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Hello All,
In our Co-op we have some board members who are now proposing that non-resident shareholders not be able to vote at all in any matters.
I understand that non-residents can be restricted from becoming board members or officers but is it legal to take away all of their voting rights?
Thanks in advance for any answers.
Very simply, if they own shares, they have a full vote. No exceptions I can think of (IANAL). Unless your Proprietary Lease has a special carve-out (which I highly doubt), *any* share dilution can land your board and co-op corporation in very hot water.
I'm not even sure the restriction on becoming a board member or officer would hold up.
There may be special rules for sponsor-owned shares, so best to check with your co-op's attorney.
Steven, I completely agree with you that disenfranchising non-resident shareholders is almost certainly not allowed, while echoing your IANAL.
One point I can state with certainty is that non-resident shareholders *can* be barred from serving as directors. That's straight from our co-op's attorney. In fact, he's the one who suggested we limit the board to residents.
- Carl Tait
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You should check with an attorney, but I'm almost certain the board does *not* have the authority to prevent non-resident shareholders from voting their shares. That would create two classes of stock within the corporation, and the board does not have the authority to create such classes. In fact, it's unlikely that *anyone* - including the full set of shareholders - would have the ability to do this. But again, ask an attorney for a definitive answer.
- Carl Tait
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