State Codes and Statutes

Statutes > Wyoming > Title17 > Chapter17

CHAPTER 17 - CLOSE CORPORATION SUPPLEMENT

 

ARTICLE 1 - PROVISIONS

 

17-17-101. Short title.

 

Thischapter shall be known and may be cited as the "Wyoming Statutory CloseCorporation Supplement."

 

17-17-102. Application of Wyoming Business Corporation Act and theprovisions of W.S. 17-3-101 through 17-3-104.

 

 

(a) The Wyoming Business Corporation Act applies to statutoryclose corporations to the extent not inconsistent with the provisions of thischapter.

 

(b) This chapter applies to a professional corporationorganized under W.S. 17-3-101 through 17-3-104 whose articles of incorporationcontain the statement required by W.S. 17-17-103(a), except insofar as W.S.17-3-101 through 17-3-104 contain inconsistent provisions.

 

(c) This chapter does not repeal or modify any statute or ruleof law that is or would apply to a corporation that is organized under theWyoming Business Corporation Act and the provisions of W.S. 17-3-101 through17-3-104 and that does not elect to become a statutory close corporation underW.S. 17-17-103.

 

17-17-103. Definition and election of statutory close corporationstatus.

 

 

(a) A statutory close corporation is a corporation whosearticles of incorporation contain a statement that the corporation is astatutory close corporation.

 

(b) A corporation having thirty-five (35) or fewer shareholdersmay become a statutory close corporation by amending its articles ofincorporation to include the statement required by subsection (a) of this section. For corporations formed prior to January 1, 1990, the amendment shall beapproved by all of the holders of the votes of each class or series of sharesof the corporation, whether or not otherwise entitled to vote on amendments. For corporations formed on or after January 1, 1990, the amendment must beapproved by the holders of at least two-thirds (2/3) of the votes of each classor series of shares of the corporation, voting as separate voting groups,whether or not otherwise entitled to vote on amendments. If the amendment isadopted, a shareholder who voted against the amendment is entitled to assertdissenters' rights under W.S. 17-16-1301 through 17-16-1331.

 

17-17-110. Notice of statutory close corporations status on issuedshares.

 

 

(a) The following statement must appear conspicuously on eachshare certificate issued by a statutory close corporation:

 

The rights ofshareholders in a statutory close corporation may differ materially from therights of shareholders in other corporations. Copies of the articles ofincorporation and bylaws, shareholders' agreements, and other documents, any ofwhich may restrict transfers and affect voting and other rights, may beobtained by a shareholder on written request to the corporation.

 

(b) Within a reasonable time after the issuance or transfer ofuncertificated shares, the corporation shall send to the shareholders a writtennotice containing the information required by subsection (a) of this section.

 

(c) The notice required by this section satisfies allrequirements of this chapter and of W.S. 17-16-627 that notice of sharetransfer restrictions be given.

 

(d) A person claiming an interest in shares of a statutoryclose corporation which has complied with the notice requirement of thissection is bound by the documents referred to in the notice. A person claimingan interest in shares of a statutory close corporation which has not compliedwith the notice requirement of this section is bound by any documents of whichhe, or a person through whom he claims, has knowledge or notice.

 

(e) A corporation shall provide to any shareholder upon hiswritten request and without charge copies of provisions that restrict transferor affect voting or other rights of shareholders appearing in articles of incorporation,bylaws, or shareholders' or voting trust agreements filed with the corporation.

 

17-17-111. Share transfer prohibition.

 

 

(a) An interest in shares of a statutory close corporation maynot be voluntarily or involuntarily transferred, by operation of law orotherwise, except to the extent permitted by the articles of incorporation orunder W.S. 17-17-112 or pursuant to a buy-sell agreement entered into by allthe shareholders.

 

(b) Except to the extent the articles of incorporation provideotherwise, this section does not apply to a transfer:

 

(i) To the corporation or to any other holder of the same classor series of shares;

 

(ii) To members of the shareholder's immediate family, or to atrust, all of whose beneficiaries are members of the shareholder's immediatefamily, which immediate family consists of his spouse, parents, linealdescendants, including adopted children and stepchildren, and the spouse of anylineal descendant, and brothers and sisters;

 

(iii) That has been approved in writing by all of the holders ofthe corporation's shares having general voting rights;

 

(iv) To a personal representative upon the death of ashareholder or to a trustee or receiver as the result of a bankruptcy,insolvency, dissolution or similar proceeding brought by or against ashareholder;

 

(v) By merger, consolidation or share exchange under W.S.17-16-1101 through 17-16-1114, or an exchange of existing shares for othershares of a different class or series in the corporation;

 

(vi) By a pledge as collateral for a loan that does not grantthe pledgee any voting rights possessed by the pledgor; or

 

(vii) Made after termination of the corporation's status as astatutory close corporation.

 

17-17-112. Share transfer after first refusal by corporation.

 

 

(a) A person desiring to transfer shares of a statutory closecorporation subject to the transfer prohibition of W.S. 17-17-111 must firstoffer them to the corporation by obtaining an offer to purchase the shares forcash from a third person who is eligible to purchase the shares undersubsection (b) of this section. The offer by the third person must be inwriting and state the offeror's name and address, the number and class, orseries, of shares offered, the offering price per share, and the other terms ofthe offer.

 

(b) A third person is eligible to purchase the shares if:

 

(i) He is eligible to become a qualified shareholder under anyfederal or state tax statute the corporation has adopted and he agrees inwriting not to terminate his qualification without the approval of theremaining shareholders; and

 

(ii) His purchase of the shares will not impose a personalholding company tax or similar federal or state penalty tax on the corporation.

 

(c) The person desiring to transfer shares shall deliver theoffer to the corporation, and by doing so offers to sell the shares to thecorporation on the terms of the offer. Within twenty (20) days after thecorporation receives the offer, the corporation shall call a specialshareholders' meeting, to be held not more than forty (40) days after the call,to decide whether the corporation should purchase all, but not less than all,of the offered shares. The offer must be approved by the affirmative vote ofthe holders of a majority of votes entitled to be cast at the meeting,excluding votes in respect of the shares covered by the offer.

 

(d) The corporation must deliver to the offering shareholderwritten notice of acceptance within seventy-five (75) days after receiving theoffer or the offer is rejected. If the corporation makes a counteroffer, theshareholder must deliver to the corporation written notice of acceptance withinfifteen (15) days after receiving the counteroffer or the counteroffer isrejected. If the corporation accepts the original offer or the shareholderaccepts the corporation's counteroffer, the shareholder shall deliver to thecorporation duly endorsed certificates for the shares, or instruct thecorporation in writing to transfer the shares if uncertificated, within twenty(20) days after the effective date of the notice of acceptance. Thecorporation may specifically enforce the shareholder's delivery or instructionobligation under this subsection.

 

(e) A corporation accepting an offer to purchase shares under thissection may allocate some or all of the shares to one (1) or more of itsshareholders or to other persons if all the shareholders voting in favor of thepurchase approve the allocation. If the corporation has more than one (1)class or series of shares, however, the remaining holders of the class orseries of shares being purchased are entitled to a first option to purchase theshares not purchased by the corporation in proportion to their shareholdings orin some other proportion agreed to by all the shareholders participating in thepurchase.

 

(f) If an offer to purchase shares under this section isrejected, the offering shareholder, for a period of one hundred twenty (120)days after the corporation received his offer, is entitled to transfer to thethird person offeror all, but not less than all, of the offered shares inaccordance with the terms of his offer to the corporation.

 

17-17-113. Attempted share transfer in breach of prohibition.

 

 

(a) An attempt to transfer shares in a statutory closecorporation in violation of a prohibition against transfer binding on thetransferee is ineffective.

 

(b) An attempt to transfer shares in a statutory closecorporation in violation of a prohibition against transfer that is not bindingon the transferee, either because the notice required by W.S. 17-17-110 was notgiven or because the prohibition is held unenforceable by a court, gives thecorporation an option to purchase the shares from the transferee for the sameprice and on the same terms that he purchased them. To exercise its option,the corporation must give the transferee written notice within thirty (30) daysafter they are presented for registration in the transferee's name. Thecorporation may specifically enforce the transferee's sale obligation uponexercise of its purchase option.

 

17-17-114. Compulsory purchase of shares after death of shareholder.

 

(a) This section, and W.S. 17-17-115 through 17-17-117, applyto a statutory close corporation only if so provided in its articles of incorporation. If these sections apply, the personal representative of the estate or thesurviving joint tenant of a deceased shareholder may require the corporation topurchase or cause to be purchased all, but not less than all, of the decedent'sshares or jointly owned shares or to be dissolved.

 

(b) The provisions of W.S. 17-17-115 through 17-17-117 may bemodified only if the modification is set forth or referred to in the articlesof incorporation.

 

(c) An amendment to the articles of incorporation to providefor application of W.S. 17-17-115 through 17-17-117, or to modify or delete theprovisions of these sections, must be approved by the holders of at leasttwo-thirds (2/3) of the votes of each class or series of shares of thestatutory close corporation, voting as separate voting groups, whether or nototherwise entitled to vote on amendments. If the corporation has noshareholders when the amendment is proposed, it must be approved by at leasttwo-thirds (2/3) of the subscribers for shares, if any, or, if none, by all ofthe incorporators.

 

(d) A shareholder who votes against an amendment to modify ordelete the provisions of W.S. 17-17-115 through 17-17-117 is entitled todissenters' rights under W.S. 17-16-1301 through 17-16-1331 if the amendmentupon adoption terminates or substantially alters his existing rights underthese sections to have his shares purchased.

 

(e) A shareholder may waive his and his estate's rights underW.S. 17-17-115 through 17-17-117 by a signed writing.

 

(f) W.S. 17-17-115 through 17-17-117 do not prohibit any otheragreement providing for the purchase of shares upon a shareholder's death, nordo they prevent a shareholder from enforcing any remedy he has independent ofthese sections.

 

17-17-115. Exercise of compulsory purchase right.

 

 

(a) A person entitled and desiring to exercise the compulsorypurchase right described in W.S. 17-17-114 must deliver a written notice to thecorporation, within one hundred twenty (120) days after the death of theshareholder, describing the number and class or series of shares beneficiallyowned by the decedent and requesting that the corporation offer to purchase theshares.

 

(b) Within twenty (20) days after the effective date of thenotice, the corporation shall call a special shareholders' meeting, to be heldnot more than forty (40) days after the call, to decide whether the corporationshould offer to purchase the shares. A purchase offer must be approved by theaffirmative vote of the holders of a majority of votes entitled to be cast atthe meeting, excluding votes in respect of the shares covered by the notice.

