Shareholder Meetings, Voting, and Inspection Rights Flashcards
What are the fundamental roles of shareholders?
- Electing the directors
- Voting on fundamental changes
What are fundamental changes?
- Mergers
- Asset sales (all or substantially all of the assets)
- Share exchanges
- Amendment of the articles of incorporation
- Dissolution
When do shareholders vote?
At either an annual meeting or a special meeting.
What happens at an annual meeting?
Election of directors and any other shareholder business.
What happens if a corporation doesn’t have its annual meeting?
Then any shareholder may call the meeting, once six months of the designated meeting date have passed.
How do you call a special meeting?
- The board of directors can just do it.
- 20% of the shareholders can do it (UNLESS otherwise provided by the bylaws.
Where will the meeting occur?
At the corporation’s executive offices UNLESS otherwise specified by the bylaw.
Internet counts, too!
What kind of notice is required for special and annual meetings?
At least five days before the meeting, including the time, date, and place.
N.B.: Ten days’ notice required for a fundamental change.
What happens if notice is not provided?
The shareholder can waive it in writing OR by showing up. Otherwise, the meeting might be deemed invalid.
What is the “record date?”
The date on which you must hold the stock to be entitled to a vote. No more than 90 days from the meeting, fixed by the directors or the articles of incorporation.
When can shareholders act outside of an annual or special meeting?
Unless otherwise provided by the bylaws, shareholders can take any action with
- unanimous, written consent of all shareholders OR
- partial consent of enough shares to meet the minimum vote for the action in question.
Who can propose issues to vote on?
Only the board of directors.
What is needed before any formal action can be taken?
A quorum, which is a majority of the outstanding shares, UNLESS otherwise provided by the bylaws.
What constitutes being “present” at a meeting?
Either actually being present OR sending a proxy.
How do you send a proxy?
Fill out a card that gives somebody else (typically the directors) the power to vote on your behalf. Send the card to the secretary of the corporation.
