Pennsylvania Article 13 — Dissenters' Rights is a legal provision that grants certain rights to dissenting shareholders or members of a corporation in Pennsylvania. This article specifically pertains to situations where a corporation undergoes major changes, such as mergers, consolidations, or changes in its corporate structure, which might impact the rights of its shareholders or members. Dissenters' rights are designed to protect minority or dissenting shareholders from being disadvantaged or forced into undesirable situations due to corporate actions. Under Pennsylvania law, there are various types of dissenters' rights, each serving a specific purpose: 1. Right to Dissent: This type of dissenters' right allows shareholders or members to object to certain corporate actions and opt-out of the proposed change. Examples of actions where shareholders can dissent include mergers, consolidations, sales of substantial assets, or amendments to the corporation's articles of incorporation or bylaws. 2. Appraisal Rights: When exercising their right to dissent, shareholders or members can trigger an appraisal process to determine the fair value of their shares or membership interests. The value is typically assessed by an independent professional appraiser who considers various factors such as the corporation's financial condition, earnings, and market trends. 3. Payment of Fair Value: If dissenting shareholders or members and the corporation cannot agree on the fair value during the appraisal process, the dissenters are entitled to be paid the appraised fair value of their shares or membership interests by the corporation. 4. Legal Protection for Dissenters: This provision offers legal protection to dissenting shareholders or members by prohibiting any retaliation or adverse consequences resulting from their exercise of dissenters' rights. Dissenters cannot be denied any right associated with their ownership or membership solely based on their dissenting actions. Pennsylvania Article 13 — Dissenters' Rights aims to strike a balance between majority rule and minority shareholder protection. It ensures that dissenting shareholders or members have an opportunity to voice their objections and receive fair compensation if they disagree with certain corporate actions. By providing these rights, Pennsylvania law promotes corporate transparency, fairness, and the protection of minority interests.
Pennsylvania Article 13 - Dissenters' Rights
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(b) Action by consent. --Unless otherwise restricted in the bylaws, any action required or permitted to be approved at a meeting of the directors may be approved without a meeting by a consent or consents to the action in record form.
If a company wants to become a corporation, it must file articles of incorporation with its appropriate state agency. This formation document is required as part of the incorporation process, and the articles provide the state a variety of information about the company and its incorporators.
Pennsylvania corporate bylaws are a written document containing provisions that govern the structure, organization, and statement of purpose of a company. This document is created by the incorporator/owner or board of directors at the time of the company's founding.
Although shareholders can't amend decisions already made, they can voice approval for specific actions or raise objections that will influence future decisions. If the shareholders disagree with the direction a director is taking the company, they may be able to remove the director from their position on the board.
Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS.
--Unless otherwise restricted in the bylaws, any action required or permitted to be taken at a meeting of the shareholders or of a class of shareholders of a business corporation may be taken without a meeting if a consent or consents to the action in record form are signed, before, on or after the effective date of ...