§ 182 Reverse Stock Split Definition

Corporations Code·California

AI SummaryVerified

This law defines what a “reverse stock split” is – when a company combines its existing shares into fewer shares of the same kind.

Key Takeaways

•A reverse stock split shrinks the number of shares, not the total ownership value.
•It is done by changing the company’s articles (its official rules).
•All shares of the same class are treated the same way.

Example

A company has 1,000 shares owned by each investor, but decides to make every 10 old shares become 1 new share.

After the change, each person who had 1,000 old shares now has 100 new shares, but the total value stays about the same.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source

View on CA.gov

§ 182 Reverse Stock Split Definition

“Reverse stock split” means the pro rata combination of all the outstanding shares of a class into a smaller number of shares of the same class by an amendment to the articles stating the effect on outstanding shares. (Added by Stats. 1975, Ch. 682.)

Last verified: January 10, 2026

Key Terms

Reverse stock split pro rata combination outstanding shares amendment to the articles

References

Official text at leginfo.legislature.ca.gov
California Legislature. Corporations Code. Section 182.

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Key Takeaways

Example

Key Terms

Related Statutes

References