O.C.G.A.

O.C.G.A. § 14-2-1320 (2019)

Notice of dissenters’ rights

✓ O.C.G.A. — 2019 edition (Public.Resource.Org Release 73)

Code text and O.C.G.A. statutory annotations on this page reflect the 2019 Official Code of Georgia Annotated (Public.Resource.Org Release 73, 2019-08-21; public domain per Georgia v. Public.Resource.Org, 2020). The Syfert case-law annotations in Notes of Decisions, below, are current.

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(a) If proposed corporate action creating dissenters’ rights under Code Section 14-2-1302 is submitted to a vote at a shareholders’ meeting, the meeting notice must state that shareholders are or may be entitled to assert dissenters’ rights under this article and be accompanied by a copy of this article. (b) If corporate action creating dissenters’ rights under Code Section 14-2-1302 is taken without a vote of shareholders, the corporation shall notify in writing all shareholders entitled to assert dissenters’ rights that the action was taken and send them the dissenters’ notice described in Code Section 14-2-1322 no later than ten days after the

CORPORATIONS & PARTNERSHIPS

corporate action was taken.

History

(Code 1981, § 14-2-1320, enacted by Ga. L. 1988, p. 1070, § 1; Ga. L. 1993, p. 1231, § 17.)

Annotations

COMMENT Source: Model Act, § 13.20. This replaces former § 14-2-251. Subsection (a) requires the corporation to notify record shareholders of the existence of dissenters’ rights before the vote is taken on the corporate action. This notice provides the reassurance to investors that the right to dissent is intended to provide because many shareholders have no idea what rights of dissent they may have or how to assert them. If the corporation is uncertain whether or not the shareholders have dissenters’ rights, it may comply with this notice requirement by stating that the shareholders ‘‘may have’’ dissenters’ rights. Such notification was required by former law at the time of the notice of the meeting for amendments of the articles of incorporation by § 14-2-191(b)(2); for mergers by § 14-2-212(b)(2); and for asset sales by § 14-2-231(2). Subsection (b) provides that notice be given after the action is taken in situations where the action is validly taken without a vote of shareholders, e.g., in a merger of a subsidiary into its parent under Section 14-2-1104, or in amendments of articles of incorporation taken by written consent of shareholders by a required vote under Section 14-2-704. Subsection 14-2-1104(c) requires the notice to be sent within ten days after corporate action is taken. Similarly, if action amending articles of incorporation is taken by written consent of the required number of shareholders, Section 14-2-704(g) requires notice to be sent to the remaining shareholders within ten days. This notice may be combined with the dissenters’ notice required by Section 14-2-1322. This was previously required by § 14-2-214(b). Note to 1993 Amendment The 1993 amendment added the phrase ‘‘no later than ten days after the corporate action was taken’’ to clarify that the notice required by Section 14-2-1322 does not need to be provided when soliciting a consent, but only after the corporation takes the action creating the dissenters’ rights. Cross-References Acting without meeting, see § 14-2-704. Meeting notice, see § 14-2-705. ‘‘Notice’’ defined, see § 14-2-141. ‘‘Record shareholder’’ defined, see § 14-2-1301. Right to dissent, see § 14-2-1302. ‘‘Shareholder’’ defined, see § 14-2-1301. Shareholders’ meetings, see § 14-2-701 et seq. RESEARCH REFERENCES Am. Jur. 2d. - 18A Am. Jur. 2d, Corporations, § 833.

Notes of Decisions

Cited in 4 cases, 1995–2002 · leading case: Croxton v. MSC Holding, Inc., 489 S.E.2d 77 (Ga. Ct. App. 1997).

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Croxton v. MSC Holding, Inc., 489 S.E.2d 77 (Ga. Ct. App. 1997). · cites it 2× “” Croxton did have standing as a dissenting shareholder for he notified the corporation that if the proposed sale of corporate assets were effectuated, he would demand payment for his shares as provided by statute, and he executed the “dissenter’s demand for payment” form which…”

VSI Enter., Inc. v. Edwards, 518 S.E.2d 765 (Ga. Ct. App. 1999). · cites it 2× “OCGA § 14-2-1331 (b) does not apply in this case, because there was no evidence that there had not been substantial compliance by the corporation with OCGA §§ 14-2-1320 through 14-2-1327. While appellants did not comply strictly with OCGA § 14-2-1325 (a) by making an offer…”

Riddle-Bradley, Inc. v. Riddle, 459 S.E.2d 576 (Ga. Ct. App. 1995). · cites it 2× “OCGA § 14-2-1320 et seq. Because the time for filing a petition for judicial appraisal is set by statute, the CPA does not enable the court to grant extensions of time upon the consent of parties or otherwise.”

Magner v. One Sec. Corp., 574 S.E.2d 555 (Ga. Ct. App. 2002). · cites it 2× “To perfect these rights following the merger, Magner, as the record shareholder, was required to “demand payment and deposit his certificates in accordance with the terms of the [dissenters’] notice” he was sent.”

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