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to Table of Contents [Oneida
Indian Nation (New York) Codes and Rules]
Last amended: 2004 BUSINESS
CORPORATION CODE - CHAPTERS 1-5
Chapter 1 - Short Title; Definitions; Applications; Certificates; Miscellaneous 101. Short
Title
201. Purposes
301. Corporate
Name; General
401. Incorporators 501. Authorized
Shares 601. By-Laws
701. Board
of Directors
801. Right
to Amend Certificate of Incorporation
901. Power
of Merger or Consolidation
1001. Authorization
of Dissolution
1101. Nation
Prosecutor's Action For Judicial Dissolution 1201. Action
by Judgment Creditor for Sequestration
1301. Authorization
of Foreign Corporations
This Code shall be known as the "Business Corporation Code".
(a) As used in this Code, unless the context otherwise requires, the term:
(a) This Code applies to every domestic corporation and to every foreign corporation which is authorized or does business in the Nation. This Code also applies to any other domestic corporation or foreign corporation of any type or kind to the extent, if any, provided under this Code or any law governing such corporation. (b) This Code also applies to a corporation of any type or kind, formed for profit under the laws of the Nation. (c) The enactment of this Code shall not affect the duration of a Corporation which is existing on the effective date of this Code. Any such existing corporation, its shareholders, directors and officers shall have the same rights and be subject to the same limitations, restrictions, liabilities and penalties as a corporation formed under this Code, its shareholders, directors and officers. (d) This Code shall not affect any cause or action, liability, penalty or action or special proceeding, which on the effective date of this Code, is accrued, existing, incurred or pending but the same may be asserted, enforced, prosecuted or defended as if this Code had not been enacted.
(a) Whenever such instrument is required to set forth an address, it shall include the street and number, or other particular description instead of a street and number. This requirement does not apply where a post office address is specified to be set forth. (b) Whenever such instrument is required to set forth the date when a certificate of incorporation was filed by the Nation Clerk, the original Certificate of incorporation is meant. This requirement shall be satisfied, in the case of a corporation created by special act, by setting forth the ordinance number and year of passage of such ordinance. (c) Every such certificate required under this Code to be signed and delivered to the Nation Clerk shall, except as otherwise specified in the section providing for such certificate, be signed either (1) by the holders of all outstanding shares entitled to vote thereon, or (2) by the chairman of the board, the president or a vice president and by the secretary or an assistant secretary, or (3) if there are no such officers by a majority of the directors or such directors as are designated by a majority of the directors in office, or (4) if also there are no directors, by the holders, or such of them as are designated by the holders, of record of a majority of all outstanding shares entitled to vote thereon, or (5) if also there is no shareholder of record, by a subscriber for shares whose subscription has been accepted or his successor in interest or (6) if also no subscription for shares has been accepted, by an incorporator or anyone acting in his stead under paragraph (c) of section 615 (Written consent of shareholders, subscribers or incorporators without a meeting). His name and the capacity in which any person signs such certificate shall be stated beneath or opposite his signature. The person signing such certificate or, if more than one person signs it, one of such persons shall verify or acknowledge the certificate if required by the section providing for such certificate. In lieu of being signed and verified or acknowledged, the certificate may be subscribed by such person and affirmed by him as true under the penalties of perjury. (d) If an instrument which is delivered to the Nation Clerk for filing complies as to form with the requirements of law and there has been attached to it the consent or approval of the Nation official, department, board, agency or other body, if any, whose consent to or approval of such instrument or the filing thereof is required by any statute of the Nation and the filing fee and tax, if any, required by any statute of the Nation in connection therewith have been paid, the instrument shall be filed and indexed by the Nation Clerk. No certificate of authentication or conformity or other proof shall be required with respect to any verification, oath or acknowledgment of any instrument delivered to the Nation Clerk under this Code, if such verification, oath or acknowledgment purports to have been made before a notary public. Without limiting the effect of section four hundred three of this Code, filing and indexing by the Nation Clerk shall not be deemed a finding that a certificate conforms to law, nor shall it be deemed to constitute an approval by the Nation Clerk of the name of the corporation or the contents of the certificate, nor shall it be deemed to prevent any person with appropriate standing from contesting the legality thereof in an appropriate forum. (e) Except as otherwise provided in this Code, such instrument shall become effective upon the filing thereof by the Nation Clerk.
Except as otherwise provided, the Nation Clerk shall collect the following fees pursuant to this Code: (a) For the reservation of a corporate name pursuant to section three hundred three of this Code, twenty dollars. (b) For the resignation of a registered agent for service of process pursuant to section three hundred five of this Code, sixty dollars. (c) For service of process on the Nation Clerk pursuant to section three hundred six or three hundred seven of this Code, forty dollars. (d) For filing a certificate of incorporation pursuant to section four hundred two of this Code, one hundred twenty-five dollars. (e) For filing a certificate of amendment pursuant to section eight hundred five of this Code, sixty dollars. (f) For filing a certificate of change pursuant to section eight hundred five-A of this Code, thirty dollars. (g) For filing a restated certificate of incorporation pursuant to section eight hundred seven of this Code, sixty dollars. (h) For filing a certificate of merger or consolidation pursuant to section nine hundred four of this Code, sixty dollars. (i) For filing a certificate of merger of a subsidiary corporation pursuant to section nine hundred five of this Code, sixty dollars. (j) For filing a certificate of merger or consolidation of domestic and foreign corporations pursuant to section nine hundred seven of this Code, sixty dollars. (k) For filing a certificate of dissolution pursuant to section one thousand three of this Code, twenty dollars. (l) For filing an application by a foreign corporation for authority to do business in the Nation pursuant to section thirteen hundred four of this Code, two hundred twenty-five dollars. (m) For filing a certificate of amendment of an application for authority by a foreign corporation pursuant to section thirteen hundred nine of this Code, sixty dollars. (n) For filing a certificate of change of application for,authority by a foreign corporation pursuant to section thirteen hundred nine-A of this Code, thirty dollars. (o) For filing a certificate of surrender of authority pursuant to section thirteen hundred ten of this Code, sixty dollars. (p) For filing a statement of the termination of existence of a foreign corporation pursuant to section thirteen hundred eleven of this Code, sixty dollars. There shall be no fee for the filing by an authorized officer of the jurisdiction of incorporation of a foreign corporation of a certificate that the foreign corporation has been dissolved or its authority or existence has been otherwise terminated or canceled in the jurisdiction of its incorporation. (q) For filing any other certificate or document, forty dollars.
