Corporate Sale of Substantially All Assets Approval Requirements in Arkansas

At a glance

Requirements one by one

Arkansas uses the qualitative all-or-substantially-all trigger

Ark. Code § 4-27-1202(a) covers a sale, lease, exchange, or other disposition of all or substantially all property, with or without goodwill, outside the usual and regular course. It states no significant-continuing-business formulation, percentage safe harbor, consolidated test, valuation method, or investment- holding rule. The full facts therefore must be assessed under the statutory words.

The board recommends and can condition submission

The board proposes the transaction and determines terms, conditions, and consideration. Under § 4-27-1202(b), it ordinarily recommends approval. A conflict of interest or other special circumstances can support no recommendation if the board communicates its basis with the submission. The board may condition submission “on any basis.”

Every shareholder gets a description before the meeting

Section 4-27-1202(d) requires notice to voting and nonvoting holders, states the transaction purpose, and includes or accompanies a transaction description. Ark. Code § 4-27-705 supplies the ordinary 10-to-60-day meeting window. The asset-sale section does not specifically require the notice to state terms, conditions, or consideration.

The default vote is a majority of all votes entitled to be cast. The articles or a board condition may require a greater vote or voting groups. Ark. Code § 4-27-704 permits the meeting-equivalent written-consent threshold; because § 4-27-1202 requires nonvoter notice, nonvoters receive the same material at least 10 days before the consent action.

Three vote-free transactions and a distribution boundary

Ark. Code § 4-27-1201 makes a usual-course disposition, an encumbrance inside or outside that course, and a transfer to a wholly owned corporation vote-free unless the articles or another chapter provision requires approval. A transaction that constitutes a distribution follows § 4-27-640 rather than the asset-sale approval section.

Authorization can be abandoned subject to contracts

After authorization, § 4-27-1202(f) allows abandonment without another shareholder action, subject to contractual rights. Subchapter 12 states no statutory agreement execution, signature, filing, amendment, closing, or timing mechanism.

Dissent is narrower than the approval verbs

Ark. Code § 4-27-1302(a)(4) gives an eligible voter dissent rights when a sale or exchange of all or substantially all property outside the usual course is consummated. It includes a sale in dissolution and excludes a court-ordered sale and a cash sale under a plan to distribute all or substantially all net proceeds within one year. The automatic text does not name a lease or other disposition, although governing records or a board resolution may create rights more broadly.

The meeting notice states that dissent rights are or may be available and includes the dissent chapter. A claimant gives written intent before the vote and does not vote in favor. Section 4-27-1302(b) limits an eligible dissenter's other challenge to an unlawful or fraudulent action.

What trips people up

• Approval and dissent use different verb lists. Section 4-27-1202 covers sale, lease, exchange, or other disposition; automatic dissent names only sale or exchange.
• The wholly owned transfer is corporation-specific. Section 4-27-1201 says a corporation all of whose shares are owned, not any wholly owned entity.
• A cash-plan exception changes dissent, not approval. The one-year net- proceeds plan appears in § 4-27-1302, not the approval trigger.

Common questions

Does Arkansas supply a percentage test for “substantially all”?

No. The approval subchapter contains no asset, income, or revenue percentage.

Must nonvoting shareholders receive the meeting notice?

Yes. Section 4-27-1202(d) expressly sends the notice to each shareholder whether or not entitled to vote.

Can the corporation abandon after approval?

Yes, without further shareholder action, subject to contractual rights.

Statutes and sources

• Ark. Code §§ 4-27-101 and -140(4) — act and covered domestic for-profit corporation. Official Arkansas Act 958 of 1987, accessed September 5, 2026.
• Ark. Code §§ 4-27-704 to -705 and -1201 to -1202 — consent, notice, exclusions, trigger, board process, vote, abandonment, and distribution boundary. Official Arkansas Act 958 of 1987, accessed September 5, 2026.
• Ark. Code § 4-27-1302 — dissent eligibility, exceptions, and challenge limit. Official Arkansas Act 408 of 2009, accessed September 5, 2026.
• Ark. Code §§ 4-27-1320 to -1321 — dissent notice and pre-vote preservation. Official Arkansas Act 958 of 1987, accessed September 5, 2026.