Can a board of directors override a shareholder vote after it is affirmed without cause?

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Can a board of directors override a shareholder vote after it is affirmed without cause?

Shareholders voted to assess each shareholder $375 but to exclude new shareholders cause the assessment was to cover back taxes from previous years. Board of directors without consulting the shareholders overrode this decision and stated that all new members and any incoming members are responsible to pay the assessment? Is this legal?

Asked on July 18, 2012 under Business Law, Pennsylvania

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

In order to establish what the proper protocol was with respect to the assessment that you are writing about concerning the corporate matter at issue, you need to carefully read the bylaws of the corporation to see what needed number of votes are required to pass a resolution for the corporation. Whether the board of directors can override the shareholder's vote would also be spelled out in the bylaws of the corporation as well.

I suggest that you consult with an attorney experienced in corporate law about the matter you are writing about if you have additional questions after you read the corporate bylaws.


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