Syfert Injury Law Firm

Your Trusted Partner in Personal Injury & Workers' Compensation

Call Now: 904-383-7448

2018 Georgia Code 14-2-915 | Car Wreck Lawyer

Link to State of Georgia Official Statute 2018 Georgia Code Annotated (sourced from legal.resource.org)
O.C.G.A. 14-2-915 Case Law from Google Scholar Amendments to OCGA 14-2-915

TITLE 14 CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS

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

ARTICLE 9 CLOSE CORPORATIONS

14-2-915. Exercise of compulsory purchase right.

  1. A person entitled and desiring to exercise the compulsory purchase right described in Code Section 14-2-914 must deliver a written notice to the corporation, within 120 days after the death of the shareholder, describing the number and class or series of shares beneficially owned by the decedent and requesting that the corporation offer to purchase the shares.
  2. Within 20 days after the effective date of the notice, the corporation shall call a special shareholders' meeting, to be held not more than 40 days after the call, to decide whether the corporation should offer to purchase the shares. A purchase offer must be approved by the affirmative vote of the holders of a majority of votes entitled to be cast at the meeting, excluding votes in respect of the shares covered by the notice.
  3. The corporation must deliver a purchase offer to the person requesting it within 75 days after the effective date of the request notice. A purchase offer must be accompanied by the corporation's balance sheet as of the end of a fiscal year ending not more than 16 months before the effective date of the request notice, an income statement for that year, a statement of changes in shareholders' equity for that year, and the latest available interim financial statements, if any. The person must accept the purchase offer in writing within 15 days after receiving it or the offer is rejected.
  4. A corporation agreeing to purchase shares under this Code section may allocate some or all of the shares pro rata to those of its shareholders who desire to purchase the shares unless all of the shareholders who desire to purchase approve a different allocation to the shareholders or to other persons.If the corporation has more than one class or series of shares, however, the remaining holders of the class or series of shares being purchased are entitled to a first option to purchase the shares not purchased by the corporation in proportion to their shareholdings or in some other proportion agreed to by all the shareholders participating in the purchase.
  5. If price and other terms of a compulsory purchase of shares are fixed or are to be determined by the articles of incorporation, bylaws, or a written agreement, the price and terms so fixed or determined govern the compulsory purchase unless the purchaser defaults, in which event the seller is entitled to commence a proceeding for dissolution under Code Section 14-2-916.

(Code 1981, §14-2-915, enacted by Ga. L. 1988, p. 1070, § 1; Ga. L. 1989, p. 946, § 42; Ga. L. 1990, p. 257, §§ 6, 7.)

COMMENT

Source: Model Statutory Close Corporation Supplement, § 15.

Section 14-2-915 sets out the mechanics of exercising the buyout option. The procedures are similar to those in Section 14-2-912 relating to third-party offers.

Like Section 14-2-912, subsection (a) requires that the selling shareholder offer all of his shares for sale on the premise that a shareholder desiring to cash out his interest in the corporation ought to divest himself of all his equity interest in the business.

Subsection (b) sets out a notice and meeting schedule for approval by the shareholders of a buyout, together with voting rules parallel to those in Section 14-2-912(c).

Subsection (c) requires the corporation to deliver a purchase offer within 75 days of the shareholder request for repurchase. This gives the corporation at least 15 days from the date of approval by the shareholders to seek financing and to negotiate informally with the requesting shareholder. The corporation's offer must be accompanied by financial statements identical to those specified in Section 14-2-1325(b) when a corporation offers a price to dissenters. Further time for negotiations is provided by allowing the requesting shareholder 15 days to accept the offer, which must be in writing. Failure to respond to the corporation's offer is treated as a rejection.

Subsection (d) authorizes the corporation to allocate repurchased shares to the remaining shareholders under the same conditions as Section 14-2-912(e). Modifications of the Model Close Corporation Supplement follow those made to Section 14-2-912(e). See the Comment to that subsection.

Note to 1990 Amendment The 1990 amendment to subsection (d) corrects provisions relating to the right to acquire shares being repurchased by a close corporation to clarify that allocation among shareholders of the same class on other than a proportional basis requires only the approval of all shareholders participating in the purchase as opposed to those eligible to participate. This change reflects the language used in the Model Close Corporation Supplement.

The 1990 amendment to subsection (e) corrects a typographical error in the Revised Model Corporation Act. The effect of the amendment is to provide, as the Model Act intended, that after the exercise of compulsory purchase rights the seller, rather than the buyer, may commence a proceeding for dissolution of the corporation if the purchaser of the shares defaults in payment of the purchase rights.

Cross-References Court action to compel purchase, see § 14-2-916. Delivery includes mail, see § 14-2-140. Effective date of notice, see § 14-2-141. Financial statements for shareholders, see § 14-2-1620. "Notice" defined, see § 14-2-141. Notice of shareholders' meeting, see § 14-2-705. Special shareholders' meeting, see § 14-2-702. Voting of shares, see Article 7, Part 2.

No results found for Georgia Code 14-2-915.