No quorum at annual shareholders meeting - now what?
Started by beckyg
about 16 years ago
Posts: 18
Member since: Oct 2009
Discussion about
Hi there, Question for the legal minds out there: If no quorum is present at the annual meeting of shareholders, the meeting is adjourned "until a later date" and then nothing ever happens until the next year, is this in violation of NY law governing corporations? e.g. one of my apartments had an annual meeting with very short notice (the minimum 10 days req'd by law) in May, right before a... [more]
Hi there,
Question for the legal minds out there:
If no quorum is present at the annual meeting of shareholders, the meeting is adjourned "until a later date" and then nothing ever happens until the next year, is this in violation of NY law governing corporations?
e.g. one of my apartments had an annual meeting with very short notice (the minimum 10 days req'd by law) in May, right before a holiday weekend. Clearly, the board didn't WANT a quorum. They adjourned the meeting, and remained in power. When I asked when the meeting was adjourned to, the answer was, next MAY!
Does the law require them to at least attempt to get a quorum again within a 3 month period, for example?
Could anyone point me to the part of the business corp law that deals with lack of quorum?
Thanks.
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Response by 30yrs_RE_20_in_REO
about 16 years ago
Posts: 9877
Member since: Mar 2009
Usually there is a provision that shareholders can call a full shareholders meeting on any topic by getting 25% of the shares to petition for it. Check your Bylaws.
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Response by beckyg
about 16 years ago
Posts: 18
Member since: Oct 2009
Thanks, 30yrs, yes, you are right, I just looked and it does specify that a special meeting can be called by the secretary when petitioned by 25% of shares, but says that the purpose must be stated in the letter calling the meeting and that "no business other than that stated in the notice shall be transacted at any special meeting unless the shareholders of record of all outstanding shares of the corporation are present thereat in person or by proxy." So I would be sure to make the "stated purpose" out to be elections.
I guess I was wondering if I could just point to NY Business law for corporations and say, "hey, if the annual meeting is adjourned for lack of a quorum, the board is required to reschedule within a certain time frame..."
That would just be a lot easier than trying to get 25% of the shares together.
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Response by beckyg
about 16 years ago
Posts: 18
Member since: Oct 2009
oh, and one more thing. The by-laws specify a date for the annual meeting (first Wed of Februrary, unless a holiday, in which case the next business day.) But the board NEVER holds the annual meeting then. It is a moving target... I really think they try to manipulate it so it falls during the time people are away (before or after long weekends & vacation time.)
Do they need to by law stick to that or do I need to motivate the other shareholders to vote on keeping the date a set one, so people know ahead of time and can plan to be there?
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Response by stevejhx
about 16 years ago
Posts: 12656
Member since: Feb 2008
You must specify a new date. Usually on second notification there is no quorum - check the bylaws.
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Response by beckyg
about 16 years ago
Posts: 18
Member since: Oct 2009
Our by-laws don't state a date; they merely say that any meeting of shareholders requires a majority to be present in order to transact business. If no quorum, the only power the shareholders present have is to adjourn the meeting "to a subsequent day." No mention of "a subsequent day within the next 90 days..."
Since the meeting was adjourned but no date set, the board is just saying that the next elections will be held at the next annual meeting 1 year later (this was back in May.)
I find it hard to believe this is legal.
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Response by manhattanfox
about 16 years ago
Posts: 1275
Member since: Sep 2007
There is date flexibility and a notification process. Also, while quorum is required for certain business -- there may be carve outs for certain business (ie election of new /reelection of officers). There are proxies and other process issues. Under these bylaws the new Board is in tact and you may shareholders at large may not get info if the board does not choose to release it. Vote em out.
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Usually there is a provision that shareholders can call a full shareholders meeting on any topic by getting 25% of the shares to petition for it. Check your Bylaws.
Thanks, 30yrs, yes, you are right, I just looked and it does specify that a special meeting can be called by the secretary when petitioned by 25% of shares, but says that the purpose must be stated in the letter calling the meeting and that "no business other than that stated in the notice shall be transacted at any special meeting unless the shareholders of record of all outstanding shares of the corporation are present thereat in person or by proxy." So I would be sure to make the "stated purpose" out to be elections.
I guess I was wondering if I could just point to NY Business law for corporations and say, "hey, if the annual meeting is adjourned for lack of a quorum, the board is required to reschedule within a certain time frame..."
That would just be a lot easier than trying to get 25% of the shares together.
oh, and one more thing. The by-laws specify a date for the annual meeting (first Wed of Februrary, unless a holiday, in which case the next business day.) But the board NEVER holds the annual meeting then. It is a moving target... I really think they try to manipulate it so it falls during the time people are away (before or after long weekends & vacation time.)
Do they need to by law stick to that or do I need to motivate the other shareholders to vote on keeping the date a set one, so people know ahead of time and can plan to be there?
You must specify a new date. Usually on second notification there is no quorum - check the bylaws.
Our by-laws don't state a date; they merely say that any meeting of shareholders requires a majority to be present in order to transact business. If no quorum, the only power the shareholders present have is to adjourn the meeting "to a subsequent day." No mention of "a subsequent day within the next 90 days..."
Since the meeting was adjourned but no date set, the board is just saying that the next elections will be held at the next annual meeting 1 year later (this was back in May.)
I find it hard to believe this is legal.
There is date flexibility and a notification process. Also, while quorum is required for certain business -- there may be carve outs for certain business (ie election of new /reelection of officers). There are proxies and other process issues. Under these bylaws the new Board is in tact and you may shareholders at large may not get info if the board does not choose to release it. Vote em out.