Amending Articles

Chapter 9 of Division 1 of Title 1 of the Corporations Code deals with the amending of articles of incorporation.

Section 900 provides that, by complying with the provisions of this chapter, a corporation may amend its articles from time to time, in any and as many respects as may be desired, so long as its articles as amended contain only provisions as it would be lawful to insert in original articles filed at the time of the filing of the amendment and, reclassification or cancellation of shares or rights of shareholders is to be made, the provisions as may be necessary to effect such change, exchange, reclassification or cancellation. There is a statement of legislative intent.

A corporation cannot amend its articles to add any statement or to alter any statement that may appear in the original articles of the initial street address and initial mailing address of the corporation, the names and addresses of the first directors, or the name and address of the initial agent, except to correct an error in the statement or to delete the information after the corporation has filed a statement.

Section 901 states that, before any shares have been issued, any amendment of the articles may be adopted by a writing signed by a majority of the incorporators, if directors were not named in the original articles and have not been elected, or, if directors were named in the original articles or have been elected, by a majority of the directors.

Section 902 provides, after any shares have been issued, amendments may be adopted if approved by the board and approved by the outstanding shares, either before or after the approval by the board. An amendment extending the corporate existence or making the corporate existence perpetual may be adopted by a corporation with approval by the board alone.

Section 903 requires a proposed amendment to be approved by the outstanding shares of a class, whether or not the class is entitled to vote thereon by the provisions of the articles, if the amendment would do any of seven specified actions.

Section 904 provides that, if any amendment of the articles would make shares assessable or would authorize remedy by action for the collection of an assessment on fully paid shares, it must be approved by all of the outstanding shares affected regardless of limitations or restrictions on the voting rights thereof.

Section 905 provides that, in the case of amendments adopted after the corporation has issued any shares, the corporation is required to file a certificate of amendment, which consists of an officers’ certificate stating four specified items.

Section 906 states that, in the case of amendments adopted by the incorporators or the board, the corporation is required to file a certificate of amendment signed and verified by a majority of the incorporators or of the board, which must state specified items.

Section 907 requires the certificate of amendment to establish the wording of the amendment or amended articles by one or more of the three specified means. If the purpose of the amendment is to effect a stock split or reverse stock split or to reclassify, cancel, exchange, or otherwise change outstanding shares, the amended articles are required to state the effect thereof on outstanding shares.

Section 908 states that, upon the filing of the certificate of amendment, the articles must be be amended in accordance with the certificate and any stock split, reverse stock split, reclassification, cancellation, exchange or other change in shares shall be effected, and a copy of the certificate, certified by the Secretary of State, is prima facie evidence of the performance of the conditions necessary to the adoption of the amendment.

Section 909 explains that a corporation formed for a limited period may at any time subsequent to the expiration of the term of its corporate existence, if it has continuously acted as a corporation and done business, extend the term of its existence by an amendment to its articles removing any provision limiting the term of its existence and providing for perpetual existence.

Section 910 allows a corporation to restate in a single certificate the entire text of its articles as amended by filing an officers’ certificate or, in circumstances where incorporators or the board may amend a corporation’s articles, a certificate signed and verified by a majority of the incorporators or the board, as applicable, entitled Restated Articles of Incorporation.

Section 911 authorizes a corporation to change its status to that of a social purpose corporation, nonprofit public benefit corporation, nonprofit mutual benefit corporation, nonprofit religious corporation, or cooperative corporation. The amendment of the articles to change status to a nonprofit corporation must revise the statement of purpose, delete the authorization for shares and any other provisions relating to authorized or issued shares.