ELECTIONS IN CORPORATIONS

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ELECTIONS IN CORPORATIONSAuthored
The Law Mind • 1067 words
Definition
Elections in corporations refers to the formal process by which a corporation selects its officers, directors, or members through a vote conducted by those entitled to participate — typically shareholders in a stock corporation or members in a non-stock corporation. The term encompasses two distinct but related functions: 1. Election of corporate officers and directors. In stock corporations, shareholders exercise the franchise to choose the board of directors, who in turn may appoint officers. The procedures governing this election — notice requirements, quorum rules, voting thresholds, and the mechanics of the ballot — are set by the corporation's charter, bylaws, or controlling statute. 2. Election of new members. In non-stock corporations, particularly eleemosynary (charitable) and ecclesiastical corporations, election refers to the admission or selection of new members into the corporate body itself. Because membership, not share ownership, defines the composition of such entities, the process of filling vacancies or expanding membership is itself a form of election governed by the corporation's founding documents. In both contexts, the fundamental principle is the same: the applicable governing documents — charter, bylaws, or statute — control the procedure, and material departures from those requirements may invalidate the result. ---
Common Confusion
"Elections in corporations" can be confused with governmental or political elections, which involve public voting for public office and are governed by an entirely separate body of administrative and constitutional law. The resemblance is structural, not legal. Corporate elections are private proceedings; they create no public rights, and the doctrines of equal protection and voting rights law that govern public elections do not apply directly, though some jurisdictions have extended shareholder-protection principles by analogy. Researchers working across both domains should also distinguish corporate elections from the federal tax "election" made by corporations (e.g., S corporation status), which is an administrative filing choice, not a voting procedure. ---
Why It Matters in Research
The core research trap is temporal. The procedural rules governing corporate elections have migrated progressively from charter-specific provisions and common law principles into comprehensive state corporation statutes — most importantly the Delaware General Corporation Law and the Model Business Corporation Act. Historical sources, including Bouvier's, reflect an era when the charter or constituent instrument was the primary and often exclusive source of authority, with common law filling gaps only in the absence of express regulation. Modern researchers must locate the applicable statute first; Bouvier's common-law defaults are often superseded. Notice requirements are a persistent flashpoint. Bouvier's cites conflicting early authority on whether personal notice was required when the charter was silent. Modern statutes have largely standardized this through notice periods, record-date mechanisms, and proxy rules — but in disputes over historical elections, particularly in older charitable or religious corporations that have never modernized their governance documents, the older common-law notice analysis remains live. The distinction between stock and non-stock corporations matters heavily in this area. Eleemosynary corporations — universities, hospitals, charitable foundations — may still operate under election-of-members frameworks that look more like Bouvier's description than like the shareholder-vote model most corporate attorneys know. Researchers encountering governance disputes in nonprofit or quasi-public entities should not import stock-corporation defaults without checking the specific charter and applicable nonprofit corporation statute. Minority shareholder and cumulative voting provisions are a related area where historical sources are largely silent but modern law is highly developed. If the research question involves contested director elections, shareholder rights, or proxy contests, the historical dictionary sources are inadequate starting points; the applicable state statute and SEC proxy rules (for public companies) are essential. ---
Historical Dictionary Support
Bouvier's Law Dictionary provides the foundational framework for the common-law understanding of corporate elections, and its analysis holds up well as a starting point for non-stock and eleemosynary corporations. Bouvier identifies the two principal applications of corporate election power — officer/director selection and member admission — and correctly locates the primary authority in the charter or constituent law, with common law operating as a residual default. The principle that governing documents "must be strictly followed" remains sound doctrine today. Where Bouvier is most useful to the modern researcher is in its treatment of notice. The cited authorities reflect genuine historical uncertainty: some courts required personal notice when governing documents were silent; others permitted notice by custom or usage; still others looked to general statute law where it existed. Bouvier's formulation that "it is safer and better practice to give notice" reads as a practitioner's hedge, not a settled rule — which accurately describes the state of the law in that period. What Bouvier does not address is equally instructive. There is no treatment of proxy voting, no discussion of cumulative voting or class voting rights, no engagement with the mechanics of shareholder record dates or quorum calculations, and no acknowledgment of regulatory overlay. These omissions are not gaps in Bouvier's scholarship; they reflect that these features of modern corporate elections either did not exist or were not yet systematized when Bouvier wrote. Researchers should treat Bouvier as authoritative for the antebellum common-law baseline and look elsewhere for everything that came after. ---
