Quorum
The minimum number of shares entitled to vote that must be represented at a shareholder meeting for the meeting to validly transact business. Default: a majority of shares entitled to vote.
A quorum is the minimum number of shares entitled to vote that must be represented (in person, by remote communication, or by proxy) at a shareholder meeting for the meeting to validly transact business. The default quorum is a majority of shares entitled to vote.
Default rule
Under § 21.358(a), unless the certificate of formation provides otherwise, the holders of a majority of the shares entitled to vote, represented in person or by proxy, constitute a quorum at a meeting of shareholders.
Modification limits
The certificate of formation may set the quorum requirement at greater or less than a majority, but not less than one-third. § 21.358(b). The certificate or bylaws may also provide that the withdrawal of shareholders from a meeting may negate the presence of a quorum (§ 21.358(c)) and may restrict the ability of remaining shareholders to adjourn and reschedule when no quorum is present (§ 21.358(d)).
Director quorum
The default quorum for a board meeting is a majority of the number of directors fixed by the certificate or bylaws, and neither document may set it below one-third. § 21.413. The act of a majority of directors present at a meeting at which a quorum is present is the act of the board, unless the certificate, the bylaws or the code requires a greater number. § 21.415(a).
Quorum disputes in closely held corporations often involve shareholders who stay away so that a quorum never forms, meetings called without proper notice, or amendments that shift the quorum threshold. Once a quorum is present, a shareholder who later walks out does not break it unless the certificate of formation or bylaws provide otherwise. § 21.358(c).