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(Code 1981, §14-2-202, enacted by Ga. L. 1988, p. 1070, § 1; Ga. L. 1989, p. 946, § 10; Ga. L. 1996, p. 1203, § 3; Ga. L. 1999, p. 405, § 4.)
- For article summarizing law relating to jurisdiction and venue over domestic and foreign corporations in Georgia, and service therein, see 21 Mercer L. Rev. 457 (1970). For article, "Some Distinctive Features of the Georgia Business Corporation Code," 28 Ga. St. B. J. 101 (1991). For article, "A Statutory Model for Corporate Constituency Concerns," see 49 Emory L.J. 1085 (2000). For review of 1996 corporation, partnership, and association legislation, see 13 Ga. St. U. L. Rev. 70.
Source: Model Act, § 2.02. Comparable provisions were in former § 14-2-171.
Subsection (a) sets forth the minimum mandatory requirements for all articles of incorporation while subsection (b) describes optional provisions that may be included. The mandatory contents of articles of incorporation have been shortened from the former requirements of § 14-2-171. This eliminates the former requirements of § 14-2-171 that articles contain recitals that the corporation is organized under the Business Corporation Code, the period of duration, a statement of corporate purposes, the par value of shares or a statement that they will have no par value, classification of shares and designations of preferences, statements that the corporation will not commence business without minimum consideration paid for shares, preemptive rights requirements, and the number and names and addresses of the initial directors. Subsection (a)(5) was added to the Model Act to provide a mailing address to which the Secretary of State may send notices and forms.
Everything else is optional. A corporation formed under these provisions will automatically have perpetual duration under Section 14-2-302(1) unless a special provision is included providing a shorter period. Similarly, a corporation formed without reference to a purpose clause will automatically have the purpose of engaging in any lawful business under Section 14-2-301(a), unless a narrower purpose clause is provided pursuant to subsection (b)(2).
Subsection (b) describes specific options that may be elected by the draftsman and contains general authorization to include other provisions relevant to the authority of the corporation, its officers and board of directors, or to the management of the corporation's internal affairs. Subsection (b)(4) has been expanded beyond the Model Act provisions to incorporate the 1987 amendment to former § 14-2-171(b)(3), authorizing shareholders to provide in the articles of incorporation that directors will not be liable to the corporation or its shareholders except for certain types of actions. Subsection (b)(4)(ii), containing one of the exceptions to permitted exculpation, has been altered by deletion of the phrase "not in good faith." The exculpatory statutes of a number of jurisdictions now follow this pattern of excluding from exculpation only acts involving intentional or willful "misconduct or a knowing violation of" law, Nev. laws, Ch. 28, 1987 or of criminal law, Va. Code § 13.1-692.1. Fla. Laws 87-245, § 2, exculpates except for knowing criminal law violations.
Note to 1989 Amendment Subsection (b)(5) was added by the 1989 amendment. It expressly validates a provision in articles of incorporation permitting boards of directors, board committees, and individual directors to consider the interests of constituencies of the corporation other than the shareholders in making decisions.
Note to 1996 Amendments Amendments to subsection (b)(4) were made to conform to some, but not all of the 1990 proposals to amend the Revised Model Business Corporation Act. The introductory clause to subsection (b)(4) was amended to delete the word "personal" before "liability of a director", to delete the phrase "breach of duty of care of other duty" before "as a director", to delete "provided that no provision shall delete or limit", which was replaced with "except", and to delete the ending phrase, "of a director." None of these changes were intended to be substantive. The Code takes no position on whether limitations on liability beyond those previously in effect are binding on corporations that have previously elected coverage under this subsection, with language purporting to limit liability to the full extent permitted by the Code as then in effect or as later amended. Whether such language is effective depends in part on judicial interpretations of the doctrine of waiver, and whether proxy disclosures made to shareholders at the time of adoption adequately disclosed this possibility.
Cross-References Amendment of articles, see §§ 14-2-603,14-2-631, and Article 10, Part 1. Bylaws, see §§ 14-2-206 &14-2-207, and Article 10, Part 2. Close corporations, see Article 9. Conflict of interest, see § 14-2-860 et seq. Duration of corporate existence, see § 14-2-302. Filing fees, see § 14-2-122. Filing requirements, see § 14-2-120. Incorporators, see § 14-2-201. Liability of shareholders, see § 14-2-622. Powers, see § 14-2-302. Professional corporations, see Georgia Professional Corporation Act. Purposes, see § 14-2-301. Restated articles, see § 14-2-1007. Share classes, see § 14-2-601.
- In light of the similarity of the statutory provisions, decisions under former Code Section 14-2-171, which was repealed by Ga. L. 1988, p. 1070, § 1, effective July 1, 1989, are included in the annotations for this Code section.
- Satisfaction of former § 14-2-171(a)(8) (now repealed), requiring minimum capital of $500, does not preclude a determination that a corporation is undercapitalized. Hyzer v. Hickman, 195 Ga. App. 213, 393 S.E.2d 79 (1990), rev'd on other grounds, 261 Ga. 38, 401 S.E.2d 738 (1991) (decided under former § 14-2-171).
Cited in Saint Francis Hosp. v. Dion, 123 Ga. App. 360, 181 S.E.2d 72 (1971); Davenport v. Petroleum Delivery Serv. of Ga., Inc., 235 Ga. 116, 218 S.E.2d 848 (1975); Bloodworth v. Sandersville Prod. Credit Ass'n, 245 Ga. 40, 262 S.E.2d 804 (1980); Bryant v. State, 155 Ga. App. 621, 271 S.E.2d 875 (1980).
- 18A Am. Jur. 2d, Corporations, §§ 165 et seq.
- 18 C.J.S., Corporations, § 56.
- Effect upon the corporate existence of failure to file certificate in organizing a corporation, 22 A.L.R. 376; 37 A.L.R. 1319.
Corporate stock without par value, 36 A.L.R. 791; 45 A.L.R. 1501; 65 A.L.R. 1347.
Validity and construction of corporate articles or bylaws relating to stock held by one retiring from corporate office or employment, 66 A.L.R. 1295.
Validity, construction, and effect of provisions of articles of incorporation or certificates of stock relating to redemption or retirement of stock, 88 A.L.R. 1131.
Validity and effect of agreement by a corporation contemporaneously with issue or sale of stock, to repurchase or redeem the stock or to cancel the subscription therefor and refund consideration paid, 101 A.L.R. 154.
Liability of officers, directors, or members of defectively organized corporation to one of their number for advances, commissions, etc., 115 A.L.R. 658.
Conclusiveness of charter as regards character, kind, or purposes of corporation, 119 A.L.R. 1012.
Provision of statute, charter, or bylaws respecting amendment of corporate bylaws as excluding waiver thereof, 169 A.L.R. 1374.
Enforceability in another jurisdiction of personal liability of stockholders for debts of corporation whose organization is incomplete or defective, 42 A.L.R.2d 659.
Construction and effect of corporate articles, charter, or bylaws limiting duration or maturity of its indebtedness, 55 A.L.R.2d 949.
Validity of restrictions on alienation or transfer of corporate stock, 61 A.L.R.2d 1318.
Corporations: validity of charter provision for nonvoting common stock, 52 A.L.R.3d 1131.
Validity and construction of provision restricting transfer of corporate stock, which conditions transfer upon consent of one other than shareholder, officer, or director of corporation, 53 A.L.R.3d 1272.
What business opportunities are in "line of business" of corporation for purposes of determining whether a corporate opportunity was presented, 77 A.L.R.3d 961.
No results found for Georgia Code 14-2-202.