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2018 Georgia Code 14-3-1402 | Car Wreck Lawyer

Link to State of Georgia Official Statute 2018 Georgia Code Annotated (sourced from legal.resource.org)
O.C.G.A. 14-3-1402 Case Law from Google Scholar Amendments to OCGA 14-3-1402

TITLE 14 CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS

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

ARTICLE 14 DISSOLUTION

14-3-1402. Proposal of dissolution and approval thereof.

  1. A corporation's board of directors may propose dissolution for submission to the members, if there are members entitled to vote thereon as follows:
    1. For a proposal to dissolve to be adopted:
      1. The board of directors must recommend dissolution to the members unless the board of directors elects, because of a conflict of interest or other special circumstances, to make no recommendation and communicates the basis for its determination to the members; and
      2. The members entitled to vote must approve the proposal to dissolve as provided in paragraph (4) of this subsection;
    2. The board of directors may condition its submission of the proposal for dissolution on any basis;
    3. The corporation shall notify each member entitled to vote of the proposed members' meeting in accordance with Code Section 14-3-705. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider dissolving the corporation;
    4. Unless the articles of incorporation, the bylaws, or the board of directors acting pursuant to paragraph (2) of this subsection requires a greater vote or vote by classes, the proposal to dissolve to be adopted must be approved by a majority of all the votes entitled to be cast on that proposal; and
    5. If the board seeks to have dissolution approved by the members by written consent or written ballot, the material soliciting the approval shall contain or be accompanied by a copy or summary of the plan of dissolution.
  2. Unless the articles of incorporation or bylaws requires a greater vote, if the corporation does not have members entitled to vote on dissolution, dissolution must be approved by a vote of a majority of the directors in office at the time the transaction is approved. In addition, the corporation shall provide notice of any directors' meeting at which such approval is to be obtained in accordance with Code Section 14-3-822.The notice must also state that the purpose, or one of the purposes, of the meeting is to consider dissolution of the corporation and contain or be accompanied by a copy or summary of the plan of dissolution.
  3. The plan of dissolution shall conform to the requirements of Code Section 14-3-1403 and shall indicate to whom the assets owned or held by the corporation will be distributed after all creditors have been paid.

(Code 1981, §14-3-1402, enacted by Ga. L. 1991, p. 465, § 1; Ga. L. 2004, p. 508, § 56.)

COMMENT

This section is based both on the Model Act and on its Business Code counterpart. It establishes the procedures for approving dissolution.

Corporations with members entitled to vote on dissolution. If a corporation has members entitled to vote on dissolution, the procedures of subsections (a) and (c) must be satisfied.

Corporations without members entitled to vote on dissolution. Corporations that do not have members entitled to vote on dissolution need only follow the procedures outlined in subsections (b) and (c).

RESEARCH REFERENCES

Am. Jur. 2d.

- 19 Am. Jur. 2d, Corporations, § 2346 et seq.

C.J.S.

- 10 C.J.S., Beneficial Associations, § 18. 19 C.J.S., Corporations, §§ 920, 950. 77 C.J.S., Religious Societies, § 137.

Cases Citing O.C.G.A. § 14-3-1402

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Shorter Coll. v. Baptist Convention of Georgia, 614 S.E.2d 37 (Ga. 2005).

Cited 15 times | Published | Supreme Court of Georgia | May 23, 2005 | 279 Ga. 466, 2005 Fulton County D. Rep. 2099

...Therefore, the Court of Appeals correctly held that the effort to reorganize the College, which clearly would not qualify as a dissolution of a for-profit corporation, was likewise not a valid "dissolution" of a non-profit corporation within the meaning of OCGA § 14-3-1406. This is true even though, under OCGA § 14-3-1402(b), the Board had the unilateral power to approve a dissolution of the College....
...gislative intent.' [Cit.]" Ray v. Barber, 273 Ga. 856(1), 548 S.E.2d 283 (2001). Under applicable statutes, the business of a corporation, regardless of whether it is operated for profit or not, cannot survive a valid "dissolution." Pursuant to OCGA § 14-3-1402(b), the trustees had every right to vote to dissolve the College and to transfer its assets intact or piecemeal to other separate and independent educational institutions....
...transferring its assets to the Foundation. It is undisputed that the College's governing documents gave only the Board, and not the Baptist Convention of the State of Georgia (GBC), the right to vote on the College's dissolution. Further, under OCGA § 14-3-1402(b), the Board alone had the right to dissolve the College....