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HomeCorporations CodeCh. 8§ 3200 Close Corporation Merger Voting

§ 3200 Close Corporation Merger Voting

Corporations Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 3200 Close Corporation Merger Voting

Key Takeaways

  • •If a small, special-type company (close social purpose corporation) merges into a bigger one that isn’t the same type, the small company’s owners must vote 'yes' with at least two-thirds of their shares.
  • •Even if some owners usually don’t get to vote, they still get to vote on this big decision.
  • •The company’s rules can say a smaller vote (like half) is okay, but never less than half.

Example

A small ice-cream shop that donates half its profits to schools wants to merge with a big ice-cream chain that doesn’t donate. The small shop’s owners must vote, and at least two-thirds of them have to say 'yes' for the merger to happen.

The law makes sure the small shop’s owners really agree before they join the bigger company, even if some owners don’t usually vote on things.

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

Official Source
View on CA.gov

§ 3200 Close Corporation Merger Voting

If any disappearing social purpose corporation in a merger is a close social purpose corporation and the surviving social purpose corporation is not a close social purpose corporation, the merger shall be approved by an affirmative vote of at least two-thirds of the outstanding shares of each class, or a greater vote if required in the articles, regardless of whether that class is entitled to vote thereon by the provisions of the articles, of the disappearing social purpose corporation. The articles may provide for a lesser vote, but not less than a majority of the outstanding shares of each class. (Amended by Stats. 2014, Ch. 694, Sec. 51. (SB 1301) Effective January 1, 2015.)

Last verified: January 23, 2026

Key Terms

disappearing social purpose corporationclose social purpose corporationsurviving social purpose corporationaffirmative vote of at least two-thirdsarticles

Related Statutes

  • § 12501 Amending Articles Before Directors
  • § 12502 Corporate Amendment Approval Rules
  • § 12508 Amending Nonprofit Articles
  • § 3202 Merger Approval Requirements
  • § 5817 Amending Nonprofit Articles

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Corporations Code. Section 3200.
View Official Source