§ 490.145 — Part definitions

Iowa § 490.145

• Jurisdiction: Iowa
• Title XII: BUSINESS ENTITIES
• Ch. 490: BUSINESS CORPORATIONS

Text

As used in this part:
1. “Corporateaction”meansanyactiontakenbyoronbehalfofthecorporation, including
any action taken by the incorporator, the board of directors, a committee of the board of
directors, an officer or agent of the corporation, or the shareholders.
2. “Date of the defective corporate action” means the date or, if the defective corporate
action occurred or may have occurred on more than one date, the range of dates, or the
approximate date or range of dates, if the exact date or range of dates is unknown or not
readily ascertainable, the defective corporate action was purported to have been taken.
3. “Defective corporate action” means all of the following:
a. Any corporate action purportedly taken that is, and at the time such corporate action
was purportedly taken would have been, within the power of the corporation, but is void or
voidable due to a failure of authorization.
b. An overissue.
4. “Failure of authorization” means the failure to authorize, approve, or otherwise
effect a corporate action in compliance with the provisions of this chapter, the articles of
incorporation or bylaws, a corporate resolution, or any plan or agreement to which the
corporation is a party, if and to the extent such failure would render such corporate action
void or voidable.
5. “Overissue” means the purported issuance of any of the following:
a. Shares of a class or series in excess of the number of shares of a class or series the
corporation has the power to issue under section 490.601 at the time of such issuance.
b. Shares of any class or series that is not then authorized for issuance by the articles of
incorporation.
6. “Putative shares” means the shares of any class or series, including shares issued
upon exercise of rights, options, warrants or other securities convertible into shares of the

corporation, or interests with respect to such shares, that were created or issued as a result
of a defective corporate action, and any of the following applies:
a. But for any failure of authorization would constitute valid shares.
b. Cannot be determined by the board of directors to be valid shares.
7. “Valid shares” means the shares of any class or series that have been duly authorized
and validly issued in accordance with this chapter, including as a result of ratification or
validation under this part.
8. a. “Validation effective time” with respect to any defective corporate action ratified
under this part means the later of the following:
(1) The time at which the ratification of the defective corporate action is approved by
the shareholders, or if approval of shareholders is not required, the time at which the notice
required by section 490.149 becomes effective in accordance with section 490.141.
(2) The time at which any articles of validation filed in accordance with section 490.151
become effective.
b. The validation effective time shall not be affected by the filing or pendency of a judicial
proceeding under section 490.152 or otherwise, unless otherwise ordered by the court.