13.1-638 - Authorized shares.
§ 13.1-638. Authorized shares.
A. The articles of incorporation shall set forth any classes of shares andseries of shares within a class, and the number of shares of each class andseries, that the corporation is authorized to issue. If more than one classor series of shares is authorized, the articles of incorporation shallprescribe a distinguishing designation for each class or series and shalldescribe, prior to the issuance of shares of a class or series, the terms,including the preferences, rights and limitations of that class or series.Except to the extent varied as permitted by this section or by subsection Bof § 13.1-646, all shares of a class or series shall have terms, includingpreferences, rights, and limitations, that are identical with those of othershares of the same class or series.
B. The articles of incorporation shall authorize:
1. One or more classes or series of shares that together have unlimitedvoting rights; and
2. One or more classes or series of shares, which may be the same class orclasses or series as those with voting rights, that together are entitled toreceive the net assets of the corporation upon dissolution.
C. The articles of incorporation may authorize one or more classes or seriesof shares that:
1. Have special, conditional or limited voting rights, or no right to vote,except to the extent otherwise provided by this chapter;
2. Are redeemable or convertible as specified in the articles ofincorporation:
a. At the option of the corporation, the shareholder, or another person orupon the occurrence of a specified event;
b. For cash, indebtedness, securities, or other property; and
c. At prices and in amounts specified or determined in accordance with aformula;
3. Entitle the holders to distributions, calculated in any manner, includingdividends that may be cumulative, noncumulative or partially cumulative;
4. Have preference over any other class or series of shares with respect todistributions, including distributions upon the dissolution of thecorporation; or
5. Entitle the holders to other specified rights, including a right that notransaction of a specified nature shall be consummated while any such sharesremain outstanding except upon the assent of all or a specified portion ofsuch shares.
D. Any of the terms of shares may be made dependent upon facts objectivelyascertainable outside the articles of incorporation in accordance withsubsection L of § 13.1-604.
E. Any of the terms of shares may vary among holders of the same class orseries so long as such variations are expressly set forth in the articles ofincorporation.
F. The description of the preferences, rights, and limitations of classes orseries of shares in subsection C is not exhaustive.
(Code 1950, §§ 13.1-12, 13.1-13; 1956, c. 428; 1958, c. 564; 1985, c. 522;1990, c. 423; 2005, c. 765.)