 

(c) The corporation must deliver a purchase offer to the personrequesting it within seventy-five (75) days after the effective date of therequest notice. A purchase offer must be accompanied by the corporation'sbalance sheet as of the end of a fiscal year ending not more than sixteen (16)months before the effective date of the request notice, an income statement forthat year, a statement of changes in shareholders' equity for that year, andthe latest available interim financial statements, if any. The person mustaccept the purchase offer in writing within fifteen (15) days after receivingit or the offer is rejected.

 

(d) A corporation agreeing to purchase shares under thissection may allocate some or all of the shares to one (1) or more of itsshareholders or to other persons if all the shareholders voting in favor of thepurchase offer approve the allocation. If the corporation has more than one (1)class or series of shares, however, the remaining holders of the class orseries of shares being purchased are entitled to a first option to purchase theshares not purchased by the corporation in proportion to their shareholdings orin some other proportion agreed to by all the shareholders participating in thepurchase.

 

(e) If price and other terms of a compulsory purchase of sharesare fixed or are to be determined by the articles of incorporation, bylaws, ora written agreement, the price and terms so fixed or determined govern thecompulsory purchase unless the purchaser defaults, in which event the buyer isentitled to commence a proceeding for dissolution under W.S. 17-17-116.

 

17-17-116. Court action to compel purchase.

 

 

(a) If an offer to purchase shares made under W.S. 17-17-115 isrejected, or if no offer is made, the person exercising the compulsory purchaseright may commence a proceeding against the corporation to compel the purchasein the district court of the county where the corporation's principal office,or, if none in this state, its registered office, is located. The corporationat its expense shall notify in writing all of its shareholders, and any otherperson the court directs, of the commencement of the proceeding. The jurisdictionof the court in which the proceeding is commenced under this subsection isplenary and exclusive.

 

(b) The court shall determine the fair value of the sharessubject to compulsory purchase in accordance with the standards set forth inW.S. 17-17-142 together with terms for the purchase. Upon making thesedeterminations the court shall order the corporation to purchase or cause thepurchase of the shares or empower the person exercising the compulsory purchaseright to have the corporation dissolved.

 

(c) After the purchase order is entered, the corporation maypetition the court to modify the terms of purchase and the court may do so ifit finds that changes in the financial or legal ability of the corporation orother purchaser to complete the purchase justify a modification.

 

(d) If the corporation or other purchaser does not make apayment required by the court's order within thirty (30) days of its due date,the seller may petition the court to dissolve the corporation and, absent ashowing of good cause for not making the payment, the court shall do so.

 

(e) A person making a payment to prevent or cure a default bythe corporation or other purchaser is entitled to recover the payment from thedefaulter.

 

17-17-117. Court costs and other expenses.

 

 

(a) The court in a proceeding commenced under W.S. 17-17-116shall determine the total costs of the proceeding, including the reasonablecompensation and expenses of appraisers appointed by the court and of counseland experts employed by the parties. Except as provided in subsection (b) ofthis section, the court shall assess these costs equally against thecorporation and the party exercising the compulsory purchase right.

 

(b) The court may assess all or a portion of the total costs ofthe proceeding:

 

(i) Against the person exercising the compulsory purchase rightif the court finds that the fair value of the shares does not substantiallyexceed the corporation's last purchase offer made before commencement of theproceeding and that the person's failure to accept the offer was arbitrary, orotherwise not in good faith; or

 

(ii) Against the corporation if the court finds that the fairvalue of the shares substantially exceeds the corporation's last sale offermade before commencement of the proceeding and that the offer was arbitrary, orotherwise not made in good faith.

 

17-17-120. Shareholder agreements.

 

 

(a) All the shareholders of a statutory close corporation mayagree in writing to regulate the exercise of the corporate powers and themanagement of the business and affairs of the corporation or the relationshipamong the shareholders of the corporation.

 

(b) An agreement authorized by this section is effectivealthough:

 

(i) It eliminates a board of directors;

 

(ii) It restricts the discretion or powers of the board orauthorizes director proxies or weighted voting rights;

 

(iii) Its effect is to treat the corporation as a partnership; or

 

(iv) It creates a relationship among the shareholders or betweenthe shareholders and the corporation that would otherwise be appropriate onlyamong partners.

 

(c) If the corporation has a board of directors, an agreementauthorized by this section restricting the discretion or powers of the boardrelieves directors of liability imposed by law, and imposes that liability oneach person in whom the board's discretion or power is vested, to the extentthat the discretion or powers of the board of directors are governed by theagreement.

 

(d) A provision eliminating a board of directors in anagreement authorized by this section is not effective unless the articles ofincorporation contain a statement to that effect as required by W.S. 17-17-121.

 

(e) A provision entitling one (1) or more shareholders todissolve the corporation under W.S. 17-17-133 is effective only if a statementof this right is contained in the articles of incorporation.

 

(f) To amend an agreement authorized by this section, all theshareholders must approve the amendment in writing unless the agreementprovides otherwise.

 

(g) Subscribers for shares may act as shareholders with respectto an agreement authorized by this section if shares are not issued when theagreement was made.

 

(h) This section does not prohibit any other agreement betweenor among shareholders in a statutory close corporation.

 

17-17-121. Elimination of board of directors.

 

 

(a) A statutory close corporation may operate without a boardof directors if its articles of incorporation contain a statement to thateffect.

 

(b) An amendment to articles of incorporation eliminating aboard of directors must be approved by all the shareholders of the corporation,whether or not otherwise entitled to vote on amendments, or if no shares havebeen issued, by all the subscribers for shares, if any, or if none, by all theincorporators.

 

(c) While a corporation is operating without a board ofdirectors as authorized by subsection (a) of this section:

 

(i) All corporate powers shall be exercised by or under theauthority of, and the business and affairs of the corporation managed under thedirection of, the shareholders;

 

(ii) Unless the articles of incorporation provide otherwise:

 

(A) Action requiring director approval or both director andshareholder approval is authorized if approved by the shareholders; and

 

(B) Action requiring a majority or greater percentage vote ofthe board of directors is authorized if approved by the majority or greaterpercentage of the votes of shareholders entitled to vote on the action.

 

(iii) A shareholder is not liable for his act or omission,although a director would be, unless the shareholder was entitled to vote onthe action;

 

(iv) A requirement by a state or the United States that adocument delivered for filing contain a statement that specified action hasbeen taken by the board of directors is satisfied by a statement that thecorporation is a statutory close corporation without a board of directors andthat the action was approved by the shareholders; and

 

(v) The shareholders by resolution may appoint one (1) or moreshareholders to sign documents as "designated directors."

 

(d) An amendment to articles of incorporation deleting thestatement eliminating a board of directors must be approved by the holders ofat least two-thirds (2/3) of the votes of each class or series of shares of thecorporation, voting as separate voting groups, whether or not otherwiseentitled to vote on amendments. The amendment must also specify the number,names and addresses of the corporation's directors or describe who will performthe duties of a board under W.S. 17-16-801.

 

17-17-122. Bylaws.

 

 

(a) A statutory close corporation need not adopt bylaws ifprovisions required by law to be contained in bylaws are contained in eitherthe articles of incorporation or a shareholder agreement authorized by W.S.17-17-120.

 

(b) If a corporation does not have bylaws when its statutoryclose corporation status terminates under W.S. 17-17-131, the corporation shallimmediately adopt bylaws under W.S. 17-16-206.

 

17-17-123. Annual meeting.

 

 

(a) The annual meeting date for a statutory close corporationis the last business day of the third month following the close of the businessyear unless its articles of incorporation, bylaws, or a shareholder agreementauthorized by W.S. 17-17-120 fixes a different date.

 

(b) A statutory close corporation need not hold an annualmeeting unless one (1) or more shareholders deliver written notice to thecorporation requesting a meeting at least thirty (30) days before the meetingdate determined under subsection (a) of this section.

 

17-17-124. Execution of documents in more than one capacity.

 

Notwithstandingany law to the contrary, an individual who holds more than one (1) office in astatutory close corporation may execute, acknowledge or verify in more than one(1) capacity any document required to be executed, acknowledged or verified bythe holders of two (2) or more offices.

 

17-17-125. Limited liability.

 

Thefailure of a statutory close corporation to observe the usual corporateformalities or requirements relating to the exercise of its corporate powers ormanagement of its business and affairs is not a ground for imposing personalliability on the shareholders for liabilities of the corporation.

 

17-17-130. Merger, consolidation, share exchange and sale of assets.

 

 

(a) A plan of merger, consolidation or share exchange that:

 

(i) If effected would terminate statutory close corporationstatus must be approved by the holders of at least two-thirds (2/3) of thevotes of each class or series of shares of the statutory close corporation,voting as separate voting groups, whether or not the holders are otherwiseentitled to vote on the plan;

 

(ii) If effected would create the surviving or new corporationas a statutory close corporation must be approved by the holders of at leasttwo-thirds (2/3) of the votes of each class or series of shares of thesurviving corporation, voting as separate voting groups, whether or not theholders are otherwise entitled to vote on the plan.

 

(b) A sale, lease, exchange, mortgage, encumbrance or otherdisposition of all or substantially all of the property, with or without thegood will, of a statutory close corporation, if not made in the usual andregular course of business, must be approved by the holders of at leasttwo-thirds (2/3) of the votes of each class or series of shares of thecorporation, voting as separate voting groups, whether or not the holders areotherwise entitled to vote on the transaction.

 

17-17-131. Termination of statutory close corporation status.

 

 

(a) A statutory close corporation may terminate its statutoryclose corporation status by amending its articles of incorporation to deletethe statement that it is a statutory close corporation. If the statutory closecorporation has elected to operate without a board of directors under W.S.17-17-121, the amendment must either comply with W.S. 17-16-801 or delete thestatement dispensing with the board of directors from its articles ofincorporation.

 

(b) An amendment terminating statutory close corporation statusmust be approved by the holders of at least two-thirds (2/3) of the votes ofeach class or series of shares of the corporation, voting as separate votinggroups, whether or not the holders are otherwise entitled to vote onamendments.

 

(c) If an amendment to terminate statutory close corporationstatus is adopted, each shareholder who voted against the amendment is entitledto assert dissenters' rights under W.S. 17-16-1301 through 17-16-1331.

 

17-17-132. Effect of termination of statutory close corporation status.

 

 

(a) A corporation that terminates its status as a statutoryclose corporation is thereafter subject to all provisions of the WyomingBusiness Corporation Act and, if incorporated under W.S. 17-3-101 through17-3-104, to all provisions of those statutes.

