights and has the same but no greater
privileges as, and except as otherwise provided in this chapter is
subject to the same duties, restrictions, penalties, and liabilities
now or later imposed on, a domestic corporation of like character.
3. This chapter does not authorize this state to regulate the
organization or internal affairs of a foreign corporation authorized
to transact business in this state. Section History: Recent Form
89 Acts, ch 288, §165
490.1506 CORPORATE NAME OF FOREIGN CORPORATION.
1. If the corporate name of a foreign corporation does not
satisfy the requirements of section 490.401, the foreign corporation,
to obtain or maintain a certificate of authority to transact business
in this state, may do either of the following:
a. Add the word "corporation", "incorporated", "company", or
"limited", or the abbreviation "corp.", "inc.", "co.", or "ltd.", to
its corporate name for use in this state.
b. Use a fictitious name to transact business in this state
if its real name is unavailable and it delivers to the secretary of
state for filing a copy of the resolution of its board of directors,
certified by its secretary, adopting the fictitious name.
2. Except as authorized by subsections 3 and 4, the corporate
name, including a fictitious name, of a foreign corporation must be
distinguishable upon the records of the secretary of state from all
of the following:
a. The corporate name of a corporation incorporated or
authorized to transact business in this state.
b. A name reserved, registered, or protected as provided in
section 490.402 or 490.403.
c. The fictitious name of another foreign corporation
authorized to transact business in this state.
d. The corporate name of a not-for-profit corporation
incorporated or authorized to transact business in this state.
3. A foreign corporation may apply to the secretary of state for
authorization to use in this state the name of another corporation
incorporated or authorized to transact business in this state that is
not distinguishable upon the secretary of state's records from the
name applied for. The secretary of state shall authorize use of the
name applied for if either of the following apply:
a. The other corporation consents to the use in writing and
submits an undertaking in form satisfactory to the secretary of state
to change its name to a name that is distinguishable upon the records
of the secretary of state from the name of the applying corporation.
b. The applicant delivers to the secretary of state a
certified copy of a final judgment of a court of competent
jurisdiction establishing the applicant's right to use the name
applied for in this state.
4. A foreign corporation may use in this state the name,
including the fictitious name, of another domestic or foreign
corporation that is used in this state if the other corporation is
incorporated or authorized to transact business in this state and the
foreign corporation has filed documentation satisfactory to the
secretary of state of the occurrence of any of the following:
a. The foreign corporation has merged with the other
corporation.
b. The foreign corporation has been formed by reorganization
of the other corporation.
c. The foreign corporation has acquired all or substantially
all of the assets, including the corporate name, of the other
corporation.
5. If a foreign corporation authorized to transact business in
this state changes its corporate name to one that does not satisfy
the requirements of section 490.401, it shall not transact business
in this state under the changed name until it adopts a name
satisfying the requirements of section 490.401 and obtains an amended
certificate of authority under section 490.1504. Section History: Recent Form
89 Acts, ch 288, §166; 96 Acts, ch 1170, § 15; 2006 Acts, ch 1089,
§13
Referred to in § 490.403, 490.1503
490.1507 REGISTERED OFFICE AND REGISTERED AGENT OF
FOREIGN CORPORATION.
A foreign corporation authorized to transact business in this
state must continuously maintain in this state both of the following:
1. A registered office that may be the same as any of its places
of business.
2. A registered agent, who may be any of the following:
a. An individual who resides in this state and whose business
office is identical with the registered office.
b. A domestic corporation or not-for-profit domestic
corporation whose business office is identical with the registered
office.
c. A foreign corporation or foreign not-for-profit
corporation authorized to transact business in this state whose
business office is identical with the registered office. Section History: Recent Form
89 Acts, ch 288, §167
490.1508 CHANGE OF REGISTERED OFFICE OR REGISTERED
AGENT OF FOREIGN CORPORATION.
1. A foreign corporation authorized to transact business in this
state may change its registered office or registered agent by
delivering to the secretary of state for filing a statement of change
that sets forth:
a. Its name.
b. If the current registered office is to be changed, the
street address of its new registered office.
c. If the current registered agent is to be changed, the name
of its new registered agent and the new agent's written consent,
either on the statement or attached to it, to the appointment.
d. That after the change or changes are made, the street
addresses of its registered office and the business office of its
registered agent will be identical.
