Shareholder Rights--Meetings, Quorum, and Rights to Inspect Flashcards
What are the types of meetings in Virginia?
(1) Annual Meetings
(2) Special Meetings
What is required at an annual meeting?
At least one director slot is open for elections
What is a special meeting and who may call one?
A meeting for stockholders to vote on a proposal or a fundamental corporate change called by the chariman of the board, the president, the board, or anyone else authorized in the articles or bylaws
What notice is required for an annual meeting?
Must include the location and time of the meeting
What notice is required for a special meeting?
Location, time and special purpose of the meeting because no action can be taken at the special meeting whose special purpose is not enumerated in the notice
When must notice be sent?
Not less than 10 days (or not less than 25 days if fundamental corporate change) or more than 60 days prior to the meeting
What happens if you fail to give proper notice?
Any action taken at the meeting is void UNLESS:
1. Those who didn’t receive notice waive objections in writing OR
2. By attending the meeting
What is a quorum for a valid shareholder meeting?
Must have a majority of all shares represented at the meeting when the meeting begins
* Shares can be represented by person or proxy
* Count by shares, not people
What is the vote required to approve a proposal?
The votes in favor must exceed the votes cast against by at least one share
* DO NOT COUNT THE SHARES THAT ABSTAIN FROM VOTING
What is a voting trust?
Agreement by shareholders in which legal title is conferred to a trustee and the shareholders keep equitable title
* Must be done in writing
What is a voting agreement?
Agreement in writing to vote shares as a majority of the signers of the agreement direct
What is cumulative voting?
Allows you to multiply your shares by the amount of open positions
* Example–if you have 100 shares and there are 9 open positions, you get 900 voting shares (gives you more voting power)
What is traditional voting?
You can cast your share of votes (i.e., how many shares you have) for each director
* Issue–if you have 100 shares, but someone else has 101, you’ll always lose to that person
What is the default voting mechanism?
Traditional–the right to engage in cumulative voting does not exist unless it is granted expressly in the articles
What is the unqualified right to inspect?
Any stockholder, upon signed written request and 10 days notice, may inspect and copy the basic corporate records at the company’s principal record
