When operating a corporation in California, one of the requirements is having annual meetings of the shareholders, board of directors, and any committees of the board of the company. At these meetings, minutes of the proceedings, recitals and resolutions must be kept, signed by the appropriate party, and inserted into the corporate minute book. The date when the annual meetings shall be held should be stated in the corporation’s bylaws.
In order to hold a meeting, there must be a minimum number or percentage of the shareholders, directors or committee members present, i.e., a quorum. This number also will be put forth in the bylaws, as will the timing, information and method required for notice of the meeting.
During the annual meetings, the shareholders elect a board of directors, consider reports of the affairs of the corporation, and transact such other business. Likewise, the directors hold a regular annual meeting for the purpose of organization of the company, the election of officers and the transaction of other business. Some of the common corporate actions taken include major purchases or leases, entering significant contracts, and important financial matters, among others.
In lieu of an actual meeting, California corporate law allows shareholders and directors to take action by a written resolution, provided that the percentage shareholders or directors required by law and by the corporate bylaws consent in writing to the resolution.
Due to the legal requirements to operate a California corporation, and considering the variety of actions required to be taken at a meeting or by resolution, it is always a good idea to have competent legal counsel guide a company through the process and prepare the necessary documentation. Moreover, properly maintaining your corporation will keep things orderly, organized and efficient, allowing you to focus your attention where it ought to be - on growing the business.