Delaware Corporation Shareholder Meeting Requirements

By Jim Thomas

Although one person can file to incorporate a business, most corporations have multiple owners, otherwise known as shareholders. Requirements for the formation and operation of corporations are established by state law. However, if a Delaware corporation is publicly traded, federal securities laws kick in and require companies to supply shareholders with "sufficient and accurate information" to make informed voting decisions. Delaware's laws are designed to encourage businesses to incorporate in the state, whether or not they actually conduct business there. As a result, many of the biggest companies in the world incorporate in Delaware. The owners and directors of Delaware corporations are given plenty of flexibility to operate their businesses, and the rules for shareholder meetings are no exception..

Although one person can file to incorporate a business, most corporations have multiple owners, otherwise known as shareholders. Requirements for the formation and operation of corporations are established by state law. However, if a Delaware corporation is publicly traded, federal securities laws kick in and require companies to supply shareholders with "sufficient and accurate information" to make informed voting decisions. Delaware's laws are designed to encourage businesses to incorporate in the state, whether or not they actually conduct business there. As a result, many of the biggest companies in the world incorporate in Delaware. The owners and directors of Delaware corporations are given plenty of flexibility to operate their businesses, and the rules for shareholder meetings are no exception..

Determination of Location

Shareholder meetings for Delaware corporations can be held inside or outside of the state, according to Title 8, Chapter 1 of Delaware's corporation laws. The location can be designated in the articles of incorporation or corporate bylaws. If there is no such designation, the board of directors determines the location of the meetings. If the board of directors is free to determine the location of the meeting, it has the power to opt for a "remote meeting" rather than a meeting at a physical location.

Ready to incorporate your business? Get Started Now

Election of Board of Directors

The main purpose of the annual shareholders meeting is to elect the board of directors, although other business may be brought before the shareholders. In most states, including Delaware, an annual meeting is mandatory. The election must be conducted by written ballot, although this can include e-mail transmission of ballots if the meeting is held remotely.

Failure to Meet

Even if the annual meeting is not held, or too few directors are elected to conduct business, the corporation remains intact and is allowed to perform "valid corporate acts." In fact, directors can be elected by written consent of shareholders, even if there is no meeting at all. However, if 13 months elapse from the date of the previous shareholder meeting, the Delaware Court of Chancery, which regulates business in the state, can order the annual meeting to be held at the request of a single shareholder or board director. The court also can issue orders specifying the time and place for the meeting, as well as the type of notice that shareholders are to receive.

Record Date

In order to receive notice of the annual meeting, you must be confirmed as a shareholder as of the record date for voting eligibility, a date adopted by the board of directors. The record date must fall within 10 to 60 days before the meeting. If you are a shareholder as of the record date, you are eligible to vote at the meeting.

Ready to incorporate your business? Get Started Now
How to Add Directors to a Corporation

References

Related articles

How to Amend Bylaws in a New York Law Corporation

A corporation's bylaws set its internal rules and procedures. For example, bylaws usually include rules for the election of the board of directors and define the rights of corporate stockholders. A New York law corporation may need to amend its bylaws for various reasons. Provisions may become outdated or no longer serve the corporation's needs. Regardless of the reason, a corporation doing legal business in New York must follow the state regulations for a for-profit corporation when changing its existing bylaws.

Can an Owner Be Voted Out of an S Corporation?

S corporations are corporations that have made a special election with the Internal Revenue Service to be taxed only at the individual shareholder level rather than at both the corporate and individual levels. Owners of the company, known as shareholders, do not participate directly in business operations and may not be voted out. If a shareholder takes on an additional function as a director or officer, he may be removed from that position. However, this removal does not affect the shareholder's ownership in the company.

New York Corporation Laws

Although municipal law may apply to operational issues such as the acquisition of business licenses, and federal law applies to the offering of corporate shares to outsiders, New York corporate law is mostly state law. You don't have to do business within the state of New York to establish a corporation there.

LLCs, Corporations, Patents, Attorney Help

Related articles

What Is the Requirement for Annual Meeting Minutes for Florida Corporations?

All corporations formed under Florida law are required to hold an annual meeting of shareholders. The annual meeting, ...

Shareholder Rights in Tennessee

If you own stock in a corporation that's formed in Tennessee or subject to its jurisdiction, the state affords you ...

How to Amend a Constitution & Bylaws of a Corporation

Corporations are independent legal business entities that operate subject to a series of rules. While corporations do ...

How to File Corporate Minutes

The laws of every state require corporations to make records of its shareholder's and board of director's meetings, ...

Browse by category