reglab/statecodes huggingface dataset:
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 19 - Fundamental Changes › Section 1994 - Disposition of unmatured claims

§ 1994. Disposition of unmatured claims.
(a) Contractual claims.--
The dissolved business corporation or successor entity shall offer any claimant whose contractual claim made pursuant to section 1992 (relating to notice to claimants) is contingent, conditional or unmatured, such security as the corporation or successor entity determines is sufficient to provide compensation to the claimant if the claim matures. The corporation or successor entity shall send the offer to the claimant by certified or registered mail, return receipt requested, within 90 days after receipt of the claim and, in all events, at least 30 days before the expiration of the two-year period specified in section 1979(a)(2) (relating to survival of remedies and rights after dissolution). A notice sent pursuant to this section shall include or be accompanied by a copy of this subchapter and of section 1979. If the claimant offered the security does not deliver to the corporation or successor entity a written notice rejecting the offer within 60 days after mailing of the offer for security, the claimant shall be deemed to have accepted the security as the sole source from which to satisfy his claim against the corporation.
(b) Other claims.--
Except as provided in section 1997(d) (relating to liability of directors), the holder of any other claim may bring an action against the dissolved corporation or its directors, officers or shareholders within the time limited by section 1979(a).
(Dec. 18, 1992, P.L.1333, No.169, eff. 60 days)
Cross References.
Section 1994 is referred to in sections 1979, 1995, 1997 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 19 - Fundamental Changes › Section 1995 - Court proceedings

§ 1995. Court proceedings.
(a) General rule.--
A dissolved business corporation or successor entity that has given notice in accordance with section 1992 (relating to notice to claimants) shall file an application with the court for a determination of the amount and form of security:
(1) that will be sufficient to provide compensation to any claimant who has rejected the offer for security made pursuant to section 1994 (relating to disposition of unmatured claims); and
(2) that will be reasonably likely to be sufficient to provide compensation for claims that have not been made known to the corporation or that have not arisen but that, based on the facts known to the corporation or successor entity, are likely to arise or to become known to the corporation or successor entity prior to the expiration of the two-year period specified in section 1979(a)(2) (relating to survival of remedies and rights after dissolution).
(b) Guardian ad litem.--
The court may appoint a guardian ad litem in respect of any proceeding brought under this subchapter. The reasonable fees and expenses of the guardian, including all reasonable expert witness fees, shall be paid by the applicant in the proceeding unless otherwise ordered by the court.
(Dec. 18, 1992, P.L.1333, No.169, eff. 60 days)
Cross References.
Section 1995 is referred to in section 1997 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 19 - Fundamental Changes › Section 1996 - No revival or waiver

§ 1996. No revival or waiver.
The giving of any notice or making of any offer under this subchapter shall not revive any claim then barred or constitute acknowledgment by the dissolved business corporation or successor entity that any person to whom the notice is sent is a proper claimant and shall not operate as a waiver of any defense or counterclaim in respect of any claim asserted by any person to whom the notice is sent.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 19 - Fundamental Changes › Section 1997 - Payments and distributions

§ 1997. Payments and distributions.
(a) General rule.--
A dissolved business corporation or successor entity that has elected to proceed under this subchapter shall:
(1) Pay the claims made and not rejected under section 1993 (relating to acceptance or rejection of matured claims).
(2) Post the security offered and not rejected under section 1994 (relating to disposition of unmatured claims).
(3) Post security ordered by the court in any proceeding under section 1995 (relating to court proceedings).
(4) Pay or make provision for all other claims that are mature, known and uncontested or that have been finally determined to be owing by the corporation or the successor entity.
(b) Disposition.--
The claims and liabilities shall be paid in full and any provision for payment shall be made in full if there are sufficient assets. If there are insufficient assets, the claims and liabilities shall be paid or provided for in order of their priority, and, among claims of equal priority, ratably to the extent of funds legally available therefor. Any remaining assets shall be distributed to the shareholders of the corporation according to their respective rights and preferences, except that the distribution shall not be made less than 60 days after the last notice of rejection, if any, was given under section 1993 (relating to acceptance or rejection of matured claims). See section 1972(a) (relating to proposal of voluntary dissolution).
(c) Evaluation of other liabilities.--
In the absence of actual fraud, the judgment of the board of directors of the dissolved corporation or the governing persons of the successor entity as to the provision made for the payment of all claims under subsection (a)(4) shall be conclusive.
(d) Liability of directors.--
(Deleted by amendment).
(Dec. 18, 1992, P.L.1333, No.169, eff. 60 days; June 22, 2001, P.L.418, No.34, eff. 60 days)
2001 Amendment.
Act 34 amended subsec. (b) and deleted subsec. (d).
1992 Amendment.
Act 169 amended subsecs. (a) and (c), deleted subsec. (d) and relettered subsec. (e) to subsec. (d).
Cross References.
Section 1997 is referred to in sections 1979, 1991, 1994 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 19 - Fundamental Changes › Section 1998 - Liability of shareholders (Repealed)

