State Codes and Statutes
Statutes > New-jersey > Title-14a > Section-14a-5 > 14a-5-2814A:5-28. Books and records; right of inspection
(1) Each corporation shall keep books and records of account and minutes of the proceedings of its shareholders, board and executive committee, if any. Unless otherwise provided in the bylaws, such books, records and minutes may be kept outside this State. The corporation shall keep at its principal office, its registered office, or at the office of its transfer agent, a record or records containing the names and addresses of all shareholders, the number, class and series of shares held by each and the dates when they respectively became the owners of record thereof. Any of the foregoing books, minutes or records may be in written form or in any other form capable of being converted into readable form within a reasonable time. A corporation shall convert into readable form without charge any such records not in such form, upon the written request of any person entitled to inspect them.
(2) Upon the written request of any shareholder, the corporation shall mail to such shareholder its balance sheet as at the end of the preceding fiscal year, and its profit and loss and surplus statement for such fiscal year.
(3) Any person who shall have been a shareholder of record of a corporation for at least six months immediately preceding his demand, or any person holding, or so authorized in writing by the holders of, at least 5% of the outstanding shares of any class or series, upon at least five days' written demand shall have the right for any proper purpose to examine in person or by agent or attorney, during usual business hours, its minutes of the proceedings of its shareholders and record of shareholders and to make extracts therefrom, at the places where the same are kept pursuant to subsection 14A:5-28(1).
(4) Nothing herein contained shall impair the power of any court, upon proof by a shareholder of proper purpose, irrespective of the period of time during which the shareholder shall have been a shareholder of record, and irrespective of the number of shares held by him, to compel the production for examination by such shareholder of the books and records of account, minutes, and record of shareholders of a corporation. The court may, in its discretion prescribe any limitations or conditions with reference to the inspection, or award any other or further relief as the court may deem just and proper. The court may order books, documents and records, pertinent extracts therefrom, or duly authenticated copies thereof, to be brought within this State and kept in this State upon whatever terms and conditions as the order may prescribe. In any action for inspection the court may proceed summarily.
(5) Holders of voting trust certificates representing shares of the corporation shall be regarded as shareholders for the purpose of this section.
L.1968, c.350; amended 1973,c.366,s.19; 1988,c.94,s.22.
14A:5-29.Preemptive rights.14A:5-29. Preemptive rights.
(1) The shareholders of corporations organized after January 1, 1969 shall not have preemptive rights unless the certificate of incorporation provides otherwise. The shareholders of corporations organized prior to January 1, 1969 shall have preemptive rights unless a bylaw duly adopted by the shareholders prior to that date or the certificate of incorporation provides otherwise. Any corporation may alter or abolish preemptive rights by amendment to its certificate of incorporation.
(2) Any corporation may elect to grant its shareholders preemptive rights. An election may be made by including in the certificate of incorporation a statement to the effect that the shareholders shall have preemptive rights.
(3) Unless otherwise provided in the certificate of incorporation, the effect of shareholders having preemptive rights shall be as follows:
(a) Upon the issuance for cash of shares, or options to purchase shares, of the same class as those held by a shareholder, the shareholder shall have a right to acquire a pro rata portion of such shares or options so issued according to the number of shares of such class held by him. Such preemptive right shall extend to shares, obligations or other securities, however described, which are convertible into shares of the same class as those held by the shareholder.
(b) Shares, obligations or other securities of the corporation which are subject to preemptive rights as herein provided shall not be deemed to be issued for cash within the meaning of this section if cash constitutes only a part of the consideration received by the corporation.
(c) A shareholder may waive his preemptive right; a waiver of a preemptive right, when evidenced by a writing, shall be binding upon the shareholder notwithstanding it is given without consideration.
(d) No shareholder shall have a preemptive right to acquire shares, obligations or other securities as herein provided, which
(i) are issued pursuant to a plan of merger or consolidation;
(ii)are issued pursuant to Chapter 8 of this act;
(iii) are issued to satisfy conversion or option rights, however evidenced, granted by the corporation;
(iv) are issued pursuant to a plan of reorganization approved by a court pursuant to a statute of this State or of the United States; or
(v) are part of the shares, obligations or other securities authorized in the original certificate of incorporation and are issued within six months from the effective date of such certificate.
(e) Upon the proposed issuance of shares, obligations or other securities subject to preemptive rights, the board shall cause notice to be given to each shareholder of record entitled to preemptive rights. The notice shall set forth (i) the amount of shares, obligations or other securities with respect to which the shareholder has a preemptive right and the method used to determine that amount;
(ii) the price and other terms and conditions upon which the shareholder may purchase such shares, obligations or other securities; and
(iii) the time within which and the method by which the shareholder must exercise the right.
The notice shall be given at least 30 days prior to the time within which the shareholder must exercise the right.
(f) Shares, obligations or other securities subject to preemptive rights, which are not acquired by shareholders in the exercise of their preemptive rights may, for a period not exceeding one year after the date limited by the directors for the exercise of such preemptive rights, be issued, sold, or optioned to such person or persons as the board may determine, at a price not less than that at which they were offered to such shareholders. Any such shares, obligations or other securities not so issued, sold or optioned during such one-year period, shall at the expiration of such period again be subject to preemptive rights of shareholders.
L.1968, c.350; amended 1973,c.366,s.20; 1988,c.94,s.23; 1995,c.279,s.6.
14A:5-30.Liability of subscribers and shareholders
14A:5-30. Liability of subscribers and shareholders.
(1) A holder of or subscriber for shares of a corporation shall be under no obligation to the corporation or its creditors to pay for such shares other than the obligation to pay to the corporation the unpaid portion of the consideration for which such shares were issued or to be issued, which in no event shall be less than the amount of the consideration for which such shares could be lawfully issued.
(2) Unless otherwise provided in the articles of incorporation, a shareholder of a corporation is not personally liable for the acts of the corporation, except that a shareholder may become personally liable by the reason of his own acts or conduct.
(3) A person holding stock in a fiduciary or representative capacity shall not be personally liable to the corporation as the holder of or subscriber for shares of a corporation but the estate and funds in his hands shall be so liable.
(4) Any person becoming an assignee or transferee of shares or of a subscription for shares in good faith and without knowledge or notice that the full consideration therefor has not been paid shall not be liable to the corporation or its creditors for any unpaid portion of such consideration, but the original holder or subscriber and any assignee or transferee prior to an assignment or transfer to a person taking in good faith and without such knowledge or notice shall remain liable therefor.
(5) No pledgee or other holder of shares as collateral security shall be liable as a shareholder.
L.1968, c.350; amended 1995,c.279,s.7.