2. If a registered agent changes the street address of the
registered agent's business office, the registered agent may change
the street address of the registered office of any foreign
corporation for which the agent is the registered agent by notifying
the corporation in writing of the change and signing, either manually
or in facsimile, and delivering to the secretary of state for filing
a statement of change that complies with the requirements of
subsection 1 and recites that the corporation has been notified of
the change.
3. A corporation may also change its registered office or
registered agent in its biennial report as provided in section
490.1622. Section History: Recent Form
89 Acts, ch 288, §168; 96 Acts, ch 1170, § 16; 97 Acts, ch 171, §
15
Referred to in § 490.1530, 490.1622
490.1509 RESIGNATION OF REGISTERED AGENT OF FOREIGN
CORPORATION.
1. The registered agent of a foreign corporation may resign the
agency appointment by signing and delivering to the secretary of
state for filing the signed original statement of resignation. The
statement of resignation may include a statement that the registered
office is also discontinued. The registered agent shall send a copy
of the statement of resignation by certified mail to the corporation
at its principal office and to the registered office, if not
discontinued. The registered agent shall certify to the secretary of
state that the copies have been sent to the corporation, including
the date the copies were sent.
2. The agency appointment is terminated, and the registered
office discontinued if so provided, on the date on which the
statement was filed. Section History: Recent Form
89 Acts, ch 288, §169; 96 Acts, ch 1170, § 17
Referred to in § 490.120, 490.125, 490.1530
490.1510 SERVICE ON FOREIGN CORPORATION.
1. The registered agent of a foreign corporation authorized to
transact business in this state is the corporation's agent for
service of process, notice, or demand required or permitted by law to
be served on the foreign corporation.
2. A foreign corporation may be served by registered or certified
mail, return receipt requested, addressed to the secretary of the
foreign corporation at its principal office shown in its application
for a certificate of authority or in its most recent biennial report
if the foreign corporation meets any of the following conditions:
a. Has no registered agent or its registered agent cannot
with reasonable diligence be served.
b. Has withdrawn from transacting business in this state
under section 490.1520.
c. Has had its certificate of authority revoked under section
490.1531.
3. Service is perfected under subsection 2 at the earliest of:
a. The date the foreign corporation receives the mail.
b. The date shown on the return receipt, if signed on behalf
of the foreign corporation.
c. Five days after its deposit in the United States mail, as
evidenced by the postmark, if mailed postpaid and correctly
addressed.
4. A foreign corporation may also be served in any other manner
permitted by law. Section History: Recent Form
89 Acts, ch 288, §170; 97 Acts, ch 171, § 16
Referred to in § 490.1531, 490.1532
490.1511 THROUGH 490.1519 Reserved.
490.1520 WITHDRAWAL OF FOREIGN CORPORATION.
1. A foreign corporation authorized to transact business in this
state shall not withdraw from this state until it obtains a
certificate of withdrawal from the secretary of state.
2. A foreign corporation authorized to transact business in this
state may apply for a certificate of withdrawal by delivering an
application to the secretary of state for filing. The application
must set forth all of the following:
a. The name of the foreign corporation and the name of the
state or country under whose law it is incorporated.
b. That it is not transacting business in this state and that
it surrenders its authority to transact business in this state.
c. That it revokes the authority of its registered agent to
accept service on its behalf and appoints the secretary of state as
its agent for service of process in any proceeding based on a cause
of action arising during the time it was authorized to transact
business in this state.
d. A mailing address to which the secretary of state may mail
a copy of any process served on the secretary of state under
paragraph "c".
3. After the withdrawal of the corporation is effective, service
of process on the secretary of state under this section is service on
the foreign corporation. Upon receipt of process, the secretary of
state shall mail a copy of the process to the foreign corporation at
the mailing address set forth under subsection 2. Section History: Recent Form
89 Acts, ch 288, §171; 96 Acts, ch 1170, § 18
Referred to in § 490.1510
490.1521 THROUGH 490.1529 Reserved.
490.1530 GROUNDS FOR REVOCATION.
The secretary of state may commence a proceeding under section
490.1531 to revoke the certificate of authority of a foreign
corporation authorized to transact business in this state if:
1. The foreign corporation does not deliver its biennial report
to the secretary of state in a form that meets the requirements of
section 490.1622 within sixty days after it is due.
