Special Meeting Minutes: How to Call and Document a Special Board or Shareholder Meeting

What a special meeting is

Corporations hold two broad kinds of meetings. Regular meetings — including the annual shareholder meeting and the annual or regular board meetings — happen on a schedule set by the bylaws or the board. Special meetings are called between regular meetings to deal with a particular matter that cannot or should not wait.

Both the board of directors and the shareholders can hold special meetings. Common reasons include:

• Approving a loan, line of credit or guarantee
• Approving a major contract, lease or purchase
• Appointing or removing an officer
• Authorizing the issuance of shares
• Amending the bylaws
• Approving a significant transaction that requires shareholder approval

The main practical difference is scope. A regular meeting can usually take up any business properly before it. A special meeting is generally limited to the purposes for which it was called. For what a regular meeting typically covers, see annual board meeting minutes.

Who can call a special meeting

The right to call a special meeting is set by your bylaws and your state's corporation statute. There is no single nationwide rule, so check both documents before sending a notice.

Statutes and bylaws differ on details, including whether shareholders can demand a meeting and what share percentage is required. Treat the table as a guide to where to look, not as the rule for your corporation.

Notice of a special meeting

Notice is where special meetings most often go wrong. While details depend on your bylaws and statute, a few general principles apply widely:

• State the purpose. Notice of a special meeting — especially a shareholder meeting — usually must describe the purpose or purposes of the meeting.
• Stay within the purpose. Business at a special meeting is generally limited to the purposes stated in the notice.
• Follow the required timing and method. How far in advance notice must be given, and whether it may be sent by mail, email or another method, come from your bylaws and statute.
• Keep proof. Keep a copy of the notice and a record of when and how it was sent.

Waivers of notice

Most statutes let a director or shareholder waive notice, typically in a signed writing. Attending a meeting can also act as a waiver, unless the person attends for the express purpose of objecting that the meeting was not properly called. Signed waivers should be kept with the minutes.

Quorum and voting

A special meeting needs the same quorum as any other meeting of that body. For the board, the bylaws commonly set the quorum as a majority of directors, subject to state law. For shareholders, quorum is usually measured by the shares entitled to vote that are present in person or by proxy.

Once a quorum is present, the vote needed to approve an action depends on the matter, the statute, the articles and the bylaws. Some actions require more than a simple majority. Record the vote on each motion so the minutes show the required approval was obtained.

What to record in special meeting minutes

Special meeting minutes follow the same principles as other minutes: record decisions, not debate. They should also show that the meeting was properly called.

For the format of the resolutions themselves, see corporate resolutions.

Written consent as an alternative

Where the bylaws and statute allow it, the board — and in some cases the shareholders — can take the same action by signed written consent instead of meeting. For board action this commonly requires the consent of all directors. A written consent avoids the notice and quorum steps, which is why many small corporations use it for one-off decisions. Our guide to corporate resolutions explains unanimous written consents.

Filing the minutes

After the meeting, the secretary finalizes and signs the minutes and files them in the minute book in date order. Keep the notice, any waivers, the attendance record and any documents approved at the meeting (such as a loan agreement or amended bylaws) with them. Our guide to corporate secretary duties covers this record-keeping role in more detail.

Common mistakes

• Acting on matters not in the notice. Approving business outside the stated purpose can leave that action open to challenge.
• No proof of notice or waiver. Without a copy of the notice or signed waivers, it is hard to show the meeting was properly called.
• Missing quorum. Actions taken without a quorum may not be valid.
• Wrong person called the meeting. Check who has authority under the bylaws before calling it.
• Minutes never signed or filed. An unsigned draft is weak evidence of what was approved.

If a special meeting was not properly called or documented, the board or shareholders can often ratify the actions at a later properly held meeting or by written consent. An attorney can advise on the right approach.