Corporate Shareholder Preemptive-Rights Requirements in South Carolina

At a glance

Requirements one by one

Start with the default right and article opt-out

South Carolina gives shareholders the default right to acquire unissued shares. Unless the articles elect not to have preemptive rights, subsection (b)'s detailed system applies, subject to express article variations (§ 33-6-300(a)-(b)).

The system gives shareholders proportional amounts on uniform board-prescribed terms designed to provide a fair and reasonable exercise opportunity (§ 33-6-300(b)(1)).

Apply coverage, reacquired-share status, and exclusions

For this section, “shares” includes a security convertible into or carrying a right to subscribe for or acquire shares. Voting and distribution-preference rules restrict which classes receive rights in other classes (§ 33-6-300(b)(4)-(5),(c)).

Reacquired shares become authorized but unissued, unless the articles prohibit reissue and the authorized count is reduced by amendment. A later issue of authorized-but-unissued reacquired shares therefore returns to the preemptive- right system (§ 33-6-310).

The system excludes compensation shares, shares satisfying compensation conversion or option rights, article-authorized shares issued within six months after incorporation, and shares sold otherwise than for money (§ 33-6-300(b)(3)).

Handle waiver, later issuance, voting, and remedies

A shareholder may waive the right, and a written waiver is irrevocable even without consideration. Declined shares may be issued to another person within one year at board-set consideration no lower than the shareholder offer. A lower-consideration or later offer is again subject to preemptive rights (§ 33-6-300(b)(2),(6)).

If shareholder voting is otherwise required, an amendment limiting or denying a class's existing right gives that class or affected series a separate vote, even if the articles label the shares nonvoting (§ 33-10-104(a)(8),(b)-(d)). A materially adverse amendment altering or abolishing the right creates appraisal under Section 33-13-102(A)(4)(iii).

An issuance outside the preemptive right does not erase every corporate-law claim. Section 33-6-300(d) expressly preserves any shareholder remedy for a breach of duty by the board of directors.

What trips people up

South Carolina's charter election runs in the opposite direction from most Model Act states. The statutory words elect not to have preemptive rights; silence leaves the default system in place (§ 33-6-300(a)-(b)).

The six-month and one-year periods govern different events. Six months defines the article-authorized formation-period exclusion; one year is the later- issuance window after shareholders decline an offer (§ 33-6-300(b)(3)(iii),(6)).

The express board-duty savings clause does not decide whether a breach occurred or what remedy follows. It only prevents the absence of a preemptive right from impairing an otherwise available duty claim (§ 33-6-300(d)).

Common questions

Do South Carolina shareholders automatically receive preemptive rights?

Yes, unless the articles provide otherwise (§ 33-6-300(a)).

Does South Carolina prescribe how many days a shareholder gets to respond?

No fixed notice or exercise period appears in Section 33-6-300. The board's uniform terms must provide a fair and reasonable exercise opportunity.

Are convertible securities included?

Yes. Section 33-6-300(c) includes securities convertible into or carrying a right to subscribe for or acquire shares.

Does an excluded issuance eliminate every shareholder remedy?

No. Section 33-6-300(d) preserves any remedy otherwise available for a board- duty breach.

Statutes and sources

• S.C. Code § 33-6-300(a)-(b)(2) — default right, article opt-out, allocation, board terms, and waiver. Official South Carolina State House text, accessed August 31, 2026.
• S.C. Code § 33-6-300(b)(3)-(c) — exclusions, class limits, one-year outsider issuance, and included convertible or subscription securities. Official South Carolina State House text, accessed August 31, 2026.
• S.C. Code § 33-6-300(d) and § 33-6-310(a) — board-duty remedy savings and reacquired-share status. Official South Carolina State House text, accessed August 31, 2026.
• S.C. Code § 33-10-104(a)(8), (b)-(d) — class and series amendment voting. Official South Carolina State House text, accessed August 31, 2026.
• S.C. Code § 33-13-102(A)(4)(iii) — appraisal for materially adverse abolition or alteration. Official South Carolina State House text, accessed August 31, 2026.