Should the corporate secretary sign a consent in lieu of an annual meeting? For a CA corp? For a DE corp? ...

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Should the corporate secretary sign a consent in lieu of an annual meeting? For a CA corp? For a DE corp?

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DakotaLegal's picture

 

 
The make-up and form of your corporation’s Bylaws or Articles will largely settle your question (private versus public). In addition to the bylaws, or if your Bylaws say nothing about the duties and powers of the corporation secretary, both California and Delaware have specific requirements about notice to the stockholders. I will link you to these laws later in this response.
 
Generally, a public corporation must have an annual meeting and your Articles and Bylaws should reflect that. Though not required under law for a private or closely held corporation, the Articles may also do just the opposite, and require an annual meeting for that type of corporation too. http://academic.cengage.com/ resource_uploads /downloads/0324595743_145749.pdf.
 
The answer may also be defined to a lesser degree, depending on which state’s (i.e., Delaware or California) rules apply to cover the annual general meeting (AGM). One assumption I’m making is that your corporate form may well be a principal incorporation in Delaware, and a sub-chapter in California….a not uncommon practice, owing to California’s less favorable corporate tax laws. http://www.nytimes.com/2012/07/01 /business/how-delaware-thrives-as-a-corporate-tax-haven.html?pagewanted=all.This assumption may mean you will have a real motivation to talk only with a corporate tax expert, so here are two places to search for a qualified corporate tax lawyer, in Delaware (http://www.dsba.org/index. php/resources/attorney-search.html) and/or in California (http://www.calbar.ca.gov /Public/Lawyer ReferralServicesLRS.aspx ).
 
What’s Your Interest In Meeting Notice Laws?
 
One assumption I am not making is what your interest in this question is. You may be a shareholder, or seeking protection from a shareholder complaint. If you are a shareholder, you may be able to make a complaint about the lack of an annual meeting. The FTC has a complaint process: http://www.ftc.gov/ftc/contact.shtm. Individual secretaries of State may look at their corporation’s meeting practices….in Delaware, a complaint on not following formalities may go to http://corp.delaware.gov/contact.shtml or in California at http://oag.ca.gov/contact/ consumer-complaint-against-business-or-company.
 
Delaware Laws On Meeting Notices: http://delcode.delaware.gov /title6/c018/sc03 /index.shtml. Delaware’s general corporate laws require a meeting, or else notice from the corporate secretary that there will be no meeting. http://delcode.delaware .gov/title8/c001/sc07/index.shtml. There is an exception to that rule, depending on (a) your Bylaws, and (b) if the rescheduled meeting is the result of an adjourned meeting.
 
 
California Laws On Meeting Notices: http://law.justia.com/codes /california/ 2010/corp/600-605.html. Here is a useful link to California’s annual meeting rules: http://www.rrdonnelley.com/financial/Downloads/PDF/Annual_Meeting_Handbook.pdf. Next, here is California's specific statute on meeting notices: http://law.justia.com/ codes/california/2010/corp/600-605.html. Note that some financially regulated companies are required to comply not with California’s meeting law notices, but with federal oversight.
 
 
The Processes and Methods of Giving Notice
 
The results of not properly handling the AGM can be repaired. Failing to properly hold the schedule AGM would not invalidate the corporation’s existence, for example, or most of its other actions. So, no matter “whom” state law requires be the one to who signs a waiver or consent of notice, to not have an annual meeting, how it is done is important. Here is a sample form that may help guide your process… http://www.lawmart.com /forms/bus-mn02.htm. It is also possible that the shareholders themselves may have given consent to the secretary’s waiver, and do not require notice.
 

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DakotaLegal's picture

 

 
The make-up and form of your corporation’s Bylaws or Articles will largely settle your question (private versus public). In addition to the bylaws, or if your Bylaws say nothing about the duties and powers of the corporation secretary, both California and Delaware have specific requirements about notice to the stockholders. I will link you to these laws later in this response.
 
Generally, a public corporation must have an annual meeting and your Articles and Bylaws should reflect that. Though not required under law for a private or closely held corporation, the Articles may also do just the opposite, and require an annual meeting for that type of corporation too. http://academic.cengage.com/ resource_uploads /downloads/0324595743_145749.pdf.
 
The answer may also be defined to a lesser degree, depending on which state’s (i.e., Delaware or California) rules apply to cover the annual general meeting (AGM). One assumption I’m making is that your corporate form may well be a principal incorporation in Delaware, and a sub-chapter in California….a not uncommon practice, owing to California’s less favorable corporate tax laws. http://www.nytimes.com/2012/07/01 /business/how-delaware-thrives-as-a-corporate-tax-haven.html?pagewanted=all.This assumption may mean you will have a real motivation to talk only with a corporate tax expert, so here are two places to search for a qualified corporate tax lawyer, in Delaware (http://www.dsba.org/index. php/resources/attorney-search.html) and/or in California (http://www.calbar.ca.gov /Public/Lawyer ReferralServicesLRS.aspx ).
 
What’s Your Interest In Meeting Notice Laws?
 
One assumption I am not making is what your interest in this question is. You may be a shareholder, or seeking protection from a shareholder complaint. If you are a shareholder, you may be able to make a complaint about the lack of an annual meeting. The FTC has a complaint process: http://www.ftc.gov/ftc/contact.shtm. Individual secretaries of State may look at their corporation’s meeting practices….in Delaware, a complaint on not following formalities may go to http://corp.delaware.gov/contact.shtml or in California at http://oag.ca.gov/contact/ consumer-complaint-against-business-or-company.
 
Delaware Laws On Meeting Notices: http://delcode.delaware.gov /title6/c018/sc03 /index.shtml. Delaware’s general corporate laws require a meeting, or else notice from the corporate secretary that there will be no meeting. http://delcode.delaware .gov/title8/c001/sc07/index.shtml. There is an exception to that rule, depending on (a) your Bylaws, and (b) if the rescheduled meeting is the result of an adjourned meeting.
 
 
California Laws On Meeting Notices: http://law.justia.com/codes /california/ 2010/corp/600-605.html. Here is a useful link to California’s annual meeting rules: http://www.rrdonnelley.com/financial/Downloads/PDF/Annual_Meeting_Handbook.pdf. Next, here is California's specific statute on meeting notices: http://law.justia.com/ codes/california/2010/corp/600-605.html. Note that some financially regulated companies are required to comply not with California’s meeting law notices, but with federal oversight.
 
 
The Processes and Methods of Giving Notice
 
The results of not properly handling the AGM can be repaired. Failing to properly hold the schedule AGM would not invalidate the corporation’s existence, for example, or most of its other actions. So, no matter “whom” state law requires be the one to who signs a waiver or consent of notice, to not have an annual meeting, how it is done is important. Here is a sample form that may help guide your process… http://www.lawmart.com /forms/bus-mn02.htm. It is also possible that the shareholders themselves may have given consent to the secretary’s waiver, and do not require notice.