Any certificate or other instrument relating to a domestic or foreign corporation filed by the Nation Clerk under this Code may be corrected with respect to any informality or error apparent on the face, incorrect statement or defect in the execution thereof including the deletion of any matter not permitted to be stated therein. A certificate, entitled "Certificate of correction of....( correct title of certificate and name of corporation)" shall be signed, verified and delivered to the Nation Clerk. It shall set forth the name of the corporation, the date the certificate to be corrected was filed by the Nation Clerk, a statement as to the nature of the informality error, incorrect statement or defect, the provision in the certificate as corrected or eliminated and if the execution was defective, the proper execution. The filing of the certificate by the Nation Clerk shall not alter the effective time of the instrument being corrected, which shall remain as its original effective time, and shall not affect any right or liability accrued or incurred before such filing. A corporate name may not be changed or corrected under this section. The provisions of this section shall apply to all instruments and certificates heretofore and hereafter filed with the Nation Clerk.
(a) Any certificate or other instrument filed by the Nation Clerk relating to a domestic or foreign corporation and containing statements of fact required or permitted by law to be contained therein, shall be received in all courts, public offices and official bodies as prima facie evidence of such facts and of the execution of such instrument. (b) Whenever by the laws of any jurisdiction other than the Nation, any certificate by any officer in such jurisdiction or a copy of any instruments certified or exemplified by any such officer, may be received as prima facie evidence of the incorporation, existence or capacity of any foreign corporation incorporated in such jurisdiction, or claiming so to be, such certificate when exemplified, or such copy of such instrument when exemplified shall be received in all courts, public offices and official bodies of the Nation, as prima facie evidence with the same force as in such jurisdiction. Such certificate or certified copy of such instrument shall be so received, without being exemplified, if it is certified by the Nation Clerk, or official performing the equivalent function as to corporate records, of such jurisdiction.
The presence of the corporate seal on a written instrument purporting to be executed by authority of a domestic or foreign corporation shall be prima facie evidence that the instrument was so executed.
(a) Whenever, under this Code or the certificate of incorporation or by-laws of any corporation or by the terms of any agreement or instrument, a corporation or the board or any committee thereof authorized to take any action after notice to any person or persons or after the lapse of a prescribed period of time, such action may be taken without notice and without the lapse of such period of time, if at any time before or after such action is completed the person or persons entitled to such notice or entitled to participate in the action to be taken or, in the case of a shareholder, by his attorney-in-fact, submit a signed waiver of notice of such requirements. (b) Whenever any notice or communication is required to be given to any person by this Code, the Certificate of incorporation or by-laws, or by the terms of any agreement or instrument, or as a condition precedent to taking any corporate action and communication with such person is then unlawful under any statute of the Nation or any regulation, proclamation or order issued under said statutes, then the giving of such notice or communication to such person shall not be required and there shall be no duty to apply for license or other permission to do so. Any affidavit, certificate or other instrument which is required to be made or filed as proof of the giving of any notice or communication required under this Code shall, if such notice or communication to any person is dispensed with under this paragraph, include a statement that such notice or communication was not given to any person with whom communication is unlawful. Such affidavit, certificate or other instrument shall be as effective for all purposes as though such notice or communication has been personally given to such person. (c) Whenever any notice or communication is required or permitted by this Code to be given by mail, it shall, except as otherwise expressly provided in this Code, be mailed to the person to whom it is directed at the address designated by him for that purpose or, if none is designated, at his last known address. Such notice or communication is given when deposited, with postage thereon prepaid, in a post office or official depository under the exclusive care and custody of the United States post office department. Such mailing shall be by first class mail except where otherwise required by this Code.
(a) The Nation Prosecutor may maintain an action or special proceeding:
(b) In an action or special proceeding brought by the Nation Prosecutor under any of the provisions of this Code:
(c) In any such action or special proceeding against a foreign corporation which has not designated the Nation Clerk as its agent for service of process under section 304 (Statutory designation of Nation Clerk as agent for service of process), any of the following acts within the territorial jurisdiction of the Nation by such foreign corporations shall constitute the appointment by it of the Nation Clerk as its agent upon whom process against such foreign corporation may be served:
(d) Paragraphs (b), (c), (d) and (e) of section 307 (Service of process on unauthorized foreign corporation) shall apply to process served under paragraph (c).
The Oneida Indian Nation reserves the right, at pleasure, to alter, amend, suspend or repeal in whole or in part this Code, or any certificate of incorporation or any authority to do business in the Nation, of any domestic or foreign corporation, whether or not existing or authorized on the effective date of this Code.
If any provision of this Code or application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of this Code which can be given effect without the invalid provision or application, and to this end the provisions of this Code are declared severable.
Unless otherwise stated, all references in this Code to chapters or sections refer to the chapters or sections of this Code, and all references in any section of this Code to a lettered or numbered paragraph or subparagraph refer to the paragraph or subparagraph so lettered or numbered in such section.
Corporate or other bodies created as instrumentalities of the Nation by Nation ordinance shall not be governed by the provisions of this Code.
The Nation does not by enacting this Code waive in any respect its sovereign immunity, or that of its agents, in any manner, under any law, for any purpose, nor in any place.
A corporation may be formed under this Code for any lawful business purpose or purposes.
