Identical to S 267, filed 3/11/25.

Section 1

Allow corporations to limit or eliminate the personal liability of its officers (defined) arising out of an action for monetary damages for breach of duty in claims by or in the right of the corporation in its bylaws under GS 55-2-02. Specifies that such a provision can't be effective with respect to any claim by or in the right of the corporation. Makes technical and conforming changes.

Section 2

Removes provision directing that emergency bylaws are subject to amendment or repeal by corporate shareholders from GS 55-2-07 (emergency bylaws). Allows the bylaws to include provisions that become effective only during an emergency if they are adopted in advance of the emergency (was, the board of directors may adopt bylaws to be effective only in an emergency). Makes technical and clarifying changes.

Rescinds the power of a corporation’s board of directors to modify lines of succession to accommodate the incapacity of a director, officer, employee or agent and to relocate its offices or designate other offices during an emergency under GS 55-3-03 (emergency powers).  During an emergency (i.e., because of some catastrophic event, it is impracticable to convene a meeting of shareholders in accordance with GS Chapter 55 or the bylaws or as specified in a notice previously given for the meeting) authorizes the board of directors to postpone a shareholder meeting or allow for remote participation upon the described notice. Makes technical and clarifying changes.

Section 3

Enacts GS 55-2-08, authorizing that any or all internal corporate claims (defined) to be brought exclusively in any specified court or courts of this State and, if so specified, in any additional courts in this State or in any other jurisdictions with which the corporation has a reasonable relationship. Clarifies that such clauses cannot confer jurisdiction, prevent bringing an internal action in the courts of the State, nor can they require such claims to be determined by arbitration. Repeals GS 55-7-50 (concerning exclusive forum or venue provisions).

Section 4

Amends GS 55-6-04 (concerning fractional shares as follows). Allows corporations to issue fractions of a share or, in lieu of doing so, to (1) pay cash in the value of such shares; (2) dispose of the fractional shares and pay the proceeds to the holders of those shares (currently, no mention of payment and disposition is by shareholders); and (3) issue scrip in certified or uncertified form (currently, registered or bearer form), as described. Prevents scrip being issued in bearer form.  Provides for transfer of written information within a reasonable time after the issuance or transfer of scrip without certificates. Modifies the listed rights of a holder of a fractional share to include receiving distribution upon liquidation (was, to participate in the assets of a corporation upon liquidation). Makes technical changes.

Prevents share certificates from being issued in bearer form in GS 55-6-25. Makes clarifying and technical changes.

Section 5

Makes clarifying change to defined term derivative proceedings in GS 55-7-41.  Details further requirements for the contents of a written demand in a derivative proceeding under GS 55-7-41 (demand).  Makes technical changes.

Amends GS 55-7-44 (dismissal of derivative proceedings) as follows. Now allows the court to dismiss the action if a determination is made either before or after commencement of the proceeding that maintenance of the derivative proceeding is not in the corporation’s best interest (currently, statute is silent as to the timing of the best interest determination). Changes the composition of the panel appointed by the court to make a best interest determination, at the corporation’s request, to one or more individuals appointed by the court  (currently, one or more independent individuals). Allows the court on its own motion or on the motion of any party to order that any motion to dismiss be made within a specified reasonable time. Makes technical, clarifying, conforming and organizational changes.  

Expands the authorized expenses for a corporation prevailing in a derivative action to include payment to the corporation incurred in responding to the demand in GS 55-7-46. Makes clarifying and technical changes.

Section 6

Remove bar on allowing corporation’s committees to amend articles of incorporation under GS 55-8-25. Makes technical change.

Section 7

Repeals GS 55-11-04(f) (instructing that the provisions of GS 55-13-02(b) [limiting certain appraisal rights] do not apply to subsidiary corporations that are parties to mergers consummated under the statute).

Expands the conditions under which certain parent unincorporated entities may merge with certain subsidiary corporations as described in GS 55-11-12, to require that the parent approves, in the manner required by laws of the state or country governing the organization and internal affairs of the  parent, a written plan of merger containing all of the provisions required by GS 55-11-10(c). No longer requires that the articles of merger delivered to the Secretary of State for filing contain (1) the merger’s terms and conditions or (2) the  manner and basis of converting the interests in each merging business entity into interests, obligations, or securities of the surviving business entity, or into cash or other property in whole or in part, or of cancelling the interests. Now requires delivery of a statement that the plan of merger has been approved by each merging business entity in the manner required by law as part of the delivery. Removes reference to board resolution in the provisions pertaining to delivery of certain information by a surviving domestic corporation. Removes provision directing that the provisions of the articles of merger may be made dependent on facts objectively ascertainable outside the articles of merger if the articles of merger set forth the manner in which the facts will operate upon the affected provisions, as described. Instead, directs that GS 55-11-10(c1) and (c2) (pertaining to mergers with unincorporated entities) apply.

Section 8

Directs the Revisor of Statutes to cause to be printed, as annotations to GS Chapter 55, all relevant portions of the Official Comments to the Model Business Corporation Act and all explanatory comments of the drafters of the act as the Revisor may deem appropriate.

Effective October 1, 2025, unless otherwise provided.