Corporate Appraisal and Dissenters'-Rights Procedure in Montana
At a glance
| Governing law, corporation, shareholder, and transaction scope | Montana Business Corporation Act pt. 13, MCA §§ 35-14-1301 to -1340; record shareholder, beneficial shareholder, or voting-trust beneficial owner of ordinary domestic corporation; survivor included for procedure (§ 35-14-1301(3), (11)) |
|---|---|
| Merger, exchange, asset-sale, amendment, conversion, and domestication triggers | Approval-required/offer-followed merger; 90%-parent subsidiary merger; acquired-company share exchange; qualifying asset disposition; cash-out fractional amendment; governing-record expansion; materially adverse domestication; nonprofit or unincorporated-entity conversion (§ 35-14-1302(1)) |
| Market-out, public-company, consideration, and governing-record expansion | Covered security, qualifying organized-market class (≥2,000 holders and ≥$20m), or redeemable open-end fund share generally excluded at record/offer/no-vote date; nonqualifying consideration or interested transaction restores. Articles may limit preferred-share rights within exceptions; governing records/board may add rights (§ 35-14-1302(1)(e), (2)-(3)) |
| Record/beneficial ownership, nominees, continuous holding, and share scope | Record holder may split only by beneficial/voting-trust owner, covering all class/series shares for that owner and disclosing name/address. Beneficial/voting-trust owner needs record-holder consent by form deadline and asserts all owned class/series shares. No express continuous-holding rule; preannouncement certification controls after-acquired treatment (§§ 35-14-1303, -1322 to -1325) |
| Meeting, consent, short-form, and post-effective notice | Meeting/offer notice says rights are, are not, or may be available and includes Part 13 if available/maybe; consent solicitation and later nonconsenter/nonvoter notice parallel it. Qualifying notices carry ≤16-month fiscal-year and latest interim financials. 90%-parent notice due within 10 days after effect (§ 35-14-1320) |
| Pre-vote intent, demand form and delivery, and voting consequences | Meeting: written intent before vote and no class/series share voted in favor. Consent: no favorable consent. Offer-followed route: written intent before purchase and no tender. Failure ends payment right (§ 35-14-1321) |
| Post-effective appraisal notice, form, share deposit, and deadline | Notice/form no later than 10 days after effect; form states first principal-term announcement, asks acquisition/nonapproval certifications, gives estimate/destinations/withdrawal date. Corporation sets form/certificate deadline 40-60 days after sending; missing either waives payment (§§ 35-14-1322 to -1323) |
| Corporation payment/offer, supplemental demand, and withdrawal | Ordinary cash payment plus interest due within 30 days after form deadline with financials/estimate; after-acquired holder may receive offer. Further demand stating holder estimate due within 30 days after payment/offer. Withdrawal date is within 20 days after form deadline; later withdrawal needs corporation written consent (§§ 35-14-1323 to -1326) |
| Court petitioner, venue, timing, discovery, costs, and interest | Corporation petitions within 60 days after unsettled further demand or pays demand. District court in principal-office county, First Judicial District fallback; all unsettled holders joined/served; plenary/exclusive jurisdiction, optional appraisers, civil discovery, no jury. Corporate-cost default with misconduct/noncompliance shifts, benefit allocation, and direct-payment suit (§§ 35-14-1330 to -1331) |
| Fair-value, fiduciary, securities, tax, and litigation boundaries | Fair value immediately before effect, customary/current transaction-context techniques, no minority/marketability discount except specified amendments; judgment-rate interest from effect. Postapproval challenge generally barred, with authorization, fraud/misleading-disclosure, interested-transaction, and late-consent-notice exceptions. No valuation, fiduciary, securities, tax, or strategy determination here (§§ 35-14-1301(5)-(6), -1340) |
Requirements one by one
Transactions, market limits, and owners
Montana reaches approval-required and offer-followed mergers, the subsidiary side of a 90%-parent merger, acquired-company share exchanges, qualifying asset dispositions, a cash-out fractional-share amendment, materially adverse domestication, and conversion to nonprofit status or an unincorporated entity. Governing records or a board resolution may add rights for another merger, exchange, disposition, or amendment. Mont. Code Ann. § 35-14-1302(1).
The market-out covers federal covered securities, organized-market classes with at least 2,000 holders and $20 million market value after specified exclusions, and redeemable open-end investment-company shares. Nonqualifying consideration and interested transactions restore rights. Mont. Code Ann. § 35-14-1302(2)-(3).
A record holder may split shares only by beneficial or voting-trust owner, covering all class-or-series shares for that owner and disclosing the owner's name and address. A beneficial or voting-trust owner needs the record holder's written consent by the form deadline and must assert all owned shares of the class or series. Mont. Code Ann. § 35-14-1303.
