Chapter 60 — Private Corporations

2011 EDITION

PRIVATE CORPORATIONS

CORPORATIONS AND PARTNERSHIPS

GENERAL PROVISIONS

(Definitions)

60.001 Definitions

(Filing Documents)

60.004 Filing requirements

60.007 Filing, service, copying and certification fees

60.011 Effective time and date of document

60.014 Correcting filed document

60.016 Forms; rules

60.017 Filing duty of Secretary of State

60.021 Appeal from Secretary of State’s refusal to file document

60.024 Evidentiary effect of copy of filed document

60.027 Certificate of existence or authorization

(Secretary of State)

60.031 Powers

(Notice)

60.034 Notice

INCORPORATION

60.044 Incorporators

60.047 Articles of incorporation

60.051 Incorporation

60.054 Liability for preincorporation transactions

60.057 Organization of corporation

60.061 Bylaws

60.064 Emergency bylaws

PURPOSES AND POWERS

60.074 Purposes

60.077 General powers

60.081 Emergency powers

60.084 Validity of corporate acts

NAME

60.094 Corporate name

60.097 Reserved name

60.101 Registered name

OFFICE AND AGENT

60.111 Registered office and registered agent

60.114 Change of registered office or registered agent

60.117 Resignation of registered agent

60.121 Service on corporation

SHARES AND DISTRIBUTIONS

(Shares)

60.131 Authorized shares

60.134 Terms of class or series determined by board of directors

60.137 Issued and outstanding shares

60.141 Fractional shares

(Issuance of Shares)

60.144 Subscription for shares before incorporation

60.147 Issuance of shares

60.151 Liability of shareholders

60.154 Share dividends

60.157 Share rights, options and warrants

60.161 Form and content of certificates

60.164 Shares without certificates

60.167 Restriction on transfer of shares and other securities

60.171 Expense of issue

(Subsequent Acquisition of Shares by Shareholders and Corporation)

60.174 Preemptive rights of shareholders

60.177 Corporation’s acquisition of its own shares

(Distributions)

60.181 Distributions to shareholders

SHAREHOLDERS

(Meetings)

60.201 Annual meeting

60.204 Special meeting

60.207 Court-ordered meeting

60.209 Meeting chairperson; closing of polls

60.211 Action without meeting

60.214 Notice of meeting

60.217 Waiver of notice

60.219 Adjournment of meeting

60.221 Record date

60.222 Participation at meeting

60.223 Meeting inspectors; duties

(Voting)

60.224 Shareholders’ list for meeting

60.227 Voting entitlement of shares

60.231 Proxies

60.234 Shares held by nominees

60.237 Corporations’ acceptance of votes

60.241 Quorum and voting requirements for voting groups

60.244 Action by single and multiple voting groups

60.247 Modification of quorum or voting requirements

60.251 Voting for directors

(Voting Trusts and Agreements)

60.254 Voting trusts

60.257 Voting agreements

(Derivative Proceedings)

60.261 Derivative proceedings

(Shareholder Agreements)

60.265 Validity of shareholder agreements inconsistent with chapter; purposes; notice of agreement; effect on liability

DIRECTORS AND OFFICERS

(Board of Directors)

60.301 Requirement for and duties of board of directors

60.304 Qualifications of directors

60.307 Number and election of directors

60.311 Election of directors by certain classes of shareholders

60.314 Terms of directors generally

60.317 Staggered terms for directors

60.321 Resignation of directors

60.324 Removal of directors by shareholders

60.327 Removal of directors by judicial proceeding

60.331 Vacancy on board

60.334 Compensation of directors

(Meetings and Action of Board)

60.337 Meetings

60.341 Action without meeting

60.344 Notice of meeting

60.347 Waiver of notice

60.351 Quorum and voting

60.354 Committees; powers; limitations

(Standards of Conduct)

60.357 General standards for directors

60.361 Conflict of interest

60.364 Loans to directors

60.367 Liability for unlawful distributions

(Officers)

60.371 Required officers

60.374 Duties of officers

60.377 Standard of conduct for officers

60.381 Resignation and removal of officers

60.384 Contract right of officers

(Indemnification)

60.387 Definitions for ORS 60.387 to 60.414

60.391 Authority to indemnify directors

60.394 Mandatory indemnification

60.397 Payment of director’s expenses in connection with proceeding

60.401 Court-ordered indemnification

60.404 Determination and authorization of indemnification

60.407 Indemnification of officers, employees and agents

60.411 Insurance

60.414 Application of ORS 60.387 to 60.411

AMENDMENT OF ARTICLES OF INCORPORATION AND BYLAWS

(Amendment of Articles of Incorporation)

60.431 Authority

60.434 Amendment by board of directors

60.437 Amendment by board of directors and shareholders

60.441 Voting on amendments by voting groups

60.444 Amendment before issuance of shares

60.447 Articles of amendment

60.451 Restated articles of incorporation

60.454 Amendment pursuant to reorganization

60.457 Effect of amendment

(Amendment of Bylaws)

60.461 Amendment or repeal by board of directors or shareholders

60.464 Bylaw increasing quorum or voting requirement for shareholders

60.467 Bylaw increasing quorum or voting requirement for directors

CONVERSION, MERGER AND SHARE EXCHANGE

60.470 Definitions for ORS 60.470 to 60.501

60.472 Conversion

60.474 Action on plan of conversion

60.476 Articles of conversion

60.478 Effect of conversion; assumed business name

60.481 Merger

60.484 Share exchange

60.487 Action on plan of merger or share exchange

60.491 Merger with subsidiary

60.494 Articles of merger or share exchange

60.497 Effect of merger or share exchange

60.501 Merger or share exchange with foreign corporation

SALE OF ASSETS

60.531 Sale of assets in regular course of business; mortgage of assets

60.534 Sale of assets other than in regular course of business

DISSENTERS’ RIGHTS

(Right to Dissent and Obtain Payment for Shares)

60.551 Definitions for ORS 60.551 to 60.594

60.554 Right to dissent

60.557 Dissent by nominees and beneficial owners

(Procedure for Exercise of Rights)

60.561 Notice of dissenters’ rights

60.564 Notice of intent to demand payment

60.567 Dissenters’ notice

60.571 Duty to demand payment

60.574 Share restrictions

60.577 Payment

60.581 Failure to take action

60.584 After-acquired shares

60.587 Procedure if shareholder dissatisfied with payment or offer

(Judicial Appraisal of Shares)

60.591 Court action

60.594 Court costs and counsel fees

DISSOLUTION

(Voluntary Dissolution)

60.621 Dissolution by incorporators or initial directors

60.624 Voluntary dissolution by consent of shareholders

60.627 Dissolution by board of directors and shareholders

60.631 Articles of dissolution

60.634 Revocation of dissolution

60.637 Effect of dissolution

60.641 Known claims against dissolved corporation

60.644 Unknown claims against dissolved corporation

60.645 Enforcement of claims against dissolved corporation

(Administrative Dissolution)

