15 Pa.C.S. Ch. 27

in effect

15 Pa.C.S. § 2701 Application and effect of chapter.

(a) General rule.--This chapter shall be applicable to a business corporation, other than a statutory close corporation or a professional corporation, that elects to become a management corporation in the manner provided by this chapter. (b) Laws applicable to management corporations.--Except as otherwise provided in this chapter, Part I (relating to preliminary provisions) and this subpart shall be generally applicable to all management corporations. The specific provisions of this chapter shall control over the general provisions of Part I and this subpart. Except as otherwise provided in this article, a management corporation may be simultaneously subject to this chapter and one or more other chapters of this article. (c) Effect of a contrary provision of the bylaws.--The bylaws of a management corporation may provide either expressly or by necessary implication that any one or more of the provisions of this chapter, except this subchapter, shall not be applicable, in whole or in part, to the corporation. (Oct. 22, 2014, P.L.2640, No.172, eff. July 1, 2015) 2014 Amendment. Act 172 amended subsec. (b).

15 Pa.C.S. § 2702 Formation of management corporations.

A management corporation shall be formed in accordance with Article B (relating to domestic business corporations generally) except that its articles shall contain: (1) A heading stating the name of the corporation and that it is a management corporation. (2) The provisions required by section 2703 (relating to additional contents of articles of management corporations). Cross References. Section 2702 is referred to in section 2705 of this title.

15 Pa.C.S. § 2703 Additional contents of articles of management corporations.

In addition to the provisions otherwise required by this subpart, the articles of a management corporation shall provide that: (1) If, and so long as, the corporation is not a registered corporation: (i) All of the outstanding shares of the corporation of all classes shall be subject to one or more of the restrictions on transfer permitted by section 1529 (relating to transfer of securities; restrictions). (ii) Except as part of a transaction having as a purpose the establishment of the corporation as a registered corporation, neither the corporation nor any shareholder shall make an offering of any of its shares of any class that would constitute a "public offering" within the meaning of the Securities Act of 1933. (2) If and so long as the corporation is not a management company registered under the Investment Company Act of 1940: (i) if the compensation or cost of benefits of the directors and five most highly-compensated officers of the corporation is determined other than by a fixed annual amount in dollars per year, or if the corporation is managed by persons other than its directors and officers, the rate, formula or other basis for payment by the corporation of such compensation or benefits shall be valid only if approved by the shareholders from time to time by the affirmative vote; or (ii) if subparagraph (i) is not applicable, the compensation or the cost of benefits of directors and of the five most highly-compensated officers of the corporation shall not be increased to a higher number of dollars per year without the prior affirmative vote obtained within one year of such increase; of the holders of the outstanding shares of each class or series whether or not otherwise entitled to vote by the articles. If the articles confer upon the holders of a class or series a specifically enforceable right to the declaration and payment of dividends which are not contingent upon or related to net income (other than as provided by section 1551(b) (relating to limitation)), the articles may deny the holders of such class or series voting rights under this paragraph. (3) The terms "compensation" and "benefits" shall mean amounts taxable, either currently or on a deferred basis, to a director or officer of the corporation under the Internal Revenue Code of 1986. Cross References. Section 2703 is referred to in sections 2702, 2704 of this title.

15 Pa.C.S. § 2704 Election of an existing business corporation to become a management corporation.

(a) General rule.--A business corporation may become a management corporation under this chapter by filing articles of amendment which shall contain, in addition to the requirements of section 1915 (relating to articles of amendment): (1) A heading stating the name of the corporation and that it is a management corporation. (2) A statement that it elects to become a management corporation. (3) The provisions required by section 2703 (relating to additional contents of articles of management corporations). (b) Procedure.--An election to become subject to this chapter shall be proposed by a resolution adopted by the board of directors and shall be adopted in accordance with the requirements of Subchapter B of Chapter 19 (relating to amendment of articles). If an effective date is not stated in the articles of amendment, this chapter shall become applicable to the corporation on the date the articles of amendment are filed in the Department of State. (c) Dissenters rights upon election.--If any shareholder of a corporation, other than a management company registered under the Investment Company Act of 1940, that adopts an election under this chapter to become a management corporation objects to that action and complies with the provisions of Subchapter D of Chapter 15 (relating to dissenters rights), the dissenting shareholder shall be entitled to the rights and remedies of dissenting shareholders therein provided. (d) Cross reference.--See section 134 (relating to docketing statement). Cross References. Section 2704 is referred to in sections 1571, 2705, 2721 of this title.

