Legal Question in Business Law in California

corporate bylaws

If a Board of Directors passes a motion for an assessment, but does not follow the bylaws in doing so, is that motion invalid and unenforceable if ratified by the shareholder at an anual stockholders' meeting? For instance, an assessment motion must have 6 or 7 Board member votes in an open meeting, but instead it had only 5 votes because the President (who introduced the motion) failed to vote and it was all done in a closed meeting. Subsequently the shareholders ratified all the acts of the Board for the year. Does this validate the incorrect assessment vote, making the assessment a valid one?


Asked on 5/12/09, 12:23 pm

1 Answer from Attorneys
Bryan C. Becker Your Lawyer for Life.

Re: corporate bylaws

It could, but of course you would bring an action to challenge it. A specific review of the by-laws and minutes will be necessary for a complete analysis and recommendation. If you would like to discuss further, feel free to contact me.

Yours truly,

Bryan

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Answered on 5/12/09, 8:43 pm


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