 

(b) Termination of statutory close corporation status does notaffect any right of a shareholder or of the corporation under an agreement orthe articles of incorporation unless this chapter, the Wyoming BusinessCorporation Act, or another law of this state invalidates the right.

 

17-17-133. Shareholder option to dissolve corporation.

 

 

(a) The articles of incorporation of a statutory closecorporation may authorize one (1) or more shareholders, or the holders of aspecified number or percentage of shares of any class or series, to dissolvethe corporation at will or upon the occurrence of a specified event orcontingency. The shareholder or shareholders exercising this authority mustgive written notice of the intent to dissolve to all the other shareholders. Sixty (60) days after the effective date of the notice, the corporation shallbegin to wind up and liquidate its business and affairs and file articles ofdissolution under W.S. 17-16-1403 through 17-16-1407.

 

(b) Unless the articles of incorporation provide otherwise, anamendment to the articles of incorporation to add, change or delete theauthority to dissolve described in subsection (a) of this section must beapproved by the holders of all the outstanding shares, whether or not otherwiseentitled to vote on amendments, or if no shares have been issued, by all thesubscribers for shares, if any, or if none, by all the incorporators.

 

17-17-140. Court action to protect shareholders.

 

 

(a) Subject to satisfying the conditions of subsections (c) and(d) of this section, a shareholder of a statutory close corporation maypetition the district court for any of the relief described in W.S. 17-17-141through 17-17-143 if:

 

(i) The directors or those in control of the corporation haveacted, are acting, or will act in a manner that is illegal, oppressive,fraudulent or unfairly prejudicial to the petitioner, whether in his capacityas shareholder, director or officer of the corporation;

 

(ii) The directors or those in control of the corporation aredeadlocked in the management of the corporation's affairs, the shareholders areunable to break the deadlock, and the corporation is suffering or will sufferirreparable injury or the business and affairs of the corporation can no longerbe conducted to the advantage of the shareholders generally because of thedeadlock; or

 

(iii) There exists one (1) or more grounds for judicialdissolution of the corporation under W.S. 17-16-1430.

 

(b) A shareholder must commence a proceeding under subsection(a) of this section in the district court of the county where the corporation'sprincipal office, or, if none in this state, its registered office, islocated. The jurisdiction of the court in which the proceeding is commenced isplenary and exclusive.

 

(c) If a shareholder has agreed in writing to pursue anonjudicial remedy to resolve disputed matters, he may not commence aproceeding under this section with respect to the matters until he has exhaustedthe nonjudicial remedy.

 

(d) If a shareholder has dissenters' rights under this chapteror W.S. 17-16-1301 through 17-16-1331 with respect to proposed corporateaction, he must commence a proceeding under this section before he is requiredto give notice of his intent to demand payment under W.S. 17-16-1321 or todemand payment under W.S. 17-16-1323 or the proceeding is barred.

 

(e) Except as provided in subsections (c) and (d) of thissection, a shareholder's right to commence a proceeding under this section andthe remedies available under W.S. 17-17-141 through 17-17-143 are in additionto any other right or remedy he may have.

 

17-17-141. Ordinary relief.

 

 

(a) If the court finds that one (1) or more of the grounds forrelief described in W.S. 17-17-140(a) exist, it may order such relief as itdeems appropriate including one (1) or more of the following types of relief:

 

(i) The performance, prohibition, alteration or setting asideof any action of the corporation or of its shareholders, directors, or officersor of any other party to the proceeding;

 

(ii) The cancellation or alteration of any provision in thecorporation's articles of incorporation or bylaws;

 

(iii) The removal from office of any director or officer;

 

(iv) The appointment of any individual as a director or officer;

 

(v) An accounting with respect to any matter in dispute;

 

(vi) The appointment of a custodian to manage the business andaffairs of the corporation;

 

(vii) The appointment of a provisional director who has all therights, powers and duties of a duly elected director to serve for the term andunder the conditions prescribed by the court;

 

(viii) The payment of dividends; or

 

(ix) The award of damages to any aggrieved party.

 

(b) If the court finds that a party to the proceeding actedarbitrarily, or otherwise not in good faith, it may award one (1) or more otherparties their reasonable expenses, including counsel fees and the expenses ofappraisers or other experts, incurred in the proceeding.

 

17-17-142. Extraordinary relief; share purchase.

 

 

(a) If the court finds that the ordinary relief described inW.S. 17-17-141(a) is or would be inadequate or inappropriate, it may order thecorporation dissolved under W.S. 17-17-143 unless the corporation or one (1) ormore of its shareholders purchases all the shares of the shareholder for theirfair value and on terms determined under subsection (b) of this section.

 

(b) If the court orders a share purchase, it shall:

 

(i) Determine the fair value of the shares, considering amongother relevant evidence the going concern value of the corporation, anyagreement among some or all of the shareholders fixing the price or specifyinga formula for determining share value for any purpose, the recommendations ofappraisers, if any, appointed by the court, and any legal constraints on thecorporation's ability to purchase the shares;

 

(ii) Specify the terms of the purchase, including if appropriateterms for installment payments, subordination of the purchase obligation to therights of the corporation's other creditors, security for a deferred purchaseprice, and a covenant not to compete or other restriction on the seller;

 

(iii) Require the seller to deliver all his shares to thepurchaser upon receipt of the purchase price or the first installment of thepurchase price;

 

(iv) Provide that after the seller delivers his shares he has nofurther claim against the corporation, its directors, officers or shareholders,other than a claim to any unpaid balance of the purchase price and a claimunder any agreement with the corporation or the remaining shareholders that isnot terminated by the court; and

 

(v) Provide that if the purchase is not completed in accordancewith the specified terms, the corporation is to be dissolved under W.S.17-17-143.

 

(c) After the purchase order is entered, any party may petitionthe court to modify the terms of the purchase and the court may do so if itfinds that changes in the financial or legal ability of the corporation orother purchaser to complete the purchase justify a modification.

 

(d) If the corporation is dissolved because the share purchasewas not completed in accordance with the court's order, the selling shareholderhas the same rights and priorities in the corporation's assets as if the salehad not been ordered.

 

17-17-143. Extraordinary relief; dissolution.

 

 

(a) The court may dissolve the corporation if it finds:

 

(i) There are one (1) or more grounds for judicial dissolutionunder W.S. 17-16-1430; or

 

(ii) All other relief ordered by the court under W.S. 17-17-141or 17-17-142 has failed to resolve the matters in dispute.

 

(b) In determining whether to dissolve the corporation, thecourt shall consider among other relevant evidence the financial condition ofthe corporation but may not refuse to dissolve solely because the corporationhas accumulated earnings or current operating profits.

 

17-17-150. Application to existing corporations.

 

Thischapter applies to all corporations electing statutory close corporation statusunder W.S. 17-17-103 after its effective date.

 

17-17-151. Reservation of power to amend or repeal.

 

Thelegislature has power to amend or repeal all or part of this chapter at anytime and all corporations subject to this chapter are governed by the amendmentor repeal.

 

State Codes and Statutes

Statutes > Wyoming > Title17 > Chapter17

CHAPTER 17 - CLOSE CORPORATION SUPPLEMENT

 

ARTICLE 1 - PROVISIONS

 

17-17-101. Short title.

 

Thischapter shall be known and may be cited as the "Wyoming Statutory CloseCorporation Supplement."

 

17-17-102. Application of Wyoming Business Corporation Act and theprovisions of W.S. 17-3-101 through 17-3-104.

 

 

(a) The Wyoming Business Corporation Act applies to statutoryclose corporations to the extent not inconsistent with the provisions of thischapter.

 

(b) This chapter applies to a professional corporationorganized under W.S. 17-3-101 through 17-3-104 whose articles of incorporationcontain the statement required by W.S. 17-17-103(a), except insofar as W.S.17-3-101 through 17-3-104 contain inconsistent provisions.

 

(c) This chapter does not repeal or modify any statute or ruleof law that is or would apply to a corporation that is organized under theWyoming Business Corporation Act and the provisions of W.S. 17-3-101 through17-3-104 and that does not elect to become a statutory close corporation underW.S. 17-17-103.

 

17-17-103. Definition and election of statutory close corporationstatus.

 

 

(a) A statutory close corporation is a corporation whosearticles of incorporation contain a statement that the corporation is astatutory close corporation.

 

(b) A corporation having thirty-five (35) or fewer shareholdersmay become a statutory close corporation by amending its articles ofincorporation to include the statement required by subsection (a) of this section. For corporations formed prior to January 1, 1990, the amendment shall beapproved by all of the holders of the votes of each class or series of sharesof the corporation, whether or not otherwise entitled to vote on amendments. For corporations formed on or after January 1, 1990, the amendment must beapproved by the holders of at least two-thirds (2/3) of the votes of each classor series of shares of the corporation, voting as separate voting groups,whether or not otherwise entitled to vote on amendments. If the amendment isadopted, a shareholder who voted against the amendment is entitled to assertdissenters' rights under W.S. 17-16-1301 through 17-16-1331.

 

17-17-110. Notice of statutory close corporations status on issuedshares.

 

 

(a) The following statement must appear conspicuously on eachshare certificate issued by a statutory close corporation:

 

The rights ofshareholders in a statutory close corporation may differ materially from therights of shareholders in other corporations. Copies of the articles ofincorporation and bylaws, shareholders' agreements, and other documents, any ofwhich may restrict transfers and affect voting and other rights, may beobtained by a shareholder on written request to the corporation.

 

(b) Within a reasonable time after the issuance or transfer ofuncertificated shares, the corporation shall send to the shareholders a writtennotice containing the information required by subsection (a) of this section.

 

(c) The notice required by this section satisfies allrequirements of this chapter and of W.S. 17-16-627 that notice of sharetransfer restrictions be given.

 

(d) A person claiming an interest in shares of a statutoryclose corporation which has complied with the notice requirement of thissection is bound by the documents referred to in the notice. A person claimingan interest in shares of a statutory close corporation which has not compliedwith the notice requirement of this section is bound by any documents of whichhe, or a person through whom he claims, has knowledge or notice.

 

(e) A corporation shall provide to any shareholder upon hiswritten request and without charge copies of provisions that restrict transferor affect voting or other rights of shareholders appearing in articles of incorporation,bylaws, or shareholders' or voting trust agreements filed with the corporation.

 

17-17-111. Share transfer prohibition.

