Ala. Code § 10A-2A-1.45

Current through the 2024 Regular Session.

Section 10A-2A-1.45 - Definitions

In this article:

(1) "Corporate action" means any action taken by or on behalf of the corporation, including any action taken by the incorporator, the board of directors, a committee of the board of directors, an officer or agent of the corporation or the stockholders.

(2) "Date of the defective corporate action" means the date (or the approximate date, if the exact date is unknown) the defective corporate action was purported to have been taken.

(3) "Defective corporate action" means

(i) any corporate action purportedly taken that is, and at the time such corporate action was purportedly taken would have been, within the power of the corporation, but is void or voidable due to a failure of authorization, and

(ii) an overissue.

(4) "Failure of authorization" means the failure to authorize, approve, or otherwise effect a corporate action in compliance with the provisions of this chapter, the certificate of incorporation or bylaws, a corporate resolution, or any plan or agreement to which the corporation is a party, if and to the extent such failure would render such corporate action void or voidable.

(5) "Overissue" means the purported issuance of:

(i) stock of a class or series in excess of the number of shares of stock of a class or series the corporation has the power to issue under Section 10A-2A-6.01 at the time of such issuance; or

(ii) stock of any class or series that is not then authorized for issuance by the certificate of incorporation.

(6) "Putative stock" means the stock of any class or series (including stock issued upon exercise of rights, options, warrants, or other securities convertible into stock of the corporation, or interests with respect to such stock) that was created or issued as a result of a defective corporate action, that (i) but for any failure of authorization would constitute valid stock, or (ii) cannot be determined by the board of directors to be valid stock.

(7) "Valid stock" means the stock of any class or series that has been duly authorized and validly issued in accordance with this chapter, including as a result of ratification or validation under this article.

(8) "Validation effective time" with respect to any defective corporate action ratified under this article means the later of:

(i) the time at which the ratification of the defective corporate action is approved by the stockholders, or if approval of stockholders is not required, the time at which the notice required by Section 10A-2A-1.49 becomes effective in accordance with Section 10A-2A-1.41; and

(ii) the time at which any certificate of validation filed in accordance with Section 10A-2A-1.51 becomes effective.

The validation effective time shall not be affected by the filing or pendency of a judicial proceeding under Section 10A-2A-1.52 or otherwise, unless otherwise ordered by the court.

Ala. Code § 10A-2A-1.45 (1975)

Added by Act 2019-94,§ 1, eff. 1/1/2020.