Q. Can an election for the purpose of electing board members be held if there is not a quorum?
—Need a Primer on Election Procedures
A. “In order to conduct any business at a shareholder’s meeting, there must be a quorum,” says attorney Andrew Brucker of Montgomery McCracken Walker & Rhoads LLP in Manhattan. “This is the minimum number of or shares that must be in attendance to make the meeting “official”. The Business Corporation Law (BCL) states that ‘holders of a majority of the votes of shares entitled to vote thereat shall constitute a quorum at a meeting of shareholders for the transaction of any business.’ The law later states that if the bylaws or Certificate of Incorporation provide, the corporation can have a quorum of less than a majority, but no less than one-third.
“When an election is scheduled at a meeting, there must be a quorum in order to hold the election. This is the primary ‘business’ that is being conducted at the meeting. Quite often in New York co-ops (and condos), if a quorum is not obtained, reports will be presented to the shareholders. Why punish those who were nice enough to attend? But the real purpose of the meeting, i.e., the election, cannot take place.”