60.647 Grounds for administrative dissolution

60.651 Procedure; effect of administrative dissolution

60.654 Reinstatement following administrative dissolution

60.657 Appeal from denial of reinstatement

(Judicial Dissolution)

60.661 Grounds for judicial dissolution

60.664 Procedure for judicial dissolution

60.667 Receivership or custodianship

60.671 Judgment of dissolution

(Disposition of Assets)

60.674 Asset distribution; deposit with Department of State Lands; claims

FOREIGN CORPORATIONS

(Authority to Transact Business)

60.701 Authority to transact business required

60.704 Consequences of transacting business without authority

60.707 Application for authority to transact business

60.711 Amendment to application for authority

60.714 Effect of authority

60.717 Corporate name of foreign corporation

60.721 Registered office and registered agent of foreign corporation

60.724 Change of registered office or registered agent of foreign corporation

60.727 Resignation of registered agent of foreign corporation

60.731 Service on foreign corporation

(Withdrawal)

60.734 Withdrawal of foreign corporation

(Revocation of Authority)

60.737 Grounds for revocation

60.741 Procedure for and effect of revocation

60.744 Appeal from revocation

60.747 Reinstatement of authority

RECORDS AND REPORTS

(Records)

60.771 Corporate records

60.774 Inspection of records by shareholders

60.777 Scope of inspection right

60.781 Court-ordered inspection

(Reports)

60.784 Reports to shareholders of indemnification

60.787 Annual report; updates; rules

REGULATION OF CORPORATE ACQUISITIONS

60.801 Definitions for ORS 60.801 to 60.816

60.804 Applicability of ORS 60.801 to 60.816

60.807 Voting rights of control shares

60.810 Acquiring person statement; shareholder meeting

60.813 Dissenters’ rights

60.816 Short title

BUSINESS COMBINATIONS WITH INTERESTED SHAREHOLDERS

60.825 Definitions for ORS 60.825 to 60.845

60.830 Ownership of shares

60.835 Prohibited business combinations

60.840 Exceptions to ORS 60.835

60.845 Greater vote of shareholders prohibited

MISCELLANEOUS

60.951 Short title

60.952 Court proceeding by shareholder in close corporation; conditions; court-ordered remedies; share purchase; expenses

60.954 Reservation of power to amend or repeal

60.957 Application to existing domestic corporation

60.961 Application to qualified foreign corporations

60.964 Saving provisions

60.967 Corporations incorporated under special acts

60.971 Severability

PENALTY

60.992 Penalty for signing false document

GENERAL PROVISIONS

(Definitions)

60.001 Definitions. As used in this chapter:

(1) “Anniversary” means that day each year exactly one or more years after:

(a) The date of filing by the Secretary of State of the articles of incorporation in the case of a domestic corporation.

(b) The date of filing by the Secretary of State of an application for authority to transact business in the case of a foreign corporation.

(2) “Articles of incorporation” include amended and restated articles of incorporation, articles of conversion and articles of merger.

(3) “Authorized shares” means the shares of all classes a domestic or foreign corporation is authorized to issue.

(4) “Conspicuous” means so written that a reasonable person against whom the writing is to operate should have noticed the writing. For example, a writing printed in italics, boldface or contrasting color, typed in capitals or underlined is conspicuous.

(5) “Corporation” or “domestic corporation” means a corporation for profit incorporated under or subject to the provisions of this chapter that is not a foreign corporation.

(6) “Delivery” means any method of delivery used in conventional commercial practice, including delivery by hand, mail, commercial delivery and electronic transmission.

(7) “Distribution” means a direct or indirect transfer of money or other property, except of a corporation’s own shares, or incurrence of indebtedness by a corporation to or for the benefit of the corporation’s shareholders in respect of any of the corporation’s shares. A distribution may be in the form of a declaration or payment of a dividend, a purchase, redemption or other acquisition of shares, a distribution of indebtedness, or otherwise.

(8) “Domestic limited liability company” means an entity that is an unincorporated association having one or more members and that is organized under ORS chapter 63.

(9) “Domestic nonprofit corporation” means a corporation not for profit incorporated under ORS chapter 65.

(10) “Domestic professional corporation” means a corporation organized under ORS chapter 58 for the purpose of rendering professional services and for the purposes provided under ORS chapter 58.

(11) “Electronic signature” has the meaning given that term in ORS 84.004.

(12) “Electronic transmission” means any process of communication that does not directly involve the physical transfer of paper and that is suitable for the retention, retrieval and reproduction of information by the recipient.

(13) “Employee” includes an officer but not a director, unless the director accepts duties that make the director also an employee.

(14) “Entity” includes a corporation, foreign corporation, nonprofit corporation, profit and nonprofit unincorporated association, business trust, partnership, two or more persons having a joint or common economic interest, any state, the United States, a federally recognized Native American or American Indian tribal government and any foreign government.

(15) “Foreign corporation” means a corporation for profit incorporated under laws other than the laws of this state.

(16) “Foreign limited liability company” means an entity that is an unincorporated association organized under laws other than the laws of this state and that is organized under a statute under which an association may be formed that affords to each of the entity’s members limited liability with respect to liabilities of the entity.

(17) “Foreign nonprofit corporation” means a corporation not for profit organized under laws other than the laws of this state.

(18) “Foreign professional corporation” means a professional corporation organized under laws other than the laws of this state.

(19) “Governmental subdivision” includes an authority, county, district and municipality.

(20) “Includes” denotes a partial definition.

(21) “Individual” means a natural person. “Individual” includes the estate of an incompetent individual or a deceased individual.

(22) “Means” denotes an exhaustive definition.

(23) “Office,” when used to refer to the administrative unit directed by the Secretary of State, means the office of the Secretary of State.

(24) “Person” includes individual and entity.

(25) “Principal office” means the office, in or out of this state, where the principal executive offices of a domestic or foreign corporation are located and designated in the annual report or application for authority to transact business in this state.

(26) “Proceeding” includes civil, criminal, administrative and investigatory action.

(27) “Record date” means the date established under this chapter on which a corporation determines the identity of the corporation’s shareholders and their shareholdings for purposes of this chapter. The determinations shall be made as of the close of business on the record date unless another time for doing so is specified when the record date is fixed.

(28) “Shares” means the units into which the proprietary interest in a corporation are divided.

(29) “Shareholder” means the person in whose name shares are registered in the records of a corporation or the beneficial owner of shares to the extent of the rights granted by a nominee certificate on file with a corporation.

(30) “Signature” includes any manual, facsimile, conformed or electronic signature.

(31) “State,” when referring to a part of the United States, includes a state, commonwealth, territory and insular possession of the United States and the agencies and governmental subdivisions of the state, commonwealth, territory or insular possession.