 

 

(a) An interest in shares of a statutory close corporation maynot be voluntarily or involuntarily transferred, by operation of law orotherwise, except to the extent permitted by the articles of incorporation orunder W.S. 17-17-112 or pursuant to a buy-sell agreement entered into by allthe shareholders.

 

(b) Except to the extent the articles of incorporation provideotherwise, this section does not apply to a transfer:

 

(i) To the corporation or to any other holder of the same classor series of shares;

 

(ii) To members of the shareholder's immediate family, or to atrust, all of whose beneficiaries are members of the shareholder's immediatefamily, which immediate family consists of his spouse, parents, linealdescendants, including adopted children and stepchildren, and the spouse of anylineal descendant, and brothers and sisters;

 

(iii) That has been approved in writing by all of the holders ofthe corporation's shares having general voting rights;

 

(iv) To a personal representative upon the death of ashareholder or to a trustee or receiver as the result of a bankruptcy,insolvency, dissolution or similar proceeding brought by or against ashareholder;

 

(v) By merger, consolidation or share exchange under W.S.17-16-1101 through 17-16-1114, or an exchange of existing shares for othershares of a different class or series in the corporation;

 

(vi) By a pledge as collateral for a loan that does not grantthe pledgee any voting rights possessed by the pledgor; or

 

(vii) Made after termination of the corporation's status as astatutory close corporation.

 

17-17-112. Share transfer after first refusal by corporation.

 

 

(a) A person desiring to transfer shares of a statutory closecorporation subject to the transfer prohibition of W.S. 17-17-111 must firstoffer them to the corporation by obtaining an offer to purchase the shares forcash from a third person who is eligible to purchase the shares undersubsection (b) of this section. The offer by the third person must be inwriting and state the offeror's name and address, the number and class, orseries, of shares offered, the offering price per share, and the other terms ofthe offer.

 

(b) A third person is eligible to purchase the shares if:

 

(i) He is eligible to become a qualified shareholder under anyfederal or state tax statute the corporation has adopted and he agrees inwriting not to terminate his qualification without the approval of theremaining shareholders; and

 

(ii) His purchase of the shares will not impose a personalholding company tax or similar federal or state penalty tax on the corporation.

 

(c) The person desiring to transfer shares shall deliver theoffer to the corporation, and by doing so offers to sell the shares to thecorporation on the terms of the offer. Within twenty (20) days after thecorporation receives the offer, the corporation shall call a specialshareholders' meeting, to be held not more than forty (40) days after the call,to decide whether the corporation should purchase all, but not less than all,of the offered shares. The offer must be approved by the affirmative vote ofthe holders of a majority of votes entitled to be cast at the meeting,excluding votes in respect of the shares covered by the offer.

 

(d) The corporation must deliver to the offering shareholderwritten notice of acceptance within seventy-five (75) days after receiving theoffer or the offer is rejected. If the corporation makes a counteroffer, theshareholder must deliver to the corporation written notice of acceptance withinfifteen (15) days after receiving the counteroffer or the counteroffer isrejected. If the corporation accepts the original offer or the shareholderaccepts the corporation's counteroffer, the shareholder shall deliver to thecorporation duly endorsed certificates for the shares, or instruct thecorporation in writing to transfer the shares if uncertificated, within twenty(20) days after the effective date of the notice of acceptance. Thecorporation may specifically enforce the shareholder's delivery or instructionobligation under this subsection.

 

(e) A corporation accepting an offer to purchase shares under thissection may allocate some or all of the shares to one (1) or more of itsshareholders or to other persons if all the shareholders voting in favor of thepurchase approve the allocation. If the corporation has more than one (1)class or series of shares, however, the remaining holders of the class orseries of shares being purchased are entitled to a first option to purchase theshares not purchased by the corporation in proportion to their shareholdings orin some other proportion agreed to by all the shareholders participating in thepurchase.

 

(f) If an offer to purchase shares under this section isrejected, the offering shareholder, for a period of one hundred twenty (120)days after the corporation received his offer, is entitled to transfer to thethird person offeror all, but not less than all, of the offered shares inaccordance with the terms of his offer to the corporation.

 

17-17-113. Attempted share transfer in breach of prohibition.

 

 

(a) An attempt to transfer shares in a statutory closecorporation in violation of a prohibition against transfer binding on thetransferee is ineffective.

 

(b) An attempt to transfer shares in a statutory closecorporation in violation of a prohibition against transfer that is not bindingon the transferee, either because the notice required by W.S. 17-17-110 was notgiven or because the prohibition is held unenforceable by a court, gives thecorporation an option to purchase the shares from the transferee for the sameprice and on the same terms that he purchased them. To exercise its option,the corporation must give the transferee written notice within thirty (30) daysafter they are presented for registration in the transferee's name. Thecorporation may specifically enforce the transferee's sale obligation uponexercise of its purchase option.

 

17-17-114. Compulsory purchase of shares after death of shareholder.

 

(a) This section, and W.S. 17-17-115 through 17-17-117, applyto a statutory close corporation only if so provided in its articles of incorporation. If these sections apply, the personal representative of the estate or thesurviving joint tenant of a deceased shareholder may require the corporation topurchase or cause to be purchased all, but not less than all, of the decedent'sshares or jointly owned shares or to be dissolved.

 

(b) The provisions of W.S. 17-17-115 through 17-17-117 may bemodified only if the modification is set forth or referred to in the articlesof incorporation.

 

(c) An amendment to the articles of incorporation to providefor application of W.S. 17-17-115 through 17-17-117, or to modify or delete theprovisions of these sections, must be approved by the holders of at leasttwo-thirds (2/3) of the votes of each class or series of shares of thestatutory close corporation, voting as separate voting groups, whether or nototherwise entitled to vote on amendments. If the corporation has noshareholders when the amendment is proposed, it must be approved by at leasttwo-thirds (2/3) of the subscribers for shares, if any, or, if none, by all ofthe incorporators.

 

(d) A shareholder who votes against an amendment to modify ordelete the provisions of W.S. 17-17-115 through 17-17-117 is entitled todissenters' rights under W.S. 17-16-1301 through 17-16-1331 if the amendmentupon adoption terminates or substantially alters his existing rights underthese sections to have his shares purchased.

 

(e) A shareholder may waive his and his estate's rights underW.S. 17-17-115 through 17-17-117 by a signed writing.

 

(f) W.S. 17-17-115 through 17-17-117 do not prohibit any otheragreement providing for the purchase of shares upon a shareholder's death, nordo they prevent a shareholder from enforcing any remedy he has independent ofthese sections.

 

17-17-115. Exercise of compulsory purchase right.

 

 

(a) A person entitled and desiring to exercise the compulsorypurchase right described in W.S. 17-17-114 must deliver a written notice to thecorporation, within one hundred twenty (120) days after the death of theshareholder, describing the number and class or series of shares beneficiallyowned by the decedent and requesting that the corporation offer to purchase theshares.

 

(b) Within twenty (20) days after the effective date of thenotice, the corporation shall call a special shareholders' meeting, to be heldnot more than forty (40) days after the call, to decide whether the corporationshould offer to purchase the shares. A purchase offer must be approved by theaffirmative vote of the holders of a majority of votes entitled to be cast atthe meeting, excluding votes in respect of the shares covered by the notice.

 

(c) The corporation must deliver a purchase offer to the personrequesting it within seventy-five (75) days after the effective date of therequest notice. A purchase offer must be accompanied by the corporation'sbalance sheet as of the end of a fiscal year ending not more than sixteen (16)months before the effective date of the request notice, an income statement forthat year, a statement of changes in shareholders' equity for that year, andthe latest available interim financial statements, if any. The person mustaccept the purchase offer in writing within fifteen (15) days after receivingit or the offer is rejected.

 

(d) A corporation agreeing to purchase shares under thissection may allocate some or all of the shares to one (1) or more of itsshareholders or to other persons if all the shareholders voting in favor of thepurchase offer approve the allocation. If the corporation has more than one (1)class or series of shares, however, the remaining holders of the class orseries of shares being purchased are entitled to a first option to purchase theshares not purchased by the corporation in proportion to their shareholdings orin some other proportion agreed to by all the shareholders participating in thepurchase.

 

(e) If price and other terms of a compulsory purchase of sharesare fixed or are to be determined by the articles of incorporation, bylaws, ora written agreement, the price and terms so fixed or determined govern thecompulsory purchase unless the purchaser defaults, in which event the buyer isentitled to commence a proceeding for dissolution under W.S. 17-17-116.

 

17-17-116. Court action to compel purchase.

 

 

(a) If an offer to purchase shares made under W.S. 17-17-115 isrejected, or if no offer is made, the person exercising the compulsory purchaseright may commence a proceeding against the corporation to compel the purchasein the district court of the county where the corporation's principal office,or, if none in this state, its registered office, is located. The corporationat its expense shall notify in writing all of its shareholders, and any otherperson the court directs, of the commencement of the proceeding. The jurisdictionof the court in which the proceeding is commenced under this subsection isplenary and exclusive.

 

(b) The court shall determine the fair value of the sharessubject to compulsory purchase in accordance with the standards set forth inW.S. 17-17-142 together with terms for the purchase. Upon making thesedeterminations the court shall order the corporation to purchase or cause thepurchase of the shares or empower the person exercising the compulsory purchaseright to have the corporation dissolved.

 

(c) After the purchase order is entered, the corporation maypetition the court to modify the terms of purchase and the court may do so ifit finds that changes in the financial or legal ability of the corporation orother purchaser to complete the purchase justify a modification.

 

(d) If the corporation or other purchaser does not make apayment required by the court's order within thirty (30) days of its due date,the seller may petition the court to dissolve the corporation and, absent ashowing of good cause for not making the payment, the court shall do so.

 

(e) A person making a payment to prevent or cure a default bythe corporation or other purchaser is entitled to recover the payment from thedefaulter.

 

17-17-117. Court costs and other expenses.

 

 

(a) The court in a proceeding commenced under W.S. 17-17-116shall determine the total costs of the proceeding, including the reasonablecompensation and expenses of appraisers appointed by the court and of counseland experts employed by the parties. Except as provided in subsection (b) ofthis section, the court shall assess these costs equally against thecorporation and the party exercising the compulsory purchase right.

 

(b) The court may assess all or a portion of the total costs ofthe proceeding:

 

(i) Against the person exercising the compulsory purchase rightif the court finds that the fair value of the shares does not substantiallyexceed the corporation's last purchase offer made before commencement of theproceeding and that the person's failure to accept the offer was arbitrary, orotherwise not in good faith; or

 

(ii) Against the corporation if the court finds that the fairvalue of the shares substantially exceeds the corporation's last sale offermade before commencement of the proceeding and that the offer was arbitrary, orotherwise not made in good faith.

