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Code of Criminal Procedure

Title 12. Corporations and Associations

Chapter 1. Business Corporation Act

Part 1. General Provisions

Subpart A. Short Title and Reservation of Power

Tit. 12, Art. 1-101. Short title

This Chapter shall be known and may be cited as the "Business Corporation Act".  References in this Chapter and elsewhere in the Revised Statutes to the Business Corporation Act or the Business Corporation Law shall be deemed to be references to this Chapter.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-102. Reservation of power to amend or repeal

The legislature has power to amend or repeal all or part of this Chapter at any time and all domestic and foreign corporations subject to this Chapter are governed by the amendment or repeal.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Subpart B. Filing Documents

Tit. 12, Art. 1-120. Requirements for documents;  extrinsic facts

    A. A document must satisfy the requirements of this Section, and of any other provision of this Chapter that adds to or varies these requirements, to be entitled to filing by the secretary of state.

            B. The filing of the document in the office of the secretary of state must be required or permitted by this Chapter.

            C. The document must contain the information required by this Chapter. It may contain other information as well.

            D. The document must be typewritten or printed or, if transmitted electronically or online, it must be in a format that can be retrieved or reproduced in typewritten or printed form. The inclusion of handwritten notations or entries on a typewritten or printed document does not affect the eligibility of the document for filing.

            E. The document must be in the English language. A corporate name need not be in English if written in English letters or Arabic or Roman numerals, and the certificate of existence required of foreign corporations need not be in English if accompanied by a reasonably authenticated English translation.

            F. The document must be signed by one of the following:

            (1) By the chairman of the board of directors of a domestic or foreign corporation, by its president, or by another of its officers.

            (2) If directors have not been selected or the corporation has not been formed, by an incorporator.

            (3) If the corporation is in the hands of a receiver, liquidator, trustee, or other court-appointed fiduciary, by that fiduciary.

            G. The person executing the document shall sign it and state, beneath or opposite the person's signature, the person's name and the capacity in which the document is signed. The document may but need not contain a corporate seal.

            H. Except as provided in R.S. 12:1701, the following documents shall be acknowledged by one of the persons who signs the document or instead shall be executed by authentic act:

            (1) Articles of incorporation.

            (2) Written consent to appointment by a registered agent.

            (3) Articles of correction.

            (4) Articles of amendment.

            (5) Articles of merger.

            (6) Articles of share exchange.

            (7) Articles of domestication.

            (8) Articles of nonprofit conversion.

            (9) Articles of nonprofit domestication and conversion.

            (10) Articles of entity conversion.

            (11) Articles of dissolution.

            (12) Articles of revocation of dissolution.

            (13) Articles of termination.

            (14) Articles of reinstatement.

            (15) Contract acknowledgment statement by a corporation that contracts with the state.

            I. If the secretary of state has prescribed a mandatory form for the document pursuant to R.S. 12:1-121, the document must be in or on the prescribed form.

            J. The document must be delivered to the office of the secretary of state for filing. Delivery may be made by electronic or online transmission if and to the extent permitted by the secretary of state. If it is filed in typewritten or printed form and not transmitted electronically or online, the secretary of state may require one exact or conformed copy to be delivered with the document, except as provided in R.S. 12:1-503.

            K. When the document is delivered to the office of the secretary of state for filing, the correct filing fee and any tax, fee, or penalty required to be paid therewith by this Chapter or other provision of law must be paid, or provision for payment made, in a manner permitted by the secretary of state.

            L. Whenever a provision of this Chapter permits any of the terms of a plan or a filed document to be dependent on facts objectively ascertainable outside the plan or filed document, the following provisions apply:

            (1) The manner in which the facts will operate upon the terms of the plan or filed document shall be set forth in the plan or filed document.

            (2) The facts may include any of the following but are not limited to:

            (a) Any of the following that is available in a nationally recognized news or information medium either in print or electronically: statistical or market indices, market prices of any security or group of securities, interest rates, currency exchange rates, or similar economic or financial data.

            (b) A determination or action by any person or body, including the corporation or any other party to a plan or filed document.

            (c) The terms of, or actions taken under, an agreement to which the corporation is a party or any other agreement or document.

            (3) As used in this Subsection:

            (a) "Filed document" means a document filed with the secretary of state under any provision of this Chapter except R.S. 12:1-1621.

            (b) "Plan" means a plan of domestication, nonprofit conversion, entity conversion, merger, or share exchange.

            (4) The following provisions of a plan or filed document may not be made dependent on facts outside the plan or filed document:

            (a) The name and address of any person required in a filed document.

            (b) The registered office of any entity required in a filed document.

            (c) The registered agent of any entity required in a filed document.

            (d) The number of authorized shares and designation of each class or series of shares.

            (e) The effective date of a filed document.

            (f) Any required statement in a filed document of the date on which the underlying transaction was approved or the manner in which that approval was given.

            (5) If a provision of a filed document is made dependent on a fact ascertainable outside of the filed document, and that fact is not ascertainable by reference to a source described in Subparagraph (L)(2)(a) of this Section or a document that is a matter of public record, or the affected shareholders have not received notice of the fact from the corporation, then the corporation shall file with the secretary of state articles of amendment setting forth the fact promptly after the time when the fact referred to is first ascertainable or thereafter changes. Articles of amendment under this Paragraph are deemed to be authorized by the authorization of the original filed document or plan to which they relate and may be filed by the corporation without further action by the board of directors or the shareholders.

            M. As used in this Section, "online" means through the secretary of state's commercial online computer system.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 554, §2, eff. Jan. 1, 2018.

Tit. 12, Art. 1-121. Forms

            A.(1) The secretary of state may prescribe and furnish on request forms for any of the following:

             (a) An application for a certificate of existence and standing.

            (b) A foreign corporation's application for a certificate of authority to do business in this state.

            (c) A foreign corporation's application for a certificate of withdrawal.

            (d) The annual report.

            (2) If the secretary of state so requires, use of these forms is mandatory.

            B. The secretary of state may prescribe and furnish forms for other documents required or permitted to be filed by this Chapter.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2019, No. 19, §2, eff. May 28, 2019.

Tit. 12, Art. 1-122. Filing, service, and copying fees

The secretary of state shall collect the fee authorized in R.S. 49:222 when a document described in this Chapter is delivered to the secretary of state for filing.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-123. Effective time and date of document

A.  Except as provided in Subsections B and C of this Section and in R.S. 12:1-124(C), a document accepted for filing is effective at one of the following:

(1)  The date and time of its receipt for filing, as evidenced by such means as the secretary of state may use for the purpose of recording the date and time of receipt.

(2)  A later time, on the date of receipt, specified in the document as its effective time.

B.  Except as provided in Subsection C of this Section, a corporation's original articles of incorporation become effective when signed as provided in R.S. 12:1-120 if all of the following conditions are met:

(1)  The articles are received for filing by the secretary of state within five days, exclusive of legal holidays, after the date that the articles are signed.

(2)  The articles are accepted for filing.

C.  A document may specify a delayed effective time and date, and if it does so the document becomes effective at the time and date specified.  If a delayed effective date but no time is specified, the document is effective at the close of business on that date.  A delayed effective date for a document may not be earlier than the first date and time that the document otherwise would have become effective under this Section or later than the ninetieth day after the date the document is received for filing by the secretary of state.

D.  A document is accepted for filing when the secretary of state files the document as provided in R.S. 12:1-125(B).

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-124. Correcting filed document

            A. A domestic or foreign corporation may correct a document filed with the secretary of state if any of the following apply:

            (1) The document contains an inaccuracy.

            (2) The document was defectively signed, attested, sealed, verified, or acknowledged.

            (3) The electronic transmission was defective.

            B. A document is corrected by delivering to the secretary of state for filing articles of correction. The articles of correction shall do all of the following:

            (1) Describe the document, including its filing date, or attach a copy of it to the articles.

            (2) Specify the inaccuracy or defect to be corrected.

            (3) Correct the inaccuracy or defect.

            C. Articles of correction are effective on the effective date of the document they correct except as to persons relying on the uncorrected document and adversely affected by the correction. As to those persons, articles of correction are effective when filed.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

Tit. 12, Art. 1-125. Filing duty of secretary of state

            A. If a document delivered to the office of the secretary of state for filing satisfies the requirements of R.S. 12:1-120, the secretary of state shall file it.

            B. The secretary of state files a document by recording it as filed on the date and time of receipt. After filing a document, except as provided in R.S. 12:1-503, the secretary of state shall deliver to the domestic or foreign corporation or its representative a copy of the document with an acknowledgment of the date of filing.

            C. If the secretary of state refuses to file a document, it shall be returned to the domestic or foreign corporation or its representative within five days after the document was delivered, together with a brief, written explanation of the reason for the refusal.

            D. The secretary of state's duty to file documents under this Section is ministerial. The secretary's filing or refusing to file a document does not do any of the following:

            (1) Affect the validity or invalidity of the document in whole or part.

            (2) Relate to the correctness or incorrectness of information contained in the document.

            (3) Create a presumption that the document is valid or invalid or that information contained in the document is correct or incorrect.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-126. Appeal from secretary of state's refusal to file document

[Reserved.]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-127. Evidentiary effect of copy of filed document

[Reserved.]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-128. Certificate of existence and standing

     A. Anyone may apply to the secretary of state to furnish a certificate of existence and standing for a domestic corporation or a certificate of authorization and standing for a foreign corporation.

            B. A certificate of existence, or authorization, and standing shall state all of the following:

            (1) The domestic corporation's corporate name or the foreign corporation's corporate name used in this state.

            (2) One of the following:

            (a) That the domestic corporation is duly incorporated under the law of this state, along with the date of its incorporation and the period of its duration if less than perpetual.

             (b) That the foreign corporation is authorized to do business in this state.

            (3) [Reserved.]

            (4) That its most recent annual report required by R.S. 12:1-1621 or R.S. 12:309 has been filed with the secretary of state and that the corporation is in good standing, or that its most recent annual report has not been filed as required by law.

            (5) That the corporation is not dissolved or terminated.

            C. Subject to any qualification stated in the certificate, a certificate of existence, or authorization, and standing issued by the secretary of state may be relied upon as conclusive evidence that the domestic corporation is in existence or the foreign corporation is authorized to transact business in this state, and, if the certificate so states, that the corporation is in good standing.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

Tit. 12, Art. 1-129. Penalty for signing false document

[Reserved.]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Subpart C. Secretary of State

Tit. 12, Art. 1-130. Powers

[Reserved.]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Subpart D. Definitions

Tit. 12, Art. 1-140. Definitions

            In this Chapter:

            (1) "Articles of incorporation" means the original articles of incorporation, all amendments thereof, and any other documents permitted or required to be filed by a domestic business corporation with the secretary of state under any provision of this Chapter except R.S. 12:1-1621. If an amendment of the articles or any other document filed under this Chapter restates the articles in their entirety, thenceforth the "articles" shall not include any prior documents.

            (2) "Authorized shares" means the shares of all classes a domestic or foreign corporation is authorized to issue.

            (2A) "Beneficial shareholder" means a person who owns the beneficial interest in shares, including a record shareholder or a person on whose behalf shares are registered in the name of an intermediary or nominee.

            (3) "Conspicuous" means so written, displayed, or presented that a reasonable person against whom the writing is to operate should have noticed it. For example, text in italics, boldface, contrasting color, capitals, or underlined is conspicuous.

            (4) "Corporation", "domestic corporation", or "domestic business corporation" means a corporation for profit, which is not a foreign corporation, incorporated under or subject to the provisions of this Chapter.

            (5) "Deliver" or "delivery" means any method of delivery used in conventional commercial practice, including delivery by hand, mail, commercial delivery, and, if authorized in accordance with R.S. 12:1-141, by electronic transmission.

            (6) "Distribution" means a direct or indirect transfer of money or other property, except its own shares, or incurrence of indebtedness by a corporation to or for the benefit of its shareholders in respect of any of its shares. A distribution may be in any of the following forms:

            (a) A declaration or payment of a dividend.

            (b) A purchase, redemption, or other acquisition of shares.

            (c) A distribution of indebtedness.

            (d) Any other form.

            (6A) "Document" means either of the following:

            (a) Any tangible medium on which information is inscribed, and includes any writing or written instrument.

            (b) An electronic record.

            (6B) "Domestic unincorporated entity" means an unincorporated entity whose internal affairs are governed by the laws of this state.

            (7) "Effective date of notice" is defined in R.S. 12:1-141.

            (7A) "Electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.

            (7B) "Electronic record" means information that is stored in an electronic or other medium and is retrievable in paper form through an automated process used in conventional commercial practice, unless otherwise authorized in accordance with R.S. 12:1-141(J).

            (7C) "Electronic transmission" or "electronically transmitted" means any form or process of communication, not directly involving the physical transfer of paper or another tangible medium, that is both of the following:

            (a) Suitable for the retention, retrieval, and reproduction of information by the recipient.

            (b) Retrievable in paper form by the recipient through an automated process used in conventional commercial practice, unless otherwise authorized in accordance with R.S. 12: 1-141(J).

            (7D) "Eligible entity" means a domestic or foreign unincorporated entity or a domestic or foreign nonprofit corporation.

            (7E) "Eligible interests" means interests or memberships.

            (8) [Reserved.]

            (9) "Entity" includes a domestic and foreign business corporation, a domestic and foreign nonprofit corporation, an estate, a trust, a domestic and foreign unincorporated entity, and a state, the United States, and a foreign government.

            (9A) The phrase "facts objectively ascertainable" outside of a filed document or plan is defined in R.S. 12:1-120(L).

            (9B) "Expenses" means reasonable expenses of any kind, including attorney's fees and other litigation-related expenses, that are incurred in connection with a matter.

            (9C) "Filing entity" means an unincorporated entity that is required by law to file a public organic document for any of the purposes stated in the definition of that term.

            (10) "Foreign corporation" means a corporation incorporated under a law other than the law of this state, that would be a business corporation if incorporated under the laws of this state.

            (10A) "Foreign nonprofit corporation" means a corporation incorporated under a law other than the law of this state, that would be a nonprofit corporation if incorporated under the laws of this state.

            (10B) "Foreign unincorporated entity" means an unincorporated entity whose internal affairs are governed by an organic law of a jurisdiction other than this state.

            (11) "Governmental subdivision" includes parish, authority, county, district, municipality, and any other state or local political subdivision.

            (12) "Includes" denotes a partial definition.

            (13) "Individual" means a natural person.

            (13A) "Intangible property" means a thing that is classified as incorporeal, as distinguished from corporeal, or property that is classified as intangible, as distinguished from tangible, by the law of the jurisdiction that governs its ownership.

            (13B) "Interest" means either or both of the following rights under the organic law of an unincorporated entity:

            (a) The right to receive distributions from the entity either in the ordinary course or upon liquidation, other than as an assignee or other similar role.

            (b) The right to receive notice or vote on issues involving its internal affairs, other than as an agent, assignee, proxy, or person responsible for managing its business and affairs.

            (13C) "Interest holder" means a person who owns an interest.

            (13D) "Knowledge" means actual knowledge. "Know" has a corresponding meaning.

            (14) "Means" denotes an exhaustive definition.

            (14A) "Membership" means the rights of a member in a domestic or foreign nonprofit corporation.

            (14B) "Nonfiling entity" means an unincorporated entity that is not a filing entity.

            (14C) "Nonprofit corporation" or "domestic nonprofit corporation" means a corporation incorporated under the laws of this state and subject to the provisions of the Nonprofit Corporation Law.

            (15) "Notice" is defined in R.S. 12:1-141.

            (15A) "Organic document" means a public organic document or a private organic document.

            (15B) "Organic law" means the statute governing the internal affairs of a domestic or foreign business or nonprofit corporation or unincorporated entity.

            (15C) "Owner liability" means personal liability for a debt, obligation, or liability of a domestic or foreign business or nonprofit corporation or unincorporated entity that is imposed on a person solely by reason of the person's status as a shareholder, partner, member, or interest holder or solely by the terms of articles of incorporation, bylaws, or an organic document under a provision of the organic law of an entity authorizing the articles of incorporation, bylaws or an organic document to make one or more specified shareholders, partners, members, or interest holders liable in their capacity as shareholders, partners, members, or interest holders for all or specified debts, obligations, or liabilities of the entity.

            (16) "Person" includes an individual and an entity.

            (16A) "Personal property" means a thing that is classified as movable, as distinguished from immovable, or property that is classified as personal, as distinguished from real, by the law of the jurisdiction that governs its ownership.

            (17) "Principal office" means the office, in or out of this state, so designated in the most recent annual report or, until an annual report is filed, in the articles of incorporation, where the principal executive offices of a domestic or foreign corporation are located.

            (17A) "Private organic document" means any document, other than the public organic document, if any, that determines the internal governance of an unincorporated entity. Where a private organic document has been amended or restated, the term means the private organic document as last amended or restated.

            (17B) "Public organic document" means the document, if any, that is filed of public record to create an unincorporated entity, to allow it to own immovable property as to third persons, or to protect its shareholders, partners, members, or interest holders against owner liability. Where a public organic document has been amended or restated, the term means the public organic document as last amended or restated.

            (18) "Proceeding" includes civil suit and civil, criminal, administrative, and investigatory action.

            (18A) "Public corporation" means a corporation that has shares listed on a national securities exchange or regularly traded in a market maintained by one or more members of a national securities association.

            (18B) "Qualified director" is defined in R.S. 12:1-143.

            (18C) "Real property" means a thing that is classified as immovable, as distinguished from movable, or property that is classified as real, as distinguished from personal, by the law of the jurisdiction that governs its ownership.

            (19) "Record date" means the date established under Part 6 or 7 of this Chapter on which a corporation determines the identity of its shareholders and their shareholdings for purposes of this Chapter. The determinations shall be made as of the close of business on the record date unless another time for doing so is specified when the record date is fixed.

            (19A) "Record shareholder" means either of the following:

            (a) The person in whose name shares are registered in the records of the corporation.

            (b) The person identified as the beneficial owner of shares in a beneficial ownership certificate pursuant to R.S. 12:1-723 on file with the corporation to the extent of the rights granted by such certificate.

            (20) "Secretary" means the corporate officer responsible for custody of the minutes of the meetings of the board of directors and of the shareholders and for authenticating records of the corporation.

            (21) "Shareholder" means, unless varied for purposes of a specific provision of this Chapter, a record shareholder.

            (22) "Shares" means the units into which the proprietary interests in a corporation are divided.

            (22A) "Sign" or "signature" means, with present intent to authenticate or adopt a document, either of the following:

            (a) To execute or adopt a tangible symbol in a document, and includes any manual, facsimile, or conformed signature.

            (b) To attach to or logically associate with an electronic transmission an electronic sound, symbol, or process, and includes an electronic signature in an electronic transmission.

            (23) "State," when referring to a part of the United States, includes a state and commonwealth, and their agencies and governmental subdivisions, and a territory and insular possession, and their agencies and governmental subdivisions, of the United States.

            (24) "Subscriber" means a person who subscribes for shares in a corporation, whether before or after incorporation.

            (24A) "Tangible property" means a thing that is classified as corporeal, as distinguished from incorporeal, or property that is classified as tangible as distinguished from intangible, by the law of the jurisdiction that governs its ownership.