Jurisdictional Note
Corporate election procedures are primarily governed by the law of the state of incorporation, not the state where the corporation operates. Delaware law is the dominant framework for publicly traded companies; the Model Business Corporation Act, adopted in various forms, governs in a majority of other states. Non-stock and nonprofit corporations are typically governed by separate nonprofit corporation statutes, which may differ substantially from the for-profit framework even within the same state. ---
Encyclopedia Cross-Reference
Corporate Formation — Corporate Types (Close, Professional, Benefit Corporations): The Law Mind Business Organizations & Corporate Law Encyclopedia Corporate Formation — S Corporations (Tax Election and Requirements): The Law Mind Business Organizations & Corporate Law Encyclopedia Note: The S corporation "election" addressed in the second entry is a federal tax filing choice, not a voting procedure. It is cross-referenced here only to help researchers avoid conflating the two uses of the word "election" in corporate contexts. ---
Related Terms
Directors (corporate); Officers of a corporation; Shareholders; Voting rights (corporate); Proxy; Quorum; Bylaws; Charter; Eleemosynary corporation; Non-stock corporation; Cumulative voting; Board of directors; Member (in nonprofit corporations); Corporate governance; Notice (corporate meetings)
ELECTIONS IN CORPORATIONSmain
Bouvier's Law Dictionary • 1928
-The power of election by corporations may apply either to corporate officers generally. or to the selection of new members to fill vacancies in those corporations, whose na-
ELECTIONS IN CORPORATIONSmain
Bouvier's Law Dictionary • 1928
ture and composition require them to con- sist of members and not of holders of cap- ital stock, as eleemosynary corporations. The election of members of a corporation of the former class is, in general, regulated by the charter, or other constituent law of the corporation, or by its by-laws, and their pro- visions must be stri ly fo'lowed. In the absence of express regulations it is a gen- eral principle that the power of election of new members, or when the number is lim- ited, of supplying vacancies, is an inherent power necessarily implied in every corpora- tion aggregate. It is said to result from the principle of self-preservation; 2 Kent 293; 1 Rolle, Abr. 513; 8 East 272. If the right and power of election is not adequately prescribed by the charter, a cor- poration has power to make by-laws consist- ent with the charter, and not contrary to law, regulating the time and manner of elec- tions and the qualifications of electors, and manner of proving the same; 3 Term 189; 3 S. & R. 29; 131 Pa. 614; and if there be no by-law, established usage will be resorted to; 20 Pa. 484. In many states there are general statutes on this subject, and in such case they must be strictly followed; 1 Thomp. Corp. § 745. Unless under express provision as to special meetings, or filling vacancies, elec- tions of officers are held at regular meetings of the corporation. The time is nearly, if not always, regulated by statute, charter, or by-laws, and such cases as are found on the subject are not as to any general principle; changed by directors so as, by postponement 1 Thomp. Corp. § 701; the date cannot be of an annual election, to lengthen their terms; 23 Md. 482; a business meeting of a benevolent corporation may be held on Sunday: 65 Barb. 357; and a charter pro- vision requiring the choice of directors at an annual meeting was held to be directory and not exclusive; 20 N. Η. 58. The place of meeting for elections is also usually regulated by the law of the corpo- ration itself, and if there be none, it should unquestionably be done at its usual and principal place of business, or where it ex- ercises its corporate functions. This is for corporate purposes its domicil, (q. v.) and the term residence is also applied to cor- porations, as the place where its business is done; 15 III. 436; 82 id. 498; while it is a citizen only of the state by which it was created; id. In the latter state only may constituent acts be done; 13 Pet. 519, 588; 11 Wall. 459, 476; 14 N. J. Eq. 380. See also 36 Vt. 750; 35 Mo. 13. Accordingly it has been held that votes and similar acts outside of the state creating it are void ; 27 Me. 509; even under a provision authoriz- ing the calling of a first meeting at such a time or place as they think proper; id.; but the appointment in one state of a secre- tary, by the directors of a manufacturing corporation of another state, has been held valid; 6 Conn. 428; and a corporation created by a concurrent legislation of two states may hold meetings for elections in either; 31 Ohio St. 317. In some states, as Minnesota, the Dakotas, and Colorado, the holding of such meetings is permitted out- side of the state; and in the latter state it is held that the fact that the annual meet- ing was held outside of the state cannot be raised in a collateral proceeding; 5 Colo. 282. Under an authority to call special meet- ings on notice of time and place, they may be called by the president at a place other than the regular place of business; 5 Sawy. 403; and at such a meeting an election may be neld if otherwise legal. Where no place is named in the charter, the directors may designate it, and officers elected at such meeting will be such de facto; 45 Pa. 59. Meetings for the election of officers fol- lowing the law of the corporation must be called by the person or persons designated for that purpose; 10 Conn. 200; 25 W. Va. 36; though it has been held that it need not always be by formal action or with strictness of procedure if it is done by their direction; 3 N. J. Eq. 68; 8 Allen 217; con- tra; 25 W. Va. 36; 34 N. H. 148; 12 Metc. 105; they must be duly assembled; 14 La. Ann. 799; whether of stockholders; 9 La.
