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2018 Georgia Code 14-2-723 | Car Wreck Lawyer

Link to State of Georgia Official Statute 2018 Georgia Code Annotated (sourced from legal.resource.org)
O.C.G.A. 14-2-723 Case Law from Google Scholar Amendments to OCGA 14-2-723

TITLE 14 CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS

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

ARTICLE 7 SHAREHOLDERS

14-2-723. 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:
    1. The types of nominees to which it applies;
    2. The rights or privileges that the corporation recognizes in a beneficial owner;
    3. The manner in which the procedure is selected by the nominee;
    4. The information that must be provided when the procedure is selected;
    5. The period for which selection of the procedure is effective; and
    6. Other aspects of the rights and duties created.

(Code 1981, §14-2-723, enacted by Ga. L. 1988, p. 1070, § 1.)

COMMENT

Source: Model Act, § 7.23. This replaces former § 14-2-2(12), which defines "shareholder."

Traditionally, a corporation recognizes only the registered owner as the owner of shares. That was the former approach in Georgia. But it has become a common practice for persons purchasing shares to have them registered in the "street name" of a broker-dealer or other financial institution, principally to facilitate transfer by eliminating the need for the beneficial owner's signature and delivery.

The purpose of Section 14-2-723 is to facilitate direct communication between the corporation and the beneficial owner by authorizing the corporation to create a procedure for bypassing both the registered owner and intermediate brokerage firms. The adoption of this procedure is discretionary with each corporation and affirmative action by the corporation is necessary to accomplish it. The procedure is also discretionary with the shareholder, who must elect to follow the applicable procedure prescribed by the corporation. The shareholder retains all of his rights except those granted to the beneficial owner.

The corporation may limit or qualify the procedure as it deems appropriate.

The definition of "shareholder" in Section 14-2-140 includes beneficial owners to the extent they obtain the rights of shareholders pursuant to the procedure authorized by this section.

Cross-References "Shareholder" defined, see § 14-2-140.

RESEARCH REFERENCES

Am. Jur. 2d.

- 18A Am. Jur. 2d, Corporations, § 934 et seq.

C.J.S.

- 18 C.J.S., Corporations, § 447 et seq.

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