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2018 Georgia Code 14-2-704 | Car Wreck Lawyer

Link to State of Georgia Official Statute 2018 Georgia Code Annotated (sourced from legal.resource.org)
O.C.G.A. 14-2-704 Case Law from Google Scholar Amendments to OCGA 14-2-704

TITLE 14 CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS

Section 2. Business Corporations, 14-2-101 through 14-2-1703.

ARTICLE 7 SHAREHOLDERS

14-2-704. Action without meeting.

  1. Action required or permitted by this chapter to be taken at a shareholders' meeting may be taken without a meeting if the action is taken by all the shareholders entitled to vote on the action or, if so provided in the articles of incorporation, by persons who would be entitled to vote at a meeting shares having voting power to cast not less than the minimum number (or numbers, in the case of voting by groups) of votes that would be necessary to authorize or take the action at a meeting at which all shareholders entitled to vote were present and voted. The action must be evidenced by one or more written consents bearing the date of signature and describing the action taken, signed by shareholders entitled to take action without a meeting and delivered to the corporation for inclusion in the minutes or filing with the corporate records.
  2. No written consent signed under this Code section shall be valid unless:
    1. The consenting shareholder has been furnished the same material that, under this chapter, would have been required to be sent to shareholders in anotice of a meeting at which the proposed action would have been submitted to the shareholders for action, including notice of any applicable dissenters' rights as provided in Code Section 14-2-1320; or
    2. The written consent contains an express waiver of the right to receive the material otherwise required to be furnished.
  3. If the articles of incorporation give the shareholders the right to cumulate their votes, action with respect to any election of directors may be taken without a meeting only by written consent signed by all the shareholders entitled to vote on the election of directors.
  4. If not otherwise fixed under Code Section 14-2-703 or Code Section 14-2-707, the record date for determining shareholders entitled to take action without a meeting is the date the first shareholder signs the consent. No written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest date appearing on a consent delivered to the corporation in the manner required by this Code section, evidence of written consents signed by shareholders sufficient to act by written consent are received by 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.
  5. A consent signed under this Code section has the effect of a meeting vote and may be described as such in any document. A consent delivered to the corporation shall become effective on the date of delivery of the last consent required to take action under subsection (d) of this Code section or such later date as it may provide.
  6. If action is taken under this Code section by less than all of the shareholders entitled to vote on the action, all voting shareholders on the record date who did not participate in taking the action shall be given written notice of the action, together with the material described in paragraph (1) of subsection (b) of this Code section, not more than ten days after the taking of action without a meeting.
  7. If this chapter requires that notice of action by shareholders be given to nonvoting shareholders and the action is taken by voting shareholders without a meeting, the corporation must give its nonvoting shareholders written notice of the action not more than ten days after the taking of action without a meeting. The notice must contain or be accompanied by the same material that, under this chapter, would have been required to be sent to nonvoting shareholders in a notice of meeting at which the proposed action would have been submitted to the shareholders for action.
  8. An electronic transmission which is transmitted by a shareholder that evidences a shareholder's consent, requests or demands an action to be taken by the corporation, or provides notice to the corporation under this chapter shall be deemed to be written, signed,and dated for the purposes of this chapter, provided that any such electronic transmission sets forth or is delivered with information from which the corporation can determine:
    1. That the electronic transmission was transmitted by the shareholder; and
    2. The date on which such shareholder transmitted such electronic transmission. The date on which such electronic transmission is transmitted shall be deemed to be the date on which such consent, request, demand, or notice was signed.

(Code 1981, §14-2-704, enacted by Ga. L. 1988, p. 1070, § 1; Ga. L. 1989, p. 946, § 23; Ga. L. 1993, p. 1231, § 7; Ga. L. 1997, p. 1165, § 5; Ga. L. 2004, p. 508, § 9; Ga. L. 2005, p. 60, § 14/HB 95.)

COMMENT

Source: Model Act, § 7.04. This replaces former § 14-2-112(d).

Subsection (a) provides that all the shareholders entitled to vote on an issue may validly act by unanimous written consent without a meeting. Unanimous written consent is obtainable, as a practical matter, only on matters on which there are only a relatively few shareholders entitled to vote. For this reason, language was added to the Model Act version of subsection (a) to restore the "opt-in" provisions of former law, § 14-2-112(d), as amended in 1985, permitting shareholder action on less than unanimous consent if so provided in the articles of incorporation.

The final sentence of subsection (a) provides that to be effective, consents must be in writing, signed by all the shareholders consenting to the action (whether unanimous under subsection (a) or by the lesser number permitted in articles of incorporation, and delivered to the secretary of the corporation. The phrase "one or more written consents" is included in subsection (a) to make it clear that all shareholders do not need to sign the same piece of paper.