 

17-17-120. Shareholder agreements.

 

 

(a) All the shareholders of a statutory close corporation mayagree in writing to regulate the exercise of the corporate powers and themanagement of the business and affairs of the corporation or the relationshipamong the shareholders of the corporation.

 

(b) An agreement authorized by this section is effectivealthough:

 

(i) It eliminates a board of directors;

 

(ii) It restricts the discretion or powers of the board orauthorizes director proxies or weighted voting rights;

 

(iii) Its effect is to treat the corporation as a partnership; or

 

(iv) It creates a relationship among the shareholders or betweenthe shareholders and the corporation that would otherwise be appropriate onlyamong partners.

 

(c) If the corporation has a board of directors, an agreementauthorized by this section restricting the discretion or powers of the boardrelieves directors of liability imposed by law, and imposes that liability oneach person in whom the board's discretion or power is vested, to the extentthat the discretion or powers of the board of directors are governed by theagreement.

 

(d) A provision eliminating a board of directors in anagreement authorized by this section is not effective unless the articles ofincorporation contain a statement to that effect as required by W.S. 17-17-121.

 

(e) A provision entitling one (1) or more shareholders todissolve the corporation under W.S. 17-17-133 is effective only if a statementof this right is contained in the articles of incorporation.

 

(f) To amend an agreement authorized by this section, all theshareholders must approve the amendment in writing unless the agreementprovides otherwise.

 

(g) Subscribers for shares may act as shareholders with respectto an agreement authorized by this section if shares are not issued when theagreement was made.

 

(h) This section does not prohibit any other agreement betweenor among shareholders in a statutory close corporation.

 

17-17-121. Elimination of board of directors.

 

 

(a) A statutory close corporation may operate without a boardof directors if its articles of incorporation contain a statement to thateffect.

 

(b) An amendment to articles of incorporation eliminating aboard of directors must be approved by all the shareholders of the corporation,whether or not otherwise entitled to vote on amendments, or if no shares havebeen issued, by all the subscribers for shares, if any, or if none, by all theincorporators.

 

(c) While a corporation is operating without a board ofdirectors as authorized by subsection (a) of this section:

 

(i) All corporate powers shall be exercised by or under theauthority of, and the business and affairs of the corporation managed under thedirection of, the shareholders;

 

(ii) Unless the articles of incorporation provide otherwise:

 

(A) Action requiring director approval or both director andshareholder approval is authorized if approved by the shareholders; and

 

(B) Action requiring a majority or greater percentage vote ofthe board of directors is authorized if approved by the majority or greaterpercentage of the votes of shareholders entitled to vote on the action.

 

(iii) A shareholder is not liable for his act or omission,although a director would be, unless the shareholder was entitled to vote onthe action;

 

(iv) A requirement by a state or the United States that adocument delivered for filing contain a statement that specified action hasbeen taken by the board of directors is satisfied by a statement that thecorporation is a statutory close corporation without a board of directors andthat the action was approved by the shareholders; and

 

(v) The shareholders by resolution may appoint one (1) or moreshareholders to sign documents as "designated directors."

 

(d) An amendment to articles of incorporation deleting thestatement eliminating a board of directors must be approved by the holders ofat least two-thirds (2/3) of the votes of each class or series of shares of thecorporation, voting as separate voting groups, whether or not otherwiseentitled to vote on amendments. The amendment must also specify the number,names and addresses of the corporation's directors or describe who will performthe duties of a board under W.S. 17-16-801.

 

17-17-122. Bylaws.

 

 

(a) A statutory close corporation need not adopt bylaws ifprovisions required by law to be contained in bylaws are contained in eitherthe articles of incorporation or a shareholder agreement authorized by W.S.17-17-120.

 

(b) If a corporation does not have bylaws when its statutoryclose corporation status terminates under W.S. 17-17-131, the corporation shallimmediately adopt bylaws under W.S. 17-16-206.

 

17-17-123. Annual meeting.

 

 

(a) The annual meeting date for a statutory close corporationis the last business day of the third month following the close of the businessyear unless its articles of incorporation, bylaws, or a shareholder agreementauthorized by W.S. 17-17-120 fixes a different date.

 

(b) A statutory close corporation need not hold an annualmeeting unless one (1) or more shareholders deliver written notice to thecorporation requesting a meeting at least thirty (30) days before the meetingdate determined under subsection (a) of this section.

 

17-17-124. Execution of documents in more than one capacity.

 

Notwithstandingany law to the contrary, an individual who holds more than one (1) office in astatutory close corporation may execute, acknowledge or verify in more than one(1) capacity any document required to be executed, acknowledged or verified bythe holders of two (2) or more offices.

 

17-17-125. Limited liability.

 

Thefailure of a statutory close corporation to observe the usual corporateformalities or requirements relating to the exercise of its corporate powers ormanagement of its business and affairs is not a ground for imposing personalliability on the shareholders for liabilities of the corporation.

 

17-17-130. Merger, consolidation, share exchange and sale of assets.

 

 

(a) A plan of merger, consolidation or share exchange that:

 

(i) If effected would terminate statutory close corporationstatus must be approved by the holders of at least two-thirds (2/3) of thevotes of each class or series of shares of the statutory close corporation,voting as separate voting groups, whether or not the holders are otherwiseentitled to vote on the plan;

 

(ii) If effected would create the surviving or new corporationas a statutory close corporation must be approved by the holders of at leasttwo-thirds (2/3) of the votes of each class or series of shares of thesurviving corporation, voting as separate voting groups, whether or not theholders are otherwise entitled to vote on the plan.

 

(b) A sale, lease, exchange, mortgage, encumbrance or otherdisposition of all or substantially all of the property, with or without thegood will, of a statutory close corporation, if not made in the usual andregular course of business, must be approved by the holders of at leasttwo-thirds (2/3) of the votes of each class or series of shares of thecorporation, voting as separate voting groups, whether or not the holders areotherwise entitled to vote on the transaction.

 

17-17-131. Termination of statutory close corporation status.

 

 

(a) A statutory close corporation may terminate its statutoryclose corporation status by amending its articles of incorporation to deletethe statement that it is a statutory close corporation. If the statutory closecorporation has elected to operate without a board of directors under W.S.17-17-121, the amendment must either comply with W.S. 17-16-801 or delete thestatement dispensing with the board of directors from its articles ofincorporation.

 

(b) An amendment terminating statutory close corporation statusmust be approved by the holders of at least two-thirds (2/3) of the votes ofeach class or series of shares of the corporation, voting as separate votinggroups, whether or not the holders are otherwise entitled to vote onamendments.

 

(c) If an amendment to terminate statutory close corporationstatus is adopted, each shareholder who voted against the amendment is entitledto assert dissenters' rights under W.S. 17-16-1301 through 17-16-1331.

 

17-17-132. Effect of termination of statutory close corporation status.

 

 

(a) A corporation that terminates its status as a statutoryclose corporation is thereafter subject to all provisions of the WyomingBusiness Corporation Act and, if incorporated under W.S. 17-3-101 through17-3-104, to all provisions of those statutes.

 

(b) Termination of statutory close corporation status does notaffect any right of a shareholder or of the corporation under an agreement orthe articles of incorporation unless this chapter, the Wyoming BusinessCorporation Act, or another law of this state invalidates the right.

 

17-17-133. Shareholder option to dissolve corporation.

 

 

(a) The articles of incorporation of a statutory closecorporation may authorize one (1) or more shareholders, or the holders of aspecified number or percentage of shares of any class or series, to dissolvethe corporation at will or upon the occurrence of a specified event orcontingency. The shareholder or shareholders exercising this authority mustgive written notice of the intent to dissolve to all the other shareholders. Sixty (60) days after the effective date of the notice, the corporation shallbegin to wind up and liquidate its business and affairs and file articles ofdissolution under W.S. 17-16-1403 through 17-16-1407.

 

(b) Unless the articles of incorporation provide otherwise, anamendment to the articles of incorporation to add, change or delete theauthority to dissolve described in subsection (a) of this section must beapproved by the holders of all the outstanding shares, whether or not otherwiseentitled to vote on amendments, or if no shares have been issued, by all thesubscribers for shares, if any, or if none, by all the incorporators.

 

17-17-140. Court action to protect shareholders.

 

 

(a) Subject to satisfying the conditions of subsections (c) and(d) of this section, a shareholder of a statutory close corporation maypetition the district court for any of the relief described in W.S. 17-17-141through 17-17-143 if:

 

(i) The directors or those in control of the corporation haveacted, are acting, or will act in a manner that is illegal, oppressive,fraudulent or unfairly prejudicial to the petitioner, whether in his capacityas shareholder, director or officer of the corporation;

 

(ii) The directors or those in control of the corporation aredeadlocked in the management of the corporation's affairs, the shareholders areunable to break the deadlock, and the corporation is suffering or will sufferirreparable injury or the business and affairs of the corporation can no longerbe conducted to the advantage of the shareholders generally because of thedeadlock; or

 

(iii) There exists one (1) or more grounds for judicialdissolution of the corporation under W.S. 17-16-1430.

 

(b) A shareholder must commence a proceeding under subsection(a) of this section in the district court of the county where the corporation'sprincipal office, or, if none in this state, its registered office, islocated. The jurisdiction of the court in which the proceeding is commenced isplenary and exclusive.

 

(c) If a shareholder has agreed in writing to pursue anonjudicial remedy to resolve disputed matters, he may not commence aproceeding under this section with respect to the matters until he has exhaustedthe nonjudicial remedy.

 

(d) If a shareholder has dissenters' rights under this chapteror W.S. 17-16-1301 through 17-16-1331 with respect to proposed corporateaction, he must commence a proceeding under this section before he is requiredto give notice of his intent to demand payment under W.S. 17-16-1321 or todemand payment under W.S. 17-16-1323 or the proceeding is barred.

 

(e) Except as provided in subsections (c) and (d) of thissection, a shareholder's right to commence a proceeding under this section andthe remedies available under W.S. 17-17-141 through 17-17-143 are in additionto any other right or remedy he may have.

 

17-17-141. Ordinary relief.