            (24B) "Unincorporated entity" means an organization or juridical person that has a separate juridical personality and that is not any of the following: a domestic or foreign business or nonprofit corporation, an estate, a trust, a state, the United States, a foreign government, or any agency or subdivision of a foreign government. In addition, the term includes a general partnership, limited liability company, limited partnership, partnership in commendam, registered limited liability partnership, business trust, joint stock association, and unincorporated nonprofit association, regardless of whether any of those included forms of organization is treated as a juridical person under the relevant organic law.

            (25) "Unanimous governance agreement" is defined in R.S. 12:1-732.

            (25A) "United States" includes a district, authority, bureau, commission, department, and any other agency of the United States.

            (25B) "Votes entitled to be cast", when used in specifying the proportion of votes required to provide a shareholder quorum or approval of an action, means the number of votes in a voting group that would be cast at a meeting at which all shares in the voting group were present and voting.

            (26) "Voting group" means all shares of one or more classes or series that under the articles of incorporation or this Chapter are entitled to vote and be counted together collectively on a matter at a meeting of shareholders. All shares entitled by the articles of incorporation or this Chapter to vote generally on the matter are for that purpose a single voting group.

            (27) "Voting power" means the current power to vote in the election of directors.

            (27A) "Voting trust beneficial owner" means an owner of a beneficial interest in shares of the corporation held in a voting trust established pursuant to R.S. 12:1-730(A). "Unrestricted voting trust beneficial owner" means, with respect to any shareholder rights, a voting trust beneficial owner whose entitlement to exercise the shareholder right in question is not inconsistent with the voting trust agreement.

            (28) "Writing" or "written" means any information in the form of a document.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2015, No. 356, §1; Acts 2016, No. 442, §1; Acts 2017, No. 57, §1.

Tit. 12, Art. 1-141. Notices and other communications

            A. Except as provided in R.S. 12:1-303, notice under this Chapter must be in writing. Unless otherwise agreed between the sender and the recipient, a notice or other communication under this Chapter must be in English.

            B. A notice or other communication may be given or sent by any method of delivery, except that electronic transmissions must be in accordance with this Section. If these methods of delivery are impracticable, a notice or other communication may be communicated by a newspaper of general circulation in the area where published.

            C. Notice or other communication to a domestic or foreign corporation authorized to transact business in this state may be delivered to its registered agent or to the secretary of the corporation at its principal office shown in its most recent annual report or, in the case of a foreign corporation that has not yet delivered an annual report, in its application for a certificate of authority.

            D. Notice or other communications may be delivered by electronic transmission if consented to by the recipient or if authorized by Subsection J of this Section.

            E. Any consent under Subsection D of this Section may be revoked by the person who consented by written or electronic notice to the person to whom the consent was delivered. Any such consent is deemed revoked if both of the following conditions are met:

            (1) The corporation is unable to deliver two consecutive electronic transmissions given by the corporation in accordance with such consent.

            (2) The inability becomes known to the secretary or an assistant secretary of the corporation or to the transfer agent or other person responsible for the giving of notice or other communications; provided, however, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.

            F. Unless otherwise agreed between the sender and the recipient, an electronic transmission is received when all of the following occur:

            (1) It enters an information processing system that the recipient has designated or uses for the purposes of receiving electronic transmissions or information of the type sent, and from which the recipient is able to retrieve the electronic transmission.

            (2) It is in a form capable of being processed by that system.

            G. Receipt of an electronic acknowledgment from an information processing system described in Paragraph (F)(1) of this Section establishes that an electronic transmission was received but, by itself, does not establish that the content sent corresponds to the content received.

            H. An electronic transmission is received under this Section even if no individual is aware of its receipt.

            I. Notice or other communication, if in a comprehensible form or manner, is effective at the earliest of the following:

            (1) If in physical form, the earliest of when it is actually received, or when it is left at a place apparently designated for the receipt of mail or other similar communication at the relevant one of the following:

            (a) A shareholder's address shown on the corporation's record of shareholders maintained by the corporation under R.S. 12:1-1601(C).

            (b) A director's residence or usual place of business.

            (c) The corporation's principal place of business.

            (2) If mailed postage prepaid and correctly addressed to a shareholder, upon deposit in the United States mail.

            (3) If mailed by United States mail postage prepaid and correctly addressed to a recipient other than a shareholder, the earliest of the following:

            (a) The date when actually received.

            (b) If sent by registered or certified mail, return receipt requested, the date shown on the return receipt signed by or on behalf of the addressee.

            (c) Five days after it is deposited in the United States mail.

            (4) If an electronic transmission, when it is received as provided in Subsection F of this Section.

            J. A notice or other communication may be in the form of an electronic transmission that cannot be directly reproduced in paper form by the recipient through an automated process used in conventional commercial practice only if all of the following requirements are met:

            (1) The electronic transmission is otherwise retrievable in perceivable form.

            (2) The sender and the recipient have consented in writing to the use of such form of electronic transmission.

            K. If this Chapter prescribes requirements for notices or other communications in particular circumstances, those requirements govern. If articles of incorporation or bylaws prescribe requirements for notices or other communications, not inconsistent with this Section or other provisions of this Chapter, those requirements govern. The articles of incorporation or bylaws may authorize or require delivery of notices of meetings of directors by electronic transmission.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

Tit. 12, Art. 1-142. Number of shareholders

A.  For purposes of this Chapter, the following identified as a shareholder in a corporation's current record of shareholders constitutes one shareholder:

(1)  Co-owners.

(2)  A corporation, partnership or other entity.

(3)  A trust or estate or the trustees, guardians, custodians, succession representatives, or other fiduciaries of a single trust, estate, succession, or account.

B.  For purposes of this Chapter, shareholdings registered in substantially similar names constitute one shareholder if it is reasonable to believe that the names represent the same person.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-143. Qualified director

            A. A "qualified director" is a director who meets the following criteria:

            (1) At the time action is to be taken under R.S. 12:1-744, does not have either of the following conflicting interests:

            (a) A material interest in the outcome of the proceeding.

            (b) A material relationship with a person who has such an interest.

            (2) At the time action is to be taken under R.S. 12:1-853 or 1-855, does not have a material relationship with a director described in either Subparagraph (a) or (b) of this Paragraph and is not either of the following:

            (a) A party to the proceeding.

            (b) A director as to whom a transaction is a director's conflicting interest transaction or who sought a disclaimer of the corporation's interest in a business opportunity under R.S. 12:1-870, which transaction or disclaimer is challenged in the proceeding.

            (3) At the time action is to be taken under R.S. 12:1-862, a director who is neither of the following:

            (a) A director as to whom the transaction is a director's conflicting interest transaction.

            (b) A director who has a material relationship with another director as to whom the transaction is a director's conflicting interest transaction.

            (4) At the time action is to be taken under R.S. 12: 1-870, would be a qualified director under Paragraph (A)(3) of this Section if the business opportunity were a director's conflicting interest transaction.

            (5) At the time action is to be taken under R.S. 12:1-202(B)(6), a director who is neither of the following:

            (a) A director to whom the limitation or elimination of the duty of an officer to offer potential business opportunities to the corporation would apply.

            (b) A director who is a related person to another officer to whom the limitation or elimination would apply.

            B. For purposes of this Section and R.S. 12:1-860:

            (1) "Material interest" means an actual or potential benefit or detriment, other than one that would devolve on the corporation or the shareholders generally, that would reasonably be expected to impair the objectivity of the director's judgment when participating in the action to be taken.

            (2) "Material relationship" means a familial, financial, professional, employment or other relationship that would reasonably be expected to impair the objectivity of the director's judgment when participating in the action to be taken.

            C. The presence of one or more of the following circumstances shall not automatically prevent a director from being a qualified director:

            (1) Nomination or election of the director to the current board by any director who is not a qualified director with respect to the matter, or by any person that has a material relationship with that director, acting alone or participating with others.

            (2) Service as a director of another corporation of which a director who is not a qualified director with respect to the matter, or any individual who has a material relationship with that director, is or was also a director.

            (3) With respect to action to be taken under R.S. 12:1-744, status as a named defendant, as a director against whom action is demanded, or as a director who approved the conduct being challenged.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2015, No. 356, §1; Acts 2016, No. 442, §1.

Tit. 12, Art. 1-144. Householding

A.  A corporation has delivered written notice or any other report or statement under this Chapter, the articles of incorporation, or the bylaws to all shareholders who share a common address if all of the following conditions are met:

(1)  The corporation delivers one copy of the notice, report, or statement to the common address.

(2)  The corporation addresses the notice, report, or statement to those shareholders either as a group or to each of those shareholders individually or to the shareholders in a form to which each of those shareholders has consented.

(3)  Each of those shareholders consents to delivery of a single copy of such notice, report or statement to the shareholders' common address.  Any such consent shall be revocable by any of the shareholders who deliver written notice of revocation to the corporation.  If the written notice of revocation is delivered, the corporation shall begin providing individual notices, reports, or other statements to the revoking shareholder no later than thirty days after delivery of the written notice of revocation.

B.  Any shareholder who fails to object by written notice to the corporation, within sixty days of written notice by the corporation of its intention to send single copies of notices, reports or statements to shareholders who share a common address as permitted by Subsection A of this Section, shall be deemed to have consented to receiving such single copy at the common address.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Part 2. Incorporation

Tit. 12, Art. 1-201. Incorporators

One or more persons capable of contracting may act as the incorporator or incorporators of a corporation by delivering to the secretary of state for filing articles of incorporation and the written consent of the registered agent required by R.S. 12:1-202(E).

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-202. Articles of incorporation and signed consent by agent to appointment

           A. The articles of incorporation shall set forth all of the following:

            (1) A corporate name for the corporation that satisfies the requirements of R.S. 12:1-401.

            (2) The number of shares the corporation is authorized to issue.

            (3) The street address, not a post office box only, of the corporation's initial registered office, and, if different, the street address, not a post office box only, of the corporation's initial principal office.

            (4) The name and street address, not a post office box only, of its initial registered agent.

            (5) If the corporation chooses to reject or limit the protection against liability of directors and officers that is provided by R.S. 12:1-832, a statement of the rejection or limitation.

            (6) The name and address of each incorporator.

            B. The articles of incorporation may set forth any of the following:

            (1) The names and street addresses, not a post office address only, of the individuals who are to serve as the initial directors.

            (2) Provisions not inconsistent with law regarding any of the following:

            (a) The purpose or purposes for which the corporation is organized.

            (b) Managing the business and regulating the affairs of the corporation.

            (c) Defining, limiting, and regulating the powers of the corporation, its board of directors, and shareholders.

            (d) A par value for authorized shares or classes of shares.

            (3) Any provision that this Chapter requires or permits to be set forth in the bylaws.

            (4) A provision that limits, reduces, qualifies, or conditions the protection against liability of directors and officers provided by R.S. 12:1-832.

            (5) A provision permitting or making obligatory indemnification of a director or officer for liability, as defined in R.S. 12:1-850(3), to any person for any action taken, or any failure to take any action, as a director or officer, except liability for any of the following:

            (a) A breach of the duty of loyalty owed by the director or officer to the corporation or its shareholders.

            (b) An intentional infliction of harm on the corporation or its shareholders.

            (c) A violation of R.S. 12:1-833.

            (d) An intentional violation of criminal law.

            (6) A provision prospectively limiting or eliminating any duty of a director or any other person to offer the corporation the right to participate in any business opportunity or in any class or category of business opportunity. The provision shall not limit or eliminate any duty of an officer or a related person of an officer until qualified directors, acting after the effective date of the provision and in accordance with the procedures set forth in R.S. 12:1-862, approve the application of the provision to that officer or related person. The approval shall have prospective effect only and may allow the provision to apply in full or to apply as limited by the terms of the approval.

            (7) A provision that cash, property or share dividends, shares issuable to shareholders in connection with a reclassification of stock, and the redemption price of redeemed shares, that are not claimed by the shareholders entitled thereto within a reasonable time, not less than one year in any event, after the dividend or redemption price became payable or the shares became issuable, despite reasonable efforts by the corporation to pay the dividend or redemption price or deliver the certificates for the shares to such shareholders within such time, shall, at the expiration of such time, revert in full ownership to the corporation, and the corporation's obligation to pay such dividend or redemption price or issue such shares, as the case may be, shall thereupon cease; provided that the board of directors may, at any time, for any reason satisfactory to it, but need not, authorize either of the following:

            (a) Payment of the amount of any cash or property dividend or redemption price.

            (b) Issuance of any shares, ownership of which has reverted to the corporation pursuant to a provision of the articles authorized by this Section, to the person that would be entitled thereto had such reversion not occurred.

            C. The articles of incorporation need not set forth any of the corporate powers enumerated in this Act.

            D. Provisions of the articles of incorporation may be made dependent upon facts objectively ascertainable outside the articles of incorporation in accordance with R.S. 12:1-120(L).

            E. As used in this Section, "related person" has the meaning specified in R.S. 12:1-860(5).

            F. A written consent to appointment, signed by the initial registered agent, shall be attached or appended to the articles of incorporation.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2015, No. 356, §1; Acts 2016, No. 442, §1; Acts 2018, No. 560, §2, eff. May 28, 2018.

Tit. 12, Art. 1-203. Incorporation

A.  Except as provided in Subsection C of this Section, the corporate existence begins, and the corporation is duly incorporated, when the articles of incorporation become effective under R.S. 12:1-123.

B.  The secretary of state's filing of the articles of incorporation is conclusive proof that the incorporators satisfied all conditions precedent to incorporation and that the corporation is duly incorporated, except in a proceeding by the state to cancel or revoke the incorporation or involuntarily dissolve the corporation.

C.  When immovable property is acquired by one or more persons acting in any capacity for and in the name of any corporation that is not duly incorporated, and the corporation is subsequently duly incorporated, the corporate existence shall be retroactive to the date of acquisition of an interest in the immovable property, but such retroactive existence shall be without prejudice to rights validly acquired by third persons in the interim between the date of acquisition and the date that the corporation is duly incorporated.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-204. Liability for preincorporation transactions

[Reserved.]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-205. Organization of corporation

A.  After incorporation, the following shall apply:

(1)  If initial directors are named in the articles of incorporation, the initial directors shall hold an organizational meeting, at the call of a majority of the directors, to complete the organization of the corporation by appointing officers and carrying on any other business brought before the meeting.

(2)  If initial directors are not named in the articles, the incorporator or incorporators shall hold an organizational meeting at the call of a majority of the incorporators to elect a board of directors who shall complete the organization of the corporation.

B.  The election by the incorporators of a board of directors may be conducted without a meeting by means of one or more written consents signed by each incorporator.

C.  An organizational meeting may be held in or out of this state.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-206. Bylaws

A.  The board of directors of a corporation may adopt bylaws for the corporation.

B.  The bylaws of a corporation may contain any provision for managing the business and regulating the affairs of the corporation that is not inconsistent with law or the articles of incorporation.

C.  The bylaws may contain one or both of the following provisions:

(1)  A requirement that if the corporation solicits proxies or consents with respect to an election of directors, the corporation include in its proxy statement and any form of its proxy or consent, to the extent and subject to such procedures or conditions as are provided in the bylaws, one or more individuals nominated by a shareholder in addition to individuals nominated by the board of directors.

(2)  A requirement that the corporation reimburse the expenses incurred by a shareholder in soliciting proxies or consents in connection with an election  of directors, to the extent and subject to such procedures or conditions as are provided in the bylaws, provided that no bylaw so adopted shall apply to elections for which any record date precedes its adoption.

D.  Notwithstanding R.S. 12:1-1020(B)(2), the shareholders in amending, repealing, or adopting a bylaw described in Subsection C of this Section may not limit the authority of the board of directors to amend or repeal any condition or procedure set forth in or to add any procedure or condition to such a bylaw in order to provide for a reasonable, practicable, and orderly process.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-207. Emergency bylaws

A.  Unless the articles of incorporation provide otherwise, the board of directors of a corporation may adopt bylaws to be effective only in an emergency defined in Subsection D of this Section.  The emergency bylaws, which are subject to amendment or repeal by the shareholders, may make all provisions necessary for managing the corporation during the emergency, including any of the following:

(1)  Procedures for calling a meeting of the board of directors.

(2)  Quorum requirements for the meeting.

(3)  Designation of additional or substitute directors.

B.  All provisions of the regular bylaws consistent with the emergency bylaws remain effective during the emergency.  The emergency bylaws are effective only during the emergency.

C.  Corporate action taken in good faith in accordance with the emergency bylaws binds the corporation and may not be used to impose liability on a corporate director, officer, employee, or agent.

D.  An emergency exists for purposes of this Section if a catastrophic event makes it impracticable to attain a quorum of the corporation's directors when and as necessary to carry out the functions of the board of directors.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Part 3. Purposes and Powers

Tit. 12, Art. 1-301. Purposes

A.  Every corporation incorporated under this Chapter has the purpose of engaging in any lawful business or activity unless a more limited purpose is set forth in the articles of incorporation.

B.  A corporation engaging in a business that is subject to regulation under another statute of this state may incorporate under this Chapter only if permitted by, and subject to all limitations of, the other statute.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-302. General powers

            Unless its articles of incorporation provide otherwise, every corporation has perpetual duration and has the power to do all things necessary or convenient to carry out its business and affairs, including without limitation power to do any of the following:

            (1) Sue and be sued, complain and defend in its corporate name.

            (2) Have a corporate seal, which may be altered at will, and to use it, or a facsimile of it, by impressing or affixing it or in any other manner reproducing it.

            (3) Make and amend bylaws, not inconsistent with its articles of incorporation or with the laws of this state, for managing the business and regulating the affairs of the corporation.

            (4) Purchase, receive, lease, or otherwise acquire and own, hold, improve, use, and otherwise deal with real or personal property, or any interest in property, wherever located.

            (5) Sell, convey, mortgage, pledge, lease, exchange, and otherwise dispose of all or any part of its property.

            (6) Purchase, receive, subscribe for, or otherwise acquire, own, hold, vote, use, sell, mortgage, lend, pledge, or otherwise dispose of, and deal in and with shares or other interests in, or obligations of, any other entity.

            (7) Make contracts and guarantees, incur liabilities, borrow money, issue its notes, bonds, and other obligations, which may be convertible into or include the option to purchase other securities of the corporation, and secure any obligation by mortgage, pledge, or security interests of any kind in any of its property, franchises, or income.

            (8) Lend money, invest and reinvest its funds, and receive and hold real and personal property as security for repayment.

            (9) Be a promoter, partner, member, associate, or manager of any limited liability company, partnership, joint venture, trust, or other entity.

            (10) Conduct its business, locate offices, and exercise the powers granted by this Chapter within or without this state.

            (11) Elect directors and appoint officers, employees, and agents of the corporation, define their duties, fix their compensation, and lend them money and credit.

            (12) Pay pensions and establish pension plans, pension trusts, profit sharing plans, share bonus plans, share option plans, and benefit or incentive plans for any or all of the current or former directors, officers, employees, and agents of the corporation and its affiliated entities, and the dependents and families of those individuals.

            (13) Make donations for the public welfare or for charitable, scientific, or educational purposes.

            (14) Transact any lawful business that will aid governmental policy.

            (15) Make payments or donations, or do any other act, not inconsistent with law, that furthers the business and affairs of the corporation.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

 

Tit. 12, Art. 1-303. Emergency powers

       A. In anticipation of or during an emergency defined in Subsection D of this Section, the board of directors of a corporation may do any of the following:

            (1) Modify lines of succession to accommodate the incapacity of any director, officer, employee, or agent.

            (2) Relocate the principal office, designate alternative principal offices or regional offices, or authorize the officers to do so.

