Sec. 2. (a) A sale,
lease, exchange, or other disposition of
assets, other than a disposition described in section 1 of this chapter, requires approval of the
corporation‘s shareholders if the disposition would leave the corporation without a significant continuing business activity. If a corporation retains a business activity that represented at least twenty-five percent (25%) of total assets at the end of the most recently completed
fiscal year, and twenty-five percent (25%) of either income from continuing operations before taxes or revenues from continuing operations for the fiscal
year, in each case of the corporation and the corporation’s subsidiaries on a consolidated basis, the corporation is conclusively considered to have retained a significant continuing business activity.
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Terms Used In Indiana Code 23-1-41-2
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Quorum: The number of legislators that must be present to do business.
- Year: means a calendar year, unless otherwise expressed. See Indiana Code 1-1-4-5
(c) The board of directors may condition the board of directors’ submission of a disposition to the shareholders under subsection (b) on any basis.
(d) If:
(1) a disposition is required to be approved by the shareholders under subsection (a); and
(2) the approval is to be given at a meeting;
the corporation shall notify each shareholder, whether the shareholder is entitled to vote, of the meeting of shareholders at which the disposition is to be submitted for approval in accordance with IC 23-1-29-5. The notice must state that the purpose or one (1) of the purposes of the meeting is to consider the disposition and must contain a description of the disposition, including the terms and conditions of the disposition and the consideration to be received by the corporation.
(e) Unless the articles of incorporation or the board of directors (acting under subsection (c)) requires a greater vote, or a greater number of votes to be present, the approval of a disposition by the shareholders requires the approval of the shareholders at a meeting at which a quorum consisting of at least a majority of the votes entitled to be cast on the disposition exists.
(f) After a disposition has been approved by the shareholders under subsection (b), and at any time before the disposition has been consummated, the disposition may be abandoned by the corporation without action by the shareholders, subject to any contractual rights of other parties to the disposition.
(g) A disposition that constitutes a distribution is governed by IC 23-1-28 and not by this section.
(h) A disposition of assets in the course of dissolution under IC 23-0.5-6, IC 23-1-45, IC 23-1-46 (before its repeal), IC 23-1-47, or IC 23-1-48 is not governed by this section.
(i) The assets of a direct or indirect consolidated subsidiary shall be considered the assets of the parent corporation for the purposes of this section.
As added by P.L.149-1986, SEC.25. Amended by P.L.133-2009, SEC.35; P.L.118-2017, SEC.19.
