Corporate Sale of Substantially All Assets Approval Requirements in Maine

At a glance

Requirements one by one

The 25% pair establishes retained activity in one direction

13-C M.R.S. § 1202(1) applies to a non-exempt disposition that would leave the corporation without a significant continuing business activity. A corporation has retained that activity if it keeps a business representing at least 25% of prior-year total assets and at least 25% of either pretax continuing income or continuing revenue. Each measure consolidates the corporation and its subsidiaries, and direct or indirect consolidated-subsidiary assets are deemed parent assets.

The text does not state the converse or supply a separate subsidiary-valuation or investment-holding rule. Disputed financial and operating facts therefore remain outside this survey.

The board ordinarily initiates, recommends, and may condition

The board initiates a covered disposition by authorizing resolution, submits it to holders, and ordinarily recommends approval. A conflict or special circumstance can support no recommendation, and 13-C M.R.S. § 827 permits agreed submission after the board determines it no longer recommends the matter. In either branch, § 1202(2) requires the board to transmit its basis. It may condition submission on any basis.

There is a separate all-holder-consent route. If every shareholder consents, including every nonvoter, § 1202(9) eliminates the board resolution and every board approval, proposal, submission, or recommendation step.

Every holder receives terms unless all holders consent

At a meeting, § 1202(4) requires notice to each voting and nonvoting holder. It states the purpose and describes the disposition, terms, conditions, and consideration. Under 13-C M.R.S. § 705(1), the ordinary interval is 10 to 60 days, while a close corporation has a 3-day minimum.

13-C M.R.S. § 704 defaults no-meeting action to unanimous consent of the holders entitled to vote. The articles may authorize the meeting-equivalent minimum, collected within 60 days. Nonvoters and nonconsenting voters then receive the meeting-equivalent materials no more than 10 days after sufficient consents or later tabulation. If every shareholder, voting and nonvoting, consents under § 1202(9), the transaction-specific notice and dissent rights disappear.

The articles can raise or lower the ordinary all-entitled vote

Section 1202(5) defaults to a majority of all votes entitled on the transaction and a majority of all votes entitled in each class or series voting separately. The articles or a board condition may require more.

The articles may instead lower each voting group's threshold, but not below a majority of votes cast at a meeting where each group has a quorum of at least a majority of its entitled votes. That floor differs from both the ordinary all- entitled denominator and the all-entitled-voter consent default.

Four exclusions and dissolution use different routes

13-C M.R.S. § 1201 removes four actions from ordinary holder approval unless the articles provide otherwise: a usual-and-regular-course disposition of any or all assets, an encumbrance in or outside that course, a transfer to wholly owned entities, and a pro rata asset distribution to one or more classes or series.

Section 1202(7) places a disposition in the course of dissolution under chapter 14 instead of section 1202's approval rule.

Approval may be abandoned before consummation

After shareholder approval and before consummation, § 1202(6) allows the corporation to abandon without another holder action, subject to other parties' contractual rights. Chapter 12 states no statutory agreement execution, filing, amendment, or closing process.

Appraisal can disappear through either of two routes

13-C M.R.S. § 1302(3) makes consummation of a § 1202 disposition an appraisal trigger. Rights do not attach if the approved action will distribute the corporation's net assets in cash, above reasonable claims reserves, within one year and according to holders' respective interests, and the disposition is not an interested transaction. Articles, bylaws, or a board resolution may also grant appraisal for another asset disposition under subsection (5).

The all-holder-consent route is separate: § 1202(9) says every shareholder's written consent eliminates dissent from the disposition. Otherwise, 13-C M.R.S. § 1321(1), (3) requires meeting and consent materials to state whether appraisal rights are, are not, or may be available and to include chapter 13 when applicable.

What trips people up

• All-holder consent means exactly that. Consent from all entitled voters is the ordinary default, but only consent from every shareholder, including nonvoters, eliminates the board steps, notice, and dissent.
• The articles may lower the meeting vote. Maine permits a lower articles- based threshold, but preserves the majority-votes-cast floor and a majority- entitled quorum for every voting group.
• The 25% sentence does not state a below-threshold presumption. It says the corporation has retained significant activity when both measures are met, without declaring the opposite result when either is missed.

Common questions

Are subsidiary assets included with the parent?

Yes, for direct and indirect consolidated subsidiaries. Section 1202(8) deems their assets parent assets for the approval analysis.

Can an interested transaction use the ordinary cash-distribution appraisal exception?

No. The § 1302(3) exception requires both the qualifying one-year cash net- asset distribution and a disposition that is not an interested transaction.

Does chapter 12 require a state filing?

No filing step appears in 13-C M.R.S. §§ 1201-1202. Other transaction, property, regulatory, or dissolution law may independently require a filing.

Statutes and sources

• 13-C M.R.S. §§ 1201-1202 — exclusions, significant-activity and 25% tests, board and notice procedure, vote variation, all-holder consent, dissolution, subsidiaries, and abandonment. Official section 1201 text and official section 1202 text, accessed September 5, 2026.
• 13-C M.R.S. §§ 704-705 and 827 — written-consent mechanics, meeting notice, and agreed submission after nonrecommendation. Official section 704 text, section 705 text, and section 827 text, accessed September 5, 2026.
• 13-C M.R.S. §§ 1302 and 1321 — appraisal eligibility, exceptions, and notice. Official section 1302 text and official section 1321 text, accessed September 5, 2026.