Colorado § 7-107-202 - Voting entitlement of shares.

§ 7-107-202. Voting entitlement of shares.

(1) Except as otherwise provided in subsections (2) and (4) of this section or in the articles of incorporation, each outstanding share, regardless of class, is entitled to one vote, and each fractional share is entitled to a corresponding fractional vote, on each matter voted on at a shareholders' meeting. Only shares are entitled to vote.

(2) Except as otherwise ordered by a court of competent jurisdiction upon a finding that the purpose of this subsection (2) would not be violated in the circumstances presented to the court, the shares of a corporation are not entitled to be voted if they are owned, directly or indirectly, by a second corporation, domestic or foreign, and the first corporation owns, directly or indirectly, a majority of the shares entitled to vote for directors of the second corporation.

(3) Subsection (2) of this section does not limit the power of a corporation to vote any shares, including its own shares, held by it in a fiduciary capacity.

(4) Redeemable shares are not entitled to be voted after notice of redemption is delivered to the holders and a sum sufficient to redeem the shares has been deposited with a bank, trust company, or other financial institution under an irrevocable obligation to pay the holders the redemption price on surrender of the shares.

Source: L. 93: Entire article added, p. 770, § 1, effective July 1, 1994. L. 2021: (4) amended, (HB 21-1124), ch. 41, p. 168, § 15, effective April 19.

ANNOTATION

Law reviews. For article, "Organizational Problems of the Small Business Corporation", see 27 Dicta 79 (1950). For article, "One Year Review of Corporations, Partnerships, and Agency", see 34 Dicta 129 (1957).

Annotator's note. Since § 7-107-202 is similar to § 7-4-116 as it existed prior to the 1993 recodification of the "Colorado Business Corporation Act", articles 101 to 117 of title 7, cases construing that provision and its predecessors have been included in the annotations to this section.

Shareholder has right to vote one vote for every share. Under this section, unless otherwise provided in the articles of incorporation, every shareholder of record of a corporation shall have the right at every shareholders' meeting to vote one vote for every share standing in his name on the books of the corporation, even though at some time in the future he intends to dispose of his stock. Fehr v. Hadden, 134 Colo. 102, 300 P.2d 533 (1956) (decided under repealed § 31-2-7, CRS 53).

But denial of voting rights to one class of common stock in an election for directors of a corporation does not violate public policy. Hampton v. Tri-State Fin. Corp., 30 Colo. App. 420, 495 P.2d 566 (1972).

The term "trustee" means a person who holds the legal title to stock for the benefit of some third party who is the stock's equitable owner and entitled to the dividends thereon and whose property, whether held in trust or otherwise, is chargeable with whatever liability may result from the ownership of the stock. Persons holding stock in trust for married women, minors, insane persons, spendthrifts, and the like would be included by the term "trustee". Nat'l Bank of Commerce v. Allen, 90 F. 545 (8th Cir. 1898).

Pledgor has right to vote his stock. Where stock is placed in the hands of a person by the real owner to be held merely as collateral security for a debt due from himself to a third person, the stock involved is really held in pledge, and the right to vote the same, in the absence of an express agreement to the contrary, remains with the pledgor. Miller v. Murray, 17 Colo. 408, 30 P. 46 (1892); Nat'l Bank of Commerce v. Allen, 90 F. 545 (8th Cir. 1898).