(a) Each corporation, subject to any limitations provided in this Code or any other statute of the Nation or its certificate of incorporation, shall have power in furtherance of its corporate purposes:
(b) No corporation shall do business under any name, other than that appearing in its certificate of incorporation, without filing, a $10.00 fee as set forth in subdivision five of this section, in the office of the Nation Clerk a certificate setting forth the name or designation under which business is carried on or conducted or transacted, its corporate name, the location, if any, of its principal place of business in the Nation and the name of each place where it carries on or conducts or transacts business. Each certificate shall be executed and duly acknowledged by an officer of the corporation. A corporation which carries on or conducts or transacts business within the territorial jurisdiction of the Nation as a member of a partnership shall not be required solely by reason thereof to file the certificate required by this paragraph if the partners shall have filed the certificate required by this section. 1-a. As used in this section, unless the context otherwise requires: (a) "Person" shall mean an individual, partnership, limited partnership, corporation, and unincorporated association; (b) The "real name" of a corporation shall mean its corporate name as set forth in its certificate of incorporation and any generally accepted, understood or recognizable abbreviations of such corporate name. (c) The use by a corporation of a divisional, departmental or trade name or designation, in conjunction with the real name of the corporation, shall be deemed to be the use of the real name of the corporation for purposes of this section. 2.(a) No person or persons shall hereafter use or file a certificate for the use of any name or designation to carry on or conduct or transact business within the territorial jurisdiction of the Nation which consists of or includes words, or initials and a word or words, which are or appear to be the full name or names, or the initial or initials and family name of a person or persons, or a colorable simulation thereof, unless
(b) In addition to the prohibitions of paragraph (a) of this subdivision, no corporation shall use or file a certificate for the use of any name or designation to carry on or conduct or transact business within the territorial jurisdiction of the Nation which consists of or includes a word or words the use of which is prohibited by subparagraphs three though nine of paragraph a of section three hundred one of the business corporation code. 3. Whenever a certificate which has been filed under t h s section does not accurately set forth the facts required by this section, or within thirty days after there has been a change in such facts, an amended certificate shall be filed which shall identify the original certificate and incorporate the corrections or changes. If such amended certificate is filed for the purpose of adding or withdrawing the name of any person to the original certificate as a person conducting a business or as a partner, such amended certificate must be executed and acknowledged by such person and by any one or more of the other person named in the original or last amended certificate, unless otherwise provided by an order of the Nation Court. Any other amended Certificate may be executed and acknowledged by any one or more of the persons named therein as a person conducting the business or as a partner or, in the case of a corporation, by an officer of the corporation. 4. A certified copy of the original certificate, or if an amended certificate has been filed, then of the most recent amended certificate filed shall be conspicuously displayed on the premises at each place in which the business for which the same was filed is conducted. 5. The Nation Clerk shall keep an alphabetical index of all certificates, provided for herein, together with appropriate notations of the nature of amended certificates and certificates of discontinuance, and for the indexing and filing of such certificates shall receive a fee of twenty-five dollars. 6. A copy of a certificate filed under the provisions of this section, duly certified to by the Nation Clerk shall be presumptive evidence in the Nation court of the facts therein contained; provided, however, that neither the certificate itself nor the filing thereof shall, for any purpose other than this section, constitute or be construed as an admission by the filing person, or be used as evidence, that such person does or has done business or has carried on, conducted or transacted business in the Nation or intended to do so. 7. Subdivision one of this section shall not apply to a person who, or a partnership which, has duly filed a certificate of continued use of firm name under the Oneida Indian Nation partnership law, or to a partnership of attorneys and counselors-at-law engaged in the practice of their profession, and subdivision three of this section shall not apply to such a person or partnership who has filed a certificate of discontinuance under subdivision ten of this section. 8. The failure to comply with the provisions of this section shall in no way affect the rights of third persons, nor shall this section be deemed or construed to limit the liability of partners under the provisions of the partnership code. 8-a. The acceptance of a certificate by the Nation Clerk for filing pursuant to the provisions of this section shall not be construed to confer any right to or interest in any trade name; nor shall any of the provisions of this section be construed to affect the rights to, or the enforcement of any rights to, any trade name acquired at any time under any other law of the Nation. 9. Any person or persons carrying on, conducting or transacting business as aforesaid, who knowingly fails to comply with the provisions of this section or who knowingly makes a false statement in a certificate filed thereunder shall be guilty of a misdemeanor. Any person or persons carrying on, conducting or transacting business as aforesaid who fails to comply with the provisions of this section shall be prohibited from maintaining any action or proceeding in the Nation court on any contract, account or transaction made in a name other than its real name until the certificate required by this section has been executed and filed in accordance with the provisions set forth herein. 10. If the business for which a certificate is filed under this section is discontinued, or the conditions under which it is conducted are such that the filing of a certificate with the Nation Clerk is no longer required, a certificate of discontinuance may be filed with the Nation Clerk, identifying such certificate and also identifying the amended certificate, if any, last previously filed and certifying the facts by reason of which the filing of a certificate is no longer required. The Certificate of discontinuance shall be executed and acknowledged in the same manner as an original certificate and shall specify the date of which the discontinuance occurred or the conditions under which the business is conducted changed so that the filing of a certificate is no longer required. The Nation Clerk shall note the discontinuance. A certificate of discontinuance shall be executed by a majority of the persons named in the original certificate or the amended certificate last previously filed as persons conducting or transacting the business or as partners or, in the case of a corporation, by an officer of the corporation, provided that if any of them shall be deceased the certificate shall so state and may be executed and acknowledged by a majority of the survivors, or by the executor or administrator of a deceased person named in the original certificate or last previously filed amended certificate as the only person conducting or transacting the business, and provided further that any such signatures may be dispensed by order of the Nation Court.
(a) No act of a corporation and no transfer of real or personal property to or by a corporation, otherwise lawful, shall be invalid by reason of the fact that the corporation was without capacity or power to do such act or to make or receive such transfer, but such lack of capacity or power may be asserted:
(a) Except as otherwise provided in this Code, the name of a domestic or foreign corporation:
(a) Any reference to a corporation in this section except as otherwise provided herein shall include both domestic and foreign corporations. (b) The provisions of section 301 (Corporate Name; General):
(a) A corporate name may be reserved by:
(b) A fictitious name for use pursuant to section 1301 of this Code, may be reserved by:
(c) Application to reserve a corporate or fictitious name shall be delivered to the Nation Clerk. It shall set forth the name and address of the applicant, the name to be reserved and a statement of the basis under paragraph (a) or (b) for the application. The Nation Clerk may require that there be included in the application a statement as to the nature of the business to be conducted by the corporation. If the name is available for corporate use, the Nation Clerk shall reserve the name for the use of the applicant for a period of sixty days and issue a certificate of reservation. The restrictions and qualifications set forth in subparagraphs (a)(3), (4), (9, (6), and (7) of section 301 (Corporate name; general) are not waived by the issuance of a certificate of reservation. The certificate of reservation shall include the name of the applicant, the name reserved and the date of the reservation. The certificate of reservation (or in lieu thereof an affidavit by the applicant or by his agent or attorney that the certificate of reservation has been lost or destroyed) shall accompany the certificate of incorporation or the application for authority when either is delivered to the Nation Clerk. (d) The Nation Clerk may extend the reservation for additional periods of not more than sixty days each, upon the written request of the applicant, his attorney or agent delivered to the Nation Clerk, to be filed before the expiration of the reservation period in effect. Such request shall have attached to it the certificate of reservation of name. Not more than two such extensions shall be granted. (e) Upon the request of the applicant, delivered to the Nation Clerk before the expiration of the reserved period, the Secretary shall cancel the reservation. (f) Any application or request under this section shall be signed by the applicant, his attorney or agent.
