Medical Marijuana Inc (MJNA)

[Det_Robert_Thorne]

Rules on Amending Articles from Oregon Revised Statutes

Since MJNA is incorporated in Oregon, the laws of the state (The Oregon Revised Statues) apply, and these laws show why the number of Authorized Shares is specified in the Articles of Incorporation, and why MJNA management couldn't change it without a vote of the shareholders.

I've highlighted the pertinent subsections in bold.

Chapter 60 covers the structure of private corporations.

Chapter 60, Section 47 specifies what shall (a more formal version of must) be included in the Articles of Incorporation:

60.047 Articles of incorporation.

(1) The articles of incorporation shall set forth:

(a) A corporate name for the corporation that satisfies the requirements of ORS 60.094;

(b) The number of shares the corporation is authorized to issue;

(c) The address, including street and number, and mailing address, if different, of the corporation’s initial registered office and the name of its initial registered agent at that office;

(d) The name and address of each incorporator; and

(e) A mailing address to which notices, as required by this chapter, may be mailed until an address has been designated by the corporation in its annual report.

As to amending the number of Authorized Shares, that's covered in Chapter 60, Section 441:

60.441 Voting on amendments by voting groups.

(1) The holders of the outstanding shares of a class are entitled to vote as a separate voting group if shareholder voting is otherwise required by this chapter on a proposed amendment if the amendment would:

(a) Increase or decrease the aggregate number of authorized shares of the class;

(b) Effect an exchange or reclassification of all or part of the shares of the class into shares of another class;

(c) Effect an exchange or reclassification, or create the right of exchange, of all or part of the shares of another class into shares of the class;

(d) Change the designation, rights, preferences or limitations of all or part of the shares of the class;

(e) Change the shares of all or part of the class into a different number of shares of the same class; [That's a split or reverse split -- DRT]

(f) Create a new class of shares having rights or preferences with respect to distributions or to dissolution that are prior, superior or substantially equal to the shares of the class;

(g) Increase the rights, preferences or number of authorized shares of any class that, after giving effect to the amendment, have rights or preferences with respect to distributions or to dissolution that are prior, superior, or substantially equal to the shares of the class;

(h) Limit or deny an existing preemptive right of all or part of the shares of the class; or

(i) Cancel or otherwise affect rights to distributions or dividends that have accumulated but not yet been declared on all or part of the shares of the class.

(2) If a proposed amendment would affect a series of a class of shares in one or more of the ways described in subsection (1) of this section, the shares of that series are entitled to vote as a separate voting group on the proposed amendment.

(3) If a proposed amendment that entitles two or more classes or series of shares to vote as separate voting groups under this section would affect those two or more classes or series in the same or a substantially similar way, the shares of all the classes or series so affected must vote together as a single voting group on the proposed amendment, unless the articles of incorporation provide or the board of directors requires otherwise.

(4) A class or series is entitled to the voting rights granted by this section although the articles of incorporation provide that the shares are nonvoting shares. [1987 c.52 §106; 2009 c.13 §1]