PSK_246 wrote:For amendments to corporate governance documents, I believe the statutory default is majority rule of eligible votes (rather than a majority of a quorum present), but the Bylaws provision can specify a different percentage.
You need a quorum of outstanding "shares" for a meeting to have effect, and to pass a vote you need a majority of the outstanding shares that are actually voting
in order to pass.
So lets say you've got 5 shareholders in a corporation - Big Johnson's Sausages, Inc.: Jim, Jean Ralphio, LaFawnda, Mark, and MurderKill LLC.
Big Johnson's articles of incorporations have authorized 20000 shares, 18000 have been issued.
Jim has 100 shares
Jean Ralphio has 10000 shares
LaFawnda has 1500 shares
MurderKill LLC has 4000 shares
Mark has 2000 shares
400 have been reacquired from a previous shareholder who wanted out. ("treasury shares")
So we currently have 17600 "outstanding" shares of the 18000 that were issued ("issued shares").
To have a quorum for a shareholder meeting, you need a majority of shares, not shareholders. Assuming 1 share equals 1 vote (remember that the articles of incorporation can modify this!) we'd need 8801 of the outstanding shares present. In this scenario, that means if Jean Ralphio doesn't show up there's never
a quorum. It also means that Jean Ralphio creates a quorum all on his own!
Now in order for anything they vote on to actually pass, the number of shares FOR must be higher than the number of shares AGAINST. That means abstaining votes aren't counted against you. So if everyone shows up and wants to vote, except for Jean Ralphio who decides he doesn't want to vote on any issues, the vote will pass if 3801 shares vote yes, so MurderKill would basically control the vote at that point.