(a) The Nation Clerk shall be the agent of every domestic corporation and every authorized foreign corporation upon whom process against the corporation may be served. (b) No domestic or foreign corporation may be formed or authorized to do business in the Nation under this Code unless in its certificate of incorporation or application for authority it designates the Nation Clerk as such agent. (c) Any designation by a domestic or a foreign corporation of the Nation Clerk as such agent, which designation is in effect on the effective date of this chapter, shall continue. Every domestic or foreign corporation, existing or authorized on the effective date of this chapter, which has not designated the Nation Clerk as such agent, shall be deemed to have done so. Any designation prior to the effective date of this chapter by a foreign corporation of an agent other than the Nation Clerk shall terminate on the effective date of this chapter. (d) Any designated post-office address to which the Nation Clerk shall mail a copy of process served upon him as agent of a domestic corporation or a foreign corporation, shall continue until the filing of a certificate under this chapter directing the mailing to a different post-office address.
(a) In addition to such designation of the Nation Clerk, every domestic corporation or authorized foreign corporation may designate a registered agent in the Nation upon whom process against such corporation may be served. The agent shall be a natural person who is a resident of or has a business address in the Nation or a domestic corporation or foreign corporation of any type or kind formed, or authorized to do business in the Nation, under this chapter or under any other statute of the Nation. (b) Any such designation of a registered agent may be made, revoked or changed as provided in this chapter. (c) A registered agent may resign as such agent. A certificate entitled "Certificate of resignation of registered agent of ....(name of designating corporation) under section 305 of the Business Corporation Code", shall be signed, verified by him and delivered to the Nation Clerk. It shall set forth:
(d) The designation of a registered agent shall terminate thirty days after the filing by the Nation Clerk of a certificate of resignation or a certificate containing a revocation or change of the designation, whichever is filed earlier. A certificate designating a new registered agent may be delivered to the Nation Clerk by the corporation within the thirty days or thereafter.
Service of process on a registered agent may be made in the manner provided by the Oneida Indian Nation Rules of Civil Procedure for the service of summons, as if the registered agent was a defendant.
(a) In any case in which a non-domiciliary would be subject to the personal or other jurisdiction of the courts of the Nation, a foreign corporation not authorized to do business within the territorial jurisdiction of the Nation is subject to a like jurisdiction. In any such case, process against such foreign corporation may be served upon the Nation Clerk as its agent. Such process may issue in the Nation court. (b) Service of such process upon the Nation Clerk shall be made by personally delivering to and leaving with him, a copy of such process. Such service shall be sufficient if notice thereof and a copy of the process are:
(c)
(d) Service made within the territorial jurisdiction of the Nation as provided in this section shall have the same force as personal service made within the Nation. (e) Nothing in this section shall affect the right to serve process in any other manner permitted by law.
The Nation Clerk shall keep a record of each process served upon the Nation Clerk under this chapter, including the date of service. It shall, upon request made within ten years of such service, issue a certificate under its seal certifying as to the receipt of the process by an authorized person, the date and place of such service and the receipt of the statutory fee. Process served upon the Nation Clerk under this chapter shall be destroyed by him after a period of ten years from such service.
One or more natural persons of the age of eighteen years or over may act as incorporators of a corporation to be formed under this chapter.
(a) A certificate, entitled "Certificate of incorporation of .......... (name of corporation) under section 402 of the Business Corporation Code", shall be signed by each incorporator, with his name and address stated beneath or opposite his signature, acknowledged and delivered to the Nation Clerk. It shall set forth:
(b) The certificate of incorporation may set forth a provision eliminating or limiting the personal liability of directors to the corporation or its shareholders for damages for any breach of duty in such capacity, provided that no such provision shall eliminate or limit:
(c) The certificate of incorporation may set forth any provision, not inconsistent with this Code or any other statute of the Nation, relating to the business of the corporation, its affairs, its rights or powers, or the rights or powers of its shareholders, directors or officers including any provision relating to matters which under this chapter are required or permitted to be set forth in the by-laws. It is not necessary to set forth in the certificate of incorporation any of the powers enumerated in this chapter.
Upon the filing of the certificate of incorporation by the Nation Clerk, the corporate existence shall begin, and such certificate shall be conclusive evidence that all conditions precedent have been fulfilled and that the corporation has been formed under this chapter, except in an action or special proceeding brought by the Nation Prosecutor. Notwithstanding the above, a certificate of incorporation may set forth a date subsequent to filing, not to exceed ninety days after filing, upon which date corporate existence shall begin.
(a) After the corporate existence has begun, an organization meeting of the incorporator or incorporators shall be held for the purpose of adopting by-laws, electing directors to hold office until the first annual meeting of shareholders, except as authorized under section 704 (Classification of directors), and the transaction of such other business as may come before the meeting. If there are two or more incorporators, the meeting may be held at the call of any incorporator, who shall give at least five days' notice thereof by mail to each other incorporator, which notice shall set forth the time and place of the meeting. Notice need not be given to any incorporator who attends the meeting or submits a signed waiver of notice before or after the meeting. If there are more than two incorporators, a majority shall constitute a quorum and the act of the majority of the incorporators present at a meeting at which a quorum is present shall be the act of the incorporator or his attorney-in-fact. (b) Any action permitted to be taken at the organization meeting may be taken without a meeting if each incorporator or his attorney-in-fact signs an instrument setting forth the action so taken. (c) If an incorporator dies or is for any reason unable to act, action may be taken as provided in such event in paragraph (c) of section 615 (Written consent of shareholders, subscribers or incorporators without a meeting).
Every certificate of incorporation which includes among its corporate purposes the establishment or operation of a day care center for children shall have endorsed thereon or annexed thereto the approval of the Oneida Indian Nation.
Every certificate of incorporation which includes among its corporate purposes the establishment or operation of a program of services for alcoholism or alcohol abuse shall have endorsed thereon or annexed thereto the approval of the Oneida Indian Nation.
Every certificate of incorporation which includes among the purposes of the corporation, the establishment or operation of a substance abuse program shall have endorsed thereon or annexed thereto the consent of the Oneida Indian Nation.
(a) Every corporation shall have power to create and issue the number of shares stated in its certificate of incorporation. Such shares may be all of one class or may be divided into two or more classes. Each class shall consist of either shares with par value or shares without par value, having such designation and such relative voting, dividend, liquidation and other rights, preferences and limitations, consistent with this Code, as shall be stated in the certificate of incorporation. The certificate of incorporation may deny, limit or otherwise define the voting rights and may limit or deny, limit or otherwise define the voting rights and may limit or otherwise define the dividend or liquidation rights of shares of any class, but no such denial, limitation or definition of voting rights shall be effective unless at the time one or more classes of outstanding shares or bonds, singly or in the aggregate, are entitled to full voting rights, and no such limitation or definition of dividend or liquidation rights shall be effective unless at the time one or more classes of outstanding shares, singly or in the aggregate, are entitled to unlimited dividend and liquidation rights. (b) If the shares are divided into two or more classes, the shares of each class shall be designated to distinguish them from the shares of all other classes. Shares which are entitled to preference in the distribution of dividends or assets shall not be designated as common shares. Shares which are not entitled to preference in the distribution of dividends or assets shall be common shares, even if identified by a class or other designation, and shall not be designated as preferred shares. (c) Subject to the designations, relative rights, preferences and limitations applicable to separate series and except as otherwise permitted by subparagraph two of paragraph (a) of section five hundred five of this chapter, each share shall be equal to every other share of the same class.