§ 1998. Liability of shareholders (Repealed).
1992 Repeal.
Section 1998 was repealed December 18, 1992, P.L.1333, No.169, effective in 60 days.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 21 - Nonstock Corporations › Extra - Chapter Notes

Enactment.
Chapter 21 was added December 21, 1988, P.L.1444, No.177, effective October 1, 1989.
Cross References.
Chapter 21 is referred to in section 1103 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 21 - Nonstock Corporations › Section 2101 - Application and effect of chapter

§ 2101. Application and effect of chapter.
(a) General rule.--
This chapter shall be applicable to:
(1) A business corporation that elects to become a nonstock corporation in the manner provided by this chapter.
(2) A domestic corporation for profit subject to Subpart D (relating to cooperative corporations) organized on a nonstock basis.
(3) A domestic insurance corporation that is a mutual insurance company.
(b) Application to business corporations generally.--
The existence of a provision of this chapter shall not of itself create any implication that a contrary or different rule of law is or would be applicable to a business corporation that is not a nonstock corporation. This chapter shall not affect any statute or rule of law that is or would be applicable to a business corporation that is not a nonstock corporation.
(c) Laws applicable to nonstock corporations.--
Except as otherwise provided in this chapter, Part I (relating to preliminary provisions) and this subpart shall be generally applicable to all nonstock corporations. The specific provisions of this chapter shall control over the general provisions of Part I and this subpart. In the case of a nonstock corporation, references in this part to "shares," "shareholder," "share register," "share ledger," "transfer book for shares," "number of shares entitled to vote" or "class of shares" shall mean memberships, member, membership register, membership ledger, membership transfer book, number of votes entitled to be cast or class of members, respectively. Except as otherwise provided in this article, a nonstock corporation may be simultaneously subject to this chapter and one or more other chapters of this article.
(Dec. 19, 1990, P.L.834, No.198, eff. imd.; Oct. 22, 2014, P.L.2640, No.172, eff. July 1, 2015)
2014 Amendment.
Act 172 amended subsec. (c).
1990 Amendment.
Act 198 amended subsec. (a).
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 21 - Nonstock Corporations › Section 2102 - Formation of nonstock corporations

§ 2102. Formation of nonstock corporations.
(a) General rule.--
A nonstock corporation shall be formed in accordance with Article B (relating to domestic business corporations generally) except that its articles shall contain:
(1) A heading stating the name of the corporation and that it is a nonstock corporation.
(2) The provisions required by section 2103 (relating to contents of articles and other documents of nonstock corporations).
(b) Initial members.--
Upon the filing of articles of a nonstock corporation, the subscribers to the minimum guaranteed capital of the corporation, if any, and the incorporators shall be the initial members of the corporation.
Cross References.
Section 2102 is referred to in sections 2105, 7105 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 21 - Nonstock Corporations › Section 2103 - Contents of articles and other documents of nonstock corporations

§ 2103. Contents of articles and other documents of nonstock corporations.
In lieu of required statements relating to shares or share structure, a nonstock corporation shall set forth in any document permitted or required to be filed under this subpart the fact that the corporation is organized on a nonstock basis. A nonstock corporation may, but need not, have a minimum guaranteed capital which shall be furnished by the subscribers thereto in such proportions as they may agree.
Cross References.
Section 2103 is referred to in sections 2102, 2105, 7105 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 21 - Nonstock Corporations › Section 2104 - Election of an existing business corporation to become a nonstock corporation

