15 Pa.C.S. § 1901 Omission of certain provisions from filed plans (Deleted by amendment).
2014 Amendment. Section 1901 was deleted by amendment October 22, 2014, P.L.2640, No.172 effective July 1, 2015.
15 Pa.C.S. Ch. 19
15 Pa.C.S. Ch. 19
in effect15 Pa.C.S. § 1902 Statement of termination.
(a) General rule.--If articles of amendment have been filed in the department prior to the termination of the amendment pursuant to provisions therefor set forth in the resolution or petition relating to the amendment, the termination shall not be effective unless the corporation shall, prior to the time the amendment is to become effective, file in the department a statement of termination. The statement of termination shall be signed by the corporation that filed the amendment and shall set forth:
(1) A copy of the articles of amendment.
(2) A statement that the amendment has been terminated in accordance with the provisions therefor set forth therein.
(b) Cross references.--See sections 134 (relating to docketing statement) and 138 (relating to statement of correction). (Oct. 22, 2014, P.L.2640, No.172, eff. July 1, 2015) 2014 Amendment. Act 172 amended subsec. (a). Cross References. Section 1902 is referred to in sections 1522, 1914 of this title.
15 Pa.C.S. § 1903 Bankruptcy or insolvency proceedings.
(a) General rule.--Whenever a business corporation is insolvent or in financial difficulty, the board of directors may, by resolution and without the consent of the shareholders, authorize and designate the officers of the corporation to execute a deed of assignment for the benefit of creditors, or file a voluntary petition in bankruptcy, or file an answer consenting to the appointment of a receiver upon a complaint in the nature of an equity action filed by creditors or shareholders, or file an answer to an involuntary petition in bankruptcy admitting the willingness of the corporation to have relief ordered against it.
(b) Bankruptcy proceedings.--A business corporation may participate in a case and proceedings under and in the manner provided by the Bankruptcy Code (11 U.S.C. § 101 et seq.) notwithstanding any contrary provision of its articles or bylaws or this subpart, other than section 103 (relating to subordination of title to regulatory laws). The corporation shall have full power and authority to put into effect and carry out a plan of reorganization and the decrees and orders of the court or judge, and may take any proceeding and do any act provided in the plan or directed by such decrees and orders, without further action by its directors or shareholders. Such power and authority may be exercised, and such proceedings and acts may be taken, as may be directed by such plan or decrees or orders, by designated officers of the corporation or by a trustee appointed by the court or judge, with the effect as if exercised and taken by unanimous action of the directors and shareholders of the corporation. Without limiting the generality or effect of the foregoing, the corporation may:
(1) alter, amend or repeal its bylaws;
(2) constitute or reconstitute and classify or reclassify its board of directors and name, constitute or appoint directors and officers in place of or in addition to all or some of the directors or officers then in office;
(3) amend its articles of incorporation, including, without limitation, for the purpose of:
(i) canceling or modifying the relative rights or preferences of any or all authorized classes or series of shares, whether or not any shares thereof are outstanding;
(ii) providing that any of Subchapter E (relating to control transactions), F (relating to business combinations), G (relating to control-share acquisitions) or H (relating to disgorgement by certain controlling shareholders following attempts to acquire control) of Chapter 25 shall not be applicable to the corporation, whether or not the amendment is adopted in conformance with the procedures specified in those subchapters, which amendment may take effect immediately without regard to any passage of time otherwise required by those subchapters; or
(iii) otherwise altering, amending or repealing any provision of the articles or bylaws notwithstanding any provision therein that the articles or bylaws may be altered, amended or repealed only under certain conditions or only upon receiving the approval of a specified number or percentage of votes of shareholders or of a class of shareholders;
(4) be dissolved, transfer all or part of its assets, merge, consolidate, participate in a share exchange, divide or convert to a nonprofit corporation, as permitted by this chapter, but in any such case a shareholder shall not be entitled to dissenters rights with respect to his shares;
(5) authorize and fix the terms, manner and conditions of the issuance of obligations, whether or not convertible into shares of any class or series, or bearing warrants or other evidence of optional rights to purchase or subscribe for shares of any class or series; or
(6) lease its property and franchises to any person.
(c) Cross reference.--See the definition of "officer" in section 1103 (relating to definitions). (Dec. 19, 1990, P.L.834, No.198, eff. imd.)
15 Pa.C.S. § 1904 De facto transaction doctrine abolished.
The doctrine of de facto mergers, consolidations and other fundamental transactions is abolished and the rules laid down by Bloch v. Baldwin Locomotive Works, 75 Pa. D. & C. 24 (C.P. Del. Cty. 1950), and Marks v. The Autocar Co., 153 F.Supp. 768 (E.D. Pa. 1954), and similar cases are overruled. A transaction that in form satisfies the requirements of this title may be challenged by reason of its substance only to the extent permitted by section 1105 (relating to restriction on equitable relief). (Oct. 22, 2014, P.L.2640, No.172, eff. July 1, 2015)
15 Pa.C.S. § 1905 Proposal of fundamental transactions.
Where any provision of this chapter requires that an amendment of the articles, a plan of asset transfer or the dissolution of a business corporation be proposed or approved by action of the board of directors, that requirement shall be construed to authorize and be satisfied by the agreement or consent in record form of all of the shareholders of the corporation entitled to vote thereon. (Dec. 19, 1990, P.L.834, No.198, eff. imd.; Oct. 22, 2014, P.L.2640, No.172, eff. July 1, 2015; Nov. 3, 2022, P.L.1791, No.122, eff. 60 days)
15 Pa.C.S. § 1906 Special treatment of holders of shares of same class or series.
(a) General rule.--Except as otherwise restricted in the articles, a plan may contain a provision classifying the holders of shares of a class or series into one or more separate groups by reference to any facts or circumstances that are not manifestly unreasonable and providing mandatory treatment for shares of the class or series held by particular shareholders or groups of shareholders that differs materially from the treatment accorded other shareholders or groups of shareholders holding shares of the same class or series (including a provision modifying or rescinding rights previously created under this section) if:
(1)
(i) the plan is approved by a majority of the votes cast by any class or series of shares any of the shares of which are so classified into groups, whether or not such class or series would otherwise be entitled to vote on the plan; and
(ii) the provision voted on specifically enumerates the type and extent of the special treatment authorized; or
(2) under all the facts and circumstances, a court of competent jurisdiction finds such special treatment is undertaken in good faith, after reasonable deliberation and is in the best interest of the corporation.
(b) Statutory voting rights upon special treatment.--Except as provided in subsection (c), if a plan contains a provision for special treatment, each group of holders of any outstanding shares of a class or series who are to receive the same special treatment under the plan shall be entitled to vote as a special class in respect to the plan regardless of any limitations stated in the articles or bylaws on the voting rights of any class or series.
(c) Dissenters rights upon special treatment.--If any plan contains a provision for special treatment without requiring for the adoption of the plan the statutory class vote required by subsection (b), the holder of any outstanding shares the statutory class voting rights of which are so denied, who objects to the plan and complies with Subchapter D of Chapter 15 (relating to dissenters rights), shall be entitled to the rights and remedies of dissenting shareholders provided in that subchapter.
(c.1) Determination of groups.--For purposes of applying subsections (a)(1) and (b), the determination of which shareholders are part of each group receiving special treatment shall be made as of the record date for shareholder action on the plan.
(c.2) Notice to shareholders.--A notice to shareholders of a meeting called to act on a plan that provides for special treatment must state that the plan provides for special treatment. The notice must identify the shareholders receiving special treatment unless the notice is accompanied by either a summary of the plan that includes that information or the full text of the plan.
(d) Exceptions.--This section shall not apply to:
(1) (Reserved).
(2) A provision of a plan that offers to all holders of shares of a class or series the same option to elect certain treatment.
(3) A plan that contains an express provision that this section shall not apply or that fails to contain an express provision that this section shall apply.
(4) A provision of a plan that treats all of the holders of a particular class or series of shares differently from the holders of another class or series. A provision of a plan that treats the holders of a class or series of shares differently from the holders of another class or series of shares shall not constitute a violation of section 1521(d) (relating to authorized shares).
(e) Definition.--As used in this section, the term "plan" means:
(1) an amendment of the articles that effects a reclassification of shares, whether or not the amendment is accompanied by a separate plan of reclassification;
(1.1) a plan of asset transfer adopted under section 1932(b) (relating to voluntary transfer of corporate assets); or
(2) a resolution recommending that the corporation dissolve voluntarily adopted under section 1972(a) (relating to proposal of voluntary dissolution). (Dec. 19, 1990, P.L.834, No.198, eff. imd.; June 22, 2001, P.L.418, No.34, eff. 60 days; July 9, 2013, P.L.476, No.67, eff. 60 days; Oct. 22, 2014, P.L.2640, No.172, eff. July 1, 2015) 2014 Amendment. Act 172 amended subsecs. (a), (d)(1) and
(e) and added subsec. (c.2).