2. The foreign corporation is without a registered agent or
registered office in this state for sixty days or more.
3. The foreign corporation does not inform the secretary of state
under section 490.1508 or 490.1509 that its registered agent or
registered office has changed, that its registered agent has
resigned, or that its registered office has been discontinued within
sixty days of the change, resignation, or discontinuance.
4. An incorporator, director, officer, or agent of the foreign
corporation signed a document that person knew was false in any
material respect with intent that the document be delivered to the
secretary of state for filing.
5. The secretary of state receives a duly authenticated
certificate from the secretary of state or other official having
custody of corporate records in the state or country under whose law
the foreign corporation is incorporated stating that it has been
dissolved or disappeared as the result of a merger. Section History: Recent Form
89 Acts, ch 288, §172; 90 Acts, ch 1205, §27; 96 Acts, ch 1170, §
19; 97 Acts, ch 171, § 17
Referred to in § 490.1531
490.1531 PROCEDURE FOR AND EFFECT OF REVOCATION.
1. If the secretary of state determines that one or more grounds
exist under section 490.1530 for revocation of a certificate of
authority, the secretary of state shall serve the foreign corporation
with written notice of the secretary's determination under section
490.1510.
2. If the foreign corporation does not correct each ground for
revocation or demonstrate to the reasonable satisfaction of the
secretary of state that each ground determined by the secretary of
state does not exist within sixty days after service of the notice is
perfected under section 490.1510, the secretary of state may revoke
the foreign corporation's certificate of authority by signing a
certificate of revocation that recites the ground or grounds for
revocation and its effective date. The secretary of state shall file
the original of the certificate and serve a copy on the foreign
corporation under section 490.1510.
3. The authority of a foreign corporation to transact business in
this state ceases on the date shown on the certificate revoking its
certificate of authority.
4. The secretary of state's revocation of a foreign corporation's
certificate of authority appoints the secretary of state the foreign
corporation's agent for service of process in any proceeding based on
a cause of action which arose during the time the foreign corporation
was authorized to transact business in this state. Service of
process on the secretary of state under this subsection is service on
the foreign corporation. Upon receipt of process, the secretary of
state shall mail a copy of the process to the secretary of the
foreign corporation at its principal office shown in its most recent
biennial report or in any subsequent communication received from the
corporation stating the current mailing address of its principal
office, or, if none is on file, in its application for a certificate
of authority.
5. Revocation of a foreign corporation's certificate of authority
does not terminate the authority of the registered agent of the
corporation. Section History: Recent Form
89 Acts, ch 288, §173; 97 Acts, ch 171, § 18
Referred to in § 490.1510, 490.1530
490.1532 APPEAL FROM REVOCATION.
1. A foreign corporation may appeal the secretary of state's
revocation of its certificate of authority to the district court
within thirty days after service of the certificate of revocation is
perfected under section 490.1510. The foreign corporation appeals by
petitioning the court to set aside the revocation and attaching to
the petition copies of its certificate of authority and the secretary
of state's certificate of revocation.
2. The court may summarily order the secretary of state to
reinstate the certificate of authority or may take any other action
the court considers appropriate.
3. The court's final decision may be appealed as in other civil
proceedings. Section History: Recent Form
89 Acts, ch 288, §174
490.1601 CORPORATE RECORDS.
1. A corporation shall keep as permanent records minutes of all
meetings of its shareholders and board of directors, a record of all
actions taken by the shareholders or board of directors without a
meeting, and a record of all actions taken by a committee of the
board of directors in place of the board of directors on behalf of
the corporation.
2. A corporation shall maintain appropriate accounting records.
3. A corporation or its agent shall maintain a record of its
shareholders in a form that permits preparation of a list of the
names and addresses of all shareholders in alphabetical order by
class of shares showing the number and class of shares held by each.
4. A corporation shall maintain its records in written form or in
another form capable of conversion into written form within a
reasonable time.
