Shareholders of Virginia corporations have long been permitted to take action by written consent, in place of a meeting of shareholders. Under existing law, the written consent must be signed by ALL shareholders entitled to vote on the action. Consequently, if any shareholder is unavailable or unwilling to sign the consent, a meeting of shareholders is required to approve the action (even if that shareholder's vote would have no impact on the outcome of the decision).
The General Assembly has amended the Virginia Stock Corporation Act to permit action by written consent and without prior notice signed by shareholders holding outstanding shares with sufficient voting power to cast the votes necessary to authorize or take the action being considered. If the action is not unanimous, the corporation must give written notice of the proposed action to all shareholders not less than five days before the action is taken. In order to take advantage of this new, streamlined provision, the corporation must have less than 300 shareholders and its articles of incorporation must authorize the taking of action in this manner. The articles of incorporation of existing corporations will need to be amended before this new procedure may be utilized. As under existing law, if the action is taken by the unanimous written consent of shareholders entitled to vote on the action, no action by the board of directors shall be required. If the action is not unanimous, board action (if applicable) will be required.
As a result of an amendment to the statutes governing notification of shareholders, Virginia corporations with 300 or more shareholders are now permitted to send notices of annual and special shareholder meetings by electronic means. Shareholders must direct the corporation to send them meeting notices in electronic format in order for a corporation to take advantage of electronic notification. Similarly, the Virginia Nonstock Corporation Act has been amended to permit proxy appointed by telegram, cablegram or other electronic means. Under current law, only written authorizations are effective.
The General Assembly has created and expanded various state tax credit programs. The new Employees with Disabilities Tax Credit creates a tax credit equal to 20 percent of the first $6,000 in wages paid annually to an otherwise-qualified employee with a disability, for a period not to exceed two years. The existing Historic Rehabilitation Tax Credit has been amended, retroactive to January 1, 1997, to allow partners and S corporation shareholders the flexibility to allocate these tax credits among themselves as they may mutually agree. This tax credit has also been expanded, effective for taxable years beginning on or after January 1, 2002, to allow any Virginia-resident individual, trust, estate or corporation to qualify for the credit with respect to eligible expenses incurred in the rehabilitation of an historic structure in another state, if the state has a reciprocal program and agreement.