§ 10A-2A-1.48 — Action on Ratification

Alabama § 10A-2A-1.48

• Jurisdiction: Alabama
• Title 10A: Alabama Business and Nonprofit Entities Code
• Ch. 2A: Alabama Business Corporation Law
• Art. 1: General Provisions
• Div. D: Ratification of Defective Corporate Actions

Text

(a) The quorum and voting requirements applicable to a ratifying action by the board of directors under Section 10A-2A-1.47(a) shall be the quorum and voting requirements applicable to the corporate action proposed to be ratified at the time the ratifying action is taken.
(b) If the ratification of the defective corporate action requires approval by the stockholders under Section 10A-2A-1.47(c), and if the approval is to be given at a meeting, the corporation shall notify each holder of valid and putative stock, regardless of whether entitled to vote
of
(i) the date of the action by the board of directors under Section 10A-2A-1.47(a), which shall be the record date, and (ii)
the date of the occurrence of
the
defective corporate action, provided that notice shall not be required to be given to holders of valid or putative stock whose identities or addresses for notice cannot be determined from the records of the corporation. The notice must state that the purpose, or one of the purposes, of the meeting, is to consider ratification of a defective corporate action and must be accompanied by (i) either a copy of the action taken by the board of directors in accordance with Section 10A-2A-1.47(a) or the information required by Section 10A-2A-1.47(a)(1) through (a)(4), and (ii) a statement that any claim that the ratification of
the
defective corporate action and any putative stock issued as a result of
the
defective corporate action should not be effective, or should be effective only on certain conditions, shall be brought within 120 days from the applicable validation effective time.
(c) Except as provided in subsection (d) with respect to the voting requirements to ratify the election of a director, the quorum and voting requirements applicable to the approval by the stockholders required by Section 10A-2A-1.47(c) shall be the quorum and voting requirements applicable to the corporate action proposed to be ratified at the time of
the
stockholder approval.
(d) The approval by stockholders to ratify the election of a director requires that the votes cast within the voting group favoring
the
ratification exceed the votes cast opposing the ratification of the election at a meeting at which a quorum is present.
(e) Putative stock on the
date
of the action by the board of directors under Section 10A-2A-1.47(a)
(and without giving effect to any ratification of putative stock that becomes effective as a result of
the
vote) shall neither be entitled to vote nor counted for quorum purposes in any vote to approve the ratification of any defective corporate action.
(f) If the approval under this section of putative stock would result in an overissue, in addition to the approval required by Section 10A-2A-1.47, approval of an amendment to the certificate of incorporation under Article 10 to increase the number of shares of stock of an authorized class or series or to authorize the creation of a class or series of stock so there would be no overissue shall also be required.

Legislative History

(Act 2019-94, §1; Act 2024-413, §1.)