Section 271 - Sale, lease or exchange of assets; consideration; procedure

1 Analyses of this statute by attorneys

  1. Chancery Court Decision, Invalidating Supermajority Director Removal Bylaw, Has Broad Implications for Supermajority Bylaw Provisions

    K&L Gates LLPLisa StarkFebruary 8, 2017

    [8] Specifically, the Court stated that Section 109(b) of the DGCL, which provides that “[t]he bylaws may contain any provision, not inconsistent with law or with the certificate of incorporation, relating to the business of the corporation, the conduct of its affairs, and its rights or powers or the rights or powers of its stockholders,” “stands in contrast to Section 102(b)(4)” of the DGCL. 8 Del. C.§ 109(b); Mem. Op.at 5 n.19. The Court’s decision suggests that certificate of incorporation provisions which require a larger vote than the majority vote provided by the DGCL may be valid.[9]See 8 Del. C.§ 251(c) (specifying a majority voting requirement for stockholders approving a merger); 8 Del. C. § 271(a) (specifying a majority voting requirement for stockholders approving a sale of all or substantially all of the assets of a corporation); 8 Del. C.§ 275(b) (specifying a majority voting requirement for stockholders approving a dissolution of a corporation).[10] See 8 Del. C.§ 109(a) (providing that “the power to adopt, amend or repeal bylaws shall be in the stockholders entitled to vote” and, even if directors are granted the power in the corporation’s certificate of incorporation to amend the bylaws, “[t]he fact that such power has been so conferred upon the directors . . . shall not divest the stockholders . . . of their power, nor limit their power to adopt, amend or repeal bylaws”).