(a) If the certificate of incorporation so provides, a corporation may issue any class of preferred shares in series. Shares of each such series when issued, shall be designated to distinguish them from shares of all other series. (b) The number of shares included in any or all series of any classes of preferred shares and any or all of the designations, relative rights, preferences and limitations of any or all such series may be fixed in the certificate of incorporation, subject to the limitation that, if the stated dividends and amounts payable on liquidation are not paid in full, the shares of all series of the same class shall share ratably in the payment of dividends including accumulations, if any, in accordance with the sums which would be payable on such shares if all dividends were declared and paid in full, and in any distribution of assets other than by way of dividends in accordance with the sums which would be payable on such distribution if all sums payable were discharged in full. (c) If any such number of shares or any such designation, relative right, preference or limitation of the shares of any series is not fixed in the certificate of incorporation, it may be fixed by the board, to the extent authorized by the certificate of incorporation. (d) Before the issue of any shares of a series established by the board, a certificate of amendment under section 805 (Certificate of amendment; contents) shall be delivered to the Nation Clerk. Such certificate shall set forth:
(a) Unless otherwise provided by the terms of the subscription, a subscription for shares of a corporation to be formed shall be irrevocable, except with the consent of all other subscribers or the corporation, for a period of three months from its date. (b) A subscription, whether made before or after the formation of a corporation, shall not be enforceable unless in writing and signed by the subscriber. (c) Unless otherwise provided by the terms of the subscription, subscriptions for shares, whether made before or after the formation of a corporation, shall be paid in full at such time, or in such installments and at such times, as shall be determined by the board. Any call made by the board for payment on subscriptions shall be uniform as to all shares of the same class or of the same series. If a receiver of the corporation has been appointed, all unpaid subscriptions shall be paid at such times and in such installments as such receiver or the court may direct. (d) In the event of default in the payment of any installment or call when due, the corporation may proceed to collect the amount due in the same manner as any debt due the corporation or the board may declare a forfeiture of the subscriptions. The subscription agreement may prescribe other penalties, not amounting to forfeiture, for failure to pay installments or calls that may become due. No forfeiture of the subscription shall be declared as against any subscriber unless the amount due thereon shall remain unpaid for a period of thirty days after written demand has been made therefore. If mailed, such written demand shall be deemed to be made when deposited in the United States mail in a sealed envelope addressed to the subscriber at his post office address known to the corporation, with postage thereon prepaid. Upon forfeiture of the subscription, if at least fifty percent of the subscription price has been paid, the share subscribed for shall be offered for sale for cash at a price at least sufficient to pay the full balance owed by the delinquent subscriber plus the expenses incidental to such sale, and any excess of net proceeds realized over the amount owed on such shares shall be paid to the delinquent subscriber or to his legal representative. If no prospective purchaser offers a cash price sufficient to pay the full balance owed by the delinquent subscriber plus the expenses incidental to such sale, or if less than fifty percent of the subscription price has been paid, the shares subscribed for shall be canceled and restored to the status of authorized but unissued shares and all previous payments thereon shall be forfeited to the corporation and transferred to capital surplus.
(a) Consideration for issue of shares shall consist of money or other property, tangible or intangible, or labor or services actually received by or performed for the corporation or for its benefit or in its formation or reorganization, or a combination thereof. In the absence of fraud in the transaction, the judgment of the board or shareholders, as the case may be, as to the value of the consideration received for shares shall be conclusive. (b) Neither obligations of the subscriber for future payments nor future services shall constitute payment or part payment for shares of a corporation. (c) Shares with par value may be issued for such consideration, not less than the par value thereof, as if fixed from time to time by the board. (d) Shares without par value may be issued for such consideration as is fixed from time to time by the board unless the certificate of incorporation reserves to the shareholders the right to fix the consideration. If such right is reserved as to any shares, a vote of the shareholders shall either fix the consideration to be received for the shares or authorize the board to fix such consideration. (e) Treasury shares may be disposed of by a corporation on such terms and conditions as are fixed from time to time by the board. (f) Upon distribution of authorized but unissued shares to shareholders, that part of the surplus of a corporation which is concurrently transferred to stated capital shall be the consideration for the issue of such shares. (g) hi the event of a conversion of bonds or shares into shares, or in the event of an exchange of bonds or shares for shares, with or without par value, the consideration for the shares so issued in exchange or conversion shall be the sum of (1) either the principal sum of, and accrued interest on, the bonds so exchanged or converted, or the stated capital represented by the shares so exchanged or converted, plus (2) any additional consideration paid to the corporation for the new shares, plus (3) any stated capital not theretofore allocated to any designated class or series which is thereupon allocated to the new shares, plus (4) any surplus thereupon transferred to stated capital and allocated to the new shares. (h) Certificates for shares may not be issued until the full amount of the consideration therefore has been paid, except as provided in paragraphs (e) and (0 of section 505 (Rights and options to purchase shares; issue of rights and options to directors, officers and employees). (i) When the consideration for shares has been paid in full, the subscriber shall be entitled to all the rights and privileges of a holder of such shares and to a certificate representing his shares, and such shares shall be fully paid and nonassessable.