§ 2104. Election of an existing business corporation to become a nonstock corporation.
(a) General rule.--
Any business corporation may become a nonstock corporation under this chapter by:
(1) Adopting a plan of election providing for the redemption by the corporation of all of its shares whether or not redeemable by the terms of its articles and adjusting its affairs so as to comply with the requirements of this chapter applicable to nonstock corporations.
(2) Filing articles of amendment which shall contain, in addition to the requirements of section 1915 (relating to articles of amendment):
(i) A heading stating the name of the corporation and that it is a nonstock corporation.
(ii) A statement that it elects to become a nonstock corporation.
(iii) A statement that the corporation is organized on a nonstock basis.
(iv) Such other changes, if any, that may be desired in the articles.
(b) Procedure.--
The plan of election of the corporation into a nonstock corporation (which plan shall include the amendment of the articles required by subsection (a)) shall be adopted in accordance with the requirements of Subchapter B of Chapter 19 (relating to amendment of articles) except that:
(1) The holders of shares of every class shall be entitled to vote on the plan regardless of any limitations stated in the articles or bylaws on the voting rights of any class.
(2) The plan must be approved by two-thirds of the votes cast by all shares of each class.
(3) If any shareholder of a business corporation that adopts a plan of election into a nonstock corporation objects to the plan of election and complies with the provisions of Subchapter D of Chapter 15 (relating to dissenters rights), the shareholder shall be entitled to the rights and remedies of dissenting shareholders therein provided. There shall be included in, or enclosed with, the notice of the meeting of shareholders called to act upon the plan of election a copy or a summary of the plan and a copy of Subchapter D of Chapter 15 and of this subsection.
(4) The plan shall not impose any additional liability upon any existing patron of the business of the corporation, whether or not that person becomes a member of the corporation pursuant to the plan, unless the patron expressly assumes such liability.
(Nov. 3, 2022, P.L.1791, No.122, eff. 60 days)
Cross References.
Section 2104 is referred to in section 1571 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 21 - Nonstock Corporations › Section 2105 - Termination of nonstock corporation status

§ 2105. Termination of nonstock corporation status.
(a) General rule.--
A nonstock corporation may terminate its status as such and cease to be subject to this chapter by:
(1) Adopting a plan of termination providing for the issue of appropriate shares to its members and adjusting its affairs so as to comply with the requirements of this subpart applicable to business corporations that are not nonstock corporations.
(2) Amending its articles to delete therefrom the additional provisions required or permitted by sections 2102(a)(1) (relating to formation of nonstock corporations) and 2103 (relating to contents of articles and other documents of nonstock corporations) to be stated in the articles of a nonstock corporation. The plan of termination (which plan shall include the amendment of the articles required by this section) shall be adopted in accordance with Subchapter B of Chapter 19 (relating to amendment of articles) except that:
(i) The members of every class shall be entitled to vote on the plan regardless of any limitations stated in the articles or bylaws, or in a document evidencing membership, on the voting rights of any class.
(ii) The plan must be approved by a majority of the votes cast by the members of each class.
(b) Increased vote requirements.--
The bylaws of a nonstock corporation adopted by the members may provide that on any amendment to terminate its status as a nonstock corporation, a vote greater than that specified in subsection (a) shall be required. If the bylaws contain such a provision, that provision shall not be amended, repealed or modified by any vote less than that required to terminate the status of the corporation as a nonstock corporation.
(c) Mutual insurance companies.--
With respect to the termination of the status of a mutual insurance company as a nonstock corporation, see section 103 (relating to subordination of title to regulatory laws) and Article VIII-A of the act of May 17, 1921 (P.L.682, No.284), known as The Insurance Company Law of 1921.
(Dec. 19, 1990, P.L.834, No.198, eff. imd.; June 22, 2001, P.L.418, No.34, eff. 60 days; Nov. 3, 2022, P.L.1791, No.122, eff. 60 days)
2022 Amendment.
Act 122 amended subsec. (a).
2001 Amendment.
Act 34 amended subsec. (c).
Cross References.
Section 2105 is referred to in section 1504 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 21 - Nonstock Corporations › Section 2121 - Corporate name of nonstock corporations

§ 2121. Corporate name of nonstock corporations.
(a) General rule.--
The corporate name of a nonstock corporation may contain the word "mutual."
(b) Insurance names.--
See section 202(c)(1)(iii) (relating to requirements for names generally).
(Dec. 19, 1990, P.L.834, No.198, eff. imd.; Oct. 22, 2014, P.L.2640, No.172, eff. July 1, 2015)
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 21 - Nonstock Corporations › Section 2122 - Classes of membership

§ 2122. Classes of membership.
The bylaws of a nonstock corporation adopted by the members may vest in the board of directors the power to establish classes of membership and to fix the several rights and liabilities thereof.
Cross References.
Section 2122 is referred to in section 1504 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 21 - Nonstock Corporations › Section 2123 - Evidence of membership; liability of members

