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Question 51

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Corporate Bylaws and initial board of directors resolution Price: $14.99 (free trial)

Question: Is there a mandatory notice period before the directors of a Colorado corporation can call a meeting to elect or terminate a director?

Response: To my knowledge, the directors cannot terminate another director merely by having a meeting and voting. Shareholders elect and remove directors by vote. In special circumstances, directors can file a lawsuit to remove a director where "the court finds that the director engaged in fraudulent or dishonest conduct or gross abuse of authority or discretion with respect to the corporation and that removal is in the best interests of the corporation." Colo. Stat. Section 7-108-109.

Shareholder removal of a director is governed by Colo. Stat. Section 7-108-108, which reads as follows:
(1) The shareholders may remove one or more directors with or without cause unless the articles of incorporation provide that directors may be removed only for cause.

(2) If a director is elected by a voting group of shareholders, only the shareholders of that voting group may participate in the vote to remove that director.

(3) A director may be removed only if the number of votes cast in favor of removal exceeds the number of votes cast against removal; except that, if cumulative voting is in effect, a director may not be removed if the number of votes sufficient to elect the director under cumulative voting is voted against such removal.

(4) A director may be removed by the shareholders only at a meeting called for the purpose of removing the director, and the meeting notice shall state that the purpose, or one of the purposes, of the meeting is removal of the director.
Per the above, the shareholders can remove a director through a special meeting of the shareholders. The notice of said meeting must state the purpose for which the shareholder meeting has been called. The bylaws should state which corporate officer issues a shareholder notice of special meeting, who can call for a special shareholder meeting (i.e., the directors), and the time length of the required notice. See Colo. Stat. Section 7-107-102, discusses special shareholder meetings. According to Colo. Stat. Section 7-107-105, notices of special and annual shareholder meetings shall be given "no fewer than ten nor more than sixty days before the date of the meeting". Again, check your bylaws to see if they specify more than 10 days as required notice to shareholders.

Submitted: 03/05/2008; Carl, Colorado
Response: 03/05/2008; JJR


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