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SUBSEQUENT ACQUISITION OF SHARES BY SHAREHOLDERS AND CORPORATION

Iowa Code tit. XII, ch. 490, subch. VI, pt. 3
in effect

Iowa Code § 490.630 Shareholders’ preemptive rights.

490.630. Shareholders’ preemptive rights. 1. The shareholders of a corporation do not have a preemptive right to acquire the corporation’s unissued shares except to the extent the articles of incorporation so provide. 2. A statement included in the articles of incorporation that “the corporation elects to have preemptive rights”, or words of similar effect, means that the following principles apply except to the extent the articles of incorporation expressly provide otherwise: a. The shareholders of the corporation have a preemptive right, granted on uniform terms and conditions prescribed by the board of directors to provide a fair and reasonable opportunity to exercise the right, to acquire proportional amounts of the corporation’s unissued shares upon the decision of the board of directors to issue them. b. A preemptive right may be waived by a shareholder. A waiver evidenced by a writing is irrevocable even though it is not supported by consideration. c. There is no preemptive right with respect to any of the following: (1) Shares issued as compensation to directors, officers, employees, or agents of the corporation, its subsidiaries, or its affiliates. (2) Shares issued to satisfy conversion or option rights created to provide compensation to directors, officers, employees, or agents of the corporation, its subsidiaries, or its affiliates. (3) Shares authorized in the articles of incorporation that are issued within six months from the effective date of incorporation. (4) Shares sold otherwise than for cash. d. Holders of shares of any class or series without voting power but with preferential rights to distributions have no preemptive rights with respect to shares of any class or series. e. Holders of shares of any class or series with voting power but without preferential rights to distributions have no preemptive rights with respect to shares of any class or series with preferential rights to distributions unless the shares with preferential rights are convertible into or carry a right to subscribe for or acquire the shares without preferential rights. f. Shares subject to preemptive rights that are not acquired by shareholders may be issued to any person for a period of one year after being offered to shareholders at a consideration set by the board of directors that is not lower than the consideration set for the exercise of preemptive rights. An offer at a lower consideration or after the expiration of one year is subject to the shareholders’ preemptive rights. 3. As used in this section, “shares” includes a security convertible into or carrying a right to subscribe for or acquire shares. 89 Acts, ch 288, §50; 2006 Acts, ch 1089, §8; 2021 Acts, ch 165, §55, 230

Iowa Code § 490.631 Corporation’s acquisition of its own shares.

490.631. Corporation’s acquisition of its own shares. 1. A corporation may acquire its own shares and, except as may be otherwise provided pursuant to section 490.632, shares so acquired constitute authorized but unissued shares. 2. If the articles of incorporation prohibit the reissue of the acquired shares, the number of authorized shares is reduced by the number of shares acquired. 89 Acts, ch 288, §51; 90 Acts, ch 1205, §23; 2002 Acts, ch 1154, §12, 125

Iowa Code § 490.632 Reacquired shares as issued but not outstanding shares.

490.632. Reacquired shares as issued but not outstanding shares. 1. A corporation which, as of December 30, 1989, treated any of its shares which it had reacquired as issued but not outstanding shares may continue to treat those shares as issued but not outstanding shares. 2. If a corporation reacquires its own shares after December 30, 1989, but before January 1, 1991, those shares constitute issued but not outstanding shares as of and after their reacquisition if either of the following is applicable: a. When the shares are reacquired, the articles of incorporation contain a provision specifying that reacquired shares constitute issued but not outstanding shares. b. Prior to January 1, 1991, the board of directors adopts a resolution specifying that shares reacquired after December 30, 1989, and prior to January 1, 1991, constitute issued but not outstanding shares. 3. If a corporation reacquires its own shares after December 31, 1990, those shares constitute issued but not outstanding shares if, at the time they are reacquired by the corporation, either of the following is applicable: a. The articles of incorporation contain a provision specifying that reacquired shares constitute issued but not outstanding shares. b. The board of directors has adopted a resolution specifying that reacquired shares constitute issued but not outstanding shares. 4. Unless otherwise provided in its articles of incorporation, a corporation may at any time, by resolution adopted by its board of directors, cancel or otherwise restore to the status of authorized but unissued shares any of its shares which it has previously reacquired and treated as issued but not outstanding shares. 90 Acts, ch 1205, §24; 91 Acts, ch 97, §54
Source: Iowa Legislature (legis.iowa.gov)URL: https://www.legis.iowa.gov/law/iowaCode/sections?codeChapter=490&year=2026Fetched: 10/20/2026

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