5. A corporation shall keep a copy of the following records at
its principal office:
a. Its articles or restated articles of incorporation, all
amendments to them currently in effect, and any notices to
shareholders referred to in section 490.120, subsection 12, paragraph
"e", regarding facts on which a filed document is dependent.
b. Its bylaws or restated bylaws and all amendments to them
currently in effect.
c. Resolutions adopted by its board of directors creating one
or more classes or series of shares, and fixing their relative
rights, preferences, and limitations, if shares issued pursuant to
those resolutions are outstanding.
d. The minutes of all shareholders' meetings, and records of
all action taken by shareholders without a meeting, for the past
three years.
e. All written communications to shareholders generally
within the past three years, including the financial statements
furnished for the past three years under section 490.1620.
f. A list of the names and business addresses of its current
directors and officers.
g. Its most recent biennial report delivered to the secretary
of state under section 490.1622. Section History: Recent Form
89 Acts, ch 288, §175; 97 Acts, ch 171, § 19; 2007 Acts, ch 140,
§11, 12
Referred to in § 490.840, 490.1602
490.1602 INSPECTION OF RECORDS BY SHAREHOLDERS.
1. A shareholder of a corporation is entitled to inspect and
copy, during regular business hours at the corporation's principal
office, any of the records of the corporation described in section
490.1601, subsection 5, if the shareholder gives the corporation
written notice of the shareholder's demand at least five business
days before the date on which the shareholder wishes to inspect and
copy.
2. A shareholder of a corporation is entitled to inspect and
copy, during regular business hours at a reasonable location
specified by the corporation, any of the following records of the
corporation if the shareholder meets the requirements of subsection 3
and gives the corporation written notice of the shareholder's demand
at least five business days before the date on which the shareholder
wishes to inspect and copy any of the following:
a. Excerpts from minutes of any meeting of the board of
directors, records of any action of a committee of the board of
directors while acting in place of the board of directors on behalf
of the corporation, minutes of any meeting of the shareholders, and
records of action taken by the shareholders or board of directors
without a meeting, to the extent not subject to inspection under
subsection 1 of this section.
b. Accounting records of the corporation.
c. The record of shareholders.
3. A shareholder may inspect and copy the records described in
subsection 2 only if:
a. The shareholder's demand is made in good faith and for a
proper purpose.
b. The shareholder describes with reasonable particularity
the shareholder's purpose and the records the shareholder desires to
inspect.
c. The records are directly connected with the shareholder's
purpose.
4. The right of inspection granted by this section shall not be
abolished or limited by a corporation's articles of incorporation or
bylaws.
5. This section does not affect either of the following:
a. The right of a shareholder to inspect records under
section 490.720 or, if the shareholder is in litigation with the
corporation, to the same extent as any other litigant.
b. The power of a court, independently of this chapter, to
compel the production of corporate records for examination. Section History: Recent Form
89 Acts, ch 288, §176
Referred to in § 490.720, 490.1603, 490.1604
490.1603 SCOPE OF INSPECTION RIGHT.
1. A shareholder's agent or attorney has the same inspection and
copying rights as the shareholder represented.
2. The right to copy records under section 490.1602 includes, if
reasonable, the right to receive copies by xerographic or other
means, including copies through an electronic transmission if
available and so requested by the shareholder.
3. The corporation may comply at its expense with a shareholder's
demand to inspect the record of shareholders under section 490.1602,
subsection 2, paragraph "c", by providing the shareholder with a
list of shareholders that was compiled no earlier than the date of
the shareholder's demand.
4. The corporation may impose a reasonable charge, covering the
costs of labor and material, for copies of any documents provided to
the shareholder. The charge shall not exceed the estimated cost of
production, reproduction, or transmission of the records. Section History: Recent Form
89 Acts, ch 288, §177; 2002 Acts, ch 1154, §99, 125
490.1604 COURT-ORDERED INSPECTION.
1. If a corporation does not allow a shareholder who complies
with section 490.1602, subsection 1, to inspect and copy any records
required by that subsection to be available for inspection, the
district court of the county where the corporation's principal office
or, if none in this state, its registered office is located may
summarily order inspection and copying of the records demanded at the
corporation's expense upon application of the shareholder.
2. If a corporation does not within a reasonable time allow a
shareholder to inspect and copy any other records, the shareholder
who complies with section 490.1602, subsections 2 and 3 may apply to
the district court in the county where the corporation's principal
office or, if none in this state, its registered office is located
for an order to permit inspection and copying of the records
demanded. The court shall dispose of an application under this
subsection on an expedited basis.
