California Section 262 refers to a provision of the Delaware General Corporation Law (DCL) that grants certain shareholders of a Delaware corporation the right to receive fair value for their shares in the event of a corporate merger or consolidation. This particular section is known as the appraisal rights provision. Under California Section 262, shareholders have the option to dissent from a proposed merger or consolidation, meaning they can object to the terms of the deal and seek appraisal of the fair value of their shares. By exercising their appraisal rights, dissenting shareholders can demand that the court determine the fair value of their shares, rather than accepting the exchange ratio or price offered by the acquiring company. The purpose of California Section 262 is to protect shareholders' interests and provide them with an avenue for seeking fair compensation in circumstances where they believe the proposed merger or consolidation undervalues their shares. It is important to note that there are different types of California Section 262 actions, each corresponding to the specific circumstances under which shareholders can exercise their appraisal rights: 1. Standard Appraisal Rights: This category covers situations where a shareholder objects to a merger or consolidation. By following the procedures outlined in California Section 262, they can demand an appraisal of their shares. 2. Short-Form Merger Appraisal Rights: Shareholders can also exercise appraisal rights in a short-form merger, which typically occurs when a parent company merges with a subsidiary it already controls. Shareholders who dissent from such mergers have the right to seek appraisal of their shares' fair value. 3. Corporate Reorganization Appraisal Rights: In certain cases, shareholders may dissent from a proposed corporate reorganization, which involves fundamental changes to the corporation's structure. These could include changes such as altering the corporation's capital stock or changing the rights and preferences of existing shares. Shareholders exercising appraisal rights under this category can seek fair value appraisal. By understanding California Section 262 along with its various types, shareholders can make informed decisions regarding their investment and leverage their rights to ensure fair treatment in the event of a merger, consolidation, or corporate reorganization.
California Section 262 of the Delaware General Corporation Law
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How to fill out California Section 262 Of The Delaware General Corporation Law?
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