Amendment . Act 67 amended subsec. (d)(3) and added subsec. (c.1). Cross References. Section 1906 is referred to in sections 1103, 1521, 1571, 1911, 1932, 1972, 2537 of this title.
15 Pa.C.S. § 1907 Purpose of fundamental transactions.
A transaction under this chapter does not require an independent business purpose in order for the transaction to be lawful. (July 9, 2013, P.L.476, No.67, eff. 60 days) 2013 Amendment. Act 67 added section 1907.
15 Pa.C.S. § 1908 Submission of matters to shareholders.
A business corporation may agree, in record form, to submit an amendment or other matter to its shareholders whether or not the board of directors determines, at any time after approving the matter, that the matter is no longer advisable and recommends that the shareholders reject or vote against it, regardless of whether the board of directors changes its recommendation. If a corporation so agrees to submit a matter to its shareholders, the matter is deemed to have been validly adopted by the corporation when it has been approved by the shareholders. (July 9, 2013, P.L.476, No.67, eff. 60 days; Oct. 22, 2014, P.L.2640, No.172, eff. July 1, 2015)
15 Pa.C.S. § 1911 Amendment of articles authorized.
(a) General rule.--A business corporation, in the manner provided in this subchapter, may from time to time amend its articles for one or more of the following purposes:
(1) To adopt a new name, subject to the restrictions provided in this title.
(2) To modify any provision of the articles relating to its term of existence.
(3) To change, add to or diminish its purposes or to set forth different or additional purposes.
(4) To cancel or otherwise affect the right of holders of the shares of any class or series to receive dividends that have accrued but have not been declared or to otherwise effect a reclassification of or otherwise affect the substantial rights of the holders of any shares, including, without limitation, by providing special treatment of shares held by any shareholder or group of shareholders consistent with section 1906 (relating to special treatment of holders of shares of same class or series).
(5) To restate the articles in their entirety.
(6) In any and as many other respects as desired.
(b) Exceptions.--An amendment adopted under this section shall not amend articles in such a way that as so amended they would not be authorized by this subpart as original articles of incorporation except that:
(1) Restated articles shall, subject to section 109 (relating to name of commercial registered office provider in lieu of registered address), state the address of the current instead of the initial registered office of the corporation in this Commonwealth and need not state the names and addresses of the incorporators.
(2) The corporation shall not be required to revise any other provision of its articles if the provision is valid and operative immediately prior to the delivery of the amendment to the Department of State for filing.
(c) Amendments pursuant to other provisions.--Amendments to the articles authorized pursuant to Chapter 2 (relating to entities generally) or 3 (relating to entity transactions) or set forth in statements or certificates permitted or required to be delivered to the department for filing by section 108 (relating to change in location or status of registered office provided by agent) or 138 (relating to statement of correction) or by this subpart need not be proposed or adopted in the manner provided in this subchapter, except to the extent that the provisions of this subchapter have been incorporated into Chapter 2 or 3 or into the provisions authorizing such statements or certificates.
(d) Cross references.--See sections 224(f) (relating to action on ratification), 321 (relating to approval by business corporation), 1103 (relating to definitions), 1507 (relating to registered office) and 1522(c) (relating to issuance of shares in classes or series; board action). (Dec. 19, 1990, P.L.834, No.198, eff. imd.; July 9, 2013, P.L.476, No.67, eff. 60 days; Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 amended subsecs. (a)(1) and (b)(2), amended and relettered former subsec. (c) to subsec. (d) and added present subsec. (c). 2013 Amendment. Act 67 amended subsec. (a)(4). 1990 Amendment. Act 198 amended subsec. (a) and added subsec. (c). Cross References. Section 1911 is referred to in section 2305 of this title.
15 Pa.C.S. § 1912 Proposal of amendments.
(a) General rule.--Every amendment of the articles of a business corporation shall be proposed:
(1) by the adoption by the board of directors of a resolution setting forth the proposed amendment;
(2) unless otherwise provided in the articles, by petition of shareholders entitled to cast at least 10% of the votes that all shareholders are entitled to cast thereon, setting forth the proposed amendment, which petition shall be directed to the board of directors and filed with the secretary of the corporation; or
(3) by action of the board of directors directing the submission of the proposed amendment to the shareholders without the board having adopted the amendment.
(b) Form of amendment.--The resolution or petition shall contain the language of the proposed amendment of the articles:
(1) by setting forth the existing text of the articles or the provision thereof that is proposed to be amended, with brackets around language that is to be deleted and underscoring under language that is to be added or otherwise clearly showing the changes to be made; or
(2) by providing that the articles shall be amended so as to read as therein set forth in full, or that any provision thereof be amended so as to read as therein set forth in full, or that the matter stated in the resolution or petition be added to or stricken from the articles.
(c) Terms of amendment.--The resolution or petition may set forth the manner and basis of reclassifying the shares of the corporation. Any of the terms of a plan of reclassification or other action contained in an amendment may be made dependent upon facts ascertainable outside of the amendment if the manner in which the facts will operate upon the terms of the amendment is set forth in the amendment. Such facts may include, without limitation, actions or events within the control of or determinations made by the corporation or a representative of the corporation.
(d) Submission to the shareholders.--Except where the approval of the shareholders is unnecessary under this subchapter, the board of directors shall direct that the proposed amendment be submitted to a vote of the shareholders entitled to vote thereon. An amendment proposed under subsection
(a)(2) shall be submitted to a vote either at the next annual meeting held not earlier than 120 days after the amendment is proposed or at a special meeting of the shareholders called for that purpose by the shareholders.
(e) Cross references.--See sections 1106(b)(4) (relating to uniform application of subpart) and 2535 (relating to proposal of amendment to articles). (Dec. 19, 1990, P.L.834, No.198, eff. imd.; June 22, 2001, P.L.418, No.34, eff. 60 days; Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 amended subsecs. (a) and (b)(1) and added subsecs. (d) and (e). 2001 Amendment. Act 34 added subsec. (c). Cross References. Section 1912 is referred to in sections 1106, 1914 of this title.
15 Pa.C.S. § 1913 Notice of meeting of shareholders.
(a) General rule.--Notice in record form of the meeting of shareholders of a business corporation that will act on the proposed amendment must be given to each shareholder entitled to vote thereon. The notice must include the proposed amendment or a summary of the changes to be effected thereby and, if Subchapter D of Chapter 15 (relating to dissenters rights) is applicable, the text of that subchapter.
(b) Cross references.--See Subchapter A of Chapter 17 (relating to notice and meetings generally) and section 2528 (relating to notice of shareholder meetings). (Dec. 18, 1992, P.L.1333, No.169, eff. 60 days; July 9, 2013, P.L.476, No.67, eff. 60 days)
15 Pa.C.S. § 1914 Adoption of amendments.
(a) General rule.--A vote of the shareholders entitled to vote on a proposed amendment shall be taken at the next annual or special meeting of which notice for that purpose has been duly given. Unless the articles or a specific provision of this subpart requires a greater vote, a proposed amendment of the articles of a business corporation shall be adopted upon receiving the affirmative vote of a majority of the votes cast by all shareholders entitled to vote thereon and, if any class or series of shares is entitled to vote thereon as a class, the affirmative vote of a majority of the votes cast in each such class vote. Any number of amendments may be submitted to the shareholders and voted upon by them at one meeting. An amendment of the articles proposed under section 1912(a)(3) (relating to proposal of amendments) shall not be deemed to have been adopted by the corporation unless it has also been approved by the board of directors, regardless of the fact that the board has directed or suffered the submission of the amendment to the shareholders for action.
(b) Statutory voting rights.--Except as provided in this subpart, the holders of the outstanding shares of a class or series of shares shall be entitled to vote as a class in respect of a proposed amendment regardless of any limitations stated in the articles or bylaws on the voting rights of any class or series if the amendment would:
(1) authorize the board of directors to fix and determine the relative rights and preferences, as between series, of any preferred or special class;
(2) make any change in the preferences, limitations or special rights (other than preemptive rights or the right to vote cumulatively) of the shares of a class or series adverse to the class or series;
(3) authorize a new class or series of shares having a preference as to dividends or assets which is senior to the shares of a class or series;
(4) increase the number of authorized shares of any class or series having a preference as to dividends or assets which is senior in any respect to the shares of a class or series; or
(5) make the outstanding shares of a class or series redeemable by a method that is not pro rata, by lot or otherwise equitable.
