Last Friday's post noted the multiple ways in which a meeting of shareholders may be invalidated. Fortunately, the California General Corporation Law provides several opportunities for curing an improperly called or noticed meeting of shareholders. Section 601(e) provides that the transactions of any meeting of shareholders, however called or noticed, and wherever held, are as valid under the following conditions:
First, a quorum must be present, either in person or by proxy (See Cal. Corp. Code § 602)
Second, either before or after the meeting, each of the persons entitled to vote who are not present (either in person or by proxy) provides in writing:
- a waiver of notice,
- a consent to holding the meeting, or
- an approval of the minutes.
Note that these fixes apply to shareholders who do not attend the meeting. Shareholders who attend the meeting will by their attendance waive notice and presence at the meeting unless the shareholder objects, at the beginning of the meeting, to the transaction of any business on the basis that the meeting is not lawfully called or convened. Attendance at the meeting, however, will not constitute a waiver of any right to object to the consideration of matters required by the General Corporation Law to be included in the notice of meeting, if objection is expressly made at the meeting.
The foregoing fix will not help widely held corporations because as a practical matter they would not be able to obtain the requisite waiver, consent or approval.