Corporate Sale of Substantially All Assets Approval Requirements in Rhode Island

At a glance

Requirements one by one

Rhode Island uses a qualitative all-or-substantially-all trigger

R.I. Gen. Laws § 7-1.2-1102 covers a sale, lease, exchange, or other disposition of all or substantially all property and assets, with or without goodwill, outside the usual and regular course. The statute supplies no significant- continuing-business formulation or general asset, income, or revenue percentage.

The board-only route in § 7-1.2-1101 covers an all-or-substantially-all disposition in the usual and regular course and a mortgage or pledge in any course. In either route, consideration may be money or real or personal property, including shares of another domestic or foreign corporation.

The board recommends and every holder receives 20-day notice

The board adopts a resolution recommending the disposition and directing its submission at an annual or special shareholder meeting. Section 7-1.2-1102 states no conflict-based nonrecommendation or conditioning procedure.

Every voting and nonvoting holder receives at least 20 days' written notice. It states the meeting type and disposition purpose and includes a dissent-right statement plus a copy or summary of § 7-1.2-1202. The section does not require a transaction description or attached terms, conditions, or consideration.

Approval is a majority of all entitled shares

At the meeting, a majority of all shares entitled to vote approves. If the articles entitle a class to vote separately, a majority of that class is also required. The section states no series or group rule, quorum formula, greater or lesser statutory vote, or board vote condition.

R.I. Gen. Laws § 7-1.2-707 permits action without a meeting only if all holders entitled to vote consent in writing. Its articles-authorized less-than-unanimous route expressly excludes a § 7-1.2-1102 disposition.

Cash and two-thirds-owned subsidiaries bypass the holder vote

Section 7-1.2-1102(e) sends any cash transfer, with or without an assumption of liabilities, to § 7-1.2-1101's no-shareholder-approval route. It does the same for a transfer to one or more subsidiaries in which the transferor owns at least two-thirds of the combined voting power entitled to elect directors.

The subsidiary rule also looks through the structure. A disposition of all or substantially all assets of subsidiaries owned at that level is treated as the parent's disposition when the subsidiary shares themselves constitute all or substantially all parent property and assets. Part 11 states no pro rata distribution, investment-holding, or dissolution exclusion.

The board may abandon after authorization

After holder authorization, § 7-1.2-1102(d) lets the board abandon without another shareholder action, subject to third-party rights under related contracts. Part 11 states no statutory agreement, signature, filing, amendment, or closing process.

Dissent uses fewer transaction verbs than approval

R.I. Gen. Laws § 7-1.2-1201(a)(2) grants dissent for a sale or exchange of all or substantially all assets requiring shareholder approval under § 7-1.2-1102. It does not name a lease or every other disposition verb. Unless the articles restore rights, subsection (c) excludes specified exchange-listed or national- market shares and a class or series with at least 2,000 record holders.

An eligible holder may challenge completed action only for a failure to follow the governing Act or corporate records, or for fraud or material misrepresentation. The transaction notice points to the separate demand and valuation procedure rather than resolving it on this page.

What trips people up

• Cash changes the statutory route. A cash transfer of all or substantially all assets follows the board-only section even when liabilities are assumed.
• Two-thirds ownership is enough for the subsidiary exception. The transfer recipient need not be wholly owned, and a separate look-through rule can make a subsidiary asset sale the parent's disposition.
• Dissent is narrower than the approval verbs. The dissent statute names a qualifying sale or exchange, while the approval statute also names leases and other dispositions.

Common questions

Who may fix the final transaction terms?

At the meeting, shareholders may fix any or all terms, conditions, and consideration or authorize the board to do so under § 7-1.2-1102(c).

What preserves a meeting-route dissent claim?

R.I. Gen. Laws § 7-1.2-1202(a) requires written objection before or at the meeting, no vote in favor, and a written payment demand within 10 days after the vote. The remaining appraisal procedure is outside this approval survey.

Does Part 11 require a state filing?

No filing step appears in the current two-section Part 11. Other transaction, property, regulatory, or dissolution law may independently require one.

Statutes and sources

• R.I. Gen. Laws §§ 7-1.2-1101 to -1102 — ordinary-course and mortgage/ pledge route, outside-course approval, cash and subsidiary exceptions, board resolution, notice, vote, and abandonment. Official regular-course text and official outside-course text, accessed September 5, 2026.
• R.I. Gen. Laws § 7-1.2-707 — unanimous written action and the express exclusion from the less-than-unanimous route. Official consent text, accessed September 5, 2026.
• R.I. Gen. Laws §§ 7-1.2-1201 to -1202 — dissent eligibility, market-out, challenge limits, and initial demand steps. Official dissent-right text and official dissent-procedure text, accessed September 5, 2026.