§ 2123. Evidence of membership; liability of members.
(a) General rule.--
Every member of record of a nonstock corporation shall be entitled to a written document evidencing his membership in the corporation. The document shall state:
(1) That the corporation is a nonstock corporation incorporated under the laws of this Commonwealth, unless the name of the corporation contains the word "mutual."
(2) The name of the person to whom issued.
(3) The class of membership, if any, held by the member.
(b) Notice of variations in rights.--
If the membership of the corporation is divided into classes, the document shall set forth (or shall state that the corporation will furnish to any member, upon request and without charge) a full or summary statement of the special rights and liabilities of membership of each class and the variations in the rights and liabilities of membership between classes. If a membership is not fully paid or if the member is otherwise liable to assessment, the document evidencing the membership shall so state.
(c) Liability.--
A subscriber to the minimum guaranteed capital of or member of a nonstock corporation shall not be under any liability to the corporation or any creditor thereof other than the obligations of complying with the terms of the subscription to the minimum guaranteed capital, if any, and with the terms of the document evidencing his membership. Otherwise, the members of a nonstock corporation shall not be personally liable for the debts, liabilities or obligations of the corporation.
(d) Dissenters rights.--
The document evidencing membership shall constitute a share certificate for the purposes of Subchapter D of Chapter 15 (relating to dissenters rights).
(Dec. 18, 1992, P.L.1333, No.169, eff. 60 days)
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 21 - Nonstock Corporations › Section 2124 - Voting rights of members

§ 2124. Voting rights of members.
Except as otherwise provided in a bylaw adopted by the members or in a written document evidencing membership, every member of record of a nonstock corporation shall have the right, at every meeting of members, to one vote.
Cross References.
Section 2124 is referred to in section 1504 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 21 - Nonstock Corporations › Section 2125 - Inapplicability of certain provisions to nonstock corporations

§ 2125. Inapplicability of certain provisions to nonstock corporations.
(a) Share structure.--
The provisions of Subchapter B of Chapter 15 (relating to shares and other securities) shall not be applicable to a nonstock corporation. A nonstock corporation shall not create or issue shares.
(b) Corporate finance.--
A patronage rebate or dividend that is, or is equivalent to, a reduction in the charge made by a nonstock corporation to a member for goods or services shall not constitute a dividend or distribution within the meaning of section 1551 (relating to distributions to shareholders).
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 21 - Nonstock Corporations › Section 2126 - Dissolution of nonstock corporations

§ 2126. Dissolution of nonstock corporations.
If at the time of dissolution of a nonstock corporation the articles, bylaws and documents evidencing membership fail to define the respective rights and preferences of the members upon dissolution, the surplus of cash or property remaining after discharging all liabilities of the corporation shall be paid to or distributed among the members according to such a plan of distribution as the members may adopt. The plan shall be adopted in accordance with Subchapter F of Chapter 19 (relating to voluntary dissolution and winding up) except that:
(1) The members of every class shall be entitled to vote on the plan regardless of any limitations stated in the articles or bylaws, or in a document evidencing membership, on the voting rights of any class.
(2) The plan must be approved by a majority of the votes cast by the members of each class.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 23 - Statutory Close Corporations › Extra - Chapter Notes

Enactment.
Chapter 23 was added December 21, 1988, P.L.1444, No.177, effective October 1, 1989.
Cross References.
Chapter 23 is referred to in section 1103 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 23 - Statutory Close Corporations › Section 2301 - Application and effect of chapter

§ 2301. Application and effect of chapter.
(a) General rule.--
This chapter shall be applicable to a business corporation, other than a management corporation, that:
(1) had elected to become a close corporation subject to Chapter B of Article III of the act of May 5, 1933 (P.L.364, No.106), known as the Business Corporation Law of 1933 (relating to close corporations), and that, as of the effective date of this chapter, had not terminated that election in the manner prescribed by statute; or
(2) elects to become a statutory close corporation in the manner provided by this chapter.
(b) Application of business corporation law generally.--
The existence of a provision of this chapter shall not of itself create any implication that a contrary or different rule of law is or would be applicable to a business corporation that is not a statutory close corporation. This chapter shall not affect any statute or rule of law that is or would be applicable to a business corporation that is not a statutory close corporation.
(c) Laws applicable to statutory close corporations.--
Except as otherwise provided in this chapter, Part I (relating to preliminary provisions) and this subpart shall be generally applicable to all statutory close corporations. The specific provisions of this chapter shall control over the general provisions of Part I and this subpart. Except as otherwise provided in this article, a statutory close corporation may be simultaneously subject to this chapter and one or more other chapters of this article.
(d) Transitional provisions.--
The following provisions of this chapter shall not apply to a statutory close corporation existing on September 30, 1989, unless otherwise provided in a bylaw adopted in the manner provided by section 2332(b) (relating to procedure):
Section 2321(b) (relating to preemptive rights) insofar as such provision authorizes the shareholders to adopt a bylaw eliminating or limiting the preemptive rights provided in that subsection.
Section 2322 (relating to share transfer restrictions).
Section 2323 (relating to transfer of shares in breach of transfer restrictions). If section 2323 is not applicable to the corporation, transfer restrictions (including a restriction that is held not to be authorized by section 1529 (relating to transfer of securities; restrictions)) shall be enforced in the same manner as if this article had not been enacted.
Section 2325 (relating to sale option of estate of shareholder).
Section 2336 (relating to fundamental changes).
(e) Cross reference.--
See the definition of "closely held corporation" in section 1103 (relating to definitions).
(Dec. 19, 1990, P.L.834, No.198, eff. imd.; Oct. 22, 2014, P.L.2640, No.172, eff. July 1, 2015)
2014 Amendment.
Act 172 amended subsec. (c).
1990 Amendment.
Act 198 amended subsec. (d).
Cross References.
Section 2301 is referred to in section 1106 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 23 - Statutory Close Corporations › Section 2302 - Definition of minimum vote

