Iowa Code 490.601 – Authorized shares
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1. The articles of incorporation must set forth any classes of shares and series of shares within a class, and the number of shares of each class and series, that the corporation is authorized to issue. If more than one class or series of shares is authorized, the articles of incorporation must prescribe a distinguishing designation for each class or series and, before the issuance of shares of a class or series, describe the terms, including the preferences, rights, and limitations of that class or series. Except to the extent varied as permitted by this section, all shares of a class or series must have terms, including preferences, rights, and limitations that are identical with those of other shares of the same class or series.
Terms Used In Iowa Code 490.601
- Articles of incorporation: means the articles of incorporation described in section 490. See Iowa Code 490.140
- 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.
- Dependent: A person dependent for support upon another.
- 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
- property: includes personal and real property. 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
2. The articles of incorporation must authorize all of the following:
a. One or more classes or series of shares that together have full voting rights.
b. One or more classes or series of shares, which may be the same class, classes, or series as those with voting rights, that together are entitled to receive the net assets of the corporation upon dissolution.
3. The articles of incorporation may authorize one or more classes or series of shares that have any of the following characteristics:
a. Have special, conditional, or limited voting rights, or no right to vote, except to the extent otherwise provided by this chapter.
b. Are redeemable or convertible as specified in the articles of incorporation in any of the following ways:
(1) At the option of the corporation, the shareholder, or another person or upon the occurrence of a specified event.
(2) For cash, indebtedness, securities, or other property.
(3) At prices and in amounts specified or determined in accordance with a formula.
c. Entitle the holders to distributions calculated in any manner, including dividends that may be cumulative, noncumulative, or partially cumulative.
d. Have preference over any other class or series of shares with respect to distributions, including distributions upon the dissolution of the corporation.
4. The terms of shares may be made dependent upon facts objectively ascertainable outside the articles of incorporation in accordance with section 490.120, subsection 11.
5. Any of the terms of shares may vary among holders of the same class or series so long as such variations are expressly set forth in the articles of incorporation.
6. The description of the preferences, rights, and limitations of classes or series of shares in subsection 3 is not exhaustive.