2021 Georgia Code
Title 14 - Corporations, Partnerships, and Associations
Chapter 2 - Business Corporations
Article 12 - Sale of Assets
§ 14-2-1201. Sale and Mortgage of Assets Not Requiring Shareholder Approval

1. As used in this Code section, the term "insolvent" means:
   1. The corporation would not be able to pay its debts as they become due in the usual course of business; or
   2. The corporation's total assets would be less than the sum of its total liabilities.
2. A corporation may, on the terms and conditions and for the consideration determined by the board of directors:
   1. Sell, lease, exchange, or otherwise dispose of all or substantially all of its property if:
      1. The corporation is insolvent and a sale for cash or its equivalent is deemed advisable by the board to meet the liabilities of the corporation; or
      2. The corporation was incorporated for the purpose of liquidating such property and assets;
   2. Mortgage, pledge, dedicate to the repayment of indebtedness, whether with or without recourse, or otherwise encumber any or all of its property whether or not in the usual and regular course of business;
   3. Transfer any or all of its property to a corporation all the shares of which are owned by the corporation; or
   4. Sell, lease, exchange, or otherwise dispose of less than all or substantially all of its property. Assets shall be deemed to be less than substantially all of a corporation's property if the fair value of the assets as of the date of the most recent available financial information does not exceed two-thirds of the fair value of all of the assets of the corporation, and the annual revenues of the corporation for the most recent fiscal year for which such financial information is available represented or produced by such assets do not exceed two-thirds of the total revenues of the corporation for that period. This subsection is intended merely to create an irrebuttable presumption with respect to transactions described in this subsection and shall not create any inference that the sale of assets exceeding the amounts described in this subsection is the sale of substantially all of the property of the corporation.
3. Unless the articles of incorporation require it, approval by the shareholders of a transaction described in subsection (b) of this Code section is not required.

(Code 1981, §14-2-1201, enacted by Ga. L. 1988, p. 1070, § 1; Ga. L. 1989, p. 946, § 57.)

- For article discussing issuance of debt securities under the Georgia Business Corporation Code, see 3 Ga. L. Rev. 11 (1968). For article, "The Acquisition Process and the Closely-Held Corporation: Selected Legal Aspects," see 36 Mercer L. Rev. 567 (1985).

RESEARCH REFERENCES

ALR.

- Power of directors to sell property of corporation without consent of stockholders, 5 A.L.R. 930; 60 A.L.R. 1210.

Trademark or tradename as asset in case of bankruptcy, insolvency, or assignment for benefit of creditors, 44 A.L.R. 706.

Validity, construction, and application of express restrictions on right of action by individual holder of one or more of a series of corporate bonds or other obligations, 108 A.L.R. 88; 174 A.L.R. 435.

Instrument issued by a corporation as certificate of preferred stock or as evidence of indebtedness, 123 A.L.R. 856.

Applicability of statutes regulating sale of assets or property of corporation as affected by purpose or character of corporation, 9 A.L.R.2d 1306.

Conditions accompanying or following dissolution of lessee corporation, as breach of covenant against assignment or sublease, 12 A.L.R.2d 179.

Valuation of stock of dissenting stockholders in case of consolidation or merger of corporation, sale of its assets, or the like, 48 A.L.R.3d 430.

Liability of director or dominant shareholder for enforcing debt legally owed him by corporation, 56 A.L.R.3d 212.

Loss on sale of securities by corporate taxpayer as fully deductible trade or business expense under 26 U.S.C. § 162(a) or uncompensated loss under 26 U.S.C. § 165(a), or as partially deductible loss incurred on sale of capital asset under 26 U.S.C. § 165(f), 34 A.L.R. Fed. 699.

When is nonbusiness debt "worthless" so as to be considered loss from sale or exchange of capital asset under 26 U.S.C. § 166(d)(1)(B), 169 A.L.R. Fed. 1