3. If the court orders inspection and copying of the records
demanded, it shall also order the corporation to pay the
shareholder's costs, including reasonable counsel fees, incurred to
obtain the order unless the corporation proves that it refused
inspection in good faith because it had a reasonable basis for doubt
about the right of the shareholder to inspect the records demanded.
4. If the court orders inspection and copying of the records
demanded, it may impose reasonable restrictions on the use or
distribution of the records by the demanding shareholder. Section History: Recent Form
89 Acts, ch 288, §178
490.1605 INSPECTION OF RECORDS BY DIRECTORS.
1. A director of a corporation is entitled to inspect and copy
the books, records, and documents of the corporation at any
reasonable time to the extent reasonably related to the performance
of the director's duties as a director, including duties as a member
of a committee, but not for any other purpose or in any manner that
would violate any duty to the corporation.
2. The district court of the county where the corporation's
principal office, or if none in this state, its registered office, is
located may order inspection and copying of the books, records, and
documents at the corporation's expense, upon application of a
director who has been refused such inspection rights, unless the
corporation establishes that the director is not entitled to such
inspection rights. The court shall dispose of an application under
this subsection on an expedited basis.
3. If an order is issued, the court may include provisions
protecting the corporation from undue burden or expense, and
prohibiting the director from using information obtained upon
exercise of the inspection rights in a manner that would violate a
duty to the corporation, and may also order the corporation to
reimburse the director for the director's costs, including reasonable
counsel fees, incurred in connection with the application. Section History: Recent Form
2002 Acts, ch 1154, §100, 125
490.1606 EXCEPTION TO NOTICE REQUIREMENT.
1. Whenever notice is required to be given under any provision of
this chapter to any shareholder, such notice shall not be required to
be given if either of the following applies:
a. Notice of two consecutive annual meetings, and all notices
of meetings during the period between such two consecutive annual
meetings, have been sent to such shareholder at such shareholder's
address as shown on the records of the corporation and have been
returned undeliverable.
b. All, but not less than two, payments of dividends on
securities during a twelve-month period, or two consecutive payments
of dividends on securities during a period of more than twelve
months, have been sent to such shareholder at such shareholder's
address as shown on the records of the corporation and have been
returned undeliverable.
2. If any such shareholder shall deliver to the corporation a
written notice setting forth such shareholder's then-current address,
the requirement that notice be given to such shareholder shall be
reinstated. Section History: Recent Form
2002 Acts, ch 1154, §101, 125
490.1607 THROUGH 490.1619 Reserved.
490.1620 FINANCIAL STATEMENTS FOR SHAREHOLDERS.
A corporation shall prepare annual financial statements, which may
be consolidated or combined statements of the corporation and one or
more of its subsidiaries, as appropriate, that include a balance
sheet as of the end of the fiscal year and an income statement for
that year. Upon written request from a shareholder, a corporation,
at its expense, shall furnish to that shareholder the financial
statements requested. If the annual financial statements are
reported upon by a public accountant, that report must accompany
them. Section History: Recent Form
89 Acts, ch 288, §179
Referred to in § 490.1601
490.1621 OTHER REPORTS TO SHAREHOLDERS. Repealed
by 2002 Acts, ch 1154, § 123, 125.
490.1622 BIENNIAL REPORT FOR SECRETARY OF STATE.
1. Each domestic corporation, and each foreign corporation
authorized to transact business in this state, shall deliver to the
secretary of state for filing a biennial report that sets forth all
of the following:
a. The name of the corporation and the state or country under
whose law it is incorporated.
b. The address of its registered office and the name of its
registered agent at that office in this state, together with the
consent of any new registered agent.
c. The address of its principal office.
d. The names and addresses of the president, secretary,
treasurer, and one member of the board of directors.
2. Information in the biennial report must be current as of the
first day of January of the year in which the report is due. The
report shall be executed on behalf of the corporation and signed as
provided in section 490.120 or by any other person authorized by the
board of directors of the corporation.
