Idaho Code § 30-29-101 SHORT TITLE.
30-29-101. SHORT TITLE.
This chapter shall be known and may be cited as the "Idaho Business Corporation Act."
[30-29-101, added 2015, ch. 243, sec. 56, p. 902.]
GENERAL PROVISIONS
Idaho Code tit. 30, ch. 30-29, pt. 30-29-1
in effectIdaho Code § 30-29-120 REQUIREMENTS FOR DOCUMENTS — EXTRINSIC FACTS.
30-29-120. REQUIREMENTS FOR DOCUMENTS — EXTRINSIC FACTS.
(a) A document delivered to the secretary of state for filing pursuant to this chapter must be typewritten or printed, or, if electronically transmitted, it must be in a format that can be retrieved or reproduced in typewritten or printed form.
(b) Notwithstanding the provisions of section 30-21-209 (b), Idaho Code, and except as otherwise permitted by subsection (e) of this section, the document must be signed:
(1) By the chairman of the board of directors of a domestic or foreign corporation, by its president, or by another of its officers;
(2) If directors have not been selected or the corporation has not been formed, by an incorporator; or
(3) If the corporation is in the hands of a receiver, trustee or other court-appointed fiduciary, by that fiduciary.
(c) The person executing the document shall sign it and state beneath or opposite the person’s signature the person’s name and the capacity in which the document is signed. The document may, but need not, contain a corporate seal, attestation, acknowledgment, or verification.
(d) Whenever a provision of this chapter, or section 30-22-107 , Idaho Code, permits any of the terms of a plan or a filed document to be dependent on facts objectively ascertainable outside the plan or filed document, the following provisions apply:
(1) The manner in which the facts will operate upon the terms of the plan or filed document must be set forth in the plan or filed document.
(2) The facts may include:
(i) Any of the following that are available in a nationally recognized news or information medium either in print or electronically: statistical or market indices, market prices of any security or group of securities, interest rates, currency exchange rates, or similar economic or financial data;
(ii) A determination or action by any person or body, including the corporation or any other party, to a plan or filed document; or
(iii) The terms of, or actions taken under, an agreement to which the corporation is a party, or any other agreement or document.
(3) As used in this subsection:
(i) "Filed document" means a document filed by the secretary of state under any provision of this chapter or chapter 21 or 22, title 30 , Idaho Code, except section 30-21-213 , Idaho Code, or part 5, chapter 21, title 30 , Idaho Code; and
(ii) "Plan" means a plan of domestication, conversion, merger or share exchange.
(4) The following provisions of a plan or filed document may not be made dependent upon facts outside the plan or filed document:
(i) The name and address of any person required in a filed document;
(ii) The registered office, if any, of any entity required in a filed document;
(iii) The registered agent of any entity required in a filed document;
(iv) The number of authorized shares and designation of each class or series of shares;
(v) The effective date of a filed document; and
(vi) Any required statement in a filed document of the date on which the underlying transaction was approved or the manner in which that approval was given.
(5) If a provision of a filed document is made dependent on a fact ascertainable outside of the filed document, and that fact is neither ascertainable by reference to a source described in subsection (d)(2)(i) of this section or a document that is a matter of public record, nor have the affected shareholders received notice of the fact from the corporation, then the corporation shall file with the secretary of state articles of amendment to the filed document setting forth the fact promptly after the time when the fact referred to is first ascertainable or thereafter changes. Articles of amendment under this paragraph are deemed to be authorized by the authorization of the original filed document to which they relate and may be filed by the corporation without further action by the board of directors or the shareholders.
(e) The annual report delivered to the secretary of state for filing under section 30-21-213 , Idaho Code, shall be executed by one (1) of the persons identified in subsection (a) of this section or by another person who is authorized by the board of directors to execute the report.
[30-29-120, added 2015, ch. 243, sec. 56, p. 902; am. 2019, ch. 90, sec. 1, p. 225.]
Idaho Code § 30-29-123 EFFECTIVE DATE OF FILED DOCUMENT.
30-29-123. EFFECTIVE DATE OF FILED DOCUMENT.
(a) If a filed document does not specify the time zone or place at which a date or time or both is to be determined, the date or time or both at which it becomes effective shall be those prevailing at the place of filing in this state.
(b) Unless otherwise provided in sections 30-29-145 through 30-29-152 , Idaho Code, any document filed pursuant to this chapter may have a delayed effective date and, when accepted for filing, is effective as provided in section 30-21-203 , Idaho Code, and this section.
[30-29-123, added 2019, ch. 90, sec. 2, p. 226.]