§ 2302. Definition of minimum vote.
(a) General rule.--
As used in this chapter, the term "minimum vote" as applied to corporate action means that:
(1) The holders of shares of every class shall be entitled to vote on the corporate action regardless of any limitations stated in the articles or bylaws on the voting rights of any class.
(2) The corporate action must be approved by vote of the shareholders of each class entitled to cast at least two-thirds of the votes that all shareholders of the class are entitled to cast thereon.
(b) Increased vote requirements.--
The bylaws of a statutory close corporation adopted by the shareholders may provide that on any corporate action subject to the minimum vote requirement of subsection (a) a vote greater than two-thirds or a vote of all shares of any class shall be required. If the bylaws contain such a provision, that provision shall not be amended, repealed or modified by any vote less than that required to effect such corporation action.
Cross References.
Section 2302 is referred to in section 1504 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 23 - Statutory Close Corporations › Section 2303 - Formation of statutory close corporations

§ 2303. Formation of statutory close corporations.
A statutory close corporation shall be formed in accordance with Article B (relating to domestic business corporations generally) except that its articles shall contain:
(1) A heading stating the name of the corporation and that it is a statutory close corporation.
(2) The provision required by section 2304(a) (relating to additional contents of articles of statutory close corporations).
Cross References.
Section 2303 is referred to in section 2307 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 23 - Statutory Close Corporations › Section 2304 - Additional contents of articles of statutory close corporations

§ 2304. Additional contents of articles of statutory close corporations.
(a) General rule.--
In addition to the provisions otherwise required by this subpart, the articles of a statutory close corporation shall provide that neither the corporation nor any shareholder shall make an offering of any of its shares of any class that would constitute a "public offering" within the meaning of the Securities Act of 1933.
(b) Number or qualifications of shareholders.--
The articles of a statutory close corporation may set forth:
(1) The maximum number of persons who are entitled to be record holders or beneficial owners of its shares.
(2) The qualifications of shareholders, either by specifying classes of persons who shall be entitled to be holders of record of shares of any class or by specifying classes of persons who shall not be entitled to be holders of shares of any class or both.
(c) Aggregation of holdings.--
Except as otherwise provided in the articles, for purposes of determining the number of holders of record or beneficial owners of the shares of a statutory close corporation, shares that are held jointly or in common or in a trust, by two or more persons, as fiduciaries or otherwise, or that are held by spouses, shall be treated as held by one shareholder.
(Dec. 19, 1990, P.L.834, No.198, eff. imd.)
1990 Amendment.
Act 198 amended subsec. (a).
Cross References.
Section 2304 is referred to in sections 2303, 2305, 2306, 2308, 2309, 2322 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 23 - Statutory Close Corporations › Section 2305 - Election of an existing business corporation to become a statutory close corporation

§ 2305. Election of an existing business corporation to become a statutory close corporation.
(a) General rule.--
A business corporation may become a statutory close corporation under this chapter by amending its articles so that they shall contain, in addition to the requirements of section 1911(b) (relating to exceptions):
(1) A heading stating the name of the corporation and that it is a statutory close corporation.
(2) A statement that it elects to become a statutory close corporation.
(3) The provision required by section 2304(a) (relating to additional contents of articles of statutory close corporations).
(b) Procedure.--
The amendment shall not be effective unless it is adopted by the affirmative vote of all shareholders of the corporation whether or not otherwise entitled to vote thereon.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 23 - Statutory Close Corporations › Section 2306 - Limitations on continuation of statutory close corporation status

