2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 2 - Entities Generally › Section 224 - Action on ratification

§ 224. Action on ratification.
(a) Quorum and required vote of governors.--
The quorum and voting requirements applicable to a ratifying action by the governors under section 223 (relating to ratification of defective entity actions) shall be the quorum and voting requirements applicable to the entity action proposed to be ratified at the time the ratifying action is taken.
(b) Notice to interest holders.--
If the ratification of the defective entity action requires action by the interest holders under section 223(c), and if the action is to be taken at a meeting, the entity must give notice to each holder of interests, regardless of whether entitled to vote, as of the record date for notice of the meeting and as of the date of the occurrence of the defective entity action. If the ratification relates to an overissue, the entity must give notice to the holders of both valid and putative interests. The entity is not required to give notice as otherwise required by this subsection to holders of valid or putative interests whose identities or addresses for notice cannot be determined from the records of the entity. The notice must state that the purpose, or one of the purposes, of the meeting is to consider ratification of a defective entity action and must be accompanied by:
(1) either a copy of the action taken by the governors in accordance with section 223 or the information required by section 223(a)(1), (2), (3) and (4); and
(2) a statement that any claim that the ratification of the defective entity action and any putative interests issued as a result of the defective entity action should not be effective, or should be effective only on certain conditions, must be brought within 120 days after the applicable validation effective time.
(c) Quorum and required vote of interest holders.--
Except as provided in subsection (d) with respect to the voting requirements to ratify the election of governors, the quorum and voting requirements applicable to the approval by the interest holders required by section 223(c) shall be the quorum and voting requirements applicable to the entity action proposed to be ratified at the time of the interest holder approval, except that the presence or approval of interests of any class or series of which no interests are then outstanding, or of any person that is no longer an interest holder, shall not be required.
(d) Election of governors.--
Action by interest holders ratifying the election of governors requires either:
(1) that the votes cast within the voting group favoring ratification exceed the votes cast opposing ratification of the election at a meeting at which a quorum is present; or
(2) in the case of directors or a class of directors of a business corporation elected by cumulative voting, that the votes cast against ratification not be sufficient to elect one or more directors to the board or to the class.
(e) Putative interests.--
The following apply to putative interests:
(1) Putative interests on the record date for determining the interest holders entitled to vote on any matter submitted to interest holders under section 223(c) shall be entitled to vote and shall be counted for quorum purposes in any vote to approve the ratification of the matter if:
(i) they are shares of a registered corporation described in section 2502(1) (relating to registered corporation status); and
(ii) they have been held of record in fungible bulk by a registered clearing agency or its nominee, acting as securities intermediary.
(2) In all other cases, putative interests on the record date for determining the interest holders entitled to vote on any matter submitted to interest holders under section 223(c), and without giving effect to any ratification of putative interests that becomes effective as a result of the vote, are not entitled to vote and do not count for quorum purposes in any vote to approve the ratification of a defective entity action.
(f) Required amendment.--
If the approval under this section of putative interests would result in an overissue, in addition to the approval required by section 223, approval of an amendment to the organic rules of the entity to increase the number of interests of an authorized class or series or to authorize the creation of a class or series of interests so there will be no over issue is also required.
(Nov. 3, 2022, P.L.1791, No.122, eff. 60 days)
2022 Amendment.
Act 122 added section 224.
Cross References. Section 224 is referred to in sections 223, 225, 228, 1911 of this title.