Also known as: written consents in lieu of stockholders meetings · action by written consent · unanimous written consent
Written by attorneys · grounded in primary & secondary sources — see below
A mechanism by which shareholders approve corporate actions without convening a formal meeting. Written consents signed by holders of at least the minimum votes required at a meeting achieve the same legal effect as a vote at a convened session. When less than unanimous consent is used, the corporation must notify nonconsenting voting shareholders within ten days.
Wolverine Steel's shareholders hold 60 percent of the voting power and sign written consents removing director Wayne Walker. Cumulative voting is not authorized in the articles. The consents satisfy the vote threshold under the governing statute, so Walker is removed even though the action occurs without a meeting and without unanimous participation.
Windham Technologies shareholders execute a shareholder agreement requiring unanimous written consent for any sale of real property. Majority shareholder Winston West later seeks board approval for a parcel sale. The remaining shareholders withhold consent in writing. The board action is invalid because the agreement displaces ordinary board authority and the required written consents were never obtained.
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The consents must be signed by holders of at least the minimum number of votes that would be required to authorize the action at a meeting where all entitled shares were present and voted. This standard appears in Model Bus. Corp. Act § 7.04(b).
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Yes. When action is taken by less than unanimous written consent, the corporation must give nonconsenting voting shareholders written notice of the action not more than ten days after the consents become effective.
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Directors may be removed by written consent only if the number of votes cast to remove exceeds the number cast against removal. When cumulative voting is authorized, a director cannot be removed by less-than-unanimous consent if the votes sufficient to elect that director under cumulative voting do not consent to removal.
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Yes. Any shareholder may apply for a court order compelling an annual meeting if the meeting was not held or written consent in lieu of an annual meeting did not become effective within six months after the fiscal year end or fifteen months after the last annual meeting, whichever is earlier.
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…time’ (i.e., while the opportunity to act with effect continues).” Id. While it is true that contemporaneous decisionmaking or unanimous written consent is required for board action (8 Del. C. § 141(f)), in our view, this testimony of the CIS board was probative and should not have been wholly discounted. See n. 5, supra . [^maj-8]:…