17-7208.   Breach of condition necessary to status as closecorporation; proceeding to prevent loss of status; jurisdiction andpowers of district court.(a) If any event occurs, as a result of which one or more of theprovisions or conditions included in a close corporation's articles ofincorporation, pursuant to K.S.A. 17-7202, and amendments thereto, toqualifyit as a close corporation has been breached, the corporation's status asa close corporation shall terminate unless:

      (1)   Within 30 days after the occurrence of theevent, orwithin 30 days after the event has been discovered,whicheveris later, the corporation files with the secretary of state acertificate, executed in accordance with K.S.A.17-6003,and amendments thereto, stating that a specified provision or conditionincluded in its articles of incorporation pursuant to K.S.A. 17-7202, andamendments thereto, toqualify it as a close corporation has ceased tobe applicable, and furnishes a copy of such certificate to eachstockholder; and

      (2)   The corporation concurrently with the filing of such certificatetakes such steps as are necessary to correct the situation whichthreatens its status as a close corporation, including, withoutlimitation, the refusal to register the transfer of stock which has beenwrongfully transferred as provided by K.S.A. 17-7207, and amendmentsthereto,or a proceeding under subsection (b).

      (b)   The district court, upon the suit of the corporation or anystockholder, shall have jurisdiction to issue all orders necessary toprevent the corporation from losing its status as a close corporation,or to restore its status as a close corporation, by enjoining or settingaside any act or threatened act on the part of the corporation or astockholder which would be inconsistent with any of the provisions orconditions required or permitted by K.S.A. 17-7202, and amendmentsthereto, tobe stated in the articles of incorporation for a close corporation,unless it is an act approved in accordance with K.S.A. 17-7206, andamendments thereto. The courtmay enjoin or set aside any transfer or threatenedtransfer of stock of a close corporation which is contrary to the termsof its articles of incorporation or of any transfer restrictionpermitted by K.S.A. 17-6426, and amendments thereto, and may enjoin anypublicoffering, as defined in K.S.A. 17-7202, and amendments thereto, orthreatenedpublic offering of stock of the close corporation.

      History:   L. 1972, ch. 52, § 132;L. 2000, ch. 39, § 43; July 1.