Q: Delaware Incorporated Company Byelaws re quorum. How can business be transacted in the event of absentee shareholders?
Byelaw states "If less than a quorum shall be in attendance at the time for which a meeting has been called, the meeting may be adjourned by a majority of the Shareholders present or represented by proxy without notice other than by announcement at the meeting" If minority shareholders do not attend, nor assign a proxy, then how can the remaining majority shareholders continue to transact business? Can they assign a proxy in the absence of those shareholders and continue with the meeting and votes?
A: Why are some of the shareholders not present? Is it a question of geography or is it a lack of interest? Do the bylaws provide for shareholder action without a meeting, such as by telephone? In answer to your specific question, Delaware law recognizes that your situation may occur, and has a provision to deal with. Any shareholder can apply to the Delaware Court of Chancery for an Order that a meeting be held, and that the shares of stock represented at such meeting (even if less than needed per the bylaws)shall constitute a quorum for the purpose of the meeting.
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