Idaho Code § 30-29-140 CHAPTER DEFINITIONS.
30-29-140. CHAPTER DEFINITIONS.
In this chapter, unless otherwise specified:
(1) "Articles of incorporation" means the articles of incorporation described in section 30-29-202 , Idaho Code, all amendments to the articles of incorporation, and any other documents permitted or required to be delivered for filing by a domestic business corporation with the secretary of state under any provision of this chapter that modify, amend, supplement, restate, or replace the articles of incorporation. After an amendment of the articles of incorporation or any other document filed under this chapter that restates the articles of incorporation in their entirety, the articles of incorporation shall not include any prior documents. When used with respect to a foreign corporation or a domestic or foreign nonprofit corporation, the "articles of incorporation" of such an entity means the document of such entity that is equivalent to the articles of incorporation of a domestic business corporation.
(2) "Authorized shares" means the shares of all classes a domestic or foreign corporation is authorized to issue.
(3) "Beneficial shareholder" means a person who owns the beneficial interest in shares, that may be a record shareholder or a person on whose behalf shares are registered in the name of an intermediary or nominee.
(4) "Conspicuous" means so written, displayed, or presented that a reasonable person against whom the writing is to operate should have noticed it. For example, printing in italics or boldface or contrasting color, or typing in capitals or underlined, is conspicuous.
(5) "Corporation," "domestic corporation," "business corporation," or "domestic business corporation" means a corporation for profit that is not a foreign corporation, incorporated under this chapter.
(6) "Distribution" means a direct or indirect transfer of cash or other property, except a corporation’s own shares, or incurrence of indebtedness by a corporation to or for the benefit of its shareholders in respect of any of its shares. A distribution may be in the form of a payment of a dividend; a purchase, redemption, or other acquisition of shares; a distribution of indebtedness; a distribution of liquidation; or otherwise.
(7) "Document" means any tangible medium on which information is inscribed, and includes handwritten, typed, printed, or similar instruments, and copies of such instruments; or an electronic record.
(8) "Effective date," when referring to a record filed by the secretary of state, means the time and date determined in accordance with section 30-21-203 or 30-29-123 (b), Idaho Code.
(9) "Electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.
(10) "Electronic record" means information that is stored in an electronic or other nontangible medium and is retrievable in paper form through an automated process used in conventional commercial practice, unless otherwise authorized in accordance with section 30-29-141 (j), Idaho Code.
(11) "Electronic transmission" or "electronically transmitted" means any form or process of communication not directly involving the physical transfer of paper, or another tangible medium, that is suitable for the retention, retrieval and reproduction of information by the recipient and is retrievable in paper form by the recipient through an automated process used in conventional commercial practice, unless otherwise authorized in accordance with section 30-29-141 (j), Idaho Code.
(12) "Eligible entity" means a domestic or foreign unincorporated entity or a domestic or foreign nonprofit corporation.
(13) "Eligible interests" means interests in eligible entities.
(14) "Employee" includes an officer but not a director. A director may accept duties that make the director also an employee.
(15) "Expenses" means reasonable expenses of any kind that are incurred in connection with a matter.
(16) "Foreign corporation" or "foreign business" means a corporation incorporated under a law other than the law of this state which would be a business corporation if incorporated under the law of this state.
(17) "Foreign nonprofit corporation" means a corporation incorporated under a law other than the law of this state, which would be a nonprofit corporation if incorporated under the law of this state.
(18) "Foreign registration statement" means the foreign registration statement described in section 30-21-503 , Idaho Code.
(19) "Includes" and "including" denote a partial definition or a nonexclusive list.
(20) "Individual" means a natural person.
(21) "Interest holder liability" means:
(i) Personal liability for a debt, obligation, or other liability of a domestic corporation or other entity that is imposed on a person:
(A) Solely by reason of the person’s status as a shareholder or other interest holder; or
(B) By the articles of incorporation of the domestic corporation or the organic rules of the other entity that make one (1) or more specified shareholders, members or interest holders, or categories of shareholders or interest holders, liable in their capacity as shareholders or interest holders for all or specified liabilities of the corporation or other entity; or
(ii) An obligation of a shareholder or interest holder under the articles of incorporation of a domestic corporation or the organic rules of another entity or to contribute to the corporation or other entity.
For purposes of the foregoing, except as otherwise provided in the articles of incorporation of a domestic corporation or the organic law or organic rules of another entity, interest holder liability arises under paragraph (i) of this subsection when the corporation or other entity incurs the liability.
(22) "Means" denotes an exhaustive definition.
(23) "Membership" [Reserved.]
