Corporate Sale of Substantially All Assets Approval Requirements in Colorado

At a glance

Requirements one by one

Colorado applies the trigger directly and through a controlled entity

Colo. Rev. Stat. § 7-112-102(1) covers an outside-course sale, lease, exchange, or other disposition of all or substantially all corporate property, with or without goodwill. It supplies no percentage, significant-continuing-activity, consolidated-basis, subsidiary-valuation, or investment-holding test.

Subsection (2) reaches one level deeper. When the corporation may vote or otherwise consent to a controlled entity's outside-course disposition of all or substantially all property, and the corporation's interests in that entity are themselves all or substantially all corporate property, the corporation may consent only after its board proposes and its shareholders approve that consent. Section 7-101-401(9) defines control by direct or indirect power to direct management and policies through voting shares, contract, or otherwise.

The board recommends or explains why it does not

The board proposes the transaction and determines its terms, conditions, and consideration. Under § 7-112-102(3), it recommends approval unless conflict of interest or other special circumstances lead it to make no recommendation; in that event it communicates its basis to shareholders with submission. The board may condition effectiveness on any basis.

Voting holders receive a description and vote by group

Section 7-112-102(5) requires notice to each shareholder entitled to vote. The notice states the purpose and contains or accompanies a description of the direct transaction or the underlying controlled-entity transaction. It does not require notice to nonvoting holders or separately demand a summary of terms, conditions, or consideration. Colo. Rev. Stat. § 7-107-105 supplies the 10-to-60-day meeting interval.

Each separately entitled voting group approves by a majority of all votes entitled to be cast in that group. The Act, articles, shareholder-adopted bylaws, or a board condition may require a greater vote. Section 7-112-102(6) states no lower-vote route.

Colo. Rev. Stat. § 7-107-104 supplies a written-consent alternative unless the articles require a meeting. The default is unanimous voter consent; the articles may expressly authorize the meeting-equivalent minimum, and the corporation must collect enough signed consents within 60 days after the first arrives.

Board-only routes, dissolution, and court orders do not align

Section 7-112-101 lets the bylaws or board authorize any disposition in the usual and regular course, any encumbrance, and a transfer to a wholly owned domestic corporation. Those transactions need no shareholder approval unless the articles say otherwise.

An outside-course all-or-substantially-all disposition connected with dissolution does require § 7-112-102 approval, but a court-ordered disposition does not. A transaction constituting a distribution is governed by § 7-106-401 rather than the extraordinary-disposition section.

Authorization preserves an exit, but contracts can constrain it

After authorization, § 7-112-102(7) permits abandonment of the direct transaction or withholding or revocation of the controlled-entity consent without further shareholder action. Contractual rights and other limitations remain. The section states no separate statutory agreement execution, filing, amendment, or closing procedure for the asset disposition.

Appraisal tracks both direct and controlled-entity dispositions

Section 7-113-102 grants appraisal to an eligible voter on consummation of a direct § 7-112-102(1) disposition and to an eligible voter on the corporation's consent to a controlled-entity disposition under subsection (2). Marketability, the consideration, interested-transaction status, and preferred-share article terms can change eligibility.

Under §§ 7-113-201 to 7-113-203, the meeting notice states the corporation's conclusion that appraisal rights are, are not, or may be available and may need to include the appraisal article. A claimant gives pre-vote intent notice and does not vote in favor. If the action becomes effective, the corporation sends the appraisal notice and form no later than 10 days afterward; the response deadline is 40 to 60 days after that notice was required to be sent.

Appraisal is paired with a qualified challenge limitation

After shareholder approval, § 7-113-401 generally bars a shareholder from contesting legality or seeking to enjoin, set aside, or rescind the action. The bar does not cover defective authorization, fraud, a material misstatement or omission, an interested transaction lacking the named approvals, or the specified less-than-unanimous-consent notice failure. This remedy provision does not decide whether the transaction crossed the qualitative threshold or resolve successor- liability, creditor, tax, securities, antitrust, employment, environmental, licensing, or regulatory law.

What trips people up

• A controlled-entity sale can trigger the parent corporation's approval. The two all-or-substantially-all conditions in § 7-112-102(2) both matter.
• Dissolution and court order point in opposite directions. An outside-course dissolution disposition is included; a court-ordered disposition is excluded.
• The denominator repeats for every voting group. Approval is a majority of all votes entitled in each group, not a majority of votes actually cast.

Common questions

May the board submit without recommending approval?

Yes, if conflict of interest or other special circumstances support no recommendation and the board communicates the basis to shareholders with the submission.

Does a mortgage require the extraordinary-disposition vote?

Not ordinarily. Section 7-112-101(1)(b) places an encumbrance of any or all property in the board/bylaw lane whether or not it is in the usual course, unless the articles require shareholder approval.

Can shareholders approve by written consent?

Yes, unless the articles require a meeting. Section 7-107-104 defaults to unanimous voter consent and permits meeting-equivalent consent only when the articles expressly provide for it.

Statutes and sources

• Colo. Rev. Stat. §§ 7-101-401, 7-106-401, and 7-107-104 to -105 — definitions, distribution boundary, written consent, and meeting notice. Official 2025 Title 7 printout, accessed September 5, 2026.
• Colo. Rev. Stat. §§ 7-112-101 to -102 — board-only transactions, extraordinary trigger, controlled-entity consent, recommendation, notice, vote, exclusions, and abandonment. Official 2025 Title 7 printout, accessed September 5, 2026.
• Colo. Rev. Stat. §§ 7-113-102, 7-113-201 to -203, and 7-113-401 — appraisal eligibility, procedure notices, and challenge limitation. Official 2025 Title 7 printout, accessed September 5, 2026.