S.C. Code Ann. § 33-18-103
Definition and election of statutory close corporation status
1988 Act No. 444, Section 2. The articles of incorporation contain the basic information about a corporation. They may also give notice to prospective shareholders and creditors of special or unusual contractual arrangements among the shareholders. The only required difference between articles of incorporation for a statutory close corporation and for a regular corporation is the statement designating the corporation to be a statutory close corporation. Although statutory close corporations may use a form of articles of incorporation identical to that for any corporation, a special format that takes into account the provisions respecting share transfer restrictions (sections 11 and 14) (Section 33-18-110 and 33-18-140), the possibility that the corporation will not have a board of directors (section 21) (Section 33-18-210), and other optional provisions that can be utilized by statutory close corporations may be more useful. See for example, the format published in 37 BUS.LAW. 309 (1981). 4. REQUIRED VOTE. Some states, e.g. Maryland and Texas, require unanimous consent of the shareholders for an existing corporation to become a statutory close corporation. Most states, however, follow the pattern of the Delaware statute that requires a two-thirds vote of all outstanding shares. The Close Corporation Supplement adopts a compromise between the two positions by requiring a two-thirds vote of each class or series of shares, voting as separate voting groups, but shareholders opposed to the election are granted dissenters' rights. 5. TRANSITION PROVISIONS. A state having an existing close corporation statute when it enacts the Model Close Corporation Supplement may allow existing close corporations to qualify automatically for close corporation status by filing amended articles of incorporation complying with section 3 (Section 33-18-103). See section 50 (Section 33-18-500).
- (a) A statutory close corporation is a corporation whose articles of incorporation contain a statement that the corporation is a statutory close corporation.
- (b) A corporation incorporated in South Carolina under this title may become a statutory close corporation by amending its articles of incorporation to include the statement required by subsection (a). The amendment must be approved by the holders of at least two-thirds of the votes of each class or series of shares of the corporation, voting as separate voting groups, whether or not otherwise entitled to vote on amendments. If the amendment is adopted, a shareholder who did not vote in favor of the amendment is entitled to assert dissenters' rights under Chapter 13 of this title.
HISTORY: 1988 Act No. 444, Section 2. The articles of incorporation contain the basic information about a corporation. They may also give notice to prospective shareholders and creditors of special or unusual contractual arrangements among the shareholders. The only required difference between articles of incorporation for a statutory close corporation and for a regular corporation is the statement designating the corporation to be a statutory close corporation. Although statutory close corporations may use a form of articles of incorporation identical to that for any corporation, a special format that takes into account the provisions respecting share transfer restrictions (sections 11 and 14) (Section 33-18-110 and 33-18-140), the possibility that the corporation will not have a board of directors (section 21) (Section 33-18-210), and other optional provisions that can be utilized by statutory close corporations may be more useful. See for example, the format published in 37 BUS.LAW. 309 (1981). 4. REQUIRED VOTE. Some states, e.g. Maryland and Texas, require unanimous consent of the shareholders for an existing corporation to become a statutory close corporation. Most states, however, follow the pattern of the Delaware statute that requires a two-thirds vote of all outstanding shares. The Close Corporation Supplement adopts a compromise between the two positions by requiring a two-thirds vote of each class or series of shares, voting as separate voting groups, but shareholders opposed to the election are granted dissenters' rights. 5. TRANSITION PROVISIONS. A state having an existing close corporation statute when it enacts the Model Close Corporation Supplement may allow existing close corporations to qualify automatically for close corporation status by filing amended articles of incorporation complying with section 3 (Section 33-18-103). See section 50 (Section 33-18-500).