Meeting With Myself: The Significance of a Small Company's Annual Meeting

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“Why do I need to have an annual meeting of shareholders?” a client asked me after forming a corporation. “I’m the only shareholder. Do I stand in front of the mirror and discuss the issues with myself?”

The annual meeting requirement does seem silly for small corporations, especially if all of the shares are owned by one person or by a married couple, and those one or two shareholders are also the officers and directors. Nevertheless, there is no convenient small business exemption to the annual meeting requirement. The California Corporations Code Section 600(b) states:

“An annual meeting of shareholders shall be held for the election of directors on a date and at a time stated in or fixed in accordance with the bylaws.”

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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