            B. During an emergency defined in Subsection D of this Section, unless emergency bylaws provide otherwise, all of the following provisions shall apply:

            (1) Notice of a meeting of the board of directors need be given only to those directors whom it is practicable to reach and may be given in any practicable manner, including by publication and radio.

            (2) Any or all directors may participate in a regular or special meeting of the board by, and the meeting may be conducted through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting.

            (3) A director participating in a meeting by the means authorized in Paragraph (2) of this Subsection is deemed to be present in person at the meeting.

            (4) Unless the application of Paragraphs (2) and (3) of this Subsection is sufficient to attain a quorum of directors, a quorum of directors consists of the number of directors who participate in a meeting if both of the following conditions are met:

            (a) Reasonable efforts have been made to provide actual knowledge of the meeting to all directors.

            (b) All of the directors who have actual knowledge of the meeting, and who could participate in the meeting lawfully and without undue hardship or risk of injury, do participate in the meeting.

            (5) If business is conducted at a meeting of directors at which a quorum would be present only by application of the rule in Paragraph (4) of this Subsection, a quorum of directors under Paragraph (4) of this Subsection is presumed to be present.

            C. Corporate action taken in good faith during an emergency under this Section to further the ordinary business affairs of the corporation binds the corporation and may not be used to impose liability on a corporate director, officer, employee, or agent.

            D. An emergency exists for purposes of this Section if a catastrophic event makes it impracticable, without applying the rules stated in Subsection B of this Section, to attain a quorum of the corporation's directors when and as necessary to carry out the functions of the board of directors.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

Tit. 12, Art. 1-304. Ultra vires

A.  Except as provided in Subsection B of this Section, the validity of corporate action may not be challenged on the ground that the corporation lacks or lacked power to act.

B.  A corporation's power to act may be challenged in any of the following:

(1)  A proceeding by a shareholder against the corporation to enjoin the act.

(2)  A proceeding by the corporation, directly, derivatively, or through a receiver, trustee, or other legal representative, against a current or former director, officer, employee, or agent of the corporation.

(3)  A proceeding by the attorney general under R.S. 12:1-1430.

C.  In a shareholder's proceeding under Paragraph (B)(1) of this Section to enjoin an unauthorized corporate act, the court may enjoin or set aside the act if equitable, and may award damages for loss, other than anticipated profits, suffered by the corporation or another party to the proceeding because of enjoining the unauthorized act.  If an act to be enjoined in the proceeding is the performance of a duty owed by the corporation under the terms of a contract to which the corporation is a party, the court may enjoin the act only if the other parties to the contract are joined in the proceeding.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Part 4. Name

Tit. 12, Art. 1-401. Corporate name

            A.(1) A corporate name may include words in any language but shall be written in English letters or characters.

            (2) A corporate name shall contain the word "corporation", "incorporated", "company", or "limited", or the abbreviation, with or without punctuation, "corp.", "inc.", "co.", or "ltd.".

            (3) A corporate name shall not contain any of the following:

            (a) Any language stating or implying that the corporation is organized for a purpose other than that permitted by R.S. 12:1-301 and its articles of incorporation.

            (b) The phrase "doing business as" or any abbreviation of that phrase, such as "d/b/a".

            (c) Any words that deceptively or falsely suggest a charitable or nonprofit nature or that imply that the corporation is an administrative agency of this state or any of its political subdivisions or of the United States.

            (d) Except as indicated, any of the following quoted words or phrases in any form:

            (i) "Casualty", "redevelopment corporation", or "electrical cooperative".

            (ii) Except for a bank holding company, "bank", "banker", "banking", "savings", "safe deposit", "trust", "trustee", "building and loan", "homestead", or "credit union".

            (iii) Except for an independent insurance agency or brokerage corporation, "insurance".

            (e) Words or phrases that consist of or comprise immoral, deceptive, or scandalous matter.

            (4) A court having jurisdiction may, upon application of the state or of any interested or affected person, enjoin a corporation from doing business under a name that violates any part of R.S. 12:1-401(A)(3)(c) or (d).

            B. Except as authorized in Subsections C and D of this Section, a corporate name shall be distinguishable upon the records of the secretary of state from all of the following:

            (1) The corporate name of a corporation or nonprofit corporation incorporated in this state.

            (2) A corporate name reserved or registered under R.S. 12:1-402 or 1-403.

            (3) The name of a foreign corporation or foreign nonprofit corporation, as stated in the certificate of authority to do business in this state issued to that corporation under Chapter 3 of this Title.

            (4) The name of a domestic limited liability company or the name of a foreign limited liability company used in the foreign limited liability company's certificate of authority to do business in this state.

            (5) The name of a partnership whose contract for partnership is filed for registry with the secretary of state or the name of a duly registered foreign partnership.

            (6) A trade name registered with the secretary of state.

            C. A corporation may apply to the secretary of state for authorization to use a name in its filings with the secretary of state that is not distinguishable upon the records of the secretary of state from one or more of the names described in Subsection B of this Section. The secretary of state shall authorize the use of the name applied for if either of the following occur:

            (1) The other registrant consents to the use in writing and submits the document required by law to change its name to one that is distinguishable upon the records of the secretary of state from the name of the applying corporation, effective no later than the time that the applying corporation will begin to use the registrant's former name.

            (2) The applicant delivers to the secretary of state a certified copy of the final judgment of a court of competent jurisdiction establishing the applicant's right to use the name applied for in this state.

            D. A corporation may use in its filings with the secretary of state a name that is not distinguishable upon the records of the secretary of state from one or more of the names described in Subsection B of this Section if the registrant of the name is incorporated, organized, or authorized to transact business in this state and the proposed user corporation did any of the following:

            (1) Merged with the other registrant.

            (2) Came into existence through the reorganization of the other registrant.

            (3) Acquired all or substantially all of the assets, including the name, of the other registrant.

            E. This Chapter does not control the use of fictitious, assumed, or trade names.

            F. If the secretary of state receives for filing articles of incorporation that include in the corporate name the word "bank", "banker", "banking", "savings", "safe deposit", "trust", "trustee", "building and loan", "homestead", "credit union", or any other word of similar import, the secretary of state shall not file the articles of incorporation until the secretary of state receives satisfactory evidence that written notice of the proposed use of that name was delivered to the office of financial institutions at least fourteen days prior to the filing made with the secretary of state.

            G. If the secretary of state receives for filing articles of incorporation that include in the corporate name the word "engineer", "engineering", "surveyor", "surveying", or any derivative thereof, the secretary of state shall not file the articles of incorporation until the secretary of state receives either of the following:

            (1) Satisfactory evidence that written notice of the proposed use of that name was delivered to the Louisiana Professional Engineering and Land Surveying Board at least ten days prior to the filing made with the secretary of state.

            (2) A written waiver of the ten-day notice requirement prescribed in Paragraph (1) of this Subsection, signed by the executive secretary or any officer of the Louisiana Professional Engineering and Land Surveying Board.

            H. If the secretary of state receives for filing articles of incorporation that include in the corporate name the word "architect", "architectural", or "architecture", the secretary of state shall not file the articles of incorporation until the secretary of state receives either of the following:

            (1) Satisfactory evidence that written notice of the proposed use of that name was delivered to the Louisiana State Board of Architectural Examiners at least ten days earlier.

            (2) A written waiver of the ten-day notice requirement, signed by the executive director or any member of the Louisiana State Board of Architectural Examiners.

            I. The assumption or use of a name in violation of this Section does not affect or vitiate the corporate existence.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1; Acts 2017, No. 367, §1; Acts 2018, No. 560, §2, eff. May 28, 2018.

Tit. 12, Art. 1-402. Reserved name

            A. A person may reserve the exclusive use of a corporate name in its filings with the secretary of state, including a fictitious name for a foreign corporation whose corporate name is not available, by delivering an application to the secretary of state for filing. The application must set forth the name and address of the applicant and the name proposed to be reserved. If the secretary of state finds that the corporate name applied for is available, the secretary of state shall reserve the name for the applicant's exclusive use for a nonrenewable period of one hundred and twenty days.

            B. The owner of a reserved corporate name may transfer the reservation to another person by delivering to the secretary of state a signed notice of the transfer that states the name and address of the transferee.

            C. A terminated corporation's name is reserved by operation of law for five years after the effective date of the corporation's termination.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2017, No. 57, §1.

Tit. 12, Art. 1-403. Registered name

            A. A foreign corporation may register its corporate name, or its corporate name with any addition authorized by R.S. 12:303(A)(3), if the name is distinguishable upon the records of the secretary of state from the corporate names that are not available under R.S. 12:1-401(B).

            B. A foreign corporation registers its corporate name, or its corporate name with any addition authorized by R.S. 12:303(A)(3), by delivering to the secretary of state for filing an application which does both of the following:

            (1) Sets forth its corporate name, or its corporate name with any addition authorized by R.S. 12:303(A)(3), the state or country and date of its incorporation, and a brief description of the nature of the business in which it is engaged.

            (2) Is accompanied by a certificate of existence, or a document of similar import, from the state or country of incorporation which is dated within ninety days of receipt by the secretary of state.

            C. The name is registered for the applicant's exclusive use upon the effective date of the application.

            D. A foreign corporation whose registration is effective may renew it for successive years by delivering to the secretary of state for filing a renewal application that complies with the requirements of Subsection B of this Section between October first and December thirty-first of the preceding year. The renewal application when filed renews the registration for the following calendar year.

            E. A foreign corporation whose registration is effective may thereafter qualify as a foreign corporation under the registered name or consent in writing to the use of that name by a corporation thereafter incorporated under this Chapter or by another foreign corporation thereafter authorized to transact business in this state. The registration terminates when the domestic corporation is incorporated or the foreign corporation qualifies or consents to the qualification of another foreign corporation under the registered name.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2017, No. 367, §1.

Part 5. Office and Agent

Tit. 12, Art. 1-501. Registered office and registered agent

            Each corporation must continuously maintain in this state both of the following:

            (1) A registered office that may be, but need not be, the same as any of its places of business.

            (2) A registered agent, who may be either of the following:

            (a) An individual who resides in this state.

            (b) A domestic or foreign corporation or other eligible entity that does all of the following:

            (i) Continuously maintains an office in this state and, in the case of a foreign corporation or foreign eligible entity, is authorized to transact business in this state.

            (ii) Files with the secretary of state a statement setting forth the name of at least two individuals at its address in this state, each of whom is authorized to receive any process served on it as such agent.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2015, No. 356, §1.

Tit. 12, Art. 1-502. Change of registered office or registered agent

            A. A corporation may change its registered office or the identity or address of its registered agent by delivering to the secretary of state for filing a statement of change that sets forth all of the following information:

            (1) The name of the corporation.

            (2) The street address of its current registered office.

            (3) If the current registered office is to be changed, the street address of the new registered office.

            (4) The name and street address of its current registered agent.

            (5) If the identity of the current registered agent is to be changed, the name of the new registered agent, and the new agent's signed written consent to the appointment, either on the statement or attached to it.

            (6) If the street address of the registered agent is to be changed, the new street address of the registered agent.

            (7) If the registered agent is a corporation or eligible entity, the name of at least two individuals at its address in this state, each of whom is authorized to receive any process served on it as such agent.

            B. A registered agent may change its street address on the records of the secretary of state for all corporations for which it serves as registered agent by delivering to the secretary of state a statement of change that sets forth all of the following information:

            (1) The name of the registered agent.

            (2) The name of the corporation for which it is acting as registered agent.

            (3) Its current street address to be changed.

            (4) Its new street address.

            (5) A certification that the registered agent has notified all of the corporations for which it serves as registered agent of the change in its address to the new street address specified in the statement of change.

            C. A registered agent may satisfy the requirements of Subsection B of this Section for multiple corporations through the delivery of a single statement of change that complies with Subsection B of this Section, provides the names of all of the corporations for which the statement is to be effective, and certifies that the registered agent has notified all of those corporations of the change in its address to the new street address specified in the statement of change.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2015, No. 356, §1.

Tit. 12, Art. 1-503. Resignation of registered agent

A.  A registered agent may resign the agent's appointment by signing and delivering to the secretary of state for filing the signed original and two exact or conformed copies of a statement of resignation.  If the office of the registered agent is also the registered office of the corporation, the statement may include a statement that the registered office is also discontinued.

B.  After filing the statement the secretary of state shall mail one copy to the registered office, if not discontinued, and the other copy to the corporation at its principal office.

C.  The agency appointment is terminated, and the registered office discontinued if so provided, on the thirty-first day after the date on which the statement was filed.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-504. Service on corporation

        A. A corporation's registered agent is the corporation's agent for service of process, notice, or demand required or permitted by law to be served on the corporation. If the registered agent is a corporation or eligible entity, service of process may be made on an individual who is identified as authorized to receive service for the registered agent in a statement on file with the secretary of state.

            B. If a corporation has no registered agent, or the agent cannot with reasonable diligence be served, the corporation may be served by registered or certified mail, return receipt requested, addressed to the secretary of the corporation at its principal office. Service is perfected under this Subsection at the earliest of the following:

            (1) The date the corporation receives the mail.

            (2) The date shown on the return receipt, if signed on behalf of the corporation.

            (3) Five days after its deposit in the United States mail, as evidenced by the postmark, if mailed postpaid and correctly addressed.

            C. This Section does not prescribe the only means, or necessarily the required means of serving a corporation.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2015, No. 356, §1.

Part 6. Shares and Distributions

Subpart A. Shares

Tit. 12, Art. 1-601. Authorized shares

            A. The articles of incorporation must set forth any classes of shares and series of shares within a class, and the number of shares of each class and series, that the corporation is authorized to issue. If more than one class or series of shares is authorized, the articles of incorporation must prescribe a distinguishing designation for each class or series and must describe, 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, all shares of a class or series must have terms, including preferences, rights, and limitations that are identical with those of other shares of the same class or series.

            B. The articles of incorporation must authorize both of the following:

            (1) One or more classes or series of shares that together have unlimited voting rights.

            (2) One or more classes or series 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.

            C. The articles of incorporation may authorize one or more classes or series of shares that have any of the following characteristics:

            (1) Are entitled to 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 of incorporation, at the option of the corporation, the shareholder, or another person or upon the occurrence of a specified event, for cash, indebtedness, securities, or other property at prices and in amounts specified or determined in accordance with a formula.

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

            (4) Have preference over any other class or series of shares with respect to distributions, including distributions upon the dissolution of the corporation.

            D. Terms of shares may be made dependent upon facts objectively ascertainable outside the articles of incorporation in accordance with R.S. 12:1-120(L).

            E. Any of the terms of shares may vary among holders of the same class or series so long as such variations are expressly set forth in the articles of incorporation.

            F. The description of the preferences, rights, and limitations of classes or series of shares in Subsection C of this Section is not exhaustive.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

Tit. 12, Art. 1-602. Terms of class or series determined by board of directors

A.  If the articles of incorporation so provide, the board of directors is authorized, without shareholder approval, to do any of the following:

(1)  Classify any unissued shares into one or more classes or into one or more series within a class.

(2)  Reclassify any unissued shares of any class into one or more classes or into one or more series within one or more classes.

(3)  Reclassify any unissued shares of any series of any class into one or more classes or into one or more series within a class.

B.  If the board of directors acts pursuant to Subsection A of this Section, it must determine the terms, including the preferences, rights, and limitations, to the same extent permitted under R.S. 12:1-601, of the following:

(1)  Any class of shares before the issuance of any shares of that class.

(2)  Any series within a class before the issuance of any shares of that series.

C.  Before issuing any shares of a class or series created under this Section, the corporation must deliver to the secretary of state for filing articles of amendment setting forth the terms determined under Subsection A of this Section.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-603. Issued and outstanding shares

A.  A corporation may issue the number of shares of each class or series authorized by the articles of incorporation.  Shares that are issued are outstanding shares until they are reacquired, redeemed, converted, or cancelled.

B.  The reacquisition, redemption, or conversion of outstanding shares is subject to the limitations of Subsection C of this Section and to R.S. 12:1-640.

C.  At all times that shares of the corporation are outstanding, one or more shares that together have unlimited voting rights and one or more shares that together are entitled to receive the net assets of the corporation upon dissolution must be outstanding.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-604. Fractional shares

A.  A corporation may do any of the following:

(1)  Issue fractions of a share or pay in money the value of fractions of a share.

(2)  Arrange for disposition of fractional shares by the shareholders.

(3)  Issue scrip in registered or bearer form entitling the holder to receive a full share upon surrendering enough scrip to equal a full share.

B.  Each certificate representing scrip must be conspicuously labeled "scrip" and must contain the information required by R.S. 12:1-625(B).

C.  The holder of a fractional share is entitled to exercise the rights of a shareholder, including the right to vote, to receive dividends, and to participate in the assets of the corporation upon liquidation.  The holder of scrip is not entitled to any of these rights unless the scrip provides for them.

D.  The board of directors may authorize the issuance of scrip subject to any condition considered desirable, including either of the following:

(1)  That the scrip will become void if not exchanged for full shares before a specified date.

(2)  That the shares for which the scrip is exchangeable may be sold and the proceeds paid to the scripholders.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Subpart B. Issuance of Shares

Tit. 12, Art. 1-620. Subscription for shares before incorporation

A.  A subscription for shares entered into before incorporation is irrevocable for six months unless the subscription agreement provides a longer or shorter period or all the subscribers agree to revocation.

B.  The board of directors may determine the payment terms of subscription for shares that were entered into before incorporation, unless the subscription agreement specifies them.  A call for payment by the board of directors must be uniform so far as practicable as to all shares of the same class or series, unless the subscription agreement specifies otherwise.

C.  Shares issued pursuant to subscriptions entered into before incorporation are fully paid and nonassessable when the corporation receives the consideration specified in the subscription agreement.

D.  If a subscriber defaults in payment of money or property under a subscription agreement entered into before incorporation, the corporation may collect the amount owed as any other debt.  Alternatively, unless the subscription agreement provides otherwise, the corporation may rescind the agreement and may sell the shares if the debt remains unpaid for more than twenty days after the corporation sends written demand for payment to the subscriber.

E.  A subscription agreement entered into after incorporation is a contract between the subscriber and the corporation subject to R.S. 12:1-621.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-621. Issuance of shares

            A. The powers granted in this Section to the board of directors may be reserved to the shareholders by the articles of incorporation.

            B. The board of directors may authorize shares to be issued for consideration consisting of any tangible or intangible property or benefit to the corporation, including cash, promissory notes, services performed, contracts for services to be performed, or other securities of the corporation.

            C. Before the corporation issues shares, the board of directors must determine that the consideration received or to be received for shares to be issued is adequate. That determination by the board of directors is conclusive insofar as the adequacy of consideration for the issuance of shares relates to whether the shares are validly issued, fully paid, and nonassessable.

            D. When the corporation receives the consideration for which the board of directors authorized the issuance of shares, the shares issued therefor are fully paid and nonassessable.

            E. The corporation may place in escrow shares issued for a contract for future services or benefits or a promissory note, or make other arrangements to restrict the transfer of the shares, and may credit distributions in respect of the shares against their purchase price, until the services are performed, the note is paid, or the benefits received. If the services are not performed, the note is not paid, or the benefits are not received, the shares escrowed or restricted and the distributions credited may be cancelled in whole or part.

            F.(1) An issuance of shares or other securities convertible into or rights exercisable for shares, in a transaction or a series of integrated transactions, requires approval of the shareholders, at a meeting at which a quorum consisting of at least a majority of the votes entitled to be cast on the matter exists, if both of the following conditions are satisfied:

            (a) The shares, other securities, or rights are issued for consideration other than cash or cash equivalents.

