2541 - Application and effect of subchapter.
SUBCHAPTER E CONTROL TRANSACTIONS Sec. 2541. Application and effect of subchapter. 2542. Definitions. 2543. Controlling person or group. 2544. Right of shareholders to receive payment for shares. 2545. Notice to shareholders. 2546. Shareholder demand for fair value. 2547. Valuation procedures. 2548. Coordination with control transaction. Effect of 1990 Amendments on Control Transactions. Section 8(c) of Act 36 of 1990 provided that, other than section 5 of Act 36 (section 2542), nothing contained in Act 36 shall be construed as having, or be deemed to have, any effect on the existing practice under Subchapter E or the interpretation, construction, scope or applicability of Subchapter E or as expressing any agreement or disagreement with any court interpretation relating to Subchapter E. Cross References. Subchapter E is referred to in sections 1715, 1903, 1924, 1953, 2501, 2551, 2575 of this title. § 2541. Application and effect of subchapter. (a) General rule.--Except as otherwise provided in this section, this subchapter shall apply to a registered corporation unless: (1) the registered corporation is one described in section 2502(1)(ii) or (2) (relating to registered corporation status); (2) the bylaws, by amendment adopted either: (i) by March 23, 1984; or (ii) on or after March 23, 1988, and on or before June 21, 1988; and, in either event, not subsequently rescinded by an article amendment, explicitly provide that this subchapter shall not be applicable to the corporation in the case of a corporation which on June 21, 1988, did not have outstanding one or more classes or series of preference shares entitled, upon the occurrence of a default in the payment of dividends or another similar contingency, to elect a majority of the members of the board of directors (a bylaw adopted on or before June 21, 1988, by a corporation excluded from the scope of this paragraph by the restriction of this paragraph relating to certain outstanding preference shares shall be ineffective unless ratified under paragraph (3)); (3) the bylaws of which explicitly provide that this subchapter shall not be applicable to the corporation by amendment ratified by the board of directors on or after December 19, 1990, and on or before March 19, 1991, in the case of a corporation: (i) which on June 21, 1988, had outstanding one or more classes or series of preference shares entitled, upon the occurrence of a default in the payment of dividends or another similar contingency, to elect a majority of the members of the board of directors; and (ii) the bylaws of which on that date contained a provision described in paragraph (2); or (4) the articles explicitly provide that this subchapter shall not be applicable to the corporation by a provision included in the original articles, by an article amendment adopted prior to the date of the control transaction and prior to or on March 23, 1988, pursuant to the procedures then applicable to the corporation, or by an articles amendment adopted prior to the date of the control transaction and subsequent to March 23, 1988, pursuant to both: (i) the procedures then applicable to the corporation; and (ii) unless such proposed amendment has been approved by the board of directors of the corporation, in which event this subparagraph shall not be applicable, the affirmative vote of the shareholders entitled to cast at least 80% of the votes which all shareholders are entitled to cast thereon. A reference in the articles or bylaws to former section 910 (relating to right of shareholders to receive payment for shares following a control transaction) of the act of May 5, 1933 (P.L.364, No.106), known as the Business Corporation Law of 1933, shall be deemed a reference to this subchapter for the purposes of this section. See section 101(c) (relating to references to prior statutes). (b) Inadvertent transactions.--This subchapter shall not apply to any person or group that inadvertently becomes a controlling person or group if that controlling person or group, as soon as practicable, divests itself of a sufficient amount of its voting shares so that it is no longer a controlling person or group. (c) Certain subsidiaries.--This subchapter shall not apply to any corporation that on December 23, 1983, was a subsidiary of any other corporation. (d) Rights cumulative.--(Deleted by amendment). (Dec. 19, 1990, P.L.834, No.198, eff. imd.; Dec. 18, 1992, P.L.1333, No.169, eff. 60 days) 1992 Amendment. Act 169 deleted subsec. (d). 1990 Amendment. Act 198 amended subsec. (a). Cross References. Section 2541 is referred to in section 1106 of this title.