Virginia Code 13.1-614.8: Commission proceedings regarding validity of corporate actions.
A. Upon application by the corporation, any successor entity to the corporation, a director of the corporation, any shareholder, beneficial shareholder, or unrestricted voting trust beneficial owner of the corporation, including any such shareholder, beneficial shareholder, or unrestricted voting trust beneficial owner as of the date of the defective corporate action ratified under § 13.1-614.3, or any other person claiming to be substantially and adversely affected by a ratification under § 13.1-614.3, the Commission may:
Terms Used In Virginia Code 13.1-614.8
- Beneficial shareholder: means a person that owns the beneficial interest in shares, which may be a record shareholder or a person on whose behalf shares are registered in the name of an intermediary as nominee. See Virginia Code 13.1-603
- Commission: means the State Corporation Commission of Virginia. See Virginia Code 13.1-603
- Corporate action: means any action taken by or on behalf of the corporation, including any action taken by the incorporator, the board of directors, a committee, an officer or agent of the corporation, or the shareholders. See Virginia Code 13.1-614.1
- 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.
- Defective corporate action: means (i) any corporate action purportedly taken that is, and at the time such corporate action was purportedly taken would have been, within the power of the corporation, but is void or voidable due to a failure of authorization, or (ii) an over-issuance of shares. See Virginia Code 13.1-614.1
- Entity: includes any domestic or foreign corporation; any domestic or foreign nonstock corporation; any domestic or foreign unincorporated entity; any estate or trust; and any state, the United States and any foreign government. See Virginia Code 13.1-603
- Person: includes an individual and an entity. See Virginia Code 13.1-603
- Putative shares: means the shares of any class or series of the corporation, including shares issued upon exercise of rights, options, warrants, or other securities convertible into shares of the corporation, or interests with respect to such shares, that were created or issued as a result of a defective corporate action, that (i) but for any failure of authorization would constitute valid shares or (ii) cannot be determined by the board of directors to be valid shares. See Virginia Code 13.1-614.1
- Service of process: The service of writs or summonses to the appropriate party.
- Shareholder: means a record shareholder. See Virginia Code 13.1-603
- Shares: means the units into which the proprietary interests in a corporation are divided. See Virginia Code 13.1-603
- Unrestricted voting trust beneficial owner: means , with respect to any shareholder rights, a voting trust beneficial owner whose entitlement to exercise the shareholder right in question is not inconsistent with the voting trust agreement. See Virginia Code 13.1-603
- Voting trust beneficial owner: means an owner of a beneficial interest in shares of the corporation held in a voting trust established pursuant to subsection A of § Virginia Code 13.1-603
1. Determine the validity and effectiveness of any corporate action or defective corporate action;
2. Determine the validity and effectiveness of any ratification under § 13.1-614.3;
3. Determine the validity of any putative shares; and
4. Modify or waive any of the procedures specified in § 13.1-614.3 or 13.1-614.4 to ratify a defective corporate action.
B. In connection with an action under this section, the Commission may make such findings or orders and take into account any factors or considerations regarding such matters as it deems proper under the circumstances.
C. Service of process of the application under subsection A on the corporation may be made in any manner provided by statutes of the Commonwealth or by rule of the Commission for service on the corporation, and no other party need be joined in order for the Commission to adjudicate the matter. In an action filed by the corporation, the Commission may require notice of the action be provided to other persons specified by the Commission and permit such other persons to intervene in the action.
D. Notwithstanding any other provision of this section or otherwise under applicable law, any action asserting that the ratification of any defective corporate action and any putative shares issued as a result of such defective corporate action should not be effective, or should be effective only on certain conditions, shall be brought in a petition filed within 120 days of the validation effective time.
2019, c. 734.