Shareholders Rights
Requirements for Valid Action at a Shareholder Meeting * Read statute, bylaws and articles * 1. Authority for the meeting * 2. Proper notice (or waiver of notice) * 3. Quorum * 4. Required number of votes cast in favor
1. Authority for Meeting * The meeting must be authorized * Look to statute and bylaws for authorization * Annual meetings MBCA §7.01 * Special meetings MBCA § 7.02 * Court ordered meetings MBCA § 7.03 * Who may call a special shareholders meeting?
2. Proper Notice * See MBCA § 7.05; Del. § 222 * a) Must the meeting notice state the purpose of the meeting? * Annual meeting MBCA § 7.05(b) * Special meeting MBCA § 7.05(c) * NOTE: A number of provisions in the applicable corporation statute will contain special notice provisions. See, e.g., MBCA §10.03(d) * b) Who is entitled to notice? * generally only shareholders entitled to vote MBCA § 7.05(a) * only shareholders on record date MBCA § 7.07; Del. § 213 * Note: In some cases shareholder who are not entitled to vote are entitled to notice. See, e.g., MBCA §§ 10.03(d) & 11.04(d). * c) What about electronic notice? * See MBCA § 1.41(c); Del. § 232 * d) Can notice be waived? * Notice (or a defect in a notice) may be waived expressly or by participation in the meeting. See MBCA § 7.06; Del. § 229 * e) What notice is required in the case of an adjourned meeting? * See MBCA § 7.05(e)
3. Quorum Requirement * See MBCA § 7.25(a); Del. § 216 * a) Can a greater or lesser quorum be authorized? * See MBCA § 7.27. The articles of incorporation may provide for a greater than majority quorum * See MBCA § 7.25 Official Comment 5 (lesser quorum) * Compare Del. § 216, which also permits the bylaws to vary the quorum requirement * Why would a corporation
1. Authority for Meeting * The meeting must be authorized * Look to statute and bylaws for authorization * Annual meetings MBCA §7.01 * Special meetings MBCA § 7.02 * Court ordered meetings MBCA § 7.03 * Who may call a special shareholders meeting?
2. Proper Notice * See MBCA § 7.05; Del. § 222 * a) Must the meeting notice state the purpose of the meeting? * Annual meeting MBCA § 7.05(b) * Special meeting MBCA § 7.05(c) * NOTE: A number of provisions in the applicable corporation statute will contain special notice provisions. See, e.g., MBCA §10.03(d) * b) Who is entitled to notice? * generally only shareholders entitled to vote MBCA § 7.05(a) * only shareholders on record date MBCA § 7.07; Del. § 213 * Note: In some cases shareholder who are not entitled to vote are entitled to notice. See, e.g., MBCA §§ 10.03(d) & 11.04(d). * c) What about electronic notice? * See MBCA § 1.41(c); Del. § 232 * d) Can notice be waived? * Notice (or a defect in a notice) may be waived expressly or by participation in the meeting. See MBCA § 7.06; Del. § 229 * e) What notice is required in the case of an adjourned meeting? * See MBCA § 7.05(e)
3. Quorum Requirement * See MBCA § 7.25(a); Del. § 216 * a) Can a greater or lesser quorum be authorized? * See MBCA § 7.27. The articles of incorporation may provide for a greater than majority quorum * See MBCA § 7.25 Official Comment 5 (lesser quorum) * Compare Del. § 216, which also permits the bylaws to vary the quorum requirement * Why would a corporation