2006 Code of Virginia § 13.1-742 - Dissolution by directors and shareholders

13.1-742. Dissolution by directors and shareholders.

A. A corporation's board of directors may propose dissolution for submissionto the shareholders.

B. For a proposal to dissolve to be adopted:

1. The board of directors shall recommend dissolution to the shareholdersunless the board of directors determines that because of conflict ofinterests or other special circumstances it should make no recommendation andcommunicates the basis for its determination to the shareholders; and

2. The shareholders entitled to vote shall approve the proposal to dissolveas provided in subsection E.

C. The board of directors may condition its submission of the proposal fordissolution on any basis.

D. The corporation shall notify each shareholder, whether or not entitled tovote, of the proposed shareholders' meeting in accordance with 13.1-658.The notice shall also state that the purpose, or one of the purposes, of themeeting is to consider dissolving the corporation.

E. Unless the board of directors, acting pursuant to subsection C, requires agreater vote, dissolution to be authorized must be approved by the holders ofmore than two-thirds of all votes entitled to be cast on the proposal todissolve. The articles of incorporation may provide for a greater or lesservote than that provided for in this subsection or a vote by separate votinggroups so long as the vote provided for is not less than a majority of allthe votes cast by each voting group entitled to vote on the proposeddissolution at a meeting at which a quorum of the voting group exists.

(Code 1950, 13.1-81; 1956, c. 428; 1975, c. 500; 1985, c. 522; 2005, c.765.)