§ 2306. Limitations on continuation of statutory close corporation status.
A statutory close corporation continues to be such and to be subject to this chapter until:
(1) it terminates its status as a statutory close corporation pursuant to section 2307 (relating to voluntary termination of statutory close corporation status by amendment of articles); or
(2) the provisions required or permitted by section 2304 (relating to additional contents of articles of statutory close corporations) to be stated in the articles to qualify a business corporation as a statutory close corporation have in fact been breached and neither the corporation nor any of its shareholders takes the steps required by section 2309 (relating to involuntary termination of statutory close corporation status; proceeding to prevent loss of status) to prevent such loss of status or to remedy such breach.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 23 - Statutory Close Corporations › Section 2307 - Voluntary termination of statutory close corporation status by amendment of articles

§ 2307. Voluntary termination of statutory close corporation status by amendment of articles.
(a) General rule.--
A statutory close corporation may voluntarily terminate its status as such and cease to be subject to this chapter by amending its articles to delete therefrom the additional provision required by section 2303(1) (relating to formation of statutory close corporations) to be stated in the articles of a statutory close corporation.
(b) Procedure.--
The amendment shall not be effective unless it is adopted by at least the minimum vote.
Cross References.
Section 2307 is referred to in sections 2306, 2308, 2309 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 23 - Statutory Close Corporations › Section 2308 - Issuance or transfer of shares of a statutory close corporation in breach of qualifying conditions

§ 2308. Issuance or transfer of shares of a statutory close corporation in breach of qualifying conditions.
(a) Notice of qualifications.--
If shares of a statutory close corporation are issued or transferred to any person who is not entitled under any provision of the articles permitted by section 2304(b) (relating to number or qualifications of shareholders) to be a holder of record of shares of the corporation and if the certificate for the shares complies with section 2321(c) (relating to notice of statutory close corporation status) or conspicuously notes the existence of such a provision of the articles, that person shall be conclusively presumed to have notice of the fact of his ineligibility to be a shareholder.
(b) Notice of size restrictions.--
If the articles of a statutory close corporation state the number of persons who are entitled to be holders or owners of its shares and if the certificate for the shares complies with section 2321(c) or conspicuously notes the existence of such a provision of the articles and if the issuance or transfer of shares to any person would cause the shares to be held by more than that number of persons, the person to whom the shares are issued or transferred shall be conclusively presumed to have notice of that fact.
(c) Refusal to register.--
Whenever any person to whom shares of a statutory close corporation have been issued or transferred has, or is conclusively presumed under this section to have, notice either:
(1) that he is a person not eligible to be a holder of shares of the corporation; or
(2) that the transfer of shares to him would cause the shares of the corporation to be held by more than the number of persons permitted by its articles to hold shares of the corporation;
the corporation may, at its option, refuse to register the transfer of the shares into the name of the transferee.
(d) Exception.--
The provisions of subsection (c) shall not be applicable if the transfer of shares, even though otherwise contrary to subsection (a) or (b), has been consented to by all the shareholders of the statutory close corporation or if the statutory close corporation has amended its articles in accordance with section 2307 (relating to voluntary termination of statutory close corporation status by amendment of articles).
(e) Rescission rights unaffected.--
The provisions of this section do not impair any right of a transferee to rescind the transaction or to recover under any applicable warranty express or implied.
(f) Definition.--
As used in this section, the term "transfer" is not limited to a transfer for value.
Cross References.
Section 2308 is referred to in section 2309 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 23 - Statutory Close Corporations › Section 2321 - Shares

