Iowa Code 490.1003 – Amendment by board of directors and shareholders
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If a corporation has issued shares, an amendment to the articles of incorporation shall be adopted in the following manner:
1. The proposed amendment shall first be adopted by the board of directors.
Terms Used In Iowa Code 490.1003
- Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
- Articles of incorporation: means the articles of incorporation described in section 490. See Iowa Code 490.140
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
- Interest: means either or both of the following rights under the organic law governing an unincorporated entity:a. See Iowa Code 490.140
- Interest holder: means a person who holds of record an interest. See Iowa Code 490.140
- Interest holder liability: means any of the following:
(1) Personal liability for a debt, obligation, or other liability of a domestic or foreign corporation or eligible entity that is imposed on a person by any of the following:(a) Solely by reason of the person's status as a shareholder, member, or interest holder. See Iowa Code 490.140- Person: means a person as defined in section 4. See Iowa Code 490.140
- Proceeding: includes a civil suit and criminal, administrative, and investigatory action. See Iowa Code 490.140
- Quorum: The number of legislators that must be present to do business.
- Shareholder: means a record shareholder. See Iowa Code 490.140
- Shares: means the units into which the proprietary interests in a domestic or foreign corporation are divided. See Iowa Code 490.140
- state: when applied to the different parts of the United States, includes the District of Columbia and the territories, and the words "United States" may include the said district and territories. See Iowa Code 4.1
- Voting group: means all shares of one or more classes or series that under the articles of incorporation or this chapter are entitled to vote and be counted together collectively on a matter at a meeting of shareholders. See Iowa Code 490.140
- written: means any information in the form of a document. See Iowa Code 490.140
2. a. Except as provided in sections 490.1005, 490.1007, and 490.1008, the amendment shall then be approved by the shareholders. In submitting the proposed amendment to the shareholders for approval, the board of directors shall recommend that the shareholders approve the amendment, unless any of the following applies:(1) The board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation.(2) Section 490.826 applies.b. If paragraph “a”, subparagraph (1) or (2) applies, the board must inform the shareholders of the basis for its so proceeding.3. The board of directors may set conditions for the approval of the amendment by the shareholders or the effectiveness of the amendment.4. If the amendment is required to be approved by the shareholders, and the approval is to be given at a meeting, the corporation shall notify each shareholder, regardless of whether entitled to vote, of the meeting of shareholders at which the amendment is to be submitted for approval. The notice must state that the purpose, or one of the purposes, of the meeting is to consider the amendment. The notice must contain or be accompanied by a copy of the amendment.5. Unless the articles of incorporation or bylaws, or the board of directors acting pursuant to subsection 3, require a greater vote or a greater quorum, approval of the amendment requires the approval of the shareholders at a meeting at which a quorum consisting of a majority of the votes entitled to be cast on the amendment exists, and, if any class or series of shares is entitled to vote as a separate group on the amendment, except as provided in section 490.1004, subsection 3, the approval of each such separate voting group at a meeting at which a quorum of the voting group exists consisting of a majority of the votes entitled to be cast on the amendment by that voting group.6. a. If as a result of an amendment of the articles of incorporation one or more shareholders of a domestic corporation would become subject to new interest holder liability, approval of the amendment requires the signing in connection with the amendment, by each such shareholder, of a separate written consent to become subject to such new interest holder liability.b. Paragraph “a” does not apply in the case of a shareholder that already has interest holder liability and the terms and conditions of the new interest holder liability are any of the following:(1) Substantially identical to those of the existing interest holder liability.(2) Substantially identical to those of the existing interest holder liability, other than changes that eliminate or reduce such interest holder liability.7. As used in subsection 6 and section 490.1009, “new interest holder liability” means interest holder liability of a person resulting from an amendment of the articles of incorporation if any of the following applies:a. The person did not have interest holder liability before the amendment becomes effective.b. The person had interest holder liability before the amendment becomes effective, the terms and conditions of which are changed when the amendment becomes effective.