§6.01. Authorized shares

Link to law: http://legislature.vermont.gov/statutes/section/11A/006/00006.01
Published: 2015

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The Vermont Statutes Online



Title

11A

:
Vermont Business Corporations






Chapter

006

:
SHARES AND DISTRIBUTIONS






Subchapter

001
:
SHARES










 

§

6.01. Authorized shares

(a) The articles

of incorporation must prescribe the classes of shares and the number of shares

of each class that the corporation is authorized to issue. If more than one

class of shares is authorized, the articles of incorporation must prescribe a

distinguishing designation for each class and, prior to the issuance of shares

of a class, the preferences, limitations, and relative rights of that class

must be described in the articles of incorporation. All shares of a class must

have preferences, limitations, and relative rights identical with those of

other shares of the same class except to the extent otherwise permitted by

section 6.02 of this title.

(b) The articles

of incorporation must authorize

(1) one or more

classes of shares that together have unlimited voting rights; and

(2) one or more

classes of shares (which may be the same class or classes as those with voting

rights) that together are entitled to receive the net assets of the corporation

upon dissolution.

(c) The articles

of incorporation may authorize one or more classes of shares that:

(1) have

special, conditional, or limited voting rights, or no right to vote, except to

the extent prohibited by this act;

(2) are

redeemable or convertible as specified in the articles of incorporation;

(A) at the

option of the corporation, the shareholder, or another person or upon the

occurrence of a designated event;

(B) for cash,

indebtedness, securities, or other property;

(C) in a

designated amount or in an amount determined in accordance with a designated

formula or by reference to extrinsic data or events;

(3) entitle the

holders to distributions calculated in any manner, including dividends that may

be cumulative, noncumulative, or partially cumulative;

(4) have

preference over any other class of shares with respect to distributions,

including dividends and distributions upon the dissolution of the corporation.

(d) Terms of

shares may be made dependent upon facts objectively ascertainable outside the

articles of incorporation in accordance with subsection 1.20(j) of this title.

(e) Any of the

terms of shares may vary among holders of the same class or series so long as

such variations are expressly set forth in the articles of incorporation.

(f) The

description of the designations, preferences, limitations, and relative rights

of share classes in subsection (c) of this section is not exhaustive. (Added

1993, No. 85, § 2, eff. Jan. 1, 1994; amended 2007, No. 190 (Adj. Sess.), § 85,

eff. June 6, 2008.)
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