CO Code § 7-117-101 (2021)
2021 Colorado Code|Title 7 - Corporations and Associations|Article 117 - Transition Provisions|§ 7-117-101. Application to Existing Corporations

  For purposes of this article, “existing corporation” means any domestic corporation that was in existence on June 30, 1994, and that was incorporated under any general statute of this state providing for incorporation of corporations for profit if the power to amend or repeal the statute under which the corporation was incorporated was reserved.    Articles 101 to 117 of this title apply to all existing corporations.    Except to the extent the articles of incorporation of an existing corporation limit or deny preemptive rights, shareholders of such corporation shall have a preemptive right to acquire unissued shares or securities convertible into such shares or carrying a right to subscribe to or acquire shares; except that, unless otherwise provided in the articles of incorporation, such preemptive rights shall not exist:   To acquire any shares issued to directors, officers, or employees pursuant to approval by the affirmative vote of the holders of a majority of the shares entitled to vote thereon or when authorized by and not inconsistent with a plan theretofore approved by such a vote of shareholders; or    To acquire any shares sold otherwise than for cash.       Notwithstanding the provisions of subsection (3) of this section, unless the articles of incorporation of an existing corporation provide otherwise:   Holders of shares of any class that is preferred or limited as to dividends or assets shall not be entitled to any preemptive right;    Holders of shares of common stock shall not be entitled to any preemptive right to shares of any class that is preferred or limited as to dividends or assets or to any obligations unless such shares are convertible into shares of common stock or carry a right to subscribe to or acquire shares of common stock; and    Holders of common stock without voting powers shall have no preemptive right to shares of common stock with voting power.       To the extent that preemptive rights exist pursuant to subsections (3) and (4) of this section, the preemptive right shall be only an opportunity to acquire shares or other securities under such terms and conditions as the board of directors may fix for the purpose of providing a fair and reasonable opportunity for the exercise of such right.    Nothing in subsections (3) and (4) of this section shall confer any preemptive right with respect to shares of a corporation incorporated before January 1, 1959, that have been or may be issued and subsequently acquired by such corporation and that have not been canceled or restored to the status of authorized but unissued shares. Any such shares in existence on June 30, 1994, or acquired thereafter by any such corporation shall not be deemed to be restored to the status of authorized but unissued shares, for purposes of this subsection (6) only, notwithstanding the provisions of section 7-106-302.    Unless the articles of incorporation of an existing corporation contain a provision establishing the vote of shareholders required to amend the articles of incorporation, as contemplated in section 7-110-103, such amendment shall be approved by each voting group entitled to vote separately on the amendment by two-thirds of all the votes entitled to be cast on the amendment by that voting group.    Unless the articles of incorporation of an existing corporation contain a provision establishing the vote of shareholders required to approve a plan of merger or a plan of exchange, as contemplated in section 7-111-103, the plan must be approved by each voting group entitled to vote separately on the plan by two-thirds of all the votes entitled to be cast on the plan by that voting group. In the case of a corporation incorporated before July 1, 1978, each outstanding share of the corporation, other than a redeemable share that is not entitled to vote by reason of section 7-107-202 (4), shall be entitled to vote on the plan of merger or exchange whether or not such share has voting rights under the provisions of the articles of incorporation, unless the articles of incorporation have been amended after June 30, 1978, by the same vote of shareholders that would have been necessary at the time of the amendment to approve the plan, so as to restrict or eliminate the right of the share to vote on the plan.    