Court Opinion

ID: 3786163
Source: CourtListenerOpinion
Date Created: 2016-07-06 07:36:13.088456+00
Date Added: 2024-06-11T14:12:57.146182
License: Public Domain

THE BUSINESS CORPORATION ACT AND OUTSTANDING STOCK
The Business Corporation Act in 18 Ohio St. 1971 does not require the filing of statements concerning change in capital stock outstanding; however, where such change in capital stock outstanding comes within the purview of 18 Ohio St. 1.138 [18-1.138](a) and 18 Ohio St. 1.138 [18-1.138](c) (1971), then such change in outstanding stock reducing the amount of authorized shares must be reflected by an amended articles of domestication under 18 Ohio St. 1.230 [18-1.230] (1971).  We have received your opinion request wherein you ask the following question: "In certain states, domestic corporations must file a Statement with the Secretary of State setting forth any change in the Capital Stock outstanding, including Treasury Stock purchased. The Statement does not change the authorized capital of the corporation, nor is it considered to be a change in the incorporating documents. When these corporations are domesticated in Oklahoma, is it necessary for them to file certified copies of these Statements with this office?" The "Business Corporation Act" found in 18 Ohio St. 1.1 [18-1.1] (1971) et seq, does not contain any requirements for the filing of statements indicating changes in capital stock outstanding per se. However, foreign corporations domesticated in Oklahoma must file amended articles of domestication as required by 18 Ohio St. 1.230 [18-1.230] (1971), which provides as follows: "Within sixty (60) days after the amendment of the articles of incorporation of any domesticated corporation, except as provided in Section 229 of this Act, amended articles of domestication of such corporation shall be executed and delivered in the same manner and shall contain the same information as of the date of execution of such amended articles of domestication as is required by Section 228 of this Act for original articles of domestication.  "For the purpose of this Section, all changes in the authorized powers of a domesticated corporation or other changes in its relationship with the state of its incorporation such as is treated as an amendment of the articles of incorporation of a domestic corporation under the provisions of this Act shall, except a change of its registered agent in the state of its incorporation, be deemed to be an amendment of its articles of incorporation." The first paragraph of Section 18 Ohio St. 1.230 [18-1.230], above quoted, requires amended articles of domestication to be filed within 60 days after any amendment of the articles of incorporation. The articles of domestication provide in part in 18 Ohio St. 1.228 [18-1.228](a)(9) (1971) as follows: "The aggregate number of its authorized shares itemized by classes, par value of shares, shares without par value, and series, if any, within any classes authorized;" However, your statement presumes that the changes in capital stock outstanding is not considered to be a change in incorporating documents. Therefore, that paragraph would not appear to be applicable. The second paragraph, however, of Section 18 Ohio St. 1.230 [18-1.230] requires that changes in the authorized powers of a domesticated corporation or other changes in its relationship with the state of its incorporation, such as is treated as an amendment of the articles of incorporation of a domestic corporation under the provisions of this Act, shall be deemed to be an amendment of its articles of incorporation. Changes in outstanding capital stock would not appear to require amended articles of incorporation by a domestic corporation except as is provided by 18 Ohio St. 1.138 [18-1.138](c) and 18 Ohio St. 1.138 [18-1.138](e) (1971), which provides as follows: "In case the articles of incorporation of such corporation provide that shares of any class or classes purchased, redeemed, purchased in lieu of redemption, or otherwise acquired shall not be reallotted, any such shares which have been so acquired shall be canceled and the authorized shares of such class or classes shall be reduced to the extent of the shares canceled. The act of cancellation of such shares shall not change the stated capital nor the amount of any surplus.  "When shares are purchased, redeemed, purchased in lieu of redemption or otherwise acquired under Paragraph c above, and the same are canceled and the authorized shares reduced to the extent of the shares canceled, an amendment to the articles of incorporation shall be made by the directors to reflect such reduction in the authorized shares." Therefore, unless the articles of incorporation of the domesticated corporation require that shares of any class or classes purchased, redeemed, purchased in lieu of redemption or otherwise acquired shall not be reallotted then the acquisition of such shares which are then canceled and the authorized shares reduced to the extent of the shares canceled requires an amendment to the articles of incorporation.  It is the opinion of the Attorney General that your question then be answered as follows: The Business Corporation Act in 18 Ohio St. 1971 does not require the filing of statements concerning change in capital stock outstanding; however, where such change in capital stock outstanding comes within the purview of 18 Ohio St. 1.138 [18-1.138](a) and 18 Ohio St. 1.138 [18-1.138](c) (1971), then such change in outstanding stock reducing the amount of authorized shares must be reflected by an amended articles of domestication under 18 Ohio St. 1.230 [18-1.230] (1971).  (James H. Gray)