§ 29–304.01. Authorized shares.
(a) The articles of incorporation shall 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 shall prescribe a distinguishing designation for each class or series and shall describe, prior to the issuance of shares of a class or series, 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.
(b) The articles of incorporation shall authorize:
(1) One or more classes or series of shares that together have unlimited voting rights; and
(2) One or more classes or series of shares, which may be the same class or classes as those with voting rights, that together are entitled to receive the net assets of the corporation upon dissolution.
(c) The articles of incorporation may authorize one or more classes or series of shares that:
(1) Have special, conditional, or limited voting rights, or no right to vote, except to the extent otherwise provided by this chapter;
(2) Are redeemable or convertible as specified in the articles of incorporation:
(A) At the option of the corporation, the shareholder, or another person or upon the occurrence of a specified event;
(B) For money, indebtedness, securities, or other property; and
(C) At prices and in amounts:
(i) Specified; or
(ii) Determined in accordance with a formula;
(3) Entitle the holders to distributions calculated in any manner, including dividends that may be cumulative, noncumulative, or partially cumulative; or
(4) Have preference over any other class or series of shares with respect to distributions, including distributions upon the dissolution of the corporation.
(d) Terms of shares may be made dependent upon facts objectively ascertainable outside the articles of incorporation in accordance with § 29-301.04.
(e) Any of the terms of shares may vary among holders of the same class or series so long as the variations are expressly set forth in the articles of incorporation.
(f) The description of the preferences, rights, and limitations of classes or series of shares in subsection (c) of this section is not exhaustive.
This section is referenced in § 29-304.02.
Effect of Amendments
The 2013 amendment by D.C. Law 19-210 substituted “money” for “cash” in (c)(2)(B).
Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.
§ 29–304.02. Terms of class or series determined by board of directors.
(a) If the articles of incorporation so provide, the board of directors may, without shareholder approval:
(1) Classify any unissued shares into one or more classes or into one or more series within a class;
(2) Reclassify any unissued shares of any class into one or more classes or into one or more series within one or more classes; or
(3) Reclassify any unissued shares of any series of any class into one or more classes or into one or more series within a class.
(b) If the board of directors acts pursuant to subsection (a) of this section, it shall determine the terms, including the preferences, rights, and limitations, to the same extent permitted under § 29-304.01, of:
(1) Any class of shares before the issuance of any shares of that class; or
(2) Any series within a class before the issuance of any shares of that series.
(c) Before issuing any shares of a class or series created under this section, the corporation shall deliver to the Mayor for filing articles of amendment setting forth the terms determined under subsection (a) and (b) of this section.
§ 29–304.03. Issued and outstanding shares.
(a) A corporation may issue the number of shares of each class or series authorized by the articles of incorporation. Shares that are issued shall be outstanding shares until they are reacquired, redeemed, converted, or canceled.
(b) The reacquisition, redemption, or conversion of outstanding shares shall be subject to the limitations of subsection (c) of this section and to § 29-304.60.
(c) At all times that shares of the corporation are outstanding, one or more shares that together have unlimited voting rights and one or more shares that together are entitled to receive the net assets of the corporation upon dissolution must be outstanding.
§ 29–304.04. Fractional shares.
(a) A corporation may:
(1) Issue fractions of a share or pay, in money, the value of fractions of a share;
(2) Arrange for disposition of fractional shares by the shareholders; or
(3) Issue scrip in registered or bearer form entitling the holder to receive a full share upon surrendering enough scrip to equal a full share.
(b) Each certificate representing scrip shall be conspicuously labeled “scrip” and shall contain the information required by § 29-304.25(b).
(c) The holder of a fractional share shall be entitled to exercise the rights of a shareholder, including the right to vote, to receive dividends, and to participate in the assets of the corporation upon liquidation. The holder of scrip shall not be entitled to any of these rights unless the scrip provides for them.
(d) The board of directors may authorize the issuance of scrip subject to any condition considered desirable, including that the:
(1) Scrip will become void if not exchanged for full shares before a specified date; and
(2) Shares for which the scrip is exchangeable may be sold and the proceeds paid to the scripholders.