What is an example of a corporate action?

Who initiates a corporate action?

When a company decides to initiate a corporate action, it is in the best interest of the company and the shareholders to ensure that the process is done efficiently and with the least amount of time and money.

Typically, one of the most important parties to the decision is the Chairman of the Board. The Chairman will typically provide direction to the Board of Directors on how to handle the issue and who needs to be involved. After that, it is up to the Board of Directors to make the final decision. A lot of corporate actions have very little input from outside parties. However, it is good practice to involve the CEO or General Counsel when determining the course of action to take.

What happens when a corporate action is initiated? A corporate action is a legal term that refers to a company making a decision that has a major impact on the company or its shareholders. For example, a company can decide to issue a dividend or make an acquisition.

Corporate actions typically occur through one of two different processes. The first is when a company makes a decision to issue a share dividend or repurchase shares. In this case, the company is in the process of issuing a dividend or repurchasing shares.

The second is when a company makes a decision to increase or decrease its ownership interest in another company. An example of this would be if a company purchased 10% of another company's stock.

What are the steps in a corporate action? In order for a company to initiate a corporate action, the company must follow certain steps. There are two different ways to initiate a corporate action. The first is to go through the annual meeting of shareholders. This is a fairly simple process and is typically used when companies are going through a formal process. The other way to initiate a corporate action is through a written notice. This is typically used when a company is initiating a corporate action that has a major impact on shareholders.

The steps in a corporate action typically include: The Board of Directors meets to discuss the matter. The Board of Directors meets again to vote on the matter. A written notice of the company's decision is sent to shareholders. The company's proxy statement is sent to shareholders. The company's annual meeting of shareholders is held. Shareholders receive a written proxy statement.

Who decides corporate actions?

The US Supreme Court has ruled that a company's board of directors makes the decision on whether to pursue litigation.

The ruling could have major implications for shareholder litigation and companies' freedom to defend themselves from class action lawsuits, which is what brought the case to the court in the first place. The ruling also could open the door for companies to bring their own suits against shareholders who file class action suits, as opposed to waiting for a class action to be brought against them.

In June 2025, the Supreme Court ruled that shareholders don't have standing to sue when a company makes a corporate action, such as a merger, and that the decisions to pursue such actions are left to the discretion of the company's board of directors. The Supreme Court's ruling centered on a case involving a merger between two publicly traded companies. A shareholder sued to block the merger, alleging that it violated federal law and breached fiduciary duties. The shareholder argued that the board of directors made the wrong decision to pursue the merger, but the US Supreme Court said that he didn't have standing to sue because his rights weren't directly affected by the merger.

In other words, the Supreme Court ruled that the shareholder's complaint was not sufficiently concrete and particularized because the shareholder did not have a direct stake in the company's decisions to pursue the merger. The high court's decision is a win for corporate defendants, and the justices reasoned that the shareholders could not seek redress through the courts because they didn't have a right to vote on the merger or otherwise have any say in it. They also decided that allowing shareholders to sue for breaches of fiduciary duties would lead to a flood of litigation and lawsuits that would burden the courts and make it more difficult for companies to raise capital for their businesses.

Although the ruling is a victory for companies, it's a significant loss for shareholders and their lawyers. It means that shareholders can't sue companies to block mergers that they don't like, and that companies can't be sued when they don't take certain actions that shareholders want them to do.

Why does the Supreme Court say that shareholders don't have standing to sue?

What is an example of a corporate action?

A corporate action can be anything that is approved by a board, a committee or a group of people.

It doesn't have to be a decision, but it does have to be approved.

One common example is a stock split. You might need to sell at least a certain number of shares at the current price to get approval.

An example of a corporate action would be the approval of an acquisition, which is usually performed by a committee of the board of directors. However, some acquisitions are approved by the full board of directors of the acquiring company.

What is a corporate action notice?

A Corporate Action Notice (CAN) is a statement you send to a director of the organisation that is requesting action on an issue, complaint or any matter that affects the organisation. It includes details of the nature of your request, how long the organisation should take to respond and when they should notify you if you have not received a response. A CAN can also include information about your rights and entitlements under the law and can set out what action the organisation will take in response to your request. If you want further help on corporate law matters, or if you're having difficulty working out what action to request, it's worth speaking to one of our Corporate Lawyers.

Who is responsible for a CAN? In a sense, there is no fixed answer to this question because the answer depends on your situation. A director of the organisation who has knowledge of the request must consider it within the context of their responsibility for the matters for which the notice was requested. As a director, the person whose responsibilities are affected by the notice (such as, for example, a CEO, a chair of a board of directors or a human resources director) is generally the only appropriate respondent. In any event, the first step is to consider the requirements of the relevant law, such as:

NSW Corporations Act: The relevant sections of the NSW Corporations Act address the responsibility of directors for dealing with requests for action and for making decisions on matters that affect the whole or part of the business of the organisation. The relevant sections are the company resolution power and the bylaws power.

NSW Corporations Act: In some circumstances, a document known as a special resolution may be required before a director can consider a matter in accordance with his or her responsibilities under the NSW Corporations Act. The special resolution power gives organisations in NSW an expedited process to address matters relating to the business affairs of the organisation (for example, to close a company). Special resolutions must be passed at annual general meeting of members, but this is usually the only requirement. You can find out more about special resolutions on the Corporations Commission website.

A federal law known as Corporations Law means that directors of large organisations that are established in other states and territories may be subject to the laws and regulations of their home state or territory. Federal law generally means the Corporations Act plus other relevant legislation.