§ 7-106-101 — Authorized shares

(1) The articles of incorporation shall state
the classes of shares and the number of shares of each class that the corporation is
authorized to issue. If more than one class of shares is authorized, the articles of
incorporation shall state a distinguishing designation for each class, and, before the
issuance of shares of any class, the preferences, limitations, and relative rights of
that class shall be stated in the articles of incorporation. All shares of a class shall
have preferences, limitations, and relative rights identical with those of other
shares of the same class except to the extent otherwise permitted by section 7-106-102.

(2) The articles of incorporation shall authorize:

(a) One or more classes of shares that together have unlimited voting rights;
and

(b) One or more classes of 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 upon dissolution.

(3) The articles of incorporation may authorize one or more classes of shares
that:

(a) Have special, conditional, or limited voting rights, or no right to vote;
except that no condition, limitation, or prohibition on voting shall eliminate any right
to vote provided by section 7-110-104;

(b) Are redeemable or convertible as stated in the articles of incorporation:

(I) At the option of the corporation, the shareholder, or another person or
upon the occurrence of a designated event;

(II) For money, indebtedness, securities, or other property; or

(III) In a designated amount or in an amount determined in accordance with a
designated formula or by reference to extrinsic facts or events;

(c) Entitle the holders to distributions calculated in any manner, including
dividends that may be cumulative, noncumulative, or partially cumulative; or

(d) Have preference over any other class of shares with respect to
distributions, including dividends and distributions upon the dissolution of the
corporation.

(4) The description of the preferences, limitations, and relative rights of
classes of shares in subsection (3) of this section is not exhaustive.

Legislative History

Source: L. 93: Entire article added, p. 753, � 1, effective July 1, 1994. L. 2003: IP(3)(b) amended, p. 2316, � 226, effective July 1, 2004. L. 2006: (1) amended, p. 880, � 70, effective July 1.