Section 14-2-922. Elimination of board of directors

   (a) A statutory close corporation may operate without a board of directors if its articles of incorporation, bylaws approved by the shareholders, or agreements between the shareholders that are otherwise lawful contain a statement to that effect.

(b) An amendment to articles of incorporation, bylaws approved by the shareholders, or an agreement between the shareholders eliminating a board of directors must be approved by all the shareholders of the corporation, whether or not otherwise entitled to vote on amendments, or if no shares have been issued, by all the subscribers for shares, if any, or if none, by all the incorporators.

(c) While a corporation is operating without a board of directors as authorized by subsection (a) of this Code section:

   (1) All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation managed under the direction of, the shareholders;

   (2) Unless the articles of incorporation, bylaws approved by the shareholders, or agreements among the shareholders provide otherwise:

      (A) Action requiring director approval or both director and shareholder approval is authorized if approved by the shareholders; and

      (B) Action requiring a majority or greater percentage vote of the board of directors is authorized if approved by the majority or greater percentage of the votes of shareholders entitled to vote on the action;

   (3) Those shareholders in whom the discretion or the powers of the board are vested are liable for the liability imposed by law upon directors;

   (4) A requirement by a state or the United States that a document delivered for filing contain a statement that specified action has been taken by the board of directors is satisfied by a statement that the corporation is a statutory close corporation without a board of directors and that the action was approved by the shareholders;

   (5) The shareholders by resolution may appoint one or more shareholders to sign documents as "designated directors"; and

   (6) Unless the context clearly requires otherwise, the shareholders of the corporation shall be deemed to be directors for purposes of applying provisions of this chapter.

(d) An amendment to articles of incorporation, bylaws approved by the shareholders, or an agreement between the shareholders deleting the statement eliminating a board of directors 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. The amendment must also specify the number, names, and addresses of the corporation's directors or describe who will perform the duties of a board under Code Section 14-2-801.

Code 1981, § 14-2-922, enacted by Ga. L. 1988, p. 1070, § 1; Ga. L. 1989, p. 946, § 45; Ga. L. 1993, p. 1231, § 10.