O.C.G.A. § 14-2-747 (2019)

Annotations

COMMENT

Source: Model Act, § 7.47 (under consideration, 1987). There was no counterpart in former Georgia law.

Section 14-2-747 clarifies the application of the provisions of Part 4 to foreign corporations. Under generally prevailing practice, a court will look to the choice-of-law rules of the forum state to determine which law shall apply. If the issue is "procedural," the law of the forum state will apply; if the issue is "substantive", relating to the internal affairs of the corporation, the law of the state of incorporation will apply. See, e.g., Glazer v. Glazer, 374 F.2d 390, 407 (5th Cir. 1967). Compare Restatement, Second, Conflict of Laws §§ 302, 303, 304, 306 and 309 (the local law of the state of incorporation will be applied except in the unusual case where, with respect to some particular issue, some other state has a more significant relationship under the principles stated in § 6 of the Restatement to the parties and the corporation or the transaction).

However, the distinction between what is procedural and what is substantive is not always clear. In view of these uncertainties, Section 14-2-747 sets forth a choice of law rule for foreign corporations. It provides, subject to three exceptions, that the matters covered by the part shall be governed by the laws of the jurisdiction of incorporation of the foreign corporation.

The three exceptions are areas that are traditionally part of the forum's oversight of the litigation process: Section 14-2-743 dealing with the ability of the court to stay proceedings; Section 14-2-745 setting forth the procedure for settling a proceeding; and Section 14-2-746 providing for the assessment of reasonable expenses (including attorney's fees) in certain situations.

Cross-References Foreign corporation transacting business without authority: defense of proceedings, see § 14-2-1502. Maintenance of proceedings, see § 14-2-1502. "Foreign corporation" defined, see § 14-2-140. Service of process on foreign corporation, see § 14-2-1510. Service on foreign corporation with revoked certificate of authority, see § 14-2-1531. Service on withdrawn foreign corporation, see § 14-2-1520.

JUDICIAL DECISIONS

Illustrative cases. - In the shareholders' suit alleging derivative claims for fraud and breach of fiduciary duty against a bankrupt corporation, its board of directors, and two investor corporations, pursuant to O.C.G.A. § 14-2-747, Florida law applied because the bankrupt corporation was incorporated in Florida. Hantz v. Belyew, F. Supp. 2d (N.D. Ga. Mar. 23, 2005).

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ARTICLE 8 DIRECTORS AND OFFICERS

Law reviews. - For article, "Comparison of Features of Old and New Business Corporation Laws Relating to Domestic Corporations," see 5 Ga. St. B. J. 13 (1968). For article, "Corporate Social-Reform, the Business Judgment Rule and Other Considerations," see 20 Ga. L. Rev. 565 (1986). For article, "Georgia's New Business Corporation Code," see 24 Ga. St. B. J. 158 (1988). For article, "Changes in Corporate Practice under Georgia's New Business Corporation Code," see 40 Mercer L. Rev. 655 (1989).

For comment, "Dead Hand Poison Pills: Will Georgia Corporations Continue to Issue a Lethal Dose?," see 16 Ga. St. U. L. Rev. 665 (2000).

For note discussing the need for revision of director and officer liability under Blue Sky Laws, see 5 Ga. L. Rev. 128 (1971). For note, "Exclusionary Tender Offers: A Reasonably Formulated Takeover Defense or a Discriminatory Attempt to Retain Control?," see 20 Ga. L. Rev. 627 (1986).

RESEARCH REFERENCES

Oppressive Conduct by Majority Shareholders, Directors, or Those in Control of Corporation, 5 POF2d 645.

Dissension or Deadlock of Corporate Directors or Shareholders, 6 POF2d 387.

Personal Liability of Corporate Officer on Promissory Note, 8 POF2d 193.

Corporate Opportunity Doctrine - Business Opportunities in "Line of Business" of Corporation, 8 POF2d 315.

Corporate Officer or Director as Alter Ego of Corporation, 9 POF2d 57.

Participation by Corporate Officer in Illegal Issuance of Securities, 9 POF2d 577.

Improper Issuance of Corporate Stock to Directors or Officers, 15 POF2d 417.

Wrongful Failure of Corporate Directors to Declare Dividend, 22 POF2d 593.

Corporate Opportunity Doctrine - Fairness of Corporate Official's Acquisition of Business Opportunity, 30 POF2d 291.

Gifts of Corporate Stock, 39 POF2d 373.

Corporate Director's Breach of Fiduciary Duty to Creditors, 16 POF3d 583.

Grounds for Disregarding the Corporate Entity and Piercing the Corporate Veil, 45 POF3d 1.

Liability of Shareholder for Wrongfully Transferring or Assigning Corporate Common Stock Shares to Third Party, 47 POF3d 139.

Company's Liability for the Entity's Failure to Acquire Fictitious Name Certification, 56 POF3d 103.

Liability for a Corporation's Failure to File as a Corporation Doing Business in a Foreign Jurisdiction, 60 POF3d 363.

ALR. - Right of corporation to act as relator in information in the nature of quo warranto, 1 A.L.R. 197.

Duty of promoter to account for proceeds of sale of stock issued to him, 43 A.L.R. 1363.

Liability of promoter to corporation on account of profits as affected by fact that all outstanding stock was held by promoter or by persons who knew the facts, 85 A.L.R. 1262.

Validity, construction, and effect of clause in obligation of corporation that it is issued without recourse against officers or directors, 87 A.L.R. 1052; 97 A.L.R. 1157.

Authority to employ attorney for corporation, 130 A.L.R. 894.

Validity of security for contemporaneous loan to corporation by officer, director, or stockholder, 31 A.L.R.2d 663.

What amounts to "oppressive" conduct under statute authorizing dissolution of corporation at suit of minority stockholders, 56 A.L.R.3d 358.

In personam jurisdiction over nonresident director of forum corporation under long-arm statutes, 100 A.L.R.3d 1108.

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PART 1 BOARD OF DIRECTORS