(c) Adoption by board of directors.--Unless otherwise restricted in the articles, an amendment of articles shall not require the approval of the shareholders of the corporation if:
(1) shares have not been issued;
(2) the amendment is restricted to one or more of the following:
(i) changing the corporate name;
(ii) providing for perpetual existence;
(iii) reflecting a reduction in authorized shares effected by operation of section 1552(a) (relating to power of corporation to acquire its own shares) and, if appropriate, deleting all references to a class or series of shares that is no longer outstanding;
(iv) adding or deleting a provision authorized by section 1528(f) (relating to shares represented by certificates and uncertificated shares);
(v) adding, changing or eliminating the par value of any class or series of shares if the par value of that class or series does not have any substantive effect under the terms of that or any other class or series of shares; or
(vi) implementing an amendment authorized by section 229(h) (relating to limitation on voiding certain defective entity actions);
(3)
(i) the corporation has only one class or series of voting shares outstanding;
(ii) the corporation does not have any class or series of shares outstanding that is:
(A) convertible into those voting shares;
(B) junior in any way to those voting shares; or
(C) entitled to participate on any basis in distributions with those voting shares; and
(iii) the amendment is effective solely to accomplish one of the following purposes with respect to those voting shares:
(A) in connection with effectuating a stock dividend of voting shares on the voting shares, to increase the number of authorized shares of the voting shares in the same proportion that the voting shares to be distributed in the stock dividend increase the issued voting shares; or
(B) to split the voting shares and, if desired, increase the number of authorized shares of the voting shares or change the par value of the voting shares, or both, in proportion thereto;
(4) to the extent the amendment has not been approved by the shareholders, it restates without change all of the operative provisions of the articles as theretofore amended or as amended thereby; or
(5) the amendment accomplishes any combination of purposes specified in this subsection.
(c.1) Board amendment under other sections.--Whenever a provision of this subpart authorizes the board of directors to take any action without the approval of the shareholders and provides that a statement, certificate, plan or other document relating to such action shall be filed in the Department of State and shall operate as an amendment of the articles, the board upon taking such action may, in lieu of filing the statement, certificate, plan or other document, amend the articles under this subsection without the approval of the shareholders to reflect the taking of such action.
(c.2) Effect of board amendment.--An amendment of articles under subsection (c) shall be deemed adopted by the corporation when it has been adopted by the board of directors pursuant to section 1912 (relating to proposal of amendments).
(d) Termination of proposal.--Prior to the time when an amendment becomes effective, the amendment may be terminated pursuant to provisions therefor, if any, set forth in the
resolution or petition. If articles of amendment have been filed in the department prior to the termination, a statement under section 1902 (relating to statement of termination) shall be filed in the department.
(e) Amendment of voting provisions.--Unless otherwise provided in the articles, whenever the articles require for the taking of any action by the shareholders or a class of shareholders a specific number or percentage of votes, the provision of the articles setting forth that requirement shall not be amended or repealed by any lesser number or percentage of votes of the shareholders or of the class of shareholders.
(f) Definition.--As used in this section, the term "voting shares" has the meaning specified in section 2552 (relating to definitions). (Dec. 19, 1990, P.L.834, No.198, eff. imd.; June 22, 2001, P.L.418, No.34, eff. 60 days; Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 amended subsecs. (a) and (c)(2) and added subsecs. (c.1) and (c.2). 2001 Amendment. Act 34 amended subsecs. (b) and (c) and added subsec. (f). 1990 Amendment. Act 198 amended subsecs. (b), (c)(2) and
(e). Cross References. Section 1914 is referred to in sections 321, 1552, 1757 of this title.
15 Pa.C.S. § 1915 Articles of amendment.
Upon the adoption of an amendment by a business corporation, as provided in this subchapter, articles of amendment shall be executed by the corporation and shall set forth:
(1) The name of the corporation and, subject to section 109 (relating to name of commercial registered office provider in lieu of registered address), the address, including street and number, if any, of its registered office.
(2) The statute under which the corporation was incorporated and the date of incorporation.
(3) If the amendment is to be effective on a specified date, the hour, if any, and the month, day and year of the effective date.
(4) The manner in which the amendment was adopted by the corporation.
(5) The amendment adopted by the corporation, which shall be set forth in full.
(6) If the amendment effects a restatement of the articles, a statement that the restated articles supersede the original articles and all amendments thereto. Cross References. Section 1915 is referred to in sections 2104, 2704, 2722, 2904, 7104 of this title.
15 Pa.C.S. § 1916 Filing and effectiveness of articles of amendment.
(a) Filing.--The articles of amendment of a business corporation shall be filed in the Department of State. See section 134 (relating to docketing statement).
(b) Effectiveness.--Upon the filing of the articles of amendment in the department or upon the effective date specified in the articles of amendment, whichever is later, the amendment shall become effective and the articles of incorporation shall be deemed to be amended accordingly. An amendment shall not affect any existing cause of action in favor of or against the corporation, or any pending action or proceeding to which the corporation is a party, or the existing rights of persons other
than shareholders. If the corporate name is changed by the amendment, an action brought by or against the corporation under its former name shall not be abated for that reason.
15 Pa.C.S. § 1921 Merger and consolidation authorized (Repealed).
2014 Repeal. Section 1921 was repealed October 22, 2014, P.L.2640, No.172, effective July 1, 2015.
15 Pa.C.S. § 1922 Plan of merger or consolidation (Repealed).
2014 Repeal. Section 1922 was repealed October 22, 2014, P.L.2640, No.172, effective July 1, 2015.
15 Pa.C.S. § 1923 Notice of meeting of shareholders (Repealed).
2014 Repeal. Section 1923 was repealed October 22, 2014, P.L.2640, No.172, effective July 1, 2015.
15 Pa.C.S. § 1924 Adoption of plan (Repealed).
2014 Repeal. Section 1924 was repealed October 22, 2014, P.L.2640, No.172, effective July 1, 2015.
15 Pa.C.S. § 1925 Authorization by foreign corporations (Repealed).
2014 Repeal. Section 1925 was repealed October 22, 2014, P.L.2640, No.172, effective July 1, 2015.
15 Pa.C.S. § 1926 Articles of merger or consolidation (Repealed).
2014 Repeal. Section 1926 was repealed October 22, 2014, P.L.2640, No.172, effective July 1, 2015.
15 Pa.C.S. § 1927 Filing of articles of merger or consolidation (Repealed).
2014 Repeal. Section 1927 was repealed October 22, 2014, P.L.2640, No.172, effective July 1, 2015.
15 Pa.C.S. § 1928 Effective date of merger or consolidation (Repealed).
2014 Repeal. Section 1928 was repealed October 22, 2014, P.L.2640, No.172, effective July 1, 2015.
15 Pa.C.S. § 1929 Effect of merger or consolidation (Repealed).
2014 Repeal. Section 1929 was repealed October 22, 2014, P.L.2640, No.172, effective July 1, 2015.
15 Pa.C.S. § 1929.1 Limitations on asbestos-related liabilities relating to certain mergers or consolidations.
(a) Limitation on successor asbestos-related liabilities.--
(1) Except as further limited in paragraph (2), the cumulative successor asbestos-related liabilities of a domestic business corporation that was incorporated in this Commonwealth prior to May 1, 2001, shall be limited to the fair market value of the total assets of the transferor determined as of the time of the merger or consolidation, and such corporation shall have no responsibility for successor asbestos-related liabilities in excess of such limitation.
(2) If the transferor had assumed or incurred successor asbestos-related liabilities in connection with a prior merger or consolidation with a prior transferor, then the fair market value of the total assets of the prior transferor, determined as of the time of such earlier merger or consolidation, shall be substituted for the limitation set forth in paragraph (1) for purposes of determining the limitation of liability of a domestic business corporation.
(b) Limitation on total assets available to satisfy successor asbestos-related liabilities.--
(1) Except as further limited in paragraph (2), the assets of a domestic business corporation that was incorporated in this Commonwealth prior to May 1, 2001, shall be exempt from restraint, attachment or execution on judgments related to claims for successor asbestos-related liabilities if the cumulative amounts which, after the time of the merger or consolidation as to which the fair market value of total assets is determined for purposes of this subsection and subsection (a), are paid or committed to be paid by or on behalf of the corporation, or by or on behalf of a transferor, in connection with settlements, judgments or other discharges of claims of asbestos-related liabilities exceed the fair market value of the total assets of the transferor, determined as of the time of the merger or consolidation.
(2) If the transferor had assumed or incurred successor asbestos-related liabilities in connection with a prior merger or consolidation with a prior transferor, then the fair market value of the total assets of the prior transferor, determined as of the time of such earlier merger or consolidation, shall be substituted for the limitation set forth in paragraph (1) for purposes of determining the extent of the exemption of the assets of a domestic business corporation.
(c) Fair market value of total assets.--
(1) A domestic business corporation may establish the fair market value of total assets through any method reasonable under the circumstances, including by reference to the going concern value of such assets or to the purchase price attributable to or paid for such assets in an arm's length transaction, or, in the absence of other readily available information from which fair market value can be determined, by reference to the value of such assets recorded on a balance sheet. Total assets shall include intangible assets. A showing by the domestic business corporation of a reasonable determination of the fair market value of total
assets shall be prima facie evidence of their fair market value.
(2) Once a reasonable determination of the fair market value of total assets has been thus established by a domestic business corporation, a claimant disputing that determination of value shall then have the burden of establishing a different fair market value of such assets.
(3) For the purpose of adjusting the limitations set forth in subsections (a) and (b) to account for the passage of time, the fair market value of total assets at the time of a merger or consolidation shall be increased annually until the earlier of:
(i) the date of the settlement, judgment or other discharge to which the limitations in subsection (a) or
(b) are being applied; or
(ii) the date on which such adjusted fair market value is first exceeded by the cumulative amounts paid or committed to be paid by or on behalf of the corporation, or by or on behalf of a transferor, after the time of the merger or consolidation as to which the fair market value of total assets is determined for purposes of subsections (a) and (b) in connection with settlements, judgments or other discharges of the successor asbestos-related liabilities; at the rate equal to the prime rate as listed in the first edition of the Wall Street Journal published for each calendar year since such merger or consolidation, plus 1%, not compounded.
(d) Application.--
(1) The limitations set forth in subsections (a) and
(b) shall apply to mergers or consolidations effected under the laws of this Commonwealth or another jurisdiction consummated prior to May 1, 2001.
(2) The limitations set forth in subsections (a) and
(b) shall apply to all asbestos claims, including existing asbestos claims, and all litigation, including existing litigation, and shall apply to successors of a domestic business corporation to which this section applies.
(3) The limitations set forth in subsections (a) and
(b) shall not apply to workers' compensation benefits paid by or on behalf of an employer to an employee pursuant to the act of June 2, 1915 (P.L.736, No.338), known as the Workers' Compensation Act, or comparable workers' compensation law of another jurisdiction.
(4) The limitations set forth in subsections (a) and
(b) shall not apply to any claim against a domestic business corporation that does not constitute a successor asbestos-related liability.
(5) This section shall not apply to an insurance corporation as defined in section 3102 (relating to definitions).
(6) The limitations set forth in subsections (a) and
(b) shall not apply to any obligations arising under the National Labor Relations Act (49 Stat. 449, 29 U.S.C. § 151 et seq.) or under any collective bargaining agreement.
(e) Definitions.--As used in this section, the following words and phrases shall have the meanings given to them in this subsection:
"Asbestos claim." Any claim, wherever or whenever made, for damages, losses, indemnification, contribution or other relief arising out of, based on or in any way related to asbestos, including property damage caused by the installation, presence
or removal of asbestos, the health effects of exposure to asbestos, including any claim for personal injury, death, mental or emotional injury, risk of disease or other injury or the costs of medical monitoring or surveillance. The term shall also include any claim made by or on behalf of any person exposed to asbestos or any representative, spouse, parent, child or other relative of any such person.
"Successor asbestos-related liabilities." Any liabilities, whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated or due or to become due, related in any way to asbestos claims, that were assumed or incurred by a domestic business corporation or foreign business corporation as a result of or in connection with a merger or consolidation, or the plan of merger or consolidation related thereto, with or into another domestic business corporation or foreign business corporation effected under the laws of this Commonwealth or another jurisdiction or which are related in any way to asbestos claims based on the exercise of control or the ownership of stock of such corporation prior to such merger or consolidation. The term shall also include liabilities which, after the time of the merger or consolidation as to which the fair market value of total assets is determined for purposes of subsections (a) and
(b), were or are paid or otherwise discharged, or committed to be paid or otherwise discharged, by or on behalf of the corporation, or by or on behalf of a transferor, in connection with settlements, judgments or other discharges in this Commonwealth or another jurisdiction.
"Transferor." A domestic business corporation or foreign business corporation from which successor asbestos-related liabilities are assumed or incurred. (Dec. 17, 2001, P.L.904, No.101, eff. imd.) 2001 Amendment. Act 101 added section 1929.1. Cross References. Section 1929.1 is referred to in sections 8128, 8368.1, 8368.6 of Title 42 (Judiciary and Judicial Procedure).
15 Pa.C.S. § 1930 Dissenters rights (Repealed).
2014 Repeal. Section 1930 was repealed October 22, 2014, P.L.2640, No.172, effective July 1, 2015.
15 Pa.C.S. § 1931 Share exchanges (Repealed).
2014 Repeal. Section 1931 was repealed October 22, 2014, P.L.2640, No.172, effective July 1, 2015.
15 Pa.C.S. § 1932 Voluntary transfer of corporate assets.
(a) Shareholder approval not required.--The sale, lease, exchange or other disposition of all, or substantially all, the property and assets of a business corporation, when made in the usual and regular course of the business of the corporation, or for the purpose of relocating all, or substantially all, of the business of the corporation, may be made upon such terms and conditions, and for such consideration, as shall be authorized by its board of directors. Except as otherwise restricted by the bylaws, authorization or consent of the shareholders shall not be required for such a transaction.
(b) Shareholder approval required.--
(1) A sale, lease, exchange or other disposition of all, or substantially all, the property and assets, with or without the goodwill, of a business corporation, if not made pursuant to subsection (a) or (d) or to section 1551 (relating to distributions to shareholders) or Subchapter F
of Chapter 3 (relating to division), may be made only pursuant to a plan of asset transfer in the manner provided in this subsection. A corporation selling, leasing or otherwise disposing of all, or substantially all, its property and assets is referred to in this subsection and in subsection (c) as the "transferring corporation."
(2) The property or assets of a direct or indirect subsidiary corporation that is controlled by a parent corporation shall also be deemed the property or assets of the parent corporation for the purposes of this subsection and of subsection (c). A merger to which such a subsidiary corporation is a party and in which a third party acquires direct or indirect ownership of the property or assets of the subsidiary corporation constitutes an "other disposition" of the property or assets of the parent corporation within the meaning of that term as used in this section.
(3) The plan of asset transfer shall set forth the terms and conditions of the sale, lease, exchange or other disposition or may authorize the board of directors to fix any or all of the terms and conditions, including the consideration to be received by the corporation therefor. The plan may provide for the distribution to the shareholders of some or all of the consideration to be received by the corporation, including provisions for special treatment of shares held by any shareholder or group of shareholders as authorized by, and subject to the provisions of, section 1906 (relating to special treatment of holders of shares of same class or series). It shall not be necessary for the person acquiring the property or assets of the transferring corporation to be a party to the plan. Any of the terms of the plan may be made dependent upon facts ascertainable outside of the plan if the manner in which the facts will operate upon the terms of the plan is set forth in the plan. Such facts may include, without limitation, actions or events within the control of or determinations made by the corporation or a representative of the corporation.
(4) The plan of asset transfer shall be proposed and adopted, and may be amended after its adoption and terminated, by the transferring corporation in the manner provided in Chapter 3 (relating to entity transactions) for the proposal, adoption, amendment and termination of a plan of merger, except section 321(d) (relating to approval by business corporation). The procedures of Chapter 3 shall not be applicable to the person acquiring the property or assets of the transferring corporation. There shall be included in, or enclosed with, the notice of the meeting of the shareholders of the transferring corporation to act on the plan a copy or a summary of the plan and, if Subchapter D of Chapter 15 (relating to dissenters rights) is applicable, a copy of the subchapter and of subsection (c).
(5) In order to make effective the plan of asset transfer so adopted, it shall not be necessary to file any articles or other documents in the Department of State.
(c) Dissenters rights in asset transfers.--
(1) If a shareholder of a transferring corporation that adopts a plan of asset transfer objects to the plan and complies with Subchapter D of Chapter 15, the shareholder shall be entitled to the rights and remedies of dissenting shareholders therein provided, if any.
(2) Paragraph (1) shall not apply to a sale pursuant to an order of court having jurisdiction in the premises or a sale pursuant to a plan of asset transfer that requires
that all or substantially all of the net proceeds of sale be distributed to the shareholders in accordance with their respective interests within one year after the date of sale or to a liquidating trust.
(3) See sections 1906(c) (relating to dissenters rights upon special treatment) and 2537 (relating to dissenters rights in asset transfers).
(d) Exceptions.--Subsections (b) and (c)(1) shall not apply to a sale, lease, exchange or other disposition of all, or substantially all, of the property and assets of a business corporation:
(1) that directly or indirectly owns all of the outstanding shares of another corporation to the other corporation if the voting rights, preferences, limitations or relative rights, granted to or imposed upon the shares of any class of the parent corporation are not altered by the sale, lease, exchange or other disposition;
(2) when made in connection with the dissolution or liquidation of the corporation, which transaction shall be governed by the provisions of Subchapter F (relating to voluntary dissolution and winding up) or G (relating to involuntary liquidation and dissolution), as the case may be; or
(3) when made in connection with a transaction pursuant to which all the assets sold, leased, exchanged or otherwise disposed of are simultaneously leased back to the corporation.
(e) Mortgage.--A mortgage, pledge, grant of a security interest or dedication of property to the repayment of indebtedness (with or without recourse) shall not be deemed a sale, lease, exchange or other disposition for the purposes of this section.
(f) Restrictions.--This section shall not be construed to authorize the conversion or exchange of property or assets in fraud of corporate creditors or in violation of law.
(g) Presumption.--The following apply to a determination whether a corporation has sold, leased, exchanged or otherwise disposed of all or substantially all, of its property and assets, with or without good will:
(1) A corporation will conclusively be deemed not to have done so if the corporation or any direct or indirect subsidiary controlled by the corporation retains a business activity that represented at the end of its most recently completed fiscal year before the transaction, on a consolidated basis, at least:
(i) 25% of total assets; and
(ii) 25% of either:
(A) income from continuing operations before taxes; or
(B) revenues from continuing operations.
(2) A determination under paragraph (1)(i) may be based on a balance sheet that reflects:
(i) the book values of the assets of the corporation, as reflected on its books and records;
(ii) a valuation that takes into consideration unrealized appreciation and depreciation or other changes in value of the assets of the corporation;
(iii) the current value of the assets of the corporation, either valued separately or valued in segments or as an entirety as a going concern; or
(iv) any other method that is reasonable in the circumstances.
(3) A determination under paragraph (1)(ii) may be based on financial statements prepared on the basis of generally accepted accounting principles or such other accounting practices and principles as are used generally by the corporation in the maintenance of its books and records and as are reasonable in the circumstances. (Dec. 18, 1992, P.L.1333, No.169, eff. 60 days; June 22, 2001, P.L.418, No.34, eff. 60 days; Oct. 22, 2014, P.L.2640, No.172, eff. July 1, 2015; Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 amended subsec. (g). 2014 Amendment. Act 172 amended subsec. (b)(1), (2) and
(4). 2001 Amendment. Act 34 amended subsecs. (b) and (c)(1) and
(2) and added subsec. (g). Cross References. Section 1932 is referred to in sections 221, 1571, 1906, 2721 of this title.
15 Pa.C.S. § 1971 Voluntary dissolution by shareholders or incorporators.
(a) General rule.--The shareholders or incorporators of a business corporation that has never transacted business or held assets other than money received from subscriptions for shares may effect the dissolution of the corporation by filing articles of dissolution in the Department of State. The articles of dissolution shall be executed in the name of the corporation
by a majority of the incorporators or a majority in interest of the shareholders and shall set forth:
(1) The name of the corporation and, subject to section 109 (relating to name of commercial registered office provider in lieu of registered address), the address, including street and number, if any, of its registered office.
(2) The statute under which the corporation was incorporated and the date of incorporation.
(3) That the corporation has never transacted business or held assets other than money received from subscriptions for shares.
(4) That the amount, if any, actually paid in on subscriptions for its shares, less any part thereof disbursed for necessary expenses, has been returned to those entitled thereto.
(5) That all liabilities of the corporation have been discharged or that adequate provision has been made therefor.
(6) That a majority of the incorporators or a majority in interest of the shareholders elect that the corporation be dissolved.
(b) Filing.--The articles of dissolution shall be filed in the Department of State. See section 134 (relating to docketing statement).
(c) Effect.--Upon the filing of the articles of dissolution, the existence of the corporation shall cease. (Nov. 21, 2016, P.L.1328, No.170, eff. 90 days) 2016 Amendment. Act 170 amended subsec. (a). Cross References. Section 1971 is referred to in section 139 of this title.
15 Pa.C.S. § 1972 Proposal of voluntary dissolution.
(a) General rule.--Any business corporation that has commenced business may dissolve voluntarily in the manner provided in this subchapter and wind up its affairs in the manner provided in section 1975 (relating to predissolution provision for liabilities) or Subchapter H (relating to postdissolution provision for liabilities). Voluntary dissolution shall be proposed by the adoption by the board of directors of a resolution recommending that the corporation be dissolved voluntarily. The resolution shall contain a statement either that the dissolution shall proceed under section 1975 or that the dissolution shall proceed under Subchapter H. The resolution may set forth provisions for the distribution to shareholders of any surplus remaining after paying or providing for all liabilities of the corporation, including provisions for special treatment of shares held by any shareholder or group of shareholders as authorized by, and subject to the provisions of, section 1906 (relating to special treatment of holders of shares of same class or series).
(b) Submission to shareholders.--The board of directors shall direct that the resolution recommending dissolution be submitted to a vote of the shareholders of the corporation entitled to vote thereon at a regular or special meeting of the shareholders.
(c) Cross reference.--See section 1974(d) (relating to amendment of winding-up election). (Dec. 19, 1990, P.L.834, No.198, eff. imd.; Dec. 18, 1992, P.L.1333, No.169, eff. 60 days; June 22, 2001, P.L.418, No.34, eff. 60 days) 2001 Amendment. Act 34 amended subsecs. (a) and (b).
1992 Amendment. Act 169 amended subsec. (a) and added subsec. (c). Cross References. Section 1972 is referred to in sections 1906, 1975, 1997 of this title.
15 Pa.C.S. § 1973 Notice of meeting of shareholders.
(a) General rule.--Notice in record form of the meeting of shareholders that will consider the resolution recommending dissolution of the business corporation must be given to each shareholder of record entitled to vote thereon. The purpose of the meeting must be stated in the notice.
(b) Cross references.--See Subchapter A of Chapter 17 (relating to notice and meetings generally) and section 2528 (relating to notice of shareholder meetings). (Dec. 18, 1992, P.L.1333, No.169, eff. 60 days; June 22, 2001, P.L.418, No.34, eff. 60 days; July 9, 2013, P.L.476, No.67, eff. 60 days)
15 Pa.C.S. § 1974 Adoption of proposal.
(a) General rule.--The resolution shall be adopted upon receiving the affirmative vote of a majority of the votes cast by all shareholders of the business corporation entitled to vote thereon and, if any class of shares is entitled to vote thereon as a class, the affirmative vote of a majority of the votes cast in each class vote. A proposal for the voluntary dissolution of a corporation shall not be deemed to have been adopted by the corporation unless it has also been recommended by resolution of the board of directors, regardless of the fact that the board has directed or suffered the submission of such a proposal to the shareholders for action.
(b) Termination of proposal.--Prior to the time when articles of dissolution are filed in the Department of State, the proposal may be terminated pursuant to provisions therefor, if any, set forth in the resolution.
(c) Action rescinding election to dissolve.--Prior to the time when articles of dissolution are filed in the department, any business corporation may rescind its election to dissolve in the same manner and by the same procedure as that provided in this subchapter for the election of a corporation to dissolve voluntarily.
(d) Amendment of winding-up election.--If the resolution with respect to voluntary dissolution so provides, an election to proceed under section 1975 (relating to predissolution provision for liabilities) or Subchapter H (relating to postdissolution provision for liabilities) may be reversed by the board of directors prior to the time when articles of dissolution are filed in the department, notwithstanding the adoption by the shareholders of the proposal for voluntary dissolution. (Dec. 19, 1990, P.L.834, No.198, eff. imd.; Dec. 18, 1992, P.L.1333, No.169, eff. 60 days) 1992 Amendment. Act 169 added subsec. (d). 1990 Amendment. Act 198 amended subsec. (a). Cross References. Section 1974 is referred to in section 1972 of this title.
15 Pa.C.S. § 1975 Predissolution provision for liabilities.
(a) Powers of board.--The board of directors of a business corporation that has elected to proceed under this section shall have full power to wind up and settle the affairs of the corporation in accordance with this section prior to filing articles of dissolution in accordance with section 1977 (relating to articles of dissolution).
(b) Notice to creditors and taxing authorities.--After the approval by the shareholders of the resolution recommending that the corporation dissolve voluntarily, the corporation shall immediately cause notice of the winding up proceedings to be officially published and to be mailed by certified or registered mail to each known creditor and claimant and to each municipal corporation in which it has a place of business in this Commonwealth.
(c) Winding up and distribution.--The corporation shall, as speedily as possible, proceed to collect all sums due it, convert into cash all corporate assets the conversion of which into cash is required to discharge its liabilities and, out of the assets of the corporation, discharge or make adequate provision for the discharge of all liabilities of the corporation, according to their respective priorities. Any surplus remaining after paying or providing for all liabilities of the corporation shall be distributed to the shareholders according to their respective rights and preferences. See section 1972(a) (relating to proposal of voluntary dissolution). (Dec. 18, 1992, P.L.1333, No.169, eff. 60 days; June 22, 2001, P.L.418, No.34, eff. 60 days) Cross References. Section 1975 is referred to in sections 1972, 1974, 1976, 1977, 1978, 1979, 1985, 4129 of this title.
15 Pa.C.S. § 1976 Judicial supervision of proceedings.
A business corporation that has elected to proceed under section 1975 (relating to predissolution provision for liabilities), at any time during the winding up proceedings, may apply to the court to have the proceedings continued under the supervision of the court and thereafter the proceedings shall continue under the supervision of the court as provided in Subchapter G (relating to involuntary liquidation and dissolution). (June 22, 2001, P.L.418, No.34, eff. 60 days)
15 Pa.C.S. § 1977 Articles of dissolution.
(a) General rule.--Articles of dissolution and the certificates or statement required by section 139 (relating to tax clearance of certain fundamental transactions) shall be filed in the Department of State when:
(1) all liabilities of the business corporation have been discharged, or adequate provision has been made therefor, in accordance with section 1975 (relating to predissolution provision for liabilities), and all of the remaining assets of the corporation have been distributed as provided in section 1975 (or in case its assets are not sufficient to discharge its liabilities, when all the assets have been fairly and equitably applied, as far as they will go, to the payment of such liabilities); or
(2) an election to proceed under Subchapter H (relating to postdissolution provision for liabilities) has been made.
(b) Contents of articles.--The articles of dissolution shall be executed by the corporation and shall set forth:
(1) The name of the corporation and, subject to section 109 (relating to name of commercial registered office provider in lieu of registered address), the address, including street and number, if any, of its registered office.
(2) The statute under which the corporation was incorporated and the date of incorporation.
(3) The names and respective addresses, including street and number, if any, of its directors and officers.
(4) The manner in which the proposal to dissolve voluntarily was adopted by the corporation.
(5) A statement that:
(i) all liabilities of the corporation have been discharged or that adequate provision has been made therefor;
(ii) the assets of the corporation are not sufficient to discharge its liabilities, and that all the assets of the corporation have been fairly and equitably applied, as far as they will go, to the payment of such liabilities; or
(iii) the corporation has elected to proceed under Subchapter H.
(6) A statement:
(i) that all the remaining assets of the corporation, if any, have been distributed as provided in the Business Corporation Law of 1988; or
(ii) that the corporation has elected to proceed under Subchapter H and that any remaining assets of the corporation will be distributed as provided in that subchapter.
(7) In the case of a corporation that has not elected to proceed under Subchapter H, a statement that no actions or proceedings are pending against the corporation in any court, or that adequate provision has been made for the satisfaction of any judgment or decree that may be obtained against the corporation in each pending action or proceeding.
(8) In the case of a corporation that has not elected to proceed under Subchapter H, a statement that notice of the winding-up proceedings of the corporation was mailed by certified or registered mail to each known creditor and claimant and to each municipal corporation in which the corporation has a place of business in this Commonwealth.
(c) Effect.--Upon the filing of the articles of dissolution in the department, the existence of the corporation shall cease.
(d) Cross references.--See sections 134 (relating to docketing statement) and 135 (relating to requirements to be met by filed documents). (Dec. 18, 1992, P.L.1333, No.169, eff. 60 days; June 22, 2001, P.L.418, No.34, eff. 60 days) 2001 Amendment. Act 34 amended subsecs. (a) and (b)(5), (7) and (8) and added subsec. (d). 1992 Amendment. Act 169 amended subsecs. (a) and (b). Cross References. Section 1977 is referred to in sections 1975, 1989, 1991.1, 1992, 9319 of this title.
15 Pa.C.S. § 1978 Winding up of corporation after dissolution.
(a) Winding up and distribution.--Every business corporation that is dissolved by expiration of its period of duration or otherwise shall, nevertheless, continue to exist for the purpose of winding up its affairs, prosecuting and defending actions or proceedings by or against it, collecting and discharging obligations, disposing of and conveying its property and collecting and dividing its assets, but not for the purpose of continuing business except insofar as necessary for the winding up of the corporation. The board of directors of the corporation may continue as such and shall have full power to wind up the affairs of the corporation.
(b) Standard of care of directors and officers.--The dissolution of the corporation shall not subject its directors or officers to standards of conduct different from those prescribed by or pursuant to Chapter 17 (relating to officers, directors and shareholders). Directors of a dissolved corporation who have complied with section 1975 (relating to predissolution provision for liabilities) or Subchapter H (relating to postdissolution provision for liabilities) and governing persons of a successor entity who have complied with Subchapter H shall not be personally liable to the creditors or claimants of the dissolved corporation. (Dec. 18, 1992, P.L.1333, No.169, eff. 60 days; June 22, 2001, P.L.418, No.34, eff. 60 days; July 9, 2013, P.L.476, No.67, eff. 60 days) 2013 Amendment. Act 67 amended subsec. (b). Cross References. Section 1978 is referred to in section 1979 of this title.
15 Pa.C.S. § 1979 Survival of remedies and rights after dissolution.
(a) General rule.--The dissolution of a business corporation, either under this subchapter or under Subchapter G (relating to involuntary liquidation and dissolution) or by expiration of its period of duration or otherwise, shall not eliminate nor impair any remedy available to or against the corporation or its directors, officers or shareholders for any right or claim existing, or liability incurred, prior to the dissolution, if an action or proceeding thereon is brought on behalf of:
(1) the corporation within the time otherwise limited by law; or
(2) any other person before or within two years after the date of the dissolution or within the time otherwise limited by this subpart or other provision of law, whichever is less. See sections 1987 (relating to proof of claims), 1993 (relating to acceptance or rejection of matured claims) and 1994 (relating to disposition of unmatured claims).
(b) Rights and assets.--The dissolution of a business corporation shall not affect the limited liability of a shareholder of the corporation theretofore existing with respect to transactions occurring or acts or omissions done or omitted in the name of or by the corporation except that, subject to subsection (d) and sections 1992(d) (relating to notice to claimants) and 1993(b) (relating to acceptance or rejection of matured claims), if applicable, each shareholder shall be liable for his pro rata portion of the unpaid liabilities of the corporation up to the amount of the net assets of the corporation distributed to the shareholder in connection with the dissolution. Should any property right of a corporation be discovered, or the corporation be named as a defendant in an action or proceeding, at any time after the dissolution of the corporation, the surviving member or members of the board of directors that wound up the affairs of the corporation, or a receiver appointed by the court, shall have authority to enforce the property right and to collect and divide the assets so discovered among the persons entitled thereto and to prosecute actions or proceedings in the corporate name of the corporation. Any assets so collected shall be distributed and disposed of in accordance with the applicable order of court, if any, and otherwise in accordance with this subchapter.
(c) Liability of shareholders.--A shareholder of a dissolved business corporation, the assets of which were distributed under section 1975(c) (relating to winding up and distribution) or 1997 (relating to payments and distributions), shall not be liable for any claim against the corporation in an amount in excess of the shareholder's pro rata share of the claim or the amount so distributed to the shareholder, whichever is less.
The aggregate liability of any shareholder of a dissolved corporation for claims against the dissolved corporation shall not exceed the amount distributed to the shareholder in dissolution.
(d) Limitation of actions.--A shareholder of a dissolved corporation, the assets of which were distributed under section 1975(c) or 1997(a) through (c), shall not be liable for any claim against the corporation on which an action is not commenced prior to the expiration of the period specified in subsection (a)(2).
(e) Conduct of actions.--An action or proceeding may be prosecuted against and defended by a dissolved corporation in its corporate name.
(f) Late-filed action or proceeding.--The following apply to an action or proceeding commenced against a dissolved corporation after the expiration of the period specified in subsection (a)(2):
(1) Any judgment against a dissolved corporation in an action or proceeding shall be void.
(2) The dissolved corporation may, but need not, appear and raise as a defense the expiration of the period specified in subsection (a)(2) and any other reasonably related matters in response to the action or proceeding.
(3) Any person who was a director, officer or shareholder of the dissolved corporation when the dissolution became effective or any governing person of any successor entity acting pursuant to Subchapter H (relating to postdissolution provision for liabilities), and any successor-in-interest to any of those persons, may, but need not, act on behalf of the dissolved corporation in taking the actions described in paragraph (2) and shall not thereby be deemed to be deprived of the operation of subsections (c) and (d) or section 1978(b) (relating to winding up of corporation after dissolution) or otherwise be responsible for any obligations of the dissolved corporation. (Dec. 18, 1992, P.L.1333, No.169, eff. 60 days; June 22, 2001, P.L.418, No.34, eff. 60 days; Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 amended subsec. (b) and added subsec. (f). 2001 Amendment. Act 34 amended subsec. (a) and added subsec.
(e). 1992 Amendment. Act 169 amended subsec. (b) and added subsecs. (c) and (d). Cross References. Section 1979 is referred to in sections 1987, 1993, 1994, 1995 of this title.
15 Pa.C.S. § 1980 Dissolution by domestication (Repealed).
2014 Repeal. Section 1980 was repealed October 22, 2014, P.L.2640, No.172, effective July 1, 2015.
15 Pa.C.S. § 1981 Proceedings upon application of shareholder or director.
(a) General rule.--Upon application filed by a shareholder or director of a business corporation, the court may entertain proceedings for the involuntary winding up and dissolution of the corporation when any one of the following is made to appear:
(1) The acts of the directors, or those in control of the corporation, are illegal, oppressive or fraudulent and that it is beneficial to the interests of the shareholders that the corporation be wound up and dissolved.
(2) The corporate assets are being misapplied or wasted and that it is beneficial to the interests of the shareholders that the corporation be wound up and dissolved.
(3) The directors are deadlocked in the direction of the management of the business and affairs of the corporation and the shareholders are unable to break the deadlock and that irreparable injury to the corporation is being suffered or is threatened by reason thereof. The court shall not appoint a receiver or grant other similar relief under this paragraph if the shareholders by agreement or otherwise have provided for the appointment of a provisional director or other means for the resolution of a deadlock but the court shall enforce the remedy so provided if appropriate.
(b) Cross reference.--See section 2536 (relating to application by director for involuntary dissolution). Cross References. Section 1981 is referred to in section 1767 of this title.
15 Pa.C.S. § 1982 Proceedings upon application of creditor.
Upon application filed by a creditor of a business corporation whose claim has either been reduced to judgment and an execution thereon returned unsatisfied or whose claim is admitted by the corporation, the court may entertain proceedings for the involuntary winding up and dissolution of the corporation when, in either case, it is made to appear that the corporation is unable to discharge its liabilities in the regular course of business, as they mature, or is unable to afford reasonable security to those who may deal with it.
15 Pa.C.S. § 1984 Appointment of receiver pendente lite and other interim powers.
Upon the filing of an application under this subchapter, the court may issue injunctions, appoint a receiver pendente lite with such powers and duties as the court from time to time may direct and proceed as may be requisite to preserve the corporate assets wherever situated and to carry on the business of the corporation until a full hearing can be had. Saved from Suspension. Pennsylvania Rule of Civil Procedure No. 1549(10), adopted June 3, 1994, provided that section 1984 insofar as it relates to the appointment of receivers in corporate dissolutions shall not be deemed suspended or affected by Rules 1501 through 1536 relating to action in equity.
15 Pa.C.S. § 1985 Liquidating receiver.
Upon a hearing, after such notice as the court may direct to be given to all parties to the proceeding and to any other parties in interest designated by the court, the court may appoint a liquidating receiver with authority to collect the assets of the corporation. The liquidating receiver shall have authority, subject to the order of the court, to dispose of all or any part of the assets of the corporation wherever situated, either at public or private sale. The assets of the corporation, or the proceeds resulting from a disposition thereof, shall be applied to the expenses of the liquidation and to the payment of the liabilities of the corporation and any remaining assets or proceeds shall be distributed by the court in the manner provided by section 1975(c) (relating to winding up and distribution). The court may direct that any or all of the provisions of Subchapter H (relating to postdissolution provision for liabilities) shall apply. The order appointing the liquidating receiver shall state his powers and duties. The powers and duties may be increased or diminished at any time during the proceedings. A receiver of a corporation appointed under this section shall have authority to sue and defend in all courts in his own name as receiver of the corporation. The court appointing the receiver shall have exclusive jurisdiction of the corporation and its property wherever situated. (Dec. 18, 1992, P.L.1333, No.169, eff. 60 days) Saved from Suspension. Pennsylvania Rule of Civil Procedure No. 1549(10), adopted June 3, 1994, provided that section 1985 insofar as it relates to the appointment of receivers in corporate dissolutions shall not be deemed suspended or affected by Rules 1501 through 1536 relating to action in equity.
15 Pa.C.S. § 1986 Qualifications of receivers.
A receiver shall in all cases be a natural person of full age or a corporation authorized to act as receiver, which corporation, if so authorized, may be a domestic corporation for profit or not-for-profit or a foreign corporation for profit or not-for-profit authorized to do business in this Commonwealth, and shall give such bond, if any, as the court may direct, with such sureties, if any, as the court may require. Saved from Suspension. Pennsylvania Rule of Civil Procedure No. 1549(10), adopted June 3, 1994, provided that section 1986 insofar as it relates to the appointment of receivers in corporate dissolutions shall not be deemed suspended or affected by Rules 1501 through 1536 relating to action in equity.
15 Pa.C.S. § 1987 Proof of claims.
(a) General rule.--In a proceeding under this subchapter, the court may require all creditors of the business corporation to file with the office of the clerk of the court of common pleas or with the receiver, in such form as the court may prescribe, verified proofs of their respective claims. If the court requires the filing of claims, it shall fix a date, which shall not be less than 120 days from the date of the order, as the last day for filing of claims and shall prescribe the notice that shall be given to creditors and claimants of the date so fixed. Prior to or after the date so fixed, the court may extend the time for the filing of claims. Creditors and claimants who do not file proofs of claim on or before the date so fixed may be barred, by order of court, from participating in the distribution of the assets of the corporation.
(b) Cross reference.--See section 1979 (relating to survival of remedies and rights after dissolution).
Cross References. Section 1987 is referred to in section 1979 of this title.
15 Pa.C.S. § 1988 Discontinuance of proceedings; reorganization.
The proceedings under this subchapter may be discontinued at any time when it is established that cause for liquidation no longer exists. In that event, the court shall dismiss the proceedings and direct the receiver to redeliver to the business corporation all its remaining property and assets.
15 Pa.C.S. § 1989 Articles of involuntary dissolution.
(a) General rule.--In a proceeding under this subchapter, the court shall enter an order dissolving the business corporation when the costs and expenses of the proceeding and all liabilities of the corporation have been discharged, and all of its remaining assets have been distributed to its shareholders or, in case its assets are not sufficient to discharge such costs, expenses and liabilities, when all the assets have been applied, as far as they will go, to the payment of such costs, expenses and liabilities. See section 139(b) (relating to tax clearance in judicial proceedings).
(b) Filing.--After entry of an order of dissolution, the office of the clerk of the court of common pleas shall prepare and execute articles of dissolution substantially in the form provided by section 1977 (relating to articles of dissolution), attach thereto a certified copy of the order and transmit the articles and attached order to the Department of State. The department shall not charge a fee in connection with the filing of articles of dissolution under this section. See sections 134 (relating to docketing statement) and 135 (relating to requirements to be met by filed documents).
(c) Effect.--Upon the filing of the articles of dissolution in the department, the existence of the corporation shall cease. (June 22, 2001, P.L.418, No.34, eff. 60 days) 2001 Amendment. Act 34 amended subsecs. (a) and (b).
15 Pa.C.S. § 1991 Definitions.
The following words and phrases when used in this subchapter shall have the meanings given to them in this section unless the context clearly indicates otherwise:
"Contractual claims." Excludes contingent contractual claims based on any implied warranty as to any product manufactured, sold, distributed or handled by the dissolved corporation.
"Priority." Does not refer either to the order of payments set forth in section 1997(a)(1) through (4) (relating to payments and distributions) or to the relative times at which any claims mature or are reduced to judgment.
"Successor entity." Includes any trust, receivership or other legal entity governed by the laws of this Commonwealth or any other jurisdiction to which the remaining assets of a dissolved business corporation are transferred subject to its liabilities and which exists solely for the purposes of prosecuting and defending actions, by or against the corporation, enabling the corporation to settle and close its business, to dispose of and convey the property of the corporation, to discharge the liabilities of the corporation, and to distribute to the shareholders of the corporation any remaining assets, but not for the purpose of continuing the business for which the corporation was incorporated. (Dec. 18, 1992, P.L.1333, No.169, eff. 60 days)
15 Pa.C.S. § 1991.1 Authority of board of directors.
(a) General rule.--The board of directors of a business corporation that has elected to proceed under this subchapter shall have full power to wind up and settle the affairs of the corporation in accordance with this subchapter both prior to and after the filing of articles of dissolution in accordance with section 1977 (relating to articles of dissolution).
(b) Winding up.--The corporation shall, as speedily as possible, proceed to comply with the requirements of this subchapter while simultaneously collecting all sums due it and converting into cash all corporate assets, the conversion of which into cash is required to make adequate provision for its liabilities. (June 22, 2001, P.L.418, No.34, eff. 60 days) 2001 Amendment. Act 34 added section 1991.1.
15 Pa.C.S. § 1992 Notice to claimants.
(a) General rule.--After a business corporation that has elected to proceed under this subchapter has been dissolved in accordance with section 1977 (relating to articles of dissolution), the corporation or any successor entity shall give notice of the dissolution requesting all persons having a claim against the corporation to present their claims against the corporation in accordance with the notice. The notice shall state:
(1) That all claims must be presented in writing and must contain sufficient information reasonably to inform the corporation or successor entity of the identity of the claimant and the substance of the claim.
(2) The mailing address to which a claim must be sent.
(3) The deadline, which shall be not less than 60 days after the date the notice is given, by which the corporation or successor entity must receive the claim.
(4) That the claim will be barred if not received by the deadline.
(5) That the corporation or a successor entity may make distribution to other claimants and the shareholders of the corporation or persons interested as having been such without further notice to the claimant.
(b) Unmatured contractual claims.--The corporation or successor entity electing to follow the procedures specified in this subchapter shall also give notice of the dissolution of the corporation to persons with contractual claims contingent upon the occurrence or nonoccurrence of future events or otherwise conditional or unmatured, and shall request that such
persons present their claims in accordance with the terms of the notice. The notice shall be in substantially the form specified in subsection (a).
(c) Publication and service of notices.--
(1) The notices required by this section shall be officially published at least once a week for two consecutive weeks and, in the case of a corporation having $10,000,000 or more in total assets at the time of its dissolution, at least once in all editions of a daily newspaper with a national circulation.
(2) Concurrently with or preceding the publication, the corporation or successor entity shall send a copy of the notice by certified or registered mail, return receipt requested, to each:
(i) known creditor or claimant;
(ii) holder of a claim described in subsection (b); and
(iii) municipal corporation in which a place of business of the corporation in this Commonwealth was located at the time of filing the articles of dissolution in the department.
(d) Claims barred.--A claim against a dissolved corporation is barred if a claimant who was given written notice under subsection (c)(2) does not deliver the claim to the dissolved corporation or successor entity by the deadline. (Dec. 18, 1992, P.L.1333, No.169, eff. 60 days; June 22, 2001, P.L.418, No.34, eff. 60 days) 2001 Amendment. Act 34 amended subsec. (c). Cross References. Section 1992 is referred to in sections 1979, 1993, 1994, 1995 of this title.
15 Pa.C.S. § 1993 Acceptance or rejection of matured claims.
(a) Notice.--A dissolved business corporation or successor entity may reject, in whole or in part, any matured claim made by a claimant pursuant to section 1992 (relating to notice to claimants) by sending notice of the rejection by certified or registered mail, return receipt requested, to the claimant within 90 days after receipt of the claim and, in all events, at least 30 days before the expiration of the two-year period specified in section 1979(a)(2) (relating to survival of remedies and rights after dissolution). A notice sent pursuant to this section shall include or be accompanied by a copy of this subchapter and of section 1979.
(b) Claims barred.--A claim against a dissolved corporation is barred if a claimant whose claim is rejected by the dissolved corporation or successor entity does not commence an action in the court to enforce the claim within 90 days after mailing of the rejection notice. (Dec. 18, 1992, P.L.1333, No.169, eff. 60 days) Cross References. Section 1993 is referred to in sections 1979, 1997 of this title.
15 Pa.C.S. § 1994 Disposition of unmatured claims.
(a) Contractual claims.--The dissolved business corporation or successor entity shall offer any claimant whose contractual claim made pursuant to section 1992 (relating to notice to claimants) is contingent, conditional or unmatured, such security as the corporation or successor entity determines is sufficient to provide compensation to the claimant if the claim matures. The corporation or successor entity shall send the offer to the claimant by certified or registered mail, return receipt requested, within 90 days after receipt of the claim
and, in all events, at least 30 days before the expiration of the two-year period specified in section 1979(a)(2) (relating to survival of remedies and rights after dissolution). A notice sent pursuant to this section shall include or be accompanied by a copy of this subchapter and of section 1979. If the claimant offered the security does not deliver to the corporation or successor entity a written notice rejecting the offer within 60 days after mailing of the offer for security, the claimant shall be deemed to have accepted the security as the sole source from which to satisfy his claim against the corporation.
(b) Other claims.--Except as provided in section 1997(d) (relating to liability of directors), the holder of any other claim may bring an action against the dissolved corporation or its directors, officers or shareholders within the time limited by section 1979(a). (Dec. 18, 1992, P.L.1333, No.169, eff. 60 days) Cross References. Section 1994 is referred to in sections 1979, 1995, 1997 of this title.
15 Pa.C.S. § 1995 Court proceedings.
(a) General rule.--A dissolved business corporation or successor entity that has given notice in accordance with section 1992 (relating to notice to claimants) shall file an application with the court for a determination of the amount and form of security:
(1) that will be sufficient to provide compensation to any claimant who has rejected the offer for security made pursuant to section 1994 (relating to disposition of unmatured claims); and
(2) that will be reasonably likely to be sufficient to provide compensation for claims that have not been made known to the corporation or that have not arisen but that, based on the facts known to the corporation or successor entity, are likely to arise or to become known to the corporation or successor entity prior to the expiration of the two-year period specified in section 1979(a)(2) (relating to survival of remedies and rights after dissolution).
(b) Guardian ad litem.--The court may appoint a guardian ad litem in respect of any proceeding brought under this subchapter. The reasonable fees and expenses of the guardian, including all reasonable expert witness fees, shall be paid by the applicant in the proceeding unless otherwise ordered by the court. (Dec. 18, 1992, P.L.1333, No.169, eff. 60 days) Cross References. Section 1995 is referred to in section 1997 of this title.
15 Pa.C.S. § 1996 No revival or waiver.
The giving of any notice or making of any offer under this subchapter shall not revive any claim then barred or constitute acknowledgment by the dissolved business corporation or successor entity that any person to whom the notice is sent is a proper claimant and shall not operate as a waiver of any defense or counterclaim in respect of any claim asserted by any person to whom the notice is sent.
15 Pa.C.S. § 1997 Payments and distributions.
(a) General rule.--A dissolved business corporation or successor entity that has elected to proceed under this subchapter shall:
(1) Pay the claims made and not rejected under section 1993 (relating to acceptance or rejection of matured claims).
(2) Post the security offered and not rejected under section 1994 (relating to disposition of unmatured claims).
(3) Post security ordered by the court in any proceeding under section 1995 (relating to court proceedings).
(4) Pay or make provision for all other claims that are mature, known and uncontested or that have been finally determined to be owing by the corporation or the successor entity.
(b) Disposition.--The claims and liabilities shall be paid in full and any provision for payment shall be made in full if there are sufficient assets. If there are insufficient assets, the claims and liabilities shall be paid or provided for in order of their priority, and, among claims of equal priority, ratably to the extent of funds legally available therefor. Any remaining assets shall be distributed to the shareholders of the corporation according to their respective rights and preferences, except that the distribution shall not be made less than 60 days after the last notice of rejection, if any, was given under section 1993 (relating to acceptance or rejection of matured claims). See section 1972(a) (relating to proposal of voluntary dissolution).
(c) Evaluation of other liabilities.--In the absence of actual fraud, the judgment of the board of directors of the dissolved corporation or the governing persons of the successor entity as to the provision made for the payment of all claims under subsection (a)(4) shall be conclusive.
(d) Liability of directors.--(Deleted by amendment). (Dec. 18, 1992, P.L.1333, No.169, eff. 60 days; June 22, 2001, P.L.418, No.34, eff. 60 days) 2001 Amendment. Act 34 amended subsec. (b) and deleted subsec. (d). 1992 Amendment. Act 169 amended subsecs. (a) and (c), deleted subsec. (d) and relettered subsec. (e) to subsec. (d). Cross References. Section 1997 is referred to in sections 1979, 1991, 1994 of this title.
15 Pa.C.S. § 1998 Liability of shareholders (Repealed).
1992 Repeal. Section 1998 was repealed December 18, 1992, P.L.1333, No.169, effective in 60 days.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.palegis.us/statutes/consolidated/view-statute?txtType=HTM&ttl=15Fetched: 10/16/2026