Raleigh Chamber: GA Update: Weekly Legislative Recap And Related News

Press release from the Raleigh Chamber:

8/9/2021

Senate Bill 507: Modify Business Corporation Act

• Section 1 extends existing provisions relating to voting of shares held by a subsidiary to situations in which the subsidiary entity is not a corporation.
• Section 2 clarifies the authority of the board of directors to fix the compensation of directors for services in any capacity as director, codifying a decision of the North Carolina Business Court interpreting this statutory provision.
• Section 3 provides that, except as otherwise fixed in the articles of incorporation or bylaws, a majority of a board of directors constitutes a quorum.
• Section 4 allows the board of directors of a corporation with a single class of shares outstanding to change the corporate name without shareholder approval.
• Section 5 provides that in a proceeding brought in superior court by a shareholder seeking an appraisal, the court must determine whether the shareholder is entitled to appraisal rights, on which issue the shareholder would bear the burden of proof. If the court determines that the shareholder is not entitled to appraisal rights, the court would be required to dismiss the proceeding as to the shareholder.
• Section 6 makes several changes to the law governing corporate records and shareholder inspection rights, includes some of the following:
  • Eliminating the current requirement that particular records be maintained at the corporation's principal office.
  • Requiring all relevant records to be maintained in a manner permitting them to be made available for inspection within a reasonable time.

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This press release was produced by the Raleigh Chamber. The views expressed here are the author’s own.