            (b) The voting power of shares that are issued and issuable as a result of the transaction or series of integrated transactions will comprise more than twenty percent of the voting power of the shares of the corporation that were outstanding immediately before the transaction.

            (2) In this Subsection, both of the following shall apply:

            (a) For purposes of determining the voting power of shares issued and issuable as a result of a transaction or series of integrated transactions, the voting power of shares shall be the greater of the following:

            (i) The voting power of the shares to be issued.

            (ii) The voting power of the shares that would be outstanding after giving effect to the conversion of convertible shares and other securities and the exercise of rights to be issued.

            (b) A series of transactions is integrated if consummation of one transaction is made contingent on consummation of one or more of the other transactions.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

Tit. 12, Art. 1-622. Liability of shareholders

        A. A purchaser from a corporation of its own shares is not liable to the corporation or its creditors with respect to the shares except to pay the consideration for which the shares were authorized to be issued pursuant to R.S. 12:1-621 or specified in the subscription agreement pursuant to R.S. 12:1-620.

            B. A shareholder of a corporation is not personally liable for the acts or debts of the corporation.

            C. A shareholder who receives a distribution in excess of what may be authorized and made pursuant to R.S. 12:1-640(A) shall be personally liable to the corporation, or to creditors of the corporation, or both, for an amount not exceeding, in the aggregate, the excess amount received by that shareholder.

            D. A proceeding to enforce the liability of a shareholder under Subsection C of this Section is subject to a peremptive period of two years measured from the relevant one of the following dates:

            (1) The date on which the effect of the distribution was to be measured under R.S. 12:1-640(E) or (G), to the extent that the distribution is alleged to have been unlawful under R.S. 12:1-640(C).

            (2) The date as of which the distribution first violated a restriction in the articles of incorporation, to the extent that the distribution is alleged to have been unlawful because it violated a restriction in the articles of incorporation.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

 

Tit. 12, Art. 1-623. Share dividends

            A. Unless the articles of incorporation provide otherwise, shares may be issued pro rata and without consideration to the corporation's shareholders or to the shareholders of one or more classes or series. An issuance of shares under this Subsection is a share dividend.

            B. Shares of one class or series may not be issued as a share dividend in respect of shares of another class or series unless one of the following conditions is satisfied:

            (1) The articles of incorporation so authorize.

            (2) A majority of the votes entitled to be cast by the class or series to be issued approve the issue.

            (3) There are no outstanding shares of the class or series to be issued.

            C. If the board of directors does not fix the record date for determining shareholders entitled to a share dividend, it is the date the board of directors authorizes the share dividend.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

 

Tit. 12, Art. 1-624. Share options

            A. A corporation may issue rights, options, or warrants for the purchase of shares or other securities of the corporation. The board of directors shall determine the terms upon which the rights, options, or warrants are issued and the terms, including the consideration, for which the shares or other securities are to be issued. The authorization by the board of directors for the corporation to issue such rights, options, or warrants constitutes authorization of the issuance of the shares or other securities for which the rights, options, or warrants are exercisable.

            B. The terms and conditions of such rights, options or warrants, including those outstanding on the effective date of this Section, may include, without limitation, restrictions or conditions that do any of the following:

            (1) Preclude or limit the exercise, transfer or receipt of such rights, options, or warrants by any person or persons owning or offering to acquire a specified number or percentage of the outstanding shares or other securities of the corporation or by any transferee or transferees of any such person or persons.

            (2) Invalidate or void such rights, options, or warrants held by any such person or persons or any such transferee or transferees.

            C. The board of directors may authorize one or more officers to designate the recipients of rights, options, warrants, or other equity compensation awards that involve the issuance of shares and to determine, within an amount and subject to any other limitations established by the board and, if applicable, the stockholders, the number of such rights, options, warrants, or other equity compensation awards and the terms thereof to be received by the recipients, provided that an officer may not use such authority to designate himself or herself or any other persons the board of directors may specify as a recipient of such rights, options, warrants, or other equity compensation awards.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

Tit. 12, Art. 1-625. Form and content of certificates

A.  Shares shall be represented by share certificates unless the issuing corporation is a participant in the Direct Registration System of the Depository Trust & Clearing Corporation or of a similar book-entry system used in the trading of shares of public corporations.  If the issuing corporation is a participant in the Direct Registration System or a similar book-entry system, shares may but need not be represented by certificates.  Unless this Chapter or another statute expressly provides otherwise, the rights and obligations of shareholders are identical whether or not their shares are represented by certificates.

B.  At a minimum each share certificate must state on its face all of the following:

(1)  The name of the issuing corporation and that it is organized under the law of this state.

(2)  The name of the person to whom issued.

(3)  The number and class of shares and the designation of the series, if any, the certificate represents.

C.  If the issuing corporation is authorized to issue different classes of shares or different series within a class, the designations, relative rights, preferences, and limitations applicable to each class and the variations in rights, preferences, and limitations determined for each series, and the authority of the board of directors to determine variations for future series, must be summarized on the front or back of each certificate.  Alternatively, each certificate may state conspicuously on its front or back that the corporation will furnish the shareholder this information on request in writing and without charge.

D.  Each share certificate must be signed, either manually or in facsimile, by the president and secretary or by two officers designated in the bylaws or by the board of directors and may bear the corporate seal or its facsimile.

E.  If the person who signed, either manually or in facsimile, a share certificate no longer holds office when the certificate is issued, the certificate is nevertheless valid.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-626. Shares without certificates

A.  If a corporation is eligible to issue shares without certificates, the board of directors of the corporation may authorize the issue of some or all of the shares of any or all of its classes or series without certificates, except to the extent that its articles of incorporation or bylaws provide otherwise. The authorization does not affect shares already represented by certificates until they are surrendered to the corporation.

B.  Within a reasonable time after the issue or transfer of shares without certificates, the corporation shall send the shareholder a written statement of the information required on certificates by R.S. 12:1-625(B) and (C), and, if applicable, R.S. 12:1-627.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-627. Restriction on transfer of shares and other securities

A.  The articles of incorporation, bylaws, an agreement among shareholders, or an agreement between shareholders and the corporation may impose restrictions on the transfer or registration of transfer of shares of the corporation.  A restriction does not affect shares issued before the restriction was adopted unless the holders of the shares are parties to the restriction agreement or voted in favor of the restriction.

B.  A restriction on the transfer or registration of transfer of shares is valid and enforceable against the holder or a transferee of the holder if the restriction is authorized by this Section and its existence is noted conspicuously on the front or back of the certificate or is contained in the information statement required by R.S. 12:1-626(B).  Unless so noted or contained, a restriction is not enforceable against a person without knowledge of the restriction.

C.  A restriction on the transfer or registration of transfer of shares is authorized for any of the following:

(1)  To maintain the corporation's status when it is dependent on the number or identity of its shareholders.

(2)  To preserve exemptions under federal or state securities law.

(3)  For any other reasonable purpose.

D.  A restriction on the transfer or registration of transfer of shares may do any of the following:

(1)  Obligate the shareholder first to offer the corporation or other persons, separately, consecutively, or simultaneously, an opportunity to acquire the restricted shares.

(2)  Obligate the corporation or other persons, separately, consecutively, or simultaneously, to acquire the restricted shares.

(3)  Require the corporation, the holders of any class of its shares, or another person to approve the transfer of the restricted shares, if the requirement is not manifestly unreasonable.

(4)  Prohibit the transfer of the restricted shares to designated persons or classes of persons, if the prohibition is not manifestly unreasonable.

E.  For purposes of this Section, "shares" includes a security convertible into or carrying a right to subscribe for or acquire shares.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-628. Expense of issue

A corporation may pay the expenses of selling or underwriting its shares, and of organizing or reorganizing the corporation, from the consideration received for shares.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Subpart C. Subsequent Acquisition of Shares by Shareholders and Corporation

Tit. 12, Art. 1-630. Shareholders' preemptive rights

A.  The shareholders of a corporation do not have a preemptive right to acquire the corporation's unissued shares except to the extent the articles of incorporation so provide.  The articles of incorporation of a corporation that was incorporated before January 1, 1969, shall be deemed to contain a statement that "the corporation elects to have preemptive rights," unless the articles of incorporation contain a specific provision enlarging, limiting, or denying preemptive rights.

B.  A statement included in the articles of incorporation that "the corporation elects to have preemptive rights", or words of similar import, means that the following principles apply except to the extent the articles of incorporation expressly provide otherwise:

(1)  The shareholders of the corporation have a preemptive right, granted on uniform terms and conditions prescribed by the board of directors to provide a fair and reasonable opportunity to exercise the right, to acquire proportional amounts of the corporation's unissued shares upon the decision of the board of directors to issue them.  Shareholders have a fair and reasonable opportunity to exercise the right to acquire shares if they are given at least forty-five days to purchase the shares after notice to them of that right, but shorter periods of time may be fair and reasonable under the circumstances in which the shares are being issued.

(2)  A shareholder may waive his preemptive right.  A waiver evidenced by a writing is irrevocable even though it is not supported by consideration.

(3)  There is no preemptive right with respect to any of the following:

(a)  Shares issued as compensation to directors, officers, agents, or employees of the corporation, its subsidiaries, or affiliates.

(b)  Shares issued to satisfy conversion or option rights created to provide compensation to directors, officers, agents, or employees of the corporation, its subsidiaries, or affiliates.

(c)  Shares authorized in articles of incorporation that are issued within six months from the effective date of incorporation.

(d)  Shares sold otherwise than for money.

(4)  Holders of shares of any class without general voting rights but with preferential rights to distributions or assets have no preemptive rights with respect to shares of any class.

(5)  Holders of shares of any class with general voting rights but without preferential rights to distributions or assets have no preemptive rights with respect to shares of any class with preferential rights to distributions or assets unless the shares with preferential rights are convertible into or carry a right to subscribe for or acquire shares without preferential rights.

(6)  Shares subject to preemptive rights that are not acquired by shareholders may be issued to any person for a period of one year after being offered to shareholders at a consideration set by the board of directors that is not lower than the consideration set for the exercise of preemptive rights.  An offer at a lower consideration or after the expiration of one year is subject to the shareholders' preemptive rights.

C.  For purposes of this Section, "shares" includes a security convertible into or carrying a right to subscribe for or acquire shares.

D.  On or after January 1, 2016, no action to enforce a preemptive right of a shareholder shall be brought unless filed in a court of competent jurisdiction and proper venue within one year of the date of the issuance of the share to which the shareholder had the preemptive right, or within one year of the date that the issuance of the share is discovered or should have been discovered.  Such an action is perempted three years after the date of the issuance of the share.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-631. Corporation's acquisition of its own shares

A.  A corporation may acquire its own shares, and shares so acquired constitute authorized but unissued shares.

B.  If the articles of incorporation prohibit the reissue of the acquired shares, the number of authorized shares is reduced by the number of shares acquired.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Subpart D. Distributions

Tit. 12, Art. 1-640. Distributions to shareholders

A.  A board of directors may authorize and the corporation may make distributions to its shareholders subject to restriction by the articles of incorporation and the limitation in Subsection C of this Section.

B.  If the board of directors does not fix the record date for determining shareholders entitled to a distribution, other than one involving a purchase, redemption, or other acquisition of the corporation's shares, it is the date the board of directors authorizes the distribution.

C.  No distribution may be made if, after giving it effect, either of the following conditions would exist:

(1)  The corporation would not be able to pay its debts as they become due in the usual course of business.

(2)  The corporation's total assets would be less than the sum of its total liabilities plus, unless the articles of incorporation permit otherwise, the amount that would be needed, if the corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution.

D.  The board of directors may base a determination that a distribution is not prohibited under Subsection C of this Section either on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances.

E.  Except as provided in Subsection G of this Section, the effect of a distribution under Subsection C of this Section is measured by one of the following:

(1)  In the case of distribution by purchase, redemption, or other acquisition of the corporation's shares, as of the earlier of  the date money or other property is transferred or debt incurred by the corporation or the date the shareholder ceases to be a shareholder with respect to the acquired shares.

(2)  In the case of any other distribution of indebtedness, as of the date the indebtedness is distributed.

(3)  In all other cases, as of the date the distribution is authorized if the payment occurs within one hundred and twenty days after the date of authorization or the date the payment is made if it occurs more than one hundred and twenty days after the date of authorization.

F.  A corporation's indebtedness to a shareholder incurred by reason of a distribution made in accordance with this Section is at parity with the corporation's indebtedness to its general, unsecured creditors except to the extent subordinated by agreement.

G.  Indebtedness of a corporation, including indebtedness issued as a distribution, is not considered a liability for purposes of determinations under Subsection C of this Section if its terms provide that payment of principal and interest are made only if and to the extent that payment of a distribution to shareholders could then be made under this Section.  If the indebtedness is issued as a distribution, each payment of principal or interest is treated as a distribution, the effect of which is measured on the date the payment is actually made.

H.  This Section shall not apply to distributions in liquidation under Part 14 of this Chapter.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Part 7. Shareholders

Subpart A. Meetings

Tit. 12, Art. 1-701. Annual meeting

A.  Unless directors are elected by written consent in lieu of an annual meeting as permitted by R.S. 12:1-704, a corporation shall hold a meeting of shareholders annually at a time stated in or fixed in accordance with the bylaws or, if not so stated or fixed, as stated or fixed in accordance with a resolution of the board of directors.  If a corporation's articles of incorporation authorize shareholders to cumulate their votes when electing directors pursuant to R.S. 12:1-728, directors may not be elected by written consent unless the written consent is unanimous.

B.  Annual shareholders' meetings may be held in or out of this state at the place stated in or fixed in accordance with the bylaws or, if not so stated or fixed, as stated or fixed in accordance with a resolution of the board of directors.  If no place is stated in or fixed in accordance with the bylaws, annual meetings shall be held at the corporation's principal office.

C.  The failure to hold an annual meeting at the time stated in or fixed in accordance with Subsection A of this Section does not affect the validity of any corporate action.

D.  If no annual shareholders' meeting is held for a period of eighteen months, and directors are not elected by written consent in lieu of an annual meeting during that period, any shareholder may by notice to the secretary demand that the secretary call such a meeting, to be held at the corporation's principal office or, if none in this state, at its registered office.  The secretary shall call the meeting and shall provide notice of the meeting as required by R.S. 12:1-705 within thirty days after the notice to the secretary of the shareholder's demand for the meeting.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-702. Special meeting

A.  A corporation shall hold a special meeting of shareholders upon either of the following:

(1)  On call of its board of directors or the person or persons authorized to do so by the articles of incorporation or bylaws.

(2)  If the shareholders holding at least ten percent of all the votes entitled to be cast on an issue proposed to be considered at the proposed special meeting sign, date, and deliver to the corporation one or more written demands for the meeting describing the purpose or purposes for which it is to be held, provided that the articles of incorporation may fix a lower percentage or a higher percentage not exceeding twenty-five percent of all the votes entitled to be cast on any issue proposed to be considered.  Unless otherwise provided in the articles of incorporation, a written demand for a special meeting may be revoked by a writing to that effect received by the corporation prior to the receipt by the corporation of demands sufficient in number to require the holding of a special meeting.

B.  If not otherwise fixed under R.S. 12:1-703 or 1-707, the record date for determining shareholders entitled to demand a special meeting is the date the first shareholder signs the demand.

C.  Special shareholders' meetings may be held in or out of this state at the place stated in or fixed in accordance with the bylaws or, if not so stated or fixed, at the place stated in or fixed in accordance with a resolution of the board of directors.  If no place is stated or fixed in accordance with the bylaws or a resolution of the board of directors, special meetings shall be held at the corporation's principal office.

D.  Only business within the purpose or purposes described in the meeting notice required by R.S. 12:1-705(C) may be conducted at a special shareholders' meeting.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-703. Court-ordered meeting

   A. The district court of the parish where a corporation's principal office or, if none in this state, its registered office, is located may in a summary proceeding order a meeting to be held:

            (1) On application of any shareholder of the corporation if an annual meeting was not held or action by written consent in lieu thereof did not become effective within the earlier of six months after the end of the corporation's fiscal year or fifteen months after its last annual meeting.

            (2) On application of a shareholder who signed a demand for a special meeting valid under R.S. 12:1-702, if either of the following conditions exist:

            (a) Notice of the special meeting was not given within thirty days after the date the demand was delivered to the corporation's secretary.

            (b) The special meeting was not held in accordance with the notice.

            B. The court may fix the time and place of the meeting, determine the shares entitled to participate in the meeting, specify a record date for determining shareholders entitled to notice of and to vote at the meeting, prescribe the form and content of the meeting notice, fix the quorum required for specific matters to be considered at the meeting or direct that the votes represented at the meeting constitute a quorum for action on those matters, and enter other orders necessary to accomplish the purpose or purposes of the meeting.

            C. For purposes of Paragraph (A)(1) of this Section, "shareholder" means a record shareholder, a beneficial shareholder, and an unrestricted voting trust beneficial owner.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

Tit. 12, Art. 1-704. Action without meeting

A.  Action required or permitted by this Chapter to be taken at a shareholders' meeting may be taken without a meeting if the action is taken by all the shareholders entitled to vote on the action.  The action must be evidenced by one or more written consents bearing the date of signature and describing the action taken, signed by all the shareholders entitled to vote on the action and delivered to the corporation for inclusion in the minutes or filing with the corporate records.

B.  The articles of incorporation may provide that any action required or permitted by this Chapter to be taken at a shareholders' meeting may be taken without a meeting, and without prior notice, if consents in writing setting forth the action so taken are signed by the holders of outstanding shares having not less than the minimum number of votes that would be required to authorize or take the action at a meeting at which all shares entitled to vote on the action were present and voted.  The written consent shall bear the date of signature of the shareholder who signs the consent and be delivered to the corporation for inclusion in the minutes or filing with the corporate records.

C.  If an earlier date has not been fixed under R.S. 12:1-707 and if prior board action is not required respecting the action to be taken without a meeting, the record date for determining the shareholders entitled to take action without a meeting shall be the first date on which a signed written consent is delivered to the corporation.  If not otherwise fixed under R.S. 12:1-707 and if prior board action is required respecting the action to be taken without a meeting, the record date shall be the close of business on the day the resolution of the board taking such prior action is adopted.  No written consent shall be effective to take the corporate action referred to therein unless, within sixty days of the earliest date on which a consent delivered to the corporation as required by this Section was signed, written consents signed by sufficient shareholders to take the action have been delivered to the corporation.  A written consent may be revoked by a writing to that effect delivered to the corporation before unrevoked written consents sufficient in number to take the corporate action are delivered to the corporation.

D.  A consent signed pursuant to the provisions of this Section has the effect of a vote taken at a meeting and may be described as such in any document.  Unless the articles of incorporation, bylaws, or a resolution of the board of directors provides for a reasonable delay to permit tabulation of written consents, the action taken by written consent shall be effective when written consents signed by sufficient shareholders to take the action are delivered to the corporation.

E.  If this Chapter requires that notice of a proposed action be given to nonvoting shareholders and the action is to be taken by written consent of the voting shareholders, the corporation must give its nonvoting shareholders written notice of the action not more than ten days after written consents sufficient to take the action have been delivered to the corporation, or  such later date that tabulation of consents is completed pursuant to an authorization under Subsection D of this Section.  The notice must reasonably describe the action taken and contain or be accompanied by the same material that, under any provision of this Chapter, would have been required to be sent to nonvoting shareholders in a notice of a meeting at which the proposed action would have been submitted to the shareholders for action.

