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2018 Georgia Code 14-3-1041 | Car Wreck Lawyer

Link to State of Georgia Official Statute 2018 Georgia Code Annotated (sourced from legal.resource.org)
O.C.G.A. 14-3-1041 Case Law from Google Scholar Amendments to OCGA 14-3-1041

TITLE 14 CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS

Section 3. Nonprofit Corporations, 14-3-101 through 14-3-1703.

ARTICLE 10 AMENDMENT OF ARTICLES OF INCORPORATION AND BYLAWS

14-3-1041. Procedure for amendment.

  1. A corporation described in paragraph (2) of subsection (a) of Code Section 14-3-1302 may amend its articles of incorporation as provided in Code Section 14-3-1040 only:
    1. Upon the prior approval of the superior court in a proceeding in which the Attorney General has been given notice; or
    2. If on or before the effective date of the amendment:
      1. Assets with a value equal to the greater of the fair market value of the net tangible and intangible assets (including good will) of the corporation, or the fair market value of the corporation if it were to be operated as a business concern, are transferred or conveyed to one or more persons who would have received its assets under subsection (b) of Code Section 14-3-1403 had it dissolved;
      2. It shall return, transfer, or convey any assets held by it upon condition requiring return, transfer, or conveyance, which condition occurs by reason of the amendment, in accordance with such condition; and
      3. The amendment is approved by a majority of the directors of the corporation who are not and will not become shareholders in, or officers, employees, agents, or consultants of the corporation following the effective date of the amendment.
  2. At least 30 days before the filing of any amendment described in Code Section 14-3-1040 by a corporation described in subsection (a) of this Code section, notice of the proposed amendment shall be delivered to the Attorney General.
  3. Without the prior written consent of the superior court in a proceeding of which the Attorney General has been given notice, no member of a corporation described in subsection (a) of this Code section may receive or keep anything as a result of an amendment described in Code Section 14-3-1040. The court shall approve the transaction if it is in the public interest.

(Code 1981, §14-3-1041, enacted by Ga. L. 1991, p. 465, § 1; Ga. L. 1993, p. 91, § 14.)

COMMENT

This section has no counterpart in the Model Act or the Business Code. It establishes procedures under which a charitable nonprofit corporation of the type described in section 14-3-1302(a)(2) may convert to a business corporation. Nonprofit corporations that are not described in section 14-3-1302(a)(2) need not follow these procedures to convert to business corporations; they need only amend their articles as provided in section 14-3-1040.

This section provides alternative procedures. The corporation may either obtain the approval of the superior court in a proceeding in which the Attorney General is given notice, or it may follow the procedures described in subsection (a)(2). Both procedures are designed to ensure that assets of charitable corporations cannot be diverted from their intended purposes via conversion of a nonprofit corporation to a business corporation. Subsection (b) ensures that the Attorney General will be notified of a proposed conversion of a corporation described in section 14-3-1302(a)(2). Subsection (c) prevents members of charitable corporations from benefiting personally or economically from conversion of the corporation to a for-profit corporation without judicial approval. Identical rules govern corporations described in section 14-3-1302(a)(2) that wish to merge with non-charitable corporations. See section 14-3-1102.

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