Also known as: separate vote requirement · separate voting requirements · separate voting requirement · separate voting
Written by attorneys · grounded in primary & secondary sources — see below
A statutory or charter provision requiring that designated classes or series of shares vote as a distinct group on specified corporate actions. Each such group must independently satisfy its own quorum before it may act, and approval occurs only if the votes cast within the group in favor exceed those opposed unless the articles impose a higher threshold.
Sentinel Security holds its annual meeting to approve a strategic pivot. The charter grants Series A preferred shares a separate vote on the pivot. Only 40 percent of the Series A shares log in. Because the Series A shares constitute a separate voting group, the 40 percent attendance falls short of the required majority quorum. The preferred group therefore cannot validly approve the pivot regardless of how the represented shares vote.
Apex Manufacturing seeks to merge with a competitor. Its articles require both common and Series B preferred shares to approve the merger as separate voting groups. Although common shares easily meet quorum and vote yes, only 45 percent of Series B shares attend. The preferred group lacks a quorum, so the merger cannot proceed despite common-share approval.
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Horizon Airlines amends its charter to require a two-thirds quorum for the Series C voting group on any sale of substantially all assets. At the special meeting only 55 percent of Series C shares are represented. Because the articles validly raised the quorum, the Series C group cannot act even though a simple majority would have sufficed under the default statute.
Beta Pharmaceuticals proposes an amendment that would limit the liquidation preference of its preferred shares. The articles and statute both require the preferred class to vote as a separate group. Preferred holders meet quorum but cast more votes against than for the amendment. The amendment fails as to the preferred group regardless of how common shares vote.
Shares representing a majority of the votes entitled to be cast by the group must be present. The articles may raise this threshold but cannot lower it below the statutory default.
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No. An amendment changing the quorum for a voting group must itself receive the separate approval of that group under the cross-referenced amendment rules.
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No. Only votes actually cast for or against the matter are compared. Abstentions are disregarded in determining whether favorable votes exceed opposing votes.
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…claim that a reapportionment plan rationally cannot be understood as anything other than an effort to segregate citizens into separate voting districts on the basis of race without sufficient justification. Because appellants here stated such a claim, the District Court erred in dismissing their complaint. IV Justice…