Indiana Unanimous Action of Shareholders Increasing the Number of Directors
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How to fill out Unanimous Action Of Shareholders Increasing The Number Of Directors?
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FAQ
For certain sensitive topics, though, shareholders want to communicate with directors. Shareholders appreciate the opportunity for a more nuanced understanding that dialogue may provide. They also value having a director hear their concerns unfiltered by management.
However, shareholders do have some power over the directors although, to exercise this power, shareholders with more that 50% of the voting powers must vote in favour of taking such action at a general meeting. One of the main powers that the shareholders have is to remove a director or directors.
As directors only owe their duties to the company, shareholders can only initiate litigation where they bring a claim in the company's name and claim for the company's loss, not their own.
(a) Subject to subdivisions (b) and (f), any or all directors may be removed without cause if: (1) In a corporation with fewer than 50 members, the removal is approved by a majority of all members (Section 5033). (2) In a corporation with 50 or more members, the removal is approved by the members (Section 5034).
Generally it is the shareholders that hold the power in the company with the directors being responsible for its day to day running. In most successful companies the directors and shareholders work closely together and are open and transparent about the actions and direction the company will take.
A shareholder brings a direct action because s/he believes that the corporation has violated some type of duty owed to the shareholder. However, this same individual can also file a class action lawsuit as a representative of an entire class of shareholders whose rights have allegedly been abridged or violated.
A company must always act in the stockholders' best interest by making sure its decisions enhance shareholder value. Stockholders do not have a say in the day-to-day management of a company, but their collective presence as company owners puts constant pressure on company management.
Can shareholders remove a director? As mentioned above, shareholders can remove a director before the expiration of his or her period of office by way of an ordinary resolution. However, written resolutions cannot be used to remove a director, the voting must take place at an actual general meeting of the shareholders.
Transactions with directorsShareholder approval is also required where a company is proposing to give a guarantee or provide security in connection with a loan made by any person to such a director.
Section 168(1) of the Act states that the shareholders can remove a director by passing an ordinary resolution at a meeting of the company. This process is complicated somewhat by the notice requirements set out in statute.
