2010 Pennsylvania Code
Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS
Chapter 23 - Statutory Close Corporations
2309 - Involuntary termination of statutory close corporation status; proceeding to prevent loss of status.

     § 2309.  Involuntary termination of statutory close corporation
                status; proceeding to prevent loss of status.
        (a)  General rule.--If any event occurs as a result of which
     the provision included in the articles of a statutory close
     corporation pursuant to section 2304(a) (relating to additional
     contents of articles of statutory close corporations) to qualify
     it as a statutory close corporation has been breached, the
     status of the business corporation as a statutory close
     corporation under this chapter shall terminate unless:
            (1)  Within 30 days after the occurrence of the event or
        within 30 days after the event has been discovered, whichever
        is later, the corporation:
                (i)  Files in the Department of State a statement
            executed by the corporation setting forth:
                    (A)  The name of the corporation and, subject to
                section 109 (relating to name of commercial
                registered office provider in lieu of registered
                address), the address, including street and number,
                if any, of its registered office.
                    (B)  A statement that the provision included in
                its articles pursuant to section 2304(a) to qualify
                it as a statutory close corporation has been
                breached.
                (ii)  Furnishes a copy of the statement to each
            shareholder.
            (2)  The corporation concurrently with the filing of the
        statement takes such steps as are necessary to correct the
        situation that threatens its status as a statutory close
        corporation including, without limitation, the refusal to
        register the transfer of shares that have been wrongfully
        transferred as provided by section 2308 (relating to issuance
        or transfer of shares of a statutory close corporation in
        breach of qualifying conditions) or initiation of a
        proceeding under subsection (b).
        (b)  Proceeding to cure breach.--Upon the application of the
     corporation or of any shareholder, the court may issue all
     orders necessary to prevent the corporation from losing its
     status as a statutory close corporation or to prevent the
     violation of any provision of the articles permitted by section
     2304(b) to be stated in the articles of a statutory close
     corporation or to restore its status as a statutory close
     corporation by enjoining or setting aside any act or threatened
     act on the part of the corporation or a shareholder that would
     be inconsistent with any of the provisions required or permitted
     by section 2304 to be stated in the articles of a statutory
     close corporation unless it is an act approved in accordance
     with section 2308(d) (relating to exception). The court may
     enjoin or set aside any transfer or threatened transfer of
     shares of a statutory close corporation that is contrary to any
     of the terms of its articles and may enjoin any public offering,
     as defined in section 2304(a), or threatened public offering of
     shares of the statutory close corporation.
        (c)  Notice of cure of breach.--When the situation that
     threatened the status of the corporation as a statutory close
     corporation has been remedied and if the corporation has not
     amended its articles in accordance with section 2307 (relating
     to voluntary termination of statutory close corporation status
     by amendment of articles), the corporation shall file in the
     department a statement executed by the corporation, setting
     forth:
            (1)  The name of the corporation and, subject to section
        109 (relating to name of commercial registered office
        provider in lieu of registered address), the address,
        including street and number, if any, of its registered
        office.
            (2)  A statement that no breach of the provision included
        in its articles pursuant to section 2304(a) exists.
     Upon the filing of the statement, the status of the corporation
     as a statutory close corporation under this chapter, if
     theretofore terminated by reason of subsection (a), shall be
     restored.
        (d)  Cross reference.--See section 134 (relating to docketing
     statement).
     (Dec. 19, 1990, P.L.834, No.198, eff. imd.)

        1990 Amendment.  Act 198 amended subsecs. (a) and (c).
        Cross References.  Section 2309 is referred to in section
     2306 of this title.