Check contractual investor consent rights before releasing a corporate action

For a private Delaware corporation, gather the executed investor, stockholder and side agreements relevant to the proposed decision. Include amendments, joinders, transfers and termination documents. Identify provisions requiring another person's approval before the company undertakes the particular action.

Section 122(18) addresses certain corporate contracts with current or prospective stockholders and permits specified restrictions and consent requirements, subject to statutory limits. Have counsel determine the operative and enforceable provisions for this company. A board's ordinary statutory authority does not answer every contractual-consent question.

Describe the action with enough detail to apply the contractual provision: the parties, scope, timing and any linked steps. Quote or reference the controlling clause in the internal register and have counsel interpret its defined terms. Do not assume that a familiar category label captures the complete contractual trigger.

Keep charter approvals, statutory votes and contractual consents as separate entries, even when the same investor participates in all three. The legal team should determine which are needed and how they interact. Mark a requirement as inapplicable only with a recorded basis, rather than leaving its row blank.

Review the agreement's eligibility conditions, transfer provisions, ownership thresholds and termination events with counsel. Connect the claimed right holder to the relevant current records. An investor may have transferred shares, changed its legal name or ceased to satisfy a contractual condition since the last transaction.

Verify the authorized signer for the right-holding party. A board designee, investment-team contact and contractual consent holder may be different people or entities. Preserve the evidence that supports each determination so future administrators do not keep using an outdated signatory list simply because it worked for an earlier financing.

Send a counsel-approved request identifying the action and the documents or terms to which consent is sought. Use the agreement's delivery method and track the response. A receipt acknowledgment, informal expression of support or silence should not be labeled consent without the legal basis counsel confirms.

Review conditions, expiration language and any waiver limited to this transaction. Compare the approved terms with the final action before release. If the transaction changes, ask counsel whether the existing consent still covers it. Do not use a one-time waiver to remove a continuing right from the register.

Retain the executed consent or waiver with the operative agreement, approval schedule and final transaction documents. Record who checked completion and the effective scope. Keep outstanding conditions assigned until the evidence shows they were satisfied.

Update the rights register only for documented changes in the governing agreements or eligible holders. Preserve the prior versions and transaction-specific decisions. The company should be able to distinguish a completed approval for one action from a permanent change in investor rights, giving the next decision-maker a reliable starting point for the next transaction.