After reading Effects When a Board Meeting of a Close Corporation is Unnecessary or Improperly Held , read also Effects if a Stock of a Close Corporation is Issued or Transferred in Breach of Qualifying Conditions
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Meetings of a corporation may be regular or special
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A written notice of the meetings must be sent to all stockholders or members
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When a meeting was unnecessary or improperly held, it may be ratified
C orporate meetings may either be regular or special.
A regular meeting is held annually on the date fixed in the bylaws, or if not so fixed, on any date after April 15 of every year as determined by the board of directors or trustees. Written notice of regular meetings may be sent to all the stockholders or members of record at least twenty-one (21) days prior to the meeting, unless a different period is required in the bylaws, law, or regulation. Said written notice may be sent to all stock holders or members of record through electronic mail or such other manner as the Securities and Exchange Commission (Commission) shall allow under its guidelines.
As for special meetings of stockholders or members, it shall be held at any time deemed necessary or as provided in the bylaws. This is on the condition that at least one (1) week written notice shall be sent to all stockholders or members, unless a different period is provided in the bylaws, law or regulation.
In a close corporation, what happens when a board meeting is unnecessary or improperly held?
The law says:
Unless the by laws provide otherwise, any action taken by the directors of a close corporation without a meeting called properly and with due notice shall nevertheless be deemed valid if:
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Before or after such action is taken, a written consent is signed by all the directors; or
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All the stockholders have actual or implied knowledge of the action and made no prompt objection in writing; or
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The directors are accustomed to take informal action with the express or implied acquiescence of all the stockholders; or
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All the directors have express or implied knowledge of the action in question and none of them makes prompt objection in writing.
An action within the corporate powers taken at a meeting held without proper call or notice is deemed ratified by a director who failed to attend, unless after having knowledge of the said action, the director promptly files his written objection with the secretary of the corporation.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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