F.  If action is taken by less than unanimous written consent of the voting shareholders, the corporation must give its nonconsenting voting shareholders written notice of the action not more than ten days after  written consents sufficient to take the action have been delivered to the corporation, or such later date that tabulation of consents is completed pursuant to an authorization under Subsection D of this Section.  The notice must reasonably describe the action taken and contain or be accompanied by the same material that, under any provision of this Chapter, would have been required to be sent to voting shareholders in a notice of a meeting at which the action would have been submitted to the shareholders for action.

G.  The notice requirements in Subsections E and F of this Section shall not delay the effectiveness of actions taken by written consent, and a failure to comply with such notice requirements shall not invalidate actions taken by written consent, provided that this Subsection shall not be deemed to limit judicial power to fashion any appropriate remedy in favor of a shareholder adversely affected by a failure to give such notice within the required time period.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-705. Notice of meeting

A.  A corporation shall notify shareholders of the date, time, and place of each annual and special shareholders' meeting no fewer than ten nor more than sixty days before the meeting date.  Unless this Chapter or the articles of incorporation require otherwise, the corporation is required to give notice only to shareholders entitled to vote at the meeting.

B.  Unless this Chapter or the articles of incorporation require otherwise, both of the following shall apply:

(1)  Notice of an annual meeting need not include a description of the purpose or purposes for which the meeting is called.

(2)  If a notice of an annual meeting does include a description of one or more purposes, the meeting is not limited to those purposes.

C.  Notice of a special meeting must include a description of the purpose or purposes for which the meeting is called.

D.  If not otherwise fixed under R.S. 12:1-703 or 1-707, the record date for determining shareholders entitled to notice of and to vote at an annual or special shareholders' meeting is the day before the first notice to shareholders is effective.

E.  Unless the bylaws require otherwise, if an annual or special shareholders' meeting is adjourned to a different date, time, or place, notice need not be given of the new date, time, or place if the new date, time, or place is announced at the meeting before adjournment.  If a new record date for the adjourned meeting is or must be fixed under R.S. 12:1-707, however, notice of the adjourned meeting must be given under this Section to persons who are shareholders as of the new record date.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-706. Waiver of notice

A.  A shareholder may waive any notice required by this Chapter, the articles of incorporation, or bylaws before or after the date and time stated in the notice.  The waiver must be in writing, be signed by the shareholder entitled to the notice, and be delivered to the corporation for inclusion in the minutes or filing with the corporate records.

B.  A shareholder's attendance at a meeting does both of the following:

(1)  Waives objection to lack of notice or defective notice of the meeting, unless the shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting.

(2)  Waives objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the shareholder objects to considering the matter when it is presented.

C.  A shareholder attends a meeting if the shareholder is present at the meeting in person or by proxy.  If a shareholder attends a meeting by proxy, then for purposes of Subsection B of this Section, an objection by the shareholder's proxy has the same effect as an objection by the shareholder.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-707. Record date

A.  The bylaws may fix or provide the manner of fixing the record date for one or more voting groups in order to determine the shareholders entitled to notice of a shareholders' meeting, to demand a special meeting, to vote, or to take any other action.  If the bylaws do not fix or provide for fixing a record date, the board of directors of the corporation may fix a future date as the record date.

B.  A record date fixed under this Section may not be more than seventy days before the meeting or action requiring a determination of shareholders.

C.  A determination of shareholders entitled to notice of or to vote at a shareholders' meeting is effective for any adjournment of the meeting unless the board of directors fixes a new record date, which it must do if the meeting is adjourned to a date more than one hundred and twenty days after the date fixed for the original meeting.

D.  If a court orders a meeting adjourned to a date more than one hundred and twenty days after the date fixed for the original meeting, it may provide that the original record date continues in effect or it may fix a new record date.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-708. Conduct of the meeting

A.  At each meeting of shareholders, a chair shall preside.  The chair shall be appointed as provided in the bylaws or, in the absence of such provision, by the board.

B.  The chair, unless the articles of incorporation or bylaws provide otherwise, shall determine the order of business and shall have the authority to establish rules for the conduct of the meeting.

C.  Any rules adopted for, and the conduct of, the meeting shall be fair to shareholders.

D.  The chair of the meeting shall announce at the meeting when the polls close for each matter voted upon.  If no announcement is made, the polls shall be deemed to have closed upon the final adjournment of the meeting.  After the polls close, no ballots, proxies, or votes nor any revocations or changes thereto may be accepted.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-709. Remote participation in annual and special meetings

       A. Shareholders of any class or series may participate in any meeting of shareholders by means of remote communication to the extent the board of directors authorizes such participation for such class or series. Participation by means of remote communication shall be subject to such guidelines and procedures as the board of directors adopts, and shall be in conformity with Subsection B of this Section.

            B. Shareholders participating in a shareholders' meeting by means of remote communication shall be deemed present and may vote at such a meeting if the corporation has implemented reasonable measures to do all of the following:

            (1) Verify that each person participating remotely is a shareholder.

            (2) Provide such shareholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the shareholders, including an opportunity to communicate, and to read or hear the proceedings of the meeting, substantially concurrently with such proceedings.

            Acts 2016, No. 442, §1.

Subpart B. Voting

Tit. 12, Art. 1-720. Shareholders' list for meeting

A.  After fixing a record date for a meeting, a corporation shall prepare an alphabetical list of the names of all its shareholders who are entitled to notice of a shareholders' meeting.  The list must be arranged by voting group, and within each voting group by class or series of shares, and show the address of and number of shares held by each shareholder.

B.  The shareholders' list must be available for inspection by any shareholder, beginning two business days after notice of the meeting is given for which the list was prepared and continuing through the meeting, at the corporation's principal office or at a place identified in the meeting notice in the city where the meeting will be held.  A shareholder, or the shareholder's agent or attorney, is entitled on written demand to inspect and, subject to the requirements of R.S. 12:1-1602(C) other than the required percentage and duration of ownership of shares, to copy the list, during regular business hours and at the shareholder's expense, during the period it is available for inspection.

C.  The corporation shall make the shareholders' list available at the meeting, and any shareholder, or the shareholder's agent or attorney, is entitled to inspect the list at any time during the meeting or any adjournment.

D.  If the corporation refuses to allow a shareholder, or the shareholder's agent or attorney, to inspect the shareholders' list before or at the meeting, or copy the list as permitted by Subsection B of this Section, the district court of the parish where a corporation's principal office or, if none in this state, its registered office, is located, on application of the shareholder, may in a summary proceeding order the inspection or copying at the corporation's expense and may postpone the meeting for which the list was prepared until the inspection or copying is complete.

E.  Refusal or failure to prepare or make available the shareholders' list does not affect the validity of action taken at the meeting.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-721. Voting entitlement of shares

           A. Except as provided in Subsections B and D of this Section, or unless the articles of incorporation provide otherwise, each outstanding share, regardless of class, is entitled to one vote on each matter voted on at a shareholders' meeting. Only shares are entitled to vote.

            B. Absent special circumstances, the shares issued by a corporation are not entitled to vote if they are owned, directly or indirectly, by a subsidiary.

            C. Subsection B of this Section does not limit the power of a corporation or subsidiary to vote any shares, including its own shares, held by it in a fiduciary capacity.

            D. Redeemable shares are not entitled to vote after notice of redemption is mailed to the holders and a sum sufficient to redeem the shares has been deposited with a bank, trust company, or other financial institution under an irrevocable obligation to pay the holders the redemption price on surrender of the shares.

            E. For purposes of Subsections B and C of this Section, the following meanings shall apply:

            (1) The term "subsidiary" means a domestic or foreign corporation, limited liability company, partnership, or other juridical person that is subject to at least majority control by the issuer of the shares, but does not include the issuer itself.

            (2) "Majority control" means ownership, direct or indirect, of a majority of any of the following:

            (a) The shares entitled to vote for the directors of a corporation.

            (b) The membership, partnership, or other interests in an unincorporated entity that are entitled either to vote for those who hold the general managerial authority in the unincorporated entity or to exercise that authority directly.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

Tit. 12, Art. 1-722. Proxies

A.  A shareholder may vote the shareholder's shares in person or by proxy.

B.  A shareholder, or the shareholder's agent or attorney-in-fact, may appoint a proxy to vote or otherwise act for the shareholder by signing an appointment form, or by an electronic transmission.  An electronic transmission must contain or be accompanied by information from which one can determine that the shareholder, the shareholder's agent, or the shareholder's attorney-in-fact authorized the transmission.

C.  An appointment of a proxy is effective when a signed appointment form or an electronic transmission of the appointment is received by the inspector of election, the secretary, or other officer or agent of the corporation authorized to tabulate votes.  An appointment is valid for eleven months unless a longer period is expressly provided in the appointment form.

D.  An appointment of a proxy is revocable unless the appointment form or electronic transmission states that it is irrevocable and the appointment is coupled with an interest.  Appointments coupled with an interest include the appointment of any of the following:

(1)  A pledgee or other person having a security interest in the shares.

(2)  A person who purchased or agreed to purchase the shares.

(3)  A creditor of the corporation who extended it credit under terms requiring the appointment.

(4)  An employee of the corporation whose employment contract requires the appointment.

(5)  A party to a voting agreement created under Section 1-731.

E.  The revocation of a proxy appointment or the death or incapacity of the shareholder appointing a proxy does not affect the right of the corporation to accept the proxy's authority unless notice of the revocation, death or incapacity is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises authority under the appointment.

F.  An appointment made irrevocable under Subsection D of this Section is revoked when the interest with which it is coupled is extinguished.

G.  Unless it otherwise provides, an appointment made irrevocable under Subsection D of this Section continues in effect after a transfer of the shares and a transferee takes subject to the appointment, except that a transferee for value of shares subject to an irrevocable appointment may revoke the appointment if the transferee did not know of its existence when acquiring the shares and the existence of the irrevocable appointment was not noted conspicuously on the certificate representing the shares or on the information statement for shares without certificates.

H.  Subject to Section 1-724 and to any express limitation on the proxy's authority stated in the appointment form or electronic transmission, a corporation is entitled to accept the proxy's vote or other action as that of the shareholder making the appointment.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-723. Shares held by intermediaries and nominees

A.  A corporation's board of directors may establish a procedure under which a person on whose behalf shares are registered in the name of an intermediary or nominee may elect to be treated by the corporation as the record shareholder by filing with the corporation a beneficial ownership certificate.  The extent, terms, conditions, and limitations of this treatment shall be specified in the procedure.  To the extent such person is treated under such procedure as having rights or privileges that the record shareholder otherwise would have, the record shareholder shall not have those rights or privileges.

B.  The procedure shall specify all of the following information:

(1)  The types of intermediaries or nominees to which it applies.

(2)  The rights or privileges that the corporation recognizes in a person with respect to whom a beneficial ownership certificate is filed.

(3)  The manner in which the procedure is selected, which shall include that the beneficial ownership certificate be signed or assented to by or on behalf of the record shareholder and the person or persons on whose behalf the shares are held.

(4)  The information that must be provided when the procedure is selected.

(5)  The period for which selection of the procedure is effective.

(6)  The requirements for notice to the corporation with respect to the arrangement.

(7)  The form and contents of the beneficial ownership certificate.

C.  The procedure may specify any other aspects of the rights and duties created by the filing of a beneficial ownership certificate.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-724. Corporation's acceptance of votes

A.  If the name signed on a vote, consent, waiver, or proxy appointment corresponds to the name of a shareholder, the corporation if acting in good faith is entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the shareholder.

B.  If the name signed on a vote, consent, waiver, or proxy appointment does not correspond to the name of its shareholder, the corporation if acting in good faith is nevertheless entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the shareholder if any of the following conditions are met:

(1)  The shareholder is an entity and the name signed purports to be that of an officer or agent of the entity.

(2)  The name signed purports to be that of an administrator, executor, guardian, conservator, curator, tutor or judicially authorized representative of the shareholder and, if the corporation requests, evidence of fiduciary status and authority acceptable to the corporation has been presented with respect to the vote, consent, waiver, or proxy appointment.

(3)  The name signed purports to be that of a receiver or trustee in bankruptcy of the shareholder and, if the corporation requests, evidence of this status acceptable to the corporation has been presented with respect to the vote, consent, waiver, or proxy appointment.

(4)  The name signed purports to be that of a pledgee or other person having a security interest in the shares, a beneficial owner, or an attorney-in-fact or representative through mandate or procuration of the shareholder and, if the corporation requests, evidence acceptable to the corporation of the signatory's authority to sign for the shareholder has been presented with respect to the vote, consent, waiver, or proxy appointment.

(5)  Two or more persons are the shareholder as co-owners, co-tenants, or fiduciaries and the name signed purports to be the name of at least one of them and the person signing appears to be acting on behalf of all of them.

C.  The corporation is entitled to reject a vote, consent, waiver, or proxy appointment if the secretary or other officer or agent authorized to tabulate votes, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatory's authority to sign for the shareholder.

D.  The corporation and its officer or agent who accepts or rejects a vote, consent, waiver, or proxy appointment in good faith and in accordance with the standards of this Section or R.S. 12:1-722(B) are not liable in damages to the shareholder for the consequences of the acceptance or rejection.

E.  The corporation's acceptance or rejection of a vote, consent, waiver, or proxy appointment under this Section is conclusive unless a shareholder objects timely to the acceptance or rejection of the item and, if the corporation rejects the objection, proves in a summary proceeding, commenced within ten days after the corporation's notice to the shareholder that it has rejected the objection, that the corporation's acceptance or rejection of the item was incorrect.  A shareholder's objection is timely under this Subsection only if the objection is made before the end of the shareholders' meeting at which the acceptance or rejection of the item is given effect or, if the item is relevant to an action taken by shareholders without a meeting in accordance with R.S. 12:1-704, before the corporation incurs a legal obligation in good faith reliance on its acceptance or rejection of the item.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-725. Quorum and voting requirements for voting groups

            A. Shares entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those shares exists with respect to that matter. Unless a provision in the articles of incorporation authorized by R.S. 12:1-727 provides otherwise, a majority of the votes entitled to be cast on the matter by the voting group constitutes a quorum of that voting group for action on that matter.

            B. Once a share is represented for any purpose at a meeting, it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or must be set for that adjourned meeting.

            C. If a quorum exists, action on a matter, other than the election of directors, by a voting group is approved if the votes cast within the voting group favoring the action exceed the votes cast opposing the action, unless this Chapter or the articles of incorporation require a greater number of affirmative votes.

            D. [Reserved.]

            E. The election of directors is governed by R.S. 12:1-728.

            F. Whenever a provision of this Chapter provides for voting of classes or series as separate voting groups, the rules provided in R.S. 12:1-1004(C) for amendments of articles of incorporation apply to that provision.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

Tit. 12, Art. 1-726. Action by single and multiple voting groups

A.  If the articles of incorporation or this Chapter provide for voting by a single voting group on a matter, action on that matter is taken when voted upon by that voting group as provided in R.S. 12:1-725.

B.  If the articles of incorporation or this Chapter provide for voting by two or more voting groups on a matter, action on that matter is taken only when voted upon by each of those voting groups counted separately as provided in R.S. 12:1-725.  Action may be taken by one voting group on a matter even though no action is taken by another voting group entitled to vote on the matter.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-727. Greater quorum or voting requirements

            A. The articles of incorporation may provide for a greater voting requirement for shareholders, or voting groups of shareholders, than is provided for by this Chapter. The articles of incorporation may make a quorum requirement for shareholders, or for a voting group of shareholders, greater or lesser than that provided by this Chapter, but the requirement may not be lower than shares having twenty-five percent of the votes entitled to be cast on a matter.

            B. An amendment to the articles of incorporation that adds, changes, or deletes a quorum or voting requirement must meet the same quorum requirement and be adopted by the same vote and voting groups required to take action under the quorum and voting requirements then in effect or proposed to be adopted, whichever is greater.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1; Acts 2017, No. 57, §1.

Tit. 12, Art. 1-728. Quorum and voting for directors;  cumulative voting

            A. Unless otherwise provided in the articles of incorporation, directors are elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present. If a quorum is not present at an annual meeting or at a special meeting called for the election of directors, the shareholders present at the meeting in person or by proxy may, by a majority of the votes cast on the matter, adjourn the meeting to the next day, at the place and time specified in the approved motion to adjourn. The shareholders present in person or by proxy at the meeting to which the earlier meeting is adjourned shall constitute a quorum for the purpose of electing directors, even if a quorum would not otherwise be present.

            B. Shareholders do not have a right to cumulate their votes for directors unless the articles of incorporation so provide.

            C. A statement included in the articles of incorporation that shareholders, or a designated group of shareholders, "are entitled to cumulate their votes for directors", or words of similar import, means that the shareholders designated are entitled to multiply the number of votes they are entitled to cast by the number of directors for whom they are entitled to vote and cast the product for a single candidate or distribute the product among two or more candidates.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2017, No. 57, §1.

Tit. 12, Art. 1-729. Inspectors of election

A.  A public corporation shall, and any other corporation may, appoint one or more inspectors to act at a meeting of shareholders and make a written report of the inspectors' determinations.  Each inspector shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of the inspector's ability.

B.  The inspectors shall do all of the following:

(1)  Ascertain the number of shares outstanding and the voting power of each.

(2)  Determine the shares represented at a meeting.

(3)  Determine the validity of proxies and ballots.

(4)  Count all votes.

(5)  Determine the result.

C.  An inspector may be an officer or employee of the corporation.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Subpart C. Voting Trusts and Agreements

Tit. 12, Art. 1-730. Voting trusts

A.  One or more shareholders may create a voting trust, conferring on a trustee the right to vote or otherwise act for them, by signing an agreement setting out the provisions of the trust, which may include anything consistent with its purpose, and transferring their shares to the trustee.  When a voting trust agreement is signed, the trustee shall prepare a list of the names and addresses of all voting trust beneficial owners, together with the number and class of shares each transferred to the trust, and deliver copies of the list and agreement to the corporation's principal office.

B.  A voting trust becomes effective on the date the first shares subject to the trust are registered in the trustee's name.

C.  Limits, if any, on the duration of a voting trust shall be as set forth in the voting trust.  The duration of a voting trust that became effective before January 1, 2015, may not exceed fifteen years, but may stipulate that it may be extended under the same terms and conditions for an additional period not to exceed ten years from the date of the expiration of the initial term.  The limitation imposed by this Subsection on the duration of a voting trust that became effective before January 1, 2015, may be modified or eliminated by unanimous agreement of the parties to the voting trust.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-731. Voting agreements

A.  Two or more shareholders may provide for the manner in which they will vote their shares by signing an agreement for that purpose.  A voting agreement created under this Section is not subject to the provisions of R.S. 12:1-730.

B.  A voting agreement created under this Section is specifically enforceable.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-732. Unanimous governance agreements

A.  The term "unanimous governance agreement" means any written agreement, other than the articles of incorporation or bylaws, that satisfies all of the following criteria:

(1)  Is approved in one or more writings signed by all persons who are shareholders at the time of the agreement.

(2)  Governs the exercise of the corporate powers or the management of the business and affairs of the corporation or the relationship among the shareholders, the directors, and the corporation, or among any of them.

(3)  States that it is a unanimous governance agreement or that it is governed by this Section.