Implicit in this language is that action by written consent is effective only when the last necessary shareholder has signed the appropriate written consent and all consents have been delivered to the corporation. Before that time, any shareholder may withdraw his consent simply by advising the secretary of that fact. Cf. Calumet Industries, Inc. v. McClure, 464 F. Supp. 19 (N.D. 111. 1978). The withdrawal of a sufficient number of consents may, of course, destroy the written consent required by this section. If a shareholder seeks to withdraw his consent after shareholders have signed written consents and filed them with the secretary of the corporation, the corporation may either treat the attempted withdrawal as too late or give it effect, thereby requiring the matter to be presented at a shareholders' meeting if the withdrawal reduces the number of consenting shareholders below the required level.

Subsection (b) has no counterpart in the Model Act. Protective provisions have been added with respect to mergers, share exchanges, and asset sales, drawn largely from former Georgia law, § 14-2-112(d), as amended in 1985, to assure that shareholders receive adequate disclosures or knowingly waive their rights to disclosures. With respect to mergers approved by written consent, the protective provisions represent a combination of former law and the provisions relating to notice of dissenters' rights contained in Article 13 of the Code. For mergers and share exchanges, the disclosure requirements of Section14-2-1103(d) will apply.

Following the 1985 amendment to former § 14-2-112(d), subsection (c) retains the unanimous consent provision for election of directors where cumulative voting is in effect, notwithstanding anything in the articles of incorporation to the contrary.

Section 14-2-704 is applicable to all shareholder actions, including the approval of fundamental corporate changes described in articles 10, 11, 11A, 12, and 14. If these actions were taken at an annual or special meeting, the Model Act provided that shareholders who were not entitled to vote on the matter would nevertheless be entitled to receive notice of the meeting, including a description of the transaction proposed to be considered at the meeting. Because of Georgia's omission of the Model Act's notice provisions for nonvoting shareholders in § 7.04(d) for actual meetings, the provisions of the Model Act for such notice in the case of shareholder action by written consent were also omitted.

Subsection (d) sets the record date, if not otherwise fixed, as the date the first shareholder signs the consent. This follows former § 14-2-112(d).

Subsection (e) permits the corporate secretary to certify to third parties that shareholder action was duly taken at a meeting of shareholders. This accommodates many printed forms, such as banking resolutions, that call for such a certificate.

Subsection (f) retains the requirement of former § 14-2-112(d), as amended in 1985, of notice of action taken by consent to nonconsenting shareholders.

Note to 1989 Amendment The 1989 amendment changed subsection (c) to clarify the relationship between section 14-2-705 and section 14-2-728. While section 14-2-728 provides that shares otherwise entitled to vote cumulatively may not be voted cumulatively at a particular meeting unless the meeting notice states that cumulative voting will be in effect or a shareholder who has the right to vote cumulatively gives notice not less than 48 hours before the time of the meeting that he intends to cumulate his votes, no such notice is required where shareholders act by unanimous consent.

The 1989 amendment also eliminates a superfluous cross reference in subsection (d) to subsections (a) and (b) of this section.

Note to 1993 Amendment The 1993 amendment is intended to clarify the notice required to be afforded shareholders in the case of actions creating dissenters' rights which are effected by shareholder consent. If a corporation solicits a consent, § 14-2-1320 still requires that the corporation notify the shareholder that the action may trigger dissenters' rights.

Note to 1997 Amendments The 1997 amendments to subsections (a) and (d) introduce the requirement that shareholders' written consents must be dated (subsection (a)), and that the requisite consents must be dated within 60 days of each other (subsection (d)). The purpose is to minimize the possibility that shareholder action by written consent will be authorized by persons who may no longer be shareholders at the time the action is taken. The final sentence of subsection (d) authorizes revocation of such consents. The second sentence of subsection (e) was added to provide a default rule for the effective date of consents, which cannot be earlier than the time the corporation receives notice of them through delivery.

Note to 2004 Amendment The 2004 amendments permit a consent, demand, or notice by a shareholder under this Chapter to be delivered by electronic transmission, if the corporation can determine from the electronic transmission that it was delivered by such shareholder, and can further determine the date upon which such shareholder transmitted such electronic transmission.

Cross-References Acceptance of consents, see § 14-2-724. Amendment of articles of incorporation, see Article 10, Part 1. Dissolution, see Article 14. Merger and share exchange, see Articles 11 and 11A. "Notice" defined, see § 14-2-141. Sale of assets, see Article 12. "Secretary" defined, see § 14-2-140. Voting entitlement generally, see § 14-2-721.

RESEARCH REFERENCES

Am. Jur. 2d.

- 18A Am. Jur. 2d, Corporations, § 9.

C.J.S.

- 18 C.J.S., Corporations, § 442.

ALR.

- Participation in meeting as waiver of compliance with notice requirement for stockholders' meeting, 64 A.L.R.3d 358.

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