(24) "Record date" means the date fixed for determining the identity of the corporation’s shareholders and their shareholdings for purposes of this chapter. Unless another time is specified when the record date is fixed, the determination shall be made as of the close of business at the principal office of the corporation on the date so fixed.
(25) "Record shareholder" means the person in whose name shares are registered in the records of the corporation or the person identified as the beneficial owner of shares in a beneficial ownership certificate pursuant to section 30-29-723 , Idaho Code, on file with the corporation to the extent of the rights granted by such certificate.
(26) "Secretary" means the corporate officer to whom the board of directors has delegated responsibility under section 30-29-840 (c), Idaho Code, to maintain the minutes of the meetings of the board of directors and of the shareholders and for authenticating records of the corporation.
(27) "Share exchange" means an interest exchange as defined in section 30-22-102 (10), Idaho Code.
(28) "Shareholder" means a record shareholder.
(29) "Shares" means the units into which the proprietary interests in a domestic or foreign corporation are divided.
(30) "Subscriber" means a person who subscribes for shares in a corporation, whether before or after incorporation.
(31) "Treasury shares" means shares of a corporation which have been issued, have been subsequently acquired by and belong to the corporation, and have not, either by reason of the acquisition or thereafter, been canceled or restored to the status of authorized but unissued shares. Treasury shares shall be deemed to be "issued" shares, but not "outstanding" shares.
(32) "Unincorporated entity" means an organization or artificial legal person that either has a separate legal existence or has the power to acquire an estate in real property in its own name and that is not any of the following: a domestic or foreign business or nonprofit corporation, a series of a limited liability company or of another type of entity, an estate, a trust, a state, the United States, or a foreign government. The term includes a general partnership, limited liability company, limited partnership, business trust, joint stock association and unincorporated nonprofit association.
(33) "United States" includes district, authority, bureau, commission, department and any other agency of the United States.
(34) "Unrestricted voting trust beneficial owner" means, with respect to any shareholder rights, a voting trust beneficial owner whose entitlement to exercise the shareholder right in question is not inconsistent with the voting trust agreement.
(35) "Voting group" means all shares of one (1) or more classes or series that under the articles of incorporation or this chapter are entitled to vote and be counted together collectively on a matter at a meeting of shareholders. All shares entitled by the articles of incorporation or this chapter to vote generally on the matter are for that purpose a single voting group.
(36) "Voting power" means the current power to vote in the election of directors.
(37) "Voting trust beneficial owner" means an owner of a beneficial interest in shares of the corporation held in a voting trust established pursuant to section 30-29-730 (a), Idaho Code.
(38) "Writing" or "written" means any information in the form of a document.
[30-29-140, added 2015, ch. 243, sec. 56, p. 903; am. 2019, ch. 90, sec. 3, p. 226.]
Idaho Code § 30-29-141 NOTICES AND OTHER COMMUNICATIONS.
30-29-141. NOTICES AND OTHER COMMUNICATIONS.
(a) Notice under this chapter must be in writing unless oral notice is reasonable in the circumstances. Unless otherwise agreed between the sender and the recipient, words in a notice or other communication under this chapter must be in English.
(b) A notice or other communication may be given by any method of delivery, except that electronic transmissions must be in accordance with this section. If the methods of delivery are impracticable, notice or other communication may be given by means of a broad non-exclusionary distribution to the public that may include a newspaper of general circulation in the area where published, radio, television, or other methods of distribution that the corporation has previously identified to its shareholders.
(c) Notice or other communication to a domestic corporation or to a foreign corporation registered to do business in this state may be delivered to the corporation’s registered agent at its registered office or to the secretary at the corporation’s principal office shown in its most recent annual report or, in the case of a foreign corporation that has not yet delivered an annual report, in its foreign registration statement.
(d) A notice or other communications may be delivered by electronic transmission if consented to by the recipient or if authorized by subsection (j) of this section.
(e) Any consent under subsection (d) of this section may be revoked by the person who consented by written or electronic notice to the person to whom the consent was delivered. Any such consent is deemed revoked if the corporation is unable to deliver two (2) consecutive electronic transmissions given by the corporation in accordance with such consent, and such inability becomes known to the secretary or an assistant secretary or to the transfer agent, or other person responsible for the giving of notice or other communications; provided, however, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.
(f) Unless otherwise agreed between the sender and the recipient, an electronic transmission is received when:
(1) It enters an information processing system that the recipient has designated or uses for the purposes of receiving electronic transmissions or information of the type sent, and from which the recipient is able to retrieve the electronic transmission; and
(2) It is in a form capable of being processed by that system.
