Corporate Sale of Substantially All Assets Approval Requirements in Louisiana

At a glance

Requirements one by one

Louisiana pairs significant activity with subsidiary attribution

La. R.S. § 12:1-1202(A) applies when a non-exempt disposition would leave the corporation without significant continuing business activity. The conclusive safe harbor requires both at least 25% of prior-year total assets and at least 25% of either continuing pretax income or continuing revenue, each measured for the corporation and subsidiaries on a consolidated basis.

Subsection H deems the assets of a direct or indirect consolidated subsidiary to be parent assets. The statute gives no separate subsidiary valuation or investment-holding rule, and falling outside the percentage safe harbor does not itself answer the qualitative significant-activity question.

The board initiates and recommends the disposition

The board initiates with an authorizing resolution, submits the proposal, and transmits its recommendation. It may withhold a recommendation because of conflicts or special circumstances and must transmit its basis; the statute also recognizes a separately cross-referenced submission rule. The board may condition submission on any basis.

Every shareholder receives terms and consideration

Section 12:1-1202(D) requires notice to every shareholder whether or not entitled to vote. The notice identifies the disposition as a meeting purpose and describes it, including terms, conditions, and consideration to be received. La. R.S. § 12:1-705 supplies the 10-to-60-day interval.

Written consent under § 12:1-704 defaults to unanimity among voters. The articles may authorize the meeting-equivalent threshold; enough dated consents must arrive within 60 days. Nonvoters and nonconsenting voters receive the action description and meeting-equivalent materials no more than 10 days after sufficient consents arrive or permitted later tabulation occurs.

The threshold is a majority of all entitled votes

Section 12:1-1202(E) requires at least a majority of votes entitled to be cast, not a majority of votes present or cast. The articles or a board submission condition may require more. The section states no automatic class or voting- group vote and no lower-vote route.

Four express exclusions sit outside the approval trigger

La. R.S. § 12:1-1201 removes a usual-course disposition of any or all assets, an encumbrance inside or outside the usual course, a transfer to one or more wholly owned entities, and a pro rata asset distribution that does not violate class or series rights. The articles may require approval for those otherwise excluded actions. Section 12:1-1202 also excludes a disposition in the course of dissolution but states no secured-creditor alternative-sale exception.

Approval can be abandoned before consummation

After shareholder approval and before consummation, § 12:1-1202(F) permits the corporation to abandon without another shareholder action, subject to other parties' contractual rights. Part 12 states no separate statutory asset- disposition agreement execution, filing, amendment, or closing process.

Appraisal is not textually limited to voting holders

Section 12:1-1302(A)(3) grants appraisal on consummation of a § 12:1-1202 disposition without saying the holder must be entitled to vote. It excludes the specified non-interested cash/net-assets distribution within one year; market, consideration, interested-transaction, and preferred-share provisions create other boundaries.

La. R.S. § 12:1-1320 requires the meeting notice to state the corporation's availability conclusion and use the applicable statutory statement. When rights may exist, annual financials ending no more than 16 months earlier and the latest quarterly financials accompany the notice. Under § 12:1-1321, a claimant gives written intent before the vote and does not vote the affected shares in favor.

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%.
• Subsidiary assets are deemed parent assets. The rule reaches direct and indirect consolidated subsidiaries.
• Appraisal does not repeat the voting-holder limit. Eligibility still turns on the cash-distribution, market, consideration, interested-transaction, and preferred-share provisions.

Common questions

Must the notice describe consideration?

Yes. Section 12:1-1202(D) requires the description to include terms, conditions, and consideration to be received by the corporation.

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

Yes. Section 12:1-1201 makes each of its otherwise vote-free actions subject to an articles requirement.

Can the corporation abandon after approval?

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

Statutes and sources

• La. R.S. §§ 12:1-704 to -705 — written consent and meeting notice. Official § 12:1-704 text and official § 12:1-705 text, accessed September 5, 2026.
• La. R.S. §§ 12:1-1201 to -1202 — excluded dispositions, significant-activity trigger, safe harbor, subsidiary attribution, board action, notice, vote, and abandonment. Official § 12:1-1201 text and official § 12:1-1202 text, accessed September 5, 2026.
• La. R.S. §§ 12:1-1302, -1320, and -1321 — appraisal eligibility, limits, notice, financials, and pre-vote preservation. Official § 12:1-1302 text and official § 12:1-1320 text, accessed September 5, 2026.