Colorado § 7-114-102 - Authorization of dissolution after issuance of shares.

§ 7-114-102. Authorization of dissolution after issuance of shares.

(1) After shares have been issued, dissolution of a corporation may be authorized in the manner provided in subsection (2) of this section.

(2) For a proposal to dissolve the corporation to be authorized:

(a) The board of directors shall adopt the proposal to dissolve;

(b) The board of directors shall recommend the proposal to dissolve to the shareholders unless the board of directors determines that, because of conflict of interest or other special circumstances, it should make no recommendation and communicates the basis for its determination to the shareholders; and

(c) The shareholders entitled to vote on the proposal to dissolve shall approve the proposal to dissolve as provided in subsection (5) of this section.

(3) The board of directors may condition the effectiveness of the dissolution on any basis.

(4) The corporation shall give notice, in accordance with section 7-107-105, to each shareholder entitled to vote on the proposal of the shareholders' meeting at which the proposal to dissolve will be voted upon. The notice shall state that the purpose, or one of the purposes, of the meeting is to consider the proposal to dissolve the corporation, and the notice shall contain or be accompanied by a copy of the proposal or a summary thereof.

(5) Unless articles 101 to 117 of this title (including the provisions of section 7-117-101 (10)), the articles of incorporation, bylaws adopted by the shareholders, or the board of directors acting pursuant to subsection (3) of this section require a greater vote, the proposal to dissolve shall be approved by each voting group entitled to vote separately on the proposal by a majority of all the votes entitled to be cast on the proposal by that voting group.

Source: L. 93: Entire article added, p. 822, § 1, effective July 1, 1994.

ANNOTATION

Law reviews. For article, "1985 Amendments to the Colorado Corporation Code", see 14 Colo. Law. 2173 (1985). For article, "Final Regulations on Substantial Economic Effect of Partnership Allocations", see 15 Colo. Law 1009 (1986).

Annotator's note. Since § 7-114-102 is similar to § 7-8-103 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.

This section prescribes one of those instances where it is mandatory that all stockholders vote despite restrictions contained in the articles of incorporation. Hampton v. Tri-State Fin. Corp., 30 Colo. App. 420, 495 P.2d 566 (1972).

But section held not applicable to nonprofit corporations. Morris Alpert & Sons v. Kahler, 31 Colo. App. 345, 502 P.2d 98 (1972).