What is an annual meeting of shareholders?
The annual meeting of directors is a once-a-year meeting where the board of directors typically selects corporate officers for the upcoming year and addresses any other corporate issues that need to be handled. Most states’ corporate laws require corporations to hold such annual meetings, but corporations typically do so even if incorporated in a state that does not require it. The corporate bylaws generally establish the date that the annual meeting must be held and, typically, corporations have their annual directors meeting immediately following their annual shareholders meeting.
During the meeting, any vote is only valid if there is a quorum of directors present. This ensures that a minority of directors can’t take controlling actions. Each state’s corporate laws define what that state considers a “quorum” to be, and it is usually defined as simply being a majority of the directors.
Finally, the corporate secretary must record minutes based on the meeting, outlining what the meeting was about, who attended, who ran it and when and where the meeting took place.