B.  A unanimous governance agreement is effective among the shareholders and the corporation, and shall be interpreted and enforced among those persons in accordance with the principle of freedom of contract, subject only to the limitations imposed by public policy.  A unanimous governance agreement is enforceable among the shareholders and the corporation even though it is inconsistent with one or more other provisions of this Chapter in that it does any of the following:

(1)  Eliminates the board of directors or restricts the discretion or powers of the board of directors.

(2)  Governs the authorization or making of distributions whether or not in proportion to ownership of shares, subject to the limitations in R.S. 12:1-640.

(3)  Establishes who shall be directors or officers of the corporation, or their terms of office or manner of selection or removal.

(4)  Governs, in general or in regard to specific matters, the exercise or division of voting power by or between the shareholders and directors or by or among any of them, including use of weighted voting rights or director proxies.

(5)  Establishes the terms and conditions of any agreement for the transfer or use of property or the provision of services between the corporation and any shareholder, director, officer, or employee of the corporation or among any of them.

(6)  Transfers to one or more shareholders or other persons all or part of the authority to exercise the corporate powers or to manage the business and affairs of the corporation, including the resolution of any issue about which there exists a deadlock among directors or shareholders.

(7)  Requires dissolution of the corporation at the request of one or more of the shareholders or upon the occurrence of a specified event or contingency.

(8)  Otherwise changes, in a manner not contrary to public policy, the result that would be reached under other provisions of this Chapter.

C.(1)  The existence of a unanimous governance agreement shall be noted conspicuously on the front or back of each certificate for outstanding shares. If, at the time of the agreement, the corporation has shares outstanding represented by certificates, the corporation shall recall the outstanding certificates and issue substitute certificates that comply with this Subsection.  The failure to note the existence of the agreement on the certificate shall not affect the validity of the agreement or any action taken pursuant to it.

(2)  Any purchaser of shares who, at the time of purchase, did not have knowledge of the existence of the agreement shall be entitled to rescission of the purchase.  A purchaser shall be deemed to have knowledge of the existence of the agreement if its existence is noted on the certificate for the shares in compliance with this Subsection.

(3)  An action to enforce the right of rescission authorized by this Subsection must be commenced within the earlier of ninety days after discovery of the existence of the agreement or two years after the time of purchase of the shares.

D.  The provisions of a unanimous governance agreement shall cease to be effective when the corporation becomes a public corporation.  If the agreement ceases to be effective for any reason, the board of directors may adopt an amendment to the articles of incorporation or bylaws, without shareholder action, to delete any references to it.

E.  A unanimous governance agreement that limits the discretion or powers of the board of directors shall relieve the directors of, and impose upon the person or persons in whom such discretion or powers are vested, liability for acts or omissions imposed by law on directors to the extent that the discretion or powers of the directors are limited by the agreement.  A person who is subjected to liability by this Subsection may be held liable only to the extent that a director vested with the same discretion or powers could be held liable, and is entitled to indemnity under R.S. 12:1-850 through 1-859, and to protection against liability under R.S. 12:1-832, to the same extent as a director vested with the same discretion or powers.

F.  The existence or performance of a unanimous governance agreement shall not be a ground for imposing personal liability on any shareholder for the acts or debts of the corporation even if the agreement or its performance treats the corporation as if it were a partnership or results in failure to observe the corporate formalities otherwise applicable to the matters governed by the agreement.

G.  Incorporators or subscribers for shares may act as shareholders with respect to a unanimous governance agreement if no shares have been issued when the agreement is made.

H.  If the shareholders have approved more than one unanimous governance agreement, all of the agreements shall, to the extent reasonable, be construed together as one agreement in which all provisions are given effect.  To the extent that conflicting provisions cannot be reconciled through that rule of construction, the more recently-approved provision controls.

I.  Except as otherwise provided in the agreement, a unanimous governance agreement shall have all of the following characteristics:

(1)  Has an initial term of twenty years.

(2)  May be renewed during the initial or any subsequent term for an additional term of up to twenty years after the renewal is approved, by means of one or more written consents to the renewal, signed by all persons who are shareholders at the time of the renewal, and delivered to the corporation in accordance with R.S. 12:1-704(C).

(3)  May be amended or terminated during its initial or any subsequent term by means of one or more written consents to the amendment or termination, signed by all persons who are shareholders at the time of the termination or amendment, and delivered to the corporation in accordance with R.S. 12:1-704(C).

(4)  Continues in effect even after the expiration of its term, as renewed, until one or more written consents to its termination, signed by the shareholders of at least twenty-five percent of the issued shares of any class are delivered to the corporation in accordance with R.S. 12:1-704(C).

J.  The corporation shall send notice of any renewal, amendment, or termination of a unanimous governance agreement to all shareholders within ten days after the effective date of the renewal, amendment, or termination, but the renewal, amendment, or termination is effective even if the notice is not sent.

K.  This Section does not affect the enforceability of any agreement among shareholders that is not a unanimous governance agreement as defined in Subsection A of this Section.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Subpart D. Derivative Proceedings

Tit. 12, Art. 1-740. Subpart definitions

In this Subpart, the following meanings shall apply:

(1)  "Derivative proceeding" means a civil suit in the right of a domestic corporation or, to the extent provided in R.S. 12:1-747, in the right of a foreign corporation.

(2)  "Shareholder" means a record shareholder, a beneficial shareholder, and an unrestricted voting trust beneficial owner.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

 

Tit. 12, Art. 1-741. Standing

A.  A shareholder may not commence or maintain a derivative proceeding unless the shareholder satisfies all of the following conditions:

(1)  Was a shareholder of the corporation at the time of the act or omission complained of or became a shareholder through transfer by operation of law from one who was a shareholder at that time.

(2)  Fairly and adequately represents the interests of the corporation in enforcing the right of the corporation.

B.  A shareholder who meets the requirements of Subsection A of this Section  may file a derivative proceeding to enforce a right of the corporation, but only after the shareholder satisfies the requirements of R.S. 12:1-742.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-742. Demand

No shareholder may commence a derivative proceeding until the following conditions are satisfied:

(1)  A written demand has been made upon the corporation to take suitable action.

(2)  Ninety days have expired from the date the demand was made unless the shareholder has earlier been notified that the demand has been rejected by the corporation or unless irreparable injury to the corporation would result by waiting for the expiration of the ninety-day period.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-742.1. Petition in derivative proceeding

The petition in a derivative proceeding shall do all of the following:

(1)  Allege that the plaintiff meets the standing requirements of R.S. 12:1-741.

(2)  Allege either that the plaintiff made demand upon the corporation at least ninety days before the filing of the petition as required by R.S. 12:1-742 or that the plaintiff made the demand and, for reasons alleged in the petition, the filing of the petition before the expiration of the ninety-day period complies with R.S. 12:1-742.

(3)  Join as defendants the corporation and the obligor on the obligation sought to be enforced.

(4)  Include a prayer for judgment in favor of the corporation and against the obligor on the obligation sought to be enforced.

(5)  Be verified by the affidavit of the plaintiff or his counsel.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-742.2. Jurisdiction over a director

          A court may exercise personal jurisdiction over a nonresident who is or has been a director of a domestic corporation as to a cause of action arising from a breach by the nonresident of a duty owed to the corporation or its shareholders because of the nonresident's position as a director.

            Acts 2017, No. 57, §1.

Tit. 12, Art. 1-742.3. Venue in derivative proceeding

         A derivative proceeding shall be brought in the parish where the registered office of the corporation is located.

            Acts 2017, No. 57, §1.

Tit. 12, Art. 1-743. Stay of proceedings

If the corporation commences an inquiry into the allegations made in the demand or petition, the court may stay any derivative proceeding for such period as the court deems appropriate.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-744. Dismissal

A.  A derivative proceeding shall be dismissed by the court on motion by the corporation if one of the groups specified in Subsection B or Subsection E of this Section has determined in good faith, after conducting a reasonable inquiry upon which its conclusions are based, that the maintenance of the derivative proceeding is not in the best interests of the corporation.

B.  Unless a panel is appointed pursuant to Subsection E of this Section, the determination in Subsection A of this Section shall be made by one of the following:

(1)  A majority vote of qualified directors present at a meeting of the board of directors if the qualified directors constitute a quorum.

(2)  A majority vote of a committee consisting of two or more qualified directors appointed by majority vote of qualified directors present at a meeting of the board of directors, regardless of whether such qualified directors constitute a quorum.

C.  If a derivative proceeding is commenced after a determination has been made rejecting a demand by a shareholder, the petition shall allege with particularity facts establishing either of the following:

(1)  That a majority of the board of directors did not consist of qualified directors at the time the determination was made.

(2)  That the requirements of Subsection A of this Section have not been met.

D.  If a majority of the board of directors consisted of qualified directors at the time the determination was made, the plaintiff shall have the burden of proving that the requirements of Subsection A of this Section have not been met; if not, the corporation shall have the burden of proving that the requirements of Subsection A of this Section have been met.

E.  Upon motion by the corporation, the court may appoint a panel of one or more individuals to make a determination whether the maintenance of the derivative proceeding is in the best interests of the corporation.  In such case, the plaintiff shall have the burden of proving that the requirements of Subsection A of this Section have not been met.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-745. Discontinuance or settlement

A.  Unless approved unanimously by the shareholders of the corporation, a derivative proceeding may not be discontinued or settled without the court's approval.  If the court determines that a proposed discontinuance or settlement will substantially affect the interests of the corporation's shareholders or a class of shareholders, the court shall direct that notice be given to the shareholders affected.

B.  This Section does not affect the plaintiff's right under Article 1671 of the Code of Civil Procedure to obtain a judgment of dismissal without prejudice if the application for dismissal is made before any defendant, including the corporation in its capacity as a defendant, makes any appearance of record in the proceeding.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-746. Payment of expenses

On termination of the derivative proceeding the court may do any of the following:

(1)  Order the corporation to pay the plaintiff's expenses incurred in the proceeding if it finds that the proceeding has resulted in a substantial benefit to the corporation.

(2)  Order the plaintiff to pay any defendant's expenses incurred in defending the proceeding if it finds that the proceeding was commenced or maintained without reasonable cause or for an improper purpose.

(3)  Order a party to pay an opposing party's expenses incurred because of the filing of a pleading, motion, or other paper, if it finds that the pleading, motion, or other paper was not well-grounded in fact, after reasonable inquiry, or warranted by existing law or a good- faith argument for the extension, modification, or reversal of existing law and was interposed for an improper purpose, such as to harass or cause unnecessary delay or needless increase in the cost of litigation.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-747. Applicability to foreign corporations

In any derivative proceeding in the right of a foreign corporation, the matters covered by this Subpart shall be governed by the laws of the jurisdiction of incorporation of the foreign corporation except for R.S. 12: 1-743, 1-745, and 1-746.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Subpart E. Proceeding to Appoint Receiver

Tit. 12, Art. 1-748. Shareholder action to appoint receiver

A.  The district court of the parish in which the registered office of the corporation is located may appoint one or more to be receivers, of and for a corporation in a proceeding by a shareholder where it is established that either of the following conditions exist:

(1)  The directors are deadlocked in the management of the corporate affairs, the shareholders are unable to break the deadlock, and irreparable injury to the corporation is threatened or being suffered.

(2)  The directors or those in control of the corporation are acting fraudulently and irreparable injury to the corporation is threatened or being suffered.

B.(1)  The court may issue injunctions, appoint a temporary receiver with all the powers and duties the court directs, take other action to preserve the corporate assets wherever located, and carry on the business of the corporation until a full hearing is held.

(2)  The court shall hold a full hearing, after notifying all parties to the proceeding and any interested persons designated by the court, before appointing a receiver.

(3)  The court has jurisdiction over the corporation and all of its property, wherever located.

C.  The court may appoint an individual or domestic or foreign corporation, authorized to transact business in this state, as a receiver and may require the receiver to post bond, with or without sureties, in an amount the court directs.

D.  The court shall describe the powers and duties of the receiver in its appointing order, which may be amended from time to time.  Among other powers, a receiver may do any of the following:

(1)  Exercise all of the powers of the corporation, through or in place of its board of directors, to the extent necessary to manage the business and affairs of the corporation.

(2)  Dispose of all or any part of the assets of the corporation wherever located, at a public or private sale, if authorized by the court.

(3)  Sue and defend in the receiver's own name as receiver in all courts of this state.

E.  [Reserved.]

F.  The court from time to time during the receivership may order compensation paid and expense disbursements or reimbursements made to the receiver from the assets of the corporation or proceeds from the sale of its assets.

G.  In this Section, "shareholder" means a record shareholder, a beneficial shareholder, and an unrestricted voting trust beneficial owner.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Part 8. Directors and Officers

Subpart A. Board of Directors

Tit. 12, Art. 1-801. Requirement for and functions of board of directors

A.  Except as provided in R.S. 12:1-732, each corporation must have a board of directors.

B.  All corporate powers shall be exercised by or under the authority of the board of directors of the corporation, and the business and affairs of the corporation shall be managed by or under the direction, and subject to the oversight, of its board of directors, subject to any limitation set forth in the articles of incorporation or in an agreement authorized under R.S. 12:1-732.

C.  In the case of a public corporation, the board's oversight responsibilities include attention to all of the following:

(1)  Business performance and plans.

(2)  Major risks to which the corporation is or may be exposed.

(3)  The performance and compensation of senior officers.

(4)  Policies and practices to foster the corporation's compliance with law and ethical conduct.

(5)  Preparation of the corporation's financial statements.

(6)  The effectiveness of the corporation's internal controls.

(7)  Arrangements for providing adequate and timely information to directors.

(8)  The composition of the board and its committees, taking into account the important role of independent directors.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-802. Qualifications of directors

            A. The articles of incorporation or bylaws may prescribe qualifications for directors or for nominees for director.

            B. A requirement that is based on a past, current or prospective action, or expression of an opinion, by a nominee or director that could limit the ability of a nominee or director to discharge his or her duties as a director is not a permissible qualification under this Section. Notwithstanding the foregoing, qualifications may include not being or having been subject to specified criminal, civil or regulatory sanctions or not having been removed as a director by judicial action or for cause.

            C. A director need not be a resident of this state or a shareholder of the corporation unless the articles of incorporation or bylaws so provide.

            D. A qualification for nomination for director adopted before a person's nomination shall apply to such person at the time of nomination. A qualification for nomination for director adopted after a person's nomination shall not apply to such person with respect to such nomination.

            E. A qualification for director adopted before the start of a director's term may apply only at the time an individual becomes a director or may apply during a director's term. A qualification adopted during a director's term shall not apply to that director before the end of that term.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

Tit. 12, Art. 1-803. Number and election of directors

A.  A board of directors must consist of one or more individuals.  The number of directors shall be fixed by or in accordance with the articles of incorporation or, if not so fixed, shall be the number fixed by or in accordance with the bylaws.  If not fixed by or in accordance with the articles or the bylaws, the number of directors shall be the number elected from time to time by the shareholders and, if directors have not been elected by the shareholders, the number of directors shall be the number of directors named as initial directors in the articles of incorporation.

B.  The number of directors may be increased or decreased from time to time by amendment to, or in the manner provided in, the articles of incorporation or the bylaws.

C.  Directors are elected at the first annual shareholders' meeting and at each annual meeting thereafter unless their terms are staggered under R.S. 12:1-806.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-804. Election of directors by certain classes of shareholders

If the articles of incorporation authorize dividing the shares into classes, the articles may also authorize the election of all or a specified number of directors by the holders of one or more authorized classes of shares.  A class, or classes, of shares entitled to elect one or more directors is a separate voting group for purposes of the election of directors.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

 

Tit. 12, Art. 1-805. Terms of directors generally

     A. The terms of the initial directors of a corporation expire at the first shareholders' meeting at which directors are elected.

            B. The terms of all other directors expire at the next, or if their terms are staggered in accordance with R.S. 12:1-806, at the applicable second or third, annual shareholders' meeting following their election, except to the extent provided in a bylaw authorized by R.S. 12:1-1022 or a shorter term is specified in the articles of incorporation in the event of a director nominee failing to receive a specified vote for election.

            C. A decrease in the number of directors does not shorten an incumbent director's term.

            D. The term of a director elected to fill a vacancy expires when the term of that director's predecessor in office would have expired had the vacancy not occurred.

            E. Except to the extent otherwise provided in the articles of incorporation or a bylaw authorized by R.S. 12:1-1022, despite the expiration of a director's term, the director continues to serve until the director's successor is elected and qualifies or there is a decrease in the number of directors.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

Tit. 12, Art. 1-806. Staggered terms for directors

The articles of incorporation may provide for staggering the terms of directors by dividing the total number of directors into two or three groups, with each group containing one-half or one-third of the total, as near as may be practicable. In that event, the terms of directors in the first group expire at the first annual shareholders' meeting after their election, the terms of the second group expire at the second annual shareholders' meeting after their election, and the terms of the third group, if any, expire at the third annual shareholders' meeting after their election.  At each annual shareholders' meeting held thereafter, directors shall be chosen for a term of two years or three years, as the case may be, to succeed those whose terms expire.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-807. Resignation of directors

A.  A director may resign at any time by delivering a written resignation to the board of directors, or its chair, or to the secretary of the corporation.

B.  A resignation is effective when the resignation is delivered unless the resignation specifies a later effective date or an effective date determined upon the happening of an event or events. A resignation that is conditioned upon failing to receive a specified vote for election as a director may provide that it is irrevocable.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-808. Removal of directors by shareholders

A.  The shareholders may remove one or more directors with or without cause unless the articles of incorporation provide that directors may be removed only for cause.

B.  If a director is elected by a voting group of shareholders, only the shareholders of that voting group may participate in the vote to remove that director.

C.  If cumulative voting is authorized, a director may not be removed if the number of votes sufficient to elect the director under cumulative voting is voted against removal. If cumulative voting is not authorized, a director may be removed only if the number of votes cast to remove is a majority of the number of votes entitled to be cast in an election of directors.

D.  A director may be removed by the shareholders only at a meeting called for the purpose of removing the director and the meeting notice must state that the purpose, or one of the purposes, of the meeting is removal of the director.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-810. Vacancy on board

A.  Unless the articles of incorporation or bylaws provide otherwise, if a vacancy occurs on a board of directors, including a vacancy resulting from an increase in the number of directors, the vacancy may be filled by one of the following methods:

(1)  The shareholders may fill the vacancy.

(2)  The board of directors may fill the vacancy.

(3)  If the directors remaining in office constitute fewer than a quorum of the board, they may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office.

B.  If the vacant office was held by a director elected by a voting group of shareholders, only the holders of shares of that voting group are entitled to vote to fill the vacancy if it is filled by the shareholders, and only the directors elected by that voting group are entitled to fill the vacancy if it is filled by the directors.

C.  A vacancy that will occur at a specific later date, by reason of a resignation effective at a later date under R.S. 12:1-807(B)  or otherwise, may be filled before the vacancy occurs but the new director may not take office until the vacancy occurs.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-811. Compensation of directors

Unless the articles of incorporation or bylaws provide otherwise, the board of directors may fix the compensation of directors.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-812. Director proxies

A.  A director may vote by proxy at a meeting of the board of directors or of a committee of the board only if the articles of incorporation so provide.

B.  A director may appoint as proxy only another director, and the appointment may be made only by means of a signed writing that is delivered to the person who is presiding at the meeting at which the proxy seeks to cast the absent director's vote.  The writing may contain instructions, general or special, concerning the proxy's authority.

C.  Except as otherwise provided in the articles of incorporation, a separate appointment of a proxy is required for each meeting, and the proxy's authority under any appointment terminates at the conclusion of the meeting for which the appointment was made.