(32) “Subscriber” means a person who subscribes for shares in a corporation, whether before or after incorporation.

(33) “United States” includes a district, authority, bureau, commission, department and any other agency of the United States.

(34) “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. All shares entitled by the articles of incorporation or this chapter to vote generally on the matter are for that purpose a single voting group. [1987 c.414 §64; 1989 c.1040 §2; 1999 c.362 §3; 1999 c.371 §2; 2001 c.104 §16; 2001 c.315 §32; 2003 c.80 §1; 2005 c.107 §1; 2009 c.14 §1; 2009 c.294 §4]

(Filing Documents)

60.004 Filing requirements. (1) A document must satisfy the requirements of this section except as any other section modifies these requirements, to be entitled to filing by the Secretary of State.

(2) This chapter must require or permit filing the document with the office.

(3) The document shall contain the information required by this chapter. It may contain other information as well.

(4) The document must be legible.

(5) The document must be in the English language. The certificate of existence required of foreign corporations need not be in English if accompanied by a reasonably authenticated English translation.

(6) The document must be executed:

(a) By the chair of the board of directors of a domestic or foreign corporation, its president or another of its officers;

(b) If directors have not been selected or before the organizational meeting, by an incorporator; or

(c) If the corporation is in the hands of a receiver, trustee or other court-appointed fiduciary, by that fiduciary, receiver or trustee.

(7) The person executing the document shall state beneath or opposite the signature the name of the person and the capacity in which the person signs. The document may, but is not required to contain:

(a) The corporate seal;

(b) An attestation by the secretary or an assistant secretary; or

(8) If the Secretary of State has prescribed a mandatory form for the document under ORS 60.016, the document must be in or on the prescribed form.

(9) The document must be delivered to the Office of the Secretary of State and must be accompanied by the required fees.

(10) Delivery of a document to the office is accomplished only when the document is actually received by the office. [1987 c.52 §4; 1989 c.1040 §3; 1999 c.486 §5]

60.007 Filing, service, copying and certification fees. The Secretary of State shall collect the fees described in ORS 56.140 for each document delivered for filing under this chapter and for process served on the secretary under this chapter. The secretary may collect the fees described in ORS 56.140 for copying any public record under this chapter, certifying the copy or certifying to other facts of record under this chapter. [1987 c.52 §6; 1989 c.383 §3; 1989 c.1040 §36; 1991 c.132 §3; 1999 c.362 §§4,4a]

60.010 [Repealed by 1953 c.549 §138]

60.011 Effective time and date of document. (1) Except as provided in subsection (2) of this section and ORS 60.014 (3), a document accepted for filing is effective on the date it is filed by the Secretary of State and at the time, if any, specified in the document as its effective time or at 12:01 a.m. on that date if no effective time is specified.

(2) If a document specifies a delayed effective time and date, the document becomes effective at the time and date specified. If a document specifies a delayed effective date but no time, the document becomes effective at 12:01 a.m. on that date. A delayed effective date for a document may not be later than the 90th day after the date it is filed. [1987 c.52 §7; 1989 c.1040 §4]

60.014 Correcting filed document. (1) A domestic or foreign corporation may correct a document filed by the Secretary of State, other than an annual report, if the document contains an incorrect statement or was defectively executed, attested, sealed, verified or acknowledged.

(2) A domestic or foreign corporation shall correct a document by delivering articles of correction to the office. The articles shall include the following:

(a) A description of the document, including its filing date, or a copy of the document.

(b) The incorrect statement and the reason it is incorrect, or a description of the manner in which the execution, attestation, seal, verification or acknowledgment is defective.

(3) Articles of correction are effective on the effective date of the document they correct except as to persons relying on the uncorrected document and adversely affected by the correction. As to those persons, articles of correction are effective when filed. [1987 c.52 §8]

60.016 Forms; rules. Upon request, the Secretary of State may furnish forms for documents required or permitted to be filed by this chapter. The Secretary of State may by rule require the use of the forms. [1987 c.52 §5; 1995 c.215 §6]

60.017 Filing duty of Secretary of State. (1) If a document delivered to the Office of the Secretary of State for filing satisfies the requirements of ORS 60.004, the Secretary of State shall file it.

(2) The Secretary of State files a document by indicating thereon that it has been filed by the Secretary of State and the date of filing. After filing a document, except as provided in ORS 60.114, 60.117, 60.671, 60.674, 60.724, 60.727 and 60.787, the Secretary of State shall return an acknowledgment of filing to the domestic or foreign corporation or its representative.

(3) If the Secretary of State refuses to file a document, the Secretary of State shall return it to the domestic or foreign corporation or its representative within 10 business days after the document was delivered together with a brief written explanation of the reason for the refusal.

(4) The Secretary of State’s duty to file documents under this section is ministerial. The Secretary of State is not required to verify or inquire into the legality or truth of any matter included in any document delivered to the office for filing. The Secretary of State’s filing or refusing to file a document does not:

(a) Affect the validity or invalidity of the document in whole or part; or

(b) Relate to the correctness or incorrectness of information contained in the document.

(5) The Secretary of State’s refusal to file a document does not create a presumption that the document is invalid or that information contained in the document is incorrect. [1987 c.52 §9; 1989 c.1040 §5; 1999 c.486 §6]

60.020 [Repealed by 1953 c.549 §138]

60.021 Appeal from Secretary of State’s refusal to file document. If the Secretary of State refuses to file a document delivered to the office for filing, the domestic or foreign corporation, in addition to any other legal remedy which may be available, shall have the right to appeal from such order pursuant to the provisions of ORS chapter 183. [1987 c.52 §10]

60.024 Evidentiary effect of copy of filed document. (1) A certificate attached to a copy of a document filed by the Secretary of State, bearing the Secretary of State’s signature, which may be in facsimile, is conclusive evidence that the original document or a facsimile thereof, is on file with the office.

(2) The provisions of ORS 56.110 shall apply to all documents filed pursuant to this chapter. [1987 c.52 §11]

60.027 Certificate of existence or authorization. (1) Anyone may apply to the Secretary of State to furnish a certificate of existence for a domestic corporation or a certificate of authorization for a foreign corporation.

(2) A certificate of existence or authorization when issued means that:

(a) The domestic corporation’s corporate name or the foreign corporation’s corporate name is registered in this state;

(b) The domestic corporation is duly incorporated under the law of this state or the foreign corporation is authorized to transact business in this state;

(c) All fees payable to the Secretary of State under this chapter have been paid, if nonpayment affects the existence or authorization of the domestic or foreign corporation;

(d) An annual report required by ORS 60.787 has been filed by the Secretary of State within the preceding 14 months; and

(e) Articles of dissolution or an application for withdrawal have not been filed by the Secretary of State.

