Iowa Code 490.152 – Judicial proceedings regarding validity of corporate actions
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1. Upon application by the corporation, any successor entity to the corporation, a director of the corporation, any shareholder, beneficial shareholder, or unrestricted voting trust beneficial owner of the corporation, including any such shareholder, beneficial shareholder, or unrestricted voting trust beneficial owner as of the date of the defective corporate action ratified under section 490.147, or any other person claiming to be substantially and adversely affected by a ratification under section 490.147, the district court of the county where a corporation’s principal office or, if none in this state, its registered office is located may do all of the following:
a. Determine the validity and effectiveness of any corporate action or defective corporate action.
b. Determine the validity and effectiveness of any ratification under section 490.147.
c. Determine the validity of any putative shares.
d. Modify or waive any of the procedures specified in section 490.147 or 490.148 to ratify a defective corporate action.
Terms Used In Iowa Code 490.152
- Beneficial shareholder: means a person who owns the beneficial interest in shares, which may be a record shareholder or a person on whose behalf shares are registered in the name of an intermediary or nominee. See Iowa Code 490.140
- Corporate action: means any action taken by or on behalf of the corporation, including any action taken by the incorporator, the board of directors, a committee of the board of directors, an officer or agent of the corporation, or the shareholders. See Iowa Code 490.145
- 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.
- Defective corporate action: means all of the following:a. See Iowa Code 490.145
- Entity: includes a domestic and foreign business corporation; domestic and foreign nonprofit corporation; estate; trust; domestic and foreign unincorporated entity; and a state, the United States, and a foreign government. See Iowa Code 490.140
- following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
- Person: means a person as defined in section 4. See Iowa Code 490.140
- Principal office: means the office, in or out of this state, so designated in the biennial report required by section 490. See Iowa Code 490.140
- Putative shares: means the shares of any class or series, including shares issued upon exercise of rights, options, warrants or other securities convertible into shares of the corporation, or interests with respect to such shares, that were created or issued as a result of a defective corporate action, and any of the following applies:
a. See Iowa Code 490.145- Rule: includes "regulation". See Iowa Code 4.1
- Shareholder: means a record shareholder. See Iowa Code 490.140
- Shares: means the units into which the proprietary interests in a domestic or foreign corporation are divided. See Iowa Code 490.140
- state: when applied to the different parts of the United States, includes the District of Columbia and the territories, and the words "United States" may include the said district and territories. See Iowa Code 4.1
- Statute: A law passed by a legislature.
- Unrestricted voting trust beneficial owner: means , with respect to any shareholder rights, a voting trust beneficial owner whose entitlement to exercise the shareholder right in question is not inconsistent with the voting trust agreement. See Iowa Code 490.140
- Voting trust beneficial owner: means an owner of a beneficial interest in shares of the corporation held in a voting trust established pursuant to section 490. See Iowa Code 490.140
2. In connection with an action under this section, the court may make such findings or orders, and take into account any factors or considerations, regarding such matters as it deems proper under the circumstances.3. Service of process of the application under subsection 1 on the corporation may be made in any manner provided by statute of this state or by rule of the applicable court for service on the corporation, and no other party need be joined in order for the court to adjudicate the matter. In an action filed by the corporation, the court may require notice of the action to be provided to other persons specified by the court and permit such other persons to intervene in the action.4. Notwithstanding any other provision of this section or otherwise under applicable law, any action asserting that the ratification of any defective corporate action and any putative shares issued as a result of such defective corporate action should not be effective, or should be effective only on certain conditions, shall be brought within one hundred twenty days of the validation effective time.