(g) Receipt of an electronic acknowledgment from an information processing system described in subsection (f)(1) of this section establishes that an electronic transmission was received but, by itself, does not establish that the content sent corresponds to the content received.
(h) An electronic transmission is received under this section even if no person is aware of its receipt.
(i) A notice or other communication, if in a comprehensible form or manner, is effective at the earliest of the following:
(1) If in a physical form, the earliest of when it is actually received, or when it is left at:
(i) A shareholder’s address shown on the corporation’s record of shareholders maintained by the corporation under section 30-29-1601 (d), Idaho Code;
(ii) A director’s residence or usual place of business; or
(iii) The corporation’s principal office;
(2) If mailed postage prepaid and correctly addressed to a shareholder, upon deposit in the United States mail;
(3) If mailed by United States mail postage prepaid and correctly addressed to a recipient other than a shareholder, the earliest of when it is actually received, or:
(i) If sent by registered or certified mail, return receipt requested, the date shown on the return receipt signed by or on behalf of the addressee; or
(ii) Five (5) days after it is deposited in the United States mail;
(4) If an electronic transmission, when it is received as provided in subsection (f) of this section; and
(5) If oral, when communicated.
(j) A notice or other communication may be in the form of an electronic transmission that cannot be directly reproduced in paper form by the recipient through an automated process used in conventional commercial practice only if the electronic transmission is otherwise retrievable in perceivable form, and the sender and the recipient have consented in writing to the use of such form of electronic transmission.
(k) If this chapter prescribes requirements for notices or other communications in particular circumstances, those requirements govern. If articles of incorporation or bylaws prescribe requirements for notices or other communications, not inconsistent with this section or other provisions of this chapter, those requirements govern. The articles of incorporation or bylaws may authorize or require delivery of notices of meetings of directors by electronic transmission.
(l) In the event that any provisions of this chapter are deemed to modify, limit, or supersede the federal electronic signatures in global and national commerce act, 15 U.S.C. 7001 et seq., the provisions of this chapter shall control to the maximum extent permitted by section 102(a)(2) of that federal act.
[30-29-141, added 2015, ch. 243, sec. 56, p. 905; am. 2019, ch. 90, sec. 4, p. 229.]
Idaho Code § 30-29-142 NUMBER OF SHAREHOLDERS.
30-29-142. NUMBER OF SHAREHOLDERS.
(a) For purposes of this chapter, the following identified as a shareholder in a corporation’s current record of shareholders constitutes one (1) shareholder:
(1) Three (3) or fewer co-owners;
(2) A corporation, partnership, trust, estate, or other entity; or
(3) The trustees, guardians, custodians, or other fiduciaries of a single trust, estate, or account.
(b) For purposes of this chapter, shareholdings registered in substantially similar names constitute one (1) shareholder if it is reasonable to believe that the names represent the same person.
[30-29-142, added 2019, ch. 90, sec. 5, p. 231.]
Idaho Code § 30-29-143 QUALIFIED DIRECTOR.
30-29-143. QUALIFIED DIRECTOR.
(a) A "qualified director" is a director who, at the time action is to be taken under:
(1) Section 30-29-202 (b)(6), Idaho Code, is not a director to whom the limitation or elimination of the duty of an officer to offer potential business opportunities to the corporation would apply or who has a material relationship with any other person to whom the limitation or elimination would apply;
(2) Section 30-29-744 , Idaho Code, does not have a material interest in the outcome of the proceeding or a material relationship with a person who has such an interest;
(3) Section 30-29-853 or 30-29-855 , Idaho Code, is not a party to the proceeding, is not a director as to whom a transaction is a director’s conflicting interest transaction or who sought a disclaimer of the corporation’s interest in a business opportunity under section 30-29-870 , Idaho Code, which transaction or disclaimer is challenged in the proceeding, and does not have a material relationship with a director described in this subsection;
(4) Section 30-29-862 , Idaho Code, is not a director as to whom the transaction is a director’s conflicting interest transaction or who has a material relationship with another director as to whom the transaction is a director’s conflicting interest transaction; or
(5) Section 30-29-870 , Idaho Code, is not a director who pursues or takes advantage of the business opportunity, directly or indirectly through or on behalf of another person or has a material relationship with a director or officer who pursues or takes advantage of the business opportunity, directly or indirectly through or on behalf of another person.
