§ 55-6-01. Authorized shares.
Article6.
Shares and Distribution.
Part 1. Shares.
§ 55‑6‑01. Authorized shares.
(a) The articles ofincorporation must prescribe the classes of shares and the number of shares ofeach class that the corporation is authorized to issue. If more than one classof shares is authorized, the articles of incorporation must prescribe adistinguishing designation for each class, and, prior to the issuance of sharesof a class, the preferences, limitations, and relative rights of that classmust be described in the articles of incorporation. All shares of a class musthave preferences, limitations, and relative rights identical with those ofother shares of the same class unless the articles of incorporation divide aclass into series. If a class is divided into series, all the shares of anyone series must have preferences, limitations, and relative rights identicalwith those of other shares of the same series. The requirement of identicalrights within a class shall not be construed to conflict with any specialvoting rights specified elsewhere in this Chapter.
(b) Each series of aclass must be given a distinguishing designation.
(c) The articles ofincorporation must authorize
(1) One or more classesof shares that together have unlimited voting rights, and
(2) One or more classesof 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 upondissolution.
(d) The articles ofincorporation may authorize one or more classes or series within a class ofshares that:
(1) Have special,conditional, or limited voting rights, or no right to vote, except to theextent prohibited by this Chapter;
(2) Are redeemable orconvertible as specified in the articles of incorporation (i) at the option ofthe corporation, the shareholder, or another person or upon the occurrence of adesignated event; (ii) for cash, indebtedness, securities, or other property;(iii) in a designated amount or in an amount determined in accordance with a designatedformula or by reference to extrinsic data or events;
(3) Entitle the holdersto distributions calculated in any manner, including dividends that may becumulative, noncumulative, or partially cumulative;
(4) Have preference overany other class or series within a class of shares with respect todistributions, including dividends and distributions upon the dissolution ofthe corporation.
(5) Notwithstanding theprovisions of (d)(3) and (4) of this section, noncumulative preferred shares ofa class or series within a class out of which shares were initially issuedafter June 30, 1957, and before October 1, 1969, shall be entitled to adividend credit, as defined in this Chapter, and until such dividend credit isfully discharged no dividend shall be paid to any shares that are subordinateto such preferred shares as to dividends.
(e) The description ofthe designations, preferences, limitations, and relative rights in subsection(d) is not exhaustive. (1901, c. 2, s. 19; 1903, c. 660, ss. 2, 3; Rev., s.1159; C.S., s. 1156; 1921, c. 116, s. 1; 1923, c. 155; C.S., s. 1167(a); 1925,c. 118, ss. 2, 2a; c. 262, s. 1; 1939, c. 199; 1949, c. 929; G.S., ss. 55‑61,55‑73; 1953, c. 822, ss. 1, 3; 1955, c. 1371, s. 1; 1969, c. 751, ss. 15‑17;1985, c. 117, s. 1; 1989, c. 265, s. 1.)