2010 Pennsylvania Code
Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS
Chapter 25 - Registered Corporations
2541 - Application and effect of subchapter.

                               SUBCHAPTER E
                           CONTROL TRANSACTIONS

     Sec.
     2541.  Application and effect of subchapter.
     2542.  Definitions.
     2543.  Controlling person or group.
     2544.  Right of shareholders to receive payment for shares.
     2545.  Notice to shareholders.
     2546.  Shareholder demand for fair value.
     2547.  Valuation procedures.
     2548.  Coordination with control transaction.

        Effect of 1990 Amendments on Control Transactions.  Section
     8(c) of Act 36 of 1990 provided that, other than section 5 of
     Act 36 (section 2542), nothing contained in Act 36 shall be
     construed as having, or be deemed to have, any effect on the
     existing practice under Subchapter E or the interpretation,
     construction, scope or applicability of Subchapter E or as
     expressing any agreement or disagreement with any court
     interpretation relating to Subchapter E.
        Cross References.  Subchapter E is referred to in sections
     1715, 1903, 1924, 1953, 2501, 2551, 2575 of this title.
     § 2541.  Application and effect of subchapter.
        (a)  General rule.--Except as otherwise provided in this
     section, this subchapter shall apply to a registered corporation
     unless:
            (1)  the registered corporation is one described in
        section 2502(1)(ii) or (2) (relating to registered
        corporation status);
            (2)  the bylaws, by amendment adopted either:
                (i)  by March 23, 1984; or
                (ii)  on or after March 23, 1988, and on or before
            June 21, 1988;
        and, in either event, not subsequently rescinded by an
        article amendment, explicitly provide that this subchapter
        shall not be applicable to the corporation in the case of a
        corporation which on June 21, 1988, did not have outstanding
        one or more classes or series of preference shares entitled,
        upon the occurrence of a default in the payment of dividends
        or another similar contingency, to elect a majority of the
        members of the board of directors (a bylaw adopted on or
        before June 21, 1988, by a corporation excluded from the
        scope of this paragraph by the restriction of this paragraph
        relating to certain outstanding preference shares shall be
        ineffective unless ratified under paragraph (3));
            (3)  the bylaws of which explicitly provide that this
        subchapter shall not be applicable to the corporation by
        amendment ratified by the board of directors on or after
        December 19, 1990, and on or before March 19, 1991, in the
        case of a corporation:
                (i)  which on June 21, 1988, had outstanding one or
            more classes or series of preference shares entitled,
            upon the occurrence of a default in the payment of
            dividends or another similar contingency, to elect a
            majority of the members of the board of directors; and
                (ii)  the bylaws of which on that date contained a
            provision described in paragraph (2); or
            (4)  the articles explicitly provide that this subchapter
        shall not be applicable to the corporation by a provision
        included in the original articles, by an article amendment
        adopted prior to the date of the control transaction and
        prior to or on March 23, 1988, pursuant to the procedures
        then applicable to the corporation, or by an articles
        amendment adopted prior to the date of the control
        transaction and subsequent to March 23, 1988, pursuant to
        both:
                (i)  the procedures then applicable to the
            corporation; and
                (ii)  unless such proposed amendment has been
            approved by the board of directors of the corporation, in
            which event this subparagraph shall not be applicable,
            the affirmative vote of the shareholders entitled to cast
            at least 80% of the votes which all shareholders are
            entitled to cast thereon.
     A reference in the articles or bylaws to former section 910
     (relating to right of shareholders to receive payment for shares
     following a control transaction) of the act of May 5, 1933
     (P.L.364, No.106), known as the Business Corporation Law of
     1933, shall be deemed a reference to this subchapter for the
     purposes of this section. See section 101(c) (relating to
     references to prior statutes).
        (b)  Inadvertent transactions.--This subchapter shall not
     apply to any person or group that inadvertently becomes a
     controlling person or group if that controlling person or group,
     as soon as practicable, divests itself of a sufficient amount of
     its voting shares so that it is no longer a controlling person
     or group.
        (c)  Certain subsidiaries.--This subchapter shall not apply
     to any corporation that on December 23, 1983, was a subsidiary
     of any other corporation.
        (d)  Rights cumulative.--(Deleted by amendment).
     (Dec. 19, 1990, P.L.834, No.198, eff. imd.; Dec. 18, 1992,
     P.L.1333, No.169, eff. 60 days)

        1992 Amendment.  Act 169 deleted subsec. (d).
        1990 Amendment.  Act 198 amended subsec. (a).
        Cross References.  Section 2541 is referred to in section
     1106 of this title.