How are shareholder’s votes conducted and counted in a closely held corporation?

December 10, 2019

 

Shareholders votes, within a class of shares, are counted based on the number of shares they have.  Shareholders may vote in person or by proxy.  N.Y. Business Corp. Law § 609.

 

In order to conduct a shareholder vote there must be quorum of shareholders at a duly called meeting of shareholders.  Shareholders must be provided with notice of a meeting upon no less than ten days’ notice.  N.Y. Business Corp. Law § 605.  Such notice may be given by mail or electronically.  Id.

 

A quorum is generally a meeting where the holders of a majority of shares to vote are present.  However, the by-laws of a corporation can set a higher or lower number of shares to constitute a quorum.  N.Y. Business Corp. Law § 603.  The minimum number of shares that can constitute a quorum is one-third of the shares.  Id.

 

Two or more shareholders may enter into a written agreement as to how they will vote their shares.  N.Y. Business Corp. Law § 620.  That voting agreement must be in writing signed by the parties to it. Id.

 

In lieu of a formal vote, shareholders may consent to corporate action by unanimous written consent.  N.Y. Business Corp. Law § 615. 

 

For more information about this article or other issues, please contact us, The Bachman Law Firm PLLC at judith@thebachmanlawfirm.com or 845-639-3210.

 

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