§ 1521. Authorized shares.

685 words·~3 min read·/pa/title-15/chapter-15/1521

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(a)General rule.-- Every business corporation shall have power to create and issue the number of shares stated in its articles. The shares may consist of one class or be divided into two or more classes and one or more series within any class thereof, which classes or series may have full, limited, multiple or fractional or no voting rights and such designations, preferences, limitations and special rights as may be desired.

(b)Provisions specifically authorized.--

(1)Without limiting the authority contained in subsection (a), a corporation, when so authorized in its articles, may issue classes or series of shares:

(i)Subject to the right or obligation of the corporation to redeem any of the shares for the consideration, if any, fixed by or in the manner provided by the articles for the redemption thereof. Unless otherwise provided in the articles, any shares subject to redemption shall be redeemable only pro rata or by lot or by such other equitable method as may be selected by the corporation.

(ii)Entitling the holders thereof to cumulative, noncumulative or partially cumulative dividends.

(iii)Having preference over any other shares as to dividends or assets or both.

(iv)Convertible into shares of any other class or series, or into obligations of the corporation.

(2)Any of the terms of a class or series of shares may be made dependent upon:

(i)Facts ascertainable outside of the articles if the manner in which the facts will operate upon the terms of the class or series is set forth in the articles. Such facts may include, without limitation, actions or events within the control of or determinations made by the corporation or a representative of the corporation.

(ii)Terms incorporated by reference to an existing agreement between the corporation and one or more other parties, or to another document of independent significance, if the articles state that the full text of the agreement or other document is on file at the principal place of business of the corporation and state the address thereof. A corporation that takes advantage of this subparagraph shall furnish a copy of the full text of the agreement or other document, on request and without cost, to any shareholder and, unless it is a closely held corporation, on request and at cost, to any other person.

(3)The articles may confer upon a shareholder a specifically enforceable right to the declaration and payment of dividends, the redemption of shares or the making of any other form of distribution if the distribution is at the time of enforcement then not prohibited by section 1551(b) (relating to limitation). Such a right shall not arise by implication, but only by either an express reference to this section or another express reference to specific enforceability of a distribution.

(c)Additional restrictions upon exercise of corporate powers.-- Additional provisions regulating or restricting the exercise of corporate powers, including provisions requiring the votes of classes or series of shares as conditions to the exercise thereof, may be specified in a bylaw adopted by the shareholders.

(d)Status and rights.-- Shares of a business corporation shall be deemed personal property. Except as otherwise provided by the articles or, when so permitted by subsection (c), by one or more bylaws adopted by the shareholders, each share shall be in all respects equal to every other share. Nothing in this subsection shall require a distribution by way of purchase, redemption or other acquisition of the corporation's shares to be made or offered with respect to all shares or all shares of the same class or series. See section 1906(d)(4) (relating to special treatment of holders of shares of same class or series).

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(Dec. 19, 1990, P.L.834, No.198, eff. imd.; June 22, 2001, P.L.418, No.34, eff. 60 days; Nov. 3, 2022, P.L.1791, No.122, eff. 60 days)

2022 Amendment. Act 122 amended subsecs. (a), (b)(3) and (d).

2001 Amendment. Act 34 amended subsecs. (b)(1) and (2)(i) and (d).

1990 Amendment. Act 198 amended subsec. (b).

Cross References. Section 1521 is referred to in sections 229, 329, 1504, 1906 of this title.

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