CHAPTER 25. SHARES GENERALLY
IC 23-1-25
Chapter 25. Shares Generally
IC 23-1-25-1
Authorization of shares in articles of incorporation
Sec. 1. (a) The articles of incorporation must prescribe the numberof shares that the corporation is authorized to issue. If more than one(1) class of shares is authorized by the articles of incorporation, thearticles of incorporation must prescribe the number of shares in eachclass and a distinguishing designation for each class. Before theissuance of shares of a class, the preferences, limitations, and relativerights of that class must be described in the articles of incorporation.All shares of a class must have preferences, limitations, and relativerights identical with those of other shares of the same class except tothe extent otherwise permitted by section 2 of this chapter.
(b) The articles of incorporation must authorize:
(1) one (1) or more classes of shares that together haveunlimited voting rights; and
(2) one (1) or more classes of shares (that may be the same classor classes as those with voting rights) that together are entitledto receive the net assets of the corporation upon dissolution.
(c) The articles of incorporation may authorize one (1) or moreclasses of shares that have one (1) or more of the followingcharacteristics:
(1) Have special, conditional, or limited voting rights, or noright to vote, except to the extent prohibited by this article.
(2) Are redeemable or convertible as specified in the articles ofincorporation:
(A) at the option of the corporation, the shareholder, oranother person or upon the occurrence of a designated event;
(B) for cash, indebtedness, securities, or other property; and
(C) in a designated amount or in an amount determined inaccordance with a designated formula or by reference toextrinsic data or events.
(3) Entitle the holders to distributions calculated in any manner,including dividends that may be cumulative, noncumulative, orpartially cumulative.
(4) Have preference over any other class of shares with respectto distributions, including dividends and distributions upon thedissolution of the corporation.
(d) The description of the designations, preferences, limitations,and relative rights of share classes in subsection (c) is not exhaustive.
As added by P.L.149-1986, SEC.9.
IC 23-1-25-2
Series of shares; filing articles with secretary of state
Sec. 2. (a) If the articles of incorporation so provide, the board ofdirectors may create one (1) or more series, and may determine, inwhole or in part, the preferences, limitations, and relative voting andother rights (within the limits set forth in section 1 of this chapter)
of:
(1) any class of shares before the issuance of any shares of thatclass; or
(2) one (1) or more series within a class before the issuance ofany shares of that series.
(b) Each series of a class must be given a distinguishingdesignation.
(c) All shares of a series must have preferences, limitations, andrelative rights identical with those of other shares of the same seriesand, except to the extent otherwise provided in the description of theseries, with those of other series of the same class.
(d) Before issuing any shares of a class or series the preferences,limitations, and relative voting and other rights of which aredetermined under this section, the corporation must deliver to thesecretary of state for filing articles of amendment, which areeffective without shareholder action, that set forth:
(1) the name of the corporation;
(2) the text of the amendment determining the terms of the classor series of shares;
(3) the date it was adopted; and
(4) a statement that the amendment was duly adopted by theboard of directors.
As added by P.L.149-1986, SEC.9.
IC 23-1-25-3
Issuance of shares; number; outstanding shares
Sec. 3. (a) A corporation may issue the number of shares of eachclass or series authorized by the articles of incorporation. Shares thatare issued are outstanding shares until they are reacquired, redeemed,converted, or cancelled.
(b) The reacquisition, redemption, or conversion of outstandingshares is subject to the limitations of subsection (c) and toIC 23-1-28.
(c) At all times that shares of the corporation are outstanding, one(1) or more shares that together have unlimited voting rights and one(1) or more shares that together are entitled to receive the net assetsof the corporation upon dissolution must be outstanding.
As added by P.L.149-1986, SEC.9.
IC 23-1-25-4
Fractional shares; scrip
Sec. 4. (a) A corporation may do any one (1) or more of thefollowing:
(1) Issue fractions of a share or pay in money the value offractions of a share.
(2) Arrange for disposition of fractional shares by theshareholders.
(3) Issue scrip in registered or bearer form entitling the holderto receive a full share upon surrendering enough scrip to equala full share. (b) Each certificate representing scrip must be conspicuouslylabeled "scrip" and must contain the information required byIC 23-1-26-6(b).
(c) The holder of a fractional share is entitled to exercise therights of a shareholder, including the right to vote, to receivedividends, and to participate in the assets of the corporation uponliquidation. The holder of scrip is not entitled to any of these rightsunless the scrip provides for them.
(d) The board of directors may authorize the issuance of scripsubject to any condition considered desirable, including:
(1) that the scrip will become void if not exchanged for fullshares before a specified date; and
(2) that the shares for which the scrip is exchangeable may besold and the proceeds paid to the scripholders.
As added by P.L.149-1986, SEC.9.