(b) For purposes of this section:
(1) "Material interest" means an actual or potential benefit or detriment, other than one which would devolve on the corporation or the shareholders generally, that would reasonably be expected to impair the objectivity of the director’s judgment when participating in the action to be taken; and
(2) "Material relationship" means a familial, financial, professional, employment, or other relationship that would reasonably be expected to impair the objectivity of the director’s judgment when participating in the action to be taken.
(c) The presence of one (1) or more of the following circumstances shall not automatically prevent a director from being a qualified director:
(1) Nomination or election of the director to the current board by any director who is not a qualified director with respect to the matter, or by any person who has a material relationship with that director, acting alone or participating with others;
(2) Service as a director of another corporation of which a director who is not a qualified director with respect to the matter, or any individual who has a material relationship with that director, is or was also a director; or
(3) With respect to action to be taken under section 30-29-744 , Idaho Code, status as a named defendant, as a director against whom action is demanded, or as a director who approved the conduct being challenged.
[30-29-143, added 2019, ch. 90, sec. 6, p. 232.]
Idaho Code § 30-29-144 HOUSEHOLDING.
30-29-144. HOUSEHOLDING.
(a) A corporation has delivered written notice or any other report or statement under this chapter, the articles of incorporation, or the bylaws to all shareholders who share a common address if:
(1) The corporation delivers one (1) copy of the notice, report, or statement to the common address;
(2) The corporation addresses the notice, report, or statement to those shareholders either as a group or to each of those shareholders individually or to the shareholders in a form to which each of those shareholders has consented; and
(3) Each of those shareholders consents to delivery of a single copy of such notice, report, or statement to the shareholders’ common address.
(b) Any such consent described in subsections (a)(2) or (a)(3) of this section shall be revocable by any of such shareholders who deliver written notice of revocation to the corporation. If such written notice of revocation is delivered, the corporation shall begin providing individual notices, reports, or other statements to the revoking shareholder no later than thirty (30) days after delivery of the written notice of revocation.
(c) Any shareholder who fails to object by written notice to the corporation, within sixty (60) days of written notice by the corporation of its intention to deliver single copies of notices, reports, or statements to shareholders who share a common address as permitted by subsection (a) of this section shall be deemed to have consented to receiving such single copy at the common address; provided that the notice of intention explains that consent may be revoked and the method for revoking.
[30-29-144, added 2019, ch. 90, sec. 7, p. 233.]
Idaho Code § 30-29-145 DEFINITIONS.
30-29-145. DEFINITIONS.
For purposes of sections 30-29-145 through 30-29-152 , Idaho Code:
(1) "Corporate action" means any action taken by or on behalf of the corporation, including any action taken by the incorporator, the board of directors, a committee of the board of directors, an officer or agent of the corporation, or the shareholders.
(2) "Date of the defective corporate action" means the date, or the approximate date if the exact date is unknown, the defective corporate action was purported to have been taken.
(3) "Defective corporate action" means any corporate action purportedly taken that is, and at the time such corporate action was purportedly taken, would have been within the power of the corporation, but is void or voidable due to a failure of authorization, and is an overissue.
(4) "Failure of authorization" means the failure to authorize, approve or otherwise effect a corporate action in compliance with the provisions of this chapter, the articles of incorporation or bylaws, a corporate resolution, or any plan or agreement to which the corporation is a party, if and to the extent such failure would render such corporate action void or voidable.
(5) "Overissue" means the purported issuance of shares of a class or series in excess of the number of shares of a class or series the corporation has the power to issue under section 30-29-601 , Idaho Code, at the time of such issuance; or shares of any class or series that is not then authorized for issuance by the articles of incorporation.
(6) "Putative shares" means the shares of any class or series, including shares issued upon exercise of rights, options, warrants, or other securities convertible into shares of the corporation or interests with respect to such shares that were created or issued as a result of a defective corporate action that, but for any failure of authorization, would constitute valid shares or cannot be determined by the board of directors to be valid shares.
(7) "Valid shares" means the shares of any class or series that have been duly authorized and validly issued in accordance with this chapter, including as a result of ratification or validation under sections 30-29-145 through 30-29-152 , Idaho Code.
(8) "Validation effective time" with respect to any defective corporate action ratified under sections 30-29-145 through 30-29-152 , Idaho Code, means the later of:
(a) The time at which the ratification of the defective corporate action is approved by the shareholders, or if approval of shareholders is not required, the time at which the notice required by section 30-29-149 , Idaho Code, becomes effective in accordance with section 30-29-141 , Idaho Code; and
(b) The time at which any articles of validation filed in accordance with section 30-29-151 , Idaho Code, become effective.
The validation effective time shall not be affected by the filing or pendency of a judicial proceeding under section 30-29-152 , Idaho Code, or otherwise, unless otherwise ordered by the court.