§ 2321. Shares.
(a) Uncertificated shares prohibited.--
A statutory close corporation shall not issue uncertificated shares.
(b) Preemptive rights.--
(1) Unless otherwise provided in a bylaw adopted by the shareholders, the holders of any class of voting shares of a statutory close corporation shall have a preemptive right to subscribe for or purchase any voting shares (or any option rights or securities having conversion or option rights with respect to any voting shares) issued or sold by the corporation for any form of consideration.
(2) Paragraph (1) shall not apply to any issue of voting shares (or of any option rights or securities having conversion or option rights with respect to such voting shares) pursuant to a plan to which Subchapter D of Chapter 15 (relating to dissenters rights) is applicable.
(c) Notice of statutory close corporation status.--
A legend in substantially the following form shall be set forth conspicuously on each share certificate issued by a statutory close corporation:
The rights of shareholders in a statutory close corporation may differ materially from the rights of shareholders in other corporations. Copies of the articles of incorporation and bylaws, agreements among shareholders or other documents, which may restrict transfers and affect voting and other rights, may be obtained by a shareholder on written request to the corporation.
This notice shall satisfy all requirements of this subpart that notice of transfer or other restrictions or relative rights be given. All persons claiming an interest in shares of a statutory close corporation:
(1) Complying with the notice requirement of this section shall be bound by the documents referred to in the notice.
(2) Not complying with the requirement of this section shall be bound only by any documents of which they, or any person through whom they claim, have knowledge or notice.
Cross References.
Section 2321 is referred to in sections 1504, 1528, 1530, 2301, 2308, 2332, 2337 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 23 - Statutory Close Corporations › Section 2323 - Transfer of shares in breach of transfer restrictions

§ 2323. Transfer of shares in breach of transfer restrictions.
Any attempted transfer of shares of a statutory close corporation in violation of any transfer restriction binding on the transferee shall be ineffective. Any attempted transfer of shares of a statutory close corporation in violation of any transfer restriction not binding on the transferee shall give the corporation the option, exercisable by notice and payment within 30 days after presentation of the shares for registration in the name of the transferee, to purchase the shares from the transferee for the same price and terms as contemplated for the ineffective transfer, unless such transfer was not intended to be a transfer for value.
Cross References.
Section 2323 is referred to in section 2301 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 23 - Statutory Close Corporations › Section 2324 - Corporation option where a restriction on transfer of a security is held invalid

§ 2324. Corporation option where a restriction on transfer of a security is held invalid.
If the bylaws contain provisions pursuant to section 2322(a) (relating to share transfer restrictions) and a restriction on transfer of a security of a statutory close corporation is held not to be authorized by section 1529 (relating to transfer of securities; restrictions), the corporation shall nevertheless have an option, for a period of 30 days after the judgment setting aside the restriction becomes final, to acquire the restricted security at a price that is agreed upon by the parties or, if an agreement is not reached, at the fair value as determined under Subchapter D of Chapter 15 (relating to dissenters rights).
Cross References.
Section 2324 is referred to in section 1571 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 23 - Statutory Close Corporations › Section 2331 - Directors

§ 2331. Directors.
(a) Agreements restricting discretion of directors.--
A written agreement among the shareholders of a statutory close corporation entitled to cast at least a majority of the votes that all shareholders are entitled to cast for the election of directors, whether solely among themselves or with a party not a shareholder, is not invalid, as between the parties to the agreement or the shareholders of the corporation, on the ground that it so relates to the conduct of the business and affairs of the corporation as to restrict or interfere with the discretion or powers of the board of directors.
(b) Effect of agreement.--
The effect of any such agreement shall be to relieve the directors and impose upon the shareholders who are parties to the agreement the liability for acts or omissions that is imposed by law on directors to the extent and so long as the discretion or powers of the board in its direction of the management of corporate affairs is controlled by the agreement. Shareholders upon whom the liabilities of directors are imposed by this section shall to that extent be entitled to the rights and immunities conferred by this part and other provisions of law upon directors of a corporation.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 23 - Statutory Close Corporations › Section 2332 - Management by shareholders

§ 2332. Management by shareholders.
(a) General rule.--
A bylaw of a statutory close corporation adopted by the shareholders may provide that the business and affairs of the corporation shall be managed by or under the direction of the shareholders of the corporation rather than by or under the direction of a board of directors. So long as such a provision continues in effect:
(1) Meetings of shareholders need not be called to elect directors.
(2) Unless the context clearly requires otherwise, the shareholders of the corporation shall be deemed to be directors for purposes of applying provisions of this subpart.
(3) The shareholders of the corporation shall be subject to all liabilities imposed and shall enjoy all rights and immunities conferred by law on directors.
(b) Procedure.--
Such a provision may be inserted in the articles or bylaws by amendment if all incorporators or all shareholders, regardless of any limitations stated in the articles or bylaws on the voting rights of any class, authorize the provision. An amendment to the articles or bylaws to delete the provision shall be adopted and shall become effective in accordance with Subchapter B of Chapter 19 (relating to amendment of articles) or section 1504 (relating to adoption, amendment and contents of bylaws) except that the holders of shares of every class shall be entitled to vote on the amendment regardless of any limitations stated in the articles or bylaws on the voting rights of any class.
(c) Notice on shares.--
If the articles or bylaws contain a provision authorized by this section, the existence of the provision shall be noted conspicuously on every share certificate issued by the corporation unless the certificate complies with section 2321(c) (relating to notice of statutory close corporation status).
Cross References.
Section 2332 is referred to in sections 102, 1504, 2301 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 23 - Statutory Close Corporations › Section 2333 - Appointment of custodian for statutory close corporation

