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2018 Georgia Code 14-2-910 | Car Wreck Lawyer

Link to State of Georgia Official Statute 2018 Georgia Code Annotated (sourced from legal.resource.org)
O.C.G.A. 14-2-910 Case Law from Google Scholar Amendments to OCGA 14-2-910

TITLE 14 CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS

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

ARTICLE 9 CLOSE CORPORATIONS

14-2-910. Notice of statutory close corporation status on issued shares.

  1. The following statement must appear conspicuously on each share certificate issued by a statutory close corporation:

    "The rights of shareholders in a statutory close corporation may differ materially from the rights of shareholders in other corporations. Copies of the articles of incorporation and bylaws, shareholders' agreements, and other documents, any of which may restrict transfers and affect voting and other rights, may be obtained by a shareholder on written request to the corporation."

  2. Within a reasonable time after the issuance or transfer of uncertificated shares, the corporation shall send to the shareholders a written notice containing the information required by subsection (a) of this Code section.
  3. The notice required by this Code section satisfies all requirements of this article and of Code Section 14-2-627 that notice of share transfer restrictions be given.
  4. A person claiming an interest in shares of a statutory close corporation which has complied with the notice requirement of this Code section is bound by the documents referred to in the notice. Any document referred to in subsection (a) of this Code section, whether or not referred to on the share certificate in the manner required by this Code section, is enforceable against a person with knowledge of the document.
  5. A corporation shall provide to any shareholder upon his written request and without charge copies of provisions that restrict transfer or affect voting or other rights of shareholders appearing in articles of incorporation, bylaws, or shareholders' or voting trust agreements filed with the corporation.

(Code 1981, §14-2-910, enacted by Ga. L. 1988, p. 1070, § 1.)

COMMENT

Source: Model Statutory Close Corporation Supplement, § 10. There was no counterpart in prior Georgia law.

The purpose of this section is to put shareholders in a statutory close corporation on notice that their shares are subject to transfer restrictions and that their rights and liabilities may be different from those of shareholders in other corporations. The notice is essential to bind third parties who are not signatories to the original agreements establishing the rights of shareholders among themselves.

Subsection (d) has been modified to clarify the binding nature of actual knowledge or notice of restrictions imposed by close corporation status. The approach parallels that of Section 14-2-627(b), relating to restrictions on transfer of shares. The Model Close Corporation Supplement approach made these documents binding upon a shareholder even though not noted on the certificate, and even though he lacked actual knowledge, if his transferor knew of them.

The notice is also drafted to satisfy the notice requirements of Section 14-2-626 where a statutory close corporation has uncertificated shares. In that case the notice required by this section would appear in the transaction statement.

Cross-References Certificateless shares, see § 14-2-626. Compulsory purchase of shares, see § 14-2-914 et seq. "Conspicuous" defined, see § 14-2-140. "Notice" defined, see § 14-2-141. Share transfer restrictions: generally, see § 14-2-627; statutory close corporations, see § 14-2-911 et seq. Shareholders' agreements, see § 14-2-731. Voting trust agreements, see § 14-2-730.

RESEARCH REFERENCES

Am. Jur. 2d.

- 18A Am. Jur. 2d, Corporations, § 568.

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