2021 Georgia Code
Title 14 - Corporations, Partnerships, and Associations
Chapter 2 - Business Corporations
Article 6 - Shares and Distributions
Part 3 - Subsequent Acquisition of Shares by Shareholders and Corporation
§ 14-2-631. Corporation's Acquisition of Its Own Shares

1. A corporation may acquire its own shares and shares so acquired constitute authorized but unissued shares, unless the articles of incorporation provide that reacquired shares become treasury shares or prohibit the reissue of reacquired shares.
2. If the articles of incorporation prohibit the reissue of acquired shares, the number of authorized shares is reduced by the number of shares acquired, effective upon amendment of the articles of incorporation.
3. The board of directors may adopt articles of amendment under this Code section without shareholder action. The articles must set forth:
   1. The reduction in the number of authorized shares, itemized by class and series; and
   2. The total number of authorized shares, itemized by class and series, remaining after reduction of the shares.
4. The board of directors may adopt articles of amendment providing that reacquired shares become treasury shares without shareholder action.
5. A corporation may create security interests in treasury shares.

(Code 1981, §14-2-631, enacted by Ga. L. 1988, p. 1070, § 1; Ga. L. 1989, p. 946, § 20; Ga. L. 1997, p. 1165, § 3.)

- For article discussing the rights of a corporation to acquire, encumber, and dispose of its own shares under the Georgia Business Corporation Code, see 3 Ga. L. Rev. 11 (1968). For article discussing treasury shares and restrictions placed upon their use by the corporation, see 3 Ga. L. Rev. 11 (1968). For article discussing "earned" surplus and "capital" surplus concepts under Georgia Business Corporation Code, see 3 Ga. L. Rev. 11 (1968). For article discussing the issuance of and limitations on redeemable shares under the Georgia Business Corporation Code, see 3 Ga. L. Rev. 11 (1968). For article, "Estate Planning: The Use of Insurance to Fund Stock Purchase Agreements," see 9 Ga. St. B. J. 303 (1973). For article, "Some Distinctive Features of the Georgia Business Corporation Code," 28 Ga. St. B. J. 101 (1991).

RESEARCH REFERENCES

Am. Jur. 2d.

- 18A Am. Jur. 2d, Corporations, § 391. 18B Am. Jur. 2d, Corporations, § 1755 et seq.

- 18 C.J.S., Corporations, § 204. 19 C.J.S., Corporations, § 660 et seq.

- Unwarranted payment of dividends as ground for ousting foreign corporation, 41 A.L.R. 997.

Transfer of bank or other corporate stock to corporation issuing it, as releasing transferrer from stockholders' statutory added liability, 86 A.L.R. 72.

Validity, construction, and effect of provisions of articles of incorporation or certificates of stock relating to redemption or retirement of stock, 88 A.L.R. 1131.

Voting power of corporation stock as confined to issued and outstanding stock to exclusion of authorized unissued stock or stock which has been reacquired by the corporation, 90 A.L.R. 315.

Validity and effect of agreement by a corporation contemporaneously with issue or sale of stock, to repurchase or redeem the stock or to cancel the subscription therefor and refund consideration paid, 101 A.L.R. 154.

Issuance by corporation of new stock certificates without requiring surrender of old, 150 A.L.R. 148.

Reduction of capital stock and distribution of capital assets upon reduction, 35 A.L.R.2d 1149.

Minority stockholders' right to enjoin further or additional issuance of stock, 38 A.L.R.2d 1366.

Rights of creditors of corporation with respect to its purchase or acquisition of its own stock, 47 A.L.R.2d 758.

Transfer of, and voting rights in, stock of co-operative apartment association, 99 A.L.R.2d 236.

Construction and operation of statute restricting corporation's right to purchase its own stock to purchase from surplus, 61 A.L.R.3d 1049.