Unless the articles of incorporation of an existing corporation contain a provision establishing the vote of shareholders required to approve a transaction involving a sale, lease, exchange, or other disposition of all, or substantially all, of its property, with or without its good will, otherwise than in the usual and regular course of business, as contemplated in section 7-112-102 (1), such transaction shall be approved by each voting group entitled to vote separately on the transaction by two-thirds of all the votes entitled to be cast on the transaction by that voting group.    Unless the articles of incorporation of an existing corporation contain a provision establishing the vote of shareholders required to approve a proposal to dissolve the corporation as contemplated in section 7-114-102, such proposal shall be approved by each voting group entitled to vote separately on the proposal by two-thirds of all the votes entitled to be cast on the proposal by that voting group. In the case of a corporation incorporated before July 1, 1978, each outstanding share of the corporation, other than a redeemable share that is not entitled to vote by reason of section 7-107-202 (4), shall be entitled to vote on a proposal to dissolve the corporation whether or not such share has voting rights under the provisions of the articles of incorporation, unless the articles of incorporation have been amended after June 30, 1978, by the same vote of shareholders which would have been necessary at the time of the amendment to approve the proposal, so as to restrict or eliminate the right of such share to vote on such proposal.    An amendment to the articles of incorporation of an existing corporation to reduce the vote required to take any action specified in subsections (7) to (10) of this section, which amendment may not reduce the required vote to less than that which would be required to take the action if the action were to be taken by a corporation formed on or after July 1, 1994, shall be adopted by the same vote and voting groups required to take the action specified in said subsections (7) to (10).     History. Source: L. 93: Entire article added, p. 850, § 1, effective July 1, 1994. L. 96: (11) amended, p. 1328, § 51, effective June 1. L. 2004: (10) amended, p. 1509, § 289, effective July 1. L. 2019: (8) amended,(SB 19-086), ch. 166, p. 1965, § 67, effective July 1, 2020.    ANNOTATION   Law reviews. For note, “Consolidations, Mergers, Sales of Assets Under the New Colorado Corporation Act”, see 31 Rocky Mt. L. Rev. 66 (1958). For article, “1959 Amendments to the Colorado Corporation Code”, see 36 Dicta 489 (1959). For comment on shareholder approval of substantial asset sales in the multisubsidiary context, see 45 U. Colo. L. Rev. 339 (1974). For article, “Conflict of Interest Transactions: Fiduciary Duties of Corporate Directors Who Are Also Controlling Shareholders”, see 57 Den. L.J. 609 (1980). For article, “Signatures on Documents Affecting Title to Colorado Real Property -- Part III”, see 12 Colo. Law. 447 (1983). For article, “The 1985 Proposed Revisions to the Colorado Corporation Code”, see 14 Colo. Law. 34 (1985). For article, “Continuing Liability for Unpaid Corporate Debts After a Corporation Ceases Business”, see 14 Colo. Law. 40 (1985). For article, “1985 Amendments to the Colorado Corporation Code”, see 14 Colo. Law. 2173 (1985). For article, “Final Regulations on Substantial Economic Effect of Partnership Allocations”, see 15 Colo. Law. 1009 (1986). For article, “Sale of Substantially All Corporate Assets”, see 16 Colo. Law. 455 (1987). For article, “Dissenter's Rights in Colorado”, see 18 Colo. Law. 1101 (1989).   Annotator's note. Since § 7-117-101 is similar to §§ 7-5-112 , 7-7-103 , and 7-8-103 as they existed prior to the 1993 recodification of the “Colorado Business Corporation Act”, articles 101 to 117 of title 7, cases construing those provisions and their predecessors have been included in the annotations to this section.   This section prescribes one of those instances where it is mandatory that all stockholders vote despite restrictions contained in the articles of incorporation. Hampton v. Tri-State Fin. Corp., 30 Colo. App. 420, 495 P.2d 566 (1972).   Section held not applicable to nonprofit corporations. Morris Alpert & Sons v. Kahler, 31 Colo. App. 345, 502 P.2d 98 (1972).   To legally effect a change in the two-thirds approval requirement of an asset sale in this section, a provision must be added to the articles of incorporation. Dominick v. Marcove, 809 F. Supp. 805 (D. Colo. 1992 ) (decided under former § 7-5-112 as it existed prior to the 1993 recodification of the “Colorado Business Corporation Act”, articles 101 to 117 of title 7).   Applied in People v. Cameron, 197 Colo. 330 , 595 P.2d 677 (1979).