Arkansas Business Corporation Act, See title 4, chapter 26.

Arkansas Secretary of State, Corporate Forms page.

Online filing of Article of Incorporation, Arkansas Secretary of State's office

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Selected Arkansas Corporate Statutes

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• 4-25-105. Joint tenancy in stock certificate.
  (a) In any instance in which any corporation or cooperative association organized under the laws of the State of Arkansas may issue any stock certificate or other form of certificate of any character evidencing ownership or equity in the corporation or cooperative association in two (2) or more persons and shall use the word "or" between the names of the persons to whom it is issued so as to cause it to read in the alternative, the persons to whom the certificate is issued in this form shall hold and own the same as joint tenants and not as tenants in common, and full and complete ownership of the certificate so issued shall pass and belong to the last survivor of the persons so named.
  (b) Any one (1) of the persons to whom any certificate may be issued in manner and form as provided in subsection (a) of this section may endorse, assign, or transfer the certificate as fully and as effectively as could all persons therein named joining together. The endorsement, assignment, or transfer so made shall be fully binding on all persons named therein.
• 4-26-802. Number, election, and term of directors.
  (a) The number of directors of a corporation shall be not less than three (3) except that in cases where all the shares of a corporation are owned of record by either one (1) or two (2) shareholders, the number of directors may be one (1) or two (2) but not less than the number of shareholders. Subject to this limitation, the number of directors shall be fixed by the bylaws except as to the number constituting the initial board of directors, which number shall be fixed by the articles of incorporation.
  (b) The number of directors may be increased or decreased from time to time by amendment to the bylaws, but no decrease shall have the effect of shortening the term of any incumbent director.
  (c) In the absence of a bylaw fixing the number of directors, the number shall be the same as the number stated in the articles of incorporation.
  (d) The number of directors who will constitute the initial board shall be stated in the articles of incorporation; and the members of the first board shall hold office until the first annual meeting of shareholders and until their successors shall have been elected and qualified.
  (e) At the first annual meeting of shareholders and at each annual meeting thereafter, the shareholders shall elect directors to hold office until the next succeeding annual meeting.
  (f) Each director shall hold office for the term for which he is elected and until his successor shall have been elected and qualified.
• 4-27-142. Number of shareholders.
  (a) For purposes of this chapter, the following identified as a shareholder in a corporation's current record of shareholders constitutes one (1) shareholder:
  1. three (3) or fewer coowners;
  2. a corporation, partnership, trust, estate, or other entity;
  3. the trustees, guardians, custodians, or other fiduciaries of a single trust, estate, or account.
  (b) For purposes of this chapter, shareholdings registered in substantially similar names constitute one (1) shareholder if it is reasonable to believe that the names represent the same person.
• 4-27-201. Incorporators. One (1) or more persons may act as the incorporator or incorporators of a corporation by delivering articles of incorporation to the Secretary of State for filing.
• 4-27-202. Articles of incorporation.
  (a) The articles of incorporation must set forth:
  1. a corporate name for the corporation that satisfies the requirements of § 4-27-401;
  2. the number of shares the corporation is authorized to issue and, if such shares are to consist of one (1) class only, the par value of each of such shares, or a statement that all of such shares are without par value; or, if such shares are to be divided into classes, the number of shares of each class, and a statement of the par value of the shares of each such class or that such shares are without par value;
  3. the street address of the corporation's initial registered office and the name of its initial registered agent at that office;
  4. the name and address of each incorporator; and
  5. the primary purpose or purposes for which the corporation is organized, which is provided to the Secretary of State for informational purposes and shall not, unless specifically stated in the articles of incorporation, limit the broad purposes provided in § 4-27-301.
  (b) The articles of incorporation may set forth:
  1. the names and addresses of the individuals who are to serve as the initial directors;
  2. provisions not inconsistent with law regarding:
     1. specific limitations on the purpose or purposes for which the corporation is organized;
     2. managing the business and regulating the affairs of the corporation;
     3. defining, limiting, and regulating the powers of the corporation, its board of directors, and shareholders; and
     4. the imposition of personal liability on shareholders for the debts of the corporation to a specified extent and upon specified conditions.
  3. a provision eliminating or limiting the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provision shall not eliminate or limit the liability of a director:
     1. for any breach of the director's duty of loyalty to the corporation or its stockholders;
     2. for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
     3. under § 4-27-833 of this chapter;
     4. for any transaction from which the director derived an improper personal benefit; or
     5. for any action, omission, transaction, or breach of a director's duty creating any third-party liability to any person or entity other than the corporation or stockholder.