[30-29-145, added 2019, ch. 90, sec. 8, p. 233.]
Idaho Code § 30-29-146 DEFECTIVE CORPORATE ACTIONS.
30-29-146. DEFECTIVE CORPORATE ACTIONS.
(a) A defective corporate action shall not be void or voidable if ratified in accordance with section 30-29-147 , Idaho Code, or validated in accordance with section 30-29-152 , Idaho Code.
(b) Ratification under section 30-29-147 , Idaho Code, or validation under section 30-29-152 , Idaho Code, shall not be deemed to be the exclusive means of ratifying or validating any defective corporate action, and the absence or failure of ratification in accordance with sections 30-29-145 through 30-29-152 , Idaho Code, shall not, of itself, affect the validity or effectiveness of any corporate action properly ratified under common law or otherwise, nor shall it create a presumption that any such corporate action is or was a defective corporate action or void or voidable.
(c) In the case of an overissue, putative shares shall be valid shares effective as of the date originally issued or purportedly issued upon:
(1) The effectiveness under sections 30-29-145 through 30-29-152 , Idaho Code, and under part 10 of this chapter or an amendment to the articles of incorporation authorizing, designating, or creating such shares; or
(2) The effectiveness of any other corporate action under sections 30-29-145 through 30-29-152 , Idaho Code, ratifying the authorization, designation, or creation of such shares.
[30-29-146, added 2019, ch. 90, sec. 9, p. 234.]
Idaho Code § 30-29-147 RATIFICATION OF DEFECTIVE CORPORATE ACTIONS.
30-29-147. RATIFICATION OF DEFECTIVE CORPORATE ACTIONS.
(a) To ratify a defective corporate action under this section, other than the ratification of an election of the initial board of directors under subsection (b) of this section, the board of directors shall take action ratifying the action in accordance with section 30-29-148 , Idaho Code, stating:
(1) The defective corporate action to be ratified and, if the defective corporate action involved the issuance of putative shares, the number and type of putative shares purportedly issued;
(2) The date of the defective corporate action;
(3) The nature of the failure of authorization with respect to the defective corporate action to be ratified; and
(4) That the board of directors approves the ratification of the defective corporate action.
(b) In the event that a defective corporate action to be ratified relates to the election of the initial board of directors of the corporation under section 30-29-205 (a)(2), Idaho Code, a majority of the persons who, at the time of the ratification, are exercising the powers of directors, may take an action stating:
(1) The name of the person or persons who first took action in the name of the corporation as the initial board of directors of the corporation;
(2) The earlier of the date on which such persons first took such action or were purported to have been elected as the initial board of directors; and
(3) That the ratification of the election of such person or persons as the initial board of directors is approved.
(c) If any provision of this chapter, the articles of incorporation or bylaws, any corporate resolution or any plan or agreement to which the corporation is a party in effect at the time action under subsection (a) of this section is taken, requires shareholder approval or would have required shareholder approval at the date of the occurrence of the defective corporate action, the ratification of the defective corporate action approved in the action taken by the directors under subsection (a) of this section shall be submitted to the shareholders for approval in accordance with section 30-29-148 , Idaho Code.
(d) Unless otherwise provided in the action taken by the board of directors under subsection (a) of this section, after the action by the board of directors has been taken and, if required, approved by the shareholders, the board of directors may abandon the ratification at any time before the validation effective time without further action of the shareholders.
[30-29-147, added 2019, ch. 90, sec. 10, p. 234.]
Idaho Code § 30-29-148 ACTION ON RATIFICATION.
30-29-148. ACTION ON RATIFICATION.
(a) The quorum and voting requirements applicable to a ratifying action by the board of directors under section 30-29-147 (a), Idaho Code, shall be the quorum and voting requirements applicable to the corporate action proposed to be ratified at the time such ratifying action is taken.
(b) If the ratification of the defective corporate action requires approval by the shareholders under section 30-29-147 (c), Idaho Code, and if the approval is to be given at a meeting, the corporation shall notify each holder of valid and putative shares, regardless of whether entitled to vote, as of the record date for notice of the meeting and as of the date of the occurrence of defective corporate action, provided that notice shall not be required to be given to holders of valid or putative shares whose identities or addresses for notice cannot be determined from the records of the corporation. The notice must state that the purpose, or one (1) of the purposes, of the meeting is to consider ratification of a defective corporate action and must be accompanied by either a copy of the action taken by the board of directors in accordance with section 30-29-147 (a), Idaho Code, or the information required by paragraphs (1) through (4) of subsection (a) of section 30-29-147 , Idaho Code, and a statement that any claim that the ratification of such defective corporate action and any putative shares issued as a result of such defective corporate action should not be effective, or should be effective only on certain conditions, shall be brought within 120 days from the applicable validation effective time.
