Delaware Article 13 — Dissenters' Rights provides important legal protections for shareholders who dissent or oppose certain corporate actions or decisions taken by Delaware corporations. This provision is part of the Delaware General Corporation Law and ensures that shareholders have the ability to exercise their rights as owners and protect their interests. Under Delaware Article 13 — Dissenters' Rights, shareholders who dissent from a proposed corporate action have the right to seek appraisal or evaluation of their shares by the Court of Chancery. This means that if a shareholder disagrees with actions such as mergers, consolidations, sales of assets, or amendments to the corporation's certificate of incorporation, they can assert their right to have their shares valued independently. There are different types of dissenters' rights under Delaware Article 13. These include appraisal rights, which allow dissenting shareholders to receive fair value for their shares, and evaluation rights, which enable shareholders to determine the fair value of their shares when exercising dissenters' rights. The main purpose of Delaware Article 13 — Dissenters' Rights is to protect shareholders from being forced to accept an unfair price for their shares in cases where they dissent from major corporate actions. It ensures that dissenting shareholders have the opportunity to receive fair compensation for their shares, reflecting the true value of their ownership interest in the corporation. Through the exercise of dissenters' rights, shareholders can challenge corporate actions that they believe may harm their investments or undermine their ownership rights. This provision encourages transparency, fairness, and accountability within Delaware corporations, as it restricts the ability of majority shareholders or management to disregard the interests of dissenting shareholders. In summary, Delaware Article 13 — Dissenters' Rights provides a vital legal mechanism for shareholders to protect their rights and seek fair value for their shares when dissenting from significant corporate actions. It encompasses both appraisal and evaluation rights, offering shareholders the opportunity to challenge actions they oppose and ensure their investment is treated fairly. By upholding the principle of shareholder protection, this provision strengthens corporate governance and fosters an environment conducive to responsible and ethical decision-making in Delaware corporations.
Delaware Article 13 - Dissenters' Rights
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FAQ
For more than 35 years, Delaware law, pursuant to Section 102(b)(7) of the Delaware General Corporation Act (DGCL), has allowed Delaware corporations to exculpate their directors from personal liability for damages resulting from such directors' violations of their duties of care.
Shareholders Through the Market Exception These states prescribe that when a public market exists (or is deemed to exist), public shareholders must employ market price instead of court-appraisal as the measure of their interests.
As of August 1, 2022, amended Section 102(b)(7) allows a corporation's certificate of incorporation to include a provision exculpating Section 3114(b) officers (including the president, CEO, and CFO) for a breach of the duty of care.
In general, appraisal rights (a/k/a dissenters' rights) under the DGCL grant a stockholder the right to an appraisal by the Delaware Court of Chancery of the fair value of the stockholder's shares of stock upon the occurrence of a merger or other similar transaction, subject to certain provisions.
No stockholder shall have any preemptive right to subscribe to an additional issue of stock or to any security convertible into such stock unless, and except to the extent that, such right is expressly granted to such stockholder in the certificate of incorporation.
Section 108 - Organization meeting of incorporators or directors named in certificate of incorporation (a) After the filing of the certificate of incorporation an organization meeting of the incorporator or incorporators, or of the board of directors if the initial directors were named in the certificate of ...
§ 158. Stock certificates; uncertificated shares. The shares of a corporation shall be represented by certificates, provided that the board of directors of the corporation may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares.
Section 203 is an antitakeover statute in Delaware which provides that if a person or entity (an ?interested stockholder?) acquires 15% or more of the voting stock of a Delaware corporation (the ?target?) without prior approval of the target's board, then the interested stockholder may not engage in a business ...