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Simple English definitions for legal terms
majority-consent procedure
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A quick definition of majority-consent procedure:
A majority-consent procedure is a way for shareholders of a company to make decisions without having to hold a meeting. Instead, they can simply write down their agreement and if the majority of shareholders are in favor, the decision is made. This is allowed in some states, like Delaware, to make decision-making easier for companies.
A more thorough explanation:
A majority-consent procedure is a legal provision that allows shareholders of a corporation to make decisions without having to hold a formal meeting. Instead, they can act by written consent of the holders of a majority of shares. This procedure is available in some states, including Delaware.
Let's say a corporation has 100 shares outstanding. The majority-consent procedure would allow the holders of 51 shares to make decisions on behalf of the entire corporation without having to hold a meeting. For example, they could vote to approve a merger or acquisition, elect new board members, or make changes to the corporation's bylaws.
This procedure can be useful for corporations that have a large number of shareholders or when it is difficult to schedule a meeting. It also allows decisions to be made more quickly than if a meeting were required.