(3) A person may apply to the Secretary of State to issue a certificate covering any fact of record.

(4) Subject to any qualification stated in the certificate, a certificate of existence or authorization issued by the Secretary of State may be relied upon as conclusive evidence that the domestic or foreign corporation is in existence or is authorized to transact business in this state. [1987 c.52 §12]

60.030 [Repealed by 1953 c.549 §138]

(Secretary of State)

60.031 Powers. The Secretary of State has the power reasonably necessary to perform the duties required of the Secretary of State by this chapter. [1987 c.52 §13]

(Notice)

60.034 Notice. (1) Except as provided in subsection (3) of this section, notice under this chapter shall be in writing unless oral notice is specifically permitted under the circumstances by the articles of incorporation or bylaws. Notice by electronic transmission, other than voice mail, is written notice.

(2)(a) Notice may be communicated in person, by mail or other method of delivery, by telephone or by voice mail or other electronic transmission.

(b) If a form of notice described in paragraph (a) of this subsection is impracticable, notice may be communicated by a newspaper of general circulation in the area where published, or by radio, television or other form of public broadcast communication.

(3) All notices required by this chapter by a corporation to its shareholders shall be in writing. Written notice by a domestic or foreign corporation to a shareholder or director, if in a comprehensible form, is effective:

(a) Upon deposit in the United States mail if it is mailed postpaid and is correctly addressed to the shareholder’s address shown in the corporation’s current record of shareholders or the director’s address shown in the corporation’s records;

(b) When electronically transmitted to the shareholder in a manner authorized in writing by the shareholder; or

(4) Written notice to a domestic or foreign corporation authorized to transact business in this state may be addressed to its registered agent at its registered office or to the domestic or foreign corporation or its president or secretary at its principal office or mailing address as shown in the records of the office.

(5) Except as provided in subsection (3) of this section, or unless the articles of incorporation or bylaws provide otherwise for notices to directors, written notice, if in a comprehensible form, is effective at the earliest of the following:

(a) When received;

(b) Five days after its deposit in the United States mail, as evidenced by the postmark, if mailed postpaid and correctly addressed; or

(c) On the date shown on the return receipt, if sent by registered or certified mail, return receipt requested and the receipt is signed by or on behalf of the addressee.

(6) Oral notice is effective when communicated if communicated in a comprehensible manner.

(7) If this chapter prescribes notice requirements for particular circumstances, those requirements govern. If articles of incorporation or bylaws prescribe notice requirements, not inconsistent with this section or other provisions of this chapter, those requirements govern. [1987 c.52 §14; 1989 c.1040 §6; 2003 c.80 §2]

60.040 [Repealed by 1953 c.549 §138]

INCORPORATION

60.044 Incorporators. One or more individuals 18 years of age or older, a domestic or foreign corporation, a partnership or an association may act as incorporators of a corporation by delivering articles of incorporation to the office for filing. [1987 c.52 §15]

60.047 Articles of incorporation. (1) The articles of incorporation shall set forth:

(a) A corporate name for the corporation that satisfies the requirements of ORS 60.094;

(b) The number of shares the corporation is authorized to issue;

(c) The address, including street and number, and mailing address, if different, of the corporation’s initial registered office and the name of its initial registered agent at that office;

(d) The name and address of each incorporator; and

(e) A mailing address to which notices, as required by this chapter, may be mailed until an address has been designated by the corporation in its annual report.

(2) The articles of incorporation may set forth:

(a) The names of the initial directors;

(b) The addresses of the initial directors;

(A) The purpose or purposes for which the corporation is organized;

(B) Managing the business and regulating the affairs of the corporation;

(D) A par value for authorized shares or classes of shares;

(d) A provision eliminating or limiting the personal liability of a director to the corporation or its shareholders for monetary damages for conduct as a director, provided that no such provision shall eliminate or limit the liability of a director for any act or omission occurring prior to the date when such provision becomes effective and such provision shall not eliminate or limit the liability of a director for:

(A) Any breach of the director’s duty of loyalty to the corporation or its shareholders;

(B) Acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;

(D) Any transaction from which the director derived an improper personal benefit;

(e) A provision authorizing or directing the corporation to conduct the business of the corporation in a manner that is environmentally and socially responsible; and

(f) Any provision that under this chapter is required or permitted to be set forth in the bylaws.

(3) The articles of incorporation need not set forth any of the corporate powers enumerated in this chapter. [1987 c.52 §16; 1989 c.1040 §7; 1991 c.883 §1; 2007 c.254 §1]

60.050 [Repealed by 1953 c.549 §138]

60.051 Incorporation. (1) Unless a delayed effective date is specified, the corporate existence begins when the articles of incorporation are filed by the Secretary of State.

(2) The Secretary of State’s filing of the articles of incorporation is conclusive proof that the incorporators satisfied all conditions precedent to incorporation except in a proceeding by the state to cancel or revoke the incorporation or involuntarily dissolve the corporation. [1987 c.52 §17]

60.054 Liability for preincorporation transactions. All persons purporting to act as or on behalf of a corporation, knowing there was no incorporation, are jointly and severally liable for all liabilities created while so acting. [1987 c.52 §18]

60.057 Organization of corporation. (1) After incorporation, if initial directors are named in the articles of incorporation, the initial directors shall hold an organizational meeting at the call of a majority of the directors to complete the organization of the corporation by appointing officers, adopting bylaws and carrying on any other business brought before the meeting.

(2) After incorporation, if initial directors are not named in the articles, the incorporator or incorporators shall hold an organizational meeting at the call of a majority of the incorporators to elect directors and complete the organization of the corporation or to elect a board of directors who shall complete the organization of the corporation.

(3) Action required or permitted by this chapter to be taken by incorporators at an organizational meeting may be taken without a meeting if the action taken is evidenced by one or more written consents describing the action taken and signed by each incorporator.

(4) An organizational meeting may be held in or out of this state. [1987 c.52 §19]

60.060 [Repealed by 1953 c.549 §138]

60.061 Bylaws. (1) The incorporators or board of directors of a corporation shall adopt initial bylaws for the corporation.

(2) The bylaws of a corporation may contain any provision for managing the business and regulating the affairs of the corporation that is not inconsistent with law or the articles of incorporation. [1987 c.52 §20]

60.064 Emergency bylaws. (1) Unless the articles of incorporation provide otherwise, the board of directors of a corporation may adopt bylaws to be effective only in an emergency defined in subsection (4) of this section. The emergency bylaws, which are subject to amendment or repeal by the shareholders, may contain all provisions necessary for managing the corporation during the emergency, including:

(a) Procedures for calling a meeting of the board of directors;

(b) Quorum requirements for the meeting; and

(2) All provisions of the regular bylaws consistent with the emergency bylaws remain effective during the emergency. The emergency bylaws are not effective after the emergency ends.

