Summary
Highlights
Attorney Chris Batan Laskos begins by introducing the topic of stockholder and member meetings, aiming to discuss their purpose, timing, location, and the discussions that typically occur during such gatherings.
The video differentiates between two types of meetings: annual regular meetings, which typically include the election of the board of directors and other necessary matters, and special meetings, called as needed by shareholders or the board to vote on specific corporate actions. The timing for regular meetings is usually specified in the bylaws, or post-April 31st if not, while special meetings can be called at any time deemed necessary or as stipulated in the bylaws.
Corporate powers are vested in the board or the stockholders as a body, not individually. Therefore, meetings are essential for them to act collectively on corporate matters. To ensure legitimate decision-making, proper notification of these meetings is crucial.
For regular meetings, a written notice must be sent to stockholders or members of record 21 days prior, unless the bylaws state otherwise. For special meetings, notice is required one week prior, again, unless specified differently in the bylaws. Notices can be sent via electronic mail, personal service, or regular mail. A stockholder or member can waive this notice expressly or impliedly by attending the meeting, but a general waiver in the bylaws or articles of incorporation is not permitted.
Section 50 of the Revised Corporation Code generally requires meetings to be held at the corporation's principal place of business, if practicable. If the principal place is too small, another suitable location within the same city or municipality is permissible.
The bylaws usually name those authorized to call meetings. If not specified, any director, trustee, or officer entrusted with management responsibility can call a meeting. A stockholder or member can also petition the Securities and Exchange Commission (SEC) to call a meeting if no authorized person does so or if they refuse.
Section 51 of the Revised Corporation Code defines the quorum for stockholder or member meetings. For stock corporations, a majority of the outstanding capital stock is required (not the number of individual stockholders). For non-stock corporations, a majority of the members is needed. Majority means one-half plus one. Without a quorum, no legitimate corporate business can be transacted, and the meeting must be adjourned.
Five requisites for a valid meeting are: called by a proper person, previous written notice (unless waived), held at the proper place and time, and the presence of a quorum. If any of these are not met, the proceedings are generally invalid. However, an exception exists: if the business transacted is within the corporation's powers (not an ultravires act), and all stakeholders or members are present or duly represented, the transactions may still be considered valid, even if some requisites were not perfectly followed.