(c) Except as provided in subsection (d) of this section with respect to the voting requirements to ratify the election of a director, the quorum and voting requirements applicable to the approval by the shareholders required by section 30-29-147 (c), Idaho Code, shall be the quorum and voting requirements applicable to the corporate action proposed to be ratified at the time of such shareholder approval.
(d) The approval by shareholders to ratify the election of a director requires that the votes cast within the voting group favoring such ratification exceed the votes cast opposing such ratification of the election at a meeting at which a quorum is present.
(e) Putative shares on the record date for determining the shareholders entitled to vote on any matter submitted to shareholders under section 30-29-147 (c), Idaho Code, and without giving effect to any ratification of putative shares that becomes effective as a result of such vote, shall neither be entitled to vote nor counted for quorum purposes in any vote to approve the ratification of any defective corporate action.
(f) If the approval under this section of putative shares would result in an overissue, in addition to the approval required by section 30-29-147 , Idaho Code, approval of an amendment to the articles of incorporation under part 10 of this chapter to increase the number of shares of an authorized class or series, or to authorize the creation of a class or series of shares so there would be no overissue, shall also be required.
[30-29-148, added 2019, ch. 90, sec. 11, p. 235.]
Idaho Code § 30-29-149 NOTICE REQUIREMENTS.
30-29-149. NOTICE REQUIREMENTS.
(a) Unless shareholder approval is required under section 30-29-147 (c), Idaho Code, prompt notice of an action taken under section 30-29-147 , Idaho Code, shall be given to each holder of valid and putative shares, regardless of whether entitled to vote, as of the date of such action by the board of directors and the date of the defective corporate action ratified, provided that notice shall not be required to be given to holders of valid and putative shares whose identities or addresses for notice cannot be determined from the records of the corporation.
(b) The notice must contain either a copy of the action taken by the board of directors in accordance with subsection (a) or (b) of section 30-29-147 , Idaho Code, or the information required by paragraphs (1) through (4) of subsection (a) of section 30-29-147 , Idaho Code, or paragraphs (1) through (3) of subsection (b) of section 30-29-147 , Idaho Code, as applicable; and a statement that any claim that the ratification of the defective corporate action and any putative shares issued as a result of such defective corporate action should not be effective, or should be effective only on certain conditions, shall be brought within 120 days from the applicable validation effective time.
(c) No notice under this section is required with respect to any action required to be submitted to shareholders for approval under section 30-29-147 (c), Idaho Code, if notice is given in accordance with section 30-29-148 (b), Idaho Code.
(d) A notice required by this section may be given in any manner permitted by section 30-29-141 , Idaho Code, and, for any corporation subject to the reporting requirements of section 13 or 15(d) of the securities exchange act of 1934, may be given by means of a filing or furnishing of such notice with the United States securities and exchange commission.
[30-29-149, added 2019, ch. 90, sec. 12, p. 236.]
Idaho Code § 30-29-150 EFFECT OF RATIFICATION.
30-29-150. EFFECT OF RATIFICATION.
From and after the validation effective time, and without regard to the one hundred twenty (120) day period during which a claim may be brought under section 30-29-152 , Idaho Code:
(a) Each defective corporate action ratified in accordance with section 30-29-147 , Idaho Code, shall not be void or voidable as a result of the failure of authorization identified in the action taken under subsection (a) or (b) of section 30-29-147 , Idaho Code, and shall be deemed a valid corporate action effective as of the date of the defective corporate action;
(b) The issuance of each putative share or fraction of a putative share purportedly issued pursuant to a defective corporate action identified in the action taken under section 30-29-147 , Idaho Code, shall not be void or voidable, and each such putative share or fraction of a putative share shall be deemed to be an identical share or fraction of a valid share as of the time it was purportedly issued; and
(c) Any corporate action taken subsequent to the defective corporate action ratified in accordance with sections 30-29-145 through 30-29-152 , Idaho Code, in reliance on such defective corporate action having been validly effected and any subsequent defective corporate action resulting directly or indirectly from such original defective corporate action shall be valid as of the time taken.
[30-29-150, added 2019, ch. 90, sec. 13, p. 236.]
Idaho Code § 30-29-151 FILINGS.
30-29-151. FILINGS.
