Nonvoting Shares under the Revised Corporation Code

Certain shares may be deprived voting rights under the articles of incorporation, a fact which must be reflected in the certificate of stock. In any case, there shall always be a class or series of shares with complete voting rights. 

Only shares classified and issued as “preferred” or “redeemable” shares, unless otherwise provided in the Revised Corporation Code. 

Notwithstanding any provision in the articles of incorporation, holders of nonvoting shares shall nevertheless be entitled to vote on the following matters: 

  • (b) Adoption and amendment of bylaws; 
  • (c) Sale, lease, exchange, mortgage, pledge, or other disposition of all or substantially all of the corporate property; 
  • (d) Incurring, creating, or increasing bonded indebtedness; 
  • (f) Merger or consolidation of the corporation with another corporation or other corporations; 

Except the foregoing instances, the vote required under the Revised Corporation Code to approve a particular corporate act shall be deemed to refer only to stocks with voting rights. 

P&L Law

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