D.  The proxy shall cast the votes of the absent director consistently with any instructions that the proxy receives from the absent director, but otherwise may cast votes on behalf of the absent director in accordance with the proxy's own discretion.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Subpart B. Meetings and Action of the Board

Tit. 12, Art. 1-820. Meetings

     A. The board of directors may hold regular or special meetings in or out of this state.

            B. Unless the articles of incorporation or bylaws provide otherwise, the board of directors may permit any or all directors to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. A director participating in a meeting by this means is deemed to be present in person at the meeting.

            C. A meeting of the board of directors may be called as provided in the bylaws, and may also be called by the board chair, by the chief executive officer, regardless of the title used by the corporation to designate that officer, or by a majority of the directors.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

Tit. 12, Art. 1-821. Action without meeting

A.  Except to the extent that the articles of incorporation or bylaws require that action by the board of directors be taken at a meeting, action required or permitted by this Chapter to be taken by the board of directors may be taken without a meeting if each director signs a consent describing the action to be taken and delivers it to the corporation.

B.  Action taken under this Section is the act of the board of directors when one or more consents signed by all the directors are delivered to the corporation.  The consent may specify the time at which the action taken thereunder is to be effective. A director's consent may be withdrawn by a revocation signed by the director and delivered to the corporation prior to delivery to the corporation of unrevoked written consents signed by all the directors.

C.  A consent signed under this Section has the effect of action taken at a meeting of the board of directors and may be described as such in any document.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-822. Notice of meeting

A.  Unless the articles of incorporation or bylaws provide otherwise, regular meetings of the board of directors may be held without notice of the date, time, place, or purpose of the meeting.

B.  Unless the articles of incorporation or bylaws provide for a longer or shorter period, special meetings of the board of directors must be preceded by at least forty-eight hour notice of the date, time, and place of the meeting.  Except as otherwise provided in the articles of incorporation or bylaws, the notice shall describe the purpose or purposes of the special meeting.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-823. Waiver of notice

A.  A director may waive any notice required by this Subpart, the articles of incorporation, or bylaws before or after the date and time stated in the notice.  Except as provided by Subsection B of this Section, the waiver must be in writing, signed by the director entitled to the notice, and filed with the minutes or corporate records.

B.  A director's attendance at or participation in a meeting waives any required notice to the director of the meeting unless one of the following occurs:

(1)  The director at the beginning of the meeting, or promptly upon arrival, objects to holding the meeting or transacting business at the meeting.

(2)  The objection is to the consideration of an item of business outside the scope of the purposes stated in the notice of the meeting and the director objects to the consideration of that item promptly after the item is first raised for consideration at the meeting.

C.  A director who objects in accordance with Subsection B of this Section, but who then participates in the meeting or votes in favor of one or more actions at the meeting, does not waive the objection except with respect to those actions at the meeting that the director votes to approve.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-824. Quorum and voting

A.  Unless the articles of incorporation or bylaws require a greater number or unless otherwise specifically provided in this Chapter, a quorum of a board of directors consists of a majority of the number of directors determined in accordance with R.S. 12:1-803.

B.  The articles of incorporation or bylaws may authorize a quorum of a board of directors to consist of no fewer than one-third of the number of directors determined in accordance with R.S. 12:1-803.

C.(1)  If a quorum is present when a vote is taken, the affirmative vote of the required majority of directors is the act of the board of directors.  The required majority of directors is a majority of the directors present, or the number of directors whose votes are required by the articles of incorporation or bylaws for the board to take the relevant action, whichever number is greater.

(2)  If a quorum is present when a meeting is convened, but the quorum is lost through the withdrawal from the meeting of one or more directors, the affirmative vote of the required majority of directors is the act of the board of directors provided that the number of affirmative votes is not fewer than the number that would have been required had the quorum not been lost.

D.  A director who is present at a meeting of the board of directors or a committee of the board of directors when corporate action is taken is deemed to have assented to the action taken unless one of the following occurs:

(1)  The director objects at the beginning of the meeting, or promptly upon arrival, to holding the meeting or transacting business at the meeting.

(2)  The dissent or abstention from the action taken is entered in the minutes of the meeting.

(3)  The director delivers written notice of the director's dissent or abstention to the presiding officer of the meeting before its adjournment or to the corporation immediately after adjournment of the meeting.  The right of dissent or abstention is not available to a director who votes in favor of the action taken.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-825. Committees

A.  Unless this Chapter, the articles of incorporation, or the bylaws provide otherwise, the board of directors may create one or more committees and appoint one or more members of the board of directors to serve on any such committee.  If the board of directors appoints a person who is not a director, that person may serve only in an advisory capacity and shall not be a member of the committee for purposes of any reference by this Chapter to a committee or to one or more members of a committee.

B.  Unless this Chapter otherwise provides, the creation of a committee and appointment of members to it must be approved by the greater of  the following:

(1)  A majority of all the directors in office when the action is taken.

(2)  The number of directors required by the articles of incorporation or bylaws to take action under R.S. 12:1-824.

C.  R.S. 12:1-820 through 1-824 apply both to committees of the board and to their members.

D.  To the extent specified by the board of directors or in the articles of incorporation or bylaws, each committee may exercise the powers of the board of directors under R.S. 12:1-801.

E.  A committee may not do any of the following:

(1)  Authorize or approve distributions, except according to a formula or method, or within limits, prescribed by the board of directors.

(2)  Approve or propose to shareholders action that this Chapter requires be approved by shareholders.

(3)  Fill vacancies on the board of directors or, subject to Subsection G of this Section, on any of its committees.

(4)  Adopt, amend, or repeal bylaws.

F.  The creation of, delegation of authority to, or action by a committee does not alone constitute compliance by a director with the standards of conduct described in R.S. 12:1-830.

G.  The board of directors may appoint one or more directors as alternate members of any committee to replace any absent or disqualified member during the member's absence or disqualification. Unless the articles of incorporation or the bylaws or the resolution creating the committee provide otherwise, in the event of the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, unanimously, may appoint another director to act in place of the absent or disqualified member.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-826. Submission of matters for shareholder vote

A corporation may agree to submit a matter to a vote of its shareholders even if, after approving the matter, the board of directors determines it no longer recommends the matter.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Subpart C. Directors

Tit. 12, Art. 1-830. Standards of conduct for directors

A.  Each member of the board of directors, when discharging the duties of a director, shall act in good faith and  in a manner the director reasonably believes to be in the best interests of the corporation.

B.  The members of the board of directors or a committee of the board, when becoming informed in connection with their decision-making function or devoting attention to their oversight function, shall discharge their duties with the care that a person in a like position would reasonably believe appropriate under similar circumstances.

C.  In discharging board or committee duties a director shall disclose, or cause to be disclosed, to the other board or committee members information not already known by them but known by the director to be material to the discharge of their decision-making or oversight functions, except that disclosure is not required to the extent that the director reasonably believes that doing so would violate a duty imposed under law, a legally enforceable obligation of confidentiality, or a professional ethics rule.

D.  In discharging board or committee duties a director who does not have knowledge that makes reliance unwarranted is entitled to rely on the performance by any of the persons specified in Paragraph (F)(1) or Paragraph (F)(3) of this Section to whom the board may have delegated, formally or informally by course of conduct, the authority or duty to perform one or more of the board's functions that are delegable under applicable law.

E.  In discharging board or committee duties a director who does not have knowledge that makes reliance unwarranted is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, prepared or presented by any of the persons specified in Subsection F of this Section.

F.  A director is entitled to rely, in accordance with Subsection D or E of this Section, on any of the following:

(1)  One or more officers or employees of the corporation whom the director reasonably believes to be reliable and competent in the functions performed or the information, opinions, reports, or statements provided.

(2)  Legal counsel, public accountants, or other persons retained by the corporation as to matters involving skills or expertise the director reasonably believes are matters within the particular person's professional or expert competence or as to which the particular person merits confidence.

(3)  A committee of the board of directors of which the director is not a member if the director reasonably believes the committee merits confidence.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-831. Standards of liability for directors

            A. A director shall not be liable to the corporation or its shareholders for any decision to take or not to take action, or any failure to take any action, as a director, unless the party asserting liability in a proceeding establishes both of the following:

            (1) No defense interposed by the director based on R.S. 12:1-832, a provision in the articles of incorporation authorized by R.S. 12:1-202(B)(6), the protection afforded by R.S. 12:1-861 for action taken in compliance with R.S. 12:1-862 or R.S. 12:1-863, or the protection afforded by R.S. 12:1-870, precludes liability.

            (2) The challenged conduct consisted or was the result of one of the following:

            (a) Action not in good faith.

            (b) A decision that the director did not reasonably believe to be in the best interests of the corporation, or as to which the director was not informed to an extent the director reasonably believed appropriate in the circumstances.

            (c) A lack of objectivity due to the director's familial, financial, or business relationship with, or a lack of independence due to the director's domination or control by, another person having a material interest in the challenged conduct, which relationship or which domination or control could reasonably be expected to have affected the director's judgment respecting the challenged conduct in a manner adverse to the corporation, and after a reasonable expectation to such effect has been established, the director shall not have established that the challenged conduct was reasonably believed by the director to be in the best interests of the corporation.

            (d) A sustained failure of the director to devote attention to ongoing oversight of the business and affairs of the corporation, or a failure to devote timely attention, by making, or causing to be made, appropriate inquiry, when particular facts and circumstances of significant concern materialize that would alert a reasonably attentive director to the need therefore.

            (e) Receipt of a financial benefit to which the director was not entitled or any other breach of the director's duties to deal fairly with the corporation and its shareholders that is actionable under applicable law.

            B.(1) The party seeking to hold the director liable for money damages, shall also have the burden of establishing both of the following:

            (a) Harm to the corporation or its shareholders has been suffered.

            (b) The harm suffered was proximately caused by the director's challenged conduct.

            (2) The party seeking to hold the director liable for other money payment under a legal remedy, such as compensation for the unauthorized use of corporate assets, shall also have whatever persuasion burden may be called for to establish that the payment sought is appropriate in the circumstances.

            (3) The party seeking to hold the director liable for other money payment under an equitable remedy, such as profit recovery by or disgorgement to the corporation, shall also have whatever persuasion burden may be called for to establish that the equitable remedy sought is appropriate in the circumstances.

            C. Nothing contained in this Section shall be construed to do any of the following:

            (1) In any instance where fairness is at issue, such as consideration of the fairness of a transaction to the corporation under R.S. 12:1-861(B)(3), alter the burden of proving the fact or lack of fairness otherwise applicable.

            (2) Alter the fact or lack of liability of a director under another provision of this Chapter, such as the provisions governing the consequences of an unlawful distribution under R.S.12:1-833 or a transactional interest under R.S. 12:1-861.

            (3) Affect any rights to which the corporation or a shareholder may be entitled under another statute of this state or the United States.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2105; Acts 2016, No. 442, §1.

Tit. 12, Art. 1-832. Protection against monetary liability

            A. Except to the extent that the articles of incorporation limit or reject the protection against liability provided by this Section, no director or officer shall be liable to the corporation or its shareholders for money damages for any action taken, or any failure to take action, as a director or officer, except for one of the following:

            (1) A breach of the director's or officer's duty of loyalty to the corporation or the shareholders.

            (2) An intentional infliction of harm on the corporation or the shareholders.

            (3) A violation of R.S. 12:1-833.

            (4) An intentional violation of criminal law.

            B. The liability of a director or officer for conduct described in Paragraphs (A)(1) through (4) of this Section may not be limited or eliminated, but the corporation may purchase insurance against that liability as provided in R.S. 12:1-857.

            C. For purposes of this Section, the duty of loyalty does not include any duty to act with any degree of care in the exercise of the director's or officer's responsibilities to the corporation or its shareholders.

            D. A provision in a corporation's articles of incorporation that became effective before January 1, 2015, and that purports to protect a director or officer of the corporation against monetary liability to the corporation or its shareholders, shall not operate as a limitation of the protection against liability provided by this Section except to the extent that it provides less protection against liability than was permitted by the law in effect at the time the provision became effective.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

Tit. 12, Art. 1-833. Directors' liability for unlawful distributions

      A. A director who votes for or assents to a distribution in excess of what may be authorized and made pursuant to R.S. 12:1-640(A) or 1-1409(A) is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating R.S. 12:1-640(A) or 1-1409(A) if the party asserting liability establishes that when taking the action the director did not comply with R.S. 12:1-830.

            B. A director held liable under Subsection A of this Section for an unlawful distribution is entitled to both of the following:

            (1) Contribution from every other director who could be held liable under Subsection A of this Section for the unlawful distribution.

            (2) Indemnity from each shareholder, for the pro-rata portion of the amount of the unlawful distribution the shareholder received.

            C.(1) A proceeding to enforce the liability of a director under Subsection A of this Section is barred unless it is commenced within two years after the relevant one of the following dates:

            (a) The date on which the effect of the distribution was measured under R.S.12:1-640(E) or (G).

            (b) The date as of which the violation of R.S. 12:1-640(A) occurred as the consequence of disregard of a restriction in the articles of incorporation.

            (c) The date on which the distribution of assets to shareholders under R.S. 12:1-1409(A) was made.

            (2) A proceeding to enforce contribution or indemnity under Subsection B of this Section is barred unless it is commenced within one year after the liability of the claimant has been finally adjudicated under Subsection A of this Section.

            D. The time limits provided in Subsection C of this Section are peremptive.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

Subpart D. Officers

Tit. 12, Art. 1-840. Officers

A.  A corporation shall have a secretary and such other officers as described in its bylaws or appointed by the board of directors in a manner not inconsistent with any bylaws.

B.  The board of directors may elect individuals to fill one or more offices of the corporation. An officer may appoint one or more officers if authorized by the bylaws or the board of directors.

C.  The secretary shall have the authority and responsibility for preparing the minutes of the directors' and shareholders' meetings and for maintaining and authenticating the records of the corporation required to be kept under R.S. 12:1-1601(A) and 1-1601(E).

D.  The same individual may simultaneously hold more than one office in a corporation.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-841. Functions of officers

In addition to the secretary's authority under R.S. 12:1-840, each officer has the authority and shall perform the functions set forth in the bylaws or, to the extent consistent with any bylaws, the authority and functions prescribed by the board of directors or by direction of an officer authorized by the board of directors to prescribe the authority and functions of other officers.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-842. Standards of conduct for officers

        A. An officer, when performing in such capacity, has the duty to act in all of the following manners:

            (1) In good faith.

            (2) With the care that a person in a like position would reasonably exercise under similar circumstances.

            (3) In a manner the officer reasonably believes to be in the best interests of the corporation.

            B. [Reserved.]

            C. In discharging his or her duties, an officer who does not have knowledge that makes reliance unwarranted is entitled to rely on any of the following:

            (1) The performance of properly delegated responsibilities by one or more employees of the corporation whom the officer reasonably believes to be reliable and competent in performing the responsibilities delegated.

            (2) Information, opinions, reports or statements, including financial statements and other financial data, prepared or presented by one or more employees of the corporation whom the officer reasonably believes to be reliable and competent in the matters presented or by legal counsel, public accountants, or other persons retained by the corporation as to matters involving skills or expertise the officer reasonably believes are matters within the particular person's professional or expert competence or as to which the particular person merits confidence.

            D. An officer shall not be liable to the corporation or its shareholders for any decision to take or not to take action, or any failure to take any action, as an officer, if the duties of the office are performed in compliance with this Section. Whether an officer who does not comply with this Section shall have liability will depend in such instance on applicable law, including those principles of R.S. 12:1-831 that have relevance.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

Tit. 12, Art. 1-843. Resignation and removal of officers

A.  An officer may resign at any time by delivering notice to the corporation. A resignation is effective when the notice is effective unless the notice specifies a later effective time. If a resignation is made effective at a later time and the board or the appointing officer accepts the future effective time, the board or the appointing officer may fill the pending vacancy before the effective time if the board or the appointing officer provides that the successor does not take office until the effective time.

B.  An officer may be removed at any time with or without cause by any of the following:

(1)  The board of directors.

(2)  The appointing officer, unless the bylaws or the board of directors provide otherwise.

(3)  Any other officer if authorized by the bylaws or the board of directors.

C.  In this Section, "appointing officer" means the officer, including any successor to that officer, who appointed the officer resigning or being removed.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-844. Contract rights of officers

A.  The appointment of an officer does not itself create contract rights.

B.  An officer's removal does not affect the officer's contract rights, if any, with the corporation. An officer's resignation does not affect the corporation's contract rights, if any, with the officer.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Subpart E. Indemnification and Advance for Expenses

Tit. 12, Art. 1-850. Subpart definitions

In this Subpart, the following meanings shall apply:

(1)  "Corporation" includes any domestic or foreign predecessor entity of a corporation in a merger.

(2)  "Director" or "officer" means an individual who is or was a director or officer, respectively, of a corporation or who, while a director or officer of the corporation, is or was serving at the corporation's request as a director, officer, manager, partner, trustee, employee, or agent of another entity or employee benefit plan.  A director or officer is considered to be serving an employee benefit plan at the corporation's request if the individual's duties to the corporation also impose duties on, or otherwise involve services by, the individual to the plan or to participants in or beneficiaries of the plan.  "Director" or "officer" includes, unless the context requires otherwise, the estate or personal representative of a director or officer.

(3)  "Liability" means the obligation to pay a judgment, settlement, penalty, fine, including an excise tax assessed with respect to an employee benefit plan, or reasonable expenses incurred with respect to a proceeding.

(4)  "Official capacity" means, when used with respect to a director, the office of director in a corporation.  "Official capacity" means, when  used with respect to an officer, as contemplated in R.S. 12: 1-856, the office in a corporation held by the officer.  "Official capacity" does not include service for any other domestic or foreign corporation or any partnership, joint venture, trust, employee benefit plan, or other entity.

(5)  "Party" means an individual who was, is, or is threatened to be made, a defendant or respondent in a proceeding.

(6)  "Proceeding" means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, arbitrative, or investigative and whether formal or informal.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-851. Permissible indemnification

           A. Except as otherwise provided in this Section, a corporation may indemnify an individual who is a party to a proceeding because the individual is a director against liability incurred in the proceeding if the requirements of Paragraph (1) or (2) of this Subsection are met:

            (1) The director satisfied the requirements of Subparagraphs (a) and (b) and, if applicable, Subparagraph (c) of this Paragraph:

            (a) The director conducted himself or herself in good faith.

            (b) The director reasonably believed the relevant one of the following:

            (i) In the case of conduct in an official capacity, that his or her conduct was in the best interests of the corporation.

            (ii) In all other cases, that the director's conduct was at least not opposed to the best interests of the corporation.

            (c) In the case of any criminal proceeding, the director had no reasonable cause to believe his or her conduct was unlawful.

            (2) The director engaged in conduct for which broader indemnification has been made permissible or obligatory under a provision of the articles of incorporation, as authorized by R.S. 12:1-202(B)(5), for which liability has been eliminated under R.S. 12:1-832.

            B. A director's conduct with respect to an employee benefit plan for a purpose the director reasonably believed to be in the interests of the participants in, and the beneficiaries of, the plan is conduct that satisfies the requirement of Item (A)(1)(a)(ii) of this Section.

            C. The termination of a proceeding by judgment, order, settlement, or conviction, or upon a plea of nolo contendere or its equivalent, is not, of itself, determinative that the director did not meet the relevant standard of conduct described in this Section.

