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ration after it has been
Arizona law requires
that directors, officers,
and persons owning
more than 10 percent
of the securities of a
corporation disclose whether they have been
involved in certain events, such as conviction of a felony or if they are the subject of
a judgment, decree or permanent order
involving securities, consumer fraud, antitrust, or matters with the essential elements
misrepresentation, theft by false pretenses,
restraint of trade or monopoly. Existing law
required a seven-year look back, while the
current law now requires that those matters
be disclosed if they occurred during the five
years preceding the filing with the ACC.
This change was made to help assure that
Actions Without a Meeting
Arizona was not requiring a longer disclo-
sure period than is required by others, such
as the U.S. Securities and Exchange Com-
mission. These changes apply to Arizona
non-profit corporations as well. No changes
to the bylaws are needed as this requirement
will apply to all corporations after the Effec-
Under the current law, if a corporation
wanted to take action without having to
provide notice and hold a shareholder meet-
ing, it could do so if all shareholders signed
a written consent to that action; however,
the consents had to be unanimous. So, if
even one shareholder was unavailable or un-
willing to sign the
consent, the corpora-
tion could not take
action without hold-
ing a meeting. In con-
trast, the corporate
laws of other states,
action if consents are
signed by the requisite majority needed to
pass the resolution. Similarly, Arizona law
governing limited liability companies has
also permitted action by less than unani-
The new law allows Arizona corporations to follow that practice, except in a few
circumstances. First, because the Arizona
constitution mandates cumulative voting for
directors, written consents to action cannot
be used to elect or remove a director unless
they are signed by all the shareholders entitled to vote on that matter. Similarly, if the
articles or bylaws require unanimous consent,
those rules must be followed. Third, these
Arizona corporations may receive and
record votes and consents by electronic
methods so long as those methods are capable
of being retained and retrieved, and can be
reproduced in paper format.