(3) Corporate action taken in good faith in accordance with the emergency bylaws binds the corporation and may not be used to impose liability on a corporate director, officer, employee or agent.

(4) An emergency exists for purposes of this section if a quorum of the corporation’s directors cannot readily be assembled because of some catastrophic event. [1987 c.52 §21]

60.070 [Repealed by 1953 c.549 §138]

PURPOSES AND POWERS

60.074 Purposes. (1) Every corporation incorporated under this chapter has the purpose of engaging in any lawful business unless a more limited purpose is set forth in the articles of incorporation.

(2) A business that is subject to regulation under another statute of this state may not be incorporated under this chapter if such business is required to be organized under such other statute. [1987 c.52 §22; 1989 c.1040 §8]

60.077 General powers. (1) Unless its articles of incorporation provide otherwise, every corporation has perpetual duration and succession in its corporate name.

(2) Unless its articles of incorporation provide otherwise, every corporation has the same powers as an individual to do all things necessary or convenient to carry out its business and affairs, including without limitation, power to:

(a) Sue and be sued and complain and defend in its corporate name;

(b) Have a corporate seal, which may be altered at will, and use it or a facsimile thereof, by impressing, affixing or reproducing it in any other manner;

(c) Make and amend bylaws, not inconsistent with its articles of incorporation or with the laws of this state for managing the business and regulating the affairs of the corporation;

(d) Purchase, receive, lease or otherwise acquire, and own, hold, improve, use and otherwise deal with real or personal property, or any interest in property, wherever located;

(e) Sell, convey, mortgage, pledge, lease, exchange and otherwise dispose of all or any part of its property;

(f) Purchase, receive, subscribe for, acquire, own, hold, vote, use, sell, mortgage, lend, pledge or otherwise dispose of and deal in and with shares or other interests in, or obligations of, any other entity;

(g) Make contracts and guarantees, incur liabilities, borrow money, issue its notes, bonds and other obligations that may be convertible into other securities of the corporation or include the option to purchase other securities of the corporation and secure any of its obligations by mortgage or pledge of any of its property, franchises or income;

(h) Lend money, invest and reinvest corporate funds and receive and hold real and personal property as security for repayment;

(i) Be a promoter, partner, member, associate or manager of any partnership, joint venture, trust or other entity;

(j) Conduct its business, locate offices and exercise the powers granted by this chapter within or without this state;

(k) Elect directors and appoint officers, employees and agents of the corporation;

(L) Define directors’, officers’, employees’ and agents’ duties, fix their compensation and lend them money and credit;

(m) Pay pensions and establish pension plans, share option plans and benefit or incentive plans for any or all of its current or former directors, officers, employees and agents;

(n) Make donations for the public welfare or for charitable, scientific or educational purposes;

(o) Transact any lawful business that will aid governmental policy; and

(p) Make payment or donations or do any other act, not inconsistent with law, that furthers the business and affairs of the corporation. [1987 c.52 §23]

60.080 [Repealed by 1953 c.549 §138]

60.081 Emergency powers. (1) In anticipation of or during an emergency defined in subsection (4) of this section, the board of directors of a corporation may:

(a) Modify lines of succession to accommodate the incapacity of any director, officer, employee or agent; and

(b) Relocate the principal office, designate alternative principal offices or regional offices or authorize the officers to do so.

(2) During an emergency defined in subsection (4) of this section, unless emergency bylaws provide otherwise:

(a) Notice of a meeting of the board of directors need be given only to those directors whom it is practicable to reach and may be given in any practicable manner, including by publication and radio.

(b) One or more officers of the corporation present at a meeting of the board of directors may be deemed to be directors for the meeting, in order of the officer’s rank and within the same rank in order of seniority, as necessary to achieve a quorum.

(3) Corporate action taken in good faith during an emergency under this section to further the ordinary business affairs of the corporation:

(a) Binds the corporation; and

(b) May not be used to impose liability on a corporate director, officer, employee or agent.

(4) An emergency exists for purposes of this section if a quorum of the corporation’s directors cannot readily be assembled because of some catastrophic event. [1987 c.52 §24]

60.084 Validity of corporate acts. (1) Except as provided in subsection (2) of this section, the validity of corporate action may not be challenged on the ground that the corporation lacks or lacked power to act.

(2) A corporation’s power to act may be challenged:

(a) In a proceeding by a shareholder against the corporation to enjoin the act;

(b) In a proceeding by the corporation, directly, derivatively, or through a receiver, trustee or other legal representative against an incumbent or former director, officer, employee or agent of the corporation; or

(3) In a shareholder’s proceeding under subsection (2)(a) of this section to enjoin an unauthorized corporate act, the court may enjoin or set aside the act, if equitable and if all affected persons are parties to the proceeding, and may award damages for loss other than anticipated profits suffered by the corporation or another party because of enjoining the unauthorized act. [1987 c.52 §25]

60.090 [Repealed by 1953 c.549 §138]

NAME

60.094 Corporate name. (1) A corporate name shall contain one or more of the words “corporation,” “incorporated,” “company” or “limited” or an abbreviation of one or more of those words.

(2) A corporate name shall not contain the word “cooperative.”

(3) A corporate name shall be written in the alphabet used to write the English language and may include Arabic and Roman numerals and incidental punctuation.

(4) A corporate name shall be distinguishable upon the records of the office from any other corporate name, professional corporate name, nonprofit corporate name, cooperative name, limited partnership name, business trust name, reserved name, registered corporate name or assumed business name of active record with the office.

(5) The corporate name need not satisfy the requirement of subsection (4) of this section if the applicant delivers to the office a certified copy of a final judgment of a court of competent jurisdiction that finds that the applicant has a prior or concurrent right to use the corporate name in this state.

(6) The provisions of this section do not prohibit a corporation from transacting business under an assumed business name.

(7) The provisions of this section do not:

(a) Abrogate or limit the law governing unfair competition or unfair trade practices; or

(b) Derogate from the common law, the principles of equity or the statutes of this state or of the United States with respect to the right to acquire and protect trade names. [1987 c.52 §26]

60.097 Reserved name. (1) A person may apply to the office to reserve a corporate name. The application must set forth the name and address of the applicant and the name proposed to be reserved.

(2) If the Secretary of State finds that the corporate name applied for conforms to ORS 60.094, the Secretary of State shall reserve the name for the applicant for a 120-day period.

(3) A person may transfer the reservation of a corporate name to another person by delivering to the office a notice of the transfer executed by the person for whom the name was reserved and specifying the name and address of the transferee. [1987 c.52 §27]

60.100 [Amended by 1953 c.549 §138; renumbered 57.815]

60.101 Registered name. (1) A foreign corporation may apply to the office to register its corporate name.

(2) The application must set forth the corporate name, the state or country of its incorporation, the date of its incorporation and a brief description of the nature of the business in which it is engaged and a statement that it is not carrying on or doing business in the State of Oregon. The application must be accompanied by a certificate of existence or a document of similar import current within 60 days of delivery, duly authenticated by the official having custody of corporate records in the state or country under whose law it is incorporated.

