Voting of Shares

Corporations Code Title 1, Division 1, Chapter 7 deals with the voting of shares in this state.

Section 700 requires each outstanding share, regardless of class, to be entitled to one vote on each matter submitted to a vote of shareholders.

Section 701 provides that, in order that the corporation may determine the shareholders entitled to notice of any meeting or to vote or entitled to receive payment of any dividend or other distribution or allotment of any rights or entitled to exercise any rights in respect of any other lawful action, the board may fix, in advance, a record date. If no record date is fixed, three specified record dates apply.

Section 702 states that shares held by an administrator, executor, guardian, conservator or custodian may be voted by such holder either in person or by proxy.

Section 703 specifies that shares standing in the name of another corporation, domestic or foreign, may be voted by an officer, agent, or proxyholder as the bylaws of the other corporation may prescribe or as the board of the other corporation may determine or, in the absence of that determination.

Shares which are purported to be voted or any proxy purported to be executed in the name of a corporation are presumed to be voted or the proxy executed in accordance with the provisions of this subdivision, unless the contrary is shown.

Section 704 explains that, if shares stand of record in the names of two or more persons, their acts with respect to voting is to have the three specified effects.

Section 705 specifies that every person entitled to vote shares may authorize another person or persons to act by proxy with respect to the shares. Any proxy purporting to be executed in accordance with the provisions of this division are presumptively valid.

Section 706 states that an agreement between two or more shareholders of a corporation, if in writing and signed by the parties thereto, may provide that in exercising any voting rights the shares held by them are to be voted as provided by the agreement, or as the parties may agree.

Section 707 says that, in advance of any meeting of shareholders, the board may appoint inspectors of election to act at the meeting and any adjournment.

Section 708 explains that every shareholder entitled to vote at any election of directors may cumulate shareholder’s votes and give one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes to which the shareholder’s shares are normally entitled.

Section 708.5 defines the terms “uncontested election” and “listed corporation.”

Section 709 provides that, upon the filing of an action by any shareholder or by any person who claims to have been denied the right to vote, the superior court of the proper county must try and determine the validity of any election or appointment of any director of any domestic corporation.

Section 710 specifies that this section applies to a corporation with outstanding shares held of record by 100 or more persons that files an amendment of articles or certificate of determination containing a “supermajority vote” provision.

Section 711 contains a number of legislative findings and declarations. A person on whose behalf shares are voted includes two specified individuals. For the purposes of this section, a person on whose behalf shares are voted does not include three specified persons.