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

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.