Corporate Sale of Substantially All Assets Approval Requirements in Georgia

At a glance

Requirements one by one

Georgia replaces the ordinary-course test with enumerated routes

O.C.G.A. § 14-2-1201(b) lists transactions the board may authorize without a shareholder vote unless the articles require one. Georgia does not use an ordinary-course or significant-continuing-activity formulation in these sections.

The list includes an insolvent corporation's cash-or-equivalent sale the board deems advisable to meet liabilities, a corporation formed to liquidate the property, an encumbrance, a transfer to a corporation whose shares are all owned by the transferor, and a disposition within the quantitative safe harbor. Section 14-2-1201(a) defines insolvency using alternative inability-to-pay and assets-below-liabilities tests.

The irrebuttable safe harbor uses two two-thirds ceilings

Section 14-2-1201(b)(4) conclusively deems the disposed assets less than substantially all only when their fair value does not exceed two-thirds of all corporate asset fair value and their annual revenue does not exceed two-thirds of total revenue. Asset values use the most recent available financial information; revenue uses the most recent fiscal year with available financial information.

The statute expressly says exceeding the amounts creates no inference that a sale is substantially all. It supplies no income measure, subsidiary- consolidation formula, or investment-holding rule, and this page does not apply the values or decide the remaining qualitative question.

The board recommends or explains and may condition

O.C.G.A. § 14-2-1202(a)-(c) requires the board to determine terms, conditions, and consideration and propose the transaction. It recommends approval unless a conflict or special circumstance leads it to make no recommendation or recommend rejection; it then sends shareholders the basis for that choice.

The board may condition submission, effectiveness, or both on any basis. The section does not prescribe a separate statutory plan, agreement, signer, or public filing for the asset disposition.

Voting holders receive a description and a majority-entitled vote

Section 14-2-1202(d) gives notice to each shareholder entitled to vote. The notice identifies the disposition as a meeting purpose and contains or accompanies a transaction description. Under O.C.G.A. §§ 14-2-704 and 14-2-705, meeting notice runs 10 to 60 days and written consent defaults to unanimity, with a meeting-minimum consent route only when the articles provide it.

Section 14-2-1202(e) requires a majority of all votes entitled to be cast—not a majority of votes cast. The articles, bylaws, or board condition may require a greater vote or voting groups. The ordinary section gives no automatic vote to an otherwise nonvoting class.

Distributions and abandonment are separate

Section 14-2-1202(g) sends a transaction constituting a distribution to § 14-2-640 instead of the asset-sale approval section. The surveyed sections state no general dissolution exception.

After authorization, § 14-2-1202(f) permits abandonment without further shareholder action, subject to contractual rights. The sentence does not decide agreement termination, fees, damages, title, tax, lien, or regulatory records.

Dissent rights have transaction and market exceptions

O.C.G.A. § 14-2-1302(a)(3), (b)-(c) gives a record shareholder dissent and payment rights for an approval-required sale or exchange. It excludes a court- ordered sale and a cash sale whose plan distributes all or substantially all net proceeds within one year.

Listed or more-than-2,000-holder shares ordinarily fall under the market-out, unless the articles or approving board resolution provides otherwise. The section preserves a challenge when procedure or governing records were not followed or the required vote was obtained through fraudulent and deceptive means. This page identifies eligibility without administering appraisal.

What trips people up

• Georgia does not use an ordinary-course exception here. Classification starts with § 14-2-1201's enumerated routes and the two-part safe harbor.
• Two-thirds is the safe-harbor ceiling, not the shareholder vote. The ordinary § 14-2-1202 vote is a majority of all votes entitled.
• Failing the safe harbor proves nothing positive. The statute expressly bars an inference that exceeding either measure means substantially all assets were sold.

Common questions

Does mortgaging all property require shareholder approval?

Not under § 14-2-1201(b)(2)'s default, which covers the listed encumbrances whether or not in the usual and regular course. The articles may require a vote.

May the board recommend rejection but still submit the transaction?

Yes. Section 14-2-1202(b) permits a rejection recommendation based on conflict or other special circumstances if the board gives shareholders its basis.

Does the asset disposition require a state filing?

Sections 14-2-1201 and 14-2-1202 state no asset-sale filing. Other title, dissolution, tax, lien, license, or industry rules may require separate records.

Statutes and sources

• O.C.G.A. §§ 14-2-1201 to -1202. The quoted current text supplies the enumerated no-vote routes, insolvency definition, two-thirds safe harbor, board/holder procedure, notice, vote, distribution boundary, and abandonment. Current Code Revision Commission/Public.Resource.Org text (accessed September 5, 2026).
• O.C.G.A. §§ 14-2-704 to -705. The quoted current text supplies consent and meeting-notice mechanics. Current Code Revision Commission/Public.Resource.Org text (accessed September 5, 2026).
• O.C.G.A. § 14-2-1302. The quoted current text supplies dissent eligibility, exceptions, and challenge savings. Current Code Revision Commission/Public.Resource.Org text (accessed September 5, 2026).