            D. Unless ordered by a court under R.S. 12:1-854(A)(3), a corporation may not indemnify a director in connection with either of the following:

            (1) A proceeding by or in the right of the corporation, except for expenses incurred in connection with the proceeding if it is determined that the director has met the relevant standard of conduct under Subsection A of this Section.

            (2) Any proceeding with respect to conduct for which the director was adjudged liable on the basis of receiving a financial benefit to which he or she was not entitled, whether or not involving action in the director's official capacity.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

Tit. 12, Art. 1-852. Mandatory indemnification

A corporation shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which the director was a party because he or she was a director of the corporation against expenses incurred by the director in connection with the proceeding.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-853. Advance for expenses

A.  A corporation may, before final disposition of a proceeding, advance funds to pay for or reimburse expenses incurred in connection with the proceeding by an individual who is a party to the proceeding because that individual is a member of the board of directors if the director delivers to the corporation both of the following:

(1)  A written affirmation of the director's good faith belief that the relevant standard of conduct described in R.S. 12:1-851 has been met by the director or that the proceeding involves conduct for which liability has been eliminated under R.S. 12: 1-832.

(2)  A written undertaking of the director to repay any funds advanced if the director is not entitled to mandatory indemnification under R.S. 12:1-852 and it is ultimately determined under R.S. 12:1-854 or 1-855 that the director has not met the relevant standard of conduct described in R.S. 12:1-851.

B.  The undertaking required by Paragraph (A)(2) of this Section must be an unlimited general obligation of the director but need not be secured and may be accepted without reference to the financial ability of the director to make repayment.

C.  Authorizations under this Section shall be made by one of the following:

(1)  By the board of directors in either of the following manners:

(a)  If there are two or more qualified directors, by a majority vote of all the qualified directors, a majority of whom shall for such purpose constitute a quorum, or by a majority of the members of a committee of two or more qualified directors appointed by such a vote.

(b)  If there are fewer than two qualified directors, by the vote necessary for action by the board in accordance with R.S. 12:1-824(C), in which authorization directors who are not qualified directors may participate.

(2)  By the shareholders, except that shares owned by or voted under the control of a director who at the time is not a qualified director may not be voted on the authorization.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-854. Court-ordered indemnification and advance for expenses

            A. A director who is a party to a proceeding because he or she is a director may petition the court conducting the proceeding for indemnification or an advance for expenses or, if the indemnification or advance for expenses is beyond the scope of the proceeding or of the jurisdiction of the court or other forum for the proceeding, may petition another court of competent jurisdiction. After ordering any notice it considers necessary, the court shall hear the petition by summary proceeding and shall, if it makes the required determination, order one of the following:

            (1) Indemnification if the court determines that the director is entitled to mandatory indemnification under R.S. 12:1-852.

            (2) Indemnification or advance for expenses if the court determines that the director is entitled to indemnification or advance for expenses pursuant to a provision authorized by R.S. 12:1-858(A).

            (3) Indemnification or advance for expenses if the court determines, in view of all the relevant circumstances, that it is fair and reasonable for the corporation to provide the ordered indemnification or advance for expenses, even though the director did not meet the relevant standard of conduct set forth in R.S. 12:1-851(A), failed to comply with R.S. 12:1-853, or was adjudged liable in a proceeding referred to in R.S. 12:1-851(D)(1) or (D)(2). If the director was adjudged liable in a proceeding referred to in R.S. 12:1-851(D)(1) or (D)(2), indemnification shall be limited to expenses incurred in connection with the proceeding.

            B. If the court determines that the director is entitled to indemnification under Paragraph (A)(1) of this Section or to indemnification or advance for expenses under Paragraph (A)(2) of this Section, it shall also order the corporation to pay the director's expenses incurred in connection with obtaining court-ordered indemnification or advance for expenses. If the court determines that the director is entitled to indemnification or advance for expenses under Paragraph (A)(3) of this Section, it may also order the corporation to pay the director's expenses to obtain court-ordered indemnification or advance for expenses.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

Tit. 12, Art. 1-855. Determination and authorization of indemnification

A.  A corporation may not indemnify a director under R.S. 12:1-851 unless authorized for a specific proceeding after a determination has been made that indemnification is permissible because the director has met the relevant standard of conduct set forth in R.S. 12:1-851.

B.  The determination shall be made by one of the following:

(1)  If there are two or more qualified directors, by the board of directors by a majority vote of all the qualified directors, a majority of whom shall for such purpose constitute a quorum, or by a majority of the members of a committee of two or more qualified directors appointed by such a vote.

(2)  By special legal counsel selected using either of the following means:

(a)  Selected in the manner prescribed in Paragraph (B)(1) of this Section.

(b)  If there are fewer than two qualified directors, selected by the board of directors, in which selection directors who are not qualified directors may participate.

(3)  By the shareholders, except that shares owned by or voted under the control of a director who at the time is not a qualified director may not be voted on the determination.

C.  Authorization of indemnification shall be made in the same manner as the determination that indemnification is permissible except that if there are fewer than two qualified directors, or if the determination is made by special legal counsel, authorization of indemnification shall be made by those entitled to select special legal counsel under Subparagraph (B)(2)(b) of this Section.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-856. Indemnification of officers

A.  A corporation may indemnify and advance expenses under this Subpart to an officer of the corporation who is a party to a proceeding because he or she is an officer of the corporation to the same extent as a director and, if he or she is an officer but not a director, to such further extent as may be provided by the articles of incorporation, the bylaws, a resolution of the board of directors, or contract except for either of the following:

(1)  Liability in connection with a proceeding by or in the right of the corporation other than for expenses incurred in connection with the proceeding.

(2)  Liability arising out of conduct that constitutes any of the following:

(a)  A breach of the officer's duty of loyalty to the corporation or its shareholders.

(b)  An intentional infliction of harm on the corporation or the shareholders.

(c)  An intentional violation of criminal law.

B.  [Reserved.]

C.  An officer of a corporation is entitled to mandatory indemnification under R.S. 12:1-852, and may apply to a court under R.S. 12:1-854 for indemnification or an advance for expenses, in each case to the same extent to which a director may be entitled to indemnification or advance for expenses under those provisions.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

 

Tit. 12, Art. 1-857. Insurance

A corporation may purchase and maintain insurance on behalf of an individual who is a director or officer of the corporation, or who, while a director or officer of the corporation, serves at the corporation's request as a director, officer, partner, trustee, employee, or agent of another domestic or foreign corporation, partnership, joint venture, trust, employee benefit plan, or other entity, against liability asserted against or incurred by the individual in that capacity or arising from his or her status as a director or officer, whether or not the individual could be protected against the same liability under R.S. 12:1-832 and whether or not the corporation would have power to indemnify or advance expenses to the individual against the same liability under this Subpart.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-858. Variation by corporate action;  application of Subpart

A.  A corporation may, by a provision in its articles of incorporation or bylaws or in a resolution adopted or a contract approved by its board of directors or shareholders, obligate itself in advance of the act or omission giving rise to a proceeding to provide indemnification in accordance with R.S. 12:1-851 or advance funds to pay for or reimburse expenses in accordance with R.S. 12:1-853. Any such obligatory provision shall be deemed to satisfy the requirements for authorization referred to in R.S. 12:1-853(C) and 1-855(C).  Any such provision that obligates the corporation to provide indemnification to the fullest extent permitted by law shall be deemed to obligate the corporation to advance funds to pay for or reimburse expenses in accordance with R.S. 12:1-853 to the fullest extent permitted by law, unless the provision specifically provides otherwise.

B.  A right of indemnification or to advances for expenses created by this Subpart or under Subsection A of this Section and in effect at the time of an act or omission shall not be eliminated or impaired with respect to such act or omission by an amendment of the articles of incorporation or bylaws or a resolution of the directors or shareholders, adopted after the occurrence of such act or omission, unless, in the case of a right created under Subsection A of this Section, the provision creating such right and in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such act or omission has occurred.

C.  Any provision pursuant to Subsection A of this Section shall not obligate the corporation to indemnify or advance expenses to a director of a predecessor of the corporation, pertaining to conduct with respect to the predecessor, unless otherwise specifically provided. Any provision for indemnification or advance for expenses in the articles of incorporation, bylaws, or a resolution of the board of directors or shareholders of a predecessor of the corporation in a merger or in a contract to which the predecessor is a party, existing at the time the merger takes effect, shall be governed by R.S. 12:1-1107(A)(4).

D.  A corporation may, by a provision in its articles of incorporation, limit any of the rights to indemnification or advance for expenses created by or pursuant to this Subpart.

E.  This Subpart does not limit a corporation's power to pay or reimburse expenses incurred by a director or an officer in connection with appearing as a witness in a proceeding at a time when he or she is not a party.

F.  This Subpart does not limit a corporation's power to indemnify, advance expenses to, or provide or maintain insurance on behalf of an employee or agent.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-859. Exclusivity of Subpart

A corporation may provide indemnification or advance expenses to a director or an officer only as permitted by this Subpart.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Subpart F. Directors' Conflicting Interest Transactions

Tit. 12, Art. 1-860. Subpart definitions

            In this Subpart, the following meanings shall apply:

            (1) "Control", including the term "controlled by", means either of the following:

            (a) Having the power, directly or indirectly, to elect or remove a majority of the members of the board of directors or other governing body of an entity, whether through the ownership of voting shares or interests, by contract, or otherwise.

            (b) Being subject to a majority of the risk of loss from the entity's activities or entitled to receive a majority of the entity's residual returns.

            (2) "Director's conflicting interest transaction" means any of the following:

            (a) A transaction effected or proposed to be effected by the corporation, or by an entity controlled by the corporation, to which, at the relevant time, the director is a party.

            (b) A transaction effected or proposed to be effected by the corporation, or by an entity controlled by the corporation, respecting which, at the relevant time, the director had knowledge and a material financial interest known to the director.

            (c) A transaction effected or proposed to be effected by the corporation, or by an entity controlled by the corporation, respecting which, at the relevant time, the director knew that a related person was a party or had a material financial interest.

            (3) "Fair to the corporation" means, for purposes of R.S. 12:1-861(B)(3), that the transaction as a whole was beneficial to the corporation, taking into appropriate account whether it was fair in terms of the director's dealings with the corporation, and comparable to what might have been obtainable in an arm's length transaction, given the consideration paid or received by the corporation.

            (4) "Material financial interest" means a financial interest in a transaction that would reasonably be expected to impair the objectivity of the director's judgment when participating in action on the authorization of the transaction.

            (5) "Related person" means, at the relevant time, any of the following:

            (a) The individual's spouse.

            (b) A child, stepchild, grandchild, parent, stepparent, grandparent, sibling, stepsibling, half sibling, aunt, uncle, niece or nephew, or spouse of any thereof, of the individual or of the individual's spouse.

            (c) A natural person living in the same home as the individual.

            (d) An entity, other than the corporation or an entity controlled by the corporation, controlled by the individual or any person specified above in this Paragraph.

            (e) A domestic or foreign business or nonprofit corporation, other than the corporation or an entity controlled by the corporation, of which the individual is a director, a domestic or foreign unincorporated entity of which the individual is a general partner or a member of the governing body, or a domestic or foreign individual, trust, or estate for whom or of which the individual is a trustee, guardian, personal representative, or like fiduciary.

            (f) A person that is, or an entity that is controlled by, an employer of the individual.

            (g) A person with whom the individual has a material relationship.

            (6) "Relevant time" means the time at which directors' action respecting the transaction is taken in compliance with R.S. 12:1-862, or if the transaction is not brought before the board of directors of the corporation or its committee for action under R.S. 12:1-862, at the time the corporation, or an entity controlled by the corporation, becomes legally obligated to consummate the transaction.

            (7) "Required disclosure" means disclosure of the existence and nature of the director's conflicting interest, and all facts known to the director respecting the subject matter of the transaction that a director free of such conflicting interest would reasonably believe to be material in deciding whether to proceed with the transaction.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

Tit. 12, Art. 1-861. Judicial action

A.  A transaction effected or proposed to be effected by the corporation, or by an entity controlled by the corporation, may not be the subject of any form of relief, or give rise to an award of damages or other sanctions against a director of the corporation, in a proceeding by a shareholder or by or in the right of the corporation, on the ground that the director has an interest respecting the transaction, if it is not a director's conflicting interest transaction.

B.  A director's conflicting interest transaction may not be the subject of equitable relief, or give rise to an award of damages or other sanctions against a director of the corporation, in a proceeding by a shareholder or by or in the right of the corporation, on the ground that the director has an interest respecting the transaction, if any of the following conditions are satisfied:

(1)  Directors' action respecting the transaction was taken in compliance with R.S. 12:1-862 at any time.

(2)  Shareholders' action respecting the transaction was taken in compliance with R.S. 12: 1-863 at any time.

(3)  The transaction, judged according to the circumstances at the relevant time, is established to have been fair to the corporation.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-862. Directors' action

A.  Directors' action respecting a director's conflicting interest transaction is effective for purposes of R.S. 12:1-861(B)(l)  if the transaction has been authorized by the affirmative vote of a majority, but no fewer than two, of the qualified directors who voted on the transaction, after required disclosure by the conflicted director of information not already known by such qualified directors, or after modified disclosure in compliance with Subsection B of this Section, provided that both of the following criteria are satisfied:

(1)  The qualified directors have deliberated and voted outside the presence of and without the participation by any other director.

(2)  Where the action has been taken by a committee, all members of the committee were qualified directors, and either the committee was composed of all the qualified directors on the board of directors or the members of the committee were appointed by the affirmative vote of a majority of the qualified directors on the board.

B.  Notwithstanding Subsection A of this Section, when a transaction is a director's conflicting interest transaction only because a related person described in  R.S. 12: 1-860(5)(e), (f), or (g) is a party to or has a material financial interest in the transaction, the conflicted director is not obligated to make required disclosure to the extent that the director reasonably believes that doing so would violate a duty imposed under law, a legally enforceable obligation of confidentiality, or a professional ethics rule, provided that the conflicted director discloses to the qualified directors voting on the transaction all of the following:

(1)  All information required to be disclosed that is not so violative.

(2)  The existence and nature of the director's conflicting interest.

(3)  The nature of the conflicted director's duty not to disclose the confidential information.

C.  A majority, but no fewer than two, of all the qualified directors on the board of directors, or on the committee, constitutes a quorum for purposes of action that complies with this Section.

D.  Where directors' action under this Section does not satisfy a quorum or voting requirement applicable to the authorization of the transaction by reason of the articles of incorporation, the bylaws, or a provision of law, independent action to satisfy those authorization requirements must be taken by the board of directors or a committee, in which action directors who are not qualified directors may participate.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Tit. 12, Art. 1-863. Shareholders' action

A.  Shareholders' action respecting a director's conflicting interest transaction is effective for purposes of R.S. 12:1-861(B)(2)  if a majority of the votes cast by the holders of all qualified shares are in favor of the transaction after notice to shareholders describing the action to be taken respecting the transaction, provision to the corporation of the information referred to in Subsection B of this Section, and communication to the shareholders entitled to vote on the transaction of the information that is the subject of required disclosure, to the extent the information is not known by them.

B.  A director who has a conflicting interest respecting the transaction shall, before the shareholders' vote, inform the secretary or other officer or agent of the corporation authorized to tabulate votes, in writing, of the number of shares that the director knows are not qualified shares under Subsection C of this Section, and the identity of the holders of those shares.

C.(1)  For purposes of this Section, "holder" means and "held by" refers to shares held by a record shareholder, a beneficial shareholder, and an unrestricted voting trust beneficial shareholder.

(2)  For the purposes of this Section, "qualified shares" means all shares entitled to be voted with respect to the transaction except for shares that the secretary or other officer or agent of the corporation authorized to tabulate votes either knows or, under Subsection B of this Section, is notified are held by a director who has a conflicting interest respecting the transaction or a related person of the director, excluding a person described in R.S. 12:1-860(5)(f).

D.  A majority of the votes entitled to be cast by the holders of all qualified shares constitutes a quorum for purposes of compliance with this Section. Subject to the provisions of Subsection E of this Section, shareholders' action that otherwise complies with this Section is not affected by the presence of holders, or by the voting, of shares that are not qualified shares.

E.  If a shareholders' vote does not comply with Subsection A of this Section solely because of a director's failure to comply with Subsection B of this Section, and if the director establishes that the failure was not intended to influence and did not in fact determine the outcome of the vote, the court may take such action respecting the transaction and the director, and may give such effect, if any, to the shareholders' vote, as the court considers appropriate in the circumstances.

F.  Where shareholders' action under this Section does not satisfy a quorum or voting requirement applicable to the authorization of the transaction by reason of the articles of incorporation, the bylaws or a provision of law, independent action to satisfy those authorization requirements must be taken by the shareholders, in which action shares that are not qualified shares may participate.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

Subpart G. Business Opportunities

Tit. 12, Art. 1-870. Business opportunities

   A. If a director or officer or related person of either pursues or takes advantage, directly or indirectly, of a business opportunity, that action may not be the subject of any form of relief, or give rise to an award of damages or other sanctions against the director, officer or related person, in a proceeding by or in the right of the corporation on the ground that such opportunity should have first been offered to the corporation, if the requirements of Paragraph (1) or (2) of this Subsection are satisfied:

            (1) Before the director, officer or related person becomes legally obligated respecting the opportunity, the director or officer brings it to the attention of the corporation and either of the following occurs:

            (a) Action by qualified directors disclaiming the corporation's interest in the opportunity is taken in compliance with the same procedures set forth in R.S. 12:1-862.

            (b) Shareholders' action disclaiming the corporation's interest in the opportunity is taken in compliance with the procedures set forth in R.S. 12:1-863, as if the decision being made concerned a director's conflicting interest transaction.

            (2) The duty to offer the corporation the particular business opportunity has been limited or eliminated pursuant to a provision of the articles of incorporation adopted, and in the case of officers and their related persons made effective by action of qualified directors, in accordance with R.S. 12:1-202(B)(6).

            B. In any proceeding seeking equitable relief or other remedies based upon an alleged improper taking advantage of a business opportunity by a director, the fact that the director did not employ the procedure described in Subsection A of this Section before taking advantage of the opportunity shall not create an inference that the opportunity should have been first presented to the corporation or alter the burden of proof otherwise applicable to establish that the director breached a duty to the corporation in the circumstances.

            C. For purposes of this Section, the term "required disclosure" as used in R.S. 12:1-862 and R.S. 12:1-863 means prior disclosure to those acting on behalf of the corporation of all material facts concerning the business opportunity that are then known to the director or officer.

            Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

Part 9. Domestication and Conversion

Subpart A. Preliminary Provisions

Tit. 12, Art. 1-901. Excluded transactions

A.  This Part may not be used to effect a transaction that causes an eligible entity or domestic or foreign corporation to hold any right, privilege, license, or franchise under the laws of this state that it is ineligible to hold.

B.  Property received through a conditional donation, grant, or devise, or held in trust or for charitable purposes pursuant to the laws of this state by a party to a transaction under this Part shall not be diverted by that transaction from the objects for which it was donated, granted, or devised, except to the extent authorized by a court judgment based upon principles of cy pres or approximation.

C.  A person who is a member, interest holder, or an affiliate of an eligible entity with a charitable purpose may not receive a direct or indirect financial benefit in connection with a transaction under this Part to which the eligible entity is a party unless the person is itself an eligible entity with a charitable purpose.  This Subsection does not apply to the receipt of reasonable compensation for services rendered.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.