§ 2333. Appointment of custodian for statutory close corporation.
(a) General rule.--
In addition to the provisions of section 1767 (relating to appointment of custodian of corporation on deadlock or other cause), the court, upon application of any shareholder, may appoint one or more persons to be custodians and, if the corporation is insolvent, to be receivers of any statutory close corporation when:
(1) pursuant to this subchapter, the business and affairs of the corporation are managed by or under the direction of the shareholders and they are so divided that the business of the corporation is suffering or is threatened with immediate and irreparable injury and any remedy with respect to such deadlock provided in the bylaws or in any written agreement of the shareholders has failed; or
(2) the applicant shareholder has the right to the dissolution of the corporation under a provision of the articles permitted by section 2337 (relating to option of shareholder to dissolve corporation).
A custodian appointed under paragraph (2) shall have the authority to liquidate the affairs of the corporation and distribute its assets.
(b) Provisional director.--
In lieu of appointing a custodian for a statutory close corporation under subsection (a)(1) or section 1767 or a receiver under Subchapter G of Chapter 19 (relating to involuntary liquidation and dissolution), the court may appoint a provisional director, whose powers and status shall be as provided in section 2334 (relating to appointment of provisional director in certain cases), if the court determines that it would be in the best interest of the corporation. The appointment shall not preclude any subsequent order of the court appointing a custodian or receiver for the corporation.
Cross References.
Section 2333 is referred to in section 2334 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 23 - Statutory Close Corporations › Section 2335 - Operating corporation as partnership

§ 2335. Operating corporation as partnership.
A written agreement among shareholders of a statutory close corporation, or any provision of the articles or bylaws of the corporation, which agreement or provision relates to any phase of the affairs of such corporation, including, but not limited to, the management of its business or declaration and payment of dividends or other division of profits or the election of directors or officers or the employment of shareholders by the corporation or the arbitration of disputes, shall not be invalid on the ground that it is an attempt by the parties to the agreement or by the shareholders of the corporation to treat the corporation as if it were a partnership or to arrange relations among the shareholders or between the shareholders and the corporation in a manner that would be appropriate only among partners and shall not be grounds for imposing personal liability on the shareholders for obligations of the corporation.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 23 - Statutory Close Corporations › Section 2336 - Fundamental changes

§ 2336. Fundamental changes.
Except as permitted or required by this chapter, a statutory close corporation shall not effect any corporate action that under Chapter 3 (relating to entity transactions) or 19 (relating to fundamental changes) requires the approval of shareholders unless the action is adopted by at least the minimum vote.
(Nov. 3, 2022, P.L.1791, No.122, eff. 60 days)
Cross References.
Section 2336 is referred to in sections 2301, 2322 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 23 - Statutory Close Corporations › Section 2337 - Option of shareholder to dissolve corporation

§ 2337. Option of shareholder to dissolve corporation.
(a) General rule.--
A bylaw of a statutory close corporation adopted by the shareholders may include a provision granting to any shareholder, or to the holders of any specified number or percentage of shares of any class of shares, an option to have the corporation dissolved at will or upon the occurrence of any specified event or contingency. Whenever the option to dissolve is exercised, the shareholders exercising the option shall give written notice thereof to all other shareholders. After the expiration of 30 days following the sending of the notice, the dissolution of the corporation shall proceed as if the required number of shareholders having voting rights had consented in writing to dissolution of the corporation as provided by Subchapter F of Chapter 19 (relating to voluntary dissolution and winding up).
(b) Amendment adding option.--
If the bylaws do not contain a provision authorized by subsection (a), the bylaws may be amended to include such a provision if adopted by the unanimous vote of all the shareholders, regardless of any limitations stated in the bylaws on the voting rights of any class, unless the original bylaws, or bylaws adopted by such a unanimous vote, specifically authorize such an amendment to be adopted by a specified vote of shareholders, which shall not be less than the minimum vote.
(c) Notice on shares.--
If the bylaws contain a provision authorized by this section, the existence of the provision shall be noted conspicuously on every share certificate issued by the corporation unless the certificate complies with section 2321(c) (relating to notice of statutory close corporation status).
Cross References.
Section 2337 is referred to in sections 1504, 2333 of this title.