§ 12364 Filling Board Director Vacancies

This law explains how to fill empty spots on a company's board of directors. It says who can pick new directors when someone leaves or is removed.

Key Takeaways

•If a director leaves, the remaining directors can usually pick a new one.
•If too many directors leave and not enough are left to make decisions, the remaining ones can still pick a new director if they all agree in writing.
•If a director is removed (not just leaving), the company's rules decide if the board or the members pick the new director.
•Members can always pick a new director if the board doesn't fill the spot.
•A director can quit by writing a letter, and they can even say when the quit will happen in the future.

Example

A company has 5 directors, but one quits. Now there are only 4 left.

The remaining 4 directors can pick a new director to fill the empty spot, unless the company's rules say only the members can do it.

(a) Unless otherwise provided in the articles or bylaws and except for a vacancy created by the removal of a director, vacancies on the board may be filled by approval of the board (Section 12222) or, if the number of directors then in office is less than a quorum, by (1) the unanimous written consent of the directors then in office, (2) the affirmative vote of a majority of the directors then in office at a meeting held pursuant to notice or waivers of notice complying with Section 12351, or (3) a sole remaining director. Unless the articles or a bylaw approved by the members (Section 12224) provide that the board may fill vacancies occurring in the board by reason of the removal of directors, such vacancies may be filled only by approval of the members (Section 12224). (b) The members may elect a director at any time to fill any vacancy not filled by the directors. (c) Any director may resign effective upon giving written notice to the chairperson of the board, the president, the secretary, or the board of directors of the corporation, unless the notice specifies a later time for the effectiveness of such resignation. If the resignation is effective at a future time, a successor may be elected to take office when the resignation becomes effective. (Amended by Stats. 2022, Ch. 617, Sec. 78. (SB 1202) Effective January 1, 2023.)

This law explains how to fill empty spots on a company's board of directors. It says who can pick new directors when someone leaves or is removed.

Key Takeaways

•If a director leaves, the remaining directors can usually pick a new one.
•If too many directors leave and not enough are left to make decisions, the remaining ones can still pick a new director if they all agree in writing.
•If a director is removed (not just leaving), the company's rules decide if the board or the members pick the new director.
•Members can always pick a new director if the board doesn't fill the spot.
•A director can quit by writing a letter, and they can even say when the quit will happen in the future.

Example

A company has 5 directors, but one quits. Now there are only 4 left.

The remaining 4 directors can pick a new director to fill the empty spot, unless the company's rules say only the members can do it.

Key Takeaways

Example

Key Terms

References

§ 12364 Filling Board Director Vacancies

Key Takeaways

Example

Key Terms

References

Key Takeaways

Example

Key Terms

Related Statutes

References

Key Takeaways

Example

Key Terms

Related Statutes

References