ARTICLE 9 CLOSE CORPORATIONS

14-2-933. Shareholder option to dissolve corporation.

The articles of incorporation, bylaws adopted by the shareholders, or an agreement among all the shareholders of a statutory close corporation may authorize one or more shareholders, or the holders of a specified number or percentage of shares of any class or series, to dissolve the corporation at will or upon the occurrence of a specified event or contingency. The shareholder or shareholders exercising this authority must give written notice of the intent to dissolve to all the other shareholders. Thirty-one days after the effective date of the notice, the corporation shall begin to wind up and liquidate its business and affairs and begin dissolution proceedings under Code Sections 14-2-1403 through 14-2-1408.

Unless the articles of incorporation, bylaws adopted by the shareholders, or any agreement among all the shareholders provides otherwise, an amendment to the articles of incorporation, bylaws adopted by the shareholders, or any agreement among all the shareholders to add, change, or delete the authority to dissolve described in subsection (a) of this Code section must be approved by the holders of all the outstanding shares, whether or not otherwise entitled to vote on amendments, or, if no shares have been issued, by all the subscribers for shares, if any, or, if none, by all the incorporators.

(Code 1981, §14-2-933, enacted by Ga. L. 1988, p. 1070, § 1; Ga. L. 1989, p. 946, § 46; Ga. L. 1990, p. 257, § 11.)

COMMENT

Source: Model Statutory Close Corporation Supplement, § 33. There was no comparable provision in former law. Former § 14-2-273(3) required the affirmative vote of the holders of a majority of the shares of each class of shares entitled to vote thereon as a class and of the total shares entitled to vote thereon to dissolve a corporation. Former § 14-2-273(1) also required board action to dissolve.

The purpose of this section is to give shareholders in a statutory close corporation, if they so elect, basically the same power to dissolve the business as general partners have under the Uniform Partnership Act. The section applies only if it is elected in the corporation's original or amended articles of incorporation. The right may be given to a single shareholder or to any group of shareholders and may be exercisable at will or restricted to certain designated circumstances. Rights under this section are in addition to other rights a shareholder may have under the Code generally or this article to dissolve the corporation.

This section is generally patterned after the Delaware statute.

Note to 1989 Amendment The 1989 amendment changed subsection (a) by changing the last Code reference in the last line from "14-2-1407" to "14-2-1408," to correct a typographical error.

Note to 1990 Amendment The 1990 amendment makes it clear that, unless otherwise provided in an appropriate governing instrument, the right to cause dissolution of a close corporation may not be altered by amendment of the bylaws or an agreement without unanimous approval.

Cross-References Articles of incorporation: amendment, see Article 10, Part 1; amendment before issuance of shares, see § 14-2-1005; generally, see § 14-2-202. Delivery includes mail, see § 14-2-140. Dissolution: generally, see Article 14; incorporators, see § 14-2-1401. Effective date of notice, see § 14-2-141. "Notice" defined, see § 14-2-141. Procedure following notice of dissolution, see § 14-2-140 et seq. Subscription for shares, see § 14-2-620.

PART 5 J UDICIAL SUPERVISION

RESEARCH REFERENCES

Am. Jur. 2d.

- 19 Am. Jur. 2d, Corporations, § 2350 et seq.

C.J.S.

- 18 C.J.S., Corporations, §§ 431, 432. 19 C.J.S., Corporations, § 945 et seq., 923 et seq.

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TITLE 14 CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS