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Form a Business

SHARES

Iowa Code tit. XII, ch. 490, subch. VI, pt. 1
in effect

Iowa Code § 490.601 Authorized shares.

490.601. Authorized shares. 1. The articles of incorporation must set forth any classes of shares and series of shares within a class, and the number of shares of each class and series, that the corporation is authorized to issue. If more than one class or series of shares is authorized, the articles of incorporation must prescribe a distinguishing designation for each class or series and, before the issuance of shares of a class or series, describe the terms, including the preferences, rights, and limitations of that class or series. Except to the extent varied as permitted by this section, all shares of a class or series must have terms, including preferences, rights, and limitations that are identical with those of other shares of the same class or series. 2. The articles of incorporation must authorize all of the following: a. One or more classes or series of shares that together have full voting rights. b. One or more classes or series of shares, which may be the same class, classes, or series as those with voting rights, that together are entitled to receive the net assets of the corporation upon dissolution. 3. The articles of incorporation may authorize one or more classes or series of shares that have any of the following characteristics: a. Have special, conditional, or limited voting rights, or no right to vote, except to the extent otherwise provided by this chapter. b. Are redeemable or convertible as specified in the articles of incorporation in any of the following ways: (1) At the option of the corporation, the shareholder, or another person or upon the occurrence of a specified event. (2) For cash, indebtedness, securities, or other property. (3) At prices and in amounts specified or determined in accordance with a formula. c. Entitle the holders to distributions calculated in any manner, including dividends that may be cumulative, noncumulative, or partially cumulative. d. Have preference over any other class or series of shares with respect to distributions, including distributions upon the dissolution of the corporation. 4. The terms of shares may be made dependent upon facts objectively ascertainable outside the articles of incorporation in accordance with section 490.120, subsection 11. 5. Any of the terms of shares may vary among holders of the same class or series so long as such variations are expressly set forth in the articles of incorporation. 6. The description of the preferences, rights, and limitations of classes or series of shares in subsection 3 is not exhaustive. 89 Acts, ch 288, §36; 2007 Acts, ch 140, §4; 2021 Acts, ch 165, §43, 230

Iowa Code § 490.602 Terms of class or series determined by board of directors.

490.602. Terms of class or series determined by board of directors. 1. If the articles of incorporation so provide, the board of directors is authorized, without shareholder approval, to do any of the following: a. Classify any unissued shares into one or more classes or into one or more series within a class. b. Reclassify any unissued shares of any class into one or more classes or into one or more series within one or more classes. c. Reclassify any unissued shares of any series of any class into one or more classes or into one or more series within a class. 2. If the board of directors acts pursuant to subsection 1, it shall determine the terms, including the preferences, rights, and limitations, to the same extent permitted under section 490.601, of any of the following: a. Any class of shares before the issuance of any shares of that class. b. Any series within a class before the issuance of any shares of that series. 3. Before issuing any shares of a class or series created under this section, the corporation shall deliver to the secretary of state for filing articles of amendment setting forth the terms determined under subsection 1. 89 Acts, ch 288, §37; 2007 Acts, ch 140, §5; 2021 Acts, ch 165, §44, 230

Iowa Code § 490.603 Issued and outstanding shares.

490.603. Issued and outstanding shares. 1. A corporation may issue the number of shares of each class or series authorized by the articles of incorporation. Shares that are issued are outstanding shares until they are reacquired, redeemed, converted, or canceled. 2. The reacquisition, redemption, or conversion of outstanding shares is subject to the limitations of subsection 3 and to section 490.640. 3. At all times that shares of the corporation are outstanding, one or more shares that together have full voting rights and one or more shares that together are entitled to receive the net assets of the corporation upon dissolution must be outstanding. 89 Acts, ch 288, §38; 2021 Acts, ch 165, §45, 230

Iowa Code § 490.604 Fractional shares.

490.604. Fractional shares. 1. A corporation may issue fractions of a share or in lieu of doing so may do any of the following: a. Pay in cash the value of fractions of a share. b. Issue scrip in registered or bearer form entitling the holder to receive a full share upon surrendering enough scrip to equal a full share. c. Arrange for disposition of fractional shares by the holders of such shares. 2. Each certificate representing scrip must be conspicuously labeled “scrip” and must contain the information required by section 490.625, subsection 2. 3. The holder of a fractional share is entitled to exercise the rights of a shareholder, including the rights to vote, to receive dividends, and to receive distributions upon dissolution. The holder of scrip is not entitled to any of these rights unless the scrip provides for them. 4. The board of directors may authorize the issuance of scrip subject to any condition, including any of the following: a. That the scrip will become void if not exchanged for full shares before a specified date. b. That the shares for which the scrip is exchangeable may be sold and the proceeds paid to the scripholders. 89 Acts, ch 288, §39; 2021 Acts, ch 165, §46, 230
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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