3. The first biennial report shall be delivered to the secretary
of state between January 1 and April 1 of the first even-numbered
year following the calendar year in which a domestic corporation was
incorporated or a foreign corporation was authorized to transact
business. Subsequent biennial reports must be delivered to the
secretary of state between January 1 and April 1 of the following
even- numbered calendar years. A filing fee for the biennial report
shall be determined by the secretary of state. For purposes of this
section, each biennial report shall contain information related to
the two-year period immediately preceding the calendar year in which
the report is filed.
4. If a biennial report does not contain the information required
by this section, the secretary of state shall promptly notify the
reporting domestic or foreign corporation in writing and return the
report to it for correction.
5. The secretary of state may provide for the change of
registered office or registered agent on the form prescribed by the
secretary of state for the biennial report, provided that the form
contains the information required in section 490.502 or 490.1508. If
the secretary of state determines that a biennial report does not
contain the information required by this section but otherwise meets
the requirements of section 490.502 or 490.1508 for the purpose of
changing the registered office or registered agent, the secretary of
state shall file the statement of change of registered office or
registered agent, effective as provided in section 490.123, before
returning the biennial report to the corporation as provided in this
section. A statement of change of registered office or agent
pursuant to this subsection shall be executed by a person authorized
to execute the biennial report. Section History: Recent Form
89 Acts, ch 288, §181; 96 Acts, ch 1170, § 20, 21; 97 Acts, ch
171, § 20
Referred to in § 490.120, 490.125, 490.128, 490.502, 490.1420,
490.1508, 490.1530, 490.1601
490.1701 APPLICATION TO EXISTING CORPORATIONS.
1. Except as provided in this subsection or chapter 504, Code
1989, or current chapter 504, this chapter does not apply to or
affect entities subject to chapter 504, Code 1989, or current chapter
504. Such entities continue to be governed by all laws of this state
applicable to them before December 31, 1989, as those laws are
amended. This chapter does not derogate or limit the powers to which
such entities are entitled.
2. Unless otherwise provided, this chapter does not apply to an
entity subject to chapter 174, 497, 498, 499, 499A, 524, 533, or 534
or a corporation organized on the mutual plan under chapter 491, or a
telephone company organized as a corporation under chapter 491
qualifying pursuant to an internal revenue service letter ruling
under Internal Revenue Code § 501(c)(12) as a nonprofit corporation
entitled to distribute profits in a manner similar to a chapter 499
corporation, unless such entity voluntarily elects to adopt the
provisions of this chapter and complies with the procedure prescribed
by subsection 3 of this section.
A corporation organized under chapter 496C may voluntarily elect
to adopt the provisions of this chapter by complying with the
provisions prescribed by subsection 3.
3. The procedure for the voluntary election referred to in
subsection 2 is as follows:
a. The corporation shall amend or restate its articles of
incorporation to indicate that the corporation adopts this chapter
and to designate the address of its initial registered office and the
name of its registered agent at that office and, if the name of the
corporation is not in compliance with the requirements of this
chapter, to change the name of the corporation to one complying with
the requirements of this chapter.
b. The instrument shall be delivered to the secretary of
state for filing and recording in the secretary of state's office.
If the corporation was organized under chapter 524 or 533, the
instrument shall also be filed and recorded in the office of the
county recorder. The corporation shall at the time it files the
instrument with the secretary of state deliver also to the secretary
of state for filing in the secretary of state's office any biennial
report which is then due.
If the county of the initial registered office as stated in the
instrument for a corporation organized under chapter 524 or 533 is
one which is other than the county where the principal place of
business of the corporation, as designated in its articles of
incorporation, was located, the corporation shall forward to the
county recorder of the county in which the principal place of
business of the corporation was located a copy of the instrument and
the corporation shall forward to the recorder of the county in which
the initial registered office of the corporation is located, in
addition to a copy of the original instrument, a copy of the articles
of incorporation of the corporation together with all amendments to
them as then on file in the secretary of state's office. The
corporation shall, through an officer or director, certify to the
secretary of state that a copy has been sent to each applicable
county recorder, including the date each copy was sent.
c. Upon the filing of the instrument by a corporation all of
the following apply:
(1) All of the provisions of this chapter apply to the
corporation.
(2) The secretary of state shall issue a certificate as to the
filing of the instrument and deliver the certificate to the
corporation or its representative.
