Section 14-2-601. Authorized shares

   (a) The articles of incorporation must prescribe the classes of shares and the number of shares of each class that the corporation is authorized to issue. 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. Except to the extent otherwise permitted by Code Section 14-2-624, unless such class is divided into a series, all shares of a class must have preferences, limitations, and relative rights identical with those of other shares of the same class; provided, however, that any of the voting powers, designations, preferences, rights, qualifications, limitations, or restrictions of or on the shares of a class, or the holders thereof, may be made dependent upon facts ascertainable outside the articles of incorporation or of any amendment thereto if the manner in which the facts shall operate upon the voting powers, designations, preferences, rights, qualifications, limitations, or restrictions of or on the shares, or the holders thereof, is clearly and expressly set forth in the articles of incorporation.

(b) The articles of incorporation may create one or more series of shares within a class of shares. If more than one series within a class of shares is authorized, the articles of incorporation must prescribe the number of shares of and a distinguishing designation for each series and, prior to the issuance of shares of a series, the preferences, limitations, and relative rights of that series must be described in the articles of incorporation. Except to the extent otherwise permitted by Code Section 14-2-624, all shares of a series must have preferences, limitations, and relative rights identical with those of other shares of the same series and, except to the extent otherwise provided in the description of the series, with those of other series of the same class; provided, however, that any of the voting powers, designations, preferences, rights, qualifications, limitations, or restrictions of or on the shares of a series, or the holders thereof, may be made dependent upon facts ascertainable outside the articles of incorporation or of any amendment thereto if the manner in which the facts shall operate upon the voting powers, designations, preferences, rights, qualifications, limitations, or restrictions of or on the shares, or the holders thereof, is clearly and expressly set forth in the articles of incorporation.

(c) 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.

(d) The articles of incorporation may authorize one or more classes or series of shares that:

   (1) Have special, conditional, or limited voting rights, or no right to vote, except to the extent prohibited by this chapter;

   (2) Are redeemable, exchangeable, or convertible as specified in the articles of incorporation:

      (A) At the option of the corporation, the shareholder, or another person or upon the occurrence of a designated event;

      (B) For cash, indebtedness, securities, or other property; or

      (C) In a designated amount or in an amount determined in accordance with a designated formula or by reference to extrinsic data or events;

   (3) Entitle the holders to distributions calculated in any manner, including dividends that may be cumulative, noncumulative, or partially cumulative; and

   (4) Have preference over any other class or series within a class of shares with respect to distributions, including dividends and distributions upon the dissolution of the corporation.

(e) If at the time the corporation issues shares or other securities that are redeemable or exchangeable for or convertible into shares of another class or series, the corporation does not have authorized and unissued shares sufficient to satisfy the rights if and when exercised, the granting of the rights is not invalid solely by reason of the lack of sufficient authorized but unissued shares to honor the exercise of the rights.

(f) The description of the designations, preferences, limitations, and relative rights of share classes and series in subsection (d) of this Code section is not exhaustive.

(g) Solely for the purpose of any statute or regulation imposing any tax or fee based upon the capitalization of a corporation, all authorized shares of a corporation organized under this chapter shall be deemed to have a nominal or par value of 1 cent(s) per share. If any federal or other statute or regulation applicable to a particular corporation requires that the shares of the corporation have a par value, the shares shall be deemed to have the par value determined by the board solely for the purpose of satisfaction of the requirements of the statute or regulation imposing a tax or fee based upon the capitalization of the corporation.

(h) As used in this Code section, the term "facts" includes, but is not limited to, the occurrence of any event, including a determination or action by any person or body, including the corporation.

(i) Nothing contained in this Code section shall be deemed to limit the board of directors' authority or discretion to determine the terms and conditions of rights, options, or warrants issuable pursuant to Code Section 14-2-624.

Code 1981, § 14-2-601, enacted by Ga. L. 1988, p. 1070, § 1; Ga. L. 1989, p. 946, § 14; Ga. L. 2000, p. 1567, § 1; Ga. L. 2001, p. 4, § 14; Ga. L. 2003, p. 897, § 2.