Corporate Sale of Substantially All Assets Approval Requirements in Arizona

At a glance

Requirements one by one

Classify the property disposition before counting votes

Ariz. Rev. Stat. § 10-1202(A) governs a sale, lease, exchange, or other disposition of all or substantially all corporate property, with or without goodwill, outside the usual and regular course of business. The board proposes the transaction and the shareholders approve it. Chapter 12 does not replace that qualitative test with an asset, income, revenue, or other percentage.

The companion § 10-1201 covers three different routes: an all-or-substantially- all disposition in the usual and regular course, any mortgage, pledge, debt dedication, or other encumbrance, and a transfer of any or all property to a corporation whose every share the transferor owns. Those routes do not require shareholder approval unless the articles of incorporation require it.

The board proposes, recommends, and may condition submission

Under § 10-1202(A)-(C), the board determines the transaction's terms, conditions, and consideration and proposes it to the shareholders. The board must recommend approval unless it decides that a conflict of interest or other special circumstances justify no recommendation and communicates the basis with the submission.

The board may condition submission on any basis. The statute does not prescribe a separate statutory plan, agreement, signature, filing, or amendment process for this asset disposition.

Every shareholder receives the meeting notice

Section 10-1202(D) overrides the ordinary voting-holder limit for this notice: the corporation notifies every shareholder, whether or not entitled to vote. The notice states that an all-or-substantially-all property disposition is a meeting purpose and contains or accompanies a transaction description.

Ariz. Rev. Stat. § 10-705(A) sets the timing at least 10 and no more than 60 days before the meeting. Its special-meeting rule also requires a purpose description.

The vote counts all entitled voting power

The default in § 10-1202(E) is a majority of all votes entitled to be cast on the transaction. It is not a majority of votes actually cast. The articles or the board, by conditioning submission, may require a greater vote or voting by groups. Section 10-1202 states no automatic class- or series-vote requirement for the disposition.

The general § 10-704 written-consent route uses the minimum vote that would authorize the action at a meeting where all entitled shares were present and voted, but its unanimity branches matter. Among them, governing records can require unanimity, and a corporation formed before August 6, 2016 defaults to unanimity unless its articles or bylaws adopt the meeting-equivalent threshold. Because § 10-1202 requires notice to nonvoting holders, § 10-704 also supplies special timing and content for proposed-action notice when voting holders act unanimously, plus notice within 30 days after effectiveness to specified nonconsenting and meeting-notice holders.

Authorization can end in abandonment

After authorization, § 10-1202(F) allows abandonment without another shareholder action. That authority remains subject to contractual rights; the statute does not decide termination rights, damages, financing conditions, escrow mechanics, or whether a commercial agreement permits abandonment.

A transaction constituting a shareholder distribution does not follow this section. Section 10-1202(G) sends it to § 10-640 instead.

Dissent rights use a narrower transaction description

Ariz. Rev. Stat. § 10-1302(A)(3) grants a voting shareholder dissent and fair- value payment rights when an outside-course sale or exchange of all or substantially all property is consummated. It includes a sale in dissolution but excludes a court-ordered sale and a cash sale under a plan distributing all or substantially all net proceeds to shareholders within one year.

That ordinary dissent trigger says “sale or exchange”; it does not repeat § 10-1202's lease or other-disposition verbs. Section 10-1302(A)(5) separately permits the articles, bylaws, or a board resolution to extend dissent rights to voting or nonvoting holders for action taken by shareholder vote.

Registered-investment-company redeemable securities are excluded. Unless the articles provide otherwise, the right also does not apply to a class or series that meets § 10-1302(D)'s exchange-listing, former Nasdaq national-market, or 2,000-record-holder condition on the voting record date. For an action creating dissenters' rights that is submitted at a meeting, § 10-1320 requires the notice to flag those rights and include the dissenters'-rights article.

What trips people up

• Arizona has no 25% safe harbor in Chapter 12. The current chapter contains only §§ 10-1201 and 10-1202 and uses usual-course and all-or-substantially-all language.
• A majority of votes cast is not enough under the default. Section 10-1202(E) counts a majority of every vote entitled to be cast on the transaction.
• Approval and dissent use different verb lists. Section 10-1202 covers a sale, lease, exchange, or other disposition, while § 10-1302(A)(3)'s ordinary dissent trigger names a consummated sale or exchange.
• A distribution takes another statutory route. Section 10-1202(G) sends a transaction constituting a distribution to § 10-640.

Common questions

Does an ordinary-course disposition require a shareholder vote?

Not under § 10-1201 unless the articles of incorporation require approval. The board still determines the terms, conditions, and consideration under that section.

May the board transfer the property to a wholly owned corporation without a vote?

Section 10-1201(A)(3), (B) says shareholder approval is unnecessary unless the articles require it when all shares of the recipient corporation are owned by the transferring corporation.

Can the board abandon after shareholders approve?

Yes. Section 10-1202(F) permits abandonment without further shareholder action, but preserves contractual rights.

Does every outside-course lease create statutory dissenters' rights?

The ordinary trigger in § 10-1302(A)(3) names a sale or exchange, not a lease. The articles, bylaws, or a board resolution can create rights for another shareholder-voted action under § 10-1302(A)(5), and the complete facts and governing records control.

Statutes and sources

• Ariz. Rev. Stat. §§ 10-140(14), 10-1201, and 10-1202. The quoted current text defines the domestic for-profit corporation, divides regular-course and extraordinary property dispositions, and supplies board, notice, vote, exception, distribution, and abandonment rules. Official Arizona Legislature sources: https://www.azleg.gov/ars/10/00140.htm, https://www.azleg.gov/ars/10/01201.htm, and https://www.azleg.gov/ars/10/01202.htm
• Ariz. Rev. Stat. §§ 10-704 and 10-705. The quoted current text supplies written-consent thresholds and notices plus meeting-notice timing. Official Arizona Legislature sources: https://www.azleg.gov/ars/10/00704.htm and https://www.azleg.gov/ars/10/00705.htm
• Ariz. Rev. Stat. §§ 10-1302 and 10-1320. The quoted current text supplies dissent eligibility, exclusions, governing-record extensions, and meeting- notice content. Official Arizona Legislature sources: https://www.azleg.gov/ars/10/01302.htm and https://www.azleg.gov/ars/10/01320.htm
• Sources accessed September 5, 2026.