 

 

(a) If the court finds that one (1) or more of the grounds forrelief described in W.S. 17-17-140(a) exist, it may order such relief as itdeems appropriate including one (1) or more of the following types of relief:

 

(i) The performance, prohibition, alteration or setting asideof any action of the corporation or of its shareholders, directors, or officersor of any other party to the proceeding;

 

(ii) The cancellation or alteration of any provision in thecorporation's articles of incorporation or bylaws;

 

(iii) The removal from office of any director or officer;

 

(iv) The appointment of any individual as a director or officer;

 

(v) An accounting with respect to any matter in dispute;

 

(vi) The appointment of a custodian to manage the business andaffairs of the corporation;

 

(vii) The appointment of a provisional director who has all therights, powers and duties of a duly elected director to serve for the term andunder the conditions prescribed by the court;

 

(viii) The payment of dividends; or

 

(ix) The award of damages to any aggrieved party.

 

(b) If the court finds that a party to the proceeding actedarbitrarily, or otherwise not in good faith, it may award one (1) or more otherparties their reasonable expenses, including counsel fees and the expenses ofappraisers or other experts, incurred in the proceeding.

 

17-17-142. Extraordinary relief; share purchase.

 

 

(a) If the court finds that the ordinary relief described inW.S. 17-17-141(a) is or would be inadequate or inappropriate, it may order thecorporation dissolved under W.S. 17-17-143 unless the corporation or one (1) ormore of its shareholders purchases all the shares of the shareholder for theirfair value and on terms determined under subsection (b) of this section.

 

(b) If the court orders a share purchase, it shall:

 

(i) Determine the fair value of the shares, considering amongother relevant evidence the going concern value of the corporation, anyagreement among some or all of the shareholders fixing the price or specifyinga formula for determining share value for any purpose, the recommendations ofappraisers, if any, appointed by the court, and any legal constraints on thecorporation's ability to purchase the shares;

 

(ii) Specify the terms of the purchase, including if appropriateterms for installment payments, subordination of the purchase obligation to therights of the corporation's other creditors, security for a deferred purchaseprice, and a covenant not to compete or other restriction on the seller;

 

(iii) Require the seller to deliver all his shares to thepurchaser upon receipt of the purchase price or the first installment of thepurchase price;

 

(iv) Provide that after the seller delivers his shares he has nofurther claim against the corporation, its directors, officers or shareholders,other than a claim to any unpaid balance of the purchase price and a claimunder any agreement with the corporation or the remaining shareholders that isnot terminated by the court; and

 

(v) Provide that if the purchase is not completed in accordancewith the specified terms, the corporation is to be dissolved under W.S.17-17-143.

 

(c) After the purchase order is entered, any party may petitionthe court to modify the terms of the purchase and the court may do so if itfinds that changes in the financial or legal ability of the corporation orother purchaser to complete the purchase justify a modification.

 

(d) If the corporation is dissolved because the share purchasewas not completed in accordance with the court's order, the selling shareholderhas the same rights and priorities in the corporation's assets as if the salehad not been ordered.

 

17-17-143. Extraordinary relief; dissolution.

 

 

(a) The court may dissolve the corporation if it finds:

 

(i) There are one (1) or more grounds for judicial dissolutionunder W.S. 17-16-1430; or

 

(ii) All other relief ordered by the court under W.S. 17-17-141or 17-17-142 has failed to resolve the matters in dispute.

 

(b) In determining whether to dissolve the corporation, thecourt shall consider among other relevant evidence the financial condition ofthe corporation but may not refuse to dissolve solely because the corporationhas accumulated earnings or current operating profits.

 

17-17-150. Application to existing corporations.

 

Thischapter applies to all corporations electing statutory close corporation statusunder W.S. 17-17-103 after its effective date.

 

17-17-151. Reservation of power to amend or repeal.

 

Thelegislature has power to amend or repeal all or part of this chapter at anytime and all corporations subject to this chapter are governed by the amendmentor repeal.

 


State Codes and Statutes

State Codes and Statutes

Statutes > Wyoming > Title17 > Chapter17

CHAPTER 17 - CLOSE CORPORATION SUPPLEMENT

 

ARTICLE 1 - PROVISIONS

 

17-17-101. Short title.

 

Thischapter shall be known and may be cited as the "Wyoming Statutory CloseCorporation Supplement."

 

17-17-102. Application of Wyoming Business Corporation Act and theprovisions of W.S. 17-3-101 through 17-3-104.

 

 

(a) The Wyoming Business Corporation Act applies to statutoryclose corporations to the extent not inconsistent with the provisions of thischapter.

 

(b) This chapter applies to a professional corporationorganized under W.S. 17-3-101 through 17-3-104 whose articles of incorporationcontain the statement required by W.S. 17-17-103(a), except insofar as W.S.17-3-101 through 17-3-104 contain inconsistent provisions.

 

(c) This chapter does not repeal or modify any statute or ruleof law that is or would apply to a corporation that is organized under theWyoming Business Corporation Act and the provisions of W.S. 17-3-101 through17-3-104 and that does not elect to become a statutory close corporation underW.S. 17-17-103.

 

17-17-103. Definition and election of statutory close corporationstatus.

 

 

(a) A statutory close corporation is a corporation whosearticles of incorporation contain a statement that the corporation is astatutory close corporation.

 

(b) A corporation having thirty-five (35) or fewer shareholdersmay become a statutory close corporation by amending its articles ofincorporation to include the statement required by subsection (a) of this section. For corporations formed prior to January 1, 1990, the amendment shall beapproved by all of the holders of the votes of each class or series of sharesof the corporation, whether or not otherwise entitled to vote on amendments. For corporations formed on or after January 1, 1990, the amendment must beapproved by the holders of at least two-thirds (2/3) of the votes of each classor series of shares of the corporation, voting as separate voting groups,whether or not otherwise entitled to vote on amendments. If the amendment isadopted, a shareholder who voted against the amendment is entitled to assertdissenters' rights under W.S. 17-16-1301 through 17-16-1331.

 

17-17-110. Notice of statutory close corporations status on issuedshares.

 

 

(a) The following statement must appear conspicuously on eachshare certificate issued by a statutory close corporation:

 

The rights ofshareholders in a statutory close corporation may differ materially from therights of shareholders in other corporations. Copies of the articles ofincorporation and bylaws, shareholders' agreements, and other documents, any ofwhich may restrict transfers and affect voting and other rights, may beobtained by a shareholder on written request to the corporation.

 

(b) Within a reasonable time after the issuance or transfer ofuncertificated shares, the corporation shall send to the shareholders a writtennotice containing the information required by subsection (a) of this section.

 

(c) The notice required by this section satisfies allrequirements of this chapter and of W.S. 17-16-627 that notice of sharetransfer restrictions be given.

 

(d) A person claiming an interest in shares of a statutoryclose corporation which has complied with the notice requirement of thissection is bound by the documents referred to in the notice. A person claimingan interest in shares of a statutory close corporation which has not compliedwith the notice requirement of this section is bound by any documents of whichhe, or a person through whom he claims, has knowledge or notice.

 

(e) A corporation shall provide to any shareholder upon hiswritten request and without charge copies of provisions that restrict transferor affect voting or other rights of shareholders appearing in articles of incorporation,bylaws, or shareholders' or voting trust agreements filed with the corporation.

 

17-17-111. Share transfer prohibition.

 

 

(a) An interest in shares of a statutory close corporation maynot be voluntarily or involuntarily transferred, by operation of law orotherwise, except to the extent permitted by the articles of incorporation orunder W.S. 17-17-112 or pursuant to a buy-sell agreement entered into by allthe shareholders.

 

(b) Except to the extent the articles of incorporation provideotherwise, this section does not apply to a transfer:

 

(i) To the corporation or to any other holder of the same classor series of shares;

 

(ii) To members of the shareholder's immediate family, or to atrust, all of whose beneficiaries are members of the shareholder's immediatefamily, which immediate family consists of his spouse, parents, linealdescendants, including adopted children and stepchildren, and the spouse of anylineal descendant, and brothers and sisters;

 

(iii) That has been approved in writing by all of the holders ofthe corporation's shares having general voting rights;

 

(iv) To a personal representative upon the death of ashareholder or to a trustee or receiver as the result of a bankruptcy,insolvency, dissolution or similar proceeding brought by or against ashareholder;

 

(v) By merger, consolidation or share exchange under W.S.17-16-1101 through 17-16-1114, or an exchange of existing shares for othershares of a different class or series in the corporation;

 

(vi) By a pledge as collateral for a loan that does not grantthe pledgee any voting rights possessed by the pledgor; or

 

(vii) Made after termination of the corporation's status as astatutory close corporation.

 

17-17-112. Share transfer after first refusal by corporation.

 

 

(a) A person desiring to transfer shares of a statutory closecorporation subject to the transfer prohibition of W.S. 17-17-111 must firstoffer them to the corporation by obtaining an offer to purchase the shares forcash from a third person who is eligible to purchase the shares undersubsection (b) of this section. The offer by the third person must be inwriting and state the offeror's name and address, the number and class, orseries, of shares offered, the offering price per share, and the other terms ofthe offer.

 

(b) A third person is eligible to purchase the shares if:

 

(i) He is eligible to become a qualified shareholder under anyfederal or state tax statute the corporation has adopted and he agrees inwriting not to terminate his qualification without the approval of theremaining shareholders; and

 

(ii) His purchase of the shares will not impose a personalholding company tax or similar federal or state penalty tax on the corporation.

 

(c) The person desiring to transfer shares shall deliver theoffer to the corporation, and by doing so offers to sell the shares to thecorporation on the terms of the offer. Within twenty (20) days after thecorporation receives the offer, the corporation shall call a specialshareholders' meeting, to be held not more than forty (40) days after the call,to decide whether the corporation should purchase all, but not less than all,of the offered shares. The offer must be approved by the affirmative vote ofthe holders of a majority of votes entitled to be cast at the meeting,excluding votes in respect of the shares covered by the offer.

 

(d) The corporation must deliver to the offering shareholderwritten notice of acceptance within seventy-five (75) days after receiving theoffer or the offer is rejected. If the corporation makes a counteroffer, theshareholder must deliver to the corporation written notice of acceptance withinfifteen (15) days after receiving the counteroffer or the counteroffer isrejected. If the corporation accepts the original offer or the shareholderaccepts the corporation's counteroffer, the shareholder shall deliver to thecorporation duly endorsed certificates for the shares, or instruct thecorporation in writing to transfer the shares if uncertificated, within twenty(20) days after the effective date of the notice of acceptance. Thecorporation may specifically enforce the shareholder's delivery or instructionobligation under this subsection.

 

(e) A corporation accepting an offer to purchase shares under thissection may allocate some or all of the shares to one (1) or more of itsshareholders or to other persons if all the shareholders voting in favor of thepurchase approve the allocation. If the corporation has more than one (1)class or series of shares, however, the remaining holders of the class orseries of shares being purchased are entitled to a first option to purchase theshares not purchased by the corporation in proportion to their shareholdings orin some other proportion agreed to by all the shareholders participating in thepurchase.