(3) If the Secretary of State finds that the name conforms to ORS 60.094 the Secretary of State shall register the name effective for one year. [1987 c.52 §28]

60.110 [Repealed by 1953 c.549 §138]

OFFICE AND AGENT

60.111 Registered office and registered agent. (1) Each corporation shall continuously maintain in this state a registered agent and registered office that may be, but need not be, the same as any of its places of business.

(2) A registered agent shall be:

(a) An individual who resides in this state and whose business office is identical to the registered office;

(b) A domestic corporation, domestic limited liability company, domestic professional corporation or domestic nonprofit corporation whose business office is identical to the registered office; or

(c) A foreign corporation, foreign limited liability company, foreign professional corporation or foreign nonprofit corporation authorized to transact business in this state whose business office is identical to the registered office. [1987 c.52 §29; 2001 c.315 §24]

60.114 Change of registered office or registered agent. (1) A corporation may change its registered office or registered agent by delivering to the office of the Secretary of State for filing a statement of change that sets forth:

(a) The name of the corporation;

(b) If the registered office is to be changed, the address including street and number of the new registered office;

(c) If the registered agent is to be changed, the name of the new registered agent and that the new agent has consented to the appointment; and

(d) That after the change or changes are made the street addresses of its registered office and the business office of its registered agent will be identical.

(2) If a registered agent changes the street address of the agent’s business office, the registered agent shall change the street address of the registered office of the corporation for which the agent is the registered agent by notifying the corporation in writing of the change and signing, either manually or in facsimile, and delivering to the office of the Secretary of State a statement that complies with the requirements of subsection (1) of this section and recites that the corporation has been notified of the change.

(3) The filing of the statement by the Secretary of State shall terminate the existing registered office or agent, or both, on the effective date of the filing and establish the newly appointed registered office or agent, or both, as that of the corporation. [1987 c.52 §30]

60.117 Resignation of registered agent. (1) A registered agent may resign as agent upon delivering a signed statement to the office and giving notice in the form of a copy of the statement to the corporation. The statement may include a statement that the registered office is also discontinued.

(2) Upon delivery of the signed statement, the Secretary of State shall file the resignation statement. The copy of the statement given to the corporation under subsection (1) of this section shall be addressed to the corporation at the corporation’s mailing address or the corporation’s principal office as shown by the records of the office of the Secretary of State.

(3) The agency appointment is terminated and the registered office discontinued, if so provided, on the 31st day after the date on which the statement was filed by the Secretary of State, unless the corporation shall sooner appoint a successor registered agent as provided in ORS 60.114, thereby terminating the capacity of such agent. [1987 c.52 §31; 1993 c.190 §1]

60.120 [Repealed by 1953 c.549 §138]

60.121 Service on corporation. (1) The registered agent appointed by a corporation shall be an agent of the corporation upon whom any process, notice or demand required or permitted by law to be served upon the corporation may be served.

(2) The Secretary of State shall be an agent of a corporation including a dissolved corporation upon whom any such process, notice or demand may be served whenever the corporation fails to appoint or maintain a registered agent in this state or whenever the corporation’s registered agent cannot with reasonable diligence be found at the registered office.

(3) Service shall be made on the Secretary of State by:

(a) Serving the Secretary of State or a clerk on duty at the office a copy of the process, notice or demand, with any papers required by law to be delivered in connection with the service, and the required fee for each party being served or by mailing to the office a copy of the process, notice or demand and the required fee for each party being served by certified or registered mail;

(b) Transmittal by the person instituting the proceedings of notice of the service on the Secretary of State and copy of the process, notice or demand and accompanying papers to the corporation being served by certified or registered mail:

(A) At the last registered office of the corporation as shown by the records on file in the office of the Secretary of State; and

(B) At such address the use of which the person initiating the proceedings knows or, on the basis of reasonable inquiry, has reason to believe is most likely to result in actual notice; and

(c) Filing with the appropriate court or other body, as part of the return of service, the return receipt of mailing and an affidavit of the person initiating the proceedings stating that this section has been complied with.

(4) The Secretary of State shall keep a record of all processes, notices and demands served upon the Secretary of State under this section.

(5) After completion of initial service upon the Secretary of State, no additional documents need be served upon the Secretary of State to maintain jurisdiction in the same proceeding or to give notice of any motion or provisional process.

(6) Nothing contained in this section shall limit or affect the right to serve any process, notice or demand required or permitted by law to be served upon a corporation in any other manner now or hereafter permitted by law, or enlarge the purposes for which service on the Secretary of State is permitted where such purposes are limited by other provisions of law. [1987 c.52 §32; 2007 c.71 §16]

60.130 [Repealed by 1953 c.549 §138]

SHARES AND DISTRIBUTIONS

(Shares)

60.131 Authorized shares. (1) The articles of incorporation must prescribe the classes of shares and the number of shares of each class that the corporation is authorized to issue. If more than one class of shares is authorized, the articles of incorporation must prescribe a distinguishing designation for each class, and prior to the issuance of shares of a class, the preferences, limitations and relative rights of that class must be described in the articles of incorporation. All shares of a class must have preferences, limitations and relative rights identical to those of other shares of the same class except to the extent otherwise permitted by ORS 60.134 and 60.157.

(2) If the articles of incorporation authorize only one class of shares, that class has unlimited voting rights and rights to receive the net assets of the corporation upon dissolution. If the articles of incorporation authorize more than one class of shares, then one or more classes of shares must together have unlimited voting rights, and one or more classes of shares which may be the same class or classes as those with voting rights, must together be entitled to receive the net assets of the corporation upon dissolution.

(3) The articles of incorporation may authorize one or more classes of shares that:

(a) Have special, conditional or limited voting rights, or no voting rights, except to the extent prohibited by this chapter;

(b) Are redeemable or convertible as specified in the articles of incorporation:

(A) At the option of the corporation, the shareholder or another person or upon the occurrence of a designated event;

(B) For cash, indebtedness, securities or other property; or

(C) In a designated amount or in an amount determined in accordance with a designated formula or by reference to extrinsic data or events;

(c) Entitle the holders to distributions calculated in any manner, including dividends that may be cumulative, noncumulative or partially cumulative; or

(d) Have preference over any other class of shares with respect to distributions, including dividends and distributions upon the dissolution of the corporation.

(4) The description of the designations, preferences, limitations and relative rights of share classes in subsection (3) of this section is not exhaustive. [1987 c.52 §33; 1989 c.4 §9; 1989 c.1040 §9]

60.134 Terms of class or series determined by board of directors. (1) If the articles of incorporation so provide, the board of directors may determine, in whole or part, the preferences, limitations and relative rights, subject to the requirements of ORS 60.131, of any class of shares before the issuance of any shares of that class or one or more series within a class before the issuance of any shares of that series.

