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Don't Be Caught Inquorate! Some Key, But Subtle, Differences In California's And Nevada's Board Quorum Requirements
Wednesday, June 12, 2024

California Corporations Code Section 307(a)(7) provides that a "majority of the authorized number of directors constitutes a quorum for the transaction of business". Thus, if the authorized number of directors is 7 and there are 4 vacancies, that meeting is inquorate even if all directs then in office are present. The minimum number necessary to establish a quorum may be decreased by either the articles of incorporation or bylaws, Id. However, the minimum number may not be fewer than 1/3 the authorized number of directors or fewer than two, which ever is larger. Id. If the authorized number of directors is one (which is only possible if the corporation has one shareholder), that director must be present to establish a quorum. Id.

While the quorum requirement for board meetings may be reduced in either the articles of incorporation or bylaws, only the articles of incorporation may impose a higher quorum requirement. This rule obtains because the introductory clause of Section 307(a) provides "[u]nless otherwise provided in the articles or, subject to paragraph (5) of subdivision (a) of Section 204, in the bylaws . . .". Section 204(a)(5) allows the articles of incorporation to include a provision requiring the quorum for taking action of a larger proportion or all of the directors.

Nevada's quorum requirement is quite different. NRS 78.315(1) provides that a majority of the board of directors "then in office" is necessary to constitute a quorum. Thus, in the above example, a quorum would be established if as few as two directors are present. Nevada's statute further provides that either the articles of incorporation or the bylaws may provide for a greater or lesser proportion.

What's Quorum's Pronoun?

In English, "quorum" is a noun. However, in Latin it is a relative or interrogative pronoun meaning who, what or which. Because Latin is an inflected language, quorum is but one form of the word. As the plural genitive form, it translates as "of whom". Latin employs grammatical gender. The masculine, feminine and neuter plural genitive forms of the pronoun are quorum, quarum, quorum. Thus, the grammatical gender of quorum is either masculine or neuter. Of course, the grammatical gender of a Latin word does not necessarily correlate to the gender of its antecedent. Thus, for example, legio is the Latin word to describe a Roman legion. It is a grammatically feminine word even though Roman legions were comprised entirely of men.

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