(a)
(b) The consideration for shares to be purchased under any such right or option shall comply with the requirements of section 504 (Consideration and payment for shares). (c) The terms and conditions of such rights or options, including the time or times at or within which and the price or prices at which they may be exercised and any limitations upon transferability, shall be set forth or incorporated by reference in the instrument or instruments evidencing such rights or options. (d) The issue of such rights or options to one or more directors, officers or employees of the corporation or a subsidiary or affiliate thereof, as an incentive to service or continued service with the corporation, a subsidiary or affiliate thereof, or to a trustee on behalf of such directors, officers or employees, shall be authorized at a meeting of shareholders by the vote of the holders of a majority of all outstanding shares entitled to vote thereon, or authorized by and consistent with and adopted by such vote of shareholders. If, under the certificate of incorporation, there are preemptive rights to any of the shares to be thus subject to rights or options to purchase, either such issue or such plan, if any shall also be approved by the vote or written consent of the holders of a majority of the shares entitled to exercise preemptive rights with respect to such shares and such vote or written consent shall operate to release the preemptive rights with respect thereto of the holders of all the shares that were entitled to exercise such preemptive rights. In the absence of preemptive rights, nothing in this paragraph shall require shareholder approval for the issuance of rights or options to purchase shares of the corporation in substitution for, or upon the assumption of, rights or options issued by another corporation, if such substitution or assumption is in connection with such other corporation's merger or consolidation with, or the acquisition of its shares or all or part of its assets by, the corporation or its subsidiary. (e) A plan adopted by the shareholders for the issue of rights or options to directors, officers or employees shall include the material terms and conditions upon which such rights or options are to be issued, such as, but without limitation thereof, any restrictions on the number of shares that eligible individuals may have the right or option to purchase, the method of administering the plan, the terms and conditions of payment for shares in full or in installments, the issue of certificate for shares to be paid for in installments, any limitations upon the transferability of such shares and the voting and dividend rights to which the holders of such shares may be entitled, though the full amount of the consideration therefore has not been paid; provided that under this section no certificate for shares shall be delivered to a shareholder, prior to full payment therefore, unless the fact that the shares are partly paid is noted conspicuously on the face or back of such certificate. (f) If there is shareholder approval for the issue of rights or options to individual directors, officers or employees, but not under an approved plan under paragraph (e), the terms and conditions of issue set forth in paragraph (e) shall be permissible except that the grantees of such rights or options shall not be granted voting or dividend rights until the consideration for the shares to which they are entitled under such rights or options has been fully paid. (g) If there is shareholder approval for the issue of rights and options, such approval may provide that the board is authorized by certificate of amendment under section 805 (Certificate of amendment; contents) to increase the authorized shares of any class or series to such number as will be sufficient, when added to the previously authorized but unissued shares of such class or series, to satisfy any such rights or options entitling the holders thereof to purchase from the corporation authorized but unissued shares of such class or series. (h) hi the absence of fraud in the transaction, the judgment of the board shall be conclusive as to the adequacy of the consideration, tangible or intangible, received or to be received by the corporation for the issue of rights or options for the purchase from the corporation of its shares. (i) The provisions of this section are inapplicable to the rights of the holders of convertible shares or bonds to acquire shares upon the exercise of conversion privileges under section 519 (Convertible shares and bonds).
(a) Upon issue by a corporation of shares with a par value, the consideration received therefore shall constitute stated capital to the extent of the par value of such shares. (b) Upon issue by a corporation of shares without par value, the entire consideration received therefore shall constitute stated capital unless the board within a period of sixty days after issue allocates to surplus a portion, but not all, of the consideration received for such shares. No such allocation shall be made of any portion of the consideration received for shares without par value having a preference in the assets of the corporation upon involuntary liquidation except all or part of the amount, if any, of such consideration in excess of such preference, nor shall such allocation be made of any portion of the consideration for the issue of shares without par value which is fixed by the shareholders pursuant to a right reserved in the certificate of incorporation, unless such allocation is authorized by vote of the shareholders. (c) The stated capital of a corporation may be increased from time to time by resolution of the board transferring all or part of the surplus of the corporation to stated capital. The board may direct that the amount so transferred shall be stated capital in respect of any designated class or series of shares.
The reasonable charges and expenses of formation or reorganization of a corporation, and the reasonable expenses of and compensation for the sale or underwriting of its shares may be paid or allowed by the corporation out of the consideration received by it in payment for its shares without thereby impairing the fully paid and nonassessable status of such shares.
(a) The shares of a corporation shall be represented by certificates or shall be uncertificated shares. Certificates shall be signed by the chairman or a vice-chairman of the board, or the president or a vice-president, and the secretary or an assistant secretary, or the treasurer or an assistant treasurer of the corporation, and may be sealed with the seal of the corporation or a facsimile thereof. The signatures of the officers upon a certificate may be facsimiles if; (1) the certificate is countersigned by a transfer agent or registered by a registrar other than the corporation itself or its employee, or (2) the shares are listed on a registered national security exchange. In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer at the date of issue. (b) Each certificate representing shares issued by a corporation which is authorized to issue shares of more than one class shall set forth upon the face or back of the certificate, or shall state that the corporation will furnish to any shareholder upon request and without charge, a full statement of the designation, relative rights, preferences and limitations of each such series so far as the same have been fixed and the authority of the board to designate and fix the relative rights, preferences and limitations of other series. (c) Each certificate representing shares shall state upon the face thereof:
(d) Shares shall be transferable in the manner provided by law and in the by-laws. (e) The corporation may issue a new certificate for shares in place of any certificate theretofore issued by it, alleged to have been lost or destroyed, and the board may require the owner of the lost or destroyed certificate, or his legal representative, to give the corporation a bond sufficient to indemnify the corporation against any claim that may be made against it on account of the alleged loss or destruction of any such certificate or the issuance of any such new certificate. (f) Unless otherwise provided by the articles of incorporation or by-laws, the board of directors of a corporation may provide by resolution that some or all of any or all classes and series of its shares shall be uncertificated shares, provided that such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the corporation. Within a reasonable time after the issuance or transfer of uncertified shares, the corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to paragraphs (b) and (c) of this section. Except as otherwise expressly provided by law, the rights and obligations of the holders of uncertificated shares and the rights and obligations of the holders of certificates representing shares of the same class and series shall be identical.
(a) A corporation may, but shall not be obliged to, issue fractions of a share either represented by a certificate or uncertificated where necessary to effect share transfers, share distributions or reclassification, mergers, consolidations or reorganizations, which shall entitle the holder, in proportion to his fractional holdings, to exercise voting rights, receive dividends and participate in liquidating distributions. (b) As an alternative, a corporation may pay in cash the fair value of fractions of a share as of the time when those entitled to receive such fractions are determined. (c) As an alternative, a corporation may issue scrip in registered or bearer form over the manual or facsimile signature of an officer of the corporation or of its agent, exchangeable as therein provided for full shares, but such scrip shall not entitle the holder to any rights of a shareholder except as therein provided. Such scrip may be issued subject to the condition that it shall become void if not exchanged for certificates representing full shares or uncertified full shares before a specified date, or subject to the condition that the shares for which such scrip is exchangeable may be sold by the corporation and the proceeds thereof distributed to the holders of such scrip, or subject to any other conditions which the board may determine. (d) A corporation may provide reasonable opportunity for persons entitled to fractions of a share or scrip to sell such fractions of a share or scrip or to purchase such additional fractions of a share or scrip as may be needed to acquire a full share.
