How to Conduct a Shareholder’s Meeting
Knowing how to conduct a shareholder’s meeting is important for all corporations. Corporate laws require ongoing meetings of the directors and shareholders.3 min read
Knowing how to conduct a shareholder’s meeting is important for all corporations. Corporate laws require ongoing meetings of the directors and shareholders. Generally, a meeting is held once a year and will involve all shareholders. Therefore, all shareholders should be invited to the meeting, at which point they will discuss official business items that need to be addressed. Such items might include electing of new board members, financial issues, and other future short-term and long-term goals and objectives.
For most corporations, a board meeting is held immediately after the shareholder meeting, to specifically go over outstanding items that were identified in the shareholder meeting. For small corporations, it is especially beneficial as most directors are shareholders and are present at both meetings.
When inviting everyone to the shareholder meeting, you’ll want to send out the invite to allow everyone the opportunity to attend or vote on certain corporate resolutions. For example, large companies with thousands of shareholders generally allow only certain shareholders the opportunity to attend the annual meeting, as having thousands of people show up to a meeting wouldn’t be practical. However, those shareholders that hold a certain percentage of shares are generally invited to such meetings, as they have much greater voting power.
Steps for Holding the Meeting
Below are the steps required for holding the shareholder meeting:
1.Schedule the meeting time/date/place and send out the notice to all shareholders
2.Conduct the meeting
3.Draft the meeting minutes
Schedule the Meeting
As previously noted, for large corporations, all shareholders will receive notice of the meeting and an ability to vote on certain resolutions, but might not necessarily be able to attend in person. Regardless of the number of shares owned, all shareholders have a right to vote on the election of the board of directors every year. In fact, certain shareholders can make their own nominations, particularly those who meet certain requirements, which can be found on the Securities & Exchange Commission (SEC) website.
Before the meeting takes place, the following materials must be disseminated to the shareholders:
4.Meeting minutes from the prior annual meeting
Conduct the Meeting
Next, you will conduct the shareholder’s meeting. There is no specific procedure requiring this meeting, although some large corporations have their own procedures for conducting the meeting. For example, some businesses might address items in a specific order and vote on each item separately. However, other businesses might choose to discuss each matter and vote on all matters in the end.
The procedure of the actual meeting is wholly up to the board and not the shareholders. Therefore, the board members will need to decide on how the meeting will be conducted; if an audio or video recording device will be present, if there will be time restraints for each speaker that will be talking during the meeting, so on and so forth.
While larger corporations have more formalized procedures in place, small corporations are less formal in their meetings, and often have such meetings in an informal setting to discuss the issues and come to a vote.
The vote itself can be either written or oral. As long as a corporate officer counts the vote, that is sufficient. The corporation’s secretary will usually draft the meeting minutes.
Prepare the Minutes
After the meeting is held, the secretary will need to prepare the meeting minutes. While it’s not required to have the secretary take on this task, someone in an administrative position generally does it. The meeting minutes are made available to all shareholders and the public. There is no requirement as to how specific the meeting minutes must be, nor is there a requirement for how the minutes should be written.
However, the minutes must be detailed enough to understand what was discussed during the meeting, how the voting was handled, and what the outcome of each issue was. It should also identify who was present at the meeting, who voted and how they voted. Lastly, the meeting minutes should include the physical notice that was mailed out to all shareholders and should also be signed, dated, and notarized.
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