Notice, preservation, and the post-effective form
Meeting and offer notices state that the corporation has concluded rights are, are not, or may be available. If rights are or may be available, the notice includes Part 13. Consent solicitation and later nonconsenter/nonvoter notice have parallel disclosures, and qualifying notices carry current-enough financials. Mont. Code Ann. § 35-14-1320.
A meeting holder delivers written intent before the vote and does not vote or permit affected shares to be voted in favor. A consent holder does not sign in favor. Under the offer-followed route, written intent arrives before purchase and the shareholder does not tender. Mont. Code Ann. § 35-14-1321.
No later than 10 days after effectiveness, the corporation sends the appraisal notice and form. The form identifies the first pre-effect announcement of the principal terms, requests acquisition and nonapproval certifications, gives the corporation's estimate, and supplies return and certificate-deposit directions. The form deadline is 40 to 60 days after sending, and the withdrawal deadline is within 20 days after the form deadline. Mont. Code Ann. § 35-14-1322.
The holder timely returns the signed form and deposits certificated shares. Missing either ends the payment right. Timely written withdrawal is allowed by the stated deadline; later withdrawal requires the corporation's written consent. Mont. Code Ann. § 35-14-1323.
Payment, further demand, and court
Ordinary payment of the estimate plus interest is due within 30 days after the form deadline and carries financials, the estimate, and the further-demand warning. A holder who does not provide the requested acquisition certification may receive the after-acquired-share offer instead. Mont. Code Ann. §§ 35-14-1324 to -1325. Mont. Code Ann. § 35-14-1325 supplies that separate offer route.
A dissatisfied holder states a written estimate and demands that amount plus interest, less any payment, within 30 days after receiving payment or an offer. Otherwise the holder accepts the payment or offer as specified. Mont. Code Ann. § 35-14-1326.
The corporation petitions within 60 days after receiving an unsettled further demand or pays the demanded amount plus interest. Venue is district court in the principal-office county or, without a Montana principal office, the First Judicial District. All unsettled holders are joined and served; jurisdiction is plenary and exclusive, ordinary civil discovery applies, appraisers are optional, and there is no jury right. Mont. Code Ann. § 35-14-1330.
Court costs ordinarily fall on the corporation, subject to equitable shifts for arbitrary, vexatious, or bad-faith conduct. Party expenses have separate noncompliance and misconduct rules. A successful direct suit for an unpaid statutory amount carries all suit expenses. Mont. Code Ann. § 35-14-1331.
What trips people up
The offer-followed merger or exchange has its own preservation step. The holder delivers intent before purchase and does not tender the affected shares. Mont. Code Ann. § 35-14-1321(3).
The first shareholder announcement matters even without a continuous-holding rule. The form asks when beneficial ownership was acquired, and missing the certification permits after-acquired-share treatment. Mont. Code Ann. §§ 35-14-1322 to -1325.
Montana's court fallback is the First Judicial District, not a named statewide county. Mont. Code Ann. § 35-14-1330(2).
Common questions
May a shareholder vote against and still demand appraisal?
Yes, but the holder must also deliver the separate written intent before the vote. The statute forbids voting the affected shares in favor. Mont. Code Ann. § 35-14-1321(1).
Does the corporation have to state whether appraisal rights exist?
It must state that it has concluded rights are, are not, or may be available. When rights are or may be available, it supplies Part 13. Mont. Code Ann. § 35-14-1320(1), (3).
What happens if the corporation misses the court deadline?
It must pay each unsettled shareholder the amount demanded plus interest. Mont. Code Ann. § 35-14-1330(1).
Can a shareholder challenge the transaction after approval?
Section 35-14-1340 generally bars a postapproval challenge, injunction, rescission, or set-aside action, but lists exceptions for approval defects, fraud or materially misleading disclosure, specified interested transactions, and a narrow less-than-unanimous-consent notice problem. Mont. Code Ann. § 35-14-1340.
Statutes and sources
- Mont. Code Ann. §§ 35-14-1301 through -1303 define the actors, value, interest, triggers, market limits, and ownership rules. Accessed September 5, 2026.
- Mont. Code Ann. §§ 35-14-1320 through -1326 govern notice, preservation, form, deposit, withdrawal, payment, after-acquired shares, and further demand. Accessed September 5, 2026.
- Mont. Code Ann. §§ 35-14-1330 through -1340 govern the court case, venue, parties, discovery, jury bar, costs, direct suit, and postapproval challenge boundary. Accessed September 5, 2026.
Source links
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