(a) A corporation may declare and pay dividends or make other distributions in cash or its bonds or its property, including the shares or bonds of other corporations, on its outstanding shares, except when currently the corporation is insolvent or would thereby be made insolvent, or when the declaration, payment or distribution would be contrary to any restrictions contained in the certificate of incorporation. (b) Dividends may be declared or paid and other distributions may be made out of surplus only, so that the net assets of the corporation remaining after such declaration, payment or distribution shall at least equal the amount of its stated capital; except that a corporation engaged in the exploitation of natural resources or other wasting assets, including patents, or formed primarily for the liquidation of specific assets, may declare and pay dividends or make other distributions in excess of its surplus, computed after taking due account of depletion and amortization, to the extent that the cost of the wasting or specific assets has been recovered by depletion reserves, amortization or sale, if the net assets remaining after such dividends or distributions are sufficient to cover the liquidation preferences of share having such preferences in involuntary liquidation. (c) When any dividend is paid or any other distribution is made, in whole or in part, from sources other than earned surplus, it shall be accompanied by a written notice (1) disclosing the amounts by which such dividend or distribution affects stated capital, capital surplus and earned surplus, or (2) if such amounts are not determinable at the time of such notice, disclosing the approximate effect of such dividend or distribution upon stated capital, capital surplus and earned surplus and stating that such amounts are not yet determinable.
(a) A corporation may make pro rata distributions of its authorized but unissued shares to holders of any class or series of its outstanding shares, subject to the following conditions:
(b) A corporation making a pro rata distribution of authorized but unissued shares to the holders of any class or series of outstanding shares may at its option make an equivalent distribution upon treasury shares of the same class or series, and any shares so distributed shall be treasury shares. (c) A change of issued shares of any class which increases the stated capital represented by those shares may be made if the surplus of the corporation is sufficient to permit the transfer, and a transfer is concurrently made, from surplus to stated capital, of an amount equal to such increase. (d) No transfer from surplus to stated capital need be made by a corporation malting a distribution of its treasury shares to holders of any class of outstanding shares; nor upon a split up or division of issued shares of any class into greater number of shares of the same class, or a combination of issued shares of any class into a lesser number of shares of the same class, if there is no increase in the aggregate stated capital represented by them. (e) Nothing in this section shall prevent a corporation from making other transfers from earned surplus to stated capital or capital surplus in connection with share distributions or otherwise. (f) Every distribution to shareholders of certificates representing a share distribution or a change of shares which affects stated capital, capital surplus or earned surplus shall be accompanied by a written notice (1) disclosing the amounts by which such distribution or change affects stated capital, capital surplus and earned surplus, or (2) if such amounts are not determinable at the time of such notice, disclosing the approximate effect of such distribution or change upon stated capital, capital surplus and earned surplus and stating that such amounts are not yet determinable. (g) When issued shares are changed in any manner which affects stated capital, capital surplus or earned surplus, and no distribution to shareholders of certificates representing any shares resulting from such change is made, disclosure of the effect of such change upon the stated capital, capital surplus and earned surplus shall be made in the next financial statement covering the period in which such change is made that is furnished by the corporation to holders of shares of the class or series so changed, or if practicable, in the first notice of dividend or share distribution or change that is furnished to such shareholders between the date of the change of the shares and the next such financial statement, and in any event within six months of the date of such change.
(a) A corporation may provide in its certificate of incorporation for one or more classes or series of shares which are redeemable, in whole or in part, at the option of the corporation or, except as provided in paragraph (b) of this section, at the option of the holder, at such price or prices, within such period or periods and under such conditions as are stated in the certificate of incorporation. (b) A corporation shall not issue common shares which purport by their terms to grant to any holder thereof the right to compel the corporation to redeem such shares except that an open-end investment company, as defined in the United States "Investment Company Act of 1940", may, if its certificate of incorporation so provides and upon compliance with that act, issue shares which are redeemable at the option of the holder at a price approximately equal to the share's proportionate interest in the net assets of the corporation, and a shareholder may compel redemption of such shares in accordance with their terms. (c) No redeemable common shares, other than such shares of an investment company or of a member corporation of a securities exchange registered under a statute of the United States such as the Securities Exchange Act of 1934 or of a corporation described in this paragraph, shall be issued or redeemed unless the corporation at the time has outstanding a class of common shares that is not subject to redemption. Any common shares of a corporation which directly or through a subsidiary has a license or franchise from a governmental agency to conduct its business, which license or franchise is conditioned upon some or all of the holders of such corporation's common shares possessing prescribed qualifications, may be made subject to redemption by the corporation to the extent necessary to prevent the loss of, or to reinstate, such license or franchise. (d) Nothing in this section shall prevent a corporation from creating sinking funds for the redemption or purchase of its shares to the extent permitted by section 513 (Purchase or redemption by a corporation of its own shares).
(a) A corporation, subject to any restrictions contained in its certificate of incorporation, may purchase its own shares, or redeem its redeemable shares, out of surplus except when currently the corporation is insolvent or would thereby be made insolvent. (b) A corporation may purchase its own shares out of stated capital unless the corporation is insolvent or would thereby be made insolvent, if the purchase is made for the purpose of:
(c) A corporation, subject to any restrictions contained in its certificate of incorporation, may redeem or purchase its redeemable shares out of stated capital unless the corporation is insolvent or would thereby be made insolvent and unless such redemption or purchase would reduce net assets below the stated capital remaining after giving effect to the cancellation of such redeemable shares. (d) When its redeemable shares are purchased by a corporation within the period of redeemability, the purchase price thereof shall not exceed the applicable redemption price stated in the certificate of incorporation. Upon a call for redemption, the amount payable by the corporation for shares having a cumulative preference on dividends may include the stated redemption price plus accrued dividends to the next dividend date following the date of redemption of such shares. (e) No resident domestic corporation which is subject to the provisions of section nine hundred twelve of this Code shall purchase or agree to purchase more than ten percent of the stock of the resident domestic corporation from a shareholder for more than the market value thereof unless such purchase or agreement to purchase is approved by the affirmative vote of the board of directors followed by the affirmative vote of the holders of a majority of all outstanding shares entitled to vote thereon at a meeting of shareholders unless the certificate of incorporation requires a greater percentage of the outstanding shares to approve. The provisions of this paragraph (e) shall not apply when the resident domestic corporation offers to purchase shares from all holders of stock or for stock which the holder has been the beneficial owner of for more than two years. The terms"resident domestic corporation", "stock", "beneficial owner", and "market value" shall be as defined in section nine hundred twelve of this Code.