(a) If the defective corporate action ratified under sections 30-29-145 through 30-29-152 , Idaho Code, would have required under any other section of this chapter a filing in accordance with this chapter, then, regardless of whether a filing was previously made in respect of such defective corporate action and in lieu of a filing otherwise required by this chapter, the corporation shall file articles of validation in accordance with this section, and such articles of validation shall serve to amend or substitute for any other filing with respect to such defective corporate action required by this chapter.
(b) The articles of validation must set forth:
(1) The defective corporate action that is the subject of the articles of validation including, in the case of any defective corporate action involving the issuance of putative shares, the number and type of putative shares issued, and the date or dates upon which such putative shares were purported to have been issued;
(2) The date of the defective corporate action;
(3) The nature of the failure of authorization in respect of the defective corporate action;
(4) A statement that the defective corporate action was ratified in accordance with section 30-29-147 , Idaho Code, including the date on which the board of directors ratified such defective corporate action and the date, if any, on which the shareholders approved the ratification of such defective corporate action; and
(5) The information required by subsection (c) of this section.
(c) The articles of validation must also contain the following information:
(1) If a filing was previously made in respect of the defective corporate action and no changes to such filing are required to give effect to the ratification of such defective corporate action in accordance with section 30-29-147 , Idaho Code, the articles of validation must set forth the name, title, and filing date of the filing previously made and any articles of correction to that filing and a statement that a copy of the filing previously made, together with any articles of correction to that filing, is attached as an exhibit to the articles of validation;
(2) If a filing was previously made in respect of the defective corporate action and such filing requires any change to give effect to the ratification of such defective corporate action in accordance with section 30-29-147 , Idaho Code, the articles of validation must set forth the name, title, and filing date of the filing previously made and any articles of correction to that filing; a statement that a filing containing all of the information required to be included under the applicable section or sections of this chapter to give effect to such defective corporate action is attached as an exhibit to the articles of validation; and the date and time that such filing is deemed to have become effective; or
(3) If a filing was not previously made in respect of the defective corporate action and the defective corporate action ratified under section 30-29-147 , Idaho Code, would have required a filing under any other section of this chapter, the articles of validation must set forth a statement that a filing containing all of the information required to be included under the applicable section or sections of this chapter to give effect to such defective corporate action is attached as an exhibit to the articles of validation; and the date and time that such filing is deemed to have become effective.
[30-29-151, added 2019, ch. 90, sec. 14, p. 237.]
Idaho Code § 30-29-152 JUDICIAL PROCEEDINGS REGARDING VALIDITY OF CORPORATE ACTIONS.
30-29-152. JUDICIAL PROCEEDINGS REGARDING VALIDITY OF CORPORATE ACTIONS.
(a) Upon application by the corporation, any successor entity to the corporation, a director of the corporation, any shareholder, beneficial shareholder or unrestricted voting trust beneficial owner of the corporation, including any such shareholder, beneficial shareholder or unrestricted voting trust beneficial owner as of the date of the defective corporate action ratified under section 30-29-147 , Idaho Code, or any other person claiming to be substantially and adversely affected by a ratification under section 30-29-147 , Idaho Code, the Idaho district court of the county where a corporation’s principal office is located, or, if none in this state, Ada county, may:
(1) Determine the validity and effectiveness of any corporate action or defective corporate action;
(2) Determine the validity and effectiveness of any ratification under section 30-29-147 , Idaho Code;
(3) Determine the validity of any putative shares; and
(4) Modify or waive any of the procedures specified in section 30-29-147 , Idaho Code, or 30-29-148 , Idaho Code, to ratify a defective corporate action.
(b) In connection with an action under this section, the court may make such findings or orders, and take into account any factors or considerations regarding such matters as it deems proper under the circumstances.
(c) Service of process of the application under subsection (a) of this section on the corporation may be made in any manner provided by statute of this state or by rule of the applicable court for service on the corporation, and no other party need be joined in order for the court to adjudicate the matter. In an action filed by the corporation, the court may require notice of the action be provided to other persons specified by the court and permit such other persons to intervene in the action.
(d) Notwithstanding any other provision of this section or otherwise under applicable law, any action asserting that the ratification of any defective corporate action and any putative shares issued as a result of such defective corporate action should not be effective, or should be effective only on certain conditions, shall be brought within one hundred twenty (120) days of the validation effective time.
[30-29-152, added 2019, ch. 90, sec. 15, p. 238.]
Source: Idaho State Legislature (legislature.idaho.gov)URL: https://legislature.idaho.gov/statutesrules/idstat/Title30/T30CH29PT1/Fetched: 10/20/2026