Shares can be held of record by multiple owners in a variety of ways, including as fiduciaries, members of a partnership, joint tenants, tenants in common, spouses as community property, tenants by the entirety, voting trustees, or persons entitled to vote under a shareholder voting agreement. If more than one owner acts to vote the shares, how are the votes to be determined?
California Corporations Code Section 704 provides that, unless the secretary is given written notice to the contrary and is furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, the following rules apply:
- If only one votes, such act binds all.
- If more than one vote, the act of the majority so voting binds all.
- If more than one vote, but the vote is evenly split on any particular matter, each faction may vote the securities in question proportionately.
If the instrument so filed or the registration of the shares shows that any the tenancy is held in unequal interests, a majority or even split for the purpose of this section shall be a majority or even split in interest.