Pennsylvania § 1522 - Issuance of shares in classes or series; board action.

§ 1522. Issuance of shares in classes or series; board action.

(a) General rule.--The division of shares into classes and into series within any class, the determination of the designation and the number of shares of any class or series and the determination of the voting rights, preferences, limitations and special rights, if any, of the shares of any class or series of a business corporation may be accomplished by the original articles or by any amendment thereof. The amendment may be made by the board of directors as provided in subsection (b).

(b) Divisions and determinations by the board.--An amendment of articles described in subsection (a) may be made solely by action of the board if the articles authorize the board to make the divisions and determinations. Unless otherwise restricted in the articles, authority granted to the board to determine the number of shares of any class or series shall be deemed to include the power to increase the previously determined number of shares of the class or series to a number not greater than the aggregate number of shares of all classes and series that the corporation is authorized to issue by the articles and to decrease the previously determined number of shares of a class or series to a number not less than that then outstanding. Upon any such decrease under this section, the affected shares shall continue as part of the aggregate number of shares of all classes and series that the corporation is authorized to issue. Unless otherwise restricted in the articles, if no shares of a class or series are outstanding, the board of directors may amend the designations and the voting rights, preferences, limitations and special rights, if any, of the shares of the class or series.

(c) Statement with respect to shares.--Whenever the board acts under subsection (b), it shall adopt a resolution setting forth its actions. Before any business corporation issues any shares of any class or any series of any class with respect to which the board has acted under subsection (b), the corporation shall file in the Department of State a statement with respect to shares executed by the corporation, setting forth:

(1) The name of the corporation.

(2) The resolution of the board required by this subsection.

(3) The aggregate number of shares of the class or series established and designated by:

(i) The resolution.

(ii) All prior statements, if any, filed under this section or corresponding provisions of prior law with respect thereto.

(iii) Any other provision of the articles.

(4) The date of the adoption of the resolution.

(5) If the resolution is to be effective on a specified date, the hour, if any, and the month, day and year of the effective date.

(d) Effect of filing statement.--Upon the filing of the statement in the department or upon the effective date specified in the statement, whichever is later, the resolution shall become effective and shall operate as an amendment of the articles, except that neither the filing of the statement nor the integration of the substance of the resolution into the text of the articles by means of a restatement of the articles as permitted by this subpart or otherwise shall prohibit the board of directors from subsequently adopting resolutions authorized by this section.

(e) Termination of proposal.--Prior to the time when a resolution required by subsection (c) becomes effective, the amendment to be effected thereby may be terminated by the board or pursuant to the provisions therefor, if any, set forth in the resolution. If a statement with respect to shares has been filed in the department prior to the termination, a statement under section 1902 (relating to statement of termination) shall be filed in the department.

(f) Cross reference.--See section 134 (relating to docketing statement).

Cross References. Section 1522 is referred to in section 1911 of this title.