The bill amends the Washington Business Corporation Act to modernize corporate governance, particularly regarding stock splits and share issuance. It introduces new definitions for "forward stock split," "reverse stock split," and "stock split," clarifying the processes for dividing or combining shares. Corporations are now permitted to implement stock splits through amendments to their articles of incorporation, which may or may not alter the authorized shares. The board of directors is empowered to set the record date for identifying shareholders impacted by a stock split. Additionally, the bill streamlines the share issuance process and clarifies the conditions under which shares are deemed fully paid and nonassessable.

Furthermore, the bill revises the approval process for mergers and share exchanges, requiring the board of directors to communicate the rationale for these actions to shareholders. It eliminates a previous provision that allowed exceptions to shareholder approval and mandates that merger plans receive approval from two-thirds of the voting group, with the option for different thresholds in the articles of incorporation. A significant addition is the provision allowing a parent corporation to merge with a wholly owned subsidiary without shareholder approval, provided certain conditions are met, including maintaining share rights post-merger. Shareholders must be notified promptly after the merger's effective date, ensuring transparency and protection. Overall, these changes aim to enhance clarity and efficiency in corporate transactions in Washington.

Statutes affected:
Original Bill: 23B.01.400, 23B.06.210, 23.95.210, 23B.11.030
Bill as Passed Legislature: 23B.01.400, 23B.06.210, 23.95.210, 23B.11.030
Session Law: 23B.01.400, 23B.06.210, 23.95.210, 23B.11.030