(2) Each series of a class must be given a distinguishing designation.

(3) All shares of a series must have preferences, limitations and relative rights identical with those of other shares of the same series and, except to the extent otherwise provided in the description of the series, of those of other series of the same class.

(4) Before issuing any shares of a class or series created under this section, the corporation must deliver to the office for filing, articles of amendment which are effective without shareholder action, that set forth:

(a) The name of the corporation;

(b) The text of the amendment determining the terms of the class or series of shares;

(d) A statement that the amendment was duly adopted by the board of directors. [1987 c.52 §34; 1989 c.1040 §10]

60.137 Issued and outstanding shares. (1) A corporation may issue the number of shares of each class or series authorized by the articles of incorporation. Shares that are issued are outstanding shares until they are reacquired, redeemed, converted or canceled.

(2) The reacquisition, redemption or conversion of outstanding shares is subject to the limitations of subsection (3) of this section and ORS 60.177 and 60.181.

(3) At all times that shares of the corporation are outstanding, one or more shares that together have unlimited voting rights and one or more shares that together are entitled to receive the net assets of the corporation upon dissolution must be outstanding. [1987 c.52 §35]

60.140 [Repealed by 1953 c.549 §138]

60.141 Fractional shares. (1) A corporation may:

(a) Issue fractions of a share or pay in money the value of fractions of a share;

(b) Arrange for disposition of fractional shares by the shareholders; and

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

(2) Each certificate representing scrip must be conspicuously labeled “scrip” and must contain the information required by ORS 60.161 (2).

(3) The holder of a fractional share is entitled to exercise the rights of a shareholder, including the right to vote, receive dividends and participate in the assets of the corporation upon liquidation. 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 considered desirable, including:

(a) That the scrip will become void if not exchanged for full shares before a specified date; and

(b) That the shares for which the scrip is exchangeable may be sold and the proceeds paid to the scripholders. [1987 c.52 §36]

(Issuance of Shares)

60.144 Subscription for shares before incorporation. (1) A subscription for shares entered into before incorporation is irrevocable for six months unless the subscription agreement provides a longer or shorter period or all the subscribers agree to revocation.

(2) The board of directors may determine the payment term of subscriptions for shares that were entered into before incorporation unless the subscription agreement specifies them. A call for payment by the board of directors must be uniform so far as practicable as to all shares of the same class or series, unless the subscription agreement specifies otherwise.

(3) Shares issued pursuant to subscriptions entered into before incorporation are fully paid and nonassessable when the corporation receives the consideration specified in the subscription agreement.

(4) If a subscriber defaults in payment of money or property under a subscription agreement entered into before incorporation, the corporation may collect the amount owed as any other debt. Alternatively, unless the subscription agreement provides otherwise, the corporation may rescind the agreement if the debt remains unpaid more than 20 days after the corporation sends written demand for payment to the subscriber.

(5) A subscription agreement entered into after incorporation is a contract between the subscriber and the corporation subject to ORS 60.147. [1987 c.52 §37]

60.147 Issuance of shares. (1) The powers granted in this section to the board of directors may be reserved to the shareholders by the articles of incorporation.

(2) The board of directors may authorize shares to be issued for consideration consisting of any tangible or intangible property or benefit to the corporation, including cash, promissory notes, services performed, contracts for services to be performed or other securities of the corporation.

(3) Before the corporation issues shares, the board of directors must determine that the consideration received or to be received for shares to be issued is adequate. That determination by the board of directors is conclusive insofar as the adequacy of consideration for the issuance of shares relates to whether the shares are validly issued, fully paid and nonassessable. A record of action by the board of directors authorizing the issuance of shares for a specified consideration may be relied upon in concluding that shares are validly issued, fully paid and nonassessable.

(4) When the corporation receives the consideration for which the board of directors authorized the issuance of shares, the shares issued therefor are fully paid and nonassessable.

(5) The corporation may place in escrow shares issued for a contract for future services or benefits or a promissory note or make other arrangements to restrict the transfer of shares, and may credit distributions in respect of the shares against their purchase price, until the services are performed, the note is paid or the benefits received. If the services are not performed, the note is not paid or the benefits are not received, the shares placed in escrow or restricted and the distributions credited may be canceled in whole or in part. [1987 c.52 §38; 1989 c.1040 §11]

60.150 [Repealed by 1953 c.549 §138]

60.151 Liability of shareholders. (1) A purchaser from a corporation of its own shares is not liable to the corporation or its creditors with respect to the shares except to pay the consideration for which the shares were authorized to be issued or specified in the subscription agreement.

(2) A shareholder of a corporation is not personally liable for the acts or debts of the corporation merely by reason of being a shareholder. [1987 c.52 §39]

60.154 Share dividends. (1) Unless the articles of incorporation provide otherwise, shares may be issued pro rata and without consideration to the corporation’s shareholders or to the shareholders of one or more classes or series. An issuance of shares under this subsection is a share dividend.

(2) Shares of one class or series may not be issued as a share dividend in respect to shares of another class or series unless the articles of incorporation so authorize, a majority of the votes entitled to be cast by the class or series to be issued approve the issue or there are no outstanding shares of the class or series to be issued.

(3) If the board of directors does not fix the record date for determining shareholders entitled to a share dividend, the record date is the date the board of directors authorizes the share dividend.

(4) For purposes of this section, a share dividend shall include a share split, other than a reverse share split. [1987 c.52 §40; 1989 c.1040 §12]

60.157 Share rights, options and warrants. (1) A corporation may issue rights, options or warrants for the purchase of shares of the corporation. The board of directors shall determine the terms upon which the rights, options or warrants are issued. The board shall also determine their form and content and the consideration for which the shares are to be issued.

(2) Rights, options or warrants issued to the holders of all shares of any class shall not be considered to conflict with the provisions of ORS 60.131 (1) if the terms and conditions of the rights, options or warrants include restrictions or conditions that:

(a) Preclude or limit the exercise, transfer or receipt of rights, options or warrants by any person owning or offering to acquire a specified number or percentage of the outstanding stock or other securities of the corporation or any transferee of any such person; or

(b) Invalidate or void the rights, options or warrants held by any such person or any transferee. [1987 c.52 §41; 1989 c.4 §10]

60.160 [Repealed by 1953 c.549 §138]

60.161 Form and content of certificates. (1) Shares may be but are not required to be represented by certificates. Unless this chapter or another statute expressly provides otherwise, the rights and obligations of shareholders are identical whether or not their shares are represented by certificates.