 

(f) If an offer to purchase shares under this section isrejected, the offering shareholder, for a period of one hundred twenty (120)days after the corporation received his offer, is entitled to transfer to thethird person offeror all, but not less than all, of the offered shares inaccordance with the terms of his offer to the corporation.

 

17-17-113. Attempted share transfer in breach of prohibition.

 

 

(a) An attempt to transfer shares in a statutory closecorporation in violation of a prohibition against transfer binding on thetransferee is ineffective.

 

(b) An attempt to transfer shares in a statutory closecorporation in violation of a prohibition against transfer that is not bindingon the transferee, either because the notice required by W.S. 17-17-110 was notgiven or because the prohibition is held unenforceable by a court, gives thecorporation an option to purchase the shares from the transferee for the sameprice and on the same terms that he purchased them. To exercise its option,the corporation must give the transferee written notice within thirty (30) daysafter they are presented for registration in the transferee's name. Thecorporation may specifically enforce the transferee's sale obligation uponexercise of its purchase option.

 

17-17-114. Compulsory purchase of shares after death of shareholder.

 

(a) This section, and W.S. 17-17-115 through 17-17-117, applyto a statutory close corporation only if so provided in its articles of incorporation. If these sections apply, the personal representative of the estate or thesurviving joint tenant of a deceased shareholder may require the corporation topurchase or cause to be purchased all, but not less than all, of the decedent'sshares or jointly owned shares or to be dissolved.

 

(b) The provisions of W.S. 17-17-115 through 17-17-117 may bemodified only if the modification is set forth or referred to in the articlesof incorporation.

 

(c) An amendment to the articles of incorporation to providefor application of W.S. 17-17-115 through 17-17-117, or to modify or delete theprovisions of these sections, must be approved by the holders of at leasttwo-thirds (2/3) of the votes of each class or series of shares of thestatutory close corporation, voting as separate voting groups, whether or nototherwise entitled to vote on amendments. If the corporation has noshareholders when the amendment is proposed, it must be approved by at leasttwo-thirds (2/3) of the subscribers for shares, if any, or, if none, by all ofthe incorporators.

 

(d) A shareholder who votes against an amendment to modify ordelete the provisions of W.S. 17-17-115 through 17-17-117 is entitled todissenters' rights under W.S. 17-16-1301 through 17-16-1331 if the amendmentupon adoption terminates or substantially alters his existing rights underthese sections to have his shares purchased.

 

(e) A shareholder may waive his and his estate's rights underW.S. 17-17-115 through 17-17-117 by a signed writing.

 

(f) W.S. 17-17-115 through 17-17-117 do not prohibit any otheragreement providing for the purchase of shares upon a shareholder's death, nordo they prevent a shareholder from enforcing any remedy he has independent ofthese sections.

 

17-17-115. Exercise of compulsory purchase right.

 

 

(a) A person entitled and desiring to exercise the compulsorypurchase right described in W.S. 17-17-114 must deliver a written notice to thecorporation, within one hundred twenty (120) days after the death of theshareholder, describing the number and class or series of shares beneficiallyowned by the decedent and requesting that the corporation offer to purchase theshares.

 

(b) Within twenty (20) days after the effective date of thenotice, the corporation shall call a special shareholders' meeting, to be heldnot more than forty (40) days after the call, to decide whether the corporationshould offer to purchase the shares. A purchase offer must be approved by theaffirmative vote of the holders of a majority of votes entitled to be cast atthe meeting, excluding votes in respect of the shares covered by the notice.

 

(c) The corporation must deliver a purchase offer to the personrequesting it within seventy-five (75) days after the effective date of therequest notice. A purchase offer must be accompanied by the corporation'sbalance sheet as of the end of a fiscal year ending not more than sixteen (16)months before the effective date of the request notice, an income statement forthat year, a statement of changes in shareholders' equity for that year, andthe latest available interim financial statements, if any. The person mustaccept the purchase offer in writing within fifteen (15) days after receivingit or the offer is rejected.

 

(d) A corporation agreeing to purchase shares under thissection may allocate some or all of the shares to one (1) or more of itsshareholders or to other persons if all the shareholders voting in favor of thepurchase offer approve the allocation. If the corporation has more than one (1)class or series of shares, however, the remaining holders of the class orseries of shares being purchased are entitled to a first option to purchase theshares not purchased by the corporation in proportion to their shareholdings orin some other proportion agreed to by all the shareholders participating in thepurchase.

 

(e) If price and other terms of a compulsory purchase of sharesare fixed or are to be determined by the articles of incorporation, bylaws, ora written agreement, the price and terms so fixed or determined govern thecompulsory purchase unless the purchaser defaults, in which event the buyer isentitled to commence a proceeding for dissolution under W.S. 17-17-116.

 

17-17-116. Court action to compel purchase.

 

 

(a) If an offer to purchase shares made under W.S. 17-17-115 isrejected, or if no offer is made, the person exercising the compulsory purchaseright may commence a proceeding against the corporation to compel the purchasein the district court of the county where the corporation's principal office,or, if none in this state, its registered office, is located. The corporationat its expense shall notify in writing all of its shareholders, and any otherperson the court directs, of the commencement of the proceeding. The jurisdictionof the court in which the proceeding is commenced under this subsection isplenary and exclusive.

 

(b) The court shall determine the fair value of the sharessubject to compulsory purchase in accordance with the standards set forth inW.S. 17-17-142 together with terms for the purchase. Upon making thesedeterminations the court shall order the corporation to purchase or cause thepurchase of the shares or empower the person exercising the compulsory purchaseright to have the corporation dissolved.

 

(c) After the purchase order is entered, the corporation maypetition the court to modify the terms of purchase and the court may do so ifit finds that changes in the financial or legal ability of the corporation orother purchaser to complete the purchase justify a modification.

 

(d) If the corporation or other purchaser does not make apayment required by the court's order within thirty (30) days of its due date,the seller may petition the court to dissolve the corporation and, absent ashowing of good cause for not making the payment, the court shall do so.

 

(e) A person making a payment to prevent or cure a default bythe corporation or other purchaser is entitled to recover the payment from thedefaulter.

 

17-17-117. Court costs and other expenses.

 

 

(a) The court in a proceeding commenced under W.S. 17-17-116shall determine the total costs of the proceeding, including the reasonablecompensation and expenses of appraisers appointed by the court and of counseland experts employed by the parties. Except as provided in subsection (b) ofthis section, the court shall assess these costs equally against thecorporation and the party exercising the compulsory purchase right.

 

(b) The court may assess all or a portion of the total costs ofthe proceeding:

 

(i) Against the person exercising the compulsory purchase rightif the court finds that the fair value of the shares does not substantiallyexceed the corporation's last purchase offer made before commencement of theproceeding and that the person's failure to accept the offer was arbitrary, orotherwise not in good faith; or

 

(ii) Against the corporation if the court finds that the fairvalue of the shares substantially exceeds the corporation's last sale offermade before commencement of the proceeding and that the offer was arbitrary, orotherwise not made in good faith.

 

17-17-120. Shareholder agreements.

 

 

(a) All the shareholders of a statutory close corporation mayagree in writing to regulate the exercise of the corporate powers and themanagement of the business and affairs of the corporation or the relationshipamong the shareholders of the corporation.

 

(b) An agreement authorized by this section is effectivealthough:

 

(i) It eliminates a board of directors;

 

(ii) It restricts the discretion or powers of the board orauthorizes director proxies or weighted voting rights;

 

(iii) Its effect is to treat the corporation as a partnership; or

 

(iv) It creates a relationship among the shareholders or betweenthe shareholders and the corporation that would otherwise be appropriate onlyamong partners.

 

(c) If the corporation has a board of directors, an agreementauthorized by this section restricting the discretion or powers of the boardrelieves directors of liability imposed by law, and imposes that liability oneach person in whom the board's discretion or power is vested, to the extentthat the discretion or powers of the board of directors are governed by theagreement.

 

(d) A provision eliminating a board of directors in anagreement authorized by this section is not effective unless the articles ofincorporation contain a statement to that effect as required by W.S. 17-17-121.

 

(e) A provision entitling one (1) or more shareholders todissolve the corporation under W.S. 17-17-133 is effective only if a statementof this right is contained in the articles of incorporation.

 

(f) To amend an agreement authorized by this section, all theshareholders must approve the amendment in writing unless the agreementprovides otherwise.

 

(g) Subscribers for shares may act as shareholders with respectto an agreement authorized by this section if shares are not issued when theagreement was made.

 

(h) This section does not prohibit any other agreement betweenor among shareholders in a statutory close corporation.

 

17-17-121. Elimination of board of directors.

 

 

(a) A statutory close corporation may operate without a boardof directors if its articles of incorporation contain a statement to thateffect.

 

(b) An amendment to articles of incorporation eliminating aboard of directors must be approved by all the shareholders of the corporation,whether or not otherwise entitled to vote on amendments, or if no shares havebeen issued, by all the subscribers for shares, if any, or if none, by all theincorporators.

 

(c) While a corporation is operating without a board ofdirectors as authorized by subsection (a) of this section:

 

(i) All corporate powers shall be exercised by or under theauthority of, and the business and affairs of the corporation managed under thedirection of, the shareholders;

 

(ii) Unless the articles of incorporation provide otherwise:

 

(A) Action requiring director approval or both director andshareholder approval is authorized if approved by the shareholders; and

 

(B) Action requiring a majority or greater percentage vote ofthe board of directors is authorized if approved by the majority or greaterpercentage of the votes of shareholders entitled to vote on the action.

 

(iii) A shareholder is not liable for his act or omission,although a director would be, unless the shareholder was entitled to vote onthe action;

 

(iv) A requirement by a state or the United States that adocument delivered for filing contain a statement that specified action hasbeen taken by the board of directors is satisfied by a statement that thecorporation is a statutory close corporation without a board of directors andthat the action was approved by the shareholders; and

 

(v) The shareholders by resolution may appoint one (1) or moreshareholders to sign documents as "designated directors."

 

(d) An amendment to articles of incorporation deleting thestatement eliminating a board of directors must be approved by the holders ofat least two-thirds (2/3) of the votes of each class or series of shares of thecorporation, voting as separate voting groups, whether or not otherwiseentitled to vote on amendments. The amendment must also specify the number,names and addresses of the corporation's directors or describe who will performthe duties of a board under W.S. 17-16-801.

