Legal Question in Business Law in Virginia

Rules on issuing stocks

My first question is as follows:I would like to know got a Virginia corporation, what the rules are for issuing new shares/stocks? Do we need to have a shareholder's meeting, directors meeting, full shareholder agreement or just the directors agreement?

My second question is that we have spent the last 2 years recovering from an embezelment by a former employee, as such we have not had the time until now to look into what meetings we are legally supposed to have each year as we are new to this area of the business.

My third question is what are the legal procedures necessary to cancel a person's shares?

Many Thanks


Asked on 3/21/03, 11:41 am

1 Answer from Attorneys
Daniel Press Chung & Press, P.C.

Re: Rules on issuing stocks

Generally, shareholder approval is required to authorize or issue new shares, but the articles of incorporation may provide that the directors may issue shares. You need to start with a review of the articles. As for what meetings are required, generally one annual shareholders meeting is required, but again, the articles and bylaws govern if they speak to the issue. To cancel shares, they first have to be owned by the corporation. You can't just cancel another person's shares.

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Answered on 3/21/03, 12:28 pm


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