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2018 Georgia Code 14-2-805 | Car Wreck Lawyer

Link to State of Georgia Official Statute 2018 Georgia Code Annotated (sourced from legal.resource.org)
O.C.G.A. 14-2-805 Case Law from Google Scholar Amendments to OCGA 14-2-805

TITLE 14 CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS

Section 2. Business Corporations, 14-2-101 through 14-2-1703.

ARTICLE 8 DIRECTORS AND OFFICERS

14-2-805. Terms of directors generally.

  1. The terms of the initial directors of a corporation expire at the first shareholders' meeting at which directors are elected.
  2. The terms of all other directors expire at the next annual shareholders' meeting following their election unless their terms are staggered under Code Section 14-2-806.
  3. A decrease in the number of directors does not shorten an incumbent director's term.
  4. A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office. Any directorship to be filled by reason of an increase in the number of directors may be filled by the board of directors, but only for a term of office continuing until the next election of directors by the shareholders and until the election and qualification of the successor.
  5. Despite the expiration of a director's term, he continues to serve until his successor is elected and qualifies or until there is a decrease in the number of directors.

(Code 1981, §14-2-805, enacted by Ga. L. 1988, p. 1070, § 1.)

Law reviews.

- For article, "The Dynamics Among Shareholders, Directors, and Officers in Corporate Organizations Under Georgia Law," see 37 Mercer L. Rev. 79 (1985). For article, "Some Distinctive Features of the Georgia Business Corporation Code," 28 Ga. St. B.J. 101 (1991).

COMMENT

Source: Model Act, § 8.05 and former § 14-2-144(4). This also replaces some provisions formerly found in § 14-2-141.

Subsection (a) provides that the terms of initial directors expire at the first shareholders' meeting, while subsection (b) provides for the annual election of directors at the annual shareholders' meeting with the single exception that terms may be staggered as permitted in Section 14-2-806.

Subsection (c) provides that a decrease in the number of directors does not shorten the term of an incumbent director or divest any director of his office. Rather, the incumbent director's term expires at the annual meeting at which his successor would otherwise be elected.

Subsection (d) rejects the Model Act rule, that the terms of all directors elected to fill vacancies expire at the next meeting of shareholders at which directors are elected, in favor of former § 14-2-144(4), which provided that a director shall be elected for the unexpired term of the director's predecessor. While the Model Act takes the position that filling vacancies is an interim act, between shareholders' meetings, the Code takes the position that recruitment of qualified directors to a staggered board may well take a commitment by the corporation to install them for a longer term. In contrast, where vacancies result from an increase in board size, shareholders retain the power under the Code, following former Georgia law, to fill vacancies so created.

Subsection (e) provides for "holdover" directors so that directorships do not automatically become vacant at the expiration of their terms but the same persons continue in office until successors qualify for office. Thus the power of the board of directors to act continues uninterrupted even though an annual shareholders' meeting is not held or the shareholders are deadlocked and unable to elect directors at the meeting.

Cross-References Annual shareholders' meeting, see § 14-2-701. Court-ordered shareholders' meeting, see § 14-2-703. Removal, see § 14-2-808. Resignation, see § 14-2-807. Size of board, see § 14-2-803. Staggered terms, see § 14-2-806. Vacancies, see § 14-2-810.

RESEARCH REFERENCES

Am. Jur. 2d.

- 18B Am. Jur. 2d, Corporations, § 1186.

C.J.S.

- 19 C.J.S., Corporations, §§ 535, 536.

ALR.

- Provision authorizing directors to fill vacancies as applicable to newly created directorships, 6 A.L.R.2d 174.

Validity of agreement in conjunction with sale of corporate shares that majority of directors will be replaced by purchaser's designees, 13 A.L.R.3d 361.

No results found for Georgia Code 14-2-805.