 

17-17-122. Bylaws.

 

 

(a) A statutory close corporation need not adopt bylaws ifprovisions required by law to be contained in bylaws are contained in eitherthe articles of incorporation or a shareholder agreement authorized by W.S.17-17-120.

 

(b) If a corporation does not have bylaws when its statutoryclose corporation status terminates under W.S. 17-17-131, the corporation shallimmediately adopt bylaws under W.S. 17-16-206.

 

17-17-123. Annual meeting.

 

 

(a) The annual meeting date for a statutory close corporationis the last business day of the third month following the close of the businessyear unless its articles of incorporation, bylaws, or a shareholder agreementauthorized by W.S. 17-17-120 fixes a different date.

 

(b) A statutory close corporation need not hold an annualmeeting unless one (1) or more shareholders deliver written notice to thecorporation requesting a meeting at least thirty (30) days before the meetingdate determined under subsection (a) of this section.

 

17-17-124. Execution of documents in more than one capacity.

 

Notwithstandingany law to the contrary, an individual who holds more than one (1) office in astatutory close corporation may execute, acknowledge or verify in more than one(1) capacity any document required to be executed, acknowledged or verified bythe holders of two (2) or more offices.

 

17-17-125. Limited liability.

 

Thefailure of a statutory close corporation to observe the usual corporateformalities or requirements relating to the exercise of its corporate powers ormanagement of its business and affairs is not a ground for imposing personalliability on the shareholders for liabilities of the corporation.

 

17-17-130. Merger, consolidation, share exchange and sale of assets.

 

 

(a) A plan of merger, consolidation or share exchange that:

 

(i) If effected would terminate statutory close corporationstatus must be approved by the holders of at least two-thirds (2/3) of thevotes of each class or series of shares of the statutory close corporation,voting as separate voting groups, whether or not the holders are otherwiseentitled to vote on the plan;

 

(ii) If effected would create the surviving or new corporationas a statutory close corporation must be approved by the holders of at leasttwo-thirds (2/3) of the votes of each class or series of shares of thesurviving corporation, voting as separate voting groups, whether or not theholders are otherwise entitled to vote on the plan.

 

(b) A sale, lease, exchange, mortgage, encumbrance or otherdisposition of all or substantially all of the property, with or without thegood will, of a statutory close corporation, if not made in the usual andregular course of business, must be approved by the holders of at leasttwo-thirds (2/3) of the votes of each class or series of shares of thecorporation, voting as separate voting groups, whether or not the holders areotherwise entitled to vote on the transaction.

 

17-17-131. Termination of statutory close corporation status.

 

 

(a) A statutory close corporation may terminate its statutoryclose corporation status by amending its articles of incorporation to deletethe statement that it is a statutory close corporation. If the statutory closecorporation has elected to operate without a board of directors under W.S.17-17-121, the amendment must either comply with W.S. 17-16-801 or delete thestatement dispensing with the board of directors from its articles ofincorporation.

 

(b) An amendment terminating statutory close corporation statusmust be approved by the holders of at least two-thirds (2/3) of the votes ofeach class or series of shares of the corporation, voting as separate votinggroups, whether or not the holders are otherwise entitled to vote onamendments.

 

(c) If an amendment to terminate statutory close corporationstatus is adopted, each shareholder who voted against the amendment is entitledto assert dissenters' rights under W.S. 17-16-1301 through 17-16-1331.

 

17-17-132. Effect of termination of statutory close corporation status.

 

 

(a) A corporation that terminates its status as a statutoryclose corporation is thereafter subject to all provisions of the WyomingBusiness Corporation Act and, if incorporated under W.S. 17-3-101 through17-3-104, to all provisions of those statutes.

 

(b) Termination of statutory close corporation status does notaffect any right of a shareholder or of the corporation under an agreement orthe articles of incorporation unless this chapter, the Wyoming BusinessCorporation Act, or another law of this state invalidates the right.

 

17-17-133. Shareholder option to dissolve corporation.

 

 

(a) The articles of incorporation of a statutory closecorporation may authorize one (1) or more shareholders, or the holders of aspecified number or percentage of shares of any class or series, to dissolvethe corporation at will or upon the occurrence of a specified event orcontingency. The shareholder or shareholders exercising this authority mustgive written notice of the intent to dissolve to all the other shareholders. Sixty (60) days after the effective date of the notice, the corporation shallbegin to wind up and liquidate its business and affairs and file articles ofdissolution under W.S. 17-16-1403 through 17-16-1407.

 

(b) Unless the articles of incorporation provide otherwise, anamendment to the articles of incorporation to add, change or delete theauthority to dissolve described in subsection (a) of this section must beapproved by the holders of all the outstanding shares, whether or not otherwiseentitled to vote on amendments, or if no shares have been issued, by all thesubscribers for shares, if any, or if none, by all the incorporators.

 

17-17-140. Court action to protect shareholders.

 

 

(a) Subject to satisfying the conditions of subsections (c) and(d) of this section, a shareholder of a statutory close corporation maypetition the district court for any of the relief described in W.S. 17-17-141through 17-17-143 if:

 

(i) The directors or those in control of the corporation haveacted, are acting, or will act in a manner that is illegal, oppressive,fraudulent or unfairly prejudicial to the petitioner, whether in his capacityas shareholder, director or officer of the corporation;

 

(ii) The directors or those in control of the corporation aredeadlocked in the management of the corporation's affairs, the shareholders areunable to break the deadlock, and the corporation is suffering or will sufferirreparable injury or the business and affairs of the corporation can no longerbe conducted to the advantage of the shareholders generally because of thedeadlock; or

 

(iii) There exists one (1) or more grounds for judicialdissolution of the corporation under W.S. 17-16-1430.

 

(b) A shareholder must commence a proceeding under subsection(a) of this section in the district court of the county where the corporation'sprincipal office, or, if none in this state, its registered office, islocated. The jurisdiction of the court in which the proceeding is commenced isplenary and exclusive.

 

(c) If a shareholder has agreed in writing to pursue anonjudicial remedy to resolve disputed matters, he may not commence aproceeding under this section with respect to the matters until he has exhaustedthe nonjudicial remedy.

 

(d) If a shareholder has dissenters' rights under this chapteror W.S. 17-16-1301 through 17-16-1331 with respect to proposed corporateaction, he must commence a proceeding under this section before he is requiredto give notice of his intent to demand payment under W.S. 17-16-1321 or todemand payment under W.S. 17-16-1323 or the proceeding is barred.

 

(e) Except as provided in subsections (c) and (d) of thissection, a shareholder's right to commence a proceeding under this section andthe remedies available under W.S. 17-17-141 through 17-17-143 are in additionto any other right or remedy he may have.

 

17-17-141. Ordinary relief.

 

 

(a) If the court finds that one (1) or more of the grounds forrelief described in W.S. 17-17-140(a) exist, it may order such relief as itdeems appropriate including one (1) or more of the following types of relief:

 

(i) The performance, prohibition, alteration or setting asideof any action of the corporation or of its shareholders, directors, or officersor of any other party to the proceeding;

 

(ii) The cancellation or alteration of any provision in thecorporation's articles of incorporation or bylaws;

 

(iii) The removal from office of any director or officer;

 

(iv) The appointment of any individual as a director or officer;

 

(v) An accounting with respect to any matter in dispute;

 

(vi) The appointment of a custodian to manage the business andaffairs of the corporation;

 

(vii) The appointment of a provisional director who has all therights, powers and duties of a duly elected director to serve for the term andunder the conditions prescribed by the court;

 

(viii) The payment of dividends; or

 

(ix) The award of damages to any aggrieved party.

 

(b) If the court finds that a party to the proceeding actedarbitrarily, or otherwise not in good faith, it may award one (1) or more otherparties their reasonable expenses, including counsel fees and the expenses ofappraisers or other experts, incurred in the proceeding.

 

17-17-142. Extraordinary relief; share purchase.

 

 

(a) If the court finds that the ordinary relief described inW.S. 17-17-141(a) is or would be inadequate or inappropriate, it may order thecorporation dissolved under W.S. 17-17-143 unless the corporation or one (1) ormore of its shareholders purchases all the shares of the shareholder for theirfair value and on terms determined under subsection (b) of this section.

 

(b) If the court orders a share purchase, it shall:

 

(i) Determine the fair value of the shares, considering amongother relevant evidence the going concern value of the corporation, anyagreement among some or all of the shareholders fixing the price or specifyinga formula for determining share value for any purpose, the recommendations ofappraisers, if any, appointed by the court, and any legal constraints on thecorporation's ability to purchase the shares;

 

(ii) Specify the terms of the purchase, including if appropriateterms for installment payments, subordination of the purchase obligation to therights of the corporation's other creditors, security for a deferred purchaseprice, and a covenant not to compete or other restriction on the seller;

 

(iii) Require the seller to deliver all his shares to thepurchaser upon receipt of the purchase price or the first installment of thepurchase price;

 

(iv) Provide that after the seller delivers his shares he has nofurther claim against the corporation, its directors, officers or shareholders,other than a claim to any unpaid balance of the purchase price and a claimunder any agreement with the corporation or the remaining shareholders that isnot terminated by the court; and

 

(v) Provide that if the purchase is not completed in accordancewith the specified terms, the corporation is to be dissolved under W.S.17-17-143.

 

(c) After the purchase order is entered, any party may petitionthe court to modify the terms of the purchase and the court may do so if itfinds that changes in the financial or legal ability of the corporation orother purchaser to complete the purchase justify a modification.

 

(d) If the corporation is dissolved because the share purchasewas not completed in accordance with the court's order, the selling shareholderhas the same rights and priorities in the corporation's assets as if the salehad not been ordered.

 

17-17-143. Extraordinary relief; dissolution.

 

 

(a) The court may dissolve the corporation if it finds:

 

(i) There are one (1) or more grounds for judicial dissolutionunder W.S. 17-16-1430; or

 

(ii) All other relief ordered by the court under W.S. 17-17-141or 17-17-142 has failed to resolve the matters in dispute.

 

(b) In determining whether to dissolve the corporation, thecourt shall consider among other relevant evidence the financial condition ofthe corporation but may not refuse to dissolve solely because the corporationhas accumulated earnings or current operating profits.

 

17-17-150. Application to existing corporations.

 

Thischapter applies to all corporations electing statutory close corporation statusunder W.S. 17-17-103 after its effective date.

 

17-17-151. Reservation of power to amend or repeal.

 

Thelegislature has power to amend or repeal all or part of this chapter at anytime and all corporations subject to this chapter are governed by the amendmentor repeal.

 

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