Corporate Sale of Substantially All Assets Approval Requirements in Connecticut

At a glance

Requirements one by one

The 25% safe harbor uses two consolidated measurements

Conn. Gen. Stat. § 33-831(a) applies when a non-exempt disposition would leave the corporation without significant continuing business activity. The conclusive safe harbor requires at least 25% of prior-year total assets and at least 25% of either continuing pretax income or continuing revenue for the corporation and each subsidiary on a consolidated basis. Falling outside the safe harbor does not decide the qualitative significant-activity question.

The board initiates, recommends, and may condition

The board initiates by authorizing resolution, submits the disposition, and recommends approval. It may make no recommendation for conflicts or special circumstances, or under the separately cross-referenced submission provision, and must transmit its basis. The board may condition submission on any basis.

Every shareholder receives the full description

Section 33-831(d) requires notice to every shareholder, voting or nonvoting. It states the purpose and describes the disposition, terms, conditions, and consideration. Conn. Gen. Stat. § 33-699 supplies the 10-to-60-day interval.

Under § 33-698, consent is unanimous by default. The certificate may authorize the meeting-equivalent threshold; enough dated consents must arrive within 60 days, and nonvoters and nonconsenting voters receive meeting-equivalent material no more than 10 days after the sufficient consents or later tabulation.

Formation date can replace majority with two-thirds

The ordinary § 33-831(e) vote is a majority of all votes entitled to be cast, unless the certificate or board requires more or voting-group approval.

For a corporation formed before January 1, 1997, subsection (i) ordinarily requires at least two-thirds of the voting power of each entitled voting group and each class outstanding before that date, whether or not otherwise entitled to vote. The certificate may expressly provide otherwise.

Four exclusions and dissolution sit outside the trigger

Conn. Gen. Stat. § 33-830 removes a usual-course disposition of any or all assets, an encumbrance inside or outside the usual course, a transfer to wholly owned entities, and a pro rata class or series asset distribution. The certificate may require approval for those otherwise exempt actions. A disposition in the course of dissolution is outside § 33-831.

Approval can be abandoned before consummation

After shareholder approval and before consummation, § 33-831(f) permits the corporation to abandon without another shareholder action, subject to other parties' contractual rights. Part XI states no separate statutory agreement execution, filing, amendment, or closing process.

Appraisal is vote-linked and ordinarily exclusive

Section 33-856 grants appraisal to an eligible voter when a § 33-831 disposition is consummated. The specified non-interested cash/net-assets distribution within one year, securities-market status, consideration, interested-transaction status, and preferred-share terms can change eligibility. When appraisal is available, subsection (d) makes it the holder's exclusive remedy against the listed action.

Under §§ 33-860 to -862, notice states whether appraisal is, is not, or may be available and may include the appraisal statutes and financials. A claimant gives written intent before the vote and does not vote in favor. If the action becomes effective, the corporation sends its notice and form no later than 10 days afterward, with a response date 40 to 60 days after sending.

What trips people up

• The safe harbor is AND plus either/or. Retained assets must reach 25%, and either continuing pretax income or continuing revenue must also reach 25%.
• Pre-1997 corporations can carry a legacy class vote. Otherwise nonvoting pre-1997 classes can enter the two-thirds calculation.
• Appraisal is tied to voting eligibility. The cash-distribution, market, consideration, interested-transaction, and preferred-share limits still apply.

Common questions

Must the notice describe consideration?

Yes. Section 33-831(d) requires terms, conditions, and consideration to be received by the corporation.

May the certificate require a vote for a usual-course disposition?

Yes. Section 33-830 makes its otherwise vote-free actions subject to a certificate requirement.

Can the corporation abandon after approval?

Yes, before consummation and without another shareholder action, subject to other parties' contractual rights.

Statutes and sources

• Conn. Gen. Stat. §§ 33-698 to -699 — written consent and meeting notice. Official Chapter 601, accessed September 5, 2026.
• Conn. Gen. Stat. §§ 33-830 to -831 — exclusions, significant-activity trigger, 25% safe harbor, subsidiary attribution, board action, notice, vote, legacy class rule, and abandonment. Official § 33-831 text, accessed September 5, 2026.
• Conn. Gen. Stat. §§ 33-856 and 33-860 to -862 — appraisal eligibility, limits, exclusivity, notice, and preservation. Official § 33-856 text, accessed September 5, 2026.