(a) An agreement for the purchase by a corporation of its own shares shall be enforceable by the shareholder and the corporation to the extent such purchase is permitted at the time of purchase by section 513 (Purchase or redemption by a corporation of its own shares). (b) The possibility that a corporation may not be able to purchase its shares under section 513 shall not be a ground for denying to either party specific performance of any agreement for the purchase by a corporation of its own shares, if at the time for performance the corporation can purchase all or part of such shares under section 513.
(a) Shares that have been issued and have been purchased, redeemed or otherwise reacquired by a corporation shall be canceled if they are reacquired out of stated capital, or if they are converted shares, or if the certificate of incorporation requires that such shares be canceled upon reacquisition. (b) Any shares reacquired by the corporation and not required to be canceled may be either retained as treasury shares or canceled by the board at the time of reacquisition or at any time thereafter. (c) Neither the retention of reacquired shares as treasury shares, nor their subsequent distribution to shareholders or disposition for a consideration shall change the stated capital. When treasury shares are disposed of for a consideration, the capital surplus shall be increased by the full amount of the consideration received unless the corporation exercises the option granted in subparagraph (a)(5) of section 517 (Special provisions relative to surplus and reserves). (d) When reacquired shares other than converted shares are canceled, the stated capital of the corporation is thereby reduced by the amount of stated capital then represented by such shares plus any stated capital not theretofore allocated to any designated class or series which is thereupon allocated to the shares canceled The amount by which stated capital has been reduced by cancellation of reacquired shares during a stated period of time shall be disclosed in the next financial statement covering such period that is furnished by the corporation to all its shareholders or, if practicable, in the first notice of dividend or share distribution that is furnished to the holders of each class or series of its shares between the end of the period and the next such financial statement, and in any event to all its shareholders within six months of the date of the reduction of capital. (e) Shares canceled under this section are restored to the status of authorized but unissued shares. However, if the certificate of incorporation prohibits the reissue of any shares required or permitted to be canceled under this section, the board by certificate of amendment under section 805 (Certificate of amendment; contents) shall reduce the number of authorized shares accordingly.
(a) Except as otherwise provided in the certificate of incorporation, the board may at any time reduce the stated capital of a corporation by eliminating from stated capital amounts previously transferred by the board from surplus to stated capital and not allocated to any designated class or series of shares, or by eliminating any amount of stated capital represented by issued shares having a par value which exceeds the aggregate par value of such issued shares without par value. However, if the consideration for the issue of shares without par value was fixed by the shareholders under section 504 (Consideration and payment for shares), the board shall not reduce the stated capital represented by such shares except to the extent, if any, that the board was authorized by the shareholders to allocate any portion of such consideration to surplus. (b) No reduction of stated capital shall be made under this section unless after such reduction the stated capital exceeds the aggregate preferential amounts payable upon involuntary liquidation upon all issued shares having preferential rights in the assets plus the par value of all other issued shares with par value. (c) When a reduction of stated capital has been effected under this section, the amount of such reduction shall be disclosed in the next financial statement covering the period in which such reduction is made that is furnished by the corporation to all its shareholders or, if practicable, in the first notice of dividend or share of distribution that is furnished to the holders of each class or series of its shares between the date of such reduction and the next such financial statement, and in any event to all its shareholders within six months of the date of such reduction.
(a) Whenever under this chapter it is necessary for a corporation to determine the amount or availability of its earned surplus, the following rules shall apply:
(b) Nothing in this section shall prevent a corporation from creating reserves from its earned surplus or capital surplus for any proper purpose or purposes, or from increasing, decreasing or abolishing any such reserve.
(a) No corporation shall issue bonds except for money or other property, tangible or intangible, or labor or services actually received by or performed for the corporation or for its benefit or in the formation or reorganization, or a combination thereof. In the absence of fraud in the transaction, the judgment of the board as to the value of the consideration received shall be conclusive. (b) If a distribution of its own bonds is made by a corporation to holders of any class or series of its outstanding shares, there shall be concurrently transferred to the liabilities of the corporation in respect of such bonds an amount of surplus equal to the principal amount of, and any accrued interest on, such bonds. The amount of the surplus so transferred shall be the consideration for the issue of such bonds. (c) A corporation may, in its certificate of incorporation, confer upon the holders of any bonds issued or to be issued by the corporation, rights to inspect the corporate books and records and to vote in the election of directors and on any other matters on which shareholders of the corporation may vote.
(a) When so provided in the certificate of incorporation, and subject to the restrictions in paragraph (d), a corporation may issue shares convertible,
(b) Unless otherwise provided in the certificate of incorporation, and subject to the restrictions of paragraph (d), a corporation may issue its bonds convertible into other bonds or into shares of the corporation within such period and upon such terms and conditions as are fixed by the board. (c) If there is shareholder approval for the issue of bonds or shares convertible into shares of the corporation, such approval may provide that the board is authorized by certificate of amendment under section 805 (Certificate of amendment; contents) to increase the authorized shares of any class or series to such number as will be sufficient, when added to the previously authorized but unissued shares of such class or series, to satisfy the conversion privileges of any such bonds or shares convertible into shares of such class or series. (d) No issue of bonds or shares convertible into shares of the corporation shall be made unless:
(e) No conversion of shares shall result in a reduction of stated capital. No privilege of conversion may be conferred upon, or altered in respect to, any shares or bonds that would result in the receipt by the corporation of less than the minimum consideration required to be received upon the issue of new shares. The consideration for shares issued upon the exercise of a conversion privilege shall be that provided in paragraph (9) of section 504 (Consideration and payment for shares). (f) When shares have been converted, they shall be canceled and disclosure of the conversion of shares during a stated period of time and its effect; if any, upon stated capital shall be made in the next financial statement covering such period that is furnished by the corporation to all its shareholders or, if practicable, in the first notice of dividend or share distribution that is furnished to the holders of each class or series of its shares between the end of such period and the next such financial statement, and in any event to all its shareholders within six months of the date of the conversion of shares. When bonds have been converted, they shall be canceled and not reissued except upon compliance with the provisions governing the issue of convertible bonds.
Failure of the corporation to comply in good faith with the notice or disclosure provisions of paragraph (c) of section 510 (Dividends or other distributions in cash or property), or paragraphs (f) and (g) of section 511 (Share distributions and changes), or paragraphs (d) of section 515 (Reacquired shares), or paragraph (c) or section 516 (Reduction of stated capital in certain cases), or subparagraph (a)(4) of section 517 (Special provisions relative to surplus and reserves), or paragraph (f) of section 519 (Convertible shares and bonds), shall make the corporation liable for any damage sustained by any shareholder in consequence thereof.
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