Legal Question in Business Law in California

Re: Replacing a corporate officer

The only thing I could add to the previous comprehensive answer is that if a corporate officer also has an employment contract for the office from which he/she is dismissed, the corporation may be liable to the dismissed former officer for compensation under the contract. No contract, no problem.

Re: Replacing a corporate officer

Normally, officers of a corporation serve at the pleasure of the Board of Directors. Unless the bylaws state differently, officers are elected/appointed by the board. In small corporations this usually occurs at the anuual board meeting, unless the coporation is a statutory close corporation and the shareholders have dispensed with annual meetings. So, unless the vice-president in question is also a director, or a shareholder with sufficient votes to elect enough directors to continue appointing him or her, the board of directors can terminate his or her term in office. The board can fire the vice-president (asking for a resignation is often preferable) or, if they prefer wait untill the next annual meeting and then simply decline to re-elect the vice-president. If the board asks the VP to resign, make sure the board memorializes its actions in a resolution, or other writing. Shareholder consent, if a small corporation, would be a good idea as well. If the board, in annual meeting, decides not to re-elect, this should be reflected in the minutes of that annual meeting.

To be safe, I'd contact counsel experienced in corporate work to review, at a minimum, the corporation's Articles, Bylaws, and Share Register to clarify the vice-president's actual status, and then advise on the best way to effect removal.

Regards,

Tom Newton