Law reviews.

- For article, "Some Distinctive Features of the Georgia Business Corporation Code," 28 Ga. St. B. J. 101 (1991).

COMMENT

Source: Model Act, Section 10.22. This replaces former §§ 14-2-146 &14-2-176.

Supermajority provisions relating to the board of directors may appear in the bylaws of the corporation without specific authorization in the articles of incorporation. See Section 14-2-824(a) and (c). Like other bylaw provisions, they may be adopted either by the board of directors or by the shareholders. See Section 14-2-1020. Such provisions, further, may be amended or repealed by the board of directors or shareholders as provided in this section.

Subsection (a) of the Model Act was amended to provide for higher voting requirements than originally specified. Subsection (a)(1) provides that a bylaw providing for board action may be adopted or amended by the shareholders, but only by affirmative vote of a majority of all votes entitled to be cast, or such higher vote as is required by the articles of incorporation or bylaws. The Model Act did not require such a high vote for shareholder action.

Subsection (a)(2) states that where supermajority voting for the board is approved or altered by the board, it must be by a majority of the entire board, rather than by a simple majority of a quorum, as would otherwise be permitted by Section 14-2-824(c), or by such higher vote as is required by the articles of incorporation or bylaws.

Subsection (b) provides that where shareholders adopt a bylaw concerning quorum and voting requirements for the board of directors, they may prescribe the conditions under which it may be amended.

Subparagraph (c) of the Model Act was deleted as superfluous because of the changes made in subsection (a).

Prior law was not so explicit about the procedures for adopting and amending bylaws governing supermajority requirements, reflecting the lesser interest in voting rules at the time of adoption. Section 14-2-146(a) simply provided for simple majority quorums "unless the articles of incorporation or the bylaws shall provide that a different number shall constitute a quorum. . . ." Section 14-2-146(b) provided that a majority of a quorum might act, unless a greater vote was required by articles, bylaws or this article. There were no statutory limitations on amendments to the bylaws concerning these provisions. Thus they were governed by Section 14-2-176(c), which required approval of all bylaws by the same vote - a majority of all voting shares, or a majority of all directors in office.

Cross-References Bylaws: amendment, see § 14-2-1020; generally, see § 14-2-206. Quorum and voting of directors, see § 14-2-824. Quorum and voting of shareholders: normal, see §§ 14-2-725 &14-2-726. Supermajority requirements, see § 14-2-727.

RESEARCH REFERENCES