North Carolina General Statutes Chapter 55. North Carolina Business Corporation Act § 55-6-04. Fractional shares

Current as of January 01, 2023 | Updated by Findlaw Staff

(a) A corporation may issue fractions of a share or, in lieu of doing so, may do any of the following:

(1) Pay in cash the value of fractions of a share.

(2) Dispose of the fractional shares and pay the proceeds to the holders of those shares.

(3) Issue scrip in certificated or uncertificated 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 G.S. 55-6-25(b). A corporation shall not issue scrip certificates in bearer form. Within a reasonable time after the issuance or transfer of scrip without certificates, the corporation shall deliver to the scripholder a written statement of the information required on certificates by G.S. 55-6-25(b) and the terms of the scrip.

(c) The holder of a fractional share is entitled to exercise the rights of a shareholder, including the rights to vote, to receive dividends, and to receive distributions upon liquidation. The holder of scrip is not 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 the following:

(1) The scrip will become void if not exchanged for full shares before a specified date.

(2) The shares for which the scrip is exchangeable may be sold and the proceeds paid to the scripholders.

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Cite this article: FindLaw.com - North Carolina General Statutes Chapter 55. North Carolina Business Corporation Act § 55-6-04. Fractional shares - last updated January 01, 2023 | https://codes.findlaw.com/nc/chapter-55-north-carolina-business-corporation-act/nc-gen-st-sect-55-6-04/

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