Amending the Certificate of Incorporation in New York
What can be amended?
A corporation has the power to make insertions, deletions, or other modifications to its certificate of incorporation as it sees fit. However, insertions may only be made to the extent that they would be lawful in an original certificate of incorporation at the time the amendment is made.
Amendments by the incorporators
An amendment may be made to the certificate of incorporation by the sole incorporator or a majority of the incorporators to the extent that the corporation lacks shareholders, subscribers for shares whose shares have been accepted or directors.
Amendments by the board
Board approval is sufficient to amend the office location, service of process address and registered agent.
Series established by board
To the extent that the certificate of incorporation authorizes the board to establish the series of a class of preferred shares, the board is empowered to authorize the filing of a certificate of amendment addressing the number, designation, relative rights and preferences and limitations applicable to the series.
Issuance of shares pursuant to options and convertibles
To the extent that share approval has been granted for issuing options or convertible bonds or shares, this approval may confer the board with authority to file a certificate of amendment for increasing the authorized shares so as to satisfy any attendant rights.
Which other amendments may the board make?
Should the certificate of incorporation prohibit their reissuance, the board may make an amendment to remove reacquired shares from authorized shares, upon cancellation of the former.
The board may also amend certain restrictions on director management authority which have become invalid under the New York Business Corporation Law, which will not be addressed within the scope of this article.
Which amendments must be approved by shareholders?
As a rule, amendments must be approved by a majority of all outstanding shares entitled to vote. Such amendments may include:
- Changes to the name, duration or purpose of the company;
- An increase or decrease of the shares or par value;
- Changing shares to different classes or a different number of shares;
- Changing the designations, relative rights, preferences or limitations of any class, be it issued or unissued. Modifications made to voting rights and rights to undeclared dividends (irrespective of whether they are cumulative or accrued) would fall under this clause.
- Creating new classes with either superior or inferior preferences to those of existing shares requires majority approval; as does
- The denial, limitation, or grant of preemptive rights; and
- A reduction of stated capital. (This may be brought about in several ways, which exceed the scope of this article).
Some of the above amendments, such as changing shares into different classes or creating new ones with different preferences to those of existing ones, may require a class or series vote.
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:מאמרים מומלצים