Corporate Sale of Substantially All Assets Approval Requirements in Kentucky

At a glance

Requirements one by one

Kentucky uses no percentage safe harbor

Ky. Rev. Stat. § 271B.12-020 applies to a sale, lease, exchange, or other disposition of all or substantially all corporate property, with or without goodwill, outside the usual and regular course. It states no significant- continuing-business, percentage, consolidated-basis, subsidiary-valuation, or investment-holding test. Whether real facts cross that qualitative threshold remains a separate question.

The board recommends or explains why it does not

The board proposes the transaction and determines its terms, conditions, and consideration. It recommends approval unless conflict of interest or other special circumstances support no recommendation, in which case it communicates the basis with submission. The board may condition submission on any basis.

Every shareholder receives a transaction description

Section 271B.12-020(4) requires notice to every shareholder whether or not entitled to vote. It states that considering the disposition is a meeting purpose and contains or accompanies a transaction description. Ky. Rev. Stat. § 271B.7-050 supplies the 10-to-60-day interval; the transaction section does not expressly require a terms, conditions, or consideration summary.

Majority approval and 80% consent are separate routes

Section 271B.12-020(5) requires a majority of all votes entitled to be cast, not a majority present or cast. The articles or a board submission condition may require more or voting-group action.

Under § 271B.7-040, no-meeting action is unanimous by default. If the articles opt in, shareholders holding at least 80% of votes entitled may act, or a higher percentage if the chapter or articles require it. Nonvoting holders and voters whose consent is not solicited receive meeting-equivalent materials at least 10 days before the action; other nonconsenting voters receive prompt notice.

Three board-only routes and a distribution boundary matter

Ky. Rev. Stat. § 271B.12-010 lets the board authorize an all-or-substantially- all disposition in the usual course, an encumbrance of any or all property in or outside that course, and transfer of any or all property to a wholly owned entity. The articles may require a shareholder vote for those routes.

A transaction constituting a distribution is governed by § 271B.6-400 rather than the extraordinary-disposition section. Section 271B.12-020 states no general dissolution or court-order exclusion.

Authorization preserves an exit, subject to contracts

After authorization, § 271B.12-020(6) permits abandonment without another shareholder action, subject to contractual rights. The section states no separate statutory agreement execution, filing, amendment, or closing process.

Dissent rights use a narrower transaction list

Section 271B.13-020 grants an eligible voter dissent rights on consummation of an outside-course sale or exchange of all or substantially all property. Unlike the approval section, it does not name lease or other disposition. 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 within one year.

Ky. Rev. Stat. § 271B.13-200 requires the meeting notice to state that rights are or may be available and offers the subtitle on request. Under § 271B.13-210, a claimant gives written intent before the vote and does not vote in favor. Ky. Rev. Stat. § 271B.13-220 requires the corporation to send a dissenters' notice within 10 days after authorization, setting a demand date 30 to 60 days after delivery. A holder entitled to dissent cannot otherwise challenge the action except through a preconsummation injunction application.

What trips people up

• Eighty percent belongs to written consent, not the meeting vote. The ordinary meeting threshold is a majority of all votes entitled.
• The articles must opt into 80% consent. Otherwise no-meeting action requires every voting shareholder.
• Approval and dissent use different verb lists. The approval section reaches lease and other disposition; the dissent trigger names sale or exchange.

Common questions

Can the board require a greater vote?

Yes. Section 271B.12-020(3) permits a submission condition on any basis, and subsection (5) expressly recognizes a board-required greater vote or voting- group vote.

Does a mortgage require the extraordinary-disposition vote?

Not ordinarily. Section 271B.12-010 places an encumbrance of any or all property in the board lane whether or not it is in the usual course, unless the articles require shareholder approval.

Can the corporation abandon after approval?

Yes. Section 271B.12-020(6) permits abandonment without further shareholder action, subject to contractual rights.

Statutes and sources

• Ky. Rev. Stat. §§ 271B.6-400 and 271B.7-040 to -.050 — distribution, written consent, and meeting notice. Official § 271B.7-040 text and official § 271B.7-050 text, accessed September 5, 2026.
• Ky. Rev. Stat. §§ 271B.12-010 to -.020 — board-only transactions, approval trigger, recommendation, notice, vote, distribution boundary, and abandonment. Official § 271B.12-010 text and official § 271B.12-020 text, accessed September 5, 2026.
• Ky. Rev. Stat. §§ 271B.13-020 and 271B.13-200 to -.220 — dissent eligibility, exclusions, notice, intent, demand, and remedy limitation. Official § 271B.13-020 text, accessed September 5, 2026.