        
        No such provision shall eliminate or limit the liability of a director for any act or omission occurring prior to the date when such provision becomes effective. All references in this subsection to a director shall also be deemed to refer to a member of the governing body of a corporation which is not authorized to issue capital stock; and
  4. any provision that under this chapter is required or permitted to be set forth in the bylaws.
  (c) The articles of incorporation need not set forth any of the corporate powers enumerated in this chapter.
• 4-27-203. Incorporation.
  (a) Unless a delayed effective date is specified, the corporate existence begins when the articles of incorporation are filed.
  (b) The Secretary of State's filing of the articles of incorporation is conclusive proof that the incorporators satisfied all conditions precedent to incorporation except in a proceeding by the state to cancel or revoke the incorporation or involuntarily dissolve the corporation.
• 4-27-204. Liability for preincorporation transactions. All persons purporting to act as or on behalf of a corporation, knowing there was no incorporation under this chapter, are jointly and severally liable for all liabilities created while so acting.
• 4-27-205. Organization of corporation.
  (a) After incorporation:
  1. if initial directors are named in the articles of incorporation, the initial directors shall hold an organizational meeting, at the call of a majority of the directors, to complete the organization of the corporation by appointing officers, adopting bylaws, and carrying on any other business brought before the meeting;
  2. if initial directors are not named in the articles, the incorporator or incorporators shall hold an organizational meeting at the call of a majority of the incorporators:
     1. to elect directors and complete the organization of the corporation; or
     2. to elect a board of directors who shall complete the organization of the corporation.
  (b) Action required or permitted by this chapter to be taken by incorporators at an organizational meeting may be taken without a meeting if the action taken is evidenced by one (1) or more written consents describing the action taken and signed by each incorporator.
  (c) An organizational meeting may be held in or out of this state.
• 4-27-206. Bylaws.
  (a) The incorporators or board of directors of a corporation shall adopt initial bylaws for the corporation.
  (b) The bylaws of a corporation may contain any provision for managing the business and regulating the affairs of the corporation that is not inconsistent with law or the articles of incorporation.
• 4-27-301. Purposes.
  (a) Every corporation incorporated under this chapter has the purpose of engaging in any lawful business unless a more limited purpose is specifically set forth in the articles of incorporation. A statement of a corporation's primary purpose or purposes made pursuant to § 4-27-202(a)(5) shall not be construed as a specific limitation of the broad purposes for which the corporation may be organized.
  (b) A corporation engaging in a business that is subject to regulation under another statute of this state may incorporate under this chapter only if permitted by, and subject to all limitations of, the other statute.
• 4-27-401. Corporate name.
  (a) A corporate name:
  1. must contain the word "corporation," "incorporated," "company," or "limited," or the abbreviation "corp.," "inc.," "co.," or "ltd.," or words or abbreviations of like import in another language; and
  2. may not contain language stating or implying that the corporation is organized for a purpose other than that permitted by § 4-27-301 and its articles of incorporation.
  (b) Except as authorized by subsections (c) and (d) of this section, a corporate name must be distinguishable upon the records of the Secretary of State from:
  1. the corporate name of a corporation incorporated or authorized to transact business in this state;
  2. a corporate name reserved or registered under §§ 4-27-402 or 4-27-403;
  3. the fictitious name adopted by a foreign corporation authorized to transact business in this state because its real name is unavailable; and
  4. the corporate name of a not-for-profit corporation incorporated or authorized to transact business in this state.
  (c) A corporation may apply to the Secretary of State for authorization to use a name that is not distinguishable upon his records from one (1) or more of the names described in subsection (b) of this section. The Secretary of State shall authorize use of the name applied for if:
  1. the other corporation consents to the use in writing and submits an undertaking in form satisfactory to the Secretary of State to change its name to a name that is distinguishable upon the records of the Secretary of State from the name of the applying corporation; or
  2. the applicant delivers to the Secretary of State a certified copy of the final judgment of a court of competent jurisdiction establishing the applicant's right to use the name applied for in this state.
  (d) A corporation may use the name of another domestic or foreign corporation that is used in this state if the corporation is incorporated or authorized to transact business in this state and the proposed user corporation:
  1. has merged with the other corporation;
  2. has been formed by reorganization of the other corporation; or
  3. has acquired all or substantially all of the assets, including the corporate name, of the other corporation.
• 4-27-501. Registered office and registered agent. Each corporation must continuously maintain in this state:
  (1) a registered office that may be the same as any of its places of business; and
  (2) a registered agent, who may be:
  1. an individual who resides in this state and whose business office is identical with the registered office;
  2. a domestic corporation or not-for-profit domestic corporation whose business office is identical with the registered office; or
  3. a foreign corporation or not-for-profit foreign corporation authorized to transact business in this state whose business office is identical with the registered office.
