January 25, 2021

Volume XI, Number 25

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January 22, 2021

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How To Fix A Defective Meeting of Shareholders

Last Friday's post  noted the multiple ways in which a meeting of shareholders may be invalidated.  Fortunately, the California General Corporation Law provides several opportunities for curing an improperly called or noticed meeting of shareholders.  Section 601(e) provides that the transactions of any meeting of shareholders, however called or noticed, and wherever held, are as valid under the following conditions:

First, a quorum must be present, either in person or by proxy (See Cal. Corp. Code § 602)

Second, either before or after the meeting, each of the persons entitled to vote who are not present (either in person or by proxy) provides in writing:

  • a waiver of notice, 

  • a consent to holding the meeting, or

  • an approval of the minutes.

Note that these fixes apply to shareholders who do not attend the meeting.  Shareholders who attend the meeting will by their attendance waive notice and presence at the meeting unless the shareholder objects, at the beginning of the meeting, to the transaction of any business on the basis that the meeting is not lawfully called or convened.  Attendance at the meeting, however, will not constitute a waiver of any right to object to the consideration of matters required by the General Corporation Law to be included in the notice of meeting, if objection is expressly made at the meeting.

The foregoing fix will not help widely held corporations because as a practical matter they would not be able to obtain the requisite waiver, consent or approval.

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© 2010-2020 Allen Matkins Leck Gamble Mallory & Natsis LLP National Law Review, Volume X, Number 328
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About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm
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Keith Bishop works with privately held and publicly traded companies on federal and state corporate and securities transactions, compliance, and governance matters. He is highly-regarded for his in-depth knowledge of the distinctive corporate and regulatory requirements faced by corporations in the state of California.

While many law firms have a great deal of expertise in federal or Delaware corporate law, Keith’s specific focus on California corporate and securities law is uncommon. A former California state regulator of securities and financial institutions, Keith has decades of...

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