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

COMMENT

Source: Model Act, § 8.24. This replaces provisions formerly found in §§ 14-2-146 &14-2-154(b).

Subsection (a) provides that in the absence of a provision in the articles of incorporation or bylaws, a quorum is determined as follows:

(1) If the board of directors consists of a fixed number - whether fixed by the board or shareholders under Section 14-2-803(b) - a quorum is a majority of that number.

(2) If the board of directors is a variable size board, a quorum consists of a majority of the number of directors prescribed at the time by the board of directors or shareholders. If no number is prescribed, then a quorum consists of a majority of directors in office immediately before the meeting begins.

Subsection (b) provides that the articles of incorporation or bylaws may decrease the size of the quorum to one-third of the number of directors determined under subsection (a).

Subsection (a) allows the articles of incorporation or bylaws to increase the quorum up to and including unanimity while subsection (c) allows these documents similarly to increase the vote necessary to take action. The articles of incorporation or bylaws may also establish quorum or voting requirements with respect to directors elected by voting groups of shareholders pursuant to Section 14-2-804. Special rules for amending bylaws setting voting and quorum requirements appear in Section 14-2-1022. Amendments of articles of incorporation governing these rules are covered by Section 14-2-1003.

The phrase "when the vote is taken" in subsection (c) is designed to make clear that the board of directors may act only when a quorum is present. If directors leave during the course of a meeting, the board of directors may not act after the number of directors present is reduced to less than a quorum.

Under subsection (d) directors, if they object or abstain with respect to action taken by the board of directors or a committee of the board of directors, must make their position clear in one of the ways described in this subsection. Georgia's former provision, § 14-2-154(b), denied the dissent procedure to directors present at the meeting who failed to vote against the action, while the Code denies it only to a director who voted in favor of the action. If objection is made in the form of a written dissent, it may be transmitted by wire, telecopier, or other medium of data transmission. This written objection serves the important purpose of forcefully bringing the position of the dissenting member to the attention of the balance of the board of directors. The requirement of a written objection also prevents a director from later seeking to avoid responsibility because of secret doubts about the wisdom of the action taken. The Code requires a written dissent to be filed no later than immediately after adjournment of the meeting, and thus shortens the time period during which a director may dissent from board action. Formerly § 14-2-154(b) permitted a director to file a dissent as much as 24 hours after a meeting. In the interest of board candor, any dissent should be filed immediately after a meeting. The right of dissent or abstention is not available to a director who voted in favor of the action taken.

Subsection (d) applies only to directors who are present at the meeting. Directors who are not present are not deemed to have assented to any action taken at the meeting in their absence.

Note to 1990 Amendment The 1990 amendment clarifies the voting procedures applicable to corporations having weighted voting among directors by indicating that all references in the Code to action by a majority of directors refers to a majority of the votes entitled to be cast by all of the directors and not a simple head-count.

Cross-References Action without meeting, see § 14-2-821. Articles of incorporation, see § 14-2-202 and Article 10, Part 1. Business combinations with interested shareholders, voting by directors, see § 14-2-1111. Bylaw amendments concerning quorums, see § 14-2-1022. Bylaw amendments repealing bylaws governing business combinations with interested shareholders, see § 14-2-1133. Bylaws, see § 14-2-206 and Article 10, Part 2. Committees of board of directors, see § 14-2-825. Director's conflicting interest transactions, quorum for, see § 14-2-862. Director standards of conduct, see §§ 14-2-830 &14-2-831. Meetings of board of directors, see § 14-2-820. "Notice" defined, see § 14-2-141. Number of directors, see § 14-2-803. "Secretary" defined, see § 14-2-140.

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