(3) The secretary of state shall not file the instrument with
respect to a corporation unless at the time of filing the corporation
is validly existing and in good standing in that office under the
chapter under which it is incorporated. The corporation shall be
considered validly existing and in good standing for the purpose of
this chapter for a period of three months following the expiration
date of the corporation, provided all biennial reports due have been
filed and all fees due in connection with the biennial reports have
been paid.
d. The provisions of this chapter becoming applicable to a
corporation voluntarily electing to be governed by this chapter do
not affect any right accrued or established, or any liability or
penalty incurred, under the chapter under which it is incorporated
prior to the filing by the secretary of state in the secretary of
state's office of the instrument manifesting the election by the
corporation to adopt the provisions of this chapter as provided in
this subsection.
4. Except as specifically provided in this chapter, this chapter
applies to all domestic corporations in existence on December 31,
1989, that were incorporated under any general statute of this state
providing for incorporation of corporations for profit if power to
amend or repeal the statute under which the corporation was
incorporated was reserved.
5. A corporation subject to this chapter which does not have a
registered office or registered agent or both designated on the
records of the secretary of state is subject to all of the following
provisions:
a. The office of the corporation set forth in its first
biennial report filed under this chapter shall be deemed its
registered office until December 31, 1990, or until it files a
designation of registered office with the secretary of state,
whichever is earlier.
b. The person signing the first biennial report of the
corporation filed under this chapter shall be deemed the registered
agent until December 31, 1990, or a statement designating a
registered agent has been filed with the secretary of state,
whichever is earlier.
c. Section 490.502 does not apply to the corporation until
December 31, 1990, or until the corporation files a designation of
registered office and registered agent at that office with the
secretary of state, whichever is earlier.
6. A corporation subject to this chapter is not subject to
chapter 491, 492, 493, or 495. Section History: Recent Form
89 Acts, ch 288, §182; 93 Acts, ch 126, § 9; 97 Acts, ch 107, § 6;
97 Acts, ch 171, § 21--24; 2002 Acts, ch 1017, §5, 8; 2003 Acts, ch
66, §1, 2; 2003 Acts, ch 108, §91; 2004 Acts, ch 1049, §191; 2004
Acts, ch 1175, § 394; 2006 Acts, ch 1010, §126; 2006 Acts, ch 1089,
§14
Referred to in § 496C.14, 496C.19, 515G.3
490.1702 APPLICATION TO QUALIFIED FOREIGN
CORPORATIONS.
A foreign corporation authorized to transact business in this
state on December 31, 1989, is subject to this chapter but is not
required to obtain a new certificate of authority to transact
business under this chapter. Section History: Recent Form
89 Acts, ch 288, §183
490.1703 SAVINGS PROVISIONS.
1. Except as provided in subsection 2, the repeal of a statute by
1989 Iowa Acts, chapter 288, and the amendment or repeal of a statute
by 2002 Iowa Acts, chapter 1154, does not affect:
a. The operation of the statute or any action taken under it
before its amendment or repeal.
b. Any ratification, right, remedy, privilege, obligation, or
liability acquired, accrued, or incurred under the statute before its
amendment or repeal.
c. Any violation of the statute, or any penalty, forfeiture,
or punishment incurred because of the violation, before its amendment
or repeal.
d. Any proceeding, reorganization, or dissolution commenced
under the statute before its amendment or repeal, and the proceeding,
reorganization, or dissolution may be completed in accordance with
the statute as if it had not been amended or repealed.
2. If a penalty or punishment imposed for violation of a statute
repealed by 1989 Iowa Acts, chapter 288, is reduced by 1989 Iowa
Acts, chapter 288, the penalty or punishment if not already imposed
shall be imposed in accordance with this chapter. Section History: Recent Form
89 Acts, ch 288, §184; 90 Acts, ch 1168, §53; 2003 Acts, ch 66, §3
490.1704 PREEMPTIVE RIGHTS FOR EXISTING
CORPORATIONS. Repealed by 2006 Acts, ch 1089, § 16.
490.1705 REINSTATEMENT OF CORPORATIONS EXISTING PRIOR
TO DECEMBER 31, 1989. Repealed by 2006 Acts, ch 1030, § 86; 2006
Acts, ch 1089, § 16.
Previous Chapter 489 Next Chapter 490A