(2) At a minimum, each share certificate shall state on its face:

(a) The name of the issuing corporation and that it is organized under the law of this state;

(b) The name of the person to whom the share is issued; and

(3) If the issuing corporation is authorized to issue different classes of shares or different series within a class, the designations, relative rights, preferences and limitations applicable to each class, the variations in rights, preferences and limitations determined for each series and the authority of the board of directors to determine variations for future series shall be summarized on the front or back of each certificate or, each certificate may state conspicuously on its front or back that the corporation will furnish the shareholder with this information on request in writing and without charge.

(4) Each share certificate must be signed, either manually or in facsimile, by two officers designated in the bylaws or by the board of directors. Each certificate may bear the corporate seal or its facsimile.

(5) If the person who signed a share certificate, either manually or in facsimile, no longer holds office when the certificate is issued, the certificate is nevertheless valid. [1987 c.52 §42]

60.164 Shares without certificates. (1) Unless the articles of incorporation or bylaws provide otherwise, the board of directors of a corporation may authorize the issue of some or all of the shares of any or all of its classes or series without certificates. The authorization does not affect shares already represented by certificates until they are surrendered to the corporation.

(2) Within a reasonable time after the issue or transfer of shares without certificates, the corporation shall send the shareholder a written statement of the information required on certificates by ORS 60.161 (2) and (3), and if applicable, ORS 60.167. [1987 c.52 §43]

60.167 Restriction on transfer of shares and other securities. (1) The articles of incorporation, bylaws, agreements among shareholders or agreements between shareholders and the corporation may impose restrictions on the transfer or registration of transfer of shares of the corporation. A restriction does not affect shares issued before the restriction was adopted unless the holders of the shares are parties to the restriction agreement or voted in favor of the restriction.

(2) A restriction on the transfer or registration of transfer of shares is valid and enforceable against the holder or a transferee of the holder if the restriction is authorized by this section and its existence is noted conspicuously on the front or back of the certificate or is contained in the information statement required by ORS 60.164 (2). Unless so noted, a restriction is not enforceable against a person who has no knowledge of the restriction.

(3) A restriction on the transfer or registration of transfer of shares is authorized:

(a) To maintain the corporation’s status when it is dependent on the number or identity of its shareholders;

(b) To preserve exemptions under federal or state securities law; or

(4) A restriction on the transfer or registration of transfer of shares may:

(a) Obligate the shareholder first to offer the corporation or other persons, separately, consecutively or simultaneously an opportunity to acquire the restricted shares;

(b) Obligate the corporation or other persons, separately, consecutively or simultaneously to acquire the restricted shares;

(c) Require the corporation, the holders of any class of its shares or another person to approve the transfer of the restricted shares if the requirement is not manifestly unreasonable; or

(d) Prohibit the transfer of the restricted shares to designated persons or classes of persons, if the prohibition is not manifestly unreasonable.

(5) For purposes of this section, “shares” includes a security convertible into or carrying a right to subscribe for or acquire shares. [1987 c.52 §44]

60.170 [Repealed by 1953 c.549 §138]

60.171 Expense of issue. A corporation may pay the expenses of selling or underwriting its shares and organizing or reorganizing the corporation from the consideration received for shares. [1987 c.52 §45]

(Subsequent Acquisition of Shares by Shareholders and Corporation)

60.174 Preemptive rights of shareholders. (1) Except to the extent limited or denied by this section or by the articles of incorporation, the shareholders of a corporation incorporated prior to June 15, 1987, shall have preemptive rights as defined in this section. By articles of amendment or restated articles filed after such date, a corporation may eliminate preemptive rights under this subsection by including in the articles of amendment or restated articles that “the corporation elects to waive preemptive rights,” or words of similar import, in which event this subsection shall no longer apply to the corporation.

(2) Except as provided in subsection (1) of this section, the shareholders of a corporation do not have a preemptive right to acquire the corporation’s unissued shares except to the extent the articles of incorporation so provide.

(3) A statement included in the articles of incorporation that “the corporation elects to have preemptive rights,” or words of similar import, means that the following principles apply except to the extent the articles of incorporation expressly provide otherwise:

(a) The shareholders of the corporation have a preemptive right, granted on uniform terms and conditions prescribed by the board of directors to provide a fair and reasonable opportunity to exercise the right to acquire proportional amounts of the corporation’s unissued shares upon the decision of the board of directors to issue them.

(b) A shareholder may waive the shareholder’s preemptive right. A waiver evidenced by a writing is irrevocable even though it is not supported by consideration.

(A) Shares issued as compensation to directors, officers, agents or employees of the corporation, its subsidiaries or affiliates;

(B) Shares issued to satisfy conversion or option rights created to provide compensation to directors, officers, agents or employees of the corporation, its subsidiaries or affiliates;

(C) Shares authorized in articles of incorporation that are issued within six months from the effective date of incorporation; or

(D) Shares sold other than for money.

(d) Holders of shares of any class without general voting rights but with preferential rights to distributions or assets have no preemptive rights with respect to shares of any class.

(e) Holders of shares of any class with general voting rights but without preferential rights to distributions or assets have no preemptive rights with respect to shares of any class with preferential rights to distributions or assets unless the shares with preferential rights are convertible into or carry a right to subscribe for or acquire shares without preferential rights.

(f) Shares subject to preemptive rights that are not acquired by shareholders may be issued to any person for a period of one year after being offered to shareholders at a consideration set by the board of directors that is not lower than the consideration set for the exercise of preemptive rights. An offer at a lower consideration or after the expiration of one year is subject to the shareholders’ preemptive rights.

(4) For purposes of this section, “shares” includes a security convertible into or carrying a right to subscribe for or acquire shares. [1987 c.52 §46; 1987 c.579 §3; 1991 c.883 §2]

60.177 Corporation’s acquisition of its own shares. (1) A corporation may acquire its own shares and shares so acquired constitute authorized but unissued shares.

(2) If the articles of incorporation prohibit the reissue of acquired shares, the number of authorized shares is reduced by the number of shares acquired, effective upon amendment of the articles of incorporation.

(3) If pursuant to this section, the number of authorized shares is reduced, articles of amendment shall be adopted by the board of directors which may be without shareholder action and shall be delivered to the office for filing. The articles shall set forth:

(a) The name of the corporation;

(b) The reduction in the number of authorized shares, itemized by class and series; and

(4) For purposes of this section, if shares of one class or series of a corporation are converted into shares of another class or series of the corporation, the shares so converted shall be considered to have been acquired by the corporation. [1987 c.52 §47; 1993 c.403 §1]

(Distributions)

60.181 Distributions to shareholders. (1) A board of directors may authorize and the corporation may make distributions to its shareholders subject to restriction by the articles of incorporation and the limitation in subsection (3) of this section.

(2) If the board of directors does not fix the record date for determining shareholders entitled to a distribution, other than a date involving a purchase, redemption or other acquisition of the corporation’s shares, it is the date the board of directors authorizes the distribution.