15 Pa.C.S. § 2705 Termination and renewal of status as a management corporation.

(a) General rule.--A management corporation may terminate its status as such and cease to be subject to this chapter by amending its articles to delete therefrom the additional provisions required by section 2702 (relating to formation of management corporations) to be included in the articles of a management corporation. If an effective date is not stated in the articles of amendment, this chapter shall cease to be applicable to the corporation on the date the articles of amendment are filed in the Department of State. (b) Automatic termination.--The status of a nonregistered corporation as a management corporation shall terminate at the time specified in this subsection upon the occurrence of any of the following: (1) Three months after the end of any fiscal year: (i) at the end of which the corporation had less than $50,000,000 of assets; and (ii) during which it had revenue or receipts of less than $50,000,000. (2) Three years after its date of incorporation or the effective date of its most recent articles of amendment filed under section 2704 (relating to election of an existing business corporation to become a management corporation). (c) Renewal.--An election to be subject to this chapter terminated under subsection (b) may be renewed by complying with the provisions of section 2704 (except subsection (c)) in the same manner as an initial election, if the corporation then satisfies the requirements of subsection (b)(1). (d) Dissenters rights upon renewal of election.--If any shareholder of a nonregistered corporation that renews an election under this chapter to continue as a management corporation objects to that action and complies with the provision of Subchapter D of Chapter 15 (relating to dissenters rights), the dissenting shareholder shall be entitled to the rights and remedies of dissenting shareholders therein provided. Cross References. Section 2705 is referred to in section 1571 of this title.

15 Pa.C.S. § 2711 Selection and removal of directors.

(a) General rule.--The bylaws of a management corporation may specify the manner in which and the persons by whom the directors of the corporation shall be selected and may be removed. Unless otherwise provided in the bylaws, the directors of a management corporation shall be selected and may be removed by the board of directors. An incidental reference to the election of directors by common or other junior shares contained in the express terms of any class or series of any preference shares defining the contingent or other voting rights of preference shares shall not constitute, for the purposes of this section, a provision of the articles providing for the election of directors by the common or other junior shares. (b) Term.--The duration of the term of office of a director of a management corporation shall not be limited by statute.

15 Pa.C.S. § 2712 Shareholder meetings unnecessary.

Annual or other regular meetings of the shareholders of a management corporation need not be held.

15 Pa.C.S. § 2721 Bylaw and fundamental change procedures.

So long as a business corporation is a management corporation subject to this chapter: (1) The board of directors shall have the full authority vested by this subpart in the shareholders to amend the articles under section 2704(b) (relating to procedure) to renew the election of the corporation to be subject to this chapter and to adopt or change the bylaws, and a bylaw adopted by the board of directors pursuant to this section may continue in effect as long as the corporation remains subject to this chapter. (2) None of the following shall be adopted or changed by the shareholders without the approval of the board of directors: (i) a plan under Chapter 3 (relating to entity transactions); (ii) an amendment of the articles; (iii) an amendment, adoption or repeal of a bylaw; (iv) a plan of asset transfer; or (v) a resolution recommending dissolution. (3) In the case of a corporation that in the ordinary course of business redeems all outstanding shares at the option of the shareholder at the net asset value or at another agreed method or amount of value thereof, a plan under Chapter 3, an amendment of the articles or a plan of asset transfer under section 1932 (relating to voluntary transfer of corporate assets) shall not require the approval of the shareholders of the corporation for adoption by the corporation. (Oct. 22, 2014, P.L.2640, No.172, eff. July 1, 2015)

15 Pa.C.S. § 2722 Changes in authorized shares.

(a) General rule.--An amendment of the articles of a management corporation shall not require the approval of the shareholders of the corporation to the extent it increases or decreases (to a number not less than that then outstanding) the number of authorized shares of the corporation or of any class or series of the corporation. (b) Procedure.--The articles of amendment shall set forth, in addition to the requirements of section 1915 (relating to articles of amendment): (1) The aggregate number of shares that the corporation shall have authority to issue, or the designations of the classes of shares of the corporation and the maximum number of shares of each class that may be issued. (2) A statement of the voting rights, designations, preferences, limitations and special rights, if any, in respect of the shares of any class or any series of any class, to the extent that they have been determined, and the maximum number of shares of any series of any class that may be issued. (3) A statement of any authority vested in the board of directors to divide the authorized and unissued shares into classes or series, or both, and to determine for any such class or series its voting rights, designations, preferences, limitations and special rights.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.palegis.us/statutes/consolidated/view-statute?txtType=HTM&ttl=15Fetched: 10/16/2026