Originally from:
Advising Minnesota Corporations and Other Business Organizations - 2nd Edition - Hardcover
Advising Minnesota Corporations and Other Business Organizations - 2nd Edition - Electronic
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CHAPTER 27
SHARE ISSUANCE DOCUMENTATION
Section
§ 27.01 Statutory Summary and Purpose of Share Certificates
§ 27.02 Legal Effect
§ 27.03 Contents Required
§ 27.04 Corporate Control and Minority Rights--Power to Issue Shares
§ 27.05 --Restrictions on Transfer after Issuance
§ 27.06 --Filing Process
§ 27.07 --Record Keeping
§ 27.01 Statutory Summary and Purpose of Share Certificates
Corporate shares may be either certificated or uncertificated.1 If the
corporation has the power to issue both kinds, then the board must
designate particular shares as “certificated” or “uncertificated” at the
time of issuance.
Every holder of certificated shares is entitled to a certificate.2 A
holder of certificated, nonassessable3 shares is entitled to a certificate of
shares which contains certain information.4 If a share is uncertificated,
then the information must be provided to the shareholder within a
reasonable time after issuance or transfer of the uncertificated shares.5
Either the articles of incorporation or the bylaws may prohibit the
issuance of uncertificated shares. Otherwise, uncertificated shares may
be approved for all or any combination of any or all series or classes of
shares by the affirmative vote of a majority of directors present.6
Uncertificated shares are undesirable for securities laws and other
reasons in large, publicly held corporations, but are fairly common in
small, privately held corporations. Within a reasonable time after
issuance of uncertificated shares, a corporation must send the shareholder
the information required to be stated on share certificates.7
The board of directors by resolution also may convert any issued and
outstanding certificated shares into uncertificated shares, but the
conversion is not effective until the shareholder surrenders the certificate
to the corporation. If the shareholder refuses surrender, the shares remain
certificated.8
Roger J. Magnuson is a Partner at Dorsey and Whitney, LLP, where he serves as Head of the National Strategic Litigation Group and has practiced since 1973. He has been recognized as one of the top trial lawyers in the United States by major national and international publications, including Chambers International Guide to American Lawyers, which profiles the top 500 trial lawyers in the United States, Best Lawyers in America, Who's Who in American Law, and Who's Who in America. Mr. Magnuson was also recognized by a Journal of Law and Politics' survey for Judge's Choice "Wins Most Cases."
Some high profile cases that he has litigated include representation of the Florida Senate in the Bush v. Gore election controversy in 2000; and representation of the Plaintiffs in the widely publicized and studied Mall of America case. For several years he has represented, among other persons and entities, the Minnesota Twins and Major League Baseball principals and players in litigation; and has litigated national and local cases in federal and state court venues. He has appealed before the Supreme Court in a number of cases; as well as the Minnesota Supreme Court. He has authored several articles and 7 books.
Richard A. Saliterman is a Principal in Saliternan & Siefferman P.C., a full-service firm in Minneapolis established in 1976. Mr. Saliterman is a leading expert on corporate business matters, and is the author of several publications on business start-ups, franchises, and trademarks. Mr. Saliterman is the former National Judge Advocate for the U.S. Navy League, based in Washington D.C.
Contributing Editor:
Amanda Chang
Contributing Authors:
Alecia Anderson
Seth Back
John Baker
Shannon Berg
Constatin Burachek
Benjamin Carpenter
Ryan Check
Carl Christensen
Peter Fear
Michael Frasier
Aaron Hall
Catherine Hanson
Paul Harman
Amy Ithlan
Michael Kern
Chris Kuhlman