2010 Pennsylvania Code
Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS
Chapter 25 - Registered Corporations
2543 - Controlling person or group.

     § 2543.  Controlling person or group.
        (a)  General rule.--For the purpose of this subchapter, a
     "controlling person or group" means a person who has, or a group
     of persons acting in concert that has, voting power over voting
     shares of the registered corporation that would entitle the
     holders thereof to cast at least 20% of the votes that all
     shareholders would be entitled to cast in an election of
     directors of the corporation.
        (b)  Exceptions generally.--Notwithstanding subsection (a):
            (1)  A person or group which would otherwise be a
        controlling person or group within the meaning of this
        section shall not be deemed a controlling person or group
        unless, subsequent to the later of March 23, 1988, or the
        date this subchapter becomes applicable to a corporation by
        bylaw or article amendment or otherwise, that person or group
        increases the percentage of outstanding voting shares of the
        corporation over which it has voting power to in excess of
        the percentage of outstanding voting shares of the
        corporation over which that person or group had voting power
        on such later date, and to at least the amount specified in
        subsection (a), as the result of forming or enlarging a group
        or acquiring, by purchase, voting power over voting shares of
        the corporation.
            (2)  No person or group shall be deemed to be a
        controlling person or group at any particular time if voting
        power over any of the following voting shares is required to
        be counted at such time in order to meet the 20% minimum:
                (i)  Shares which have been held continuously by a
            natural person since January 1, 1983, and which are held
            by such natural person at such time.
                (ii)  Shares which are held at such time by any
            natural person or trust, estate, foundation or other
            similar entity to the extent the shares were acquired
            solely by gift, inheritance, bequest, devise or other
            testamentary distribution or series of these
            transactions, directly or indirectly, from a natural
            person who had acquired the shares prior to January 1,
            1983.
                (iii)  Shares which were acquired pursuant to a stock
            split, stock dividend, reclassification or similar
            recapitalization with respect to shares described under
            this paragraph that have been held continuously since
            their issuance by the corporation by the natural person
            or entity that acquired them from the corporation or that
            were acquired, directly or indirectly, from such natural
            person or entity, solely pursuant to a transaction or
            series of transactions described in subparagraph (ii),
            and that are held at such time by a natural person or
            entity described in subparagraph (ii).
                (iv)  Control shares as defined in section 2562
            (relating to definitions) which have not yet been
            accorded voting rights pursuant to section 2564(a)
            (relating to voting rights of shares acquired in a
            control-share acquisition).
                (v)  Shares, the voting rights of which are
            attributable to a person under subsection (d) if:
                    (A)  the person acquired the option or conversion
                right directly from or made the contract, arrangement
                or understanding or has the relationship directly
                with the corporation; and
                    (B)  the person does not at the particular time
                own or otherwise effectively possess the voting
                rights of the shares.
                (vi)  Shares acquired directly from the corporation
            or an affiliate or associate, as defined in section 2552
            (relating to definitions), of the corporation by a person
            engaged in business as an underwriter of securities who
            acquires the shares through his participation in good
            faith in a firm commitment underwriting registered under
            the Securities Act of 1933.
                (vii)  Shares acquired directly from the corporation
            in a transaction exempt from the registration
            requirements of the Securities Act of 1933.
            (3)  In determining whether a person or group is or would
        be a controlling person or group at any particular time,
        there shall be disregarded voting power arising from a
        contingent right of the holders of one or more classes or
        series of preference shares to elect one or more members of
        the board of directors upon or during the continuation of a
        default in the payment of dividends on such shares or another
        similar contingency.
        (c)  Certain record holders.--A person shall not be a
     controlling person under subsection (a) if the person holds
     voting power, in good faith and not for the purpose of
     circumventing this subchapter, as an agent, bank, broker,
     nominee or trustee for one or more beneficial owners who do not
     individually or, if they are a group acting in concert, as a
     group have the voting power specified in subsection (a), or who
     are not deemed a controlling person or group under subsection
     (b).
        (d)  Existence of voting power.--For the purposes of this
     subchapter, a person has voting power over a voting share if the
     person has or shares, directly or indirectly, through any
     option, contract, arrangement, understanding, conversion right
     or relationship, or by acting jointly or in concert or
     otherwise, the power to vote, or to direct the voting of, the
     voting share.
     (Dec. 19, 1990, P.L.834, No.198, eff. imd.; Feb. 10, 2006,
     P.L.21, No.6, eff. imd.)

        2006 Amendment.  Act 6 added subsec. (b)(2)(vii).
        1990 Amendment.  Act 198 amended subsecs. (a) and (b).
        Cross References.  Section 2543 is referred to in sections
     1106, 2542 of this title.