• 4-27-601. Authorized shares.
  (a) The articles of incorporation must prescribe the classes of shares, the number of shares of each class that the corporation is authorized to issue, and a statement of the par value of the shares of each class or a statement that the shares of a class are to be without par value. If more than one class of shares is authorized, the articles of incorporation must prescribe a distinguishing designation for each class, and, prior to the issuance of shares of a class, the preferences, limitations, and relative rights of that class must be described in the articles of incorporation. All shares of a class must have preferences, limitations, and relative rights identical with those of other shares of the same class except to the extent otherwise permitted by § 4-27-602.
  (b) The articles of incorporation must authorize (1) one or more classes of shares that together have unlimited voting rights, and (2) one or more classes 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.
  * * *
• 4-27-620. Subscription for shares before incorporation.
  (a) A subscription for shares entered into before incorporation is irrevocable for six months unless the subscription agreement provides a longer or shorter period or all the subscribers agree to revocation.
  (b) The board of directors may determine the payment terms of subscription for shares that were entered into before incorporation, unless the subscription agreement specifies them. A call for payment by the board of directors must be uniform so far as practicable as to all shares of the same class or series, unless the subscription agreement specifies otherwise.
  (c) Shares issued pursuant to subscriptions entered into before incorporation are fully paid and nonassessable when the corporation receives the consideration specified in the subscription agreement.
  (d) If a subscriber defaults in payment of money or property under a subscription agreement entered into before incorporation, the corporation may collect the amount owed as any other debt. Alternatively, unless the subscription agreement provides otherwise, the corporation may rescind the agreement and may sell the shares if the debt remains unpaid for more than 20 days after the corporation sends written demand for payment to the subscriber.
  (e) A corporation that issues shares pursuant to a subscription agreement entered into before incorporation must comply with § 4-27-621(b)(c), and (f). A subscription agreement entered into after incorporation is a contract between the subscriber and the corporation subject to all of the provisions of § 4-27-621.
• 4-27-621. Issuance of shares.
  (a) The powers granted in this section to the board of directors may be reserved to the shareholders by the articles of incorporation.
  (b) The board of directors may authorize shares to be issued for consideration consisting of money paid, labor done, or property actually received. Neither promissory notes nor the promise of future services shall constitute valid consideration for the issuance of shares.
  (c) Shares having a par value may not be issued for consideration less than the par value of such shares.
  (d) Before the corporation issues shares, the board of directors must determine that the consideration received or to be received for shares to be issued is adequate. That determination by the board of directors is conclusive insofar as the adequacy of consideration for the issuance of shares relates to whether the shares are validly issued, fully paid, and nonassessable.
  (e) When the corporation receives the consideration for which the board of directors authorized the issuance of shares, the shares issued therefor are fully paid and nonassessable.
  (f) Shares may not be issued until the full amount of the consideration for the shares, fixed as provided by law, has been paid.
• 4-27-622. Liability of shareholders.
  (a) A purchaser from a corporation of its own shares is not liable to the corporation or its creditors with respect to the shares except to pay the full consideration, fixed as provided by law, for which the shares were issued or were to be issued.
  (b) Unless otherwise provided in the articles of incorporation, a shareholder of a corporation is not personally liable for the acts or debts of the corporation except that he may become personally liable by reason of his own acts or conduct.
• 4-27-625. Form and content of certificates.
  (a) Shares may but need not be represented by certificates. Unless this chapter or another statute expressly provides otherwise, the rights and obligations of shareholders are identical whether or not their shares are represented by certificates.
  (b) At a minimum each share certificate must state on its face:
  1. the name of the issuing corporation and that it is organized under the law of this state;
  2. the name of the person to whom issued;
  3. the number and class of shares and the designation of the series, if any, the certificate represents; and
  4. the par value of the shares, or if the shares have no par value, a statement of such fact.
  (c) If the issuing corporation is authorized to issue different classes of shares or different series within a class, the designations, relative rights, preferences, and limitations applicable to each class and the variations in rights, preferences, and limitations determined for each series (and the authority of the board of directors to determine variations for future series) must be summarized on the front or back of each certificate. Alternatively, each certificate may state conspicuously on its front or back that the corporation will furnish the shareholder this information on request in writing and without charge.
  (d) Each share certificate (1) must be signed (either manually or in facsimile) by two officers designated in the bylaws or by the board of directors and (2) must bear the corporate seal or its facsimile.
  (e) If the person who signed (either manually or in facsimile) a share certificate no longer holds office when the certificate is issued, the certificate is nevertheless valid.
• 4-27-627. Restriction on transfer of shares and other securities.