ELECTIONS IN CORPORATIONSmain
Bouvier's Law Dictionary • 1928
397; or directors; 12 N. H. 205, 549; 47 Ia. 11; upon due notice; 5 Burr. 9681; in accord- ance with charter or by-laws; 13 Allen 90 ; 7 Conn. 214; 14 Vt. 300; 18 Bush 63; and when there is no provision as to method, personal notice is proper; 7 Conn. 214; or according to general statute law, if there be such; 19 Wend. 87; but, though it is safer and better practice to give notice, in case of stated meetings for regular elections, notice is not required, but the members are charged with notice of them; 86 Me. 78; 4 B. & C. 441; 36 Ν. Η. 358; 11 Wend. 604; while of special meetings there must al- ways be notice; 2 H. L. Čas. 789; 22 N. Y. 128; 6 8. & R. 469; and the failure to not- ify a single member will avoid the proceed- ings, 5 Burr. 2681; 4 B. & C. 441; 4 Α. & Ε. 538; 22 Ν. Y. 128; 1 Thomp. Corp. § 708; unless notice is waived by attend- ance, as, if all are present, each of them waives the want or irregularity of notice; 7 Ind. 547; 11 Wend. 604. Such waiver will not operate as against a positive direction of the charter; 1 Dill. Mun. Corp. § 264; and when there is no provision as to notice it must be personal; 8 Conn. 191; 8 Metc. 301; 40 Cal. 77: 31 N. J. L. 107. As to what constitutes a quorum at elec- tions, see MEETINGS; QUORUM. As to all the details of the conduct of elec- tions, the provisions of state statutes, char- ters, or by-laws, must be strictly pursued and will generally be found to cover the subject. Where a statute provided for three inspectors, it was held that two could act; 16 Abb. Pr. N. S. 8. The method of appointment prescribed must be strictly followed; 11 Wend. 604; though in cer- tain emergencies the corporators may ap- point; 2 Abb. Pr. N. s. 381; and a candi- date has been held not disqualified: 7 Cow. 402; but this is so contrary to well settled and judicious legal principles that it cannot be considered desirable. An election other- wise valid will not be avoided because in- spectors were not sworn; 19 Wend. 635; or the oath taken not subscribed by them ; 2 Abb. Pr. N. S. 361. In the absence of a statute to the contrary, their duties are ministerial, and they cannot act upon the challenge of a vote except to follow the transfer books; 19 Wend. 37; 4 Cow. 882 ; or put the challenged party on oath; id. note; or pass judicially upon proxies reg- ular on their face; 44 N. J. L. 529; because not acknowledged or witnessed; 36 How. Pr. 477; but this would be otherwise if, as is often the case, the charter requires wit- nesses. They may not reject votes once re- ceived; 10 Abb. Pr. N. S. 331; nor go beyond the ballot to ascertain the intention of the voter; 15 id. 14. Ballots in which only the initials of a candidate were inserted have been held sufficient when it was determined by a verdict who was intended thereby ; 5 Denio 409. If the statutes provide that only a certain number are to be chosen, ballots containing more names will not be counted; 27 Mo. 365; 38 N. Y. St. 217; 8 Wend. 396; 2 Burr. 1020; votes for ineli- gible candidates were formerly held to be "thrown away;" 2 Burr. 1021 note; but it has been held in a later case that such votes will not give the election to a minor- ity candidate unless the voters knew of the ineligibility; 44 N. J. L. 529. There is no common-law right to vote by proxy, except in England in case of peers; 1 Bla. Com. 168; 131 Pa. 623; and in public or municipal corporations, voting can only be done in person; 2 Kent 294; in private corporations, the right of voting by proxy is usually conferred by charter and the weight of authority is that, if not so conferred, it may be done by by-law; id. 295; 5 Day 329; 131 Pa. 614; 69 III. 195; Moraw. Corp. § 486; Cook, Stockh. § 610; contra; 18 Hun 427; 14 N. J. L. 222. See 3 Grant, Pa. 209; 103. Pa. 134; 1 Paige 598; 2 Pa. Co. Ct. 280; 1 Thomp. Corp. § 787; 4 L. R. A. 421; 3 Dessaus. 557. A proxy may be revoked, even if given for a valuable con- sideration, if about to be used fraudulently; 6 Paige 337; and voting by proxy in fraud or violation of the charter may be restrained by injunction; 6 Gill & J. 94. A certificate of election is not essential; 11 Wend. 604; but it is, when valid on its face, prima facie evidence of election; 10 Abb. Pr. 381; but a court on quo warranto, may go be- hind it; 20 Wend. 12. It is probable that at common law each stockholder is entitled to but one vote with- out respect to the number of shares held. In public and municipal corporations un- doubtedly each member has but one vote, and it is said in connection with the state- ment of this principle: "This rule has been applied to stockholders in a private corpo- ration, and it has been held that such a shareholder has but one vote, although he be the owner of many shares of the capital stook;" Cook, Stock & Stockholders § 608. But this writer, after adverting to the al- most universal practice of providing by constitution, statute, or charter for a vote to each share of stock adds, "at the present day it is probable that

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