Iowa Code

Iowa Code § 490.604 (2026)

Fractional shares

✓ current as of July 2026

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1. A corporation may issue fractions of a share or in lieu of doing so may do any of the following:

a. Pay in cash the value of fractions of a share.

b. Issue scrip in registered or bearer form entitling the holder to receive a full share upon surrendering enough scrip to equal a full share.

c. Arrange for disposition of fractional shares by the holders of such shares.

2. Each certificate representing scrip must be conspicuously labeled “scrip” and must contain the information required by section 490.625, subsection 2.

3. The holder of a fractional share is entitled to exercise the rights of a shareholder, including the rights to vote, to receive dividends, and to receive distributions upon dissolution. The holder of scrip is not entitled to any of these rights unless the scrip provides for them.

4. The board of directors may authorize the issuance of scrip subject to any condition, including any of the following:

a. That the scrip will become void if not exchanged for full shares before a specified date.

b. That the shares for which the scrip is exchangeable may be sold and the proceeds paid to the scripholders. 89 Acts, ch 288, §39; 2021 Acts, ch 165, §46, 230 \n 490.605 through 490.619 Reserved.\n\nTue Dec 09 22:07:43 2025 Iowa Code 2026, Chapter 490 (142, 1) 35 BUSINESS CORPORATIONS, §490.621\n\n PART 2 ISSUANCE OF SHARES \n

Notes of Decisions

Cited in 3 cases, 1996–2000 · leading case: Sec. State Bank, Hartley v. Ziegeldorf, 554 N.W.2d 884 (Iowa 1996).

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Sec. State Bank, Hartley v. Ziegeldorf, 554 N.W.2d 884 (Iowa 1996). · cites it 2× “See Iowa Code § 490.604 . The effect of this plan was to squeeze out the minority shareholders.”

Lerner v. Lerner Corp., 750 A.2d 709 (Md. Ct. Spec. App. 2000). “§ 23-1-25-4 (Michie 1999); Iowa Code Ann. § 490.604 (West 1999); Kan.”

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