  (a) The articles of incorporation, bylaws, an agreement among shareholders, or an agreement between shareholders and the corporation may impose restrictions on the transfer or registration of transfer of shares of the corporation. A restriction does not affect shares issued before the restriction was adopted unless the holders of the shares are parties to the restriction agreement or voted in favor of the restriction.
  (b) A restriction on the transfer or registration of transfer of shares is valid and enforceable against the holder or a transferee of the holder if the restriction is authorized by this section and its existence is noted conspicuously on the front or back of the certificate or is contained in the information statement required by § 4-27-626(b). Unless so noted, a restriction is not enforceable against a person without knowledge of the restriction.
  (c) A restriction on the transfer or registration of transfer of shares is authorized:
  1. to maintain the corporation's status when it is dependent on the number or identity of its shareholders;
  2. to preserve exemptions under federal or state securities law;
  3. for any other reasonable purpose.
  (d) A restriction on the transfer or registration of transfer of shares may:
  1. obligate the shareholder first to offer the corporation or other persons (separately, consecutively, or simultaneously) an opportunity to acquire the restricted shares;
  2. obligate the corporation or other persons (separately, consecutively, or simultaneously) to acquire the restricted shares;
  3. require the corporation, the holders of any class of its shares, or another person to approve the transfer of the restricted shares, if the requirement is not manifestly unreasonable;
  4. prohibit the transfer of the restricted shares to designated persons or classes of persons, if the prohibition is not manifestly unreasonable.
  (e) For purposes of this section, "shares" includes a security convertible into or carrying a right to subscribe for or acquire shares.
• 4-27-630. Shareholders' preemptive rights.
  (a) The shareholders of a corporation do not have a preemptive right to acquire the corporation's unissued shares except to the extent the articles of incorporation so provide.
  (b) A statement included in the articles of incorporation that "the corporation elects to have preemptive rights" (or words of similar import) means that the following principles apply except to the extent the articles of incorporation expressly provide otherwise:
  1. The shareholders of the corporation have a preemptive right, granted on uniform terms and conditions prescribed by the board of directors to provide a fair and reasonable opportunity to exercise the right, to acquire proportional amounts of the corporation's unissued shares upon the decision of the board of directors to issue them.
  2. A shareholder may waive his preemptive right. A waiver evidenced by a writing is irrevocable even though it is not supported by consideration.
  3. There is no preemptive right with respect to:
     1. shares issued as compensation to directors, officers, agents, or employees of the corporation, its subsidiaries or affiliates;
     2. shares issued to satisfy conversion or option rights created to provide compensation to directors, officers, agents, or employees of the corporation, its subsidiaries or affiliates;
     3. shares authorized in articles of incorporation that are issued within six (6) months from the effective date of incorporation;
     4. shares sold otherwise than for money.
  4. Holders of shares of any class without general voting rights but with preferential rights to distributions or assets have no preemptive rights with respect to shares of any class.
  5. Holders of shares of any class with general voting rights but without preferential rights to distributions or assets have no preemptive rights with respect to shares of any class with preferential rights to distributions or assets unless the shares with preferential rights are convertible into or carry a right to subscribe for or acquire shares without preferential rights;
  6. Shares subject to preemptive rights that are not acquired by shareholders may be issued to any person for a period of one (1) year after being offered to shareholders at a consideration set by the board of directors that is not lower than the consideration set for the exercise of preemptive rights. An offer at a lower consideration or after the expiration of one year is subject to the shareholders' preemptive rights.
  (c) For purposes of this section, "shares" includes a security convertible into or carrying a right to subscribe for or acquire shares.
• 4-27-728. Voting for directors - Cumulative voting.
  (a) Unless otherwise provided in the articles of incorporation, directors are elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present.
  (b) Shareholders do not have a right to cumulate their votes for directors unless the articles of incorporation so provide.
  (c) A statement included in the articles of incorporation that "[all] [a designated voting group of] shareholders are entitled to cumulate their votes for directors" (or words of similar import) means that the shareholders designated are entitled to multiply the number of votes they are entitled to cast by the number of directors for whom they are entitled to vote and cast the product for a single candidate or distribute the product among two (2) or more candidates.
  (d) Shares otherwise entitled to vote cumulatively may not be voted cumulatively at a particular meeting unless:
  1. the meeting notice or proxy statement accompanying the notice states conspicuously that cumulative voting is authorized; or
  2. a shareholder who has the right to cumulate his votes gives notice to the corporation not less than forty-eight (48) hours before the time set for the meeting of his intent to cumulate his votes during the meeting, and if one (1) shareholder gives